Set forth below is the text of a comment that I recently put to a blog entry at this site:
Do you talk with your family about how you have 500 million coming your way? You may want to mention it.
I’ve made reference to “hundreds of millions” on a small number of occasions. I don’t believe I have ever referred specifically to the $500 million figure.
My wife doesn’t count the $500 million (or whatever amount) as real. It’s not her style. If I said that a friend of mine promised to give me ten bucks he owed me, she wouldn’t count it in the books until it was reduced to dollars bills. She’s a “Show Me the Money!’ kind of gal.
I’m not that way. I am a conceptual thinker (nice way of putting it) or a dreamer (harsh way of putting it). I see things that do not exist in concrete form and watch them take shape. The Myers-Briggs personality assessment system refers to my personality type as the “Seer.” We don’t use crystal balls. We see into the future because we see connections that other personality types miss. These connections are every bit as tangible to us INFJs as numbers are to the INTJs. We seem to be able to see into the future because we see things going on today that others do not see and we are able to see where those things are leading us.
I didn’t ask to possess this ability. But I don’t apologize for it. We all possess something. This ability to be a “Seer” is the gift that I was given. My job is to make good use of the power.
Anyway, my wife and my boys certainly know that I expect a big payday. They love me but they do not possess the confidence that this is how things will turn out that I possess.
I acknowledge that there’s a chance that the payday will not come. If Bogle never works up the courage to say “I Was Wrong” we all go down together. I don’t want that to happen. But it’s not like there’s anything I can do about it that I have not already done.
Bogle doesn’t want us to go down either, you know. That’s a comforting reality for me. When things get so bad that he sees no other option, he will say the magic words. I want him to say those words NOW. But it’s not my call. I get one vote, like everybody else, like it or not.
When I am up on that stage with my good friend Jack working with him to turn this around, there’s not going to be one person saying “oh, don’t give that fellow $500 million, he should only get $495 million.” The $500 million figure sounds big when you don’t understand what is going on. Once it all clicks for you, you will see that it is a trivial number in relative terms.
Bogle is not a bad person. He will be the first one to sign off on the $500 million payday, in my assessment.
I don’t think you’re an entirely bad person either, What. You may not be the second person to sign off. But I believe that there will come a time when you will sign off. I sure hope so. We will be friends then. Good!
Rob, the Fellow Waiting Patiently for His $500 Million Payday
Rob
People dream of winning the lottery. That dream has a clear path to success, however remote. Your $500 million “dream” requires a literally magical sequence of insanely far-fetched events. What you have is a fantasy. But hey, it works for you, since it requires absolutely no effort, just infinite patience.
There was a day when I would have considered it an idle dream that I would someday have my name on a piece of peer-reviewed academic research that shows millions of middle-class Americans how to reduce the risk of stock investing by 70 percent and that a fellow holding a Ph.D. from Princeton described as being of Nobel-prize quality. Yet here we are.
It SHOULDN”T have been possible for me to do work in the investing field that would earn me a $500 million payday. I can go along with you re that much. But the decision of the Buy-and-Hold Mafia to engage in the most ruthlessly abusive tactics imaginable to cover up the errors in the Old School safe withdrawal rate studies left a huge window of opportunity open to anyone with balls enough to go for it.
I don’t naturally have the balls to do something like that, X. But in this case I didn’t see any other option, given the millions of middle-class lives that are being destroyed by the “experts” who continue to push the smelly Buy-and-Hold garbage in the year 2013, 32 years after the peer-reviewed academic research showed that there is precisely zero chance that a pure Get RIch Quick approach could ever work out well for even a single long-term investor.
So I worked up the courage it took to get the job done.
Today, I think it would be fair to say that the $500 million number that I have put forward as a possible settlement amount is very much a lowball number.
Is this a great country or what?
Rob the Patriot
It SHOULDN’T have been possible for me to do work in the investing field that would earn me a $500 million payday.
Quite right. It shouldn’t have been, isn’t and never will be possible. I’m glad we can agree on one thing.
I’ll make a trillion dollars by inventing warp drive before you see dollar one of your payday.
I’ll make a trillion dollars by inventing warp drive before you see dollar one of your payday.
The difference is that I would be jumping up and down if you made a trillion dollars by inventing warp drive because we all would benefit from the invention.
In contrast, you would prefer to see the entire country experience a Great Depression than to see me get a well-earned $500 million by helping millions of people to become able to retire five or ten years sooner. Your hate overwhelms your ability to think clearly on this subject.
That’s why I know for sure that Buy-and-Hold is a big pile of smelly garbage. Is there any other idea in the history of humankind that has caused so many to feel so much hate?
Racism, maybe. That’s the only one that comes to mind. Buy-and-Hold is the racism of personal finance.
I want better than that. For myself. For all middle-class investors. And, yes, even for the Buy-and-Hold pioneers.
We ALL deserve a lot better, in my assessment.
