Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Check this out: https://www.marketwatch.com/story/5-things-we-can-still-learn-from-vanguards-jack-bogle-2018-10-08
Of course you don’t like being reminded of the Bogleheads conference, for obvious reasons, but Bogle does throw you a bone: “It would probably take a 25% drop [for the stock market] to get to its normalized value.”
Not bad, right? He’s meeting you halfway. How about lopping a couple years off the old man’s prison sentence?
I believe that Bogle is saying what he truly believes. And I think that’s healthy. It could be that he’s right and that I’m wrong. If there’s even a 1 percent chance that he’s right, I want people to hear that point of view. So I am glad that we have him around to express it.
You don’t see any death threats in that paragraph that I just wrote. You don’t see any demands for unjustified board bannings. You don’t see any acts of defamation. You don’t see any threats to get academic researchers fired from their jobs. That’s the difference. It’s when that sort of thing is added to the mix that financial fraud comes into the picture. That’s where prison sentences come into the picture.
Jack Bogle should say what he believes. So should Bill Bernstein. So should Larry Swedroe. So should Robert Shiller. So should Rob Bennett. So should Microlepsis. So should John D. Craig. And on and on and on and on and on. We all have a different perspective. We all have to post our honest views for a board community as a while to achieve its potential.
It is only the Buy-and-Holders that engage in criminal acts to intimidate the “other side” from expressing its sincere views. I’ve never seen a Valuation-Informed Indexer do that.
So who do you think people are going to be angry at in the event that we see another crash, as Shiller’s research indicates is likely? They are going to be angry at the Buy-and-Holders. And they are going to learn about the criminal acts. And they are going to demand prison sentences. That’s what I truly believe is going to happen.
Do I want it to happen? I do not. But you know what? I am not Superman. I have not been able to stop this stuff from happening. If the tables were turned and there was 37 years of peer-reviewed research showing that I got an important number wrong in a retirement study posted at my web site, I would be praising the guy who brought it to my attention morning noon and night. I would be thanking him for saving me from a lot of embarrassment and for keeping me from taking on huge financial liabilities and even a possible prison sentence.
That’s not what happened with John Greaney. And that’s not what happened with Mel Lindauer. And that’s not what happened with Jack Bogle.
I love Bogle. There is no one alive on Planet Earth who holds him in higher esteem. All you have to do to see that is to look at all of the Bogle ideas that I incorporated into the Valuation-Informed Indexing model. Or consider whose book it was that persuaded me that Greaney got the numbers wrong in his study — it was Bogle’s. I hadn’t read Shiller’s book at the time. Bogle was the bigger influence at the time.
I love Bogle. I do not love financial fraud. That’s the story here.
I don’t have the ability to lop any time off of anyone’s prison sentence. I am not going to be serving on any of the juries that will be formed in the days following the next price crash. So I will have zero say. The only possible influence that I might have is that I think I might be able to say some things that would put Bogle’s behavior and Lindauer’s behavior and Greaney’s behavior in a somewhat more positive light than some of the millions who have seen their retirement accounts wiped out will be inclined to put it. And it is my intent to do everything in my power to put their behavior in the best light possible. That’s as far as I can go and that far I will indeed go.
I am not going to say that I believe that Greaney’s study contains a valuation adjustment. If I did that, I would be at risk of going to prison myself. So no freakin’ thanks, you know?
I love Bogle. I hate financial fraud. I wish that I could say that Bogle has never done anything to suggest that he either supports Lindauer or at the very least tolerates him. I cannot say that. All that is said on our boards goes into Post Archives. There is a lot of material in which Bogle has given the very strong impression that he either supports or at the very bare minimum tolerates Lindauer. So I am bound to acknowledge that reality. And then others decide who goes to prison and for how long.
If there is every anything that I can do to help Bogle or Lindauer or Greaney or anyone else, I am going to do it. In three seconds and you wont have to ask me a second time. But I am never going to say that I believe that Greaney’s study contains a valuation adjustment. Thousands of people have looked at the study over the course of the past 16 years and not one has been able to identify a valuation adjustment.
