Set forth below is the text of a comment that I recently posted to another blog entry at this site:
He is clearly a buy and hold supporter.
Does Buffett support the 12-year cover-up of the errors in the Old School safe-withdrawal-rate studies, Anonymous?
Does Buffett support the death threats you Goons have used to intimidate people who have reported on the 33 years of peer-reviewed academic research showing that long-term timing has worked for 140 years of stock market history and is 100 percent required for any investor who hopes to have a realistic hope of long-term success?
Does Buffett support demands for unjustified board bannings? Does he support tens of thousands of acts of defamation? Does he support demands to get academic researchers fired from their jobs?
These questions are silly. Buffett obviously does not support any of these things.
Neither would Bogle if he were not caught in a trap. Neither would Bernstein if he were not caught in a trap. Neither would Burns if he were not caught in a trap. Neither would Pfau if he were not caught in a trap.
The Buy-and-Hold Pioneers put together their strategy at a time when the research had not yet been published on whether long-term timing works or not. All they had was research showing that short-term timing doesn’t work and they jumped to a hasty conclusion that no form of timing is necessary. Shiller proved that hasty conclusion false in 1981. A huge bull market arrived and no one cared for a time that the Buy-and-Holders had gotten it terribly wrong. The economic crisis that follows every time Buy-and-Hold becomes popular arrived in 2008. People have begun to open their minds to new ideas. But one thing holds them back.
The thing that holds them back is The Buy-and-Hold Mafia. Lots and lots of people have beyond to have grave doubts re Buy-and-Hold. But they have witnessed the ruthlessness of the Buy-and-Hold Mafia and they want no part of what happens to those who post honestly on what the last 33 years of peer-reviewed research says re what works in the real world.
If Buy-and-Hold were a legitimate strategy, the errors in the Old School retirement studies would have been corrected within 24 hours. Everyone who works in this field lives in fear of “crossing” the Buy-and-Hold Mafia. So those errors have remained uncorrected to this day. But everyone who has taken five minutes to check the studies has found that they contain no valuation adjustments.
Buffett will speak in an informed and honest way when everyone else does. He will do so when he feels that it is safe to do so.
The Buy-and-Hold Mafia is a criminal enterprise. The Wall Street Con Men have lots of money and lots of power and lots of influence and they have silenced many people. Following the next price crash, they won’t be able to silence us anymore. A big blogger will speak out. Or a major newspaper will detail the 12-year cover-up. Or a venture capitalist will get behind Valuation-Informed Indexing, seeing the fortune there is to be made in providing millions of middle-class investors with true research-based investing advice.
That’s the story. The only thing that can ever change the way things are is for people to speak out against The Buy-and-Hold Mafia. People don’t want to get involved. People are afraid. People find the entire business an ugly business. But there is no other way.
I don’t think that the members of the Buy-ad-Hold Mafia had bad intent. They just didn’t know it all. None of us did. Shiller didn’t publish his research until 1981. That’s just the way it goes sometimes.
The problem is that people who give bad investing advice are subject to legal liabilities if they are found to have claimed that their advice is rooted in peer-reviewed academic research when in reality it is the opposite of what the peer-reviewed academic research shows. The Buy-and-Holders started down a dark path by accident and in time they found themselves so far down that dark road that they elected to cover-up their mistake rather than acknowledge it. Now they are subject to legal liabilities and, in the case of you Goons, prison sentences.
I care. I want to help. But I have zero willingness to commit a felony myself. If I were to say that the Old School retirement studies are legitimate, I would be aiding the 12-year cover-up. That’s financial fraud. That’s a felony. That’s prison time. No can do.
Buffett will tell us his sincere views about Buy-and-Hold when he and all others feel safe to do so. That will be after the 12-year cover-up of the errors in the Old School retirement studies has been exposed and your prison sentence has been decided. At that point, there will be no reason for all of us not to move forward together and we will obviously do just that.
I will continue doing all that I can to bring that day on as soon as possible. That obviously is best for the millions of middle-class people whose lives are in the process of being destroyed by The Buy-and-Hold Mafia. It is also what is best for you Goons. Your prison sentences obviously will be a bit shorter if you come clean prior to the next price crash.
I will obviously be reporting to your jury what you did when the suggestion was made that you ask Bogle to have Buffett review the peer-reviewed research that I co-authored with Wade Pfau. It is obviously an urgent public-policy matter that Buffett share with us all his thoughts on that research. The members of your jury will obviously take into consideration your reaction to the idea when they are deciding your case and the length of your prison term.
The hand of kindness remains extended. The odds that I will agree to take part in the 12-year cover-up of the errors in the Old School retirement studies remain precisely zero.
I wish you well.
Rob
laugh says
who exactly is in the buy and hold mafia and how did they get so much power? do you have any real names of people who wield this type of influence over the universe?
