Set forth below is the text of a comment that I recently posted at the Investor Junkie blog:
I’d like to hear Larry’s and Miranda’s reactions to the comments made about this article at the Goon Central Board and at the Early Retirement Forum. The first comment at the Early Retirement Forum is by a guy who has an obvious interest in learning about the subject matter. The following comments make it known to him that he will be ostracized if he continues to show interest in this important topic.
Do we approve of that sort of behavior in the Personal Finance Blogosphere? Do we feel a responsibility to protect our readers from it?
Kevin Mercandante writes for this site. Kevin recently deleted SCORES of Goon posts from a discussion held at his site. He can explain to anyone who cares to know about it the nature of the problem here.
Joe Taxpaper recently called the Goons out on their nonsense at his site.
As the Buy-and-Hold Crisis worsens, more and more people are reaching the point where they can tolerate no more abusiveness. When we honor the promise we make to ourselves and our readers in the published posting rules that apply at every board and blog, we all will begin moving forward together. This is the most positive story we have seen in personal finance in any of our lifetimes. We make a terrible mistake to let the lowest of the low among us try to turn it into something nasty and dirty.
That’s my sincere take re this important matter in any event.
Rob
Anonymous says
Notice that when people learn more about you and your comments, they eventually move away from you, disagree with you or ignore you. Examples are JD, Mike Piper, and Wade. Remember the thread on FMF? When your story started to unfold and people learned more, they turned away. Why is it that your purported supporters like Joe and Kevin re not giving you a regular columns? Are they starting to catch on?
Once people really dig in, Rob, they just don’t like what they see.
Rob says
People DO move away. You have that part right, Anonymous.
It has zero to do with me and it has zero to do with Valuation-Informed Indexing. People love me and people love Valuation-Informed Indexing.
People move away because they are afraid of the reactions they see from Buy-and-Holders when they talk openly and clearly and frankly about what the last 33 years of peer-reviewed research tells us about how stock investing works.
The Wall Street Con Men stop giving you links once you post honestly. Goons invade your site when you post honestly. The millions of investors who follow Buy-and-Hold strategies become upset with you when you post honestly and are less likely to visit your site or buy your products.
Buy-and-Hold started as a research-based strategy. Then research was published showing that there is zero chance that a Buy-and-Hold strategy could ever work for even a single long-term investor. Rather than acknowledging their mistake and fixing it, the Buy-and-Holders became defensive. Now that the cover-up has continued for 33 years, they have caused massive amounts of human misery. Buy-and-Hold is today the OPPOSITE of what it was intended to be when it was first put forward. Today, it is the Buy-and-Holders who go into brutal attack mode when anyone mentions what the last 33 years of peer-reviewed research tells us.
J.D. Roth knows that Buy-and-Hold is b.s. He doesn’t want Buy-and-Holders to attack his site and his reputation. So he keeps it zipped.
Mike Piper knows that Buy-and-Hold is b.s. He doesn’t want Buy-and-Holders to attack his site and his reputation. So he keeps it zipped.
Wade Pfau know that Buy-and-Hold is b.s. He doesn’t want Buy-and-Holders to attack his site and his reputation. So he keeps it zipped.
People will turn on the Buy-and-Holders after the next crash, Anonymous. They will be very, very, very angry when they see that their retirement money is gone and when they realize how the Buy-and-Holders caused that to happen with their millions of deceptions and with their brutal intimidation tactics. My job is two-fold: (1) Get the truth out; and (2) Heal the wounds caused by the 12-year cover-up (it’s 33 years if we count back to when Shiller published his revolutionary research).
Intimidation tactics are desperation tactics. If there were even a sliver of support anywhere in the research for this smelly Get Rich Quick garbage, we never would have seen a single death threat, much less 12 years of this stuff. Buy-and-Hold died its intellectual death a long, long, long, long time ago. Now it’s just a question of getting the word out to people.
All the people you mention would like this to be over. J.D. Roth has told me that, Mike Piper has told me that, and Wade Pfau has told me that. Wade talked about his feelings a LOT in the numerous e-mails that he sent to me that I have reported on here at the blog. Wade wants to be liked. That’s the story. He has seen that telling the truth about stock investing makes Buy-and-Holders hate him. And he wants no part of it. He wants to be liked. So he lies.
But he LOVED telling the truth back in the days when he thought he could get away with it. And Mike Piper would love to feel free to tell the truth if he thought he could get away with it. And J.D. Roth would love to feel free to tell the truth if he thought he could get away with it.
