Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:
But of course, the real issue is this:
Why do you refuse to get a paying job to support your family? You still would have plenty of time to troll the internet when not working.
You would no longer feel the need to live in your make believe world if you had an income.
I obviously have sufficient income or I wouldn’t be here.
Lots of people would tell me that I should not respond to your posts. They obviously are not put forward with good intent. They are put forward as part of an intimidation campaign. People reading the back and forth who might be inclined to step forward themselves and speak up in support of Valuation-Informed Indexing see the sort of ugliness that you Goons bring to the table and instead self-censor themselves.
When those people don’t talk, the impression is left that pretty much the entire world believes in Buy-and-Hold. That’s not so. The vast majority believes in Buy-and-and-Hold. But my experience going back 15 years is that, in the days before you Goons make clear how far you will go with your intimidation campaigns, about 10 percent of the population of investors follows a Valuation-Informed Indexing strategy and about another 10 percent has sufficient interest in the concept that they express a desire to be able to ask questions about it (but then stop doing so once death threats and all this sort of thing are put forward by the Buy-and-Hold Goons)
That’s a total of 20 percent of the investing population that has an interest in these ideas. That’s millions of people. Businesses could be started serving those millions of people with solid research-based insights on how to invest effectively for the long term. Only you Goons stand in the way. The businesses won’t make money today because people remain afraid to ask their questions so long as you Goons pollute the discussions. But once the Goon problem is solved, businesses will be formed and then, when people see the money that there is to be made developing true research-based strategies, more businesses will be formed and more and more investors will come around to the new strategy.
We have to deal with the Goon problem. It is the only way to the other side. People hold back from doing so because it is all so nasty and so strange and because those promoting research-based strategies are very much in the minority today and so they get banned from sites and all this sort of thing. But there is just no other way to solve the problem. The good stuff is on the other side and the only way over the mountain is through it.
We all need to stick up for each other. 10 percent of the investing population is a lot of people. If we all stood up for each other, there’s not a thing that you Goons could do to us. I am the first person on the internet to make these points. It just turned out that I was the “lucky” one put in these circumstances. I have tried everything else that a reasonable person could possibly do and I have reached the sincere conclusion that this is the only way that as a society we can get to where we all deep in our hearts want to go.
I intend to always be charitable to you Goons. You really do follow Buy-and-Hold strategies and you really do believe on at least one level of consciousness that others should follow them too. You just cannot bear to hear those others exploring ideas that you do not support and the pain that this causes you makes you engage in behavior that has never been viewed as acceptable in civil society. Those of us who want things to get better need to be charitable to BOTH you Goons and to the millions of middle-class investors who want to know what really works in investing. We need to balance the competing concerns.
That’s my sincere take, Sammy. I naturally wish you all the best that this life has to offer a person.
Rob
Anonymous says
What research based strategies are being banned? Is there a list?
Rob says
Every strategic analysis must contain consideration of the valuation level that applies, according to the last 36 years of peer-reviewed research. It was once believed that the market is efficient, that valuations don’t matter. That’s why Buy-and-Hold was developed the way it was. But Shiller published “revolutionary” (his word) research in 1981 showing that valuations affect long-term returns. That changed everything. Or at least it should have.
There are obviously millions of smart and good people who believe in Buy-and-Hold. My personal belief is that someone who calculates numbers that do not reflect valuation adjustments because he personally believes in Buy-and-Hold would be on the right side of the law SO LONG AS HE EXPLAINS TO ALL WHO SEE HIS ANALYSES THAT THERE IS NOW 36 YEARS OF PEER-REVIEWED RESEARCH SHOWING THAT VALUATIONS MUST BE CONSIDERED AND DIRECTS PEOPLE TO SITES OFFERING MORE INFORMATION SO THAT THE READER CAN MAKE DECISIONS AS TO WHICH STRATEGY TO FOLLOW FOR HIMSELF.
The Buy-and-Holders got it all wrong. Valuations are the single most important factor in any investing analysis. They didn’t get it wrong intentionally. But those who follow the peer-reviewed research have known for over three decades that there is peer-reviewed research showing that valuations matter. So no one can claim to be an “expert” in this field and fail to let his readers know about this without running afoul of the laws against financial. That’s certainly Rob Bennett’s sincere take, in any event.
I hope that helps a bit.
Rob
Reality says
Is VII the only researched based strategy?
