Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:
You are only disagreeing with yourself. Anyone can go back and look at the plan you posted in 2002. They can look at all your historical updates since that time as well. Would you like me to post them? People can also visit your website and see all the childish posts as well (referred to in point #2 above). They can see all the lies you made up.
Here is a tip. Stop blaming everything and everyone else for your own retirement plan failure. Move on and get a job while you still can.
It all comes down to whether or not Greaney included a valuation adjustment in the retirement study posted at his web site. If he included a valuation adjustment, then I am in the wrong and always have been. But if he had included a valuation adjustment, why would not one person (including Greaney himself!) have been able to identify it in 18 years? It doesn’t take 18 years to identify a valuation adjustment in a retirement study.
The problem is the embarrassment over the cover-up. The bigger cover-up has been going on not for 18 years but for 39 years. If we had all been thinking clearly, we would have all started talking about the far-reaching implications of Shiller’s work back in 1981.
Every article from that point forward that recommended Buy-and-Hold should have included a note that there was new peer-reviewed research pointing in a very different direction. We did not as a society launch the national debate that we needed to begin in 1981 and by 2002, when I advanced my famous post pointing out that Greaney’s study lacked a valuation adjustment, the Buy-and-Holders realized that it would look very bad for them to acknowledge that. What kind of expert would be 21 years behind in his reading of the peer-reviewed research? To fail to note in the year 2002 that a retirement study lacked a valuation adjustment would have been to acknowledge that you were 21 years behind in your reading of the peer-reviewed research.
If I had a magic wand, I would wave it in the air and take us all back to 1981 and we could play it the other way. I am 100 percent certain that that’s what we would do if we had another chance at it. But I am fresh out of magic wands, you know? So we have to figure out some way to fix things from the situation that we are in today, with a 39-year cover-up on the books and with stocks priced at two times their fair value. It’s a mess.
The other side of the story is that the last 39 years of peer-reviewed research in this field is the most important 39 years of peer-reviewed research in the history of investment analysis, We have been collectively slamming our head against the wall for 39 years now. To ignore the peer-reviewed research when developing your investment strategy is to slam your head against the wall. Do you know the one great thing about slamming your head against the wall for 39 years running? The one great thing is that at any moment you could make a decision to stop doing that thing. And that will feel so, so good! That option will remain open to us in the days following the next price crash, when we will be able to see with our own eyes how much pain always follows from the widespread promotion of Get Rich Quick.Buy-and-Hold investment strategies.
The 10 percent of us who understand that Shiller’s Nobel-prize-winning research is legitimate research are not going to bring this long national nightmare to an end by keeping quiet about what we know in deference to the delicate feelings of our Buy-and-Hold friends. We have to show our Buy-and-Hold friends the respect of believing that deep down inside they want to get this stuff right and want to be called out on their b.s. when they get something terribly wrong. It’s by calling them out (while recognizing their many amazing contributions as well, to be sure) that we bring the long national nightmare to an end.
Those of us who believe that Shiller’s Nobel-prize-winning research is legitimate research need to work up the courage to call the Buy-and-Holders out when they suggest that there might be some magical, mystical alternate universe in which it is not 100 percent required for every long-term stock investor to practice long-term market timing (price discipline!)
That’s the answer, Sammy. I am sure.
Rob
The market is crashing. Why are people blaming Coronavirus instead of buy and hold?
Because as of today Buy-and-Hold remains the dominant model for understanding how stock investing works.
The CAPE value has gone to 8 by the end of every earlier bull/bear cycle. If the CAPE value drops to 8 and then remains in that neighborhood for five yeas, people are going to start asking questions. When enough people are open to questioning, the 10 percent who believes that Shiller’s Nobel-prize-winning research is legitimate research will begin to feel safe posting their sincere views at investing boards and blog. And then knowledge of the realities will begin to spread.
That’s the way it is done. That’s the only way that it CAN be done. A paradigm doesn’t change in a day or a week or a month or a year. It takes time for people to work up the courage to question fundamental beliefs about a subject, thing that they have felt for a long time were certainly so. Galileo was put under house arrest by the Catholic church for saying that the earth was not the center of the universe, as the Bible indicated. Why didn’t people just refer to the same scientific information that Galileo was referring to? Because they had believed for a long time that it was impossible that the Bible could contain error. Their minds clicked off when evidence was presented that the earth is not the center of the universe, just as the minds of Buy-and-Holders click off when evidence is presented that it is not possible to calculate the safe withdrawal rate accurately without taking into consideration the valuation level that applies on the day the retirement begins.
But today it would be hard to find a reasonable person who believes that the earth is the center of the universe. Things change. People learn new things over time. Society advances in its understanding of how the world around it works.