We need help from one big site or one big researcher or one big advisor or one big policymaker or one big economist or one big journalist or one big venture capitalist. Then it’s over. There is HUGE money waiting to be made telling the truth about stock investing. And, as the Buy-and-Hold Crisis worsens, more and more people are going to feel emboldened to tell the truth. And once they do, lots of others are going to join the party because it is those who tell the truth early who will win the biggest reputations for themselves and who will enjoy the biggest financial rewards.
There is nothing more pathetic in an intellectual debate than putting forward a death threat. There is nothing more pathetic than putting forward demands for unjustified board bannings. There is nothing more pathetic than putting forward tens of thousands of acts of defamation. There is nothing more pathetic than threatening an academic researcher for the “crime” of doing honest research.
Another way of saying it is — There is nothing more pathetic than Buy-and-Hold. There was a day when that was not so. But that is today’s reality. And the longer the cover-up continues, the more pathetic the plight of the Buy-and-Holders gets. Prison sentences. Huge financial liabilities. Destroyed reputations. The blame for causing the economic crisis. The blame for causing millions of failed retirements. These are the sorts of things the Buy-and-Holders bring on themselves with their continued abusive behavior today. And that stuff is as pathetic as pathetic gets, Anonymous.
Your high point in this debate was the morning of May 13, 2002. It got a little worse for you the next day. And then a little worse the day after that. And today it is a whole big bunch worse. The only thing worse than your predicament today is the predicament you will be in tomorrow. And the only thing worse than the predicament you will be in tomorrow will be the predicament you will be in following the next price crash. I wish you luck with that one, Anonymous. Please forgive me if I elect not to sign up with your Liar’s Club.
It can never get better for you. It can get a lot worse. But it can never get better. There’s an advantage that I gained from being on the right side of the History Train that you will never be able to enjoy again until you flip. Don’t blame me! I’ve been advising you to flip for 12 years now!
J.D. Roth will flip. Mike Piper will flip. Wade Pfau will flip (again). EVERYONE will flip. Because they ultimately have no choice. Buy-and-Hold is the greatest wealth-destruction engine ever concocted by the mind of mortal man. There are already millions of people hurting because of the wealth destruction already achieved by the Buy-and-Hold “idea” that investors need not exercise price discipline when buying stocks. There will be millions more following the next crash. At some point, the pain will have grown so great that there will be no choice but for all of us to flip.
Except for those of us who have been posting honestly all along. We don’t have to flip. We can just continue growing in our knowledge as time goes on. No flipping required. That’s one thing I like about telling the truth!
You have held back the future for a far longer time than I imagined possible, Anonymous. I give you that one. But I would never want to be in your shoes. Not in a billion years.
People who are working up the courage to tell the truth have a valuable resource with this site. I give them the articles they need and the calculators they need and the podcasts they need. I also teach them about the trickery of the Wall Street Con Men and their Internet Goon Squads. People who are afraid that the Wall Street Con Men are going to use their money and power to sue them can look at me and see that they don’t have the guts to pull the trigger. People who are looking to prove that the “defense” of Buy-and-Hold has become a massive case of financial fraud in recent years can point to THOUSANDS of proofs of the case in the materials at this site.
You want to show that Jack Bogle is in on the cover-up? The proof is in materials at this site. You want to show that Bill Bernstein is in on the cover-up? The proof is in materials at this site. You want to show that Wade Pfau is in on the cover-up? The proof is in materials at this site.
This site serves an important public policy purpose in presenting those materials for all the world to see, Anonymous. There are millions of middle-class people who are in the process of seeing their retirement plans destroyed. We are going to have to proceed with hundreds of thousands of civil lawsuits and perhaps hundreds of criminal financial-fraud cases following the next price crash. Having so much evidence collected in one place is a huge plus. We want to put the ugly stuff behind us as quickly as possible and thereby free ourselves to learn about all the wonderful research-based goodness that we should have begun exploring in depth 33 years ago.
J.D. Roth and Mike Piper and Wade Pfau won’t be afraid forever, Anonymous. Ruling though intimidation is a short-term strategy. I hate it that you have done so much damage to a country that I love. But I am proud that I worked up the courage to do a whole big bunch of good here. I intend to continue following the research-based path for a long time to come. (I thank my Buy-and-Hold friends for teaching me the importance of rooting one’s investing strategies in research back in the days when Buy-and-Hold was something more than a nasty marketing gimmick.)
