Set forth below is the text of an e-mail that I sent to Pema Levy, a reporter at MotherJones.com who wrote an article titled Rachel Mitchell’s Former Colleague Slams Her Kavanaugh Memo As “Absolutely Disengenious.”
Pema:
The Old Ideas on Saving & Investing Don't Work -- Here's What Does
"Valuation-Informed Indexing Is the Same Song We Sing. Glad You Belong to the Same Choir We Do."
"Retirees Now Frequently Base Their Retirement Decisions on the Portfolio Success Rates Found in Research Such as the Trinity Study.... This Is Not the Information They Need for Making Their Withdrawal Rate Decisions."
"The P/E10 Tool Could Drastically Change
How the Entire Investment Industry
Operates and Measures Risk."
"The Your Money or Your Life Book
for a New Generation."
"A Newer School of Thought Believes That the Safe Withdrawal Rate Depends on How Stocks Are Priced at the Time You Begin Making Withdrawals."
"A Fascinating Retirement Calculator."
"The Evidence is Pretty Incontrovertible. Valuation-Informed Indexing...Is Everywhere Superior to Buy-and-Hold Over Ten-Year Periods."
"Every Detail Shows Rob's Respect
for His Information and His Reader."
"You’ve Accomplished Something Radical
With Your Idea of Passion Saving."
"Big Moves Out of Stocks Should Not Be Done at All. But Strategic Asset Allocation Can Be Done At Very Rare Times, Maybe Six Times in an Investor’s Lifetime, Three Times When the Market Is Stupidly High and Three Times When Stupidly Low."
"Valuation-Informed Investing and Passive Investing
Share More of a Common Ancestry
Than It Might Appear at First."
"It Is Great to See a Finance Journalist Who Understands That Valuations Matter. Efficient Market Zealotry Is Rampant in the Journalism Community. I Just Love Your Valuation-Based Return Calculator."
"There Is Always An Unlimited Supply of Complainers Against Any Good Idea."
"Rob: This Has Been One of the Most Insightful and Helpful Comments I Think Anyone Has Ever Posted. Thank You for This Lesson and for Sharing Your Knowledge on This Subject!"
"There Is An Extensive Literature About the Predictability of Long-Term Stock Returns. There Is an Extensive Literature About Short-Term Market Timing. My Question Is About Long-Term Market Timing. The Literature Seems Slim."
"Your Ideas Are Sound."
"For Years, the Investment Industry Has
Tried to Scare Clients Into Staying Fully Invested
in the Stock Market at All Times, No Matter
How High Stocks Go. It's Hooey.
They're Leaving Out More Than Half the Story."
"There Are Time-Periods Where Stocks Are a Terrible Addition to That Portfolio. Yet Inexplicably, We As Planners STILL tend to Suggest That It Is 'Risky' to Not Own Stocks When in Reality the Only Risk Is to Our Business."
"Valuation-Informed Indexing Provides More Wealth for 102 of 110 of the Rolling 30-Year Time-Periods While Buy-and-Hold Did Better in Eight of the Periods."
"There Is a Growing Behavioral Economics Movement, But It So Far Has Had Limited Impact. Economists Are Not Fond of the Softness and Imprecision of Psychology. These Notions Are Considered Vaguely Unprofessional and Flaky."
"I Would Occasionally Get a Response Post
Saying I Was 'the Best Since Rob Bennett
Challenged Us to Think.'"
"This [The Stock-Return Predictor]
Is a Very Handy Little Tool."
"A Much Simpler Way to Bring
the Valuation Issue to Focus."
(Referring to The Stock-Return Predictor)
"It's Informative, It's Based on Solid Data and It Provides Useful Results." (Referring to The Stock-Return Predictor)
"Meet Three Couples Who Left the Corporate World to Do the Kinds of Work That Satisfied Them."
"A Very Solid Approach to Investing."
"Rob Bennett Has Been on a Tear With One Outstanding RobCast After Another."
"It’s Time for a Different Way to Look at Investing, and Rob Is Onto Something Here."
"My Afternoon Train Reading."
(Referring to Rob's Article titled
Why Buy-and-Hold Investing Can Never Work)
"What Is It With Guys Named Rob?
Longtime Index Agitator Rob Arnott Has Now
Been Joined on These Pages by a
Vanguard Diehard Agitator Named Rob Bennett."
"He Offers a Fresh New Perspective
that Will Motivate You to Get on Track
With a Solid Savings Plan."
"While Browsing at www.PassionSaving.com the Other Day, I Discovered an Article Featuring Ten Unconventional Money-Saving Tips. Each of These Offers a New Way to See Money."
"Rob Has Ideas About Investing That Many Bloggers Find 'Interesting.' His Posts Are Often Controversial and Always Thought Provoking."
"Is There a Way to Turn Saving Into Something Fun? If There Was, I Bet a Lot More of Us Would Do a Lot More Saving. I Found a Website Where This Basic Premise Is Explored in Great Depth."
"I Have Much More Confidence in My Ability to Understand What Is Happening....I Thank You for Your Public Service, and, In Another Dimension, for the Personal Courage It Took to Make It Happen."
"I Was Hooked on the Idea of [Passive] Index Indexing, But Something Inside Made Me Wonder "Too Good to Be True?" and "What's the Downside?" I Happened on to Your Site and Valuation-Informed Indexing Seems to Make Sense."
"Reads Like a Casual Conversation
with a Likable Guy Who Wants Nothing More
Than to Help Others Experience the Same Joy
and Happiness He Has Found."
"Your 'Secrets' Are Exactly Like Magic Tricks: Once Revealed, They Look So Simple, Yet You Need Somebody to Show You How It Works."
"Rob's Da Man! Never in the History of the Diehards Forum Has One Poster, Always Making Civil and Well Thought-Out Posts, Managed to Irritate So Many Without Anyone Being Able to Articulate a Good Reason As to Why."
"I’ve Been Surprised at How Controversial This Idea Is, but If Most People Are Buying and Holding, They Are Emotionally Invested in This Strategy."
"The Findings for [Long-Term] Market Timing Are So Robust That It Hardly Matters How We Do It."
"The Elegant Simplicity of His Ideas Throughout Warms the Heart and Startles the Brain."
"Mr. Bennett Evidences an Unusual Skill....
You'll Have to Buy a Copy....Extraordinary....
A Massive Heap of Crap."
"By Reading All the Information on Your Website I Was Able to Develop a Part of Me I Didn't Know I Would Be Able to Become."
"Innovative Financial Thinking."
"Knowledgeable."
"Holy Toledo! This Is Great Stuff!"
""He Offers Down-to-Earth But
Nevertheless Eye-Opening Insights About
the Why and the How of Early Retirement."
"Challenges Unfounded Assumptions."
"It’s Always Good to Read Something New That Challenges Your Way of Thinking."
"Rob, Thanks for All of Your Articulate, Well-Written and Well-Reasoned Commentary."
"Although Rob and I Don’t See Eye to Eye
on Every Detail, His Site Is a
Valuable Resource for Research."
"Thanks, Rob. I Love Seeing So Many
Personal Finance Bloggers Who Offer Such
High Quality Content on Their Own Sites Come Here
to Weigh In [on Your Ideas]."
"A Ton of Tremendously Useful Content."