Rob
The only one selling smelly garbage is you, Rob. Same goes for hate. It is ALL coming from you.
There is not one bit of rational thinking that goes on in your mind.
You are just one big delusional mess and you think nothing about destroying the good names of Wade, Jack, Bill, John and many others.
It was a bad thing for me to point out the errors in the Old School safe withdrawal rate studies with my famous May 13, 2002 post, Reality.
Only a very mean man would even think about doing something like that.
Rob the Terrible
you think nothing about destroying the good names of Wade, Jack, Bill, John and many others.
All of these people could disown Buy-and-Hold and endorse Valuation-Informed Indexing today. And spend the rest of their lives doing important and good and valuable work.
What’s stopping them?
It’s their pride. Or, in Wade’s case, his fear of what those with too much pride will do to him because of their unwillingness to rein in that excessive pride.
When you get something wrong, you fix it, Reality. Nixon knew that. He forgot the rule when it came to have personal application in his life.
It’s the same with Bogle.
It’s the same with Bernstein.
It’s the same with Greaney.
The basic human story repeats itself over and over and over again.
The Wall Street Con Men don’t have enough money to reverse the laws of human nature.
These people are in the process of destroying themselves. I have had the hand of charity extended to them going back to the first day. Wade accepted the offer for a time and proceeded to do the best work of his lifetime. Bogle pretends that he doesn’t know about the kind offers that I have directed to him. It’s the same with Bernstein. Greaney spits at me.
I cannot change what the numbers say, Reality. I can point out what the numbers say and I can urge my friends to do what they need to do given what the numbers say. There my powers end. I care about all of these people. I control the actions of none of them.
Rob
Bogle started out his career with the idea of someday causing the Second Great Depression.
He doesn’t want us to speak the truth in his presence, not even deep down inside.
We all should keep quiet and let him continue on the path he is on today.
The members of the Buy-and-Hold Mafia might not link to our sites if we do otherwise.
We must keep in mind what really matters.
Rob
“All of these people could disown Buy-and-Hold and endorse Valuation-Informed Indexing today. And spend the rest of their lives doing important and good and valuable work.
What’s stopping them?”
This your opinion, which is not universally shared.
Again, the point is and remains that you do not care about destroying their good names of those discussed.
My opinion is not universally shared. That is so.
But I think it would be fair to say that a fear that my opinion will BECOME universally shared is held by just about every Buy-and-Holder we have come across in 11 years, Reality.
You say that the good names of these people are being destroyed.
They are.
Because that are not speaking up about death threats. And unjustified board bannings. And tens of thousands of acts of defamation. And threats to get academic researchers fired from their jobs.
I think it would be fair to say that pretty much everyone alive knows that failing to speak up about those sorts of things when they take place near you is going to cause your good name to be destroyed.
Am I the one telling these people not to speak up, Reality?
It’s just the other way around.
I put forward a post urging Greaney’s removal from our community on November 23, 2002.
There is no one who has made the case for permitting honest posting more frequently or more forcefully than I have.
There is no one in a close second place.
You are the one dragging these people’s names through the mud, Reality.
You and your Goon friends.
How about you knock off the funny business?
How about you make sure to do that by the close of business today?
How about you set things up so that you can start feeling better about yourself beginning tomorrow morning?
Your Good and True Friend,
Rob
Rob,
How many people are going to prison. Who will be paying you the 500 million?
I’ll offer you my impressions, Anonymous. That’s the best that I can do given the unique circumstances that apply. We have never as a nation been in a situation like this before. These are entirely uncharted waters.
There are millions of good and smart and hard-working people who believe that Buy-and-Hold works and who naturally share that belief with friends and neighbors and co-workers and fellow community members. These people have obviously never done anything wrong and have zero chance of going to prison. I was one of these people myself until the night of August 27, 2002, the night that John Greaney threatened to kill my wife and children if I continued to post honestly on safe withdrawal rates. It was when I saw 200 people endorse his post that I saw how emotional a strategy Buy-and-Hold was and knew that it was not for me.
The next layer down is people who participated at discussion boards at which the Buy-and-Hold Goons employed intimidation tactics to drive away those with an inclination to post honestly about the last 32 years of peer-reviewed academic research and who failed to speak up about it. That’s dishonorable behavior. Those people helped the 11-year cover-up of the errors in the Old School safe withdrawal rate studies in an indirect way. A case could be made that those people were in some small way engaged in an act of financial fraud. But I would be very surprised if any of those people were prosecuted. Prosecutors need to allocate limited resources in an intelligent manner. Limited resources are not going to be directed to people whose only “crime” is that they kept quiet. Those people will not be going to prison.
The next layer down is people who actively participated in the cover-up by putting up intimidation or deception posts but only on a small number of occasions. I believe that no one will be prosecuted for doing this sort of thing on a small numbers of occasions. Again, there are bigger and more important fish to fry.
