Set forth below is the text of a comment that I recently posted to another blog entry at this site:
You keep getting these questions because your history at these conventions is to be a wallflower. If you tell any of those bloggers that he or she is going to prison, they undoubtedly will mention it on their blog.
At the first financial bloggers convention that I attended (FinCon11), there must have been 15 different bloggers who came up to me and said some version of: “Oh, so YOU’RE Rob Bennett! YOU’RE that guy!”
They all know me, X. They all know the basic story. Rob Bennett has pointed out that there is now 32 years of peer-reviewed academic research showing that Buy-and-Hold is a big pile of smelly garbage and not one of the big shot experts has been able to respond with an effective argument. They all know that everyone working in this field should be writing about this story, the most important economic and political story of any of our lifetimes.
None of them mention it on their blogs. They are all AFRAID to mention it on their blogs.
Tell the truth about Buy-and-Hold on your blog, and you are going to get the treatment that Rob Bennett got when he told the truth about Buy-and-Hold. Tell the truth about Buy-and-Hold and you are going to get the treatment that John Walter Russell got when he told the truth about Buy-and-Hold. Tell the truth about Buy-and-Hold and you are going to get the treatment that Wade Pfau got when he told the truth about Buy-and-Hold.
Everybody gets it, X.
The other side of the story is that, when 10 of us who want to tell the truth about Buy-and-Hold all agree to stick together and not let the Buy-and-Hold Mafia pick us off one by one, it is all over. Buy-and-Hold was a mistake. There has never been a single peer-reviewed study showing that an investor who refuses to consider price when setting his stock allocation can obtain good long-term results. Not one person in this field has ever supplied the URL of such a study because no such study exists. The entire thing was in its early days an innocent mistake and then over time was transformed into a marketing gimmick, The Marketing Gimmick that Destroyed the U.S. Economy.
After the next crash, people will be mad enough to demand honesty. And the Wall of Intimidation will come crashing down.
That’s when those who have posted in “defense” of Mel Linduaer and John Greaney will be sent off to serve long prison terms.
My job today is to do what I can to see that the number sent off to serve prison terms is as small as possible given the circumstances that apply and that the prison sentences assigned are as short as possible given the circumstances that apply.
I naturally wish you all the best things that this life has to offer someone on the road to being assigned a long prison sentence.
Rob
Rob,
The only one afraid to tell the truth is you. You are afraid to mention that those you have called “buy and holders” have done very well with their investments despite your doomsday scenarios. You are afraid that your own financial plans have not turned out as hoped for. You are afraid that you may have wasted over a decade of your life with nothing to show for it. You are afraid that your legacy will be that of nut case.
This fear has driven you to putting up constant threats of prison to those that you see as enemies, yet those very threats only prove what your critics claim about you.
So, Rob, are you afraid to allow this post on your board, just like you are with the 95% of posts you block?
Yes.
Rob
when 10 of us who want to tell the truth about Buy-and-Hold all agree to stick together and not let the Buy-and-Hold Mafia pick us off one by one, it is all over.
Just 9 more to go. At your current rate of progress after 11 years, we can project the end of the Buy-and-Hold Mafia at: never mind.
What happened to those two “JWR-level of support complete converts” you found at FinCon? Did the BAHM pick them off already?
The Valuation-Informed Indexers only need one win, X.
When something replaces something else, it replaces it forever. The Buy-and-Hold “idea” has wrecked our economy four times now. It is not going to wreck it a fifth time. After the next crash, it’s over. We didn’t have 32 years of peer-reviewed academic research showing what caused the three earlier economic crises when they hit. That changes things.
If you had it to do over, even you would play it different. You won’t acknowledge it, but it’s so all the same.
Lots of other Buy-and-Holders are thinking similar thoughts. Once honest posting is permitted, Jack Bogle goes down in history as a great hero for having built the foundation for Valuation-Informed Indexing. The same is true to a lesser extent for lots of others, people like Bernstein and Swedroe and Burns and on and on.
After the next crash, everybody wants the same thing. When everybody is pushing in the same direction, things move quickly.
And, if we all are going to be pushing in the same direction then, it make sense that we all start pushing in the same direction now. The number of people who will be angry at the Buy-and-Holders drops dramatically if we spare people the Second Great Depression.
So everything points in the same direction.
The only hitch is making the transition.
Cognitive Dissonance is the answer there.
