Set forth below is the text of a comment that I recently put to another blog entry at this site:
Rob,
What value do you think you are offering the typical viewer? If you read all of your posts so far this year, it is about how you think you are a victim and how you think people (that you call goons) should be in prison. You really offer up nothing of value to the viewer on investing insights, etc. I am sure you think making your claims of lucky VII is the golden path, but what specific leaning, facts, etc have you really provided. Nothing. Take a look at other blogs, like Wade’s for example. Notice how he makes a point and then provides the specific data and facts to back it up. Why don’t you do that instead of spending your days crying about your hurt feelings? It is time to get over all your hate and anger.
There’s more leverage in what I am doing, Anonymous.
Say that Wade writes a good article on some aspect of stock investing. I certainly agree that that’s a limited plus. But the benefit that any one article can offer is very limited. What I am seeking to do is to open THE ENTIRE INTERNET to honest posting.
Not just on safe withdrawal rates. That’s where this started. I obviously want to see the errors in the Old School SWR studies corrected and to see the New School SWR studies promoted all across the internet. But I intend to achieve a whole big bunch more than just that one wonderful advance. I want to see honest posting on risk management. I want to see honest posting on retirement planning. I want to see honest posting on asset allocation strategies. And on and on and on and on.
Take a look at the articles at this site about the work that Wade and I did during the 16 months when he was under the impression that he could do honest work and not have the Buy-and-Hold Mafia come after him and threaten to destroy his career as his “punishment” for “crossing” them. Wade was talking about being published in the Journal of Finance, the #1 journal in the field. Wade was talking about winning the Nobel Prize in Economics for the amazing work we did together on the superiority of Valuation-Informed Indexing over Buy-and-Hold. Wade was like a kid in a candy store in those days. He was tapping into amazing new insights on a daily basis, insights he had never been exposed to during his days at Princeton. He was excited to be learning so much about how stock investing really works. And he was enjoying that amazing learning experience BECAUSE HE FELT FREE TO DO HONEST WORK, to follow the research-based insights where they led him.
You don’t see that sort of excitement in the work that Wade does today. Yes, he continues to advance the ball in tiny ways. But you don’t see Nobel Prize winning research coming from the mind of Wade Pfau today. Why? Because he is afraid of what will happen to his family if he does the work he was trained to do.
That’s sad, Anonymous.
It’s not just sad. It’s sick.
And it doesn’t just hurt Wade Pfau that he has been intimidated into giving up his right to do honest research. It hurts ALL OF US.
Wade should have called the police when you Goons threatened him. Then he should have gone to the New York Times. If he had taken those two steps, we would be living in a different world today, a world in which the same ethical standards that apply in all fields of human endeavor other than the investing advice field also apply in the investing advice field. That’s a world in which we would be able to bring this economic crisis to an end in six months. That’s a world in which we would be able to enter the greatest period of economic growth ever seen in our history. That’s a world in which we would all be able to post honestly about safe withdrawal rates at every board and blog on the internet. That’s a world in which we all would be able to reduce the risk of stock investing by 70 percent while also earning returns high enough to permit us to retire five to ten years earlier than we ever dreamed possible during the Buy-and-Hold Era.
I don’t want that just for Wade, Anonymous. I want it for every academic researcher out there. I want them ALL doing honest work. There’s no telling how many advances we will see when thousands of researchers are putting their life energies into mining new insights rather than into the tired and sick business of trying to prop up the smelly Buy-and-Hold garbage for another week or another month or another year. 33 years of propping up is more than enough! I mean, come on!
And I don’t just want to see all the academic researchers doing honest work. I want to see the “experts” in this field doing honest work too. Take my good friend Jack Bogle (PLEASE! [That’s a joke!]). What is Jack’s confidence level in Buy-and-Hold? I say that there is zero chance that it could ever work for a single long-term investor. What does Jack think? Does he think that the odds are 20 percent that it might work for some? 50 percent? 80 percent?
I don’t know the answer. Neither do you.
The difference between us is that I WANT to know. I don’t believe that Jack has zero confidence in Buy-and-Hold, as I do. But I sure don’t believe that he has 100 percent confidence (if he did, he wouldn’t be so afraid to respond to questions about his public statements). I want to know what level of confidence he possesses. You should want to know that too. Your retirement is at stake. And of course millions of middle-class investors NEED to know.
