Set forth below is the text of a post that I recently put to the Goon Central board:
Oh, and good luck finding an attorney willing to sue people who disagree with you at online discussion boards!
I’ve already spoken to more than one attorney who told me the case was strong enough to take on. That’s not an issue.
The issue today is that I have not found one to take the case on a contingency basis. There are five ways to solve that problem.
One is that the ban on honestzzz posting is an issue of huge public policy significance. There are millions unemployed today because of the Buy-and-Hold crisis. People are losing faith in our political system because the two political parties are in the pocket of Wall Street. When we go into the Great Depression, there is a good chance that there will be a world war and millions will die. In these sorts of circumstances, it is possible to find very good lawyers willing to take cases on a pro bono basis as a means of enhancing their reputations.
Two is that there is already a similar case that was brought by a Yale lawyer (to whom I have had conversations about how to proceed) which was taken on a pro bono basis. One of the issues here is that this is a new area of law and many lawyers are unwilling to take a case on contingency when the uncertainties always present in a new area of law are present. When the case taken by the Yale lawyer has finished its way through the courts, there will be precedent. Lawyers will be able to look at the damages obtained against people who engaged in defamation on discussion boards and see that similar amounts can be obtained in other cases where the facts are exceptionally strong.
Three is that, after the next crash, the anger at what the Buy-and-Holders have done to our society and to our financial futures is going to be very strong. It will be easy to connect with thousands of people on the internet with an interest in achieving justice against the people who have posted in “defense” of Lindauer and/or Greaney. There are no doubt lawyers today who would gladly take the case if I could reach them. My reach is greatly extended as the crisis worsens and as the number of people seeking to obtain justice for what has been done to us increases.
Four, there will in time be media lawyers who will want to take this on to be the first lawyers to have worked on a case dealing with the many unique fact patterns present here. The internet discussion board is an important communications medium of the future. This is a case where a tiny number of lawyers would very much want to be involved but the vast majority would not. Once I connect with the right people, I don’t anticipate problems.
Five, I will be connecting with lots of people of great influence as we spread the word re Valuation-Informed Indexing. A lot of people in the investment industry have done their reputations harm by getting involved in the promotion of Buy-and-Hold at times when they did not recognize the danger. The entire industry is going to need to take steps to restore the reputations of financial planners who fell for the mumbo jumbo. Those people have lots of money and they will be able to help me (and all of the thousands or tens of thousands who need to bring lawsuits because their retirements are failing after they believed claims promoted at boards that had banned honestzzz posting on what the historical data says) out. Maybe John Bogle will finance the lawsuits. That would be a nice Alfred Hitchcock ending to the story.
I believe that we will work it out one way or the other, Yip. Job #1 is bringing the economic crisis to an end and making all the powerful insights of the first ten years of our discussions available to everyone. All sorts of wonderful things follow from that. Successful lawsuits against the Internet Sewer Rats is just one of the wonderful things we will be seeing in days to come, in my assessment.
There was a day when there were people saying that I was crazy to believe that we would ever achieve a consensus in this field that the Old School studies get all the numbers wildly wrong. Some of the same people who said that are now expressing doubt that the lawsuits will be successful. My thought is — I’ll give it my best shot, I can do no more and I can do no less. Perhaps it is the people who put their financial futures at risk for the thrill of being able to use the internet to destroy millions of middle-class lives who were the crazy ones all along!
I don’t have a crystal ball. We’ll have to wait and see.
Rob
You should write for The Onion. This is HILARIOUS stuff Rob!
You have created a completely parallel Universe in your mind and its fascinating watching you write about it.
And I noticed he also seems to be able to speak quite freely about the ‘SWR’ topic and how a much lower than 4% withdraw rate is probably your best bet.
Why is he able to do so while you get constantly banned? Attitude, demeanor, and conduct.
You have created a completely parallel Universe in your mind
Backatcha, my old friend.
You’re hitting on an important truth here, What. Buy-and-Hold and Valuation-Informed Indexing are indeed parallel universes of thought.
