Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“When I win one time, I win forever.”
So said everyone who ever played the lottery. They liked their cards too. The odds against them didn’t matter. They would win someday, because they were special.
I have 35 years of peer-reviewed research (based on 145 years of historical return data) on my side, Anonymous. That ain’t nothing. That’s a lot more than a lottery ticket.
And I have common sense on my side. Price discipline is accepted as critical in every market that exists other than the stock market. If it turns out that the Buy-and-Holders are right that price discipline is not essential in the stock market, that will be a shocker.
ALL of the evidence is on my side. 100 percent of the evidence supports Valuation-Informed Indexing and 0 percent of the evidence supports Buy-and-Hold. Many years ago (in 1965) a mistake was made that led smart and good people to conclude that the market is efficient and that therefore the idea that the market could ever be mispriced is silly and that thus there is no need for investors to worry about exercising price discipline. But in the 50 years since, there has never been a single study published lending support to that pretty-darn-far-out-there (by any objective standard) “idea” (I put the word “idea” in quote marks because the Get Rich Quick impulse that resides within us all is the driver here and the GRQ impulse has no intellectual content to it, it is purely an emotional thing).
Wade Pfau spent a long time researching the literature to determine if there was ever a single study supporting Buy-and-Hold and he found that there has never been even one. So that aspect of the question is now settled beyond any reasonable dispute.
I also have a mountain of documentation of the behavior of the Buy-and-Holders in the 14 years since I put up my famous post questioning whether the Old School retirement studies contain valuation adjustments or not. The behavior that we have seen is not even a tiny bit rational. That reality supports Shiller’s understanding of how the market works.
If mispricing is a real thing, as his “revolutionary” (his word) 1981 research showed, then we should be seeing a lot of emotional behavior on the part of Buy-and-Holders at times when stock prices are insanely high. That’s what we have been seeing. If the market were efficient/rational, we never would have seen 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. Fama has been discredited a second time and in a different manner over the past 14 years.
Finally, I have the support of most of the experts in this field. I don’t have their open support. People who work in this field are today afraid to say openly that they believe that Buy-and-Hold is a big pile of smelly garbage because they have seen what you Goons do to the reputations of those who dare to “cross” them by speaking honestly re these matters. But the experts in this field have consciences. And they give voice to their consciences in all sorts of public statements that hint at the doubts they hold re the crazy idea that the stock market might be the first market that ever existed in which price discipline is not 100 percent critical.
I have collected at this site hundreds of statements from hundreds of experts that support the Valuation-Informed Indexing concept. The experts who have done so include the biggest Buy-and-Hold advocate of them all, my good friend Jack Bogle. It was by reading Bogle’s book that I learned why the Old School retirement studies are in error. So it would be 100 percent fair to say that it was Jack who kicked off The Great Debate, not me.
All that I did was to work up the courage to violate the Social Taboo against discussing these matters in clear and firm and simple and widely understandable language. That turned out to be a big deal. But it would not have been a big deal had it not been for the massive cover-up that had already been in place for 21 years when I put forward that May 13, 2002, post on safe withdrawal rates.
Bogle feels trapped today but he is ultimately on my side, not yours. And the things he will see happening to our country following the next price crash will prompt him to come clean. I am virtually certain that that is how it will play out, going by what I know about the man’s character from how he has acted through his entire career.
And of course it is not just Bogle. There are THOUSANDS of experts in this field feeling tortured today by the human misery that they have caused by participating in the massive cover-up. All of those people will be coming forward following the crash. These people have lots of money and lots of power and lots of influence. When they flip, I gain a huge edge that up to now has been working to the benefit of you Goons. Again, that’s not nothing. That’s something. Something big.
You have a few things going for you. But I don’t see the things that you have going for you continuing to do you much good following the next price crash.
You have human ignorance. That’s the biggie. Until 1981, we did not know how stock investing works. There was no cover-up in those days. We just did not know. What we learned in 1981 was shocking. That’s why Shiller describes his findings as “revolutionary.” Revolutionary ideas often do not catch on in one or two years or even in one or two decades. 35 years is pushing it. But when you look at things with a broad perspective, you learn that even 35 years is not entirely unheard of when a new idea is as shocking as this one.
Ignorance gets dispelled in time. That’s the story of the world in general and of our nation in particular. There was a time when most people thought that slavery could never be overcome. But it has been. There was a time when most people thought that there would never come a day when people would be able to research thousands of books from the comfort of their living room. But today they can. There was a day when most people thought that the goal of putting a man on the moon was a joke. Those people have been proven wrong.
Goons have been with us from the beginning of time. They are always overcome in the end by the power of good ideas that benefit millions of human souls. Or at least so says Rob Bennett.
