Set forth below is the text of a comment that I recently posted to another blog entry at this site:
Just a suggestion, perhaps you should post your rules for acceptable comments. The two comments from Laugh that you served up as today’s post certainly wouldn’t get through anymore.
Comments that add to our collective learning experience are encouraged. Comments that detract from our collective learning experience are discouraged.
I obviously approved the two comments by Laugh. And then I highlighted them by featuring them as a separate blog entry. I believed that there was a learning experience to be had by seeing them and thinking about what they signify.
Now –
If Laugh showed up every day and posted those same words to every blog entry here, I wouldn’t approve them every time. I can see approving the same comment more than once if it was used in two different places where it had some relevance. But I wouldn’t approve the same comment on a daily basis because it would be boring for people to read the same words over and over again.
You need to add something. That’s the bottom line. I’ve approved death threats. Death threats hurt us because they drive good people away. So my first reaction to a death threat is to want to delete it. But death threats signify something in this particular debate. They show how emotional Buy-and-Holders become when challenged with accurate reports of what the last 34 years of peer-reviewed research shows. People need to know how much pain the Buy-and-Holders are in. So I have approved a limited number of death threats. I don’t like them. I always criticize them in my responses (while also acknowledging the pain that they reveal and trying to do something to help reduce that pain). But I think that we need a small number of death threats on the record for the record to be complete.
I always consider the context in which a comment is offered. If you say “Bogle is great” as a comment to an argument that Bogle has made at least one big mistake, I would approve it because it expresses the other side of the story. If you said “Bogle is great” as a comment to an argument not relating in any way to Bogle, I would be less inclined to approve it. I might. Any argument on Valuation-Informed Indexing relates at least in an indirect way to Bogle. So it’s possible that that one would get through. It would help if there were another sentence or two explaining why you think Bogle is great.
But if you offered five comments to an article talking about Bogle’s mistake saying “Bogle is great,” I would approve at most two of them. The first one would be okay for the reasons outlined above. I might let the second one pass, especially if somewhat different wording was used. I would not approve the third comment saying the same thing in the same thread even if the comment considered by itself was relevant to the thread and non-abusive.
The comments that I deleted yesterday were just too argumentative. There was no content to them, just contentiousness. I first approved them because I felt that there was a tiny bit of something real to them. One of the issues on the table is whether site owners have a right to delete posts that do harm to their marketing efforts if those comments are backed by 34 years of peer-reviewed research. I say that that is fraud. A lot of good and smart people believe otherwise. I think that people will reconsider after they lose most of their retirement money in the next price crash. But we haven’t yet seen the consequences of these deceptions and so we have seen a lot of non-Goons make that sort of argument. So, while I always disagree with that argument, I usually approve comments making it. I personally view that argument as out to lunch but there are too many people who view it as containing something real for me to feel okay about deleting comments making it as a general rule. But there has to be at least a tiny bit of effort to develop the point evidenced. There were a couple of comments yesterday that showed zero effort. I approved them with the general rule in mind and then deleted them when I reread them a short time later.
If they had stayed up for a full day, I wouldn’t have gone back and deleted them even if I came to realize that they were lacking an effort to develop the argument. After a comment stays up for a day, I would consider it part of the record. And it is exceedingly rare for me to delete a comment even on the same day that I have approved it. But in this particular case I decided that that was the way to go.
You are right to suggest that I have gotten tougher re the approval of Goon comments in recent months. That’s because pretty much everything has been said multiple times and so new comments making points that have been made previously no longer add to our collective learning experience. It might be true that I would not approve Laugh’s second comment today; it would depend on whether it was phrased in a novel way or not. I would be inclined to approve the first comment.
The point that the cover-up of Shiller’s work is a funny sort of cover-up because his book has been widely reviewed and because he was awarded a Nobel prize is a very strong point for your side. This is NOT an ordinary cover-up. Our story is an exceedingly strange one. Lots of people have a hard time accepting that there is an ongoing cover-up of research that was awarded a Nobel prize and featured in a best-selling book. I say that there has been a cover-up of Shiller’s work. But it is a cover-up taking place in broad daylight.Exceedingly strange stuff. So I view the point that Laugh was making with that comment as a 100 percent fair one.