The premise of Buy-and -Hold is that investors engage in the rational pursuit of their self-interests. If that is so, all the rest of the conventional investing wisdom follows and Buy-and-Hold is the ideal strategy.
The premise of Valuation-Informed Indexing is that valuations matter. If that is so, all of the precepts of Valuation-Informed Indexing follow and Buy-and-Hold is in the long run the most dangerous strategy ever concocted by the human mind, one certain to bring on a horrible economic crisis and ultimately the Second Great Depression.
We need to know which of those premises is true!
If it is true that investors are rational, valuations cannot matter because large amounts of overvaluation or undervaluation are logical impossibilities in a world in which investors are rationally pursuing their self-interests (it is in no one’s long-term self-interest for stocks to be wildly mispriced).
If it is true that valuations matter, the efficient market hypothesis — the academic construct on which the entire Buy-and-Hold model is built — is pure nonsense.
So which is it? Are investors rational? Or do valuations matter?
I believe that valuations matter, which means that investors are NOT rational. There are millions of good and smart people who believe that investors are rational, which means that valuations do not matter.
The proper thing to do is to have a national debate on these issues. We need to have everyone participating in the discussion of every important investing question so that we can make sense out of all this.
The problem is that a significant number of the Buy-and-Holders DO NOT WANT to have this debate. A significant number have doubts about their investing strategy and fear what will happen to it if it is exposed to honest and informed challenges. If the Valuation-Informed Indexers are right, doing something about this group is the key to overcoming the economic crisis.
It should be so easy. We have cultural norms in this country in favor of the idea of talking things over, of hearing a diversity of viewpoints.
But, as you say, we are talking alternate universes of thought here. The Buy-and-Holders cannot bear to hear that they got the PREMISE wrong and that all they built on that premise is thus also wrong. These painful truths cause the Buy-and-Holders to experience cognitive dissonance. They hear the words spoken by the Valuation-Informed Indexers, but their minds do not process the information.
The only thing that has broken through the many layers of defenses of the Buy-and-Holders is the economic crisis. That brought on a greater openness. I was blacklisted at just about every blog in the Personal Finance Blogosphere prior to the crisis. I am not today. So things are changing.
But things have not changed enough for us to bring on that national debate we need. The next big event is the second crash, the one that will put us in the Second Great Depression. It looks as if that is what it is going to take for us all to get where we deep in our hearts want to be.
The good news is that Valuation-Informed Indexing is everything that we once thought Buy-and-Hold would prove to be — it is a simple, research-supported strategy that lets all middle-class people invest in stocks for high long-term returns while taking on remarkably little risk. When we can get the word out about VII, we will be able to bring the Second Great Depression to an end by reassuring all middle-class people about their financial futures.
We are indeed livig in parallel universes, What. The thought processes of Buy-and-Holders and Valuation-Informed Indexers never touch. It’s not hilarious, however. It is very scary. For our society to survive, we need to get accurate information on how to invest out to millions of middle-class people. Without the toleration for other systems of thought that has been characteristic of our nation in areas outside the discussion of stock investing strategies during the Buy-and-Hold Era, we will not make it.
I hope those listening in on these words will join me in a prayer that we stop and consider what our most fundamental social norms call on us to do in these circumstances.
I wish you the best, What.
Rob
Why is he able to do so while you get constantly banned? Attitude, demeanor, and conduct.
I believe you are talking about Wade Pfau here.
He pulls his punches, What. He doesn’t say all he knows. He goes along to get along.
The rule is that you cannot say that the Buy-and-Holders are wrong. If I said “I personally use a withdrawal rate of 2 percent,” the dogmatic Buy-and-Holders could tolerate that. They do not see it as a threat to their claims of being “Scientific” for someone to follow a different strategy. They DO see it as a threat for someone to say that there is 30 years of academic research showing Buy-and-Hold to be a FAILED idea. That is the reality.
Numbers are numbers, What. Numbers take us out of subjectivity and put us in the realm of objectivity, where there are true claims and false claims. The claim that a 4 percent withdrawal is safe for a retirement that began at the top of the bubble is objectively false. The data shows that that retirement has only a 30 percent chance of surviving 30 years. That ain’t safe. It ain’t a close call.