Bogle f’d up when he failed to speak up about the Lindauer matter. Guess who wrote to him on several occasions imploring him to take action? And it wasn’t just me. There were a number of us who wrote to him. And no action was taken. I can love the man to death and praise him to the skies and it won’t change that simple reality. Bogle f’d up and only a small number of his friends possessed the courage and love for the man to implore him to fix the f-up. I wish that you had stepped forward at the time, Anonynmous. You might have made the difference, man. You never know unless you try.
I hope that all that helps at least a tiny bit.
Love the man, hate financial fraud, hate the idea of seeing any of my many Buy-and-Hold friends go to prison. For obvious reasons.
I have an article at my site titled something like “12 Reasons Why Valuation-Informed Indexing Might Not Work.” Bogle should write an article like that re Buy-and-Hold. I shouldn’t have to be the one pointing out the flaws in Bogle’s strategy. He should do it. That way he gains the high ground. That would be awesome. He should stop behaving defensively and make an effort to get ahead of the curve. There would still be lots of people who stuck with Buy-and-Hold. But the poisonous atmosphere that influences every discussion held at the Bogleheads Forum today would dissipate it he did that. I encourage my good friend to get that article written and posted by the close of business today. For EVERYONE’s benefit.
My best and warmest wishes to you and yours.
Prison-Sentence-Lopping (If Only He Could!) Rob
Anonymous says
“I am not going to say that I believe that Greaney’s study contains a valuation adjustment. If I did that, I would be at risk of going to prison myself. So no freakin’ thanks, you know?”
The question had nothing to do with Greaney. No one ever asks you about Greaney. In fact you completely missed the point of the comment, which was that Bogle said the market is overvalued. You should have found that encouraging. Instead you spiraled off yet again with your standard deranged angry rant. So “Bogle f’d up”? Chill, dude.
Rob says
I’ve never advanced death threats. I’ve never advanced demands for unjustified board bannings. I’ve never advanced thousands of acts of defamation. I’ve never advanced threats to get an academic researcher fired from his job. It’s not me who needs to chill. It’s the people who have put up posts in “defense” of Mel Lindauer and Jack Bogle and John Greany who need to child. I mean, please give me a freakin’ break.
All questions that relate to stock investing have something to do with Greaney. Greaney got an important number wrong in a retirement study that he posted to his web site. That error will directly cause thousands of failed retirements, in the event that stocks continue to perform in the future anything at all as they always have in the past. Indirectly his behavior may well cause MILLIONS of failed retirements because it was my intent to share with the entire world what we learned at that board about safe withdrawal rates and that would have helped the MILLIONS of investors who followed other Buy-and-Hold retirement studies that got the numbers wrong because they did not include an adjustment for the valuation level that applies on the day the retirement begins.
Now —
That’s news, right?
The discovery of an error in a retirement study that saves millions of people from suffering failed retirements is big news in this field. The primary purpose of investment advice is to help people plan their retirements. And we have discovered an error that has hurt millions of investors. So we should have seen that error written up at every investing site on the planet within a few days, right? There’s never been a bigger story in this field than the discovery of the error in Greaney’s study that I wrote about in my famous post from the morning of May 13, 2002.
Why hasn’t that story been written up at every site? Bogle’s attitude toward the development is a big part of the explanation. I wrote to Bogle asking him to deal with the Lindauer Matter. Did you see him do anything? I sure didn’t. That’s why that board was destroyed. That’s why that board became a corrupt enterprise. That’s why the best posters at the Bogleheads Forum were either banned or driven off the board. Those of us who were trying to use the board for the purposes for which it was created asked Bogle for his help in dealing with the Lindauerheads and he sat on his hands.
Bogle is a leading figure in this field. People watch how he reacts to determine how they are going to act themselves. Wade Pfau loved doing honest work in this field. Loved it, loved it, loved it. When Lindauer started defaming him and threatening him, Wade watched how Bogle reacted. Bogle did nothing. That’s one of the things that made Wade afraid that his career would be destroyed if he continued going fully honest work. I liked it when Wade was doing fully honest work. I learned a lot from him. And I know that lots of others did too. Bogle should have spoken up for him and in opposition to Lindauer. He did not. That’s why things are what they are today.