You have the power of the Wall Street Con Men to destroy the careers of those of us who dare to do honest work in this field. I mentioned one problem for you above, that the con men themselves have consciences and are looking to flip and will do so the second they see evidence that it is safe to do so. Another problem is that there is a wealth of literature available today (on the internet!) showing that Buy-and-Hold is a con. Shiller was awarded a freakin’ Nobel Prize. The massive cover-up is in the process of busting open. If you are going to keep a cover-up in place, it is pretty darn important to see that the lead voice telling the truth not be awarded a freakin’ Nobel Prize. You Goons are not doing so hot a job lately! Bogle might want to think about bringing in some fresh blood.
Another problem for “your side” is that the errors of the Buy-and-Holders don’t just hurt investors — they hurt every American citizen. Millions who don’t even own stocks have been hurt by the economic crisis that Shiller predicted in his book. Those people don’t make their living as investing advisors. Those people cannot be silenced by threats to destroy their cushy and well-paying jobs if they spill the beans.
Those people are today intimidated by the expertise that they imagine the “experts” to truly possess (they cannot imagine the extent of the corruption that has come to exist in this field during the Buy-and-Hold years because no one living in this country has ever before seen corruption of this breadth and depth). But they are not going to remain intimidated following the next crash. They are going to be mighty pissed following the next crash. They are going to be looking for answers to some hard questions. They are not going to take the mumbo jumbo b.s. that the Buy-and-Holders pump out so relentlessly as serious responses. It’s not going to go well for you Goons at that time, in my assessment.
I don’t say that I am special, Anonymous. I say that the humans are special. I say that this country is special.
You were there at Motley Fool when I had hundreds of posters cheering me on and expressing their sincere view that the discussion that I started was the most exciting discussion ever held at that board and you were there at the scores and scores of places to which we have taken The Great Debate in the many years since at which we have seen similar reactions. You wouldn’t have responded with threats of physical violence and with threats of career destruction if you didn’t understand that the thousands who have expressed a great desire for honest posting re the past 35 years of peer-reviewed research in this field represent millions who possess such a desire.
Those people are going to be heard from. Those people are going to gain access to the honest investing commentary that they need and desire. I am going to see to it.
Hit me with your best shot, Goon Man. Hit every American citizen with your best shot.
You are going to lose. You are going to end up in a prison cell. Our laws against financial fraud are good laws. They are going to be enforced. Count it.
You of course know this. If you didn’t know it, you wouldn’t be posting here on a daily basis.
It’s over.
It’s been over for a long, long, long, long time.
It was over when John Walter Russell posted his research showing that the safe withdrawal rate at the top of bubble was 1.6 percent, not 4.0 percent. Everything since that day has been the playing out of details. From that day forward, there has never been any other way that this could end but with prison sentences for a good number of you Goons. Not because of anything that I have said. Because of what you Goons have said. Because of the words that you yourselves have put in the Post Archives with your names attached to them and helpfully time-stamped through the wonders of our modern-day technology miracle.
You are the one holding a lottery ticket at best. It is always possible that things that have never once happened in our country or in our markets are going to happen this time. I don’t say that the odds of that are zero. I say that I am not willing to stake my freedom on such a long-shot bet.
I am the one betting on a sure thing. You are the one holding a lottery ticket. A losing one. For a lottery re which the winner was declared years ago.
That’s my take.
I could be wrong. It has been known to happen. I am emotionally invested re this matter.
But that is my sincere take.
I wish you all the best that this life has to offer. That’s sincere.
But I care about the millions of middle-class people whose lives are in the process of being destroyed by this massive cover-up. So I continue to do what I do.
We will find out together how it all plays out as time reveals itself.
I will remain your friend either way. Investing strategies that are truly rooted in peer-reviewed research make one confident, not so emotional that questioning of them is heard as a personal attack.
Hang in there, man. It gets better. A LOT better.
Love is the answer. I am sure.
Rob
“And I have common sense on my side.”
Everyone, as in literally every person, thinks common sense is on his side. Might as well say “I’m right because I say so.”
So you are dropping FinCon, where everyone talks investing, in favor of political sites, where everything you write about is off topic. Perhaps you could explain the common sense in that plan.
You are right about the common sense thing, Anonymous. I agree with you re that one. I see it my way and you see it your way. I cannot say it your way and remain honest and I presume that the same is so with you.
And I also certainly agree that what you say about FinCon appears on first impression to be so. Investing issues should be explored at places where people congregate to discuss investing issues. Nothing could be more obvious.
I have had great success bringing up Valuation-Informed Indexing at the FinCon meetings. People love, love, love hearing about the implications of Shiller’s amazing research. I couldn’t be happier about the reaction that I have received to my discussions of VII at FinCon meetings.
So far, so good.
The problem is with the follow-through. People tell me that they are thrilled to hear my message. THEN THEY DON’T DO ANYTHING ABOUT IT.
