Set forth below is the text of a comment that I recently posted to another blog entry at this site:
Do you expect the bogleheads to merely forget your past behavior and trust that you have changed?
Any Boglehead who thinks that I have changed is a damned fool, Uralapin.
The owners of the Bogleheads Forum are as corrupt as the day is long. But I wouldn’t call any of then fools. You don’t have to read too many of my posts here to know where things stand. They know where things stand.
Following the next price crash, there will be court proceedings. Things will be set straight. That’s how our system works.
After the owners of the Bogleheads Forum have spent some time in prison, their hearts will melt. That’s how human beings work.
I intend to take over operation of the Bogleheads Forum after the prison sentences are announced. There are lots of great people who post there and they deserve to have a place where they can feel clean about the discussions in which they participate.
Our economy will recover. I believe that we will see the greatest period of growth in U.S. history.
When their prison sentences are over, I will welcome the owners of the Bogleheads Forum to the site. We will get along just fine and they will make important contributions. They will feel better about themselves.
We all will make it to the other side of The Big Black Mountain together.
And people will look back in future days and wonder what all the commotion was about.
My best wishes to you.
Rob
Anonymous says
Rob,
Is there anyone else in the financial community that has a made a statement saying that they agree with you about fraud, prison sentences and $500 million windfalls? If so, who and can you give us a link.
Rob says
There’s no one who has said what I have said re financial fraud, prison sentence and $500 million settlement payments.
But there was a Nobel Prize Committee that gave their award to Robert Shiller.
For research findings that he published 33 years ago.
So we all should have started exploring the implications of those research findings 33 years ago. If we had, the Buy-and-Holders would have had nothing to cover up. If we had, there never would have been a single death threat or a single demand for a single unjustified board banning or a single act of defamation or a single threat to get a single academic researcher fired from a single job.
We see all those things because the thousands of people who would love to be able to tell their clients and readers the truth about what the last 33 years of peer-reviewed research shows know that they will be sending a lot of Buy-and-Holders to prison if they do so. What happens after the crash? Do they work up the courage to tell the full truth or do they not?
I say that they work up the courage to tell the full truth.
There will never be a day when there will be one person other than myself saying that you are on the way to prison, Anonymous. There are today THOUSANDS who want to feel safe saying that. Once one person other than me works up the courage to say it, there will be hundreds within a few weeks joining him. A few weeks later, there will be thousands.
By the time we reach the point where there are people other than myself saying it, you will have no options left. You should consider yourself fortunate that as of today it is only me. That means that there is still some time remaining for you to do what you need to do to get your prison sentence shortened a bit. That may not be the case for too much longer.
If you weren’t a Goon, you would be thanking me for trying to help you out by having the courage to say these things before it becomes the cool thing to do to say these things. But of course you are a Goon. So you don’t.
So be it, you know? I have done all that it is possible for me to do. When people point out at a later date how sad it is that you Goons are going off to prison, I will agree with them but I will also be able to point to these comments and show them that you Goons had one true friend in the world who said what needed to be said at a time when it might still do some good.
Does that make everything allright?
Not by a long shot.
But it’s all that a non-Superman can do in these circumstances.
I can do no more and I can do no less. That’s the bottom line.
Don’t let the bad guys get you down, man.
Rob
Anonymous says
Uh oh. Shiller says to buy stock:
http://money.cnn.com/2014/12/04/investing/shiller-housing-wealth/index.html?iid=HP_LN
Rob says
I’m grateful to you for providing us the link, Anonymous. What Shiller says on the subject should always be of interest to anyone who reads the materials at this board.
I don’t agree with your “uh oh.” Shiller has said all kinds of self-contradicttory things on the practical how-to questions of stock investing. He is a giant in this field. As is Bogle. Bogle has obviously made some big mistakes, in my assessment. Shiller has as well.
I am not entirely sure that what he said in this particular speech was a mistake. It sounds like he is just saying that stocks are a better investment than real estate. It’s not clear that he is saying that stocks are a good buy today. But I think it would be fair to say that it sounds like that is what he is saying. And, given what he has said in recent interviews that we have examined here, my guess is that is indeed what he thinks today.
As an aside, I think we all owe you and the other Goons some thanks for posting a good number of links to Shiller interviews in recent months. Those are helpful. I have been less than impressed by some of his comments. But he said them and people need to know what he said. He is the grandfather of Valuation-Informed Indexing. When he messes up, he to some extent makes us all look bad.
