I’ve added Podcast #34 to the “RobCasts” section of the site. It’s called My Conversations with Michael Kitces.
Michael is a good and obviously smart guy. But he does not yet see the benefit of saying in clear and plain language that the Old School SWR studies get all the numbers wrong. It’s by acknowleding the errors of the past that we gain the ability to advance to the golden age of investing — the Rational age.
Jon Harding says
The title of today’s passion is misleading. They were asked if anything has fundamentally changed in their thinking….not that they had made mistakes and they need to admit to them
I think you should be more careful in your “headlines”
Rob says
Thanks for your comment, Jon. It’s good to hear from you again.
The title that Jon is referring to is “Bogle and Bernstein Asked to Acknowledge Any Mistakes.” It’s the title I used at the “Today’s Passion” entry for today that links to a thread at Bogleheads.org at which a poster asks for information re (as Jon notes) whether John Bogle or William Bernstein have made fundamental changes in their thinking re how stock investing works.
I don’t think that the title is misleading, Jon. If someone makes a fundamental change in his thinking re how stock investing works, he is acknowledging having made a mistake at an earlier time. If you got something fundamental wrong, you got something wrong, no? We are saying the same thing using different words.
My reaction to your comment is that it illustrates the problem that is at the core of all the “controversy” we have seen re the analytical errors in the Old School safe-withdrawal-rate studies. There is a feeling in InvestoWorld that it is something shocking and terrible for an investing “expert” to acknowledge having gotten something wrong. I do not see it that way AT ALL.
What’s the big deal? Bogle and Bernstein have made mistakes. I have detailed a number of them in articles and podcasts posted at the site. Why do some see it as being such a huge big deal for them to acknowledge these errors? Do people think that the world is going to explode if their favorite investing expert acknowledges getting something wrong? How the heck are we ever going to advance in our knowledge if we do not acknowledge our mistakes? How are we going to learn more? A policy of never admitting mistakes is the worst policy that could be adopted.
The title of Chapter Ten of the book I am writing is “Jack Bogle Started Out As a Little Boy.” The point is that Bogle is human, just like all the rest of us. It is my strongly held view that we do the “experts” in this field no favor when we pretend that they are incapable of making mistakes. Put these people on a pedestal and you create a situation where they feel that they need to pretend to possess a level of confidence in what they say that is not warranted. Acknowledging the obvious reality that these people can make mistakes (and have done so!) lets them off the hook. It helps them in their efforts to help us.
I’ve learned important things from Bogle. I’ve learned important things from Bernstein. One of the important things I’ve learned is that both of these individuals are capable of making mistakes. I hope that we will see more of the sorts of comment that we saw from the fellow who started that thread. If I were able to post at Bogleheads.com, I would respond to the fellow by listing the mistakes made by Bogle and Bernstein that I know about today. Doing so would help the fellow who started the thread, Bogle, Bernstein, and every community member listening in to the discussion. It’s a win/win/win/win/win.
I mean no disrespect in suggesting to you that you need to lighten up, Jon. People make mistakes. In all areas of human endeavor other than investing. And in the investing field too. Please try to let this in. Please try to come to terms with it. Our hopes of getting through the crisis we are experiencing today depends on it.
Let Bogle grow! Let Bernstein grow! Let us all grow! Let us all learn together! Please try to give up on this idea that your favorite investing “experts” are descended straight from heaven. They are smart and good people. And they are human. We humans make mistakes from time to time. ALL of us do.
Thanks again for taking the time to post your comment. I sincerely hope that we will be hearing from you again.
Rob
Jon Harding says
“If someone makes a fundamental change in his thinking re how stock investing works, he is acknowledging having made a mistake at an earlier time. If you got something fundamental wrong, you got something wrong, no? We are saying the same thing using different words”
No one as said they have made a fundamental change, they were only asked if they would. Your ideas might get better traction if you didn’t play so fast and loose with the words of others. It doesn’t help your credibility.
