Set forth below is the text of a comment that I recently put to the Joe Taxpayer blog:
More of Rob’s fantasy that it is a vast conspiracy.
How about a vast cognitive dissonance, Bob? Or a conspiracy of ignorance?
Humans had the ability to fly for many years before the first airplane was put in the sky. Was the reason we did not fly for so many years that there was a conspiracy or was it just that we did not know it all.
Humans had the ability to harness of the power of electricity for many years before we made use of it. Was it a conspiracy or was it just that we did not know?
Humans had the ability to cure many diseases before we did so. Was it a conspiracy or was it just that we did not know?
We did not understand the fundamental rules of how stock investing works in 1980.
In 1981 the research was published that took us where we all deep in our hearts long to be.
We now know what we need to know. Intellectually.
But we can’t talk about what we know. Because it hurts the feelings of those who went with what we once thought we knew to do so. So knowing by itself doesn’t do us a whole lot of good, does it?
I contacted someone I met at FinCon12 to see if she would like me to hire her to help me get my message before more people. She likes me. She hasn’t said precisely what she thinks of the message but she has certainly never demonstrated any hostility towards it. She is smart. She is particularly strong in some areas in which I am particularly weak. Sounds like a good match, right?
She has shown interest in the idea of working with me. But she doesn’t think I can succeed unless I stop talking about “the haters.”
I don’t agree. THE HATERS ARE THE ENTIRE FREAKIN’ PROBLEM.
I am not some investing genius. I saw that the Old School SWR studies get the numbers wildly wrong ten years before the Wall Street Journal saw it. Do you know how hard it was to see that? It was like seeing that 2 plus 2 does not equal 22. The studies don’t include an adjustment for valuations! There’s 32 years of peer-reviewed academic research showing that valuations is the most important factor in ANY investing analysis. So the numbers HAD to be wildly wrong! In ordinary circumstances, a five-year-old child could see that.
So why didn’t Jack Bogle and all these other Big Shots see it?
They didn’t see it because they do not want to see it.
That’s all.
That’s the entire story.
This is not a numbers story or an intellect story or a research story. This is an EMOTIONS story.
The fact that the Buy-and-Holders have spent 11 years engaging in hate rather than in sharing with millions of people all of the amazing breakthrough insights we have come up with together is THE ENTIRE STORY.
If I don’t discuss the hate, I am not telling the story. That IS the story. Our hate is the holdup. Our burning hate for what the last 32 years of peer-reviewed academic research tells us about stock investing was the primary cause of the economic criss. We have bankrupted tens of thousands of businesses with our hate. We have put millions of people out of work with our hate. And we are just getting started! We are still in the early days of this ultimate Buy-and-Hold Crisis.
We are on the 99-yard line. Our society works. Because it is a dynamic society. When people do things wrong, our social systems have ways of figuring that out and getting those wrong things replaced with right things. We are very, very close to doing that in the investing realm. There is one thing that stands in our way.
The people who have spent decades of their lives either promoting Buy-and-Hold strategies or following Buy-and-Hold strategies very, very, very, very, very much do not want us to go forward. It hurts their feelings to acknowledge that they have been taken. It hurts their feelings to know that they are going to need to rebuild their Big Shot status in a world in which lots of other people will be competing with them for that Big Shot status.
That’s it.
There is nothing else.
Wade Pfau researched this question. He wanted to know if there had ever been a single study published backing up the key Buy-and-Hold assertion that there is no need to engage in long-term timing. He searched and he searched and he searched and he never found a single study.
He went to the Bogleheads Forum and asked f anyone there knew of a single study supporting the key Buy-and-Hold claim. Jack Bogle did not know of a single study supporting Buy-and-Hold. Bill Bernstrein did not know of a single study supporting Buy-and-Hold. Larry Swedroe did not know of a single study supporting Buy-and-Hold. Rick Ferri did not know of a single study supporting Buy-and-Hold.
Do you want to know what I think?
I think none of these people knew of a single study because there has never been a single study. I think Wade was right. I think that’s why they threatened to get him fired from his job if he continued to publish honest research.
And I think the cover-up is doomed.
