Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
No, you said your beef with Greaney is that he got the SWR numbers wrong. You’ve been hammering that for years. “Personally responsible for millions of busted retirements”, you said. If so, then Bengen’s numbers are even wronger. And he is well known, unlike Greaney. So why are you not at least posting a comment to that linked article? Don’t you have any convictions at all?
I haven’t read the Bengen article. I am going to read it. It is the sort of piece that I often write Valuation-Informed Indexing columns on. It is possible that I will do that in this case. I need to read the article to decide whether it is a good fit for that or not.
The issue is not how far off the mark the numbers are. Peter Lynch was at one time saying that the safe withdrawal rate was 7 percent. He was a lot more off the mark than Greaney was and is. But Lynch responded to criticism of his numbers very differently than Greaney. Lynch was informed of his mistake by Scott Burns. He acknowledged the mistake and thanked Burns for pointing it out to him and then hired Burns to write a column for a magazine that he owned. That’s the right way to go about things.
I 100 percent think that Greaney got the numbers wrong. But I also believe (I wrote this in an article that I posted at this site years ago) that Greaney personally believes that his numbers are not in error. The way that I wrote it was that, if Greaney’s best friend asked him what the SWR is, Greaney would tell him that it is 4 percent. Another way of saying it is that, if Greaney took a lie detector test and was asked if the SWR is always 4 percent, he could answer “yes” and pass the test. I do not believe that the objective evidence supports this belief. But I also believe that he is suffering from cognitive dissonance — as we all [including Old Farmer Hocus!] do from time to time. I believe that Greaney believes that the number is always 4 percent.
Is it possible that Bengen believes that the number is 4.5 percent? I believe that that is possible. If that is the case, I believe that Bengen is wrong. But of course it is possible that I am wrong. The way that we resolve matters like this in our society is that we let both people speak and then people interested in the subject listen to both sides make their case and try to figure out the realities for themselves. I have had a few interactions with Bengen. They have been pleasant. My view of Bengen is that he got something wrong but that he is HONESTLY wrong. That’s very, very, very different from Greaney, who I believe will be going to prison for a long, long time in the days following the next price crash.
You of course know the difference. Greaney has advanced death threats in an effort to cover up his mistake. He has demanded unjustified board bannings. He has put forward thousands of acts of defamation He has advanced threats to get academic researchers fired from their jobs. Greaney has destroyed millions of middle-class lives with his insanely abusive behavior. Those people obviously have a right to bring civil suits against him to recover their losses. Those losses are in the trillions. Greaney is obviously not going to be able to make them whole. They obviously have a right to seek criminal prosecutions. I believe that, when this story is written up on the front page of the New York Times, Greaney will be prosecuted in a criminal action and will be placed in a prison cell for the remaining days of his life. I would be very surprised if the same thing happened with Bengen. So the two cases are very different.
In the event that Bengen makes strong points in his article, he could help us all. I can write a response piece and then interested parties can look at both articles and form their own conclusions as to who has the best of it. That’s how our system works. It is my strongly held view that it is a very good system indeed. So, presuming that Bengen is sincere (as I believe he is), he is doing a good thing for all of us by making his case. I think it is wonderful and, if I can advance the ball a bit by responding to his article, I will do so.
Greaney has done that sort of thing from time to time. All of you Goons have. The reason why I am writing these words is that I want to encourage you to do more of that. I learn from you when you challenge me. I could be wrong. If I am wrong, I want to learn that and I am more likely to learn it from people who challenge me than from people who tell me that my every word is gold. So thanks for that. And I of course am grateful to my good friend John Greaney for the times that he has challenged me and thereby taught me and helped me.
But I did not build that Motley Fool board into the #1 most successful board in the history of the Motley Fool site for the purpose of seeing any of my friends thrown in prison cells. I consider Greaney a friend. So, when I saw him walking a very dark path, I got about the business of working up the courage to call him out on his b.s. and thereby to help him set things right before he destroyed his own life and the lives of millions of other middle-class people. I believe strongly that the site administrator at Motley Fool should have booted him from the board long before Greaney found himself in circumstances where he would be going to prison down the line a bit. The site administrator was more concerned about the dollar bills that Greaney brought in with his relentless promotion of the pure Get Rich Quick investing strategy than he was with keeping John out of prison. I think he was wrong to fail to execute his job responsibilities reasonably and thereby to ruin John’s life for the sake of a few crummy dollar bills. Not this boy, you know? I am proud to say that I tried very hard to take things in a very different direction. I asked the site administrator to do his job and, when he failed to do so, I asked my fellow community members to join together and to demand of him that he do his job. That is all in the Post Archives.
I see all the difference in the world between the behavior of John Greaney and the behavior of Bill Bengen. John has taken himself and the rest of us down, down, down, down, down, Bill has been helping us all out. You couldn’t have a bigger contrast. I only wish that all of my fellow community members felt the same measure of friendship towards John that I still feel to this day and would thus join me in trying to make the best of his very bad situation.
Does all of that not sound at least pretty much on the mark, my old friend?