Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
http://www.aaii.com/journal/article/insights-on-using-the-withdrawal-rule-from-its-creator#comments
Bengen is asked about and comments about Wade, Shiller, Michael Kitces, FIRECalc, CAPE. There’s even a link to one of Wade’s papers (sadly, not the one you wrote.) This is an active comment thread, so there’s no excuse for you not jumping in.
But you don’t. How can you just sit on the sidelines? You say you have the most important job in the world. This is right in your freakin wheelhouse. If you stay silent now, then obviously nothing will ever rouse you from your hibernation.
I’m grateful for the link, Anonymous.
I have commented at hundreds of places. The problem is certainly not that I have not commented enough.
We have a problem as a society. Shiller provided us the last piece of the stock investing puzzle in 1981. Had he published his “revolutionary” (his word) research findings in 1961, there never would have been any Buy-and-Hold. But it didn’t happen that way. By the time Shiller showed that valuations affect long-term returns, we already had an entire industry built around Buy-and-Hold. All of the powerful and wealthy people who were making their living promoting Buy-and-Hold did not want their clients and readers and friends to realize that they had made a mistake. So they kept quiet about the far-reaching implications of what Shiller had done. They praised him, they patted him on the head, they patronized him, down the road a piece they even awarded him a Nobel prize. But they didn’t change any of their strategic recommendations to reflect his research findings. And, as time passed, it became harder and harder for them to acknowledge their mistake and thereby bring the cover-up to an end. It’s now been 36 years. It’s now not just hard to admit the mistake, as it would have been in 1981. It’s now very, very, very, very hard.
I did not cause any of this. I came along in 2002, when I saw that Greaney got the numbers wrong in his retirement study and told my friends at the Motley Fool’s Retire Early board. Hundreds of them saw right away how important that post was. They said that I had started the most important discussion ever held in that board’s history. Greaney threatened to kill family members of anyone who continued to post honestly and eventually he got the discussion shut down. Motley Fool made clear that they would not do anything to Greaney or any of his Goon supporters but that they would ban anyone who got on his bad side. So everyone who cared about the subject of early retirement left the board and a board that was once the pride of the site became a wasteland of nonsense. Similar things happened at lots of different places. And here we are.
I don’t think that we have any choice but to open the entire internet to honest posting re safe withdrawal rates and lots of other critically important investment-related topics. Shiller predicted in his book that the continued promotion of Buy-and-Hold strategies would lead to an economic crisis late in the first decade of the new Century, and, sure enough, we saw one. The economic crisis stirred up political frictions on both the left and the right that we still are suffering from today. Stocks are still priced at two times fair value. So we are still looking at a 50 percent price drop or more than that in the event that stocks continue in the future to perform anything at all as they always have in the past (every other bull/bear cycle in our nation’s history did not end until valuations dropped to one-half fair value). So we have a situation on our hands. We stand on the threshold of the biggest economic advance in our nation’s history. The peer-reviewed research that I co-authored with Wade Pfau shows that we can reduce the risk of stock investing by 70 percent just by permitting honest posting on the last 36 years of peer-reviewed research in this field.
I’ll tell you what. Go over to that thread and ask the people there if they would like Rob Bennett to come over and share his thoughts about how safe withdrawal rates work in a world in which valuations affect long-term returns. If Wade Pfau or Robert Shiller or Bill Bengen or Michael Kitces asks me to come over and join the discussion, I will be there in a jiffy. I love my country and I love all those friends of mine and I am 100 percent happy to help. I am not going to go over there uninvited so that you Goons can engage in your trickery and stir up trouble one more time. It serves no constructive purpose. Every person alive on Planet Earth benefits if we all learn how stock investing works in the real world. Show that you want to advance the discussion and that the other people participating in the discussion want to generate a learning experience for everyone involved and I am 100 percent in. I am not inclined at this moment in time to get involved without some assurances along those lines.
We are all in the same boat. We all benefit from learning about the new research. How about you show that in your posts? How about these experts that you refer to show that they want to see responsible behavior on the part of the people participating in the discussion and make clear that they will not tolerate death threats or demands for unjustified board bannings or thousands of acts of defamation or threats to get academic researchers fired from their jobs? When we begin doing this the right way, we will make more progress in 15 hours than we have made in 15 years of letting you Goons run wild with your hate. We need civil and reasoned discussions for the discussions to bear good fruit. There are rules of civility that are followed in every field of human endeavor other than stock investing and that are reflected in our laws against financial fraud. Those rules are going to need to be given recognition in our discussions of what the last 36 years of peer-reviewed research teach us about stock investing if our discussions are to bear good fruit in this area.
