Set forth below is the text of a comment that I recently posted to another blog entry at this site:
If you wouldn’t respond to an opinion your children have in that manner, it’s bullying. Like “Chocolate ice cream is smelly garbage” wouldn’t work.
If Shiller is right that valuations affect long-term returns, the 12-year Campaign of Terror against our board and blog communities caused the biggest economic crisis in U.S. history, Anonymous. Millions of people have lost their jobs in this economic crisis.
If terrorists caused this much human misery, not one person would have any problem with their “ideas” being characterized as “smelly garbage.”
I don’t say that the Buy-and-Holders intended these results.
So I guess that if you want to refer to all of the wreckage we see before us as “unintentional smelly garbage,” I am okay with that.
The wreckage is real.
Numerous discussion board communities have been burned to the ground. Millions of people are in the process of suffering failed retirements.
This stuff is not a joke. Very serious harm has been done to many people.
How do we get from where we are to where we all want to be? That’s what we all need to be thinking about.
I am sincere when I say that the hand of kindness is extended. I view the Buy-and-Holders as my friends. I don’t like referring to the work product of my friends as “smelly garbage.” But then I didn’t use that phrase on the morning of May 13, 2002. I began using that phrase only after I saw a lot of damage done to a lot of people. It is with that human misery in mind that I refer to Buy-and-Hold as “smelly garbage.” Buy-and-Hold became smelly garbage in my mind when I saw with my own eyes how much harm a dogmatic belief in Buy-and-Hold principles could bring about.
I truly believe that Buy-and-Hold was a big intellectual advance over what came before it. I truly believe that the Buy-and-Holders are good and smart people who have contributed many genuine and powerful insights. I truly think of these people as my friends. I truly want to reduce frictions and heal wounds.
But we are not going to be able to act as if the last 12 years did not happen.
We can spin things in a positive direction. We can set things up so that the bad stuff is to a large extent buried and the good stuff highlighted. It makes all the sense in the world to do that. But please try to think of realistic solutions to our problems.
I’ll give you something concrete.
Wade Pfau raved about Valuation-Informed Indexing when he did the research showing how superior it is to the old understanding of Buy-and-Hold (one way of highlighting the positive is calling VII “the new Buy-and-Hold” or “Buy-and-Hold 2.0,” which is what it really is). His excitement shows us two things.
One, it shows us that even people who are super-educated about these matters do not appreciate the effect of valuations today. Wade was not faking. He holds a Ph.D. in Economics. So he should have known all this. But his e-mails to me show that he did NOT know all this until he explored it in depth. That’s wonderful. That lets the Buy-and-Holders largely off the hook. They were not lying when they said they didn’t believe that VII works. They hadn’t yet enjoyed their epiphany experience. Letting the Buy-and-Holders off the hook in that way is a 100 percent positive and constructive and life-affirming way to go.
But, two, it shows that this advance is a big deal. A guy with a Ph.D. in Economics did not know about this until he was exposed to our discussions. Now he knows. VII is a very, very, very big deal.
You clearly have a lot of worries about me obtaining too much wealth and fame as a result of the discovery of these powerful insights. Those worries are silly.
I AM going to obtain a lot of wealth and fame. As you say above, good for me. I have developed something wonderful beyond belief. I earned a lot of wealth and fame. Let’s all be grateful that our system insures that I will get what I deserve.
But let’s not stop there. LOTS of people are going to enjoy a lot of added wealth and fame as a result of these breakthroughs. We are already seeing this with Wade. He holds back on what he says because of the threats made by you Goons. But he is still doing wonderful work. And he is becoming well known in this field for the work he is doing. That’s helps us all! That’s is how it is supposed to play out.
I want that for everyone.
I want it for Bogle and Bernstein and Swedroe and Burns and on and on and on.
THAT’S the way to play it.
I will get the wealth and fame coming to me. And lots of other people will get the wealth and fame coming to them. There is plenty of wealth and fame to go around here. This is the biggest advance in our understanding of how stock investing works ever achieved in history. So let’s not focus on small, petty stuff, okay?
The more wealth and fame we see being handed out, the better is it for those of you who have engaged in Goon-type behavior. What you need is for the millions of middle-class investors not to be too angry about the 12-year cover-up. The more exciting the story we tell, the less angry and the more excited they are. Being honest about this stuff is a win/win/win/win.