I do not approve of many of the tactics employed by you Goons. But I don’t at all say that you have never made good points in your comments here. There has been lots of good stuff mixed in with the garbage. Some of your best stuff related to the following points:
1) The fact that Shiller has been disingenuous in his presentation of his own ideas. I was reluctant to believe this for a long time. Shiller is a hero to me (as is Bogle, to be sure). But when a Goon is right, a Goon is right, you know? You guys (and witches) won me over on this one. Shiller has been disingenuous. He remains a Hero of the First Rank for the middle-class investor. I don’t take that back. But the way he states things is often confusing and that has hurt the cause in a serious way. So the point that you Goons made about him needed to be advanced. You gradually forced me to acknowledge that he has been disingenuous. It took me some time to acknowledge it but you were right re that one;
2) The fact that a big reason why Bogle did not call for investors to change their stock allocations in response to big valuation shifts was because he wanted Buy-and-Hold to be as simple as possible and saw this as an unnecessary complication. You haven’t made this point often but there was at least one series of posts in which you made it. I view this as a very strong point. I don’t think it was the only reason why Bogle took the path he did. But I think it was a major factor. It’s a motivation for which I have a good bit of sympathy because I think simplicity is critical and I believe that there is no one in this field who has done more to make investing simple for the average person than Bogle.
3) You questions about how markets really work and about how what we have seen in the stock market is something that we don’t see in other markets. These were the hardest questions for me to answer. I don’t say that I’ve gotten everything perfect in my responses. But I do think that I made reasonable points as a result of struggling with those questions. Those questions prompted a major learning experience for me. So I am exceedingly grateful for the pushback I saw from you Goons on a number of market-related questions.
4) Your points about how few investors are pure Buy-and-Holders or pure Valuation-Informed Indexers. I found these comments highly persuasive. I think that theory is VERY important. But it is also important to recognize that most average people are either suspicious of theoretical arguments or disinterested in them. Most investors follow a modified or compromised version of Buy-and-Hold. And there are more investors who follow a modified or compromised version of VII than there are who follow a pure version of the new model. This insight (which I picked up from my conversations with you Goons) has many practical implications.
I hope that helps a bit. I am always open to hearing new arguments, whether of the Goon or non-Goon variety. It is true that I am approving fewer comments today than I approved in the past. You Goons have been complaining for a long time that the words that appear at this site are repetitive. I haven’t generally gone along with that one. But I now think things have reached a point where there really IS a lot of repetition evidencing itself. So I am today less inclined to approve comments that make points that have been made many times before. You need to come up with something at least a little bit new or find some other way to make use of your time. I will not today approve a comment saying “hocus forgot to take his meds.” That’s so 2002!
Hang in there, man. It gets better. A LOT better.
Rob
“I said that, if we do not see a crash by the end of 2015, that would be grounds to question this VII stuff. I think that is fair. We cannot say when it will come but there are lots of reasons to believe that it should come by the end of 2015. If it doesn’t, that would suggest that we are missing a big piece of the puzzle and I think it would be fair for my critics to point that out.”
Nears as anyone can tell, those “lots of reasons” start and end with your “145 years of historical data”. But 2015 is over, and no crash. What went wrong? Now you say 2016, or maybe 2018. But your 145 year chart hasn’t changed. You’ve given no reason for pushing the date out, except to avoid admitting your blown call.
The reason for pushing the date out is that the crash has not come yet, Anonymous. To predict a crash by the end of 2015 on New Year’s Eve would be a little bit stupid, no?
But it’s not a blown call. I never said that it was certain that we would see a crash by the end of 2015. I said that that was my personal prediction. The data says that we should see it by the end of 2018. But that’s the farthest-out date (presuming that stocks continue to perform in the future somewhat as they always have in the past). I didn’t choose the farthest-out date for my personal prediction. A short time after I gave the 2015 date, I changed my personal prediction to the end of 2016. If we don’t see a crash by then, I will go with 2017. Does that not make good sense?