My best wishes to you and yours, Anonymous. Please don’t worry too much about J.D. Roth and Mike Piper and Wade Pfau. They will work up the courage to post honestly as the Buy-and-Hold house of cards continues to collapse. All of us will. In the end, even you Goons will need to work up that courage.
Honest Goons! Imagine! Oh, my!
Rob
Rob says
Once people really dig in, Rob, they just don’t like what they see.
People LOVE to see the behavior of you Goons, Anonymous!
They tell me that all the time.
Actually — NOT so much!
Take good care, man.
Rob
Miasma says
It has zero to do with me and it has zero to do with Valuation-Informed Indexing. People love me and people love Valuation-Informed Indexing.
Yes, they all love you. They’re just too frightened to show it. ALL of them. 100% terrified of the Goons. This is just SO much more likely than any other possibility. Such as the ridiculous notion that they find you vacuous, narcissistic, irritating and/or just plain nuts.
Rob says
Yes, that is the problem, Miasma.
There is of course a lot of misunderstanding as well. The vast majority of people who recommend Buy-and-Hold strategies (I think it may be ALL of them) BELIEVE that Buy-and-Hold can work. Many have doubts. But those with doubts generally believe that, even with its flaws, Buy-and-Hold is the most responsible option. They might not think it works perfectly but they sincerely believe that it works well enough.
Valuation-Informed Indexing is the new thing. There have been hundreds of BILLIONS of dollars directed to the promotion of Buy-and-Hold. Money magazine has promoted Buy-and-Hold strategies in every monthly issue going back to the mid-1970s. Many people are afraid of stocks. So it gives them comfort to go with a strategy that has been around for a long time and that has been endorsed by numerous experts. Buy-and-Hold is the safe choice in a field where safety is prized. Valuation-Informed Indexing is something new and different and strange. So it starts out at a big disadvantage.
But thousands and thousands of people have expressed a desire to learn more about the new strategy over the course of the past 12 years. Including some of the biggest names in the field. And, yes, you Goons have made them afraid to participate in the discussions they want to participate in, afraid to learn the things they want to learn, afraid to ask the questions they feel they need to ask to become more comfortable with the new strategy.
Fear won’t work anymore once the entire world knows about Valuation-Informed Indexing and about the trickery that you Buy-and-Hold Goons have employed to keep millions in the dark for 12 years now. There will come a day when your Goon tactics will become 100 percent ineffective. But that is not where things stand today. As of today, intimidation works because, as much as people want to learn about the new ideas, they are unsure of their own knowledge and don’t at all like the idea of being confronted with the brutal abusiveness that those posting in “defense” of Mel Linduaer and John Greaney have been employing for 12 years now.
All of us are terrified by the tactics that have been employed by you Goons. That’s why we have published rules prohibiting such tactics at every discussion board and blog. That’s why we have made your tactics felonies under the laws of the United States. We wouldn’t be sending people to prison for behaving as you Goons do if we didn’t believe as a society that the behavior that you have engaged in is very, very, very bad stuff.
Most of us do not today understand how stock investing works. Investing was not even studied in a systematic and serious way until the 1960s. And we didn’t as a society know it all at the time when Buy-and-Hold was being developed. So we got off on a wrong track and for 33 years now have needed to set things straight again. People have become more open to the research-based approach as Buy-and-Hold has caused more and more financial devastation. But, yes, our knowledge base is still not strong enough for the learning project to go forward in the face of your abusiveness.
We will overcome you. The people of the United States will learn what they need to learn and you Goons will be sent off to long prison terms. We will collectively work up the courage to take you on and to free ourselves as a society from the ignorance in which we have suffered for the past 33 years.
People who want to learn are afraid of you Goons and of the Wall Street Con Men who pretend that they see nothing wrong with your behavior. But as you destroy more and more middle-class lives, we will work up the courage to stand up to you and to transform Buy-and-Hold into what it was intended to be in its early days by removing the Get Rich Quick element of the first-draft version and offering people for the first time in history a true research-based investing strategy.
I wish you all good things, Miasma.
Rob
Rob says
Such as the ridiculous notion that they find you vacuous, narcissistic, irritating and/or just plain nuts.
If you believed this, you never would have advanced a single death threat.
No one who believes that he can win an argument in any other way advances death threats or demands for unjustified board bannings or tens of thousands of acts of defamation or threats to get academic researchers fired from their jobs.