Perhaps no one on the internet will be willing to take on the Goons. I find that an amazing reality. But perhaps it is so. It has certainly been largely so for 11 years.
But there’s this other thing.
The next stock crash. The 65 percent price drop. The Second Great Depression.
People are going to notice that.
It’s going to be written up in all the papers.
THEN people are going to work up the courage to speak out.
Aren’t they?
If they don’t, we all go down together. If we all think it is such a horrible, horrible thing to say out loud that Old Saint Jack dropped the ball re this one, then it’s out of my hands. At least I will have the small consolation of knowing that I gave it my best shot.
It wasn’t a conspiracy when it started. Had Shiller published his research in 1971 instead of 1981, the famous book would have been called “A Valuation-Informed Walk Down Wall Street.” The Buy-and-Hold Pioneers were trying to do what I am trying to do, They are trying to help people.
It’s SORT of a conspiracy now that we are in the cover-up stage. But it’s not all people trying to make a buck. The woman I contacted to help me get my message out stands to make a buck by taking it the other way. Hundreds of my blogger friends could make a buck taking it the other way. They could build blogs explaining how Valuation-Informed Indexing works and after the next crash hits, they would become famous because they would have one of the few blogs that tell the truth about how stock investing works in the real world.
Why do all these people who in ordinary circumstances are perfectly happy to make a buck not have much interest in making a buck re this one?
It’s the Social Stigma.
The woman told me that the people sitting around her during my Ignite talk felt that I was “bitter.” She doesn’t want people saying that about her. None of us want lots of other people saying that sort of thing about us. So when we have doubts, we keep it zipped. It’s not our fight, we tell ourselves. Let someone else take on the haters.
I expect to make many hundreds of millions of dollars from this.
And I expect to feel good making it. Because this is the biggest advance in our understanding of how stock investing works in the history of investing analysis.
I don’t like having the hate directed at me. Obviously. But I don’t like posting dishonestly about what the research says either. So I have never given two seconds of consideration to playing it the other way.
Either we will all win (which means I will win most of all) or we will all lose (which means my loss is no worse than anyone else’s loss). Those are the only two possible outcomes.
It’s not a conspiracy in the sense in which that word is usually used. There were not a bunch of evil people who got together in a smoke-filled room to do us in. But there WERE humans. And those humans DID make the sort of mistakes that humans have since the beginning of time been known to make. And those human mistake-makers HAVE been engaging in brutally abusive behavior to cover up their mistakes for 11 years now.
Why are these so intense?
Because it matters so much. Because the mistake was so darn big.
Is that a bad thing?
It is not.
It is a good thing.
Correcting a huge mistake takes us forward in a huge way.
I can’t wait to see all the human enrichment that will follow when we get down to the business of CORRECTING the mistake.
Do I need to tell people about the haters to get the mistake corrected?
I do.
There is no other way to explain to people why we didn’t reduce the risk of stock investing by 70 percent back in 1981, when we first learned intellectually how to do it.
I believe we will survive. I don’t believe that I am the only person alive who appreciates the good things that our economic and political systems have brought us all. So I think there will come a day when I will be able to persuade others to help out. It won’t take many. We have 32 years of peer-reviewed academic research behind us. When we have ten people standing by each other so that the Goons can no longer destroy us one by one, it will be over.
In ordinary circumstances, Buy-and-Hold would have died gradually, a little bit at a time year by year by year. Because of the 11-year cover-up, things have been set up so that it will die all at once, once we get those 10 people willing to stand up for each other in the face of the brutal assaults of the Buy-and-Hold Goons.
It’s getting better. I have had a front-row seat to all this going back to the first day, and I can tell you that there are lots and lots of signs that it is getting better.
When I get those 10 people assembled in one place (my site!), it’s going to get a LOT better very, very quickly. There will be HUNDREDS of blogs promoting Valuation-Informed Indexing in days to come. They will be the most popular blogs on the internet. Their owners will get very, very rich. And they will feel rich inside too because they will know how many human lives have benefitted from their courage.
