A Rich Life

The Old Ideas on Saving & Investing Don't Work -- Here's What Does

“Someone Else Will Have to Give the Speech That Brings the 17-Year Cover-Up to a Full and Complete Stop. Shiller Could Do It. Buffett Could Do It. Bernstein Could Do It. Pfau Could Do It. Arnott Could Do It. Bogle Was Best-Positioned to Do It Because He Is Perceived As the King of Buy-and-Hold. But Others Will Be Able to Get the Job Done. The Key Is That the Message Be Sent Loud and Clear That, From the Day of That Speech Forward, Everyone Who Comments on Stock Investing Should Feel 100 Percent Free to Express His Sincere Views on the Subject.”

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

Given the unfortunate news of Jack Bogle’s passing yesterday, one would have expected you to make a post today honoring Jack. But then again, given how much you have slandered him extensively by calling him the biggest con-man, saying he has cost people millions and saying he would go to prison, I guess it is not surprising you failed to do so.

Of course, you will use the same tactic as always by acting like you are praising him, which is just sickening. It is like smiling at someone while stabbing them in the back. You can spare us all from your hollow words.

Maybe you are a bit sad today. You had told us Jack would be giving his “I was wrong” speech and that he would then be working with you as well as making sure you get a $500 million windfall. I guess that retirement plan has failed as well. What is plan C?

 

Given the unfortunate news of Jack Bogle’s passing yesterday, one would have expected you to make a post today honoring Jack.

I did that.

But then again, given how much you have slandered him extensively by calling him the biggest con-man, saying he has cost people millions and saying he would go to prison, I guess it is not surprising you failed to do so.

The Big Guy screwed up in a major way by failing to address the Linduaer Matter even though it was clearly his responsibility to do so. I sent him three e-mails asking him to do so. I know that others (such as John D. Craig) also sent him e-mails. So he screwed up in a big way. It makes me sad to say that. But there’s no getting around it. It’s as much my job to say that as it was Bogle’s job to speak up about the Lindauer matter when Lindauer was threatening people for the “crime” of saying that they believe that the last 37 years of peer-reviewed research in this field is legitimate research and that the Buy-and-Hold retirement studies saying that the safe withdrawal rate is always the same number are in error and are dangerous studies.

It is like smiling at someone while stabbing them in the back.

I see it very, very, very differently. There is a thing called “The Golden Rule.” The idea is to do unto others as you would have them do unto you. If I screw up in some way, I would like to think that my friends would point out the mistake to me and implore me to fix it as soon as possible. I love Bogle. So of course that’s what I did. Those who failed to speak up hurt him in a very serious way. I question how deep their friendship runs. I am sure that they rationalize failing to try to help him out. But I know that I would want my friends to try to help me. So that’s what I have tried to do for my friend Jack Bogle.

It’s an extremely cynical perspective to think that Bogle would prefer that people just keep quiet about his mistakes. The suggestion is that he does not care about getting things right, that he does not care how many people he hurts so long as he never has to say the words “I” and “Was” and “Wrong.” To forward that suggestion is to communicate a belief re Bogle that is 50 times more negative than any belief about Bogle that I have ever expressed. Not this boy, you know?

What is plan C?

Someone else will have to give the speech that brings the 17-year cover-up to a full and complete stop. Shiller could do it. Buffett could do it. Bernstein could do it. Pfau could do it. Arnott could do it. I am sure there are others who could do it. Bogle was best-positioned to do it because he is perceived as the king of Buy-and-Hold. But others will be able to get the job done. The key is that the message be sent loud and clear that, from the day of that speech forward, everyone who comments on stock investing should feel 100 percent free to express his sincere views on the subject and that the days of Buy-and-Holders employing death threats and demands for unjustified board bannings and thousands of acts of defamation and threats to get academic researchers fired from their jobs to silence those of us who believe that the last 38 years of peer-reviewed research is legitimate research have come to a full and complete stop.