"Your Enthusiasm Is Infectious."
"I Woke Up at 4:00 am and Stared at the Wall for 20 Minutes....Thank You for Doing What You Do."
"It Might Just Give You
a New Way of Looking at Saving."
"'Staying Too Long in a Job Where You Don’t Feel Relevant Takes a Toll,' Said Rob Bennett, Who Worked for Years in a Well-Paying Corporate Communications Job Where He Didn’t Have Enough to Do."
"You Have Started One of the Most Interesting
and Stimulating Discussions This Board has Seen
in a Long Time."
"A Respected Author and Commentator, Mr. Bennett has Dedicated Himself to Educating Average Investors to Avoid the Most Common Errors."
"I've Gone from Shattered Dreams of Early Retirement to Glimpses of Hope to Reassurance from Quantitative Research."
"Some of the Most Helpful and Insightful Market Discussions on the Web Take Place on These Pages."
"Rob is the Only Person I Know (If Only via Message Board) Who has Completely Opted Out of Participation in the Stock Bubble. And You Know What? He Has Benefited Immensely from Doing So."
"Makes the Subject of Saving Edgy and Fresh."
"Rob Bennett, the Author of a Book Called Passion Saving, Thinks the Saving Problem Is Partly One of Packaging. So He Prefers to Couch it in the Language of Freedom."
"I LOVE This Article and
Am Proud to be Publishing It!"
"Rob Bennett: Some People Disagree With Him, and He Rubs a Lot of People the Wrong Way. But He Has Interesting Ideas About Valuation-Informed Indexing, and He Delves Into a Lot of What Makes a Successful Investing Strategy."
"Rob….Wow…..Your Response Sent Shivers
Up the Ol’ Pilgrim Spine."
"I Have Counseled My Clients to Allocate a Percentage to Equities Based Upon Market Valuations....I Feel Like I've Found a Kindred Spirit. Fascinating Web Site."
“A Simple Age-Based Asset Allocation Formula Is Not Appropriate, and Any Sensible Asset-Allocation Formula Should Combine Both Age/Investment Horizon and Market Valuation Levels.”
"Had a Guest Post This Week from Rob Bennett, Where He Discusses the Benefits of Value-Informed Indexing, Which I Find Very Intriguing."
"I Can Appreciate Rob's Comments.... Buy-and-Hold?
For the Most Part, a Long Obsolete Theory."
"Utterly Brilliant!"
"Your Website Is So Enjoyable That It Is Keeping Me From My Research As I Am So Excited That I Have Found Such a Valuable Resource."
"What We're Talking About Here Really
...Is Empowerment."
"The Return Predictor Is Based upon the Principle that Over the Long Term, Stock Market Prices Will Reflect the Ten-Years Earnings Growth of the Underlying Companies. Prices Return to a Common Growth Pattern."
"Rob’s Arguments in Favor of Value Investing Actually Make a Lot of Sense In a Way That Should Make Any Rational Buy-and-Holder Uncomfortable."
"What I Don't Understand Is How Rob Can Correspond in Such a Sweet and Polite Way
-- Yet He Irritates Me to No End!"
"You Go About It in a Manner that is Catastrophically Unproductive by Adding Missionary Zeal that Inflates Your Importance and Demeans Others. The Whole Idea That There is a New School of Safe Withdrawal Rates Reeks of Personal Aggrandizement."
"Inflammatory."
“What Warren Buffett Did Was Essentially Quite Close to What Rob Bennett Has Written. Buffett Has in Fact Been Cleverly Incorporating Long-Term Market Timing Based on Valuation of the Market in His Allocation of Money to Stocks.”
"This Report Offers A Fresh Perspective That Is Rarely Found In Other Financial Literature."
"Rob Bennett Says That Market Timing Based on Aggregate P/E Ratios Can Be a Far More Effective Strategy. This Claim Is Consistent With Shiller's Analysis and I Can See How It Might Be So."
"Retiring Early Was A Concept I Did Not Entertain. I Was Going to Retire at 65 After Putting in 40 Years. Now I Am Glad To Say That All That Has Changed."
"In a Couple of Days, I Had
Devoured the Entire Book."
"FIRECalc May Not Be the Last Word
on Safe Withdrawal Rates."
"It Seems to Me That Some on This Board Feel Threatened by the Arrival of Rob and His Ideas. They Feel a Threat to Their Perceived Elite Status."
"You've Got to Say One Thing for Rob. He Has NEVER Lowered Himself to Ad Hominen Attacks -- Subliminal or Otherwise -- on Any Other Person on This Board. Not Once. Ever. At Least Give Him Credit for That."
"I Have Never Seen Rob Show Incivility. No Matter What. Truly Amazing. Either He Is Really the Output of an Artificial Intelligence Program, or the Man's on the Way to Becoming a Saint!"
"You're the Politest Guy on the Internet.
Such a Soft Touch!"
"Props for Keeping Your Cool in the Married with Debt Article. Best of Luck Combating Buy-and-Hold."
"I Caught Up [at the Financial Bloggers Conference] With a Fairly Controversial Financial Blogger
Named Rob Bennett, Who Struck Me As the
Nicest Guy Around. There -- I Said It!"
"In Rob Bennett's Case, He Was Banned for No Known Listed Forum Policy. Except His Viewpoint Was Different From Other Bogleheads and [He Was Perceived As] a Threat."
"Mr. Bennett, You Are Spot on About Integrating Some Type of Valuation Filter to One's Stock Allocation. Astute Investors Have Incorporated Some Type of 'Valuation Timing' Into Their Investment Decisions Since the Beginning of Time."
"His Insights Into What Is Really Going On In The Stock Market Are Quite Compelling."
"It Was an Epiphany...Valuation-Informed Indexing Beats Buy-and-Hold Over Most Long-Term Holding Periods at Much Lower Volatility."
"I Am Intrigued By Your Ideas."
"I Read the Book and I Loved It.
The Philosophy Resonated with Me.
I Am a Believer in Your Concept."
"If Your Investment Ideas Can Do for Investing
What Weston Price’s Ideas Did for Food,
You’ve Got Our Attention."
"I Have Looked at His Website and Reviewed His Research and Find It Both Compelling and Completely Logical and Common-Sense-Based."
"If Investors Paid More Attention to Valuations, We Would Have Fewer Boom-and-Bust Cycles. The Investing Institutions Are Definitely Going to Avoid It Because It Affects Their Income."
"The Calculators on Your Site Are Great Resources. It Amazes Me How So Many People Can Say 'Valuations Matter' Yet, in the Next Breath, They'll Say That We Should Ignore Valuations."
"Must Read As Per My Viewpoint
For All Value Seekers."
"His Approach Is Both Mathematically Rigorous
and Easy to Understand."
"Difficult Subjects Can Be Explained to the Most Slow-Witted Man If He Has Not Formed Any Idea of Them. But the Simplest Thing Cannot Be Made Clear to the Most Intelligent Man If He Believes He Knows Already What Is Laid Before Him."
"I Am Not Afraid. I Was Born to Do This."
"I Certainly Have Seen the Academic Profession Squelching Unfashionable ideas and Have Often Been on the Wrong Side of It. Kuhn Shows How Most Pathbreaking Scientific Ideas Are Rejected at First, Usually for Decades.”