Yours in eternal bitterness,
Rob
Rob
People say you appear bitter because you are. Just because you and Wade had a professional disagreement it doesn’t give you a right to run posting after posting calling his integrity into question in an attempt to ruin his career which, despite your best efforts seems to be going quite well.
Wade and I don’t have any disagreements of any consequence. Wade is 100 percent convinced that Valuation-Informed Indexing works. He loves it. We certainly don’t agree on every point. But we agree on 90 percent of the issues that came up during our 16 months of working together on the research we published together.
I DO call Wade’s integrity into question. That comment is correct. That’s why Wade does not want people to see my reports on our e-mail correspondence. He knows that it reflects poorly on his ethics. He is a smart guy and a hard-working guy and a good guy. But he is a guy who betrayed his research and his profession and his country when he agreed at the demand of you Goons to pretend that he believes that there was no need for the Old School SWR studies to be corrected after the errors were discovered in them. Wade obviously believes that the errors should be corrected. He said so on numerous occasions before you Goons threatened to send defamatory e-mails to his employer if he continued to publish honest research and to work to get the retirement studies corrected.
The last thing in the world I would want is to see Wade’s career ruined. I told him at the time when he said he was going to betray his research that this was an “insane” thing to do. Why would I say that if I didn’t want Wade to succeed at his work? For that matter, why would I work with him for 16 months if I did not want him to succeed? That idea is 100 percent nuts.
I love Wade. I will continue to promote the research that he and I published together. I think it would be fair to describe that research as the most important research published in this field in the past three decades. I hope to see Wade win a Nobel prize in economics. If that Nobel prize has to be delivered to a prison cell, I think it would be fair to say that that would be the perfect crazy ending to this entire crazy 12-year-long saga. I have told Wade that I want to be there on the day he gets out to share with him a prime rib dinner and a nice cold pitcher of beer and to have some laughs at the craziness of the old days.
Wade has behaved unethically. That’s a stone cold fact. LOTS of good and smart people have behaved unethically. That’s one side of the story.
The other side of the story is that we have learned through our work together how to bring the economic crisis to an end and how to reduce the risk of stock investing by 70 percent for millions of middle-class investors. I think it would be fair to say that we are going to see some amazing advances in this field following the next price crash, which I am confident will be the death knell for the smelly Buy-and-Hold garbage.
I naturally wish you the best of luck with whatever investing strategies you elect to pursue, Trebor.
Rob
People say you appear bitter because you are.
I don’t buy it, Trebor.
Is it bitter to say that we are the luckiest generation of investors ever to walk Planet Earth? That’s my primary message.
I want to bury the smelly Buy-and-Hold garbage 30 feet in the ground, where it can do no further harm to humans and other living things. That much is certainly so. But that desire is not rooted in bitterness. It is rooted in a desire to free millions of people (including of my many Buy-and-Hold friends) to live far richer (in every sense of the word) lives than they have ever imagined possible in earlier days. I am excited about my nation’s future, not bitter. I naturally want us to survive this Buy-and-Hold Crisis so that we can all arrive together safely at that exciting post-Buy-and-Hold future.
Don’t let the bad guys get you down, man.
Rob
http://wpfau.blogspot.com/2012/05/valuations-and-withdrawal-rates.html
Yeah, you and Wade don’t disagree on anything of substance. Sure.
And the Bogleheads keep having open and honest discussions regarding retirement saving and spending strategies free of you pontificating and your pay-attention-to-me-I -am-important-really-I-am posts
http://www.bogleheads.org/forum/viewtopic.php?f=1&t=133889&newpost=1975749
Yeah, you and Wade don’t disagree on anything of substance. Sure.
The jury will see the scores and scores of e-mails that Wade wrote when he felt free to express his sincere beliefs.
And it will see the words he wrote at the demand of you Goons when you were holding a gun to his head.
And the jurors will make their decision.
That’s how the system works, Trebor. And properly so.
Rob
free of you pontificating and your pay-attention-to-me-I -am-important-really-I-am posts
There are two ways that you can respond when you see someone doing important work, Trebor.
You can permit feelings of envy and hate to destroy you.
Or you can try to rein in your negative emotions and think about how you can get about the business of doing equally important work.
