Set forth below is the text of an e-mail that I sent on January 13. 2020, to Elizabeth Vaughn, author of the article Muslim Scholar: “This Regime, for the First Time Ever, Is Seriously Threatened:
Elizabeth:
My name is Rob Bennett. I liked you article at RedState.com titled “Muslim Scholar: “This Regime, for the First Time Ever, Is Seriously Threatened.”
When I read about your background, that you were once a financial consultant and options trader, I thought that I should send you a link to my article on how the relentless promotion of the Buy-and-Hold strategy is causing so much human misery for millions:
[Link Provided Here]
I ask that you invest the time needed to read two or three paragraphs to see if it pulls you in.
Please take good care.
Rob
This morning, we see that the price wars with oil is also now taking blame, along with the coronavirus as to the drop in stocks. There are also comments about the drop in treasuries are also signaling a recession. Not a single comment about buy and hold causing anything. I am guessing that you haven’t received a call yet from The New York Times. Don’t hold your breath waiting.
I can’t control what other people say, Anonymous. Please mark ME down as saying that it was the relentless promotion of the Buy-and-Hold “strategy” that served as the primary cause of the price drop that we experienced over the past few weeks just as it served as the primary cause of the huge price drop that brought on the 2008 economic crisis.
The other factors that are mentioned obviously play a role, just as the other factors that were mentioned in regard to the 2008 economic crisis played a role then. But these factors are things beyond our control. There are going to be positive economic events and there are going to be negative economic events. The question is what we do as a people to be prepared for those developments when they take place. There is now 39 years of peer-reviewed research showing that the best way to prepare for them is to always, always, always encourage all investors to practice market timing so that the irrational exuberance which we are all naturally formed to fall victim to does not get so out of control as to bring on an economic crisis.
The factor that is in our control is the CAPE value that applies when negative economic events show up on the scene. If the CAPE value had been 16 when the Coronavirus hit, we probably would have seen a drop to 13, a loss of about 20 percent, significant but not too terribly frightening. Given that we were at a CAPE value of near 30 when the virus hit, a drop to 13 would be loss of nearly 17 CAPE points. Losses that big could cause the raging irrational exuberance to be transformed into a raging irrational depression, a transition that would cause the CAPE level to drop all the way down to 8. That would mean that millions of investors would see losses of nearly 70 percent. The resulting loss of consumer buying power would cause hundreds of thousands of businesses to go under and millions of workers to be thrown out of their jobs. It would cause political frictions to worsen. There’s already one case in history in which the high prices brought on by the promotion of Buy-and-Hold strategies caused a Great Depression.
Please mark me down as urging that every investing discussion board and blog on the internet be opened to honest posting re the last 39 years of peer-reviewed research in this field, without a single exception. We know from the thousands of community members who have expressed a distaste for the criminal tactics that you Goons have employed to block millions from learning what the peer-reviewed research teaches us all that most investors would be perfectly willing to practice market timing if only they had access to honest and accurate reports of what the peer-reviewed research says and to places to talk about what it means.
I believe that we will get there. 18 years later than I would have preferred, to be sure. But I believe that once we get to a better place and are all living better lives as a result that it is unlikely that there will be even one person wishing that we could return to the Buy-and-Hold days and the insane bull markets and insane bear markets and insane economic crises that went with them. Holy moly!
I haven’t received a call from the New York Times as of this morning. But I believe that that day will come. I believe that this is a good country. I believe that the people of the United States are going to find a way to overcome you Goons. It will be interesting to see how it all plays out.
My best and warmest wishes you and yours, in any event, dear Goon friend.
Buy-and-Hold Critic Rob
“I can’t control what other people say, Anonymous.”
And that is why you won’t hear people blame buy and hold and you will never get that call from The New York Times, despite what YOU want to believe.
I definitely cannot control what other people say. We are in complete agreement re that one.
I do control what I say. What I say is that Buy-and-Hold is the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind. There is not an iota of evidence in the peer-reviewed research suggesting that there might be some alternate universe where market timing (price discipline!) is not always 100 percent required. Wade Pfau checked that one out very, very carefully. And of course he concluded that: “Yes, Virginia, Valuation-Informed Indexing works!”
