Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
The moral here is that none of us can learn what we need to learn from a single discussion, even an honest one. We need to be immersed in honest discussions, with lots of people coming at the various issues from lots of different perspectives, and those discussions need to continue for a long time. Eventually, things start to click for us. From that point forward, our understandings gradually grows deeper and deeper and deeper.
My understanding is much deeper than anyone else’s (including Shiller’s). Not because I am smarter than other people. My understanding is deeper because I have been working this harder and longer than anyone else and thus I have naturally had many more click experiences and have been able to build on them to a greater extent than anyone else.
We humans learn by talking things over with other humans. I believe strongly that we need to give ourselves permission to talk over the implications of the last 36 years of peer-reviewed research. I am 100 percent confident that not one of us will ever look back in regret once we take that fateful step of opening every discussion board and blog on the internet to honest posting re safe withdrawal rates and scores of other critically important investment-related topics.
My best wishes.
Rob
Anonymous says
“scores of other critically important investment-related topics.”
And what would these “scores” of topics be?
Rob says
This is an intelligent question.
It’s every single issue, Anonymous. The question of whether or not the market is efficient is fundamental. Everything else follows from that. If the market is efficient, then Buy-and-Hold is the ideal strategy, I certainly do not say different. But if valuations affect long-term returns, then it is emotion that drives stock price changes and Buy-and-Hold gets every single question it has ever addressed wrong. I don’t say intentionally. I believe that the Buy-and-Holders once sincerely believed that the market is efficient (and indeed I believe that millions sincerely believe this to this day). But if it is true that valuations affect long-term returns (I believe this strongly and there is 36 years of peer-reviewed research supporting me re this one), then there is zero chance that Buy-and-Hold could get even a single question right.
Everything that Buy-and-Hold says about risk management is wrong if it is true that valuations affect long-term returns. Everything that Buy-and-Hold says about retirement planning is wrong if it is true that valuations affect long-term returns. Everything that Buy-and-Hold says about asset allocation is wrong if it is true that valuations affect long-term returns.
If you get your starting premise wrong, you get everything wrong. I have often made the comparison to race relations. When people look at the fact that, in the 1950s, black people could not drink from the same water fountains as white people, they think it seems crazy. How could any person with a brain ever believe that that made sense? To understand what happened, you have to go back in history to when black people were slaves. They were not thought of as full humans. That’s how you come up with a rule that they cannot drink from the same water fountains as white people. Then you do away with the slavery thing, which is good. But if you don’t think through all the implications of the mistake that caused all the problems, you are still left with the crazy idea that blacks cannot drink out of the same water fountains as whites.
Fundamental mistakes have tremendous staying power because they don’t cause one thing to go wrong, they cause countless things to go wrong. And the more devastating a mistake is, the greater the reluctance is to admitting the mistake. In the investing case, we have thousands and thousands of wealthy and powerful people whose entire careers are rooted in the mistaken belief that the market is efficient. They do not want to admit their mistake. They do not, do not, do not. And they possess the power to destroy the career of anyone who dares to “cross” them by doing honest, research-based work in this field.
That’s why we are all living through an economic crisis today. Every single one of us is affected by the mistake. We all retire much later than we would if we had access to honest, research-based investing advice. And we all take on far more risk than we would need to take on if we all had access to honest research-based investing advice. But who is going to work up the courage to stand up to these Wall Street Con Men? They are powerful people. They don’t like to be crossed. They are used to getting their way. They have a lot of money at stake. They are worried that they will be going to prison for a long time if millions of middle-class investors learn how they have been lied to about what the peer-reviewed research in this field says. It’s a big mess, my friend.
This is why I say that we should all bend over backwards to show as much human charity as we can within the limits of the law to our Buy-and-Hold friends and to our Wall Street Con Men friends and to our Goon friends. They wouldn’t have gone down this road if they had known when they were starting out what we all learned when Shiller published his “revolutionary” (his word) 1981 research findings. Why not cut them all a generous piece of slack and thereby put our economic system and our political system on a much firmer footing? That benefits all of us, no? So I don’t see any downside.
