Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
The only death threat made, was the one that came from you. All the board banning look to be justified. The largest collection of defamation can be found on this website. All you have to do is just stop with the defamation. The career threat is made up. That has been confirmed by Wade. Your positive sign is really a negative sign. You have to realize that you are wrong, thus your recent comments about going back to work.
Okay, Anonymous.
I do wish you all good things, in any event.
Rob
Uh oh. A bunch of goons are talking about SWR without reference SWR expert Rob Bennett. You better get over there and set them straight.
http://www.city-data.com/forum/investing/3067263-4-rule-paradox.html
I only read the first page of comments. I thought there were some good points made. It is by talking things over that we learn.
Rob
I thought you said that the goons weren’t allowing these discussions to take place? So I guess there is no conspiracy going on and your work is no longer needed.
The “conspiracy” that you refer to is a conspiracy of ignorance. There was a time (1980) when we all knew only enough things about how stock investing works to believe that Buy-and-Hold is the answer. Then (in 1981) we learned important new things. The fact that those new things were written up in peer-reviewed research did not mean that every person on the planet understood all the implication of the new findings. Actually, no one knew all the implications. Some knew a good deal, some knew nothing, and most knew that a little something had happened but did not possess any in-depth knowledge of the advances.
Over time, lots of people have tried to help us expand our knowledge by exploring the implications of the new findings. I am one of those. John Walter Russell is another. Wade Phau is another. Carl Richards is another. Microlepsis is another. John D. Craig is another. BenSolar is another. Michael Kitces is another. And on and on and on and on and on.
Buy-and-Holders have directed hostility at those people. The usual reaction on the part of the people trying to spread knowledge is to clam up. The common view is: If people don’t want to hear this stuff, if I am going to pay a price for spreading knowledge, I just won’t go there, it’s not my problem. Shiller’s message is a hard one for lots of people to take. His research shows that every stock portfolio is worth only one-half of what Buy-and-Holders say it is worth. So people generally would prefer not to hear about it. And most people who work in this field would prefer to have people like them than to insist that the small number who want to hear about the new knowledge get what they want.
I am not willing to play it that way. I want to see everyone saying what they believe. I want the Buy-and-Holders saying what they believe. And I also want the Valuation-Informed Indexers saying what they believe. We are not there. The discussion that you point to would have had some different contributions had Wade Phau and I been able to get our research written up on the front page of the New York Times. That article would have reached a lot of people. And those people would have then reached a lot of people. Word would have spread and spread and spread, as it does in lots of areas other than the investment advice field. And the conversations that people would have had as a result of those learning experiences would have caused the discussion that you pointed to to have some different elements to it.
You never see the comments that people don’t put forward because a learning experience was denied to them. I have never said that no one discusses safe withdrawal rates. I have said that discussions of safe withdrawal rates are different from what they would be if there were no intimidation tactics being employed by Buy-and-Holders to suppress discussion of how Shiller’s findings affect our understanding of how the safe withdrawal rate is calculated.
Bernstein said in his book that the 4 percent rule is off by two percentage points when valuations are as high as they were at the top of the bubble. That was an amazingly controversial thing to say at the time he said it (May 2002). I know whereof I speak. Book marketing departments like controversy. It is controversy that sells books. So the ordinary thing that would have happened there is that the publisher would have created ads quoting Bernstein as saying that the numbers that millions of people have used to plan their retirements were wildly off the mark. That did not happen. In fact, Bernstein didn’t even mention what he said in his book when the subject came up in the discussions at the Bogleheads Forum. He told the truth. But he kept a very low profile re what he said. He acted like he was ashamed of what he had said rather than proud of it.
That’s the problem. It’s not that there is no discussion of safe withdrawal rates or of any other investment-related topic. It’s that the discussions that are held are unbalanced. In most discussions, you cannot even tell that there was “revolutionary” (Shiller’s word) research published in 1981. It’s as if Shiller does not exist. He does exist. And we all need to recognize that. But today the price that is paid for incorporating Shiller’s findings into a discussion of stock investing is so high that few are willing to pay it. Many don’t even understand the far-reaching implications of Shiller’s work. And those who do generally have learned to keep it zipped.
That’s a very, very, very big problem. If valuations really do affect long-term returns, the safe withdrawal rate was 1.6 percent in 2000, not 4 percent.. And the chance of a retirement taking a 4 percent withdrawal surviving 30 years was only 30 percent. People need to know that. If we tell people both sets of numbers (valuation-adjusted and non-valuation-adjusted) and they elect to go with the Buy-and-Hold numbers, that’s on them. But if we only tell people one side of the story and engage in insanely abusive posting practices to intimidate those who believe that the last 38 years of peer-reviewed research is legitimate research out of saying what they believe, then the people engaging in the intimidation tactics are responsible for any losses that follow. I see that as a very unfortunate reality.
I think we should be permitting honest posting at every discussion board and blog on the internet. When we start doing that, we will have very different discussions from the discussions that we are having today.