Shiller is not our enemy. Shiller’s Nobel-prize-winning research promises to help us all live better lives. We just all need to unite on insisting on reasonable enforcement of the laws of the United States in discussions of how stock investing works for that to happen.
My best wishes to you.
Science Believing Rob
“ If the CAPE value drops to 8 and then remains in that neighborhood for five yeas, people are going to start asking questions.”
I guess you have been building up a large pile of cash to invest in the market if we get down to 8, right?
My assets have been depleted as you Goons have continued your Campaign of Terror against our board and blog communities for 18 years, Anonymous. Telling the research-based truth about how stock investing works has not been the ticket to fame and fortune for this boy.
But I expect to make hundreds of millions in the days following the next price crash, when I believe we will see every discussion board and blog on the internet opened to honest posting re the past 39 years of peer-reviewed research in this field. And, yes, I intend to invest most of that money in stocks and earn a very handsome long-term return on that investment.
My long-term financial success will have been due to two things: (1) Passion Saving; and (2) Valuation-Informed Indexing. It is the Passion Saving concept that taught me to use my savings to shift to a form of work that would pay me much higher rewards (both financial and otherwise) in the long term. And it is the Valuation-Informed Indexing concept that taught me how to invest the money that eventually came to earn the highest possible return while taking on the smallest possible risk. Good for Passion Saving and Valuation-Informed Indexing, you know?
I wouldn’t go back and play it any other way for all the money in the world. I obviously have never enjoyed any of the abusive stuff. I believe that the abusive stuff has hurt millions of people in very serious ways (you Goons most of all). So “no” to that. But I of course spoke out strongly in OPPOSITION to the abusive stuff. The research-based stuff promises to help millions of us to live richer and better lives for a long, long time to come. I find that exciting and life-affirming.
I just hope that we can get through the next crash in one piece. That’s the one that scares me. Buy-and-Hold has brought on devastation to millions throughout the history of the market and all signs are that we are going to see that happen one more time, whether it is the Coronavirus or something else that proves to be the precipitating event that brings on the ocean of pain that we have coming to us in the event that Shiller’s Nobel-prize-winning research turns out to be legitimate research.
Crash-Fearing Rob
You take no responsibility for your financial situation? Really?
“ It is the Passion Saving concept that taught me to use my savings to shift to a form of work that would pay me much higher rewards (both financial and otherwise) in the long term. And it is the Valuation-Informed Indexing concept that taught me how to invest the money that eventually came to earn the highest possible return while taking on the smallest possible risk. Good for Passion Saving and Valuation-Informed Indexing, you know?”
Just because you think you should get paid for it, doesn’t mean anyone owes you a dime. People pay for something THEY believe has value and that they want it.
You take no responsibility for your financial situation? Really?
I take pride in the fact that I worked up the courage to do the right thing.
It became clear that my country needed me for a job that very much needed to be done and that no one before me had quite worked up the courage to take on. I’ve obviously paid a big financial price for speaking up. But my country has procedures in place to compensate someone who is placed in such circumstances and I am confident that those procedures will be followed in a reasonable way.
I do take responsibility for not speaking up sooner. I knew that Greaney’s retirement study lacked a valuations adjustment three years earlier than the day when I put forward my famous post of May 13, 2002. That was wrong. If I had it to do over, I would have just spoken out on the first day and have let the chips fall where they fell. But we don’t get do-overs, you know?
At least I did finally work up the courage on the morning of May 13, 2002. All of the amazing insights that we have been able to develop as a community since then became possible when I took that fateful step. I don’t take full credit for all those insights. I obviously had lots and lots of help from lots and lots of good and smart people. But none of those insights would have come to light had I not first pushed the “Post” button on that fateful post. So I do take partial credit for all of them. It’s a humbling experience to know that I had the power within me to cause all that.
We are all put on this earth for a reason. I think it would be fair to say that I discovered the reason why I was put here. I hesitated to take action when I knew that I was being called to act. But I did eventually work up the courage to do what had to be done. Thank the heavens for that much, you know?
My best wishes.
Rob
Just because you think you should get paid for it, doesn’t mean anyone owes you a dime. People pay for something THEY believe has value and that they want it.
And people’s ideas of what has value in the investment advice realm changes after they lose 50 percent of their life savings in an economic crisis that causes an ocean of human misery for millions of people. We caught a brief glimpse of how that works with the exposing of the Bernie Madoff scam. The Great Buy-and-Hold Con is just Bernie Madoff multiplied by 500.