Whatever happened to the stock crash that Shiller predicted for this year? There’s not much time left for that one to come through, is there?
It’s not my intent to pick on him. I of course got that prediction wrong about us seeing a crash within a year or two of the 2012 election(I don’t recall today precisely what I said back then, only that the prediction that I made did not come through). The point here is that short-term predictions are always dangerous. it doesn’t matter whether it is Shiller making them or Bogle making them or Bennett making them. Short-term predictions of where stock prices are headed never work!
Anyway, to the extent that Shiller is saying that it makes sense to go with a high stock allocation today (I think to some extent he really is saying that), I think he is wrong. But it doesn’t bother me that he is saying something different that what I am saying. Shiller doesn’t know it all and I don’t know it all. It could be that he is wrong, it could be that I am wrong. We all should be saying what we believe and we all should be trying to learn from others and from our own mistakes. Shiller is a hero to me (as is Bogle). But I do not view him as infallible or anything close to it. And I obviously do not view myself as infallible or anything close to it.
I wish that you held Bogle (and Shiller) to the same tough standard to which you hold me, Anonymous. Investors who want to learn how to make better investing decisions should be holding all others to reasonably high standards while also being friendly and forgiving in their dealings with all others. If anything, you should make an effort to hold the people who have most influenced you to somewhat higher standards than those that you apply to others. Nothing that I say or that Shiller says is likely to affect you too much. What Bogle says is more likely to affect you. So it makes sense for you to be more careful when listening to his words.
Anyway, I do thank you for the link. I follow what Shiller says to a small extent on my own. You have brought a number of things to my attention that I otherwise would have missed. That caused me to spend more time thinking about what Shiller has said and I think that has helped me to develop a better take on where he is coming from (I don’t mean to suggest by that that I am coming from precisely the same place — I am not).
Hang in there.
Rob
Trebor Martin says
Vanguard publishes article on 4% retirement rule. What ban?
http://vanguardblog.com/2014/11/07/the-4-spending-rule-20-years-later/
Rob says
The 4 percent rule should have been corrected when we first learned that it was in error, Trevor. That was the morning of May 13, 2002.
There are millions of people who will be suffering failed retirements in days to come because those errors were not corrected within 24 hours.
We all should be talking about why the errors were made. We can learn from our mistakes. To learn from them, we have to acknowledge that they are in fact mistakes. Saying the words “I” and “Was” and “Wrong” kicks off a wonderful journey of learning that everyone in this field very much needs to experience.
And we won’t be learning only about the errors in the Old School safe-withdrawal-rate studies. The same mistake that caused us to get the retirement planning numbers so wildly wrong caused us to get asset allocation advice wildly wrong too. Getting one’s asset allocation right is very important. So that’s good stuff.
Most importantly, we need to focus on the emotions behind the 12-year cover-up of these errors. Get Rich Quick strategies are highly addictive. Buy-and-Hold is highly addictive. The future of investing advice is developing tools to help people from falling for Get Rich Quick schemes. The Get Rich Quick urge that resides within us all is an emotional urge. We need to talk a LOT more about investor emotions and that means talking about WHY we got the retirement planning numbers wrong, not just that we did so.
We need to clean up the corruption. There are lots of people who long to be able to do good work in this field and who want to be talking about all the things that I refer to above. We need to help those people to feel safe to do so. That means putting you Goons in prison and setting up law firms to take on the thousands and thousands of civil cases that people need to bring as a result of the 12-year cover-up.
We need to pass laws so that nothing like this can ever happen again. We need to be sure that the owners of internet sites honor their promises to protect us from Goons like you.
We need to explain to people how it was the continued promotion of Buy-and-Hold strategies for 33 years after the peer-reviewed research in this field showed that there is precisely zero chance that such strategies could ever work for even a single long-term investor that caused the economic crisis. The economic crisis has hurt all of us. We all need to know why it happened and what we need to do to make sure that Buy-and-Hold never causes another economic crisis.
It’s good stuff on top of good stuff on top of good stuff on top of good stuff. All of that follows from coming clean on this one issue.
What is banned is HONESTY. We don’t need more Buy-and-Hold Lies. We need honesty. We need to be telling people about the DANGERS of Buy-and-Hold strategies, not telling them that there is some mystical, magical research somewhere that no one is able to put his or her hands on that supports this smelly Get Rich Quick garbage.
My take.
Rob
Rob says
Where’s the discussion of the effect of the valuation level that applies on the day the retirement begins? That’s the error that caused the problem. She doesn’t even discuss that issue.