There are going to be thousands of people developing the Valuation-Informed Indexing concept for many decades to come. You could be one of them. Or you can continue down the dark path you are traveling down today.
You know what I want for my Goon friend.
And you know that it is your call, not mine, as to what you do with the rest of your life.
Love beats hate in the long term. Every time.
My best wishes.
Rob
http://money.cnn.com/2014/02/26/retirement/retirement-income.moneymag/index.html
Forget the 4% withdrawal rule
Juicy excerpt
“It turned out that a person who invested half in stocks and half in bonds could spend 4% of his or her wealth in the first year, adjust that dollar amount for inflation in subsequent years, and still have money 30 years later. That worked in every historical 30-year period, as well as in most computer simulations based on the historical rate of return. Even drawing a hefty 5% worked more often than not.
But without strong stock and bond returns to help refresh your nest egg as you spend from it, those old numbers can’t be relied on, argues Pfau.
“The probability that a 4% withdrawal rate will work in the future is much lower,” he says. ”
It looks like Wade understands the difference between the past and the future.
Greaney’s study should have been corrected on the day he discovered the error he made in it.
Yes, Wade knows that.
And , yes, he learned it from me. He told me that. Numerous times. I have copies of all the e-mails.
And, yes, he is afraid to say that today because of the threats that were made by Buy-and-Holders to destroy his career if he continued to post honestly on this question.
And yes, you Goons are responsible for the trillions of dollars in losses that were suffered by millions of middle-class investors as a result of the 12-year cover-up. Every one of those studies should have been corrected when the errors in them were first discovered.
And, yes, I will continue to post honestly re this matter. And yes, there will be hundreds of lawyers taking these cases following the next price crash.
It’s all going to come out.Those who support the cover-up will go to prison. Those who demand that the cover-up be brought to an end will go on to great things. They will be the leaders in the post-Buy-and-Hold Era.
I wish you all good things, Evidence.
Rob
If we search the internet, we see consistent comments by people that think Rob has a mental illness, is a liar, or both.
Do we see the same about Jack? No
Do we see the same about Bill? No
Do we see the same about Wade? No
Do we see the same about Larry? No
Do we see the same about Rick? No
So, I guess you are in a league of your own, Rob. Congratulations.
You would see the same comments about Jack and Bill and Wade and Larry and Rick if they insisted on their right to post honestly about the findings of the last 33 years of peer-reviewed academic research in this field, Anonymous.
Buy-and-Hold is a Get Rich Quick scheme. Millions of people have been taken in by it. Those people are hurting. Some of them lash out with abusive posts when I report honestly and accurately what the research says. Others don’t lash out themselves but tolerate others lashing out. People are hurting. There is zero doubt re this.
How do we bring this to an end?
If I do not speak out, who will?
Every one of the people you name would like to be posting honestly. Every one of the people you name WLL be posting honestly after the next crash.
If they are going to be posting honestly then, why not just have them start doing it now?
Is there someone who benefit from continuation of this charade?
I don’t like people calling me names. But it is more important to me to post honestly than it is to get people to stop calling me names.
And I want all those people you name (whom I count as friends) to feel free to post honestly as well.
If Buy-and-Hold were a legitimate strategy, not one person would have been called a name. If Buy-and-Hold were a legitimate strategy, the people who followed it would have confidence in it and would welcome challenges to their beliefs because they would know that their strategy could survive challenges.
You are hurting Anonymous. Your behavior shows it.
I didn’t cause that hurt. It is your desire to continue believing in something that just doesn’t add up that causes you hurt.
It’s the same with Greaney. He is embarrassed that he got a number wrong. He doesn’t like to think of himself as a person who gets numbers wrong. He should be asking himself how he found himself on a path where he was getting numbers wrong. He failed himself when he got onto that path.
I am the nutcase who saw the errors in the Old School SWR studies 10 years before the Wall Street Journal wrote about them.
I am the nutcase who co-authored the most important peer-reviewed research published in this field in the past 30 years.
I am the nutcase who took Bogle’s ideas to places he never imagined taking them and made them workable in the real world for the first time.
No apologies.
I wish you the best of luck in all your future endeavors.
Rob