They don’t link to me or send me e-mails when we return home from the conference or engage in their own explorations of the various topics or go to sites that have banned honest posting and ask that they drop the funny business or whatever. We are so close. But in 14 years we haven’t crossed the finish line. It’s frustrating.
In a sense it is more frustrating when people respond positively to my message than it is when people behave goonishly. With you Goons, I can pretty much dismiss a lot of what you say because it is so obvious that your intent is to block discussion and you have zero interest in participating in a learning experience. I don’t like the way you behave. But at least your behavior is easy to comprehend. You like Buy-and-Hold, you never want to give it up and so you are relentless about blocking any discussions of anything that threatens to replace Buy-and-Hold. I have never experienced a goonish interaction at a FinCon event. It is always this other thing — this mix of either a moderately positive or an intensely positive experience with a great reluctance to going forward on the path pointed to by that experience.
That is the more frustrating reaction for me because it comes close enough to being what I want to see that it makes me feel hopeful but yet it never provides the payoff that I need to see to get the fire started and to thereby open every investing discussion board and blog on the internet to honest posting on safe withdrawal rates and scores of other investing-related topics. If people were not so positive, I could hope that I would get a better reaction by improving my presentation. But people LOVE the presentation and are intensely impressed by it. So I cannot draw any hope from making efforts to improve. I go into these things knowing that the odds are very high that I am going to experience frustration. After six years, I have grown weary of the experiencing the frustrating encounters. So I am opting out this time.
I don’t believe that things are going to go great at political blogs. I believe that things are going to be frustrating in the political realm too. So I am not saying that this change will solve my problems.
However, the type of experience will be a bit different. In the political realm, the problem is that people defer to the investing experts re investing topics. That is an understandable position to take. It is certainly the position that I took in the days when I was a Buy-and-Holder. I never thought that it might all be a scam that people who proclaimed themselves as “experts” had been covering up for 21 years. I know it today to be a scam but I didn’t know that then. And so I can understand why other people who don’t follow investing closely don’t today see Buy-and-Hold as a huge scam.
The question is — Where am I more likely going to see change over time, in the investing realm or in the political realm?
People are too compromised in the investing realm. Wade Pfau thought that he would be awarded a Nobel prize if he continued to do the honest work that he was doing when we completed the peer-reviewed research that we co-authored. He had a HUGE incentive to tell you Goons to stuff it. But when he saw that you had the power of Jack Bogle and the other Wall Street Con Men behind you, he concluded that his career would be finished if he continued to do honest work in just the one area of safe withdrawal rates. That’s pretty darn amazing. Wade is a smart guy and an ambitious guy. The fact that he concluded that the corruption in the investing field has become so pervasive that a decision to do honest work re just a single important subject means career death tells us all something about what we are up against in trying to bring this economic crisis to an end.
In contrast, we are seeing things begin to happen on the political side. Bernie Sanders had more success than expected in the Democratic primaries. Donald Trump had more success than expected in the Republican primaries. People are beginning to catch on that the elites in our country are today in it for themselves, that they are wiling to let the rest of the country go to hell if that is what they need to stuff their pockets with a few more dollars. The fact that Bogle and the other Wall Street Con Men would let millions of people lose their jobs in an economic crisis rather than acknowledge a mistake that was uncovered by the peer-reviewed research 35 years ago shows just how corrupt our elites have become in recent decades. The elites vs. the people is the political story of our day.
People on the political side are going to have a hard time believing what the Buy-and-Holders have done to us (and to themselves also, to be sure — when our country is destroyed, the Buy-and-Holders have no place to live themselves). But at least those on the political side are not compromised by their own ability to make millions by selling out their fellow citizens. Those on the political side have less understanding of the issues than those on the investing side. But they also have less of a temptation to keep their mouths shut about the massive con as a means of lining their own pockets. So I can see at least some potential that things will turn out to be more promising on the political side of the street.
I am not declaring that this is going to work. I think there’s a decent chance that it will. I also think that there is a decent chance that it will not. If I were to put odds on it, I would say that the greater probability is that it will NOT work until we see the next price crash. Following the next price crash, I would say that the odds are very, very good that it will work.
But following the next price crash, the odds are also very good that my efforts will bear good fruit if I direct them to the investing side. So, if the crash comes within the next 12 months, I will attend the FinCon event next year. If the crash does not come within the next 12 months, I will continue to direct my energies to the political side if I see some signs that efforts directed there will bear more fruit than efforts directed to the investing side. I would want to see some positive signs to continue to direct efforts to the political side for more than 12 months.
Does all of that not make at least a little bit of sense, viewing things from the perspective of someone why very, very much wants to see every investing discussion board and blog on the internet opened to the honest exploration of the implications of the last 35 years of peer-reviewed research in this field?
Rob