I guess that I am a tiny bit encouraged that Bogle acknowledged that the market is overvalued. That’s a step in the right direction. It’s better than the alternative. But has Bogle said how much today’s valuation levels pull down the safe withdrawal rate? Has he said how much investors should be lowering their stock allocations to keep their risk profiles where they want them to be? People need that practical, how-to information. It’s not enough for them to know that stocks are overvalued. They need to know WHAT TO DO ABOUT IT.
It’s when investors respond to overvaluation by lowering their stock allocations that they exercise price discipline and thereby help pull prices back down to where they should be. That’s the only way it can be done. That’s the way it is done in every other market that exists. It’s because we don’t provide investors the information they need to practice price discipline when buying stocks that prices go to such insane levels and wreck our economy as well as our personal retirement dreams. I don’t like seeing people’s retirement dreams destroyed. I don’t like seeing our economy destroyed. So I like to see Bogle tell people WHAT TO DO about today’s crazy stock prices. And I am not seeing that. I am not seeing that AT ALL. An acknowledgment that stocks are overpriced just doesn’t get the job done. So, yes, I believe that Bogle f’d up. Big time.
We are looking at things from different perspectives, Anonymous. We are working at cross purposes. I love you as a person. But I don’t agree with you that it is okay that Greaney’s retirement study remains uncorrected 16 years after he became aware of the error in it. If we were all thinking clearly, there wouldn’t be one person on the planet who did not agree with me that Greaney needs to correct his study by the close of business today if not sooner. But clearly there is at least one. Otherwise, it would have happened by now. Clearly there is more than one. A LOT more.
I would like to see the same ethical standards that apply in every other field of human endeavor apply in the investment advice field.
Oops! I went and said something controversial again!
I believe that the people who work in the investment advice field are in many respects like the people who work in all other fields. I believe that deep in their hearts they also would like to see the same ethical standards that apply in all other fields apply in the investment advice field too. But they don’t feel safe asking for change. They see what has been done to me and to all others who stuck their necks out trying to make this much needed change take place and they elected to keep quiet about the corruption that has come to dominate this field in the Buy-and-Hold Era. It’s someone else’s problem. it’s someones else’s fight.
Well, it became my problem and my fight when Greaney got down to the business of driving every intelligent poster off the Retire Early board because it was the intelligent ones who often challenged his Buy-and-Hold/Get Rich Quick views in one way or another. So, yes, for me Greaney is the issue. Not Greaney himself. The all-encompassing corruption that permits people watch Greaney destroy millions of lives and not speak up about it because discussing the last 37 years of peer-reviewed research has become “controversial” in the Buy-and-Hold Era. I don’t like the corruption, Anonymous. I have seen it hurt too many people. So I want to expose it and to thereby end it.
Bogle’s silence in the face of the corruption that he has witnessed when he visited the Bogleheads Forum hurts me in my efforts to clean up this field. People respect Bogle, for one thing. His name is a much bigger name than my name. So they tend to think that he is probably right and that I am probably wrong. And Bogle has a lot more power and influence and money that I have. So he has those things going for him too. I have a big job in front of me cleaning up this field. I could use Bogle’s help. With Bogle’s help, I could make enormous strides in very little time. But I have not received much help from this great man thus far. His acknowledgment that stocks are overpriced today is a small plus. But it does not by itself offer much in the way of help at a time at which we all very much need to see the Buy-and-Hold corruption cleaned up big bunches.
That’s where I am coming from, in any event. Does that help at all?
Greaney-Obsessed, Bogle-Disappointed Rob
Anonymous says
“All questions that relate to stock investing have something to do with Greaney.”
If Greaney hadn’t lost interest in playing with you years ago, he would find that statement very amusing. He did more than get in your head. He drove you completely out of your mind. Without even trying.
Rob says
Okay, Anonymous.
I do wish you all good things, in any event.
Completely Out of His Mind Rob