Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Do you think Shiller sits around all day wondering what is on Rob Bennett’s mind?
I do not.
But I believe that every single person in the United States would benefit if Shiller would address a lot of the questions that I have raised over the past 17 years about the implications of his Nobel-prize-winning research. I believe that Shiller could tell us things that we all need to hear and I want to do everything in my power to get us to a place where we all start hearing those things. His ideas are powerful and important. We are hurting ourselves by accepting a situation where we are not benefiting from them to the extent we could.
Say that someone had discovered the cure for cancer and that the people who profit from running cancer treatment centers engaged in criminal behavior to stop people from hearing about what this person had done. And that I said on the internet that we all should be doing what we could to get the message about how to cure cancer out to everyone. Would that person be thinking about what was on my mind every day? No. But it would still be a good thing if we could persuade that person to report the criminal behavior and thereby change the circumstances that applied so that he could get his message out.
I want to benefit from Shiller’s research. And I want you to benefit from Shiller’s research. And I want every person alive in the United States to benefit from Shiller’s research. I think it is a shame that there has been a cover-up. Had there never been a cover-up, the opposition to spreading the word about Shiller’s research would be far less than it is today. Each day that the cover-up continue makes things worse. So I would like the cover up to end today.
Does that help at all?
Rob
“But I believe that every single person in the United States would benefit if Shiller would address a lot of the questions that I have raised over the past 17 years about the implications of his Nobel-prize-winning research.”
Everyone thinks their own opinions need to be considered. What matters is what that expert consensus feels needs to be addressed.
Your ego is way too inflated.
90 percent of the experts in this field believe today that Buy-and-Hold is fine. And 90 percent of today’s investors believe that Buy-and-Hold is fine. I think it would be fair to say that 90 percent constitutes a “consensus.” So Buy-and-Hold enjoys consensus support. We agree re that much.
Where we part company is when you say that “what matters is what that expert consensus feels need to be addressed.” It sounds like you are saying that a strategy that enjoys consensus support may not be challenged in posts put to the internet. I couldn’t possibly disagree more. Valuation-Informed Indexing is supported by 38 years of peer-reviewed research and a Nobel prize. If I were to say in a post that I believe that the safe withdrawal rate is always the same number, I would be engaging in financial fraud (I obviously do not believe any such thing — there are tens of thousands of posts that could be submitted as evidence that I do not believe any such thing). It cannot possibly be the case that the right thing for me to do at this point in the proceedings is to agree to commit financial fraud to appease you Goons.
I don’t believe that my ego is inflated. I think that the work that I have done is of huge importance. I believe that the transition from Buy-and-Hold to Valuation-Informed Indexing represents the biggest advance in the history of personal finance. But I of course always give credit to the many fine people who have helped us achieve that advance, a group that obviously includes many Buy-and-Holders and that to a small extent even includes you Goons. So the issue isn’t ego.Thousands of people have done good work. I am one of them and I have long been the lead voice urging that we open the entire internet to honest posting re the far-reaching implications of the last 38 years of peer-reviewed research in this field. So I have played a particularly important role. But thousands of people have made positive contributions. I obviously could never have gotten to first base but for the contributions of many fine people. This has certainly not been anything even remotely close to a one-man effort.
A number of academics told me that the story is that we are as a nation working our way though a paradigm change. That’s the deal. Shiller’s work represents such a huge advance that people who believe in Buy-and-Hold have a hard time letting it in. These academics told me that it will take a crisis to get things to a point where enough people will open their minds to the new model for it to gain some momentum. That sounds right to me. I believe that the crisis that will change things will be the 50 percent drop in stock prices that we should be seeing within the next year or two or three, according to Shiller’s understanding of how the market works. My job is to prepare the ground for the transition. I need to do everything that I can to understand on a deep level why as a society of people we have been so reluctant to make this transition and to pull everyone together so that we do not destroy ourselves in recriminations after that crash arrives and does great harm to millions of lives.
I believe strongly that the Ban on Honest Posting is doing great harm to every last one of us, Anonymous. It hurts me, it hurts you, it hurts Shiller, it will have a long-term negative effect on Bogle’s reputation, and on and on and on. If I had a magic wand, I would wave it in the air and bring the Ban on Honest Posting to a full and complete stop by the close of business today.
I am fresh out of magic wands.
So I have to accept what comes no matter how horrifying the reality is that I see playing out before all of our eyes.