Rob says
You’re right that the fellow who started the thread did not say that either Bogle or Bernstein has made a fundamental change in his advice. The title that I gave to the link does not suggest that he did so. The title that In used is: “Bogle and Bernstein Asked to Acknowledge Any Mistakes.” The “Any” tells the reader that it is in question (in the mind of the person starting the thread) whether there are mistakes to report or not. The fellow was asking that any mistakes known be identified.
The reason why I chose the thread as a Today’s Passion link is that I am aware of mistakes made by both Bogle and Bernstein. I would like to see those mistakes acknowledged. It would change the history of stock investing if those mistakes were discussed openly both at Bogleheads.org and elsewhere. I have been urging Bogle and Bernstein to acknowledge their mistakes for a good time now (without knowing for sure to what extent they are able to hear all of my urgings). I think it would be fair to say that we wouldn’t be going through what we are going through today if these mistakes had been acknowledged when the investing discussions held by the Retire Early and Indexing communities first brought them to light.
Again, what is the big deal? Why are you so opposed to the idea of discussing mistakes made by your favorite investing advisors? Do you think that it helps your investing results for you to be able to pretend that these mistakes were never made? Do you think it helps Bogle or Bernstein for the widespread discovery of these mistakes to be further delayed? Do you think it is realistic to believe that these mistakes are never going to be widely discovered?
I do not get where you are coming from, Jon. My sense is that your anger is real. You wouldn’t bother posting about this otherwise. But I am not able to make any rational sense whatsoever out of your desire that these mistakes not be widely discussed. Mistakes don’t fix themselves. Mistakes are made by people and mistakes need to be fixed by people. When you admit a mistake, you thereby put it behind you. The worst course of action on discovery of a mistake is to delay the reporting of it. Have you not found this to be true in your own experience?
I of course do not know what level of awareness Bogle and Bernstein have of their mistakes. I do know that I tried to bring them to their attention as soon as I learned about them. I wrote an article entitled “Bogle’s Big Mistakes” that was linked to at the Vanguard Diehards board (Bogle has said that he reviews this board on a weekly basis). I also tried to sign up for the annual Diehards meeting so that I could personally bring Bogle’s mistakes to his attention (Mel Lindauer, co-author of “The Bogleheads’ Guide to Investing” responded by changing the rules re who could attend the meeting and by explaining that he did so because he believed that Bogle needed to be “protected” from the questions that I was going to ask him — I find that comment highly insulting to Bogle, someone for whom I feel large amounts of both respect and affection). I also interacted with Bernstein re safe withdrawal rates and asked him to appear at the Early Retirement Forum for further exploration of the topic. Finally, I let Bernstein know about The Stock-Return Predictor (and provided a link to it) at one of the threads he posted on.
The mistakes in question would have been addressed and resolved a long time ago had others made the same efforts I have made to bring them to the attention of Bogle and Bernstein. If I were able to post to that board today, the fellow who started the thread would have obtained a far more helpful response to his question than what he has in fact obtained. The idea of a discussion board is to help one’s fellow community members come to a better understanding of the questions they are asking about. No?
Rob
Jon Harding says
I give up
Rob says
I don’t want you to give up, Jon. I would prefer to see you make an effort to come to terms with the questions you raised.
I of course acknowledge your right to give up.
But I don’t see these questions going away. If there are other community members with thoughts on either side of the question, I hope that they will share them with us.
The goal should be to find a way to advancement of our understanding of how stock investing works in the real world. The question (in my mind) is: What approach best serves that purpose? How firm do we have to be? How flexible should we be? What mix of firmness and flexibility is the most fair and appropriate and constructive mix? All constructive input is appreciated.
Are there any other community members who see me as being off base re this one?
Rob
Offbase? says
You are in left field, forget ‘off base’
Rob says
Are you able to offer any thoughts as to why you believe this to be so, OffBase?
Rob
John Walter Russell says
The fact remains that both John Bogle and William Bernstein contradict themselves, especially William Bernstein.
They try to give comprehensive overviews, but they are limited by their reliance on the academic community (actually, parts of the academic community–the efficient market advocates).
This leads them to confusion. There is no other way.
Have fun.
John Walter Russell
John says
JWR
Thanks for clearing it all up for us