Dogmatism is not called for. I have no problem saying “I could be wrong and, if I were, I would probably be the last to know.” I say things like that all the time. But it would not be honest for me to say that I personally able to see some way that the Buy-and-Holders could be right about safe withdrawal rates. I have looked at the numbers. I see no way.
Wade doesn’t say it that way. He has tried a few times and he has been hit hard and he has pulled back. I of course understand why he doesn’t like being attacked by the Buy-and-Holders. No one likes being attacked. But, if we want to survive this economic crisis, we need to talk straight re this stuff. We all do, not just me and Wade. We need all economists and all journalists and all researchers and all financial planners and all policymakers saying what they truly believe re these matters, with none of them holding back for fear of what the Lindauerheads and the Greaney Goons will do to them if they dare to express their true beliefs in public.
Even Robert Shiller has said that he has never told us all he knows about stock investing because he fears the attacks that would be made on him if he were to do so. This is a national scandal! Shiller is a Yale professor. We need to know what he thinks. We deny ourselves something valuable when we permit these Internet Sewer Rats to decide for us what we may hear and what we may not hear.
The underlying dynamic is that the case against Buy-and-Hold has been growing stronger for 30 years now. Even most advocates of the idea have doubts at this point. If the Buy-and-Holders were more confident, they could tolerate questioning. It is when you are in deep doubt and yet trying to hold on that you cannot stand to have your ideas questioned. This is where we stand with the Buy-and-Holders today — they themselves have serious doubts that they dare not listen to for fear that their confidence will collapse entirely.
If fair argument doesn’t cause our belief in Buy-and-Hold to collapse, the Second Great Depression will do the job. You can’t ban the Reality Principle from a discussion board, What. This is the brutal reality we all face today. In these sorts of circumstances, it is not appropriate for those of us who have studied this matter in some depth to be pulling our punches for fear of what nasty names we will be called if we tell the true story.
Or at least that’s the sincere take of one Rob Bennett, a known flawed human who has made many mistakes about important matters in the past.
Rob
Actually, in many cases on that forum the 4% rule is discussed as being unsafe in general. Would you like links?
You are the problem, not the SWR discussion.
Also, I meant parallel Universe as in one where you will ‘meet with great leaders’ or you will ‘have lawyers falling over themselves to help you sue people on the Internet’ or you will ‘have great reach’.
I don’t see how any of this is remotely possible in the ‘real’ Universe where you spend most of your time writing nonsense on a forum dedicated to ridiculing you.
Of course the 4 percent rule is unsafe, What. It is wildly unsafe. We have known this since the morning of May 13, 2002.
We need to the authors of the dangerous studies to [b]correct[/b] them.
We need to get this written up on the front page of the New York Times and Wall Street Journal.
We need to have a national debate about how such smart people managed to get the numbers so wildly wrong in studies that millions of middle-class people have used to plan their retirements.
We need to get John Bogle and Bill Bernstein and Burton Malkiel to acknowledge that Buy-and-Hold was a mistake and to urge that every board and blog on the internet be opened to honest posting.
We need to get the Stock-Selling Industry to stop spending millions promoting he failed Buy-and-Hold strategy and to direct that money to the promotion of Valuation-Informed Indexing instead.
Do you see?
We’ve known that the retirement studies were in error for ten years now. Now we need to proceed to Next Steps.
Please take care.
Rob
I don’t see how any of this is remotely possible in the ‘real’ Universe
When the car was invented, do you think the buggywhip manufacturers who were screaming and hollering that this was the end of the world could foresee the internet highway system or the fast food industry that largely followed as a result or the increase in spending on attending sporting events because people now had a convenient way to get to ballparks not in their neighborhood.
Please understand that I was the one who discovered the errors in the Old School retirement studies. I stopped focusing on that one back in May 2002, when we had research showing beyond any reasonable doubt that the numbers in the studies were wildly wrong. I have spent the 10 years since learning WHY the studies got the numbers so wildly wrong and how we can improve our understanding of stock investing in hundreds of different ways by using what we have learned from the research of the past 30 years to move forward.