I hope that that makes at least a little bit of sense to you, Anonymous.
Conspiracy Theory Rob
Honest posting has always been allowed. Banning takes place when we see poor behavior.
You consider it poor behavior to let people know that the retirement study posted at John Greaney’s web site lacks an adjustment for the valuation level that applies on the day the retirement begins. I consider it wonderful behavior. I believe that that is something that people very much need to know. Failing to include a valuation adjustment makes a big difference.
Rob
The best way that I have been able to come up with to state concisely the change that needs to take place is that we need to go from acting as if there is one and only one academic model for understanding how stock investing works to understanding that there are two and that both are rooted in the work of men who have been awarded a Nobel prize for their research. When I put forward my famous post of the morning of May 13, 2002, the reaction was as if a nuclear bomb had been dropped on that board community. There should have been no surprise whatsoever to my suggestion that we might want to look at the effect of valuations on safe withdrawal rates. There was at that time 21 years of peer-reviewed research showing that valuations affect long-term returns.
People are shocked to hear what Shiller’s research tells us about safe withdrawal rates and about scores of other critically important investment-related topics because they have not heard the far-reaching implications of his Nobel-prize-winning research discussed often enough. As we move in the direction of permitting (and ultimately encouraging!) more honest discussion of these matters, the widespread shock that now arises whenever valuation adjustments are included in analyses of stock investment strategies will dissipate and discussing Shiller’s ideas will just be another thing. Some will buy into the arguments, some will not, and some will take a halfway position. As is normal and healthy.
It is not even a tiny bit healthy for discussion of the far-reaching implications of Shiller’s Nobel-prize-winning research to be suppressed. That needs to change. I believe that it WILL change in the days following the next price crash, when millions of middle-class people will be shaken up to see over 50 percent of their life savings disappear into thin air. But I am not a fortune teller. We are going to have to wait to see how things play out to know for sure.
Hang in there, man. It gets better. A lot better.
Bad Behaving Rob
“You consider it poor behavior to let people know that the retirement study posted at John Greaney’s web site lacks an adjustment for the valuation level that applies on the day the retirement begins. I consider it wonderful behavior. I believe that that is something that people very much need to know. Failing to include a valuation adjustment makes a big difference.”
Your faulty position on this and other matters have been explained to you thousands of times. People are tired of your old routine.
The only people that you can speak for are your fellow Goons, Anonymous.
I have heard from thousands of Normals who indicated that they very, very much would like to see every discussion board and blog on the internet opened up to honest posting re the last 38 years of peer-reviewed research in this field. I care about those people and I am going to do my best to see that they (and millions more like them) get what they are seeking.
The problem that we have been having for 17 years now is that the Normals have never before seen such outrageously abusive behavior as that which has been engaged in by you Goons to suppress discussion of Shiller’s Nobel-prize-winning research. They are going to have to work up more courage to take you on if we are going to see our dream of opening the entire internet to honest posting come true. I believe that this will happen in the days following the next price crash, when our entire nation will be able to see clearly just how much damage is done when we collectively tolerate a ban on honest posting on the last 38 years of peer-reviewed research.
Right now, Shiller’s points are valid but are largely viewed as being theoretical in nature. They will no longer be viewed as being purely theoretical after we have seen millions of middle-class lives destroyed by the relentless promotion of the pure Get Rich Quick approach (Buy-and-Hold). Or so Rob Bennett sincerely believes, you know?
My best and warmest wishes to you and yours, my dear Goon friend.
Old Routine Rob
“I have heard from thousands of Normals who indicated that they very, very much would like to see every discussion board and blog on the internet opened up to honest posting re the last 38 years of peer-reviewed research in this field. I care about those people and I am going to do my best to see that they (and millions more like them) get what they are seeking.”
Yet these thousands, as you claim, don’t post here, even though they could do so anonymously. Your words lack credibility.
They don’t post here, Anonymous. You got that one right.
The question is, after they lose over 50 percent of their retirement money, will they work up the courage to call you Goons out on your b.s. and to get you placed in prison cells, where you belong. Once there is one large site where people who are posting honestly are protected, the idea of permitting honest posting on the last 38 years of peer-reviewed research will just grow and grow and grow. The Wade Pfau’s of the world will be awarded Nobel prizes and every academic researcher on the planet will be rushing to prepare research exploring Shiller’s “revolutionary” (his word) findings. The Motley Fools of the world will be seeing millions in revenue come in from hundreds of thousands of grateful middle-class investors who will want to be assured that they never again will have to live through another Buy-and-Hold Crisis. And life will just get better and better and better for all of us.
We should have started moving toward better things in 1981. I obviously wish that we had. But better late than never, no? The fact that we have held off for 38 years just means that there is a mountain of positive pent-up advances to be achieved. The Great Buy-and-Hold Con has hurt us all terribly. When we lift the Ban on Honest Posting, it is going to feel the way it would feel if you had been banging your head against a wall for 38 years and then decided one day to stop. Wow! What a feeling!