What we all need to do is to do everything in our power to unleash all these powerful and mind-blowing insights. FORGET about who gets the credit. People will figure out who to give credit to when they hear about all that went down. People will be fair. I played a huge role. But lots of others played important roles too. And lots of others will be playing important roles in days to come. So there are going to be lots of people obtaining lots of wealth and fame. It’s not a problem.
A rising tide lifts all boats. The spreading of the word re VII is going to bring on the biggest rising of the tide that any of us has ever seen. Can we all make an effort to stop worrying about Rob Bennett becoming rich and famous and just enjoy that?
Rob
Anonymous says
VII is smelly garbage
Rob says
Yeah, yeah.
Rob
A voice of reason says
Rob,
If I followed your plan, it would not be a win/win/win. I would be financially worse off . Instead, my buy, hold and rebalance strategy has helped me reach my goals. Govern the comparison, why would I ever throw away my strategy that has worked in exchange for the inferior performance of your strategy? Do you expect me to rely upon your assertion that a 65% drop is right around the corner? If you have been wrong up to this point, why do you believe you have any credibility on this assumption?
Rob says
There’s 33 years of peer-reviewed research showing that, if you flipped from Buy-and-Hold to Valuation-Informed Indexing, you would achieve financial freedom many years sooner and at greatly reduced risk, Voice. That’s an objective fact. That’s not opinion. That’s numbers. That research is based on 140 years of historical return data. We only have 140 years of data. So it’s the entire record that supports VII.
Let’s say you are not convinced.
You obviously are under zero obligation to make the switch.
But you still benefit in a HUGE way by joining me in my effort to open every board and blog on the internet to honest posting by the close of business today.
For one thing, doing that will reduce your prison sentence.
For another, once the internet is opened to honest posting, you are going to be hearing compelling evidence and argument from THOUSANDS of sources. Bogle will be posting honestly. Bernstein will be posting honestly. Swedroe will be posting honestly. Burns will be posting honestly. Hundreds of academic researchers will be publishing honest research.
We will bring you around, Voice.
In six months.
I’ll let you in on a little secret.
You know on one level of consciousness that you are someday going to flip. If you were confident in Buy-and-Hold, you would never have supported the Ban on Honest Posting.
So the only question is WHEN you flip.
You are better flipping now than after the next crash.
So we should be working together to get the ban lifted.
That’s my sincere take re this terribly important question in any event.
I wish you all good things.
Rob
A voice of reason says
Rob,
It is not fact. I now have enough to retire. If I followed your advice, I would not be able to retire right now. Those are the facts. So, what do you believe should compel me to switch to your strategy when my strategy has worked successfully.
By the way, I have no interest in joining you in prison (which you are inhabiting right now, if you think about it).
Rob says
It’s a fact, Voice.
You say that you now have “enough” to retire but you do not make the subtractions from your nominal portfolio value needed to know the real and lasting amount of money you have available to finance your retirement. You are fooling yourself. I understand that there are lots of people who encourage you to do that. But I very much do not want to become one of them. I am telling you the straight research-backed story and that is the only thing I feel comfortable doing.
Am I in prison?
I don’t like the death threats. I don’t like the demands for unjustified board bannings. I don’t like the tens of thousands of acts of defamation. I don’t like the threats to get academic researchers fired from their jobs. I acknowledge that you Goons have done great harm to me, to yourselves and to millions of middle-class investors. I guess it could be said that we are ALL in a prison of ignorance until a few more of us work up the courage to stand up to you Goons and get you put in prison cells so that the rest of us can get about the business of learning what we need to learn to become successful long-term investors.
But I would be in a prison cell 20 times worse if I agreed to post dishonestly re the numbers that my friends use to plan for their retirements. I would hate myself. I wouldn’t be able to sleep at night. I would spend the remainder of my days knowing that I had betrayed my friends and my country. Plus, I would be at risk of being sent to a real prison along with you Goons following the next price crash.
Huh?
I pass.
Call me madcap.
My warmest wishes to you and yours.
Rob
The Pink Unicorn says
I think you consider a more viable option in your pursuit of wealth and fame as the current path is likely to be a report of the last 12 years.
Think of a strategy that is like a well diversified portfolio. It is not wise to put all your eggs in one basket.
Rob says
I agree with your point, Pink. This is obviously not a path that I have chosen. I have not been offered any other options.