The reasons don’t begin and end with the 145 years of historical data. The data is the most important reason. Another is common sense. Price discipline matters in all other markets. So it is hard to imagine why it would not matter in the stock market too. That’s a second reason. A third reason is the insane level of emotion we see evidenced by Buy-and-Holders when someone posts about the last 34 years of peer-reviewed research. The displays of emotion support Shiller’s theory that it is investor emotion that sets stock prices rather than economic realities (because the market just happens to be priced at insanely high levels at the same time as we are seeing all this emotion evidence itself on discussion boards). The statements of many of the experts in this field to the effect that investors should be taking valuations into consideration when setting their stock allocations is the fourth reason. Jack Bogle himself does that. Why? He advocates Buy-and-Hold and yet he includes statements in all of his articles and speeches explaining why Buy-and-Hold can never work. Huh? That shows that he has a conscience and would like to be telling the truth about this stuff if he thought it would be possible to turn a buck at the same time. I put more faith in Bogle’s honest statements than I do in the ones that help him turn a quick buck.
Nothing went wrong. The market is not predictable in the short-term. I have said that not just thousands of times but tens of thousands of times, perhaps hundreds of thousands of times. You need to pay better attention! That’s just the way it works, Anonymous. Short-term timing doesn’t work and no Valuation-Informed Indexer has ever said otherwise. We accept what the peer-reviewed research from before 1981 says as much as we accept what the peer-reviewed research from after 1981 says. You have to include both in your model to get something that works in the real world.
You quote me as saying “that would be grounds to question this VII stuff.” I personally continue to have great confidence in the VII model. But I certainly don’t object to anyone saying that at one time I predicted a crash by the end of 2015 and that it did not arrive by that time. Shiller once said that investors who were heavily in stocks would regret it by the end of 2006 and that didn’t happen either. They didn’t regret it until two years later. And it may well be that the crash that I once thought we would see by the end of 2015 will come within the next two years. We will all just have to wait and see.
I never offered any guarantees and I don’t offer any today. We can do some things and we can not do other things. One thing that we cannot do is give precise predictions of when crashes will come. One thing we can do is to warn investors that one is certainly coming in the not-too-distant future in the event that stocks continue to perform in the future anything at all as they always have in the past. Every investor alive needs to know that. If we all posted honestly and respected the right of every other poster to post honestly, every investor alive WOULD know that. And you wouldn’t be on your way to prison. That would be a better world, in my sincere assessment.
I hope that helps a bit.
My best and warmest wishes to you and yours, Goon friend.
Rob
“…the end of 2018. But that’s the farthest-out date… ”
The bullshit just never stops pouring out of your innumerate loud wrong mouth, does it, Rob? Enjoy your next year of scraping along on whatever paltry income you have left at this point. What a loser. I only feel sorry for your innocent family — while you personally deserve every karmicly-driven privation coming your way.
I detect emotion in these words, Anonymous.
This is why I speak out against the smelly Buy-and-Hold garbage so strongly and so frequently. It hurts people. Not just Normals. It has hurt you Goons in very serious ways. And, believe it or not, I don’t like to see that. I care about you.
I naturally wish you all the best things that this life has to offer a person.
Rob
Then (2013): “I can give the reasons why I view the end of 2015 as being an outside date…But the entire historical record indicates we should see the crash by the end of 2015.”
Now: “I never said that it was certain that we would see a crash by the end of 2015…The data says that we should see it by the end of 2018. But that’s the farthest-out date…”
“But it’s not a blown call.”
Nothing but your own quotes. If that’s goonish, doesn’t that make you the goon?
Do you think that Shiller was wrong when he said near the end of 1996 that investors who were heavily invested in stocks would come to regret it within the next 10 years?
We didn’t see the crash until near the end of 2008. Shiller was off by two years.
He was technically wrong. But he got something very important very right. We were headed toward an economic crisis. He saw it coming. Few others did. Jack Bogle certainly was not saying what Shiller was saying.
Had we listened more carefully to what Shiller was saying in 1996, we could have avoided the economic crisis that began in 2008. Millions of people who are unemployed today would not be unemployed today. Millions of entrepreneurs who have seen their businesses fail would not have seen their businesses fail. Millions of people on both the left and the right who have begun to lose confidence in our political system would not have begun to lose confidence in our political system. Millions of people who are on their way to suffering failed retirements would not be on their way to suffering failed retirements.
I think we should have listened more carefully to what Shiller said in 1996. That’s my sincere take, Anonymous.
If you want to say “Nyeh, nyeh, nyeh, Shiller was off by two years.” I guess you can do that. I cannot stop you. But it is my view that you are focusing on the small error contained in Shiller’s words and ignoring the huge breakthrough insight also contained in Shiller’s words. He got something wrong. That’s so. But he also got a much bigger thing right. That’s part of the story too. Both things are realities and both realities need to be taken into consideration by every investor alive today.