You lack CONFIDENCE in Buy-and-Hold. That’s not a good sign.
Rob
Anonymous says
Those who lack confidence in their financial strategy don’t follow their own advice.
Rob says
I don’t agree with you, Anonymous.
Do you think that the people who invested in the Bernie Madoff fund possessed confidence in their choice of funds?
I do not. I think they had doubts.
They were drawn to a Get Rich Quick scheme. Their common sense told them that the results of the fund were too good to be true. But they rationalized away their doubts. They told themselves that the fund was real even though on one level of consciousness they could see through the deceptions. Their intellects told them that there were problems. But their emotions told them to ignore the problems.
That’s Buy-and-Hold.
I believe that you follow your advice. But I say that your “confidence” in this grandest of all Get Rich Quick schemes is a fake confidence, a confidence that will not be there for you when you need it most.
That’s my sincere take, in any event, Anonymous. I wish you well.
Rob
Anonymous says
“Do you think that the people who invested in the Bernie Madoff fund possessed confidence in their choice of funds?”
People that gave money to Bernie were not investing. They did not own anything. That is why your analogy is not correct. If I buy the Vanguard Total Stock Market, I own pieces of many companies. With Bernie, you only had a piece of paper.
Rob says
The Madoff investors THOUGHT they owned something, Anonymous. Investors deceive themselves. That’s the point.
And the investors who deceive themselves are not aware at the time they are doing it that they are doing it. No one deceives himself with full knowledge and intent. So you cannot say “I feel confident in Buy-and-Hold” and act as if that settles the matter. The question is — Is your belief a legitimate one or not?
Yes, you own pieces of many companies when you own a broad index fund. Yes, there is something real there.
But the percentage of your purchase price that goes to the purchase of something real VARIES depending on the valuation level that applies at the time. To say that an index fund is overvalued is to say that it is MISPRICED. You are not paying the proper price and so it is not realistic for you to expect to obtain the proper return.
If stocks are priced at three times fair value, most of your money is NOT going to the purchase of pieces of the underlying companies. In that circumstance, two-thirds of your money is going to the purchase of cotton-candy nothingness and one-third is going to the purchase of the underlying companies. Is that not so?
Why are you so offended by the idea of looking at how much of your money goes to the purchase of the underlying companies and how much does not?
It’s not because doing that is dumb. If you thought it was dumb, you wouldn’t do it yourself but it wouldn’t bother you that others do it. You cannot even bear to hear others TALK about doing it. That’s defensiveness. That’s emotion. You wouldn’t be so defensive re this point if there wasn’t a part of you that saw the merit in it.
If you were one of the Madoff investors, would you want your friends to try to help you out before you lost all your money? Or would you want them to tell you what they know you want to hear?
Do you remember how angry the Madoff investors were when they found out they had been taken? That’s what is going to happen with the Buy-and-Holders. They won’t accept that they have been taken today because it hurts. But what happens when it is no longer possible for them to fool themselves, when most of their retirement money is gone? Then you (and all the rest of us too!) have a big problem.
I’m trying to help you, Anonymous. I have been trying to help you since the first day. The only reason why you won’t take my help is that it hurts too much. But it is going to hurt MORE later on, not less.
You say: “With Bernie, you only had a piece of paper.” When the number on your portfolio statement is the number you see today divided by three, the portfolio statement you take comfort in today will be “only a piece of paper.” They will not give you the money back. That’s not the way the Wall Street boys play the game.
Rob
Anonymous says
“The Madoff investors THOUGHT they owned something, Anonymous. Investors deceive themselves. That’s the point.”
That doesn’t change anything Rob. THEY DIDN’T OWN ANYTHING. Buy and hold investors DO own stock, bond and/or cash holdings that are material.
Through my funds, I own pieces of McDonalds, WalMart, Apple, Exxon, ConocoPhillips, IBM, etc., etc, etc. You can sit here all day and say you don’t think it is worth the current trading amount and I and others will disagree, yet is still has value. That is just your opinion and that opinion can vary on stock to stock, fund to fund, etc. I can tell you that I think your house is worth $150,000 and you think it is worth $190,000. We each have our own opinion, yet you still own your home and it has a value. Bernie Madoff “investors” ended up with the value equal to your advice (which is ZERO).