"First They Ignore You, Then They Ridicule You, Then They Fight You, Then You Win."
"We Cannot Assume the Existence of Predictability Just Because There Are No Studies That Fully Reject It."
"I Am Also Extremely Grateful to Rob Bennett for Motivating This Topic and Contributing His Experience and Encouragement."
"Rob Bennett Was an Early Pioneer in 3rd Generation Modeling by Advocating (Through Various Online Forums) that Withdrawal Rates Must Be Adjusted for Market Valuations Consistent with Research by Campbell and Shiller."
"I Am Fascinated by the Growing Body of Research that Revolves Around the P/E10 Ratio by Robert Shiller, Doug Short, Wade Pfau, Michael Kitces, John Hussman, Crestmont Research, Jim Otar, Mike Philbrick, Adam Butler & Rob Bennett."
"Rob Is an Enigma in the Personal Finance World. He Has Interesting Theories on Investing Based on Market Valuations. But He Weaves a Tale Which Makes the Stories of Alexander Litvinenko & Gareth Williams Seem Tame by Comparison."
"In Recent Years, the 4 Percent Rule
Has Been Thrown Into Doubt."
"A Safe Withdrawal Rate Is Very Dependent
on the Valuation of the Stockmarket
at the Retirement Date."
"I Have Read Everything I Can About Valuation-Informed Indexing. Buy-and-Hold Is Extremely Problematic. I Respect the Passion, Hard Work and Research That You Have Put Into This Very Important Issue. Your Work Has Huge Value."
"The World of Personal Finance Blogging Needs More Rob Bennetts. He’s Passionate. He’s Intelligent. He’s Writing Things That Go Against the Grain."
"Beyond Awesome."
"The Wealth Management Industry Seems Intent on Containing This Discussion for Fear Clients Might Discover that the Emperor Has No Clothes."
"Recommended Reading."
“All Who Are Still Holding Equities at Present Levels Because Their Financial Adviser Insists that Timing Market Cycles Is Impossible to Do -- Read This!"
"The Fact that Aggressive and Short-Term Market Timing Was Unproductive Did Not Mean That There Were Never Times When It Would Be Wealth-Maximizing to Get Out of the Market."
"The Amount of Return You Can Expect From a Diversified Equity Portfolio Is Inversely Correlated to the Market Valuation at the Start of the Holding Period. It Is One of the Most Robust Statistical Relationships in Modern Finance."
"Why Would Your Job Be Jeopardized
By Such a Sensible Claim?"
"Received Worrisome E-Mail from Rob Bennett. Warns of Risk with Buy-and-Hold Investing
-- I Have No Clue."
"As Attorney, Tax Expert and Financial Writer Rob Bennett Told Us, the Problem Is That, By the Time Shiller Published His Research, Many Big Names Had Already Endorsed Buy-and-Hold."
"This Seems to Me to Be a Fundamental Challenge to Some of the Most Basic Tenets of the Boglehead Paradigm."
"You Want to be Very, Very Wary of Anything Connected with Rob Bennett, the Most Infamous Troll in the History of Investing Forums on the Internet."
“I’ve Had My Fill of Those Long-Winded Posts that Include Distortions, Unsubstantiated Claims, Misquotes and Comments Taken Out of Context.”
"Haven't You Noticed Yet That NO ONE Discusses Your Ideas, NO ONE Mentions Your Name, NO ONE Goes To Your Web Site."
"I've Had Similar Experiences. I Know of Two Young Professors Who Wanted to Do Research on Fundamental Index and Reported to Me That Their Colleagues Advised Them That This Line of Research Could Derail Their Career Prospects."
"As with Drug Studies Funded by Drug Companies, It Would Be Churlish to Suppose that the Chicago School of Business Was in the Bag. But It Would Also Be Idealistic to Assume That There Was No Funding Bias at All."
"This Sort of Intimidation Is Not Acceptable. The Cigarette and Pharmaceutical Industries Found Research Supporting Their Products By Funding It. But That Was Big Money Supporting Outcomes, Not Dissuading Others."
"Financial Economists Gave Little Warning to the Public About the Fragility of Their Models. There Is No Ethical Code for Professional Economic Scientists. There Should Be One."
"The Situation [Referring to the Intimidation Tactics Used to Silence Academic Researcher Wade Pfau's Reporting of the Dangers of Buy-and-Hold Investing Strategies] Seems Well Below Any Professional and Academic Acceptable Standards."
Many Academics Can Become Quite Strident When Their Views Are Challenged. Academia Is Often Subject to Self-Serving Bias That Obliterates Ethical Bounds."
"I Don't Like Too Much the Conspiracy Idea. I Am Not Pressured By Anyone in My Research."
"This Is What Investing Should Be -- Calculated, Deliberate, Confident, Informed and Simple."
"It Is Obvious that Rob, in Attempting to Identify New Safe Withdrawal Rate Strategies...Is Goring Your Ox. If Rob Improves on [the] Safe Withdrawal Rate Methodology, the Implication Is Clear: You Are All, Metaphorically, Out of Business."
"I Applaud His Effort to Inject Another Piece of Objectivity Into a Very Complex, Highly Subjective Topic -- Making Money in the Market."
"Naturally, I Am Finding That Valuation-Informed Indexing Can Allow You to Reach a Wealth Target With a Lower Saving Rate and to Use a Higher Withdrawal Rate in Retirement Than You Could With a Fixed Allocation."
"A Careful Examination of Past Returns Can Establish Some Probabilities About the Prospective Parameters of Return, Offering Intelligent Investors a Basis for Rational Expectations About Future Returns."
"The Ability to Estimate the Long-Term Future Returns of the Major Asset Classes Is Perhaps the Most Important Investment Skill That An Indivisual Can Possess."
"The Stock Market Resembles Roulette. In Both Cases, the Accuracy of Sensible Forecasts Rises Over Time."
"Returns Are for the Most Part a Matter of Simple Arithmetic...Much of Our Industry Seems Fearful of Basic Arithmetic of This Sort."
"How Can It Be That One-Year Returns Are So Apparantly Random and Yet Ten-Year Returns Are Mostly Forecastable? In Looking at One-Year Returns, One Sees a Lot of Noise. But Over Longer Time Intervals the Noise Effectively Averages Out and Is Less Important."
"The Notion That Rich Valuations Will Not Be Followed By Sub-Par Long-Term Returns Is a Speculative Idea That Runs Counter to All Historical Evidence. It Is an Iron Law of Finance That Valuations Drive Long-Term Returns."
"It's January and the Temperature Is Below Freezing. If You Asked Me Whether It Will be Warmer or Cooler Next Tuesday, I Would Be Unable to Say. However, If You Asked Me What Temperature to Expect on April 9, I Could Predict "Warmer Than Today" and Almost Surely Be Right."
"If the Response Is "Who Knew?", It Won't Be Much Comfort for Retirees in the Employment Line at Wal-Mart. This is Especially True Since a Rational Understanding of History and the Drivers of Longer-Term Stock Returns Can Help Retirees To Avoid That Surprise."
"New of the Demise of the Random Walk Has Only Very Slowly Spread, In Part Because Its Overthrow Came as a Shock. If the Random Walk Hypothesis Were Correct, the Most Likely Return Would Be the Historic Average Return. The Evidence, However, Is Strongly Against This."
