Set forth below is the text of a comment recently put to another thread at this site by a regular site visitor, followed by my response:
Can you name a single person who’s either pure BH or pure VII as you define them? A person who would never, ever change his allocations under any circumstances, or one who is forced to mechanically make changes based on valuations, with no consideration of other factors?
Of course you can’t. No such person exists. Even theoretically there’s no sane person who believes valuations can never have an effect on future returns, or one who says they must always. The data is clear – historically, valuations have had some effect on future prices, some of the time. Shiller will tell you that. Vanguard will tell you that. Fama will tell you that. There are no two “opposite” (your word) views.
The retirement study posted at John Greaney’s web site does NOT contain an adjustment for the valuation level that applies on the day the retirement begins. Greaney often referenced that study in his posts at the Motley Fool board. I put forward a post on the morning of May 13, 2002, that asked whether we should be considering valuations when we identified the safe withdrawal rate. You say here that: “Historically, valuations have had some effect on future prices, some of the time.”
So should SWR studies include an adjustment for the valuation level that applies on the day the retirement begins or not? I say they should. What do you say, Anonymous?
Rob
Uh oh, Rob. Research now shows that market timing scheme’s like VII, don’t work.
http://www.bogleheads.org/forum/viewtopic.php?f=10&t=169986
Time for you to say the words “I was wrong”.
Here is another article, Rob. It is targeting people like you that are predicting crashes:
http://blog.aarp.org/2015/07/22/what-the-end-of-the-world-teaches-us-about-investing/
Maybe you need to set Allan Roth straight.
Thank you for providing the link, Anonymous. Your attitude is anti-learning and non-helpful. But the material at the link is a plus. All investors need to be looking at this stuff and need to be considering all possible angles.
The material at the link shows in a powerful way that I am right. I have been saying from the first day that we need to have a national debate on the last 34 years of peer-reviewed research. You Goons have been saying (with your actions) that all honest debate must be stamped out through the use of any means (abusive or not, legal or not) available. The fact that so many posters participated on that thread and that a good number made sound points shows that I was right — an honest debate is desperately needed.
One poster pointed out that a poll was taken that showed that only 10 percent of the Bogleheads Community believes that valuations matter. That shouldn’t be given the 34 years of peer-reviewed research showing that valuations (price discipline) is 80 percent of the investing story. It should be the other way — we should be seeing 90 percent Valuation-Informed Indexers and 10 percent Buy-and-Holders.
That’s where things will be headed following the crash, when you Goons are placed in prison cells, where you belong. That’s going to flip it. Then all the people who have doubts about Buy-and-Hold will be speaking up in clear and firm ways. Then there will be no 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. Then I will be running the Bogleheads Forum and I will obviously not permit such garbage. It will no longer be a corrupt enterprise. The discussions will be REAL.
We need to have these discussions. And people want to hear these discussions. But they need to be conducted according to the laws of the United States. No other way will work. If the owners of the Bogleheads Forum were willing to follow the laws of the United States, I would be participating at that thread. I am the person who discovered the errors in the Old School SWR studies and the person who co-authored the most important piece of research published in this field over the past three decades. So I obviously need to be there for the discussion to be legitimate. People need to hear what people who support the research-based approach have to say, not only what the Buy-and-Holders have to say.
We need Wade Pfau participating in an honest way in the discussions. The owners of that board were complicit in the threats made to destroy Wade’s career if he continued doing honest work in this field. Those people need to be put in prison cells for the rest of us to be able to do fruitful work.
We need Rob Arnott participating. Arnott has told us how he and other researchers have been threatened by Buy-and-Holders when they tried to do honest work. That needs to stop if our efforts are to prove fruitful.
We need Microlepsis participating. A poll at that community showed that he was one of the most popular posters in the history of the forum. Mel Lindauer removed him for that reason. It is Lindauer who needs to be removed and placed in a prison cell. We need more honest, intelligent posters and fewer of the Lindauer types who speak with their fists.