I gave this a great deal of thought a number of years back and that’s the best we can do.
So we should be going with Cognitive Dissonance and we should be going with it now.
I cannot make the call on my own. You got me re that one.
So I have no choice but to wait.
The other side of the story is that you have no choice but to acknowledge sooner or later that we are all in the same boat.
Your side decides the timing.
But doing it sooner helps your side even more than it does mine.
You can hurt me. But only by making choices that hurt you more.
I vote for less hurt for all concerned.
While acknowledging that I get only one vote.
And, as always, I offer you my best and warmest regards.
Rob
WSJ experts Wade Pfau, William Bengen, and others discussing does the 4% rule still work.
http://www.spreecast.com/events/does-the-4-rule-still-work
Your thoughts?
Trebor
I didn’t listen to the 30-minute discussion, Trebor. I think it would be fair to say that I have heard everything there is to say about this subject over the course of the 11 years of discussions.
The way the question is phrased — Does the 4 percent rule STILL work? — is of course both silly and misleading.
We learned from Shiller’s research in 1981 that valuations affect long-term returns. Thus, there has always been precisely zero chance that the safe withdrawal rate could be a stable number. If the return changes with changes in valuations, the safe withdrawal rate obviously changes as well. So the 4 percent rule NEVER worked. It was always either too high or too low, depending on the valuation level that applied at the time the calculation was being performed.
The question that matters is not whether the 4 percent rule works or not. The question that matters is — Why are we as a society covering up the errors in the Old School safe withdrawal rate studies? It’s not such a big deal that a mistake was made. But it is a very big deal indeed that we are not letting the people who were hurt by that mistake know about the harm that was done to them. And we should be telling people the accurate, valuation-adjusted numbers (because the SWR concept is of great importance). And we should be exploring why the mistake was made in the first place so that we all advance in our understanding of how stock investing works.
Rob
“…I didn’t listen…”
Got it.
Would you prefer that I lie about it, Anonymous?
The issue of whether the Old School SWR studies are analytically valid or not was settled on the afternoon of May 18, 2002, when John Walter Russell put forward his sensitivity analysis re the Greaney study. Do you think that it would be helpful for me to pretend that the matter of whether these studies “still work” is a live question in December 2013?
We are in an economic crisis today because as a society we have engaged in layers upon layers upon layers of deception re the 32 years of peer-reviewed academic research showing that there is precisely zero chance that a Buy-and-Hold strategy could ever work for even a single long-term investor. And you think it would be plus for me to add another layer of deception to the mix?
Um — No thanks. Call me madcap. Please try to find someone else.
Bill Bengen is a smart fellow. It is a pity that we are wasting his talents in this way.
Wade Pfau is a smart fellow. It is a pity that we are wasting his talents in this way.
We are paying a big price for wasting the talents of thousands and thousands of people who could be directing their energies to helping us all to fine-tune our Valuation-Informed Indexing strategies.
That’s my sincere take re this important matter, in any event.
Rob
It’s nice to see that you didn’t let a complete ignorance of the content of the presentation stop you from critiquing it. And you wonder why no one takes you seriously.
It’s the people who are pretending that it is a live question in the Year 2013 whether the Old School studies are valid who are not acting seriously, Trebor.
Shiller didn’t publish his research last week or last month or last year. He published it in 1981.
How many decades do you think we should let pass before we begin taking his findings into account when putting together retirement studies?
Do you think four decades would be enough?
Would five decades turn the trick for you?
Rob
There’s only one thing that needs to be said in a safe withdrawal rate discussion held in December 2013.
What we need to hear is that all those participating in the discussion are going to devote all their energies to getting the Old School studies corrected within 24 hours of the end of the discussion.
I have a funny feeling that if either Wade or Bill had worked up the courage to make that promise that he would have sent me an e-mail telling me about it.
So I am highly confident that I am not missing out on anything but more intelligent (the worst kind!) rationalizations of bad behavior.
Rob
Bennett said:
“What we need to hear is that all those participating in the discussion are going to devote all their energies to getting the Old School studies corrected within 24 hours of the end of the discussion.”
But of course, he previously admitted, just prior:
“…I didn’t listen…” (His whole problem, in a nutshell)
Bennett has yet to produce evidence of just one specific tangible error in any one specific ‘study.’
Not one.
No wonder no one takes him seriously.
That makes sense, Anonymous.
Rob