You have been just like chicken little claiming the sky is falling, yet it hasn’t happened. If you are so sure of the total collapse, then you should buy stocking up on gold as well as building a doomsday shelter or you should be shorting the market. Instead, all you are doing is spewing out your talking points and have no substance behind what you say.
Rob says
The peer-reviewed research paper that I co-authored with Wade Pfau shows millions of middle-class investors how to reduce the risk of stock investing by 70 percent, Anonymous. That’s investor heaven! I’m not saying the sky is falling. I’m saying that we are the luckiest generation of investors ever to walk Planet Earth! We just need to start tapping into the benefits of the last 33 years of peer-reviewed research.
And I say that we should permit honest posting on every board and blog on the internet. Self-deception is hard when there are other people advancing other points of view. When only one view is permitted, it’s easy for people to get the wrong idea that that view is the only view out there.
I wish you all good things, in any event.
Rob
Anonymous says
You keep predicting a 65% drop and how millions will have been decimated. What do you call that?
Rob says
It’s reporting how stocks will perform in coming days presuming that they will continue performing in the future at least somewhat as they always have in the past.
Permitting stocks to become insanely overpriced is like living on credit card debt. You have to pay up when the party is over.
That reality doesn’t turn this very, very good news into bad news. After the crash we will be able to spread the word about the greatest advance in the history of personal finance to every board and blog on the internet.
I wish we were not taking this rocky road. But we are headed to a wonderful, wonderful place. What bad stuff there is comes from our unwillingness as a society to let go of mistakes made in earlier days and to step quickly into the very positive future awaiting us once we come to our collective senses.
Rob
Anonymous says
I know you are praying for a crash since you missed out on the market gains. Your financial sufferings are of your own making.
Rob says
Once we decide as a society to permit honest posting everywhere on the internet on the findings of the past 33 years of peer-reviewed research in this field, none of us ever again has to pray or hope or wish for anything in relation to our stock returns, Anonymous.
We save money and we put it into the market where we get back a return of 6.5 percent real each year. Simple. Safe. Smart. No emotion.
If ever we see other investors messing things up by getting pulled into the Get Rich Quick garbage pushed so relentlessly by the Wall Street Con Men, enough of us pull back enough to get prices back where they should be. After the point has been made several times that we will stand up for ourselves when the Con Men try to destroy the asset class we need to be able to finance our retirements, they will give up on all the foolishness and get with the program.
I don’t pray for a crash and I don’t wish for a crash and I don’t hope for a crash, Anonymous.
What I pray and hope and wish for is that we will all come to realize that it is time to start acting like adults when it comes to our retirement money. I pray and hope and wish that we will all agree to pay off the huge debt we incurred in the out-of-control bull market and that we will begin demanding that the “experts” in this field start behaving more responsibly than they have been behaving in recent decades.
It is investor emotion that fuels investing risk. The thing that I pray and hope and wish for is that we all work together 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, and get about the business of bringing this economic crisis to an end and to bringing on the greatest period of economic growth in U.S. history.
The Get Rich Quick/Buy-and-Hold emotionalism adds NOTHING to the equation.
Nothing.
True research-based investing strategies are the future.
That’s my sincere take re these terribly important matters, in any event.
Rob
Anonymous says
Rob,
You have said you are fine with people that use buy and hold strategies yet then you say you want to bury it.
Rob says
Both things are so, Anonymous.
I want to bury Buy-and-Hold because I believe that it is the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind. I believe that the Buy-and-Hold “idea” that it is not necessary to exercise price discipline when buying stocks has caused more human misery than any earlier idea in the history of personal finance. Are you able to imagine any reason why I wouldn’t want to bury something that has caused so many people so much pain?
But I of course am fine with people following Buy-and-Hold strategies. The person who holds the money should decide on the strategy used to invest it. I don’t offer any guarantees on anything I say. So those who hold the money being invested had better decide for themselves what strategies to follow.
I could be wrong.
What if I am wrong?
If people stopped advocating Buy-and-Hold and I am wrong, we would be in an awful mess.
I believe that those who believe in Buy-and-Hold should advocate Buy-and-Hold and that those who believe in Valuation-Informed Indexing should advocate Valuation-Informed Indexing.
That’s how our system works in all fields other than the investing-advice field and that’s what I think works. I would like to see things done in the investing field in the manner in which they are done in every other field of human endeavor. That would be a huge advance!
I obviously think that Valuation-Informed Indexing would prevail if things were done that way.
But then, I would, wouldn’t I?
Rob