"I Don't Think We Can Debate the Merits of This Type of Forecasting [Referring to the Numbers Generated by The Stock-Return Predictor] Unless We Believe 'This Time It's Different.'"
"I've Seen Absolutely Nothing From You That I Can Use in a Tangible Fashion to Formulate an Investment Plan. Your Ideas Are So Mushy That It's a Complete Waste of Time to Even Consider Them."
"Do You Really Think Your Tool
[The Stock-Return Predictor]
Is 'Wiser' Than the Market?
If It Was That Easy,
Everybody Would Be Doing It."
"The Expected Return of Stocks [As Reported By The Stock-Return Predictor] Needs To Be At Least the Treasury Inflation-Protected Securities (TIPS) Rate for Stock Investing To Make Sense."
"I Have Used Valuations to Adjust My Asset Allocation For Many Years With Very Favorable Results."
"I Don't Care If You Do or Don't Believe That the Market Will Behave Similarly in the Future As It Has in the Past. Either Way, This [The Stock-Return Predictor] Is an Excellent Way to Understand What the Market Has Done In the Past."
"My Role Is To Give People Who Don't Like What the Historical Stock-Return Data Says About the Effect of Valuations on Long-Term Returns Somebody To Yell At On Internet Discussion Boards."
"It Really Is a Shame and Indefensible That So Many Feel the Need to Jump Into It With No Interest of Posting on the Topic But Just to Disrupt. Are You That Insecure? Some on the Forum Have an Interest in This Topic. If You Don't, Stay Out!"
"Irrational Behavior Does Follow Patterns. But How Many Experts in Behavioral Finance Believe That Such Knowledge Can Be Used to Predict Markets? Basically, None. Your Model Cannot Attain the Level of Predictive Value You Claim."
"The Safe Withdrawal Rate Studies Are Based on History. This [The Retirement Risk Evaluator] Shows, Based on the Same History, What the Probabilities Are for the Future at Various Starting Points. If the First Has Value, Then Surely This Does Too."
"There Are Hundreds of People Who Contributed to This. This Calculator [The Stock-Return Predictor] Demonstrates in a Compelling Way the Power of This New Internet Discussion-Board Communications Medium."
"A P/E10 of'26' Is Bad. Now Look at the 30-Year Return Predicted by the Calculator -- 5.4 Percent Real. That's Not Bad. There Are All Sorts of Strategic Implications That Follow From Understanding That Stocks Provide Different Sorts of Returns Over Different Sorts of Time-Periods."
"I Would Never Invest in Anything Without Having Any Idea What the Expected Return Is. For Instance, I Would Not Walk Into a Bank And Say "I'll Take One Certificate of Deposit, Please" WIthout Asking What Rate They Are Offering."
"I've Seen Things Said on Investing Boards That I Have Never Heard Said in Discussions of Any Non-Investing Topic. The Question of Whether Valuations Affect Long-Term Returns Is a Topic That Causes People More Emotional Angst Than Does Abortion or Impeachment Proceedings or the War in Iraq."
"It's Not Possible For Those Who Have Come to Believe That Stocks Are Always Best to Accept that Valuations Matter. The Two Beliefs Are Mutually Exclusive. If Valuations Matter, There Is Obviously Some Valuation Level At Which Stocks Are Not Best. The Two Paradigms Cannot Be Reconciled."
"The Great Safe Withdrawal Rate Is Over. Rob Bennett Has Won.The Technical Evidence Supporting This Assertion Is Rock Solid."
"I Am Afraid that the Emperor SWR [for "Safe Withdrawal Rate"] Has No Clothes."
"I Cite You and John Walter Russell in My Paper as the Earliest and Strongest Advocates of This Approach [New School Safe Withdrawal Rate Research]."
"Dear Rob -- I Just Became Aware of Your Past Research in September. Since Then, I've Read Archives From Many Discussion Boards and Websites, and I Always Find Your Writing to Be Very Interesting and Intriguing."
"I Think Rob Bennett Did Provide An Important Contribution in Terms of Describing a Way for P/E10 to Guide Asset Allocation for Long-Term Conservative Investors. I Also Think He Was Right on the Issue of Safe Withdrawal Rates."
"What Studies Show This [That Long-Term Timing Doesn't Work]? In Particular, Are There Some Academic Studies That I Haven't Found Yet? That's All I Want to Know."
"Because the Precise Timing of This Mean Reversion Is Not Known in Advance, Expecting the Result to Happen in the Short-Term Will Not Be Possible. But Long-Term Investors Who Can Be Patient Can Wait for This Mean Reversion and Will Eventually Come Out Ahead."
"Your Work Is at Odds with the Ethos of the Board -- Here the Theme is John Bogle's Philosophy, Which Eschews Market Timing. This Board Came Into Existence to ESCAPE One Individual, the Very Individual With Whom You Have Openly Aligned Yourself."
"The Problem With Long-Term Market Timing Is That It Takes Too Long to Find Out If You Are Right or Wrong."
"Why Is It Such an Odious Violation of the Tenets of Bogleheadism to Explore Whether Someone Who Has Enough Patience Might Be Able to Benefit from the Transitory Nature of Speculative Returns (the Idea That the P/E Ratio Eventually Ends Up Where It Started)?"
"Let Me Explain Why I Posted About This Here. Valuation-Informed Indexing Has Had Critics for Years. But Until Norbert Did It In 2008, Nobody Seemed to Have Provided a Serious Investigation of It. I Couldn't Understand Why. That Bothered Me."
"If You Really Don't Like Market Timing in Any and All Forms, You May Not See Any Point in an Empirical Investigation. You View Me as One of a Long Line of Hucksters Trying to Sell You Some Snake Oil. I Don't Want to Be Such a Person."
"Having a Completely Ineleastic Demand for Equities Is a Bit Bonkers. No One Acts That Way with Life's Other Important Commodities. Campbell Advocates a Linear Valuations-Based Strategy so That You Wouldn't Be Making Big Changes. This Would Be Like Rebalancing But More Flexible."
"The Whole Idea of Valuation-Informed Indexing Belongs to You. Do You Mind if I call the Paper 'Valuation-Informed Indexing'? I Would Give You Credit. I Have Been Toying With the Idea of Sending the Paper to the Journal of Finance, Which Is the Most Prestigious Journal in Academic Finance."
"I Definitely Need to Cite You as the Founder of Valuation-Informed Indexing, As I Have Not Found Anyone Else Who Can Lay Claim to That. Shiller Pointed Out the Predictive Power of P/E10 But Never Discussed How to Incorporate It Into Asset Allocation, As Far As I Know."
"I Tested a Wide Variety of Assumptions About Asset Allocation, Valuation-Based Decision Rules, Whether the Period Is 10, 20, 30 or 40 Years, and Lump-Sum vs. Dollar-Cost Averaging To Show That the Results Are Quite Robust to Changes In Any of These Assumptions."
"Yes, Virginia, Valuation-Informed Indexing Works!"
"I Wrote Up the Programs to Test Your Valuation-Informed Indexing Strategies Against Buy-and-Hold and I Am Quite Excited. You Say in the RobCast That VII Should Beat Buy-and-Hold About 90 Percent of the Time. I Am Getting Results That Support This."