The objection to honest posting is all by people who are in some way invested in the Buy-and-Hold mode, What. THere was never any reason for believing that Buy-and-Hold could work for any long-term investor. That was just marketing hype by the con men on Wall Street. Those of us who have looked at the academic research of the past 30 years can tell you how to obtain far higher returns while taking on dramatically less risk by TUNING OUT all of the Get Rich Quick garbage put forward by the Buy-and-Hold advocates on Wall Street.
This stuff doesn’t have to be complicated. This stuff doesn’t have to be risky. It’s just that you can’t expect to get the straight story from the con men on Wall Street. If the middle class is to survive, we need to provide a means for them to obtain accurate and honest and research-backed investment advice. That’s the future.
Please do whatever you can to help spread the word. We are all counting on you!
Rob
I guess the buggy metaphor works…if the car inventor spent all his time fooling around instead of inventing the car?
Check out the May 13, 2002, post at Motley Fool pointing out the errors in Greaney’s SWR study, What. It’s got my name on it.
Rob
And a post can build a car? Can a billion posts build a car?
Yes.
Posts spread knowledge, What.
Knowledge is what builds everything.
We all should support the spreading of knowledge. There shouldn’t be one person opposed.
When there is a great advance in knowledge, people sometimes react in fear. People grow used to the old ways and they close their ears to the knowledge. But that’s a mistake. The reason why the social norms in our society protect those trying to advance knowledge is that people who came before us learned how knowledge can be put to use making life better for us all.
There is one reason why Buy-and-Holders react so violently to the idea of allowing honest posting on what the last 30 years of academic research tells us about how stock investing works in the real world. It is that the advances we have achieved intellectually are so great as to scare their socks off.
If our free market is to survive (I want this!), the Buy-and-Holders are going to have to let go of their fears and permit us all to move on to learning about a far better and far safer way to invest in stocks.
There will probably be another crash and then a Second Great Depression. But that will be the end of Buy-and-Hold. After we see what the Second Great Depression brings us, “Buy-and-Hold” will be a dirty phrase. No one will support it. We will all be happy to learn about the academic research that shows us how to achieve far higher returns at greatly reduced risk and to retire many years sooner than we dreamed possible during the Buy-and-Hold years.
Smear campaigns against progress don’t work. You can’t ban advances in knowledge from a discussion board. The Reality Principle has a way of catching up to all of us. Even the Big Shots on Wall Street cannot in the end stop the History Train from moving in the direction in which it has signaled it intends to move.
I wish you good things, What.
Rob
So if Henry Ford wrote pamphlets on building cars someone would have built cars? Would anyone care about the writer of the pamphlets? Would they somehow receive ‘hundreds of millions of dollars’?
You seem to have a stunningly poorly thought out plan.
I guess not even pamphlets on building cars is accurate. Its more like a pamphlet on the notion of building cars.
So if Henry Ford wrote pamphlets on building cars someone would have built cars?
Developing a blueprint for building a car is obviously the first step to building a car, What. Formulating the tens of thousands of posts I have put forward over the past 10 years is how I developed the blueprint for Valuation-Informed Indexing. That is not something that I or anyone else could have done in a single day or a single week or a single month or a single year. Writing those posts (most of them were responses to questions from investors) was a powerful learning experience. There is zero chance that I could have done the work that followed without first having done the intellectual work that was required to craft the tens of thousands of posts.
I of course did not stop with crafting tens of thousands of posts answering every question that could be imagined re these new ideas. I recorded 200 podcasts. I co-developed five unique calculators. I wrote three Google Knols that address critically important questions in great depth. I started the five columns I now write, which takes our knowledge of how stock investing works much deeper.
So — yes, the process by which this far superior investing strategy was developed was similar in many important ways to the process that Henry Ford used to take the car concept from a vague but promising idea to a practical solution to a problem experienced by millions of middle-class people (how to get from here to there in a convenient, low-cost way). The analogy holds up well.