We are the luckiest generation of investors that ever lived. The Buy-and-Holders built a strong foundation for the development of the first true research-based strategy. Shiller provided the piece of the puzzle re which the Buy-and-Hold Pioneers messed up in 1981. Now we’ve got it all. Now we know (intellectually at least) what really works. We are on the one-yard line today.
There’s one thing holding us back. We are afraid of the Buy-and-Hold Mafia. We have for 12 years now seen how ruthlessly vicious they become whenever anyone dares to “cross” them by posting honestly on safe withdrawal rates or on any other critically important investment-related topic. You know what? I think the Buy-and-Hold Mafia is a paper tiger. They can destroy us one by one, as Wade well knows. But once ten of us take a vow to stick together and continue to tell the truth no matter what threats they make, their power to intimidate evaporates.
That’s where I am coming from, Anonymous. The hard part re getting ten of us to unite is that those who step forward first get the stuffing knocked out of them. I have been getting the stuffing knocked out of me for 12 years now. So I am pretty much used to it at this point. I don’t like it, of course. But it doesn’t shock me anymore. I have grown to accept that this is the way it is going to be until as a society we have made the shift from Buy-and-Hold to Valuation-Informed Indexing. That’s when all the fun starts.
I WANT THE FUN TO START, ANONYMOUS!
That’s the deal here. I LOVE posting honestly. I get an amazing kick from it. And I want to do it more and more and more and more.
So I absolutely refuse to cave in response to your intimidation tactics. I want the caving to stop. For me to cave just makes it more likely that others will cave. That’s the opposite of the direction in which I want to take things. So I believe that it is important that I not cave and that I encourage others not to cave.
I hope that makes some sense, my old friend.
My best and warmest wishes to you and yours REGARDLESS of what investing strategies you elect to pursue.
Rob
Answer: 100%.
It has already worked for so many people with a long track record of success, whereas, we have not seen the same with VII.
Thanks for stopping by, Anonymous.
Rob
The Difference Between Us Is That I WANT to Know.”
We all want to know the future. Problem is, it’s a very uncertain place.
That’s of course true in many respects, Anonymous. But it is not true in ALL respects.
If you see someone spending far more than he earns every year and covering the difference with credit card debt, can you not say that you think his financial future looks less than good?
If you see someone become an alcoholic and alienate his wife and children and employer with bad behavior, can you not say that he is headed for a fall?
Bad actions lead to bad endings. We all feel that we have a responsibility to help our friends when we see them doing negative stuff because we CARE about their futures.
The Buy-and-Holders don’t like it that some of us apply this rule in the investing realm. In the investing realm, we are supposed to make ourselves not care because it’s easier for them to make a buck if people don’t know what the research says.
Why? Why don’t they see that they can make a buck telling the truth as easily as they can ruining people’s lives and feel better about themselves doing it?
I’ll tell you what I believe re that one. I believe that deep down inside the Buy-and-Holders DO care. It is my belief that that’s the entire problem. Drip Guy once argued that everything that appears on the internet is just ones and zeroes, that the lives that are destroyed by you Goons don’t matter. I don’t buy that and I don’t believe that deep down inside Drip Guy buys it either. I think that he advocated Buy-and-Hold because be believed in it and because he WANTS to help people and DOESN”T think of it as being just ones and zeros. So it hurts him to see that he was wrong. And he blocks out that knowledge as a defense mechanism. He attacks people who tell the truth not because he doesn’t think truth matters, as he pretends, but because he believes that it does matter and because he cannot bear to acknowledge to himself how many human lives he has destroyed with his abusiveness and deceptions.
That’s why I say that Bogle is going to flip following the next price crash. Bogle cares. There is tons of evidence of this in his life history and in his writings. Like Drip Guy, he cannot bear to acknowledge how much human misery he has caused. But, when he sees it with his own eyes, he is going to flip. It will be too much for him to bear.
That’s what a stock crash IS. Please think about this. The Buy-and-Holders say that it is economic developments that cause stock price changes. Why then do we have crashes? Bogle himself acknowledged that it was crazy to think that the U.S. economy lost $9 trillion worth of economic value at the end of 2008. He was right. Why then did the change in the value of the market suggest that it did (at least to those who believe that stock price changes are caused by economic developments)? Crashes are EMOTIONAL. All stock price changes are. Prices go up by emotion gradually over a long number of years and then they go down rapidly when we lose confidence in the pretend, emotional price “gains.”