I believe that the national debate in which we will all be participating in the days following the next price crash will highlight the absolutely critical role that Bogle played in advancing our collective understanding of how stock investing works while also of course demonstrating beyond any reasonable doubt whatsoever that it is not possible to calculate the safe withdrawal rate accurately without taking the valuation level that applies on the day the retirement begins into consideration.

My work completes Bogle’s work, it does not come anything close to entirely refuting it. It refutes the parts that were developed before Shiller published his “revolutionary” (Shiller’s word) research findings. But Bogle offered a large number of hugely powerful insights as well as the unfortunate false claim that it is not necessary to exercise price discipline (by practicing long-term timing) when buying stocks.

It will be interesting to see how it all plays out. I look forward to the day when we are working together to promote all of Bogle’s ideas to every investor alive on Planet Earth while also of course doing all we can to let people know about the ideas that Bogle put forward before all the research needed was available to him and which he unfortunately failed to correct when the error on which they were based (the idea that the market is efficient) was revealed to us all.

I naturally wish you the best of luck in all your future life endeavors, my dear Goon friend.

Bogle-Loving (and Bogle Correcting!) Rob

Comments

  1. No speech will ever be given because no one else has your interpretation. There is nothing to “play out”. It is all a big “nothing burger”.

  2. Thousands of people have either endorsed my interpretation or expressed a desire that people agreeing with my interpretation be permitted to speak so that all investors can hear both sides and decide for themselves which strategy to follow. If no one but me believed that valuations affect long-term returns, Shiller would not have been able to get his book published, If no one but me believed that valuations affect long-term returns, Shiller would not have been awarded a Nobel prize. If no one but me believed that valuations affect long-term returns, Wade Pfau would not have spent 16 months of his life preparing the peer-reviewed research that we co-authored showing that Valuation-Informed Indexing has been far superior to Buy-and-Hold for as far back as we have recorded of stock prices. If no one but me believed that valuations affect long-term returns, Wade would have declared at the end of that research project that: “Yes, Virginia, Valuation-Informed Indexing works!”

    If you truly thought that the last 38 years of peer-reviewed research in this field was a big nothing-burger, you would not have engaged in criminal acts to keep millions of people from learning about it. That’s not normal behavior. That’s not the sort of behavior that you ever see from people who believe that there is peer-reviewed research supporting their favored investment strategy. That’s the sort of behavior that you see from people working a con. I mean, please give me a freaking break.

    I believe that there is a great deal to play out and I believe that we will see things play out in the days following the next price crash, when millions of people see the real harm that relentless promotion of a pure Get Rich Quick investing strategy has done to them. But you are not going to agree to come clean because I say that. You will come clean when you are placed in a prison cell. Or, if you don’t come clean at that time, you will certainly no longer be able to hold the rest of us back from having the discussions about the last 38 years of peer-reviewed research in this field that we want and need to have to become effective long-term investors.

    I think that’s going to be the turning point. One, the price crash that wakes people up to the dangers of a pure Get Rich Quick approach. And, two, the announcement of the prison sentences for those who led this massive act of financial fraud. Once your prison sentence is announced, there is going to be a huge change in how site owners deal with the abusive posting of our Buy-and-Hold Goon friends. I am 100 percent sure.

    But we’ll see, you know? I certainly wish you the best of luck with it, in any event. I hope that that helps, at least a tiny bit.

    Something Burger Rob

  3. “Thousands of people have either endorsed my interpretation or expressed a desire that people agreeing with my interpretation be permitted to speak so that all investors can hear both sides and decide for themselves which strategy to follow. ”

    If that was true, your comments section would be filled with supporters on a daily basis.

  4. Are you okay with waiting to see how many comments are posted at this site on a daily basis after we as a nation experience the next price crash and after your prison sentence is announced?

    Patient Rob

  5. “Are you okay with waiting to see how many comments are posted at this site on a daily basis after we as a nation experience the next price crash and after your prison sentence is announced?”

    That will be right after the little green aliens from Mars come down to steal our pet goldfish.