Anonymous says
“AND DIRECTS PEOPLE TO SITES OFFERING MORE INFORMATION SO THAT THE READER CAN MAKE DECISIONS AS TO WHICH STRATEGY TO FOLLOW FOR HIMSELF.”
Which sites would those be and who makes that decision?
Rob says
Is VII the only researched based strategy?
It is.
Buy-and-Hold was intended to be the first research-based strategy. The effort to make it that failed in 1981, when “revolutionary” (Shiller’s word) research findings were published and the Buy-and-Holders elected to ignore it. VII incorporates all the research that is behind Buy-and-Hold (which is very important research) and adds in the last 36 years of research as well, making it the first TRUE research-based strategy.
There are many ways to implement VII. So there are numerous FORMS that the strategy can take. But all research-based strategies incorporate consideration of valuations in some way into the mix. That’s what distinguishes VII from BH. Buy-and-Holders ignore valuations. VIIers consider the effect of valuations in some way.
Future research will help in the refining of the concept. For example, some Valuation-Informed Indexers might prefer to change their stock allocation once per year while others might want to make only one change per 10 years on average. To the extent that you consider those different strategies, there is more than one research-based strategies. But both of those variations are forms of the VII concept.
I hope that helps a bit.
Rob
Rob says
Which sites would those be and who makes that decision?
This site would do the job. John Walter Russell’s site would do the job. Shiller’s site would do the job. Wade Pfau’s site would do the job once he feels free to do honest research again and incorporates that into the site. There are others.
The site owner would make the decision. Who else?
A site owner who for some reason wanted to avoid pointing people to other sites could do that so long as he included at his own site clear and fair and reasonably complete explanations of why many people believe that valuations matter. The key to avoiding prosecution would obviously be to act in good faith. Personally, I would never put forward numbers that did not reflect the effect of valuations. For me to do that would be financial fraud in any circumstances because I do not believe that those numbers would be accurate. But I believe that someone who possesses a strong belief in Buy-and-Hold might get away with it if he included a fair discussion of why many good and smart people hold a different point of view. If I were sitting on a jury and I saw that a fellow had included such a discussion at his site, I would be inclined to believe that, while he might be wrong in what he said, he was telling people what he truly believed and not trying to trick them. My take is that might get you out of the fraud zone. But others will have to offer their takes on that one as time goes on and as we learn more about the ethical lines that we are going to insist on as a society.
I hope that helps a bit.
Rob
Reality says
Is VII the only researched based strategy?
“It is.”
So the only strategy that should be discussed is your VII strategy.
Rob says
No.
People can discuss whatever they want. People can recommend playing the lottery to finance your retirement if they want.
What you cannot do unless you want to spend some time in prison is to commit financial fraud, which is a felony. If you say that there’s peer-reviewed research showing that the safe withdrawal rate is always 4 percent when in fact the last 36 years of peer-reviewed research shows that the SWR is a number that ranges from a low of 1.6 percent to a high of 9,0 percent, you have run afoul of the laws of the United States in a very serious way.
Of course it doesn’t matter what I say about it. What matters is what millions of middle-class people say about it after they find out following the next price crash that they have been cheated out of their retirements. I believe that they are going to be very upset. But I could be wrong. I don’t know everything. We will have to wait to see how it all plays out to find out for certain.
I know with 100 percent certainty that no one is going to be able to find any posts in “defense’ of Buy-and-Hold in my file at that time. They will find lots of posts in which I express admiration and gratitude to the Buy-and-Holders for their many amazing contributions. But never any in which I “defend” the 15-year cover-up of the errors in the Buy-and-Hold retirement studies. Quite to the contrary, they will find THOUSANDS of posts in which I speak up in THE STRONGEST POSSIBLE TERMS in OPPOSITION to this massive act of financial fraud.
I wish you the best of luck with it, my good friend. But I would be sincerely grateful if you would try to find someone else to help you out with the massive act of financial fraud. It is not my particular cup of tea.
It is not a terribly close call.
Rob
Anonymous says
“What you cannot do unless you want to spend some time in prison is to commit financial fraud, which is a felony. If you say that there’s peer-reviewed research showing that the safe withdrawal rate is always 4 percent when in fact the last 36 years of peer-reviewed research shows that the SWR is a number that ranges from a low of 1.6 percent to a high of 9,0 percent, you have run afoul of the laws of the United States in a very serious way.”