"Never Underestimate the Power of a Dominant Academic Idea to Choke Off Competing Ideas, and Never Underestimate the Unwillingness of Academics to Change Their Views in the Face of Evidence. They Have Decades of Their Research and Academic Standing to Defend."
"There's So Much That's False and Nutty
in Modern Investing Practice."
"Following Conventional Wisdom Has Led a Generation of Investors Down the Road to Ruin."
"It Is Sad That the Idea That Price Doesn't Matter...Should Ever Have Been Seriously Considered".
"The Conventional Wisdom of Modern Investing Is Largely Myth and Urban Legend."
"Economics Is a Dog's Breakfast of Theoretical Ideas and Alleged Causal Relationships That Are At All Times Unproven and In Dispute."
"Since They Did Not Diagnose the Disease, There Is Little Popular Confidence That They Know the Cure. What If Economics Is, Actually, At the Same Level as Medicine Was When Doctors Still Believed in the Application of Leeches?"
"One of the Most Remarkable Errors
in the History of Economics."
"Everything Has Fallen Apart."
"We Wonder Why Funds and Banks, Full of the Best and Brightest, Have Made Such a Mess of Things. Part of the Reason Is That We Have Taught Economic Nonsense to Two Generations of Students."
"Perhaps Most Scandalously, the Theory [Behind Buy-and-Hold] Remained Received Wisdom Long After Empirical and Theoretical Arguments Had Demolished It Within the Academic Community."
"I Love the Humans Dearly (the Title of the Book I Am Writing Is Investing for Humans: How to Get What Works on Paper to Work in Real Life) But They Can Be a Trial at Times. Hey! Helping the Humans Learn What It Takes to Invest Effectively Is Not All That Different From Being Married!
"We Are Going to See Hearts Melt Following the Next Crash. I Will Be Working Side-By-Side With All of My Many Buy-and-Hold Friends to Rebuild Our Broken Economy."
"Wow, I Did Not Realize You Had Achieved This Much Success and Had Many Devoted Believers/Followers. That’s Great, Then Ignore the Opposition. It Is Great to Have Opposition: That Means You Are Doing Something Right."
"I Do NOT Believe I Know It All. I Believe That Shiller Discovered Something Very Important and It Appalls Me That More People Are Not Exploring the Implications of His Findings. My Aim Is To Launch a National Debate."
"I Can See How Many Readers Would Be Put Off by the Somewhat Sensational/Scandalist Tone and Would Not Persevere to Read, Thinking You Are Losing Your Mind."
"I LOVE Everything About Buy-and-Hold Other Than the Failure to Encourage Investors to Take Price Into Consideration When Setting Their Stock Allocations. That's a Mistake That Was Made Because Shiller’s Research Was Not Available at the Time The Strategy Was Being Developed."
"Valuation-Informed Indexing Sounds Like a Real Thing. If It Is and I Can Thoroughly Understand It, Then It Will End Up In My Classrooms and in My Students' Minds (Of Course, With References to You and Wade)."
"I Can Confirm Wade Pfau's Experience. Whenever I Send My Papers to the Financial Analysts Journal or Similar Traditional Journals, I Get Rejected."
"As a Fan of Thomas Kuhn's The Structure of Scientific Revolutions, I Know That Progress Can Be Frustratingly Slow and What Is Typically Needed Is Either a Crisis or the Ascent of a New Generation of Scientists Who Did Not Build Their Careers on the Old Models and Theories."
"We Trace the Deeper Roots [of the Financial Crisis] to the Economics' Profession's Insistence on Constructing Models That, By Design, Disregard the Key Elements Driving Outcomes in Real World Markets."
"Rob Gets Himself So Worked Up Over What Someone Else Is Doing With Their Own Money and Not Bothering Rob in the Least. As Long As They Aren't Knocking on Your Basement Door, What Do You Care? They Are Happy and Content. Leave Well Enough Alone and Focus on Your Own Account."
"I've Been on Forum Since the BBS Days and I Think Rob is Special. He Could Be an Internet Meme If He Put Some Effort Into It. Someday, He Will Realize That the Only Thing He's Good At Is Being an Epic Loser. He Just Needs to Embrace That Idea and Run With It. Watch Out, LOLCats, Here Comes Pathetic Guy!"
"Your Lies Are Not Even in the Realm of the Possible, Much Less Actually Credible, Much Less Actually True."
"I'm Your Friend. I Am Not a Boil on Your Ass."
"You Guys [the Greaney Goons] Are the Same Jokers Who Have Done This Before, Sparring with Rob Over Nonsensical Issues On This Site and Others, Leveling Personal Attacks, and You Don't Even Use Real Names! Rob Is Entitled to His Opinion, But the Fact That You Challenge Every Jot and Tittle of What He Says Makes It Clear You Have An Unholy Agenda. Please Take It Elsehwere."
"Rob, Take This As Friendly Advice. You're a Smart and Articulate Guy and You Could Be Making Valuable Contributions to This Discussion. I've Dealt with the Mentally Ill Before and I've Found That They Sometimes Can Be Reasonable If Gently Redirected."
"Always Remember Others May Hate You, But Those Who Hate You Don't Win Unless You Hate Them, and Then You Destroy Yourself."
"I’m a Numbers Guy. And I Believe I Understand Rob’s Thesis, that Future Returns, Over the Next Decade, Have a Tight Inverse Correlation to the PE10 for the Starting Point. Remember, Correlation Doesn’t Need to be 100%, Only That There’s a Bell Curve of Potential Outcomes that Shift Meaningfully Based on the Input."
"What a Difference a Threat to Get the Father of Two Small Children Fired From His Job Has on an Investing Discussion, Eh? Long Live Buy-and-Hold! It’s Science! With a Marketing Twist!"
"I Respect Rob and His Analysis. He's Bright, Energetic and Passionate. [The Goon Stuff] Is Really Nonsense. I Enjoy a Thought-Provoking Conversation With People I Respect."
"The Fact that Shiller is a Proponent of the Approach Takes it from a Fringe View to Mainstream, in my Opinion."
"I Have had Academic Researchers Tell Me That They Dream of the Day When They Will be Able to do Honest Research Once Again. I Have had Investment Advisors Tell me That They Dream of the Day When They Will be Able to Give Honest Investing Advice Again."
"Let’s Call a Spade a Spade, Shall We? Wade Pfau Stole Your Research and Put His Name on it, Throwing You Just a Tiny Crumb of Acknowledgement to Ward Off a Lawsuit. He’s Profiting Handsomely By His Theft, Leading a Charmed Life, Widely Published, Widely Respected. While Rob Bennett Continues to Toil in Total Obscurity. It’s So Incredibly Unfair, I Think If It Happened to Me, It Could Actually Drive Me Insane."
By Rob
Set forth below is the text of an e-mail that I sent to Pema Levy, a reporter at MotherJones.com who wrote an article titled Rachel Mitchell’s Former Colleague Slams Her Kavanaugh Memo As “Absolutely Disengenious.”
Pema:
Anonymous says
Did you get a response?
Rob says
I did not.
Rob
Anonymous says
So why would you even post this? Running out of material?