I have no worries about how this is going to turn out ASSUMING that Shiller’s Nobel-prize-winning research is legitimate research. I believe that it is. All of my decisions re these matters are rooted in that belief. But in the event that Shiller’s Nobel-prize-winning research is not legitimate research, then I have wasted the last 18 years of my life. I sure so not believe that that is so. But I am not infallible. It is at least a theoretical possibility that I am wrong about that one. That would be bad for me.
If you knew about a terrorist attack that would cost thousands of people their lives and you also knew that, in the event you were wrong about the information you had come across, you might be putting yourself and your family at a small amount of risk by reporting it to the authorities, would you report it? I like to think that I would report what I knew to the authorities. If thousands of people died because I lacked the courage to come forward because of some small risk to myself associated with doing so, I don’t think that I could live with myself from that day forward.
That’s how I feel about this matter. What if it turns out that Greaney’s retirement study really does lack a valuations adjustment, just as I said in my famous post from the morning of May 13, 2002? What if it turns out that Shiller’s research really is legitimate research, just as the panel that awarded him a Nobel prize concluded? I couldn’t live with myself if those two things are true and I failed to speak up. So I pushed myself to do what I had to be done heedless of the short-term personal cost to myself and my family.
Sooner or later someone had to do it, Anonymous That’s the bottom line here. We cannot forever have a situation where a nation of people are investing their live savings to provide for their retirements and yet have no access to accurate and honest reports on what the last 39 years of peer-reviewed research in the field says about how to go about doing that. That is just not a viable set of circumstances in a free society. I was the one that the Fates (Or God or Evolution or whatever you want to say) called on to take action. I gave it my best shot. Such is life, like it or not. It’s not all days at the beach for anyone.
This one was a day at NORMANDY beach, thanks to you Goons, But whachagonnado?
G.I Rob
“ If the CAPE value drops to 8 and then remains in that neighborhood for five yeas, people are going to start asking questions”
Why would they? There is always a named trigger. If the current environment drops more, it is blamed on the virus. You lose.
There is certainly going to be a named trigger. I am not saying different.
The question is — will there be more openness to what the last 39 years of peer-reviewed research says once people have seen 50 percent of their life savings disappear into thin air? I think there will be.
Remember, Shiller is saying that high prices are rooted in investor emotion. When prices crash, that causes investor emotions to move in a different direction. Today, people are somewhat hostile to the idea that the true value of stocks is only 50 percent of the stated value. After prices fall by 50 percent or more, it will be claims that there is no need to take price into consideration when buying stocks that will provoke hostility.
When investor emotions change, investor openness to the message of the last 39 years of peer-reviewed research will change. Or so Rob Bennett sincerely believes, you know? I am not all knowing. It is possible that I am wrong. But that is what I sincerely believe. So that is what I am going to go by.
I don’t think it is possible that I could lose by posting honestly. If I am right,then I will be rewarded immensely for having traveled a road that permitted me to learn things about how stock investing works that no one before me has ever learned, If I am wrong, well, it was because of an honest mistake. I won’t be going to prison or anything like that. If I am wrong, I obviously would have preferred to have spent my last 18 years doing something else. But I think it would be fair to say that not one iota of evidence has been presented over the past 18 years indicating that I might be wrong. That’s pretty amazing given how motivated you Goons are to find something, There’s no such thing as perfect certainty in this world. But I think it would be fair to say that this is as close as it gets.
Even you Goons appreciate that my case is very strong and would persuade lots of people if they were able to hear it. If you did not believe that. you never would have advanced a single abusive post. And you have advanced 7,943,229 of them. I’ve been counting.
My best and warmest wishes to you and yours, Anonymous.
Rob
If the CAPE value drops to 8, I will be saying that the true value of each investor’s portfolio is two times its stated value instead of what I am saying today, that the true value of each investor’s portfolio is half of its stated value. I will be telling people that their portfolio is worth twice what the Buy-and-Holders are saying it is worth. That’s a big difference.
Most people hate the tactics that you Goons employ. That’s why we have laws against them. So why do they let you get away with all the garbage? It’s because they can’t stand thinking that their portfolios are worth only half of what they have been led to believe they are worth. So, even though they don’t like the abusive stuff, they tolerate it because at least it shuts that Rob Bennett fellow up.
Nothing that I say will be threatening to people anymore once prices have fallen. Get Rich Quick approaches don’t have nearly the same appeal after they have failed. And research-based approaches come to possess more appeal when people are able to see how they would have helped them if only they had had a chance to learn about them. People are going to be looking for people to blame after the next economic crisis. No offence, but I think you Goons are going to land at the top of most people’s lists.
But we’ll see, in any event. I do wish you the best of luck with it.
Rob