Getting each and every one of us to experience that wonderful feeling is what this is all about, my long-time head-banging friend.
Credibility Lacking Rob
But I thought these normals embarrassed VII, why would they not be posting now?
I presume that you meant to say “embraced.”
There are lots of people who see merit in Shiller’s research but who have not carefully thought through its how-to implications. That was so of me on May 13, 2002. I felt strongly enough that valuations affect long-term returns to put my neck on the line and advance a post asking why we didn’t consider valuations when calculating the safe withdrawal rate. But I was still a Buy-and-Holder. I did not abandon Buy-and-Hold until August 27, 2002, when Greaney put forward his first death threat and over 200 Buy-and-Holders endorsed it.
That makes no sense. If Buy-and-Holders got the retirement numbers wildly wrong, the whole thing is messed up. But it took three months of daily interactions with you Goons for me to see that. That amazes me today. How could I see the error in the safe withdrawal rate studies and not see that the model for understanding how stock investing works that gave birth to those studies was not gravely flawed? That’s those darn humans for you! We are not logic processing machines. We are capable of reason. But we are also capable of rationalization. When our brains tells us something that is too big for us to handle emotionally, we resort to rationalization to escape the pain caused by that psychic conflict.
Thousands of our fellow community members have indicated that they would like honest posting to be permitted so that they can hear both sides and learn about this stuff. That doesn’t mean that they are solidly committed Valuation-Informed Indexers. They are interested in the idea. But they haven’t thought it all through carefully. They have not absorbed all there is to know about the subject. Their feelings are not strong enough for them to be willing to come to a place where there are few other posters just to be able to learn about Valuation-Informed Indexing. They don’t care enough to do that. But, if honest posting were permitted at boards that they visit, they would in time become more and more committed to the new ideas.
Earnabuck was a great example of that. Earnabuck did not agree with me on investing. He told me that when we posted together at the Bogleheads Forum. But he believed that I should be able to post honestly. He complained about the tactics of the Lindauerheads on numerous occasions. One time he said that he was at the Motley Fool board when I first questioned Greaney’s study. He said that in the early days he believed that Greaney was right and thought that I sounded a little nuts. Then in time he came to see that a valuation adjustment really was required. He had started his intellectual development toward understanding the new model. He was still a Buy-and-Holder when it came to his general beliefs re investing. But he had abandoned the Buy-and-Hold belief in one area — how to calculate safe withdrawal rates. In time, he would have continued to move in that direction if honest posting had been permitted and he had been able to gradually take in more and more of the new way of thinking about how stock investing works.
People don’t turn on a dime. Rarely does someone say one day “I am a Buy-and-Holder” and then the next day “I am a Valuation-Informed Indexer.” That’s just not the way humans operate. Again, we are not information processing machines. We take ideas in gradually. For a belief in Valuation-Informed Indexing to spread we need to permit (and encourage!) honest posting re the last 38 years of peer-reviewed research at every site on the internet. People will come around bit by bit, day by day. In time I believe that Valuation-Informed Indexing will become dominant. But that is not going to happen overnight.
Valuation-Informed Indexing will never become dominate if those who believe in it today are always too intimidated to say what they believe in clear and simple and non-apologetic ways. We have to insist on our right to post honestly to get the conversion process going. It won’t happen any other way. If enough people had insisted on their right to post honestly before I came on the scene, I never would have had any abusiveness directed at me. When I put up my post asking if we should consider valuations, some would have said “yes” and some would have said “no,” but there would have been no nuclear explosion.
It was that nuclear explosion that told me that there was something very, very wrong in how we had been discussing these issues since 1981. As soon as Shiller’s “revolutionary” (his word) research was published, that should have been the end of the belief that there is only one academic model for understanding how stock investing works. People can follow either model. That’s a personal choice. But no reasonable person can say that Buy-and-Hold is the only rational model in a world in which peer-reviewed research showing that valuations affect long-term returns exists. If valuations affect long-term returns, there is zero chance that the market is efficient. If valuations affect long-term returns, risk is not constant but variable. If valuations affect long-term returns, investors who want to keep their risk profile constant over time MUST practice long-term timing.
We learn by talking things over. We do not know everything that there is to know about how stock investing works today. So we must permit honest posting. Not just in the published rules of our sites. We must ENFORCE the published rules when the Buy-and-Holders violate them. The published rules (and of course the laws of the United States) are there to protect us from the learning suppression that the Buy-and-Holders bring to the table when they engage in insanely abusive posting tactics because of the emotional pain that they experience to see their investment strategy challenged in public.
Rob
It is like you live in a bizzaro world. You are out of touch with reality.
I’m not a Buy-and-Holder. That much is certainly fair to say.
I once was. But I have come to believe that the last 38 years of peer-reviewed research in this field is legitimate research. Sue me, you know?
My best and warmest wishes to you and yours.
Rob