Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
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.