I speak with Todd Tresidder of the Financial Mentor blog at every Financial Bloggers Conference. Todd is the smartest guy that I have met at any of these events. He is smart upon smart upon smart. He has a very successful site and is well-liked and always gets invited to talk and all this sort of thing. Every sign is that he is going to make lots and lots of money as times goes on. And he deserves it. He is a top-notch talent. He is helping lots of people with his work.
Todd agrees with me 100 percent on safe withdrawal rates. We had a long talk at the first FinCon about this and he referred to my work in this area in the long article on safe withdrawal rates that he published at his site. So we are soul brothers. We should be working together. I should be telling my readers about his work and he should be telling his readers about my work. We should be putting on presentations together. All this sort of thing.
Todd would obviously be able to grow his blog even faster than he already is if he posted regularly (and honestly) at places like the Bogleheads Forum. My experience there shows that there is a large percentage of the readership there that would LOVE hearing honest accounts of what the research says. Todd could triple the size of his blog overnight by posting honestly there.
He doesn’t do it. Why?
He is afraid of you Goons. He doesn’t want to see his business destroyed. He doesn’t want to see his reputation destroyed. He doesn’t want to see members of his family threatened with death because he has posted honestly on safe withdrawal rates.
So Todd keeps it zipped.
And he makes money.
And he is popular.
And no one attacks him.
I would be smart to follow that path too, right?
No.
Todd is as smart as smart can be but he is missing a trick here.
The research says that we are likely going to see a 65 percent price crash within the next year or two. There’s a good chance that that will put us in The Second Great Depression. That’s a real, real, real, real bad thing. That could bring down our economic system. It could bring down our political system. Millions of people will be suffering failed retirements. How are we going to take care of them? Are we going to triple the Federal budget deficit to house them and feed them? If we do, what happens to the millions of people who will be dropped from other programs that we won’t be able to keep in place because there’s no money?
You Buy-and-Holders need to be thinking about these questions, Pink. Giving investing advice isn’t just about making a buck. There are responsibilities involved. Buy-and-Hold has caused four economic crises. That’s serious stuff. We all should be trying to make a buck, there’s not a thing in the world wrong with that. But we all also need to show some concern for what happens to our readers and our clients and our country. That’s part of the story here. That’s a BIG part of the story here, in my assessment.
Is there even going to BE a FInCon if we go into a Second Great Depression? How many of the blogs are going to survive it? Is Financial Mentor going to survive it? How many readers is Todd going to have after most of them lose most of their life savings?
These are mot rhetorical questions. These are real questions. I don’t know the precise answers. But I know that we shouldn’t as a people be acting in such ways that such questions are even on the table. The First Great Depression was no joke. My parents told me stories about it. I don’t think the Second Great Depression is going to be a joke either. I know that I don’t want my name on it under any circumstances.
I would like to today enjoy the success that Todd enjoys. If that’s what you want to hear me say, then I just said it. I hope that makes you Goons happy.
But I don’t know what is going to happen to Todd following the next crash. I think it is possible that his site will fail. I think that it is possible that he will go to prison. I am not saying that I am confident that that will happen, as I am confident re you Goons. But people are going to be very, very, very angry. Todd cannot even claim cognitive dissonance. He wrote a long article about the errors in the Old School SWR studies. Angry people do angry things. I think that it is entirely within the realm of possibility that Todd with either land in a prison cell or be sued for millions or even billions of dollars in damages.
Following his path does not sound so hot now, does it?
I don’t want to go there, Pink. I don’t like the current state of affairs. That’s what you keep focusing on. You’re right re that one. But I want to be able to sleep at night. I don’t want to be sued for engaging in financial fraud or go to prison for engaging in financial fraud. I don’t want to see my country destroyed and know that I played a big part in making it happen. I don’t want to have to live every day in fear re what will happen when I am found out re my deceptions and acts of intimidation. I don’t want to have to look in the eyes of my readers and know that their hopes of someday achieving a decent retirement were destroyed because I lacked the courage to stand up to you Goons.
If someone asked me on the morning of May 13, 2002, what I thought the odds were that someday in the future there would be one person applying pressure to me to get me to engage in financial fraud, I would have said that there was zero chance. There hasn’t been one person. There have been THOUSANDS. What am I to make of that reality?