Rob
Would anyone care about the writer of the pamphlets?
Ford obviously did not build the cars by himself. There obviously were lots of smart people who got involved when they saw the potential of the idea.
And that’s of course just what happened in this case. Why do you think that thousands of your fellow community members have expressed a desire that honest posting be permitted on all our boards and blogs? Why do you think I was able to obtain those 110 insanely complementary comments you see at the “People Are Talking” section at the left-hand side of this page? Why do you think the Wall Street con men pushing Buy-and-Hold have reacted with such alarm to the possibility that ordinary middle-class people might be able to use the internet to learn about this stuff unless Goon Squads rush in to destroy the boards that good people form to help spread the word about what works?
People care deeply. And properly so. It is the future of our free market economic system we are talking about at this site. You have obtained many benefits from that economic system. You would care deeply too if you were thinking straight.
No?
Rob
You seem to have a stunningly poorly thought out plan.
This is a rude comment.
What the heck is wrong with you, What?
Are you a loser? Are you emotionally distraught? Are you not able to accept that you were taken in by a con when you became a Buy-and-Holder?
Normal people don’t engage in that sort of rudeness. There’s a reason why you are not able to discuss these matters in a calm and friendly and warm and rational manner, What. Your behavior here is a strong sign that the investing strategy you are following today is gravely flawed. Sound investing strategies give the investor following them confidence. Yours is not doing the job. Please fix.
For your own sake, you know? It’s your retirement money that is at stake here, What. You need to get this one right.
Rob
Its more like a pamphlet on the notion of building cars.
You sound like a gosh-darned fool, What. Is that what you want to sound like?
Please take a look at this link:
http://arichlife.passionsaving.com/about/
I wish you well, my emotionally distraught friend.
Rob
I read the link, it is mostly your normal irrelevant blibber blabber. Is there a specific point you wish to make?
You have had a vague notion for over a decade and spent most of your time fooling around on ridiculous websites – maybe its time to do something that can actually have a result? Like build a car maybe?
Whether I am rude or not is irrelevant – you need a wake up call. You have been in lala-land for more than a decade and you seem to be completely stuck in a rut – going nowhere.
Additionally, recording ridiculous self aggrandizing sermons of your self and writing a bunch of vague / non-actionable stuff that no one reads is not a good analogy for Henry Ford.
No one in their right mind would think so.
The funniest thing is that in the past 10 years a buy-and-hold portfolio has had more success than your crusade to promote honest posting! And that is during one of the worst periods ever!
I read the link, it is mostly your normal irrelevant blibber blabber. Is there a specific point you wish to make?
My specific point is that Get Rich Quick investing strategies cause the investors who follow them to become hyper-emotional and to call good and important work “irrelevant blibber blabber.”
I can point you to the materials you need to look at to become an effective long-term investor, What. But I cannot with a wave of my hand cure your emotional resistance to taking a look at rational, research-supported strategies. You have to get the ball rolling re that one. You have to reach a point at which you are in enough pain to try something new.
One suggestion I have put forward is that we work together to open every investing board and blog on the internet to honest posting on what the last 30 years of academic research says. Once we do that, you will be hearing the real story from hundreds of people on a daily basis. That will help wear down your emotional resistance.
I wish you the best of luck in all your future endeavors.
Rob
Whether I am rude or not is irrelevant
It’s 100 percent relevant, What. You are missing the point.
Pure emotional-based strategies are not the way to go with your retirement money.
I’m sure, What.
Really.
Please make an effort to give this some thought.
Rob
recording ridiculous self aggrandizing sermons of your self and writing a bunch of vague / non-actionable stuff
Please take a look at the adjectives you use, What.
Not a good sign.
You would not be acting this way if you had any hope that Buy-and-Hold might for the first time work in the long term, right?
You don’t need me to explain to you why Get Rich Quick can never work. You know it yourself on one level of consciousness.
I mean, come on.
Rob
The funniest thing is that in the past 10 years a buy-and-hold portfolio has had more success
Buy-and-Hold is a sure thing, What. It can’t miss.