She says that the problem is that we are in a low-return environment today. The Old School studies took that into account. Greaney’s study too that into account. It is an insult to him and to all the authors of Old School SWR studies to say that they didn’t consider the possible that we might enter a time-period when returns would be lower. The entire point of all SWR studies is to identify the withdrawal rate that works in worst-case scenarios. Entering a bad return environment is obviously a bad-case scenario. So that is not the mistake that was made.
And she says that the studies failed to take the possibility of bad return sequences into account. Again, the Old School studies do that! It was the Old School SWR studies that taught us all the importance of considering return sequences. That was the gold in them. Before the Old School studies came out, people like Peter Lynch were saying that the SWR is 7 percent. The Old School studies put an end to that. It is a grossly unfair insult to the authors of the Old School studies to say that they did not consider the effect of returns sequences when they were the ones who achieved that huge breakthrough that advanced our knowledge of how retirement planning works in a very big way.
The elephant in the living room is valuations. There is 33 years of peer-reviewd research showing that the valuation level that applies on the day the retirement begins is the most important factor in determining the safe withdrawal rate. There is a Social Taboo against talking about this because 90 percent of the experts in this field have been ignoring this factor for 33 years after the peer-reviewed research showed that it is critical and in a not-small number of cases have engaged in financial fraud (a felony) to keep millions of middle-class investors from learning about the important of this factor.
I cannot change the history, Trebor. I love the Buy-and-Holders for their many positive contributions and I always will. Those contributions are real and important and are already written in the book and thus can never be negated. But the Buy-and-Holders are going to look very, very, very bad following the next crash when they try to once again explain away the realities staring millions of middle-class investors in the face.
Price matters when buying stocks just as much as it does when buying anything else. Ignore price and you get it all wrong. No matter how smart you are. No matter how much of a big shot you are.
Price matters.
That’s the future.
Either we acknowledge that as a society and stop with 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 or we all go down together. Those are the two options before us. We can enjoy the benefits of being the luckiest generation of investors that ever lived or we can see our economic system fail.
I am telling.
Not because I have some grudge against the Buy-and-Holders. Because I love them. Jack Bogle never wanted all his wonderful work to turn out this way. The woman who wrote this article never wanted her hard work to turn out this way. Not one person wanted this. Even Mel Linduaer and John Greaney never wanted this.
But here we are.
Every time another Buy-and-Holder tells another lie he or she makes it harder for all the others to acknowledge the mistake they made in 1981. The sooner you come clean, the shorter your prison sentence will be. Because the sooner you come clean, the sooner the millions of middle-class investors will be able to learn about the first true research-based investing strategy and the sooner we will be able to bring the Buy-and-Hold Crisis to an end.
Again, that’s my sincere take re these terribly important matters in any event.
My best and warmest wishes to you and yours and to all of my many good Buy-and-Hold friends.
Rob
Rob says
You’ve asked me what I will do if there is not another crash within the next two years. I have said that I will write a column saying that that tells me that there is something wrong with the Valuation-Informed Indexing concept and that I will continue studying the matter to try to figure out what really works best.
I’d like to know what you Goons will do if there IS a crash of 65 percent or so within the next two years. Will that shake your confidence in Buy-and-Hold? I will continue to believe that it will shake your confidence regardless of what you say but I would like to hear what YOU say on the matter.
If you say that it will not shake your confidence, I have a follow-up question. Is there ANYTHING that could ever shake your confidence? If Jack Bogle says the words “I Was Wrong,” would that do it? Is this a matter of blind faith with you?
If it is blind faith, it is blind faith. It is not my intent to ridicule you. But I do not think that something that you follow out of blind faith can properly be called science. I was once a Buy-and-Holder because I believe in science and Buy-and-Hold is marketed as science. I gave it up when in my eyes it became clear that it was not science but emotion that was behind the widespread belief in Buy-and-Hold. That’s part of the reason why I ask the question. I marvel at how people who say they believe in science (we have that in common) evidence a blind-faith belief in this investing strategy.
Rob
Laugh says
I won’t do anything if there is a 65 percent decline in equities. I have been through many declines and am wealthier than ever. now that I’m older most of my wealth is not in equities anyway.
Rob says
Okay, Laugh.
It won’t hit you as hard if you don’t have much money in equities.
But I think you may experience some change in your thinking. Lots of other people will be talking about what went wrong and I think that may influence you a bit.
But perhaps not. It certainly could be that I will be proven wrong re this.
My best and warmest wishes to you and yours.
Rob