I get it that Buy-and-Hold has been a huge money-maker for our Wall Street Con Men friends. But the deeper reality is that in the long run they could make even more money promoting a true research-based strategy. The Bennett/Pfau research shows that investors can reduce the risk of stock investing by nearly 70 percent merely by switching to a common-sense strategy that demands market timing (price discipline!) at all times. Stocks will be a far more appealing asset class once we have reduced the risk of stock investing by 70 percent. So even our Wall Street Con Men friends end up big winners once we open the entire internet to honest posting.
My sincere take.
Wall Street Con Man Sympathizer Rob
“I definitely cannot control what other people say”
And that is why your scenario will not play out. History shows us as to how people see stock market drops.
You can sit around and make up your own story line, but that doesn’t make it true nor does it mean that you will get others to believe the story you are telling.
That’s like saying that, because people in the 1960s got their news from watching CBS and ABC and NBC that nobody is going to use the internet to learn about the news today. Things change, Anonymous. Shiller didn’t publish his Nobel-prize-winning research until 1981. So people obviously couldn’t advance beyond Buy-and-Hold prior to that time. And, from 1981 forward, we have never seen the horrors that we experience at the end of a bull/bear cycle. So, while those who paid attention to the peer-reviewed research knew that there was precisely zero chance that Buy-and-Hold could ever work for a single long-term investor, investors as a whole have not yet had any strong personal motivation to find out what the research teaches us. Throw in the insanely abusive behavior of you Goons and the first true research-based strategy (Valuation-Informed Indexing) has not yet been able to gain traction.
If you don’t think that a 70 percent price crash will motivate millions to be more open to what the last 39 years of peer-reviewed research says and to insist that you Goons be placed in prison cells, where you belong, then you don’t think that. I certainly think it. I am going to proceed with my life based on what I think. What I think is that the American people are going to find a way to overcome you Goons and that we will someday in the not-too-distant future see every discussion board and blog on the internet opened to honest posting re the last 39 years of peer-reviewed research in this field.
I could be wrong. I am not infallible. I thought that Greaney’s Campaign of Terror against the Motley Fool board would be brought to an end within two days, three at the most. I think it would be fair to say that the joke was on me re that one. But, yes, I believe that in days to come millions of investors are going to act in their self-interest and insist that every board and blog be opened to honest posting re safe withdrawal rates and re scores of other critically important investment-related topics.
We’ll see, you know?
My best and warmest wishes to you, in any event.
Hope and Change Candidate Rob
“That’s like saying that, because people in the 1960s got their news from watching CBS and ABC and NBC that nobody is going to use the internet to learn about the news today. ”
The internet has been out for a long time now. It is no longer something new. We have plenty of history to see how things play out.
Your real problem is that you have put all your eggs in one basket and then built your entire story around it. You just convinced yourself that you are right. You never planned on failure and you never set yourself up with a Plan B. You have also wrongly assumed that buy and hold investors are not diversified and you have also not considered how they have balanced their portfolios. This is why true buy and holders are not fearful of what is going on in the market. Even with market drops, they will not deplete their portfolios.
I’ve put all my eggs in the basket that says that the same standards of honesty and personal integrity that apply in every field of endeavor other than the investment advice field are going to apply again in the investment advice field as well. I think that that’s a pretty darn safe bet.
It doesn’t take 18 years to determine whether or not a retirement study posted at some internet goon’s site contains a valuation adjustment. I mean, come on.
I definitely think that I am right. I think that I am right about Valuation-Informed Indexing. But even in the unlikely event that I am wrong about that one, I know with 100 percent certainty that we should be permitting honest posting re the last 39 years of peer-reviewed research at every site on the internet. It is beyond my powers of imagination to come up with a scenario in which I am wrong re that one. In the unlikely event that I really am wrong about Valuation-Informed Indexing, permitting honest posting at every site would insure that whatever errors I have made would be exposed. The fact that you Goons are so hotly opposed to seeing my ideas put to the test tells a tale. You don’t believe that it is possible to defend Buy-and-Hold in civil and reasoned debate any more than I do.
It’s time for us as a nation to move on to something better, in this boy’s sincere opinion.
Rob
You have admitted that you might be wrong. You also know that you cannot really predict the market. Why didn’t you have a Plan B, knowing the risk?