I am here to help. I can assure you of that much. Let me know of some way that I can help you out and I will be there for you in three seconds and you won’t have to ask a second time.
Outside of making that promise, I do not see what I can do for you. I cannot change the realities of stock investing. If Shiller is right in what he believes about how stock investing works (I believe that he is), then Shiller is right in what he believes about how stock investing works and there is nothing that I can do about it except to wait to see how things play out following the next crash and do everything in my power at that time to make life as easy as possible for every single person affected by those events.
I hope that works for you.
My best and warmest wishes to you and yours.
Ego-Inflated (Or Not?) Rob
“Valuation-Informed Indexing is supported by 38 years of peer-reviewed research and a Nobel prize. ”
No, it is not. Your entire diatribe is taking a few comments from a couple people and then creating a whole story that you say supports your position.
I am going to continue posting honestly on safe withdrawal rates and on scores of other critically important investment-related topics, Anonymous. It will be interesting to see how things play out in the days following the next price crash.
I naturally wish you all the best that this life has to offer a person, in any event.
Diatribe Advancing Rob
You use the word “honest” as a way of trying to convince people of credibility or to subtly say that those in opposition are somehow dishonest. I could just say that I will post honestly about how the moon is made of green cheese. What you are really saying is that you will continue to post your opinions.
Secondly, you have been telling us how we should wait to see how things play out. We have already seen that. Wake up, Rob. You are now in your 60’s. You can’t afford to keep sitting around.
Yes, I will continue to post my opinions. That is certainly what I am saying.
And, yes, one reason why I frequently note that I honestly do not believe that the retirement study posted at John Greaney’s web site contains an adjustment for the valuation level that applies on the day the retirement begins is that the fact that I am okay with honest posting and the Buy-and-Holders are not suggests a credibility problem for the Buy-and-Holders. That is certainly what I am saying.
The Buy-and-Holders and the Valuation-Informed Indexers are speaking different languages, Anonymous. There really is research supporting Valuation-Informed Indexing. It exists. 38 years of it exist.
There is no research supporting the Buy-and-Hold claim that there is no need to practice price discipline (long-term timing) when buying stocks. Wade Pfau found it hard to believe that the Buy-and-Holders had been making this claim for many years and that there was precisely zero support for it in the literature. So he looked and he looked and he looked. And he came up empty-handed. There is nothing. That’s why you Goons felt that the only way to keep Buy-and-Hold going after Wade began putting up posts about the peer-reviewed research that he co-authored with me was to threaten to get him fired from his job if he continued doing so. You didn’t engage in criminal acts because you thought it was a fun idea. You engaged in criminal acts because you felt that you were backed into a corner and you couldn’t think of any other way out.
Get Rich Quick schemes are rooted in emotion, not reason. I can put forward thousands of posts making the rational case for Valuation-Informed Indexing and they won’t cause you to modify your views one iota. Your views are rooted in emotion, not reason. You want Buy-and-Hold to be a real strategy. You want the numbers on your portfolio statement to be accurate. You want stocks to be the best asset class regardless of the price you pay for them. You want crazy things, things that are a logical impossibility. But you want them really, really, really bad. I am insisting on my right to talk about strategies rooted in the peer-reviewed research. So we are working at cross purposes.
Will a price drop of more than 50 percent change investor emotions enough so that we will be able to open every discussion board and blog on the internet to honest posting re the last 38 years of peer-reviewed research in this field? I sure think so. I think that that is going to bring on the crisis that we need to as a society achieve this paradigm change.
But I am not God. I could be wrong. We are going to have to wait to see it play out to find out for sure.
I certainly wish you the best of luck with it, dear friend.
I am going to continue to post my opinions HONESTLY. There’s no give re that one. Zero flexibility.
I hope that that helps at least a tiny bit.
Still Sleeping Rob
All of that is factually incorrect. Wade, and many others, have addressed our comments regarding John Greaney. You can choose not to agree with it, but that doesn’t mean anything other than your disagreement. Secondly, your comments about the 38 years of research is also wrong. You are not commenting on all research. Instead, you are just stating your opinion on a couple comments from 2 people. Third, we have significant amounts of outcome data on buy and hold portfolios that have been successful, yet we have zero outcomes based on VII. Lastly, your claims of criminal activity lack any factual basis. Your claims of death threats and job threats continue to remain unsupported.