But of course we do need to open every site on the internet to honest posting re the last 36 years of peer-reviewed research. If we don’t do that, we see a Second Great Depression and there are no charitable words that are going to help our Wall Street Con Men friends at that point. The time for teaching millions of people what the last 36 years of peer-reviewed research says is now and, to do that in the age of the internet, we need to open every site on the internet to honest posting. I mean, come on.
The mistake that the Buy-and-Holders made affects every single question relating to investing. Buy-and-Hold is a numbers-based approach. The last 36 years of peer-reviewed research shows that the number that matters most (not by a little bit but by a very big bit) is the valuations number. Calculate numbers without taking into consideration the most important number of all (by a long shot) and all of your calculations are going to be in error. Huh? How does that help anybody?
The Buy-and-Holders should want to get the numbers right. That means that they should be in favor of opening every investing site on the internet to honest posting on safe withdrawal rates and scores of other critically important investment-related topics.
I hope that helps a small bit, my old friend.
Rob
Anonymous says
“It’s every single issue, Anonymous.”
It just seems one issue. You want every website to be focused on discussing VII, right?
Rob says
Every site should permit honest posting on the last 36 years of peer-reviewed research. Absolutely. Without question.
I don’t agree with the word “focused,” though. It should be the people who visit the site who determine its focus. 90 percent of the population today believes in Buy-and-Hold. So I would expect 90 percent of the posts to be rooted in a belief in Buy-and-Hold principles. That should be the focus.
The focus can change over time, of course. It would be my hope that, once we permit honest posting, we would begin to see more people coming around to a belief in Valuation-Informed Indexing. So we might well see the focus move in that direction over time. But it’s not for me to say. That’s for the community as a whole to say.
I guess you could say that my HOPE would be that in time the focus would move in the direction of Valuation-Informed Indexing. But I only get to say what my personal focus is. For so long as I personally believe in Valuation-Informed Indexing, that has to be my focus when I am posting on investing or I am not being honest. I obviously possess a 100 percent right to post honestly. So that one is solely for me to say. But I don’t possess a right to set the focus of the entire community of a board and I would never dream of trying to do such a thing. The board as a whole has to work its will re that one.
I hope that helps a small bit.
Rob
Anonymous says
It seems the majority have already made a decision, Rob.
Rob says
The majority made a decision when it adopted laws making financial fraud a felony.
At this time we are waiting for prices to fall so that we can get those laws enforced and put you Goons behind prison bars.
From that point forward it is all downhill sledding for all of us.
My best wishes to you and yours, Goon friend.
Rob
Anonymous says
Yet there is no proof or charges related to a felony.
Rob says
We will have to wait to see how it all plays out, Anonymous.
Why do I have the funny feeling that I may have said that before?
Rob
Anonymous says
“Why do I have the funny feeling that I may have said that before?”
You are describing your entire website. It is stuck on repeat.
Rob says
Okay.
Rob
Anonymous says
You say that Wade Pfau learned from you and that you have gone deeper than Shiller. Both earning a good living from the investment field/careers. Why haven’t you?
Rob says
I am Public Enemy #1 of the Buy-and-Holders. I don’t pull punches. I say exactly what I believe. And, since I believe that the last 36 years of peer-reviewed research is legitimate research, what I believe is rarely in accord with what my Buy-and-Hold friends believe (although I of course have the greatest respect possible for them).
Shiller has made amazing contributions. But he pulls his punches.
Pfau had made amazing contributions. But he pulls his punches.
Each time someone pulls a punch, he makes it harder for all the rest of us. The only way out of this mess is for every single person involved to say exactly what he or she believes. It’s through the interactions of people who believe very different things that we all learn together. I would not want any Buy-and-Holder to pull his punches in his dealings with me. I learn more when my Buy-and-Hold friends say exactly what they believe. I return the favor to my Buy-and-Hold friends by saying exactly what I believe in my interactions with them. I wouldn’t dream of showing them the disrespect of failing to do so.
