“Every Word That I Say Is Rooted in Shiller’s 1981 Findings, the Findings That Caused Him To Be Awarded a Nobel Prize. We Need to Know Not Just What Rob Bennett Thinks Are the Implications of Those Findings, We Need to Know What Shiller Thinks Are the Implications of Those Findings. We Need to Freakin’ Ask Him.”

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

“Every word that I have written over the past 16 years is rooted in Shiller’s “revolutionary” (his word) finding that valuations affect long-term returns.”

No, it is what you think Shiller should be saying.

What I say is what follows logically from what Shiller said.

I am not saying that Shiller has said precisely the same things that I have said. In some cases that is so. But in most cases it is not. I say what seems to me to logically follow from what Shiller said. There is a second brain involved. People need to know that. For me to say it is not the same as for Shiller to say it. So you have a point here. If Shiller thought about every word that I have ever put forward and commented on it himself, there would probably be a good number of cases where Shiller’s take would be at least a little different from my take. And people need to make that distinction. They need to be able to identify Shiller’s takes on all of the various topics and then identify Bennett’s takes on all of the various topics and then of course they should make an effort to resolve the differences, to figure out for themselves which takes on which topics make the most sense and which can be improved and which can be discarded.

My point when I say that every word that I have written is rooted in Shiller’s “revolutionary” (his word) research findings is that I am not just some guy on the internet who woke up one morning and revealed that I had had a dream that valuations affect long-term returns and then addressed every question of investment strategy as if that were so. No. The finding that valuations affect long-term returns is rooted in peer-reviewed research that was published in 1981 and led to the awarding of a Nobel prize in Economics in subsequent years. So the foundation of everything that I have ever said on stock investing is very, very, very strong. People need to know that. That reality is an important part of this story.

I can get things wrong. People need to know that too, of course. But what has happened for 16 years running is that the Buy-and-Holders have not been able to find problems in what I say. If they could, they would. They naturally want to defend the strategy they believe in when I challenge it and the natural way to do that is to point out errors in my thinking. But in every case they have given up on that effort. In every case they either just stop participating in the discussion with me (this is what usually happens) or they resort to threats of violence and board bannings and all of the other Goon garbage that we have seen (this is what happens when I refuse to take hints that I should silence myself). When the Buy-and-Holders either resort to abusiveness or tolerate seeing others resort to abusiveness, they are making an implicit statement that they cannot imagine any other way of challenging my claims. That’s a big deal. The fact that that has been our universal experience for 16 years running now is a very big deal.

The ordinary experience would not be for me to play the role that I have played. I’ve written close to 400 columns at the Value Walk site. Let’s take just one of them to make the point. I wrote a column a number of years back in which I argued that, if it is true that valuations affect long-term returns, then it is not true, as has long been believed to be the case, that stocks are more risky than bonds. If it is true that valuations affect long-term returns, then most of the risk of stocks is optional. All that investors need to do to avoid that risk is to take valuations into consideration when setting their stock allocations. I was particularly proud of that column. I have been hearing that stocks are more risky than bonds for many years now. It is obviously a very big deal if it turns out that that is not so and if the community of investors learns that. And I have never seen anyone else say that. So that one has my name on it. I have a column posted on the internet with my name on it and with a date stamped on it showing when I came to this conclusion that makes a very important statement about how stock investing works in the real world. That’s just one column out of 400. But, if just that one column turns out to be correct, then I have changed the world of stock investing in a huge and very positive way. That’s as cool as it gets.

But is it true? That’s what we need to know. No one should go just by what I say. Anyone who would go solely by what I say about such a matter is an idiot. We agree re that much. What we don’t agree on is what we should do in response to that reality. Your response is to say that I should shut up, I should stop expressing my views on the implications of Shiller’s “revolutionary” (his word) finding of 1981 that valuations affect long-term returns. I think that’s a horrible, horrible, horrible response. I think that the proper response is to show the proper amount of skepticism re what Rob Bennett says but to have thousands of other smart people comment on Shiller’s Nobel-prize-winning research findings and find out what they mean that way.

Bogle should be writing about this stuff every single day. Shiller should be writing about this stuff every single day. Pfau should be writing about this stuff every single day. Bernstein should be writing about this stuff every single day. That’s the answer. The answer is not to shut Rob Bennett up, the answer is to get everyone else talking. That’s my sincere take, Anonymous.

The obvious question is: Why isn’t everyone already talking about this “revolutionary” (Shiller’s word) stuff? There are mountains of money to be made providing millions of middle-class people with honest, accurate, research-based investment advice. We know that there is a huge market for what I do because we saw the reaction at the Motley Fool board when I first raised the suggestion that Shiller’s findings should have changed what we think about how safe withdrawal rates are calculated. So why is it Rob Bennett who writes the column arguing that stocks are actually not more risky than bonds? Why aren’t there thousands of smart people out to help people and make a buck doing it who got to that one long before this Rob Bennett fellow ever came on the scene?