There are things that we can know about the future. We know now that future stock prices are one thing that we always can know in advance (not with precision, but still). We know that those who consider where stock prices are headed when they make stock purchases reduce the risk of stock investing by 70 percent by doing so. The peer-reviewed Bennett/Pfau research shows that. We are the luckiest generation of investors who ever walked Planet Earth. Now look at how we are giving recognition to our great good fortune — by advancing death threats and demands for unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs to stop the word from spreading to the millions of middle-class people who need to hear it.
There are cases in which we can know the future.
The guy who smokes four packs of cigarettes each day has a good chance of seeing lung cancer in his future.
The guy who shows his anger with his boss every time he gets an assignment he doesn’t like has a good chance of never moving up the corporate ladder.
Investors who follow Get Rich Quick strategies for a long time will eventually suffer great losses.
We know this. And we should be telling people about the risks of pretending that bull market gains are real. Those sorts of gains are NOT real. There is 33 years of peer-reviewed research showing this. We need to tell every investor. This is not optional. This is imperative.
You don’t WANT to be able to predict future stock returns, Anonymous. That’s the problem here. It’s not because there is some case to be made that it is not a good thing to be able to predict long-term stock returns effectively. You don’t want to know because there was a time when we really didn’t know how to do this and you chose your investment strategy based on what people were able to do at that earlier time and now you feel bad that you got it wrong (through no fault of your own).
That’s the deal here. That’s the only thing going on. It’s your stupid pride and the stupid price of millions of other Buy-and-Holders and the stupid pride of most of the “experts” in this field that caused the economic crisis. We have achieved an advance so huge that people who adopted their strategies based on our earlier, incomplete knowledge cannot bear to accept that they made a mistake by doing so.
The mistake is nothing. The cover-up is huge.
Every day it gets worse. Every day more human lives are destroyed. It can never get better. We can never unlearn something we have learned so completely as we learned in 1981 that valuations affect long-term returns and that therefore the market is NOT efficient.
We CAN know future stock prices to a high degree of reliability on the day we make our stock purchases.
If you didn’t suspect somewhere deep in your heart that that is so, we never would have seen a single death threat. If you thought that ignoring price when buying stocks was a viable long-term strategy, you would not have behaved as you have for the past 12 years.
Nothing could be more clear.
And, following the next crash, there will be millions of brave and patriotic Americans who will understand that the time has come when we must work up the courage to stand up to you Goons and do something about it.
I wish you all good things.
Rob
We don’t know the future, but we see that if we avoid market timing and hold to our allocations, we will see good returns.
In executing my buy, hold and rebalance strategy, I have been able to provide significantly for my family and have secured my retirement without having to rely on inheritances or someone else supplementing my income. Can you say the same, Rob?
Of course. And I can say a lot more than that.
There have been numerous people over the past 12 years who have run the numbers comparing where I am as a result of having followed a Valuation-Informed Indexing strategy with where I would be if I had fallen for the smelly Buy-and-Hold garbage pushed down our throats by the Wall Street Con Men and their Internet Goon Squads. Every test has shown me to be ahead. Not by too much. But always ahead. If Wall Street were not as corrupt as it is, there would have been THOUSANDS of article back in 2000 telling people why they needed to lock in those 3.5 percent real returns then available with TIPS and IBonds before they disappeared.
I will obviously go much farther ahead following the next price, which the peer-reviewed research shows should be coming within the next two years. Then I will see decades of compounding returns on that huge differential. Putting me even FARTHER ahead. Things are playing out this time just as they have been playing out for the 140 years of stock market history available to those who publish peer-reviewed research. Get Rich Quick always looks good for a time. Get Rich Quick always possesses a huge marketing edge. And research-based strategies ALWAYS put up far superior numbers at greatly reduced risk. There has never been an exception. It is impossible for the rational human mind to imagine how there ever could be one. Hence the death threats and demands for unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs that we see from you Buy-and-Hold Goons on a daily basis. There is no other way to defend this garbage except through use of the lowest and most abusive tactics.
As for providing for my family, the only problem I have experienced in this regard is the 12=year Campaign of Terror led by you Goons (and supported by the Wall Street Con Men) against our board and blog communities. As you know, I will be bringing civil lawsuits against all posters and web sites that have put up posts in “defense” of you Goons following the next price crash. I have offered to settle those lawsuits for $500 million on the condition that the full amount be paid prior to the onset of the next crash. Whether I receive that amount prior to the crash or a very big multiple of that amount following the crash, I have a funny feeling that my family will be well provided for for many, many generations into the future. Call me madcap.
And you will be spending your last years in a prison cell! How much smarter you are than the thousands of our fellow community members who expressed a desire that honest posting be permitted!