It’s a career limiting move in the short term. The Buy-and-Holders are in the majority and they have the power to shut me down today. But I think that my approach will prove to be a gangbusters success in the long run. I have learned mountains of stuff that I would not have learned if I were not always pushing myself to the next stage of understanding. You can’t push yourself to the next stage of understanding for so long as you are pulling your punches. If I were to pull my punches, I would be selling myself out. And that means that I would be selling my readers out too. And of course ultimately it means that I would be selling my Buy-and-Hold friends out as well. Not this boy, you know?
I am seen as more of a threat than Shiller and Pfau. I would like to see them become bolder. If my Buy-and-Hold friends were thinking clearly, they would want them to become bolder too. We don’t learn when everyone tells us how great we are. We learn when our sincere views are challenged in vigorous and civil and reasoned debate.
That’s my sincere take re these terribly important matters, in any event.
Rob
Anonymous says
That doesn’t add up. You said you have thousands is supporters and you don’t need many to earn a living. How are buy and holders blocking you from anything?
Rob says
There are thousands of people who have expressed a desire that honest posting be permitted at every discussion board and blog on the internet. Those people don’t necessarily support Valuation-Informed Indexing. Most of them do not. They have an interest. They want to be able to ask questions. But as of now, they more Buy-and-Holders than they are Valuation-Informed Indexers.
This is why it is so important that every site be opened to honest posting. Even if every site were opened to honest posting. there would still be lots of people who would opt for Buy-and-Hold. It might well be that it would still be a majority who would opt for Buy-and-Hold. My guess is that that would be the case, at least for some time into the future.
But there is no question in my mind that we would have many more converts to VII if every site were opened to honest posting. Many more. Investing is an important matter. People are not going to change their strategy based on what one guy on the internet says. They need to hear lots of people come at the questions from lots of different perspectives and they need to be able to ask lots of questions. Over time, people come around. That’s just the way it works.
We can’t get there without opening every site to honest posting. Right now, it takes a lot of effort to learn what you need to learn to become a Valuation-Informed Indexers. I was a Buy-and-Holder myself for a long time. I don’t think of myself as stupid. I was a Buy-and-Holder because for a long time I had never heard the other side of the story. Until the other side of the story is told in great detail at lots of places, progress is going to be slow. But once we begin getting the word out in a serious way, progress will be rapid because the case for VII is so strong.
Naturally, I want progress to be rapid. So I want to see every site opened to honest posting on the last 36 years of peer-reviewed research. Some Buy-and-Holders are holding us back by engaging in criminally abusive behavior. Others are holding us back by failing to speak up in opposition to the criminally abusive behavior. Every single person alive in the United States today should be speaking up in opposition to you Goons. There shouldn’t be one person not urging that your prison sentences begin as soon as possible. It is not even possible for the rational human mind to imagine any possible benefit coming from a delay in announcement of your prison sentence.
Does that help?
Rob
Anonymous says
“There are thousands of people who have expressed a desire that honest posting be permitted at every discussion board and blog on the internet. Those people don’t necessarily support Valuation-Informed Indexing. Most of them do not. They have an interest. They want to be able to ask questions. But as of now, they more Buy-and-Holders than they are Valuation-Informed Indexers.”
Okay, so you say you have this support. Explain specifically how you are kept from earning a living like Wade or Shiller. How is anyone blocking you from doing so?
Rob says
I didn’t enact the laws against financial fraud, Anonymous. I think they are good and necessary laws. But the laws were there before I came on the scene.
I’m going to tell the story, that’s all. The millions of people whose lives you have destroyed will decide whether to bring civil or criminal actions.
If death threats were not a way of blocking good things from happening, death threats would not be against the law.
If the people of the United States did not need protection from you, we never would have adopted laws protecting us from you.
I will tell the story. And the people of the United States will decide what to do about what has been done to them. And that’s as it should be.
Rob