This is where death threats enter the picture. You Goons have your lives riding on the validity of the Buy-and-Hold Model for understanding how stock investing works. It drives you freaking nuts to think that you might have gotten it all wrong. You cannot bear to hear someone on the internet challenge your beliefs. And there are lots of non-Goons who don’t approve of the tactics you employ to crush discussion of the implications of Shiller’s findings but who are not too upset to see those discussions crushed and who thus go along with your use of those tactics anyway. And we end up as a society that has missed out once again on learning whether it is true that stocks are more risky than bonds or whether that is in fact not true.

Days pass. Weeks pass. Months pass. Years pass. We remain trapped in our ignorance despite 37 years of peer-reviewed research pointing us all to a better way.

The American way is not to remain trapped in our ignorance. The American way is to talk things over in civil and reasoned discussions. That’s why every board on the internet has rules prohibiting the tactics employed by you Goons. That’s why we have laws against financial fraud. The American way is to move forward even though it hurts sometimes to move forward because moving forward sometimes means learning how to pronounce those words “I” and “Was” and “Wrong.” I love my country. I favor the American way. That’s the bottom line here.

Shiller has not said every word that I have said. I am not claiming that he has. I am saying that every word that I have spoken is rooted in a “revolutionary” (that’s Shiller’s word) finding of Shiller’s from 1981 that we all should have been exploring for 37 years now. I have been exploring it for 16 years now. I offer no apologies. I think that every single person in the field should be doing what I am doing. We are not all going to agree. That’s of course fine. That’s part of what the American way is all about. So long as we remain civil and reasoned in our discussions, we will learn. And learning is the one true free lunch out there. So that is the road we need to take, the American road, the road approved by the laws of the United States and by the posting rules of every site on the internet.

That’s the deal, Anonymous. Every word that I say is rooted in Shiller’s 1981 findings, the findings that caused him to be awarded a Nobel prize. We need to know not just what Rob Bennett thinks are the implications of those findings, we need to know what Shiller thinks are the implications of those findings. We need to freakin’ ask him. If we drop all the Goon garbage, I am 100 percent certain that he will be happy to share with us. But we most certainly will have to drop the Goon garbage. He has shown that he is not going to be forthcoming until we do that. And of course we need to hear from thousands of others too. And all of those others will be forthcoming as well once we drop the Goon garbage. Dropping the Goon garbage opens the floodgates on the greatest advance ever achieved in the history of personal finance.

I am doing my part. I can do no more and I can do no less. If I want thousands of others to start sharing their sincere takes re the far-reaching implications of the last 36 years of peer-reviewed research in this field, then I had better be willing to take on all the heat that for the moment goes with doing that. So that’s what I do. I offer my take on hundreds of different topics that we all should be examining on a daily basis. And I take the heat that for the time being is associated with doing that. There will come a day when there will not be so much heat. I am 100 percent certain of that. Then there will be thousands offering their takes on all these questions, not just me. That will be a very, very, very good thing.

But it has to start with one, you know?

I wish that someone else had taken on you Goons. It would have made my life a lot easier if it had all gone down that way. I wouldn’t be in line for a $500 million settlement payment if someone else had been the trailblazer before I ever showed up on the scene. But I still would have preferred that it had been done that way. This job is fun intellectually and it is fun because it involves helping millions of people in a very big way. But the nasty stuff is not fun. I do it because it has to be done. I noticed back in the Summer of 2002 that no one else had done it and so I pulled up my big boy pants and got about the business of doing it. And here we are, you know?

I am not Shiller. What I say is not necessarily what Shiller would say. But every word that I say is rooted in what Shiller showed in 1981. It’s not my fault that we don’t today have thousands of people addressing all of the topics that need to be addressed. That’s the fault of you Goons. I don’t have the power to make you knock off the funny business. All that I can do is to call you out on your b.s. I have done that. And yet you continue! All that we can do at this point is to wait patiently for the price crash and see whether living through what that is going to mean for millions of people causes the emotional background in which these discussions take place to change enough for us to get lots of other people involved in the discussions in a constructive way.

I am highly confident that we will all pull together in the days following the crash to take this thing to a very, very, very positive place. But we are going to have to wait and see to find out for sure. I could be wrong. If I were, I would probably be the last to know. So we are just going to have to wait and see.

I naturally wish you all the best that this life has to offer a person regardless of how things play out, my good friend.

Rob