I wouldn’t trade places with you for all the money in the world, Anonymous.
I care about you. I will try to help you. When I am telling people about why they lose most of their retirement money, it is my intent to spin things as much in your direction as is possible without me committing felonies of my own. All that makes sense and is proper and good and life-affirming, in my assessment.
But no prison for this boy!
Find someone else.
No can do.
It’s not my particular cup of tea.
I can’t go for that.
Please try to find someone else.
Fair enough, old friend?
Rob
So much will happen after the next price crash. Of course, you said the same things before the crash of 2008-09. And nothing happened. Okay, that crash didn’t count – but just wait till the NEXT one.
So, you need to count on a 65% crash and values staying there (as you know, us buy and holders don’t panic in down turns, we just keep buying) and you need your $500 million payday and then you will be better off than us.
Hmmmmm, I think I like my plan better, which is to earn money the old fashioned way: work hard, keep expenses low, save a significant part of income, buy/hold/rebalance.
How has the last 12 years of your so called campaign of terror impacted your ability to support your family? After all, you retired.
LOTS of important stuff happened after the 2008 crash, X.
There were a good number of people calling Taylor Larimore a liar following that crash. It wasn’t everyone. But there were some amazing things said at the Bogleheads Forum in the months following the 2008 crash. Had prices not been pumped back up in early 2009,there would have been more and more amazing things said. The crash made a BIG difference.
It was not too long after the crash that Wade Pfau contacted me and asked to work with me developing peer-reviewed research on the VII concept. I don’t think that would have happened prior to the crash. It was the crash that helped Wade to understand the realities well enough to see the opportunity that was being presented to him. Following the next crash, there will be HUNDREDS of academic researchers who will be doing the research we all need to see for us to recover from this economic crisis.
I had a hard time finding a blog that would run my Guest Blog Entries prior to the crash. Following the crash, I was able to find SCORES of them. That was a big change.
I have doubts as to whether I would be able to say the things I have said in my two Ignite talks at the FinCon meetings prior to the crash.
The psychology of most middle-class people is different today. You can see that just by talking to friends and people you meet at baseball games and all that sort of thing. It takes time for it to sink in how much damage Get Rich Quick strategies do in the end. It doesn’t happen overnight. That process of developing an understanding of the real-world dangers of Buy-and-Hold strategies began in late 2008. The next crash will accelerate the learning process in a huge way. The door is now kicked about one-third open. The next big kick is going to make a huge difference.
Even you Goons evidence less confidence in your angry and abusive posts today. You still try to put on the intimidation act. But it comes through that you are scared. I get to see that on a daily basis. That’s one of the reasons why I let you post here. It is my job to enhance my understanding of what Get Rich Quick strategies do to people’s ability to think clearly and you Goons evidence that in a concentrated way. I have seen a significant change in your posts since the 2008 crash. Researchers who in future days come to study the comments put to this blog to gain an understanding of how the Get Rich Quick fantasies hurt investors will be able to show that objectively.
I don’t receive death threats in my in-box anymore. Why? It’s because the mindset of investors is changing. There was a time when I was receiving death threats on almost a daily basis. I don’t recall receiving ANY since the 2008 crash. That’s not a change of significance?
I think you are fooling yourself. X.
And I think you are finding it harder and harder to do so as the evidence of the long-term dangers of Get Rich Quick strategies accumulates.
I think that Jack Bogle is going to be working with me following the next crash. Without Bogle backing you up, you Goons are nothing.
The full truth is that I think that even most of you Goons will flip after we see another 65 percent price drop. A P/E10 of 8 is INSANE, just as insane as a P/E10 of 25 or more. You don’t get an insane P/E10 level without a LOT of out-of-control investor fear. You employ a pure emotion-driven strategy today. Why would you not follow the emotion when it goes south? And of course we could never have a P/E10 of 8 unless just about every last Buy-and-Hold gave it up. That’s how we get the P/E10 level down to 8. So almost by definition we are going to have to see most of you Goons flip before we can bring this economic crisis to an end.
The first leg of the crisis made a big difference. The second leg will make a bigger difference.
Then we will all pull together and rebuild.
Good for us. The good news here is 50 times more good than the bad news here is bad.
My take.