Rob says
Jack Bogle.
Bill Bernstein.
Larry Swedroe.
Scott Burns.
The owners of the Motley Fool site.
The owners of the Index Universe site.
The owners of the Morningstar.com site.
The owners of the Bogleheads.com site.
And on and on and on and on.
They got their power legitimately. There really was peer-reviewed research published in 1965 that appeared to many good and smart people to support the Buy-and-Hold concept. That wasn’t fraud. That was good stuff. I can go a step farther than that. I can say that that was heroic stuff. The Buy-and-Hold Pioneers took us out of the dark ages re our understanding of how stock investing works. Their huge insight — that short-term timing never works — is the second most powerful insight ever developed in the history of investing analysis. We all owe a great debt of gratitude to the Buy-and-Hold Pioneers.
It became fraud sometime between 1981, when Yale Economics Professor Robert Shiller published his “revolutionary” (his word) research showing that, while it is indeed so that short-term timing never works, long-term timing (price discipline) ALWAYS works and is ALWAYS 100 percent required for investors hoping to have any realistic hope of long-term success, and the morning of May 13, 2002. On the morning of my famous post pointing out the errors in the Old School SWR studies, the Buy-and-Holders responded with an insane level of defensiveness. So they obviously were aware on at least one level of consciousness that the research showed that Buy-and-Hold could never work. I have seen no evidence that they were aware of that in 1981. It appears to me that their confidence that Buy-and-Hold could be defended in civil and reasonable debate gradually declined over those 21 years until things got to the point where they stood on the morning of May 13, 2002. I can obviously only give personal testimony as to events that took place after that date.
They keep their power through the use of brutal intimidation tactics. The most obvious case is where they threatened to get Academic Researcher Wade Pfau fired from his job if he continued to publish and promote honest research. There are thousands of researchers who would love to be doing honest research today. But, like Wade, many of them have families and, thus, do not dare to “cross” my good friend Jack Bogle and the other Wall Street Con Men trying to keep the Buy-and-Hold fantasy alive another week, another month, another year.
The con men want to come clean. It was an honest passage in Bogle’s book that taught me that the Old School SWR studies were in error. Bernstein gave a partly honest response when one of you Goons sent him an e-mail asking if the methodology used in the Old School studies is analytically invalid. Swedroe stood up to Linduaer once and got himself banned from the Bogleheads Forum. Pfau wrote to the authors of the Trinity study and asked them to correct the errors in their study. And on and on and on.
The problem is that the Wall Street Con Men know that, if they come clean, they go to prison. Bogle should have acknowledged his mistake when Shiller first published the research discrediting the Buy-and-Hold Model. He rationalized not doing so. I presume that he told himself that it would all somehow work out. And now that 33 years has passed, it is 1,000 times harder for Old Saint Jack to work up the courage to say the Three Magic Words.
Everybody who works in this field knows that his career will be destroyed if he tells the full truth re these matters. So everyone keeps it zipped.
But keeping it zipped re financial fraud only causes the financial fraud to spread. Financial fraud is a cancer. The longer it continues, the more lives are ruined. The more lives that are ruined, the longer are the prison sentences that are ultimately assigned to those participating in the massive act of fraud.
My job is to bring it to an end and get us back to the original Buy-and-Hold idea — rooting one’s strategies in the peer-reviewed research.
I hope that helps a bit, Laugh.
Rob
Rob says
I should add that a big part of the answer to your question “How did they get so much power?” is that they obtained the power through the Pretend Money created by their advocacy of Buy-and-Hold.
Investors determine the price of stocks. When they assign insanely high prices to stocks, it is like voting themselves raises. This “strategy” never works in the long run. Increasing your portfolio value by raising the price of stocks to insanely dangerous levels is like borrowing on credit cards. It is very much a short-term strategy. But it does allow for the creation of a huge amount of Pretend Money. And money translates into power in this mixed-up world of ours.
The Buy-and-Holders had created $12 trillion in Pretend Money as of January 2000. $12 trillion buys a lot of friends. Everyone who has worked in this field during the Buy-and-Hold years was influenced by the lies that were told to make millions of middle-class investors believe that the $12 trillion of phony, Get Rich Quick “gain” was somehow real. Once someone has participated in such a lie, he is very reluctant to acknowledge the act of fraud. He can he held liable for damages in civil suits. Or he could be sent to prison.
Once the Buy-and-Holders have come clean, we will never again have to live through something like this. We will correct the textbooks and people like Wade Pfau will learn the realities in school rather than through conversations with bloggers. We’re just not there yet. It is only in 1981 that the last piece of the intellectual puzzle was discovered. And the Buy-and-Hold Mafia has been working hard in the three decades since to insure that word of what the peer-reviewed research says does not get out.
If men were angels, we would not have to experience an economic crisis or a Second Great Depression to get the word out about how stock investing works in the real world. Men are not angels. I hate to be the one to break the news to you, Laugh.