I forgot.
Rob
I didn’t see any links to any actual strategy though. Nor do I find one after reading most of the material on this site (god help me your writing sucks which made it very painful to do so).
It’s there, What.
If you are too emotionally invested in Buy-and-Hold to see it when it appears before you one time, will having it appear before you two or three or four times help? I doubt it.
You need to work on those emotional issues.
The rest will come easy.
Think about when you have been in an argument with a loved one. You insist that you are right. You get red in the face. You shout. You say nasty things. Everything gets uglier and uglier.
Why are you so distraught? Because you are right? No! It is because you are wrong! If you were right, somebody saying things that are wrong wouldn’t bother you. The reason you are so upset is that a part of your consciousness knows that you are wrong and you can’t stand to admit it and each time you holler it gets harder to find a way out of the trap.
Then at some point the part of you that is still capable of making sense of the world realizes that you really love that person and you say the words “I’m sorry.” And suddenly all those monsters go away. Things get better and better and better.
There’s great power in the words “I” and “Was” and “Wrong,” What.
All the humans have been there. Relax. Let the pride go. Read for understanding. Discover new worlds.
You can do it, What. We’re all counting on you. Somewhere deep inside, YOU are counting on you.
Rob
your writing sucks
Again, not a good sign.
This shows us all how much you hurt, What.
I don’t want to see you hurt.
Please try a bit harder. You will see a big payoff when you get to the other side of the Big Black Mountain.
Imagine yourself on the other side of the Big Black Mountain and that may give you the courage you need to take the steps to get to the other side.
I look forward to shaking your hand when you get to the other side of the Big Black Mountain (which is not nearly as big as it looks), my old abusive-posting friend.
Rob
No, really – your writing sucks.
Can you please post a link to a clear actionable strategy? Not vague notions.
No, really – your writing sucks.
Yeah, yeah.
If this is all you’ve got, you ain’t got nothing, What.
I mean, come on.
Rob
Can you please post a link to a clear actionable strategy? Not vague notions.
There’s nothing vague in saying that paying attention to the price you pay for stocks is going to benefit you in the long run, What. And there’s 30 years of academic research supporting this “vague notion.”
If you were to say that what I am proposing is 100 percent obvious, then you’d be on to something. It couldn’t be more obvious. Paying attention to price obviously helps the investor.
But millions don’t do it, do they?
It’s also obvious why the con men on Wall Street push Buy-and-Hold so relentlessly. The car dealerships would love if it we didn’t pay attention to price when buying cars. And the housing industry would love it if we didn’t pay attention to price when buying houses. And the banana industry would love it if we didn’t pay attention to price when buying bananas.
Is there any sane person who would say that it is a “vague notion” to pay attention to price when buying cars or houses or bananas? There is not one. Yet there are millions who swear by Buy-and-Hold when it comes to buying stocks. Why? Wall Street spends hundreds of millions promoting its Buy-and-Hold mumbo jumbo. And the money is so good in this field for those who go along to get along that 90 percent of the “experts” play along rather than risk getting kicked off the gravy train for the terrible “crime” of providing genuine and honest help to millions of middle-class investors.
If you don’t want to pay attention to price, you don’t have to, What. Please don’t follow any “vague notions” on my account.
I am going to continue to follow common sense strategies myself. I am going to urge my friends to do the same. I hope that’s okay by you.
If you ever find a single study supporting the Buy-and-Hold garbage, I hope you will send it along to me so that I can feature it in a blog post here. So long as not one study exists supporting this Get RIch Quick garbage, I am going to stick with what common sense says MUST work and what 140 years of historical data confirms always HAS worked.
I don’t put my retirement money down on what the con men on Wall Street tell me to put it down on just because they spend millions trying to persuade me to do so. I need to see some data. I need to hear some sensible arguments. I need to see some academic research. I’m funny that way.
I of course wish you the best of luck with whatever investment strategies you elect to follow, What. Please take care.
Rob
That is totally vague and unactionable advise – which is why no one pays attention to you.
I’m not convinced, What.
Rob