Rob says
I post it because it’s part of the story, Anonymous.
As a people we are trying to work our way from Buy-and-Hold to Valuation-Informed Indexing. We have had a lot of successes. Shiller published his peer-reviewed research. He wrote a best-selling book that was reviewed in all the top publications. He was awarded a Nobel prize. Wade Pfau and I had our follow-up research published in a peer-reviewed journal. We had thousands of our fellow community members express a desire that honest posting be permitted at every discussion board and blog on the internet.
We have also experienced a good number of setbacks. Wade was threatened and silenced. Bans on honest posting were imposed at all of the major sites. The errors in the Buy-and-Hold retirement studies have done uncorrected for 16 years now.
Each e-mail that I send is an effort to help us get the ball rolling forward at a quicker pace. Most of them are not going to get responses. But every now and again, one will. When you put the ball up, you never know where it is going to land. When I sent 30,000 e-mails to academic researchers, Rob Arnott was one of the people who responded with some very helpful e-mails. I wouldn’t have gotten those if I had not put the ball up in the air. When I continued to post at the Bogleheads Forum in the face of a lot of brutal attacks advanced by you Goons, Wade Pfau was listening in. So he contacted me to ask if I wanted to work with him on research showing that Valuation-Informed Indexing is superior to Buy-and-Hold. Again, that wouldn’t have happened had I not kept putting the ball up in the air.
Your abusiveness shows your desperation. If Greaney’s study really contained a valuation adjustment, we never would have seen any of your criminal behavior. If people stood up to you, we would all be Valuation-Informed Indexers today, there wouldn’t still be any Buy-and-Holders. But when we give up in the face of the relentless abuse, it causes others to lose heart and give up too. So I don’t want to do that.
Every person in the world benefits from knowing how to invest effectively. So we all should be working together to open every site on the internet to honest posting. We are not going to get a response to every e-mail we send out. But we will get more responses the more we send out. So we all should do what we can. And. each time someone does something positive, we should all celebrate that tiny step forward. So I report here when I do something like that.
How many e-mails have you sent today letting people know of the errors in the Buy-and-Hold retirement studies?
Material Deluged Rob
Anonymous says
You have already said the same things over and over. How does this specifically add to the story?
Rob says
I hadn’t said them to Pema Levy. Now I have. That’s an advance.
Once upon a time, Wade Pfau did not know about this stuff. They didn’t teach him about Valuation-Informed Indexing at the Ph.D. program at Princeton. And you Goons didnt like it one bit that I was posting about it at the Bogleheads Forum. But I did it anyway. And Wade became intrigued and contacted me and we prepared some pretty darn amazing research together. That’s how it is done, Anonymous. That’s how every new idea ever introduced came to take over the world — by people learning about it.
Pema Levy could have a brother who works at the New York Times. She might have lost some money in the 2008 crash and be kind of pissed about it. So she might read the entire article and ponder it a bit and talk it over with her friends a bit. And then share it with her brother. And her brother might convince his editors to put an article on the front page. And that article might persuade my good friend Jack Bogle to flip to the Valuation-Informed Indexing side. And that might change the world for millions of people in a very, very positive way.
Or it might be the person who I contact next week who gets the ball rolling in that way.
You never know.
What you know is that, if you don’t put the ball up, you are not going to score. And that, if you put the ball up, there is at least a tiny chance that you will score. So it is always better to put the ball up.
You want to be sure that you are playing a game that you want to win. If you are playing a game that doesn’t matter, you are wasting your time. I knew on the evening of August 27, 2002, that this is a game that I want to win. That was the night when Greaney advanced his first death threat and 200 of my Buy-and-Hold friends pushed the “Recommend” button. If Buy-and-Hold can cause 200 otherwise good and smart people to recommend a death threat against a friend of theirs, there is something seriously messed-up about Buy-and-Hold. And I want people to see that. I want to get everybody in the country talking about that so that we can all get about the business of moving on to something better.
That’s where I am coming from, in any event.
I naturally wish you all the best that this life has to offer a person. I hope that helps a small bit.
Disillusioned Buy-and-Holder Rob
Anonymous says
“I hadn’t said them to Pema Levy. Now I have. That’s an advance.”
How is it an advance if it never resulted in anything? It is like getting a junk email and hitting the delete button.
Rob says
She may have read the article and loved it and not responded to me. Or she may have put the article aside but will pull it out and read it after the next crash when the topic seems more relevant. Or she may have read a few paragraphs and lost interest but will be pulled back to finish it after the crash. Or she may have found the article unbelievable but will find it believable after the crash. There are all sorts of possibilities.
And, if the article does not affect Pema in any way, it may affect the next person to whom I send it. Or the one after that.
It only takes one, Anonymous. Wade Pfau was a big one. Rob Arnott was a big one. John Walter Russell was a big one. There will be more big ones down the road. And then at some point there will be enough forward momentum that it won’t be as difficult to spread the word from that point forward.
How many others are sending these e-mails? That’s the question. If few others are doing it, that means that I am doing more than most others. Good for me, you know? I can do no more and I can do no less.
My best wishes.
Junk Mailing Rob
Anonymous says
When people don’t respond to an email, they are not interested. Your point is silly.
Rob says
I don’t agree with that the way you say it. The default action is always not to get involved. People need to feel a strong reaction to get involved. Most people do not feel strongly re this matter. So it is going to be a rare case when I get a response. But a good number of those who do not respond may be affected in some way. It may take multiple encountered for someone to develop strong feelings re this matter. My e-mail may lay the groundwork for a stronger reaction somewhere down the line. You just don’t know.
In any event, if one person does not react, the next one might. When I sent out the 30,000 e-mails to academic researchers, I got 150 responses. That’s a response rate of 0.5 percent. If that rate applies here, I would need to send 200 e-mails to get a response. That’s an argument for sending MORE e-mails, not fewer. If I send one e-mail every day for a year, I would get two responses. That’s two more than I would get if I sent zero e-mails.
The problem that we have as a nation is that most of us do not want to send 200 e-mails to get one response. I know the feeling! It’s hard work. Not just physically. It’s hard work EMOTIONALLY. When you get one response to 200 e-mails, you have been rejected 199 times. Who needs that, you know? We all want to be appreciated for our efforts. To be rejected 199 times hurts. Big time.
That’s why we are where we are. That’s why we all had to endure an economic crisis in 2008. That’s why things are set up so that we may endure a follow-up in the next year or two or three. I watched the movie “A Bridge Too Far” last week. 10,000 men were sent on the mission and 2,000 came home. Those are bad numbers. And the missions was a failure. They secured the bridge they were trying to secure but the reinforcements did not arrive in time and they were not able to hold it. So it could be said that those 8,000 men died for nothing.
Did they?
Had they secured the bridge, the believed that they could have brought the war to an end one year earlier. That would have been a very big deal. They lost 8,000 men because they believed that they had a good chance to bring the war to an end one year earlier. It didn’t go the way they wanted it to. But they gave it their best shot. Those 8,000 men died for their country. They showed their love for their country by giving up their lives for it. No one on our side wanted them to die that way. But a life given up for love of one;s country is not really a wasted life. Not in my book, anyway.