Still, it is the humans who discovered these things. And it is the humans who have been expressing a desire that the internet be opened to honest posting for 12 years now. So we aren’t all bad.
Now go and live in peace with your brother, grasshopper.
Rob
Anonymous says
Rob,
Not considering a variable in a study is not fraud and doesn’t require an immediate or any update.
If I publish a study showing a link between smoking and cancer but fail to account for family history it may be a less than perfect study but I am in no way required to amend that study.
You are welcome to post your own finding and highlight how the current study is insufficient. It seems like you have already done this Rob and now people are free to review everything available. That is how it works old studies aren’t updated new research is done on top of previous research and if it hold enough merit it just usurps the old as the gold standard. Maybe people aren’t willing to accept they need to consider Rob Bennett’s way of valuing stock and only Rob’s valuation when deciding on a safe withdrawal rate. Not including this very esoteric valuation metric from an internet troll into your study is not fraud.
Rob says
If Greaney didn’t think it was fraud to lie about the numbers that people use to plan their retirements, he never would have threatened to kill my wife and children if I didn’t agree to stop reporting the accurate numbers. Give me a friggin’ break.
And if Bogle didn’t think it was fraud to continue telling people that the peer-reviewed research supports Buy-and-Hold 33 years after the research that once was thought to do that was discredited, he never would have gotten involved in the threats to get Academic Researcher Wade Pfau fired from his job unless he agreed to stop publishing honest research. Again, give me a friggin’ break.
I’m telling, Anonymous.
That’s the bottom line.
I’m telling the millions of people who will see a large portion of their retirement money disappear following the next price crash who did it to them. And I am going to help them organize and file lawsuits and get prosecutors to file criminal cases and all the rest.
That’s how our system works. There are always going to be some low-lifes who are going to be tempted to exploit human weaknesses for their personal profit. Fortunately, we were smart enough as a society to enact laws making financial fraud a felony. The announcement of your prison sentence will go viral. From that day forward, the rest of us will be learning about the first true research-based strategy, the strategy that lets us all reduce the risk of stock investing by 70 percent.
If you don’t think it is fraud to lie about the numbers that people use to plan their retirements, tell it to the jury, my old friend. It’s your jury that holds your fate in their hands. It’s your jury that you need to convince.
I want nothing to do with felonies and juries and prison sentences. It is my intent to continue to post honestly re safe withdrawal rates and scores of other critically important investment-related topics.
We’ll meet on the other side of the river following the next price crash and compare notes as to who has fell and as to who has been left behind. Fair enough, my long-time abusive posting friend?
Rob
Rob says
If I publish a study showing a link between smoking and cancer but fail to account for family history it may be a less than perfect study but I am in no way required to amend that study.
If I were on your jury and I found out that you threatened to kill family members of the fellow who pointed out your error, that fact would count against you in my mind.
If I learned that you threatened to send defamatory e-mails to researchers who produced accurate studies in an effort to get them fired from their jobs unless they agreed to stop publishing honest research, that would also count against you.
Call me madcap!
Rob
Rob says
If I publish a study showing a link between smoking and cancer but fail to account for family history it may be a less than perfect study but I am in no way required to amend that study.
What if your conclusion is that smoking four packs of cigarettes a day is “100 percent safe” and that the reason why you were able to produce numbers that suggested that conclusion is that you did not count any deaths caused by cancer?
That’s what the authors of the Old School SWR studies did. Valuations is not just any old factor. It is by far the biggest factor. It overwhelms all the other factors. At the time when Greaney was saying that a 4 percent withdrawal was “100 percent safe,” the honest studies were saying that retirements calling for a 4 percent withdrawal had only a 30 percent chance of lasting 30 years.
We will see following the next crash whether the millions of middle-class people whose lives have been destroyed by your thousands of acts of intimidation and deception will think your little joke is as funny as you think it is.
I am betting on my country’s laws to set things straight, Anonymous.
The more you evidence your hatred of the laws and of the people of this country, the more I feel compelled to rise up in her defense.
Time will tell the tale.
Rob
Curious says
Wow. You’re claiming that Bogle “was involved in the threats” to get someone fired unless they wrote fraudulent research.
That’s a fairly strong accusation. Seems like something that would be easy to get attention for, if true. If it’s not, of course, it seems to be rather reckless.
Rob says
new research is done on top of previous research and if it hold enough merit it just usurps the old as the gold standard.
That’s precisely what I expect to see happen following the announcement of your prison sentence, Anonymous.
Our system works. Goons like yourself can slow things down for a time. But we wouldn’t have adopted the laws making financial fraud a felony if we didn’t think it was a bad thing. The people who adopted those laws will put you in prison once they see how many human lives you have destroyed. Good for them! It needs to be done and it will open the door to the exploration of all sorts of powerful insights.