Rob
So, you need to count on a 65% crash and values staying there
By no stretch. The numbers show that I am ahead today. The next crash will put me much FARTHER ahead, so much farther ahead that you Goons will never be able to catch up. That’s the way it ALWAYS works. It has been working that way for 140 years, according to the peer-reviewed research. Get Rich Quick is a marketing gimmick.
as you know, us buy and holders don’t panic in down turns, we just keep buying
Buy-and-Holders have to sell in a crash or else there could never be a crash. A P/E10 of 8 is insane. We cannot experience that sort of insanity in stock pricing without the Buy-and-Holders selling. It is the selling of the Buy-and-Holders that causes the market to bottom out and start working its way back up again. It’s when the Buy-and-Holders sell that the economic crisis comes to an end.
you need your $500 million payday and then you will be better off than us.
Again, no. I am already ahead by the numbers. But I have no intention of turning down the $500 million payday. Call me madcap.
I think I like my plan better, which is to earn money the old fashioned way: work hard, keep expenses low, save a significant part of income, buy/hold/rebalance.
If you would throw in “and use the peer-reviewed research as a guide in developing my investing strategy,” I could sign up for the rest of that.
There was time when Buy-and-Holders SUPPORTED the idea of using the peer-reviewed research as a guide.
That’s what caused me to fall in love with the Buy-and-Hold concept in the old days.
I think Bogle had it right the first time. I believe that taking the research into consideration is key.
Sue me.
Rob
How has the last 12 years of your so called campaign of terror impacted your ability to support your family? After all, you retired.
We’ll discuss that one in a courtroom, Anonymous.
That one belongs in a courtroom, not here.
Rob
“There was a time when I was receiving death threats on almost a daily basis.”
Outright lie. PRove it. Provide links and/or evidence. Obviously, the police and your Congressman did not agree with you!
“I don’t recall receiving ANY since 2008”
Wait a minute. Let’s say you really did get threats every single day, as you purport (which I do not belive for an instant). They stopped EVER happening at all for the past SIX YEARS, and yet you stipp complain about them every day, and m ake them a topic of multiple posts per day? Rob, #1, it’s a lie you tell. #2, even if it wasn’t a lie, then get over it already. People live in horrible circumstances — wives lost in accidents, parents murdered, children raped, sibling lost…. and even with those REAL and HORRIFIC losses, people understand that after a period of grieving and mourning, the best thing is to get on with life. MAybe it’s time you put the past behind you and try to focus on learning to become a good provider and an attentive spouse.
PS (not a death threat)
It’s not a question of whether I personally “get over” having received death threats or not, Grandpop.
The most important question here is whether an investing strategy that was truly rooted in peer-reviewed research would cause its followers to become so emotional as to advance death threats when challenges to it were presented to them.
Fama and Shiller both won Nobel prizes. They say opposite things about how stock investing works. We need as a society to figure out who is right and who is wrong.
Fama says that stock investing is a 100 percent rational endeavor. Shiller says that stock investing is a highly emotional endeavor. What does the fact that I saw death threats in my in-box on a daily basis because I was the person who discovered the errors in the Old School retirement studies tell us about who is right?
Shiller is right. Stock investing is a highly emotional endeavor. Buy-and-Hold pushes the emotional element to the highest point that it has ever been pushed. Valuation-Informed Indexing neutralizes the emotional element. When people can quantify how much it costs them to give in to their emotional impulses (that is, to ignore mispricing) THEY STOP DOING IT. Stock-market prices will become self-regulating once we lift the Ban on Honest Posting and permit millions of investors to learn what the last 33 years of peer-reviewed research teaches us.
People should be writing about the emotion that you Goons evidence in your comments at this site at every board and blog on the internet. We all have a Get Rich Quick urge and it is our Get Rich Quick urge that makes stock investing risky. The job of an investing analyst is to help people overcome their Get Rich Quick urge. There’s no better way to show people how following Buy-and-Hold strategies rots out both your brain and your soul than to point to the comments that you Goons post here.
And we of course we also need to show people how big names like Jack Bogle and Bill Bernstein and Scott Burns and Larry Swedroe either tolerate your abusiveness or in some cases outright encourage it. The Buy-and-Holders created a monster and that monster is now in the process of destroying not only our retirement portfolios but also our economic system. PEOPLE IN THIS FIELD NEED TO FOCUS ON INVESTOR EMOTION. That’s where all the risk is. Overcoming the Buy-and-Hold urge is 80 percent of the stock investing story. You can’t leave that part out and do a good job of helping people learn how to invest for retirement.
That’s my sincere take re these terribly important matters in any event, Grandpop. There has never been a single case in which a Valuation-Informed Indexer has advanced a death threat in support of his investing strategy. I wonder why.
Rob