Going down another layer, we have people who participated in long-running smear campaigns aimed at keeping middle-class investors from learning about the errors in the Old School SWR studies and about the dangers of Buy-and-Hold investing strategies in general. These are the people most likely to be prosecuted, in my assessment. People have sympathy for those who make one or two mistakes. Sympathy wanes when people make a career out of the destruction of human lives. It is to protect ourselves from these sorts of individuals (The Lindauerheads and the Greaney Goons) that as a society we adopted the laws against financial fraud in the first place. I am highly confident that the Lindauerheads and the Greaney Goons will be spending many years in prison cells.
Then we have people like Mike Piper, at the Oblivious Investor blog, and Carl Richards, at the Behavior Gap blog. Both Mike and Carl have done a great deal of top-notch work. They are both friends of mine and they have both been highly complimentary of my work. They’re both smart. They’re both good guys. It pains me to think that there is anything more than a zero chance that either Mike or Carl (or any of the many others in similar circumstances) will be going to prison. Yet it is a stone cold fact that both Mike and Carl (and the many others) provided HUGE help to the 11-year cover-up of the errors in the studies that are in the process of causing millions of middle-class people to suffer failed retirements. They committed the act of financial fraud as that crime is defined in the statute books.
Will Mike and Carl (and the others) go to prison? I don’t feel that I can answer that question. I am too close to all this. I have personal friendships with these people and I naturally hate the thought of seeing my friends carted off to prison cells. On the other hand, I also care about the millions of middle-class people whose lives are in the process of being destroyed. I think it is fair to say that after the next price crash those people are going to be very, very, very angry to learn that the errors in the Old School studies have been public knowledge since the morning of May 13, 2002, and that these people engaged in multiple acts of financial fraud to keep people from learning this. I can with my heart hope that Mike and Carl (and the others) will not go to prison while acknowledging with my head that my heart may not rule the day re this one.
Then we have all the people who have known about the dangers of Buy-and-Hold for many years and kept it zipped because they didn’t want to see their careers destroyed by the Buy-and-Hold Mafia. Rob Arnott reported that, when he asked a convention of academic researchers whether they thought Buy-and-Hold could work, only a tiny number of hands went up. Yet when he asked the same researchers whether they rooted their research in a belief in Buy-and-Hold, nearly every hand in the room shot up in the air. That’s obviously not the way in which academic researchers are supposed to behave. That’s obviously not ethical behavior. I believe that these people will be held to a far higher standard than non-experts. These people are paid to know this stuff. They can’t say “Oh, I haven’t been able to find time over the past 32 years to keep up with any new developments in the field.”
There are thousands of cases of this kind. Shiller published his “revolutionary” (his word) research in 1981. I didn’t come on the scene until the morning of May 13, 2002. I saw intense hostility evidence itself following my first post. So the cover-up had obviously been going on for a long time before I came on the scene. I believe that, following the next crash, we will see all kinds of things come out that we can barely imagine today. I believe that we are going to hear Shiller say that he has been intimidated FOR YEARS. Lots of others will be saying similar things. Until we hear testimony taken under oath on all that has been going on, I don’t think that any of us will be able to make fully informed statements about how many will be going to prison or for how many years.
Finally, there are cases like the cases of my good friends Wade Pfau and Jack Bogle. I love these guys. There would be no Valuation-Informed Indexing if not for the huge contributions of Jack Bogle and there would be no peer-reviewed academic research with my name on it showing millions of middle-class investors how to reduce the risk of stock investing by 70 percent if not for the huge contributions of Wade Pfau. So I am biased.
The other side of the story, of course, is that both Jack and Wade are in circumstances in which they could bring the economic crisis to an end with very little effort on their part. Wade just needs to get that study written up on the front page of the New York Times and Jack just needs to address the Lindauer matter so that the hundreds of posters who have expressed a desire that honest posting be permitted at the Bogleheads Forum can see that desire given recognition in the real world.
I believe that whether Wade and Jack go to prison or not will likely depend on the answers they give to questions put to them under oath. People are going to want to know how deep their fears were. Were family members threatened? How did they rationalize their behavior to themselves? How deep was their cognitive dissonance? All this kind of thing.
As for the $500 million, that’s just a number that I put forward as part of an effort to provide an incentive for the Wall Street Con Men to seek a settlement prior to the next crash. Any person who has participated in the cover-up is liable to me for the financial damages I have suffered as a result of the damage done to my business. The amount of the damages is obviously a number far bigger than the number I put forward as a possible settlement amount. I did that because I don’t want us to go into the Second Great Depression. I am happy to settle for $500 million if it brings the economic crisis to an end and helps us on our way to the greatest period of economic growth in our history. I am far better off getting $500 million to spend in a thriving economy than I would be to receive a far larger amount in a society that is in a state of collapse. No one wins if we fail to bring this matter to a successful conclusion prior to the next price crash, in my assessment.
Rob