We need John D. Craig participating. Again, one of the most popular posters in the history of the forum. Again, banned because his popularity and intelligence “offended” Mel Linduaer, a poster who “wins” arguments with those putting forward research-based strategies by threatening physical violence on those who dare to “cross” him by posting honestly.
We need bloggers like Mike Piper posting honestly at the forum. Mike told me that he very, very much would like to post honestly but that he fears Mel Lindauer and what he will do to his blog if he dares to “cross” him. None of Mike’s contributions from the day he agreed to post dishonestly count. No one can say today which words he means and which words he is putting forward to appease you Goons.
Ethics come first, Anonymous.
Honesty comes first.
Research comes first.
Until we put you Goons in prison cells, that site is a corrupt enterprise. There are honest and helpful comments mixed in with the deception stuff. But there is no means by which to separate out the two until the board is placed in the hands of people willing and able to conduct business there in an ethical manner.
We need Jack Bogle acting ethically. Bogle has a big name in this field. There are people who think he is telling the truth. Honest people don’t associate with the ethical zeroes who have put up posts in “defense” of Mel Lindauer and John Greaney. So Bogle has failed the basic ethical test in a very big way. People need to know that. That says something about Buy-and-Hold. When people like Jack Bogle conclude that there is no ethical way to defend this “strategy” things have reached a point where the strategy should no longer be defended.
That’s my sincere take, Anonymous. We very much need to have a national debate on the implications of the last 34 years of peer-reviewed research in this field. But it needs to be conducted pursuant to the laws of the United States. We need to see announcements of prison sentences for those who have posted in “defense” of Mel Linduaer and John Greaney and Jack Bogle. From the day those prison sentences are announced, it will be all downhill sledding for all of us.
I am sure
My best and warmest wishes to you and yours.
Rob
Maybe you need to set Allan Roth straight.
Again, thanks for the link. I want everyone who visits this site to become familiar with what people other than myself think about this stuff. I think it is a good idea if people read the material at the link.
I spoke with Allan at one of the Financial Blogger Conferences. We engaged in some e-mail correspondence following the conference.
He was in the audience when I gave a presentation showing how much people could add to the lengths of their retirements by saving just a little bit more money. It was a powerful and highly counter-intutive point that I was able to make using the Retirement Risk Evaluator. Allan was excited about it and wanted to write an article about it.
When I explained what was behind the calculator (it incorporate the last 34 years of peer-reviewed research and thus shows results 100 percent the opposite of what the Buy-and-Holders push), he lost interest. Allan is a Buy-and-Holder.
I obviously think that’s unfortunate. He is smart (like all Buy-and-Holders). He could do a lot of good for people. And I am sure that that is what he wants to do deep in his heart.
But he has not yet been able to acknowledge the 34 years of peer-reviewed research showing that there is precisely zero chance that a Buy-and-Hold strategy could ever work for a single long-term investor. That’s always the hang-up. And so it is with Allan. He has a huge emotional investment in Buy-and-Hold and it is hard for him to give it up. My guess and my hope is that that will change following the next crash. I believe that Allan and I will become good friends and will work together on lots of projects following the next crash.
I am the farthest thing one could be from a Doom-and-Gloomer.
I say that the good news in our saga is 50 times more good than the bad news is bad. We now know how to reduce the risk of stock investing by 70 percent. We now now had to prevent economic crises. We now know how to increase returns enough for us all to be able to retire five to ten years sooner than we imagined possible during the Buy-and-Hold years. The stuff I push is not Doom and Gloom! It is an exciting and wonderful and life-affirming research-based advance!
The crash will hurt. It may put us in the Second Great Depression. We are looking at some serious bad stuff up ahead.