If you follow me around and press me to make short-term predictions about how the market is going to perform in future days, I am going to get some of them wrong. You shouldn’t be surprised by that. The entire historical record shows that anyone trying to predict the future turns of the market is going to get some of them wrong. I have no better ability than anyone else to get them all right. So I am certainly going to get some of them wrong.
If I want to maintain a perfect record, I am just going to have to refuse to make predictions. But I don’t intend to play it that way. You ask me to make predictions because you want to be able to hold me accountable. I think it is healthy for me to be held accountable. So there are circumstances in which I will agree to make predictions. And in some cases I will get them wrong. There’s nothing that I can do about it. That’s just the way it works.
Now —
If you were fair-minded, you would put the wrong prediction in its proper context.
I said on the morning of May 13, 2002, that Greaney got the numbers wildly wrong in his retirement study. You Goons pretended to believe that I was the one in the wrong. Ten years later, the Wall Street Journal ran a story saying that the 4 percent rule is a big pile of garbage. So did the Economist magazine. So did Smart Money magazine. So did the Financial Mentor site. So did about 30 other leading publications in this field. Greaney ruined thousands of lives with his false claims about the safe withdrawal rate. I told the world about his mistake. That’s a big deal. I would have saved millions of people from suffering failed retirements had my May 13, 2002, post been given the publicity it merited and would have received had it not been for the insanely abusive and indeed criminal behavior of you Goons.
Is my exposure of the errors in the Old School safe-withdrawal-rate studies more important or less important than my wrong prediction? It is 500 times more important. The prediction of when the next crash will come is a parlor trick. It means nothing. The crash is going to do us all bone-crusing damage regardless of whether it comes by the end of 2015 or by the end of 2016 or by the end of 2017. I got the year wrong but I did not get the bigger point wrong — We are headed for a massive price crash that will deepen the economic crisis and may even land us in the Second Great Depression and we all should be working 24/7 to lessen its impact. That’s what matters, not knowing the precise day and hour that the crash is going to come.
We can know some things and we cannot know some things. We know that practicing price discipline when buying stocks is 80 percent of the game. There has never in 145 years of stock market history been an investor who practiced price discipline and who achieved a poor long-term result. And there has never in 145 years of stock market history been an investor who failed to practice price discipline who achieved a good long-term result.
Buy-and-Hold always dramatically increases risk while also dramatically reducing return. Buy-and-Hold is the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind. Valuation-Informed Indexing, in contrast, is the first true research-based investing strategy. Valuation-Informed Indexing is the strategy that Bogle thought he was developing when he developed Buy-and-Hold plus a whole lot more than he did not even imagine as within the realm of possibility. Buy-and-Hold is the past, Valuation-Informed Indexing is the future.
Perhaps there will come a day when we will know more about how stock investing works than we do today and when it will be possible not only to make effective long-term predictions but also to make effective short-term predictions. I have my doubts, but you never know, perhaps that day will come. So my advice is that you take any short-term predictions that I or anyone else puts forward with a huge grain of sale.
The same mountain of peer-reviewed research that shows why you should not place too much confidence in short-term predictions shows why you MUST pay very close attention to long-term predictions rooted in consideration of price levels. Those predictions ALWAYS work. It is not possible for the rational human mind to imagine some alternate universe where price would not play a huge role in determining the merit of a stock purchase and of course the entire historical record confirms that what common sense tells us must be so really is so. The Buy-and-Holders have destroyed millions of lives by telling lies re this matter and they destroy thousands more with each day they continue doing so. They should knock off the funny business. Now. Today.
I am going to continue posting honestly re safe withdrawal rates and scores of other critically important investment-related topics, Anonymous. I have never given two seconds of consideration to playing it any other way, and, if I am true to myself, I never will.
I intend to say a few words at your trial aimed at getting your prison sentence reduced a bit. I ask nothing in return from you for doing so. I think it is the right thing to do given the circumstances that apply, so that is the way that I am going to play it. But I will of course testify honestly. Going to prison is not high on my bucket list. So that one is 100 percent non-negotiable.
I naturally wish you the best of luck in all of your future life endeavors, my long-time Goon friend.
Rob