What matters is what the members of your jury say when they meet in the days following the next price crash. How many site owners do you think are going to be willing to ban honest posting on safe withdrawal rates after your prison sentence has been announced? I know! I know! The answer is: precisely zero. And, once there is no ban in place, every investor alive in the United States is just going to learn and learn and learn and learn and learn. All of the hundreds of investing insights that we should have been mining for 38 years now will suddenly become available to us within the space of a few months. It will be the most exciting time for investors in the history of our nation. Are you joking?
I am commenting on ALL research. Shiller’s research DISCREDITS Fama’s research and all Buy-and-Hold research. The core idea in all Buy-and-Hold research is that the market is efficient, that price changes are caused by a rational assessment of economic developments. Shiller showed that that is not so, that valuations affect long-term returns, that price changes are caused by investor emotion, which is transitory and not real or permanent. There is nothing going the other way. There was never any research showing that long-term timing (price discipline) isn’t always required. That was an ASSUMPTION, not a finding. Fama showed that short-term timing doesn’t work and the Buy-and-Holders jumped to the conclusion that long-term timing isn’t required. They didn’t check, they just assumed. Shiller was the first to check and he showed that valuations affect long-term returns (which cannot possibly be so if the Buy-and-Hold assumption is valid). And everyone who has ever checked this in the 38 years since has found the same thing.
We should open up every site on the internet to honest posting and get the word out re the dangers of Buy-and-Hold to every investor alive on the planet. That’s Rob Bennett’s sincere take re these terribly important matters, in any event.
I wish you all good things, dear friend.
Opinion Holding Rob
Again, your comments lack any factual basis.
Okay, Anonymous.
I wish you all good things.
Is there anything else that I can do for you?
Factually Challenged Rob
“Is there anything else that I can do for you?”
I am not asking you for anything. You are the one asking. You want Shiller, Wade and a host of other people to say things. You want people to let you have an unfettered soap box on their forums to say and do whatever you want. You seem to be hoping that we will all just go along with your unverified claims of death threats, job threats, etc. You want the The New York Times to write articles about you. You want people to pay you $500 million. Read your board. You are the one making all the demands.
I expect the laws of the United States to be followed when I post on boards where people meet to learn about retirement planning and I point out to them that a study that many of them are using to plan their retirement lacks an adjustment for the valuation level that applies on the day that the retirement begins. That much would be fair to say.
It hasn’t happened. But those laws remain in place. Those laws are every bit as much a reflection of our national will as is the popularity of Buy-and-Hold. We are as a nation acting in a conflicted way for the time being. Will we resolve the conflict in the days following the next price crash, when we see with our own eyes how much following Buy-and-Hold strategies has hurt us, just as the last 38 years of peer-reviewed research in this field told us it would?
I believe that we will. I believe that our best days are ahead of us. I believe that Buy-and-Hold is the past and that Valuation-Informed Indexing is the future. So I am waiting for that big advance.
I want Shiller to do things, I want Wade Pfau to do things, I want everyone living in the United States to do things. Why wouldn’t I? I love my country. I love the people who reside in it. Naturally, I wish the best for them. Naturally I want to see them do the things that they need to do to advance into a very bright future in which the risk of stock investing has been reduced by nearly 70 percent (according to the peer-reviewed research that I co-authored with my good friend Wade Pfau).
I want lots of things. But I don’t think that it would be quite right to say that I am asking for those things today. I would of course like to have those things today. But I no longer believe that it is possible for me to have them today. I need help to make all these things happen. And I do not believe that I am going to get that help until we see another price crash and it causes people to open up to the idea of giving the last 38 years of peer-reviewed research in this field a serious look.
I want lots of things. But I am not asking for anything at this moment in time. I am just waiting. I am always trying to understand better what is going on. And I am writing a book that tells the story. And that’s pretty much it.
I respond to your questions because I want to help you cope with any pain that you are feeling and because I don’t want to pass up on any learning experiences that might be made available to me by people who are skeptical of my beliefs about how stock investing works and who have from time to time asked me questions that helped me think about aspects of the story that I had not considered enough before hearing those questions.
There is nothing that I am asking you for at this point in time, Anonymous. I have offered to help you and you have demonstrated a lack of interest in my offers. So be it, you know? You are obviously not required to accept my offers. You have other plans. I wish you the best of luck with those plans. Go in peace, grasshopper, you know?
Hang in there, dear friend.
Rob the Demanding One