That’s how I feel about this Buy-and-Hold thing. We all want the same thing. We all want to learn how to invest more effectively. If Bogle were thinking clearly, he would want me to send as many e-mails as I possibly can. Because he would want to enjoy the learning experience that he can only enjoy once we open every discussion board and blog on the internet to honest posting. Bogle has taught me a lot of exciting stuff. I am trying to return the favor. Bogle did what he did partly because he loves his country and I do what I do partly because I love my country. There’s no shame in putting in a lot of effort for a small return if you are doing it out of love. At least that’s my take.
We will have to see how it all plays out, Anonymous. If one of these e-mails produces magic, I have a funny feeling that down the road a bit you will be thanking me for sending out the hundreds or thousands that produced no response. You don’t know in advance which ones will produce magic and which ones will produce no response. So you have to send the 199 that garner no response to get the job done. That’s just the nature of the job re this particular matter. I don’t like it that that’s the nature of the job. Not one teeny little bit. But I don’t have control over that aspect of the matter. Perhaps you’ve noticed.
My best and warmest wishes to you and yours.
One-Down, 199-to-Go Rob
Rob says
I’ll come at it from a slightly different angle.
One could say that, if it’s really true that valuations affect long-term returns, we would have corrected all of the textbooks in this field years ago. So it’s silly trying to get those textbooks corrected now.
That follows, doesn’t it?
The reality remains that Shiller has been awarded a Nobel prize and the textbooks have not yet been corrected.
So what to do, you know?
I think that we need to talk it over. I think that we need to open every discussion board and blog on the internet to honest posting. I think that doing that benefits each and every one of us with no possible downside. That’s my sincere take.
So I send the e-mails. You call it silly. I certainly agree that it is inefficient. In an ideal world, there would be much more effective ways in which to proceed. One might try putting up a post at the Motley Fool site pointing out the Greaney’s retirement study lacks a valuation adjustment, something like that. I tried that one already, Anonymous. Perhaps you’ve noticed.
The whole dispute is silly, if you want to be frank about it. Permitting honest posting re so important a matter is obviously a good idea. So there is no grounds for any dispute here. And yet here we are, you know?
You could say that human beings are silly, if you wanted to. There’s evidence to support that claim.
But there is also evidence to support a claim that human beings are wonderful creatures. We came up with Buy-and-Hold, did we not? Which offered us scores of powerful advances in our collective understanding of how stock investing works. And we came up with the last 37 years of peer-reviewed research, which shows us the path to correcting the one error we made when we were developing the Buy-and-Hold Model. So we have opened the path to developing scores of additional advances. Good for us, you know?
Now these wonderful and yet silly creatures just need to get their wonderful side having a good talking-to with their silly side so that we can all live richer (in every sense of the word) lives from that point forward. Pretty darn exciting stuff. If it take 199 non-responses for every response achieved, that’s valuable work. In MY assessment. The e-mails go out because it is MY sincere take that we would all benefit from permitting honest posting re these matters. You don’t have to agree. I am telling you where I am coming from.
Profoundly Silly (But Also Profoundly Loving!) Rob
Anonymous says
“I don’t agree with that the way you say it”
Of course you don’t. It doesn’t fit your narrative. Most people, like this person, receive hundreds of emails every week. We decide what is important and respond to it. The rest, like your email, is ignored and/or deleted.
Rob says
Rob Arnott responded to one of the my e-mails. He is one of the top figures in the field, he once served as the editor of the Financial Analysts Journal. He looked over my site and said that my views on stock investing are “solid.” He also told me that he has experienced the same sorts of abuse that I have at the hands of Buy-and-Holders. He said that several researchers who were planning to do research on his ideas on stock investing were taken aside and told that doing such research might prove to be a career-limited move.
That’s powerful stuff. That explains why we had an economic crisis in 2008 and why we may well be on the road to living through another one in the not-too-distant future. I have a funny feeling that the members of your jury will be taking a careful look at Armott’s e-mails to me when determining the length of your prison sentence. And those e-mails would not exist had I not been willing to get 199 non-responses for every response that I received. So I think it might be best if I continue sending them.
I hope that works for you, my dear Goon friend.
My best and warmest wishes to you and yours.
Narrative-Fitting Rob
Anonymous says
“Rob Arnott responded to one of the my e-mails.”.
And Pema did not. Thus my point. That is why your post is a nothing burger.
Rob says
It’s part of the story. If I report only on the e-mails that get responses, I am telling only part of the story. In the days following the next price crash, lots of people are going to want to know why no one told them about the dangers of Buy-and-Hold. The fact that I got only one response per each group of 200 e-mails that I sent to academic researchers is part of the explanation. If it were easy to get people concerned about the Ban on Honest Posting, there wouldn’t be a Ban on Honest Posting. The lack of alarm that many of us feel re these matters is part of the story
I am going to report on the e-mails that get responses. Those are my favorites. But the ones that don’t get responses have a tale to tell as well. Anything that helps us understand better what is going on re these matters is a plus in my assessment. We need to examine these questions from multiple angles. We need to come to a FULL understanding.
My sincere take.
Nothing Burger Rob
Anonymous says
“It’s part of the story. ”
It is only part of the story as to how you try to make something out of nothing. A meaningless waste of time.
Rob says
Getting the Buy-and-Hold retirement studies corrected is nothing? We disagree re that one, Anonymous.
A lot of the people who posted at the old Retire Early board had become friends of mine. I view a failed retirement as a serious life setback.
I mean, please give me a freakin’ break.
Time-Wasting Rob
Anonymous says
“A lot of the people who posted at the old Retire Early board had become friends of mine.”
I noticed that your “friends” don’t post here. Wonder why?
Rob says
They don’t want to be social outcasts. When I put up my famous post from the morning of May 13, 2002, pointing out that the Greaney retirement study lacks a valuation adjustments, hundreds of my friends came forward to say that the debate that followed was the most exciting and helpful that we had ever had at that board. So far so good. Then we saw the threats of violence and the threats of career destruction. Then those people got quiet. And they remain quiet today.
We need a story on the front page of the New York Times. Once we have that story, there won’t be any more shame about the 37-year-long cover-up and we will all be able to move forward together in our understanding of how stock investing works. We need to enforce the laws against financial fraud, That’s the best course of action for every single one of us.
Will it happen prior to the next price crash? I hope so. But going by what I have seen over the past 16 years, I wouldn’t bet on it.
Will it happen in the days following the next price crash. I sure hope so. I sure believe so.
We have laws against financial fraud. In ordinary circumstances, those laws protect us. These are not ordinary circumstances. We are in a situation in which lots of wealthy and powerful and well-connected people have continued to promote Buy-and-Hold for 37 years after Shiller published his Nobel-prize-winning research showing that there is precisely zero chance that such a strategy could ever work for even a single long-term investor. Tell the truth about stock investing and you are making all of those wealthy and powerful and well-connected people look bad. Not exactly the recipe for quickly getting ahead in this field.
But sooner or later we have to come clean with the millions of investors whose lives we are in the process of destroying, right? What do you propose?
I propose putting the behavior of the Wall Street Con Men and their various internet Goon Squads in the best possible light that we can without engaging in outright dishonesty ourselves. Tell me something that I can do to help you that is on the right side of the felony live and I will be on it in three seconds and you won’t have to ask a second time. I won’t even look at anything on the wrong side of the felony line. Not in 16 years, not in 16 billions years.