So that means that every time there is a discussion, VII needs to be mentioned or else there is fraud, right? Every board, every strategy discussion must include VII. Then, to take it a step further, since this is the only website that has full information on VII, this website should be referenced.
Rob says
Should every discussion of physics include a mention of gravity? Gravity is a core reality in the physical world. So, yes, every discussion might not include a direct mention but every discussion should include either a direct or an indirect reference of some sort to gravity. So it is with valuations. It is hard for me to imagine how there could be a discussion of a strategic stock investing question that did not include either a direct or indirect reference to valuations.
This site today contains the fullest discussion of valuations available on the internet. So it is certainly a good place to link to to provide people with background on the far-reaching implications of the last 36 years of peer-reviewed research in this field. But I think there are other places that could be linked to that would get the job done. A site owner who did not want to link outside his own site could provide a description of the relevant issues that would be enough to make his readers aware of the essentials of what they need to know and then leave it to the readers to find places that provide more in-depth discussions.
Is there some reason why you wouldn’t want to link here, Anonymous? The reason why I do this work is because the material provided here is so important and because the competition in this area is so slim. I’ve earned the link, you know? I don’t think that the most cold-hearted Goon would argue in his more honest moments that there is any other site that has explored as many aspects of the valuations question as I address here. So why not link here if you are trying to be sure that your readers are aware of issues that you personally have elected not to explore?
Word about the importance of the valuations question will spread quickly once we open every site on the internet to honest posting. I am not going to have the biggest site on the valuations question for long. I am going to have LOTS of competition once all the other site owners see that it is safe and lucrative to do work in this area. That’s as it should be. That’s the way I want it to be. The more sites that get involved in this game, the more I will learn and the more you will learn and the more everyone else will learn. Getting the word out is a win/win/win/win/win.
The key is that we all must work hard to get the word out quickly. We don’t want something like what has happened over the past 15 years ever to happen again. Say that someone had started linking like crazy to a site like this one 16 years ago. If that had happened, Greaney would not have been surprised when I put forward my famous post asking whether valuations should be considered when calculating the safe withdrawal rate. He would have had a more enjoyable 15 years and I would have had a more enjoyable 15 years and you would have had a more enjoyable 15 years.
When Steve Jobs came out with the iphone, did people say “oh, let’s be careful not to let anyone see pictures of people holding iphones or else it might cause Jobs to get credit for the contributions he had made?” No sane person did that. Jobs got lots of credit and properly so. But lots of people came out with new versions too and that caused other people to get credit. You could start a web site giving useful information on valuations. You would be doing a service if you did so. You would get linked if you did so. You would be giving me competition by doing so. And I would thank you for doing so. I don’t fear competition. I fear an economic collapse. Giving me some competition would make it less likely that we would see an economic collapse. I think I can stand some competition.
Please try to stop worrying so much about my success and worry more about whether we have all done enough to get the word out about what the last 36 years of peer-reviewed research teaches us about how stock investing works. I have played a big role in getting the word out. So of course I am going to get lots of links. That’s wonderful news for all of us. But there is plenty of room here for thousands and thousands of people to do well for themselves by doing good for millions of us. You could be one of them. Instead of fretting over whether the popularity of my web site is about to explode, why not build your own and take some of that juice for yourself. We could work together if you want. If you are working to spread the word re how stock investing works, I will be doing what I can to promote you. I certainly don’t spend any of my human energies worrying that you will do so much good work that you will become very famous and very rich. If you become famous and rich that means that you have done good work that benefits all of us and that would make me a very happy man indeed.
Make sense?
Rob
Anonymous says
“If you become famous and rich that means that you have done good work that benefits all of us and that would make me a very happy man indeed.”
But what if I get the credit and the money, but you don’t?
Rob says
Then that’s the way the ball bounces, my good friend.
It’s all part of the wonderful game.
You want to put Old Farmer Hocus in his place? Beat him at his own game!
You Goons should have thought of that one on the morning of May 13, 2002. That one’s legal. That one is on the right side of the line. That one has potential.
And it involves helping people. So you would get a warm feeling inside as well.
All of your nastiness has just served to make lots of people afraid to create any competition for me. If you are trying to hold me back long-term, that’s surely not the way to go.
Rob
Anonymous says
Well, you won’t have to worry. I am already rich. I have several million in a nicely diversified portfolio, strong cash flow and still have about 13 more working years ahead of me.
Rob says
Good for you. I wish you a long and healthy retirement in which to enjoy it.
Rob