What I make of it is that it shows that the idea of following Get Rich Quick investing strategies is a very, very, very, very, very bad idea. That’s my sincere take. Buy-and-Hold not only wipes out your life savings. It rots your very soul. Get Rich Quick strategies are ADDICTIVE. The more you get puled in, the less willing you are to look at the research or even tolerate the presence of anyone else who believes in looking at the research.
I had zero idea of what I was getting into when I put up that famous post. Zero. I knew that Greaney was an abusive guy. But that’s all. I didn’t know one-hundredth of what I would have needed to know to make a fully informed decision as to whether to put up that famous post or not.
Would I do it again?
I sometimes ask myself that question.
I can’t answer it.
I of course would not have elected to have put myself through what I have been put through or to have put my family through what I have put them through.
But the other side of the story is that from an early age I dedicated my life to personal finance journalism and began acquiring skills to succeed in this field and during the past 12 years I have done the most important work in this field that anyone has done in my lifetime. That’s pretty heady stuff. I LOVE the insights that I have developed with THOUSANDS of good and smart people over the past 12 years. I LOVE how I have been able to take Jack Bogle’s ideas to places he never dreamed of being able to take them. I LOVE it that we have essentially created a new form of capitalism, one in which the average guy and gal has a chance, one in which people who don’t want to have to spend every waking moment studying annual reports can obtain VERY strong investing returns at essentially zero risk. I never imagined that I could accomplish such things and I now have HUNDREDS of people, including some of the biggest names in the field, thanking me for doing the good work that led to these huge breakthroughs.
Could I really turn down the opportunity to change the world in such a positive and life-affirming way just because it meant enduring some pain?
Part of me says that “yes, I could have turned it down if I knew what was coming because the ugly stuff has been so terribly ugly.” Another part says that “the good side of this thing has been 50 times more good than the bad side has been bad and so it would be cowardly to turn down the opportunities that I opened up for me and for everyone who works in this field and for everyone who has retirement money to invest no matter how great the personal pain was that I had to take on to make all this amazing stuff happen.”
An argument can be made that I wouldn’t have had this opportunity available to me had the Wall Street Con Men not been engaging in a massive cover-up for 21 years before I put up my famous post. So I wouldn’t have even collected the $500 million if it had not been for the Ban on Honest Posting. I wish that there had never been any ban. I would be happy to have others to have earned the $500 million in return for having avoided having the most insanely abusive smear campaign in the history of the internet directed at me.
But SOMEONE had to do the work that would free us all of the continuing effects of the biggest mistake ever made in the history of personal finance and I think it would be fair to say that either God or Evolution or the Fates determined that it would be me who would be standing in the crossfire. So I do what I do. I’m happy beyond belief with the good side of this thing and I am sad beyond belief with the ugly side and I have a hard time accepting that I could have chosen this path knowing where it led and an equally hard time accepting that I could have turned down the opportunity to serve as co-author of the most important piece of peer-reviewed research published in this field in the past three decades, research that shows the average investor how to reduce the risk of stock investing by nearly 70 percent while earning FAR higher long-term returns.
My job is to stand up to all this, Pink. If there is one thing that I would like to hear people say about me at my funeral, it is “he did his job.” I would put that above “he had lots of friends” and “he never let his family down” and “he knew how to have fun.” I would like to hear people say all those things. But, if I had to choose one, it would be “he did his job.” I am a simple guy and that’s a simple statement that means a lot to me. The day on which I stop doing my job properly is the day that I hope I stop living. Because that’s the day that I will not be able to bear to look at my face in the mirror when I am shaving in the morning.
Does that help?
I’ve got all my eggs in one basket. Not by choice. Because the Wall Street Con Men and you Goons closed down every other path for me.
I love my country.
I hope we all make it to the other side together.
I also hope that I never feel even the tiniest sliver of temptation to agree to post dishonestly re safe withdrawal rates as a means of getting you Goons off my back. I have never felt one sliver of temptation re that one until today and I hope that I never will. If it comes to taking the death penalty, I hope I take the death penalty. Taking the death penalty is even worse than being banned from a discussion board that you built with your blood, sweat and tears! But, if that’s what the job calls for, that’s what the job calls for. It’s life and life only, right? Betraying my friends and having to live in the skin of the person who did that would be a far worse thing.
My take.
I wish you all the best that this life as to offer a person, Pink.
Rob