I cannot wait! I am totally psyched!
Hang in there, man.
Rob
Rob says
Wow. You’re claiming that Bogle “was involved in the threats” to get someone fired unless they wrote fraudulent research.
That’s a fairly strong accusation. Seems like something that would be easy to get attention for, if true. If it’s not, of course, it seems to be rather reckless.
You were there when it happened, Curious. And you were of course involved.
Was it easy to get Nixon removed from office? There was LOTS of evidence of funny business for a LONG time before he was removed from office. Was it easy to get him removed?
Was it easy to get Joe Paterno removed?
Was it easy to get that bicycle racing guy removed?
It is HARD to get powerful people prosecuted for corruption, Curious.
It is VERY hard.
It’s hard enough that I would prefer that someone else do the job.
Guess what? No one else has stepped forward. Lots of people don’t think that it is as easy as you say.
Still, it has to be done.
And I do believe that I will pull it off.
People are going to be upset following the next price crash. Everything is documented. 100 times over.
There are thousands of people in this field who would like to come clean. Coming clean means telling the truth about Bogle. So I believe it is going to happen.
Truth be told, even Bogle has shown signs of wanting to come clean. It would not surprise me if I had his help. I believe his heart is going to melt following the next price crash.
We’ll see, you know?
You will play your cards and I will play my cards and Bogle will play his cards and we’ll see how it all turns out.
Can we at least agree re that much?
I am going to do everything in my power to expose every crime that has been committed. I will do it will love. But I will not back down. Zero chance.
Fair enough?
Rob
Anonymous says
Was it easy to get Joe Paterno removed?
Unfortunately, analogies don’t make an invented reality any less invented.
Rob says
The purpose of the analogy is to help people understand what is going on, Anonymous.
No, the analogy by itself does not make what I am saying true. I certainly agree with that point.
The comment that I was responding to was something to the effect of “if Bogle were behaving in a corrupt manner, it would be easy to get people to pay attention to that.” I can see how someone would think that. I certainly thought it myself prior to May 13, 2002. I believed in Bogle. I believed in Motley Fool. I believed in all of my friends at the Early Retirement Forum. And on and on.
If you had told me at that time that Greaney would be successful in his efforts to get me banned at Motley Fool, I would have said you were nuts. All I would have to do is to contact the site administrator and tell him what Greaney was up to and that would solve the problem. That didn’t work out so well for me, did it?
Bogle is a great person. There is no one alive who believes that more strongly than I do. But he is a human and he is flawed and he makes mistakes and then he is tempted to cover up those mistakes rather than acknowledge them. That’s the reality.
People who love Bogle have a hard time accepting that. That’s why I mentioned Paterno. There are many people who love Paterno as much as the people who love Bogle love Bogle. Paterno’s accomplishments were real. He was also a great person. He was also flawed. When the stuff came out about what happened at Penn State, there were students who protested in support of Paterno. They didn’t care about the facts. They still loved the guy. Like it or not, that’s the way the humans are.
It’s my job to make sense of this for people. You have a hard time accepting that Bogle did anything wrong. So I am offering analogies to help you see that the people taken in by false claims do not appreciate at the time that they are being taken that the claims are false. The people who loved Nixon at the time he was being investigated couldn’t appreciate what the evidence showed because their real love for the man made it impossible for them to do so. The people who loved Paterno at the time things were coming out about Penn State couldn’t appreciate what the evidence showed because their real love for the man made it impossible for them to do so. The people who love Bogle today cannot appreciate what the evidence shows because their real love for the man makes it impossible for them to do so.
People are not rational creatures. That’s the core story here. People are rationaliZING creatures. They make decisions as to what to believe based on emotion. Then they concoct rationalizations to support those emotional choices.
The question is — What happens when the money disappears from their retirement accounts?
The emotions CHANGE. When that happens, you will no longer see investors concocting rationalizations for Buy-and-Hold. You will see the opposite. You will see people directing their mental energies to concocting all sorts of overly negative appraisals of what the Buy-and-Holders did. In those days, people will be saying that Bogle INTENTIONALLY got it wrong. Which is a take that is as emotional as today’s popular take that he did not get it wrong at all.
My job is to help people avoid both extremes. Bogle is a great man who made a mistake. That’s the reality. Both parts of that sentence are true and both parts of that sentence are important realities that need to be known by all investors.
The analogies do not make what I say so. The purpose of the analogies is to take the discussion out of the investing realm, where people’s emotional biases control them, and to show how the same basic dynamics have played out in other areas of human endeavor. People behave emotionally in ALL endeavors. Including investing. If you want to understand how investing works, you need to gain an appreciation of how things go down in other areas of human endeavor. Because it is the same humans who make decisions in both non-investing contexts and in investing contexts.
I hope that helps a bit.
Rob