I am 100 percent confident that we will all pull together in the days following the next price crash. The people who you name love their country and, when they see the human misery caused by a deepening of the economic crisis, they are going to do what needs to be done. I wish they would do it today. It would be a huge plus for everyone concerned if they did it today. But you know what? I cannot make good things happen unless the laws of the United States are followed in the discussions that are held. That’s a necessary part of the equation. Show me that there has been a change of heart on the part of these people and I am in in two seconds. If there has not yet been a change of heart the best that I can promise you is that I will do the very best that I can do as soon as it appears to me that there has been a change in heart.
I hope that helps a small bit.
Rob
Anonymous says
“I have commented at hundreds of places. The problem is certainly not that I have not commented enough.”
You have said you have the most important job in the world. What exactly is that job? Apparently it’s to inform the people who come to this site. Those people number in the low single digits. Doesn’t sound very important to me.
Or do you consider your job already done? But that can’t be. Nobody is talking about VII.
Rob says
Every word that I post to this site today, when there are few readers, will still be there in the days following the next price crash, when there will be thousands and thousands of readers.
Shiller supplied us all with the “revolutionary” (his word) research findings that we needed to learn how stock investing works in the real world back in 1981. He or someone else who read his work could have written all the words that have appeared at this site in recent years back in 1981. They didn’t do it. That wasn’t my doing. I wish they had done it. Had they supplied all these words in lots of different places 37 years ago, my life would have been a lot easier over these past 16 years.
I’m putting the words forward.
That’s pretty much it, you know? That’s my job. I am a journalist. Journalists tell people the story of things happening around them that they need to know about. The last 36 years of peer-reviewed research is the most important 36 years of peer-reviewed research in the history of investing analysis. I am telling the story of what that 36 years of peer-reviewed research teaches us and of why we are not today hearing about what that research teaches us at every investing site on the internet.
What millions of other people make of that story is up to them. The journalist doesn’t get to tell his readers how they will respond to his words. I have my hunches as to how people are going to respond to the story in the days following the next price crash. Those are strong hunches. But we are just going to have to wait and see, you know? It is not my call. It is up to millions of others to determine how things will play out. I strongly believe that that is as it should be. So I am just going to let those millions of others decide things.
I am going to continue to do my job to the best of my ability. I am going to continue to tell the story as honestly as I can possibly tell it and as charitably as I possibly tell it. That’s me. That’s my contribution to the world. I can do no more and I can do no less.
I love you Goons. But, as Paul McCartney once put it, “when you got a job to do, you gotta do it well.” I am a live-and-let-live sort of fellow, a my-heart-is-an-open-book sort of fellow. But when things get real, I am a when-you-got-a-job-to-do-you-gotta-do-it-well sort of fellow. If that means giving the other fellow a little bit of hell, that means giving the other fellow hell. I didn’t make the rules. I didn’t create this goofy, old, mixed-up world.
The words housed at this site will be giving you Goons hell in the days following the next price crash, Anonymous. That’s my prediction. That’s my sincere take. But you know what? We are just going to have to wait a bit to find out for sure. I could be wrong. That’s the catch that always applies re these sorts of matters.
I will be giving you hell with love in my heart for you in any event. To whatever extent that helps, I can assure you of that much. I like the Paul McCartney song because it acknowledges both the ideal and the sometimes unfortunate reality of things. I get a kick out of the “you gotta give the other fellow hell!” line because, as much as I would like to believe that that is never the case, in this ever-changing and fallen world that we live in, sometimes that really is just the way it goes.
I believe in John Lennon’s injunction that “All You Need Is Love” too. But sometimes showing love means giving the other fellow hell. It’s a contradiction and a puzzle. And I think that McCartney did a good job of pointing it out in that terrific song of his from a good number of years back.
https://www.youtube.com/watch?v=e7aGAIWe3uE
I hope that all helps a small bit.
My best wishes.
Lyrical Rob