Does that help at all?
Open every discussion board and blog on the internet to honest posting re the last 37 years of peer-reviewed research in this field and I will have no shortage of friends whatsoever.
Friendless (For the Time-Being!) Rob
Anonymous says
“They don’t want to be social outcasts.”
Not believable.
They can post anonymously.
Rob says
It’s true that they could post anonymously.
I don’t think that people like even flirting with the idea of becoming social outcasts. The protection that comes from posting anonymously doesn’t assure them. It’s not just that they don’t want other people to know that they are social outcasts. They don’t want to know it themselves. If they post anonymously, they would still know themselves that they had done so, right? They don’t want that. People are afraid of being social outcasts and they just don’t want to even play at it (which is what they would be doing if they posted anonymously).
Acknowledging that we caused the economic crisis is a scary thing, Anonymous. It means saying that the experts made a mistake about a very important matter. That’s scary. And we are all in on it. The experts couldn’t have continued making the mistake if we had called them out. So we are all in on it. That makes it double scary. Acknowledging that it was the heavy promotion of Buy-and-Hold that caused the economic crisis is like accusing ourselves of a crime. The first instinct is to go into denial.
Also, please remember that even those who have doubts about Buy-and-Hold are not sure. We learned by talking things over with others. We can’t do that re Buy-and-Hold because of the ban. So we can’t really learn about the topic. When I say that lots of my friends expressed excitement over having the debate that we need to have, I am not saying that they signed on to everything that I said. They didn’t. They saw the merit of talking things over, that’s all. Some would in time have come to agree with me if we had let the debate go forward. But they are not going to go out on a limb today and express agreement with me, even anonymously. Make it clear to them that that is a safe thing to do, and they may do it, or they may at least pick up the debate and see where things go. But they haven’t yet talked things through enough to go out on a limb. We learn through talking things over and these people have not been permitted to talk things over in a safe way.
I’ve made the comparison to civil rights from time to time. Do you remember the movie “Guess Who’s Coming to Dinner?” It’s about a white girl who wants to bring the black man she is going to marry home to meet her parents. The parents are liberal. So they should be fine with this. But the entire tension of the movie is that they are uneasy about it. Fast forward to today and they would not have a problem. But it was hard in the early days of the civil rights struggles even for liberals to be quite that “progressive.” People need to be permitted to change slowly.
If you asked people of that day to say “Blacks are equal to whites,” they would have said it. If you asked them to say “blacks and whites should intermarry,” they would have hesitated, even if they were speaking under the cloak of anonymity. They wouldn’t be able to come up with any logical reason why blacks should not marry whites. They wouldn’t exactly oppose it. But they wouldn’t be quite capable of expressing enthusiasm for the idea.
That’s what you are asking people to do when you ask them to post anonymously in support of Valuation-Informed Indexing. There are people who would do that if there were no social stigma attached to it. But so long as that social stigma persists, they are going to hold back. It’s not just that they want to avoid direct punishment (which they could avoid by posting anonymously). They want to avoid the yucky feelings that come from violating a social taboo.
Show people that honest posting is both tolerated and encouraged and you will see more of it. Honor your word not to punish it and more people will venture forward. The anonymity thing is not enough to get the job done. Not today. Perhaps after the crash. But not today.
I hope that helps a small bit.
Social Outcast (With an Exclamation Point!) Rob
Anonymous says
“I don’t think that people like even flirting with the idea of becoming social outcasts. The protection that comes from posting anonymously doesn’t assure them. ”
They are anonymous. That in itself would be assurance. You just make it up as you go.
Rob says
I didn’t make up Shiller’s research showing the valuations affect long-term returns.
I didn’t make up Wade Pfau’s conclusion that: “Yes, Virginia, Valuation-Informed Indexing works!”
I didn’t make up the death threats and the demands for unjustified board bannings and the thousands of acts of defamation and the threats to get academic researchers fired from their jobs.
If humans were 100 percent rational, as the Buy-and-Holders assume, you are right that anonymity would provide people with all the protection that they need. But humans are NOT 100 percent rational. That’s the reality that keeps tripping you up. Humans are emotional creatures and they don’t like taking the risk of becoming social outcasts, even when provided anonymity.
If we want investing advice to work, we are going to need to start crafting it for HUMANS. Because the vast majority of investors are humans. When you calculate the safe withdrawal rate in a world in which most investors are humans, you get very, very different numbers from the ones that our Buy-and-Hold friends report.
My sincere take.
Human (For Good or For Ill) Rob
Anonymous says
“If we want investing advice to work, we are going to need to start crafting it for HUMANS. ”
Because it is currently crafted for farm animals?
Your entire site is a bunch of nonsense.
Rob says
Buy-and-Hold was crafted for Vulcans, Anonymous. If ignores the effects of investor emotions, which produce both overvaluation and undervaluation.
Bunch-of-Nonsense (According to the Vulcans!) Rob
Anonymous says
Other than you, who believes in any of this?
Rob says
Everyone who read Shiller’s book and recommended it to friends. The people who awarded Shiller a Nobel prize. The thousands of our fellow community members who expressed a desire that honest posting be permitted at every site. The people who wrote the 200 comments featured on the slider at the top of every page of this site. Rob Arnott, who told me that my work is “solid.” Carl Richards, who said that my work is of “huge value.” Wade Pfau, who asserted that: “Yes, Virginia, Valuation-Informed Indexing works!” And on and on and on and on.
Even you Goons believe on one level of consciousness. If you didn’t believe, nothing I said would trouble you. It is because you are not able to come with a reasoned response to the last 37 years of peer-reviewed research that you get so upset. People do not behave this way when they are confident in their views.
True Believer Rob
Anonymous says
And all these supporters of you are posting here non stop as proof to what you are saying…..Got it.
Rob says
There will be thousands posting here on a daily basis in the days following the next price crash, when you Goons will just be beginning your prison terms. Do you think I am looking to trade places?
The people of the United States are going to win this one, Anonymous. I am sure.
If there is ever anything that I can do to help, please let me know. I do wish you all good things.
True Goon Friend Rob
Anonymous says
“There will be thousands posting here on a daily basis in the days following the next price crash, when you Goons will just be beginning your prison terms. Do you think I am looking to trade places?”
And there will be pots of gold at the end of rainbows and unicorns will be dancing in the streets. We can all make stuff up.
Rob says
Buy-and-Hold is made up, Anonymous. Wade Pfau spent months trying to find one peer-reviewed study showing that it is not just as necessary to practice price discipline when buying stocks as it is when buying anything else. He came up empty-handed.
Please explain.
Skeptical Rob
Anonymous says
The same Wade Pfau that wrote a while article on how you are wrong and the same Wade Pfau that will no longer talk to you.
Rob says
After you Goons threatened to send defamatory e-mails to his employer in the event that he continued doing honest work in this field.
If Buy-and-Hold were a real thing, we never would have seen a single act of intimidation.
It’s a scam, Anonymous. It’s a con. It’s a fraud. It’s a marketing gimmick.
I mean, please give me a freakin’ break.
It’s not for me, in any event.
I naturally wish you all the best that this life has to offer a person.
Rob