That’s part of the process. We need to go through that stuff to get you Goons placed in prison cells so that the rest of us can move forward with the very important business of talking this stuff through together. I don’t like that reality one little bit. But after 13 years of your goonishness I think it would be fair to say that that’s where things stand.
Rob
Gee, Rob. It seems the entire financial world is against you……hhhhhmmmmmmmmmmm.
Yes and no, Anonymous.
Buy-and-Hold is dominant today. There is a lock-in effect that goes with that that has kept us from having a national debate re the peer-reviewed research for 34 years now. In that sense, yes, I am facing strong headwinds.
But look at what I have working for me.
I have 34 years of peer-reviewed research backing me up.
I have Shiller’s Nobel Prize demonstrating the validity and importance of the Valuation-Informed Indexing concept.
I have research that I have co-authored showing that VII has far outperformed BH for 145 years running published in a peer-reviewed journal.
I have the laws of the United States on my side, meaning that you Goons will be placed in prison cells following the next price crash. That’s going to make a HUGE difference. Once people on the internet hear about the prison cells, there ain’t going to be one site on the internet still pushing the smelly Buy-and-Hold garbage.
I have thousands and thousands of people who would like to start successful businesses on the internet who can earn million and million by being thought leaders as we move from the failed Buy-and-Hold garbage to the first true research-based investing strategy.
I have scores and scores of big-name experts who have endorsed the VII concept and who have expressed a desire to be able to post honestly re the last 34 year of peer-reviewed research.
I have thousands of fellow community members who have expressed a desire to be able to hear honest reports re what the research says. That translates into millions of middle-class investors in the non-internet world who feel the same way.
Somehow I think I will manage to soldier on.
The financial world is in the process of changing. For the better. In a big way. Good for the financial world.
My best wishes.
Rob
Rob,
This situation can only be one of two things:
1. A vast conspiracy
2. A made up fantasy
It is one or the other. Which is more likely?
Was the denial of civil rights to people with black skin a vast conspiracy?
Was it a made-up fantasy?
Those are not the only two categories.
The Buy-and-Holders are good and smart people. They have helped us in many ways. They believe in what they are doing.
They made a mistake.
If we permitted honest posting, they would come to understand the mistake they made and all would be well.
But the mistake is so big that they cannot bear to face it. It hurts them to look at the evidence that they made a mistake. When people get hurt, they lash out at the cause of the hurt. The Buy-and-Holders are human and they lash out at those of us who make a strong case that they are wrong.
We all should be trying to help the Buy-and-Holders to understand how they got on the wrong track. But they have lots of ways of discouraging us from doing so because of their great wealth and power. As a result, most of us pull our punches. We don’t want them mad at us. We try to drop hints as to why Buy-and-Hold can never work but we don’t state things plainly enough for most people to understand the full ramifications of what the research shows to be so.
We need to cut that out.
Not tomorrow.
We need to cut that out NOW.
We ALL need to do that
Your two options are not the only possibilities. Humans are more complex than that.
There is no made-up fantasy here and there is no vast conspiracy here. What we have here is a huge advance in our understanding of how stock investing works, an advance so huge that it makes those who built their careers on the earlier understanding feel bad that they made a mistake.
As a society, we need to move on. It is be putting you Goons is prison that the rest of us can all get about enjoying the benefits of happening to be alive at the time in history when the last piece of the investing puzzle fell into place. Once we have one large site that permits honest posting on the last 34 years of peer-reviewed research, the idea of permitting honest posting (that is, putting individuals who post in “defense” of Mel Lindauer and John Greaney and Jack Bogle in prison cells, where they obviously belong) will spread and spread and spread.
That’s the story, Anonymous. Anyone who doesn’t talk about prison sentences for you Goons is adding to the problem rather than to the solution. We adopted laws against financial fraud for a good reason. Those laws must be enforced. Now. By the close of business today, if not sooner.
That’s my sincere take re these terribly important matters, in any event.
I naturally wish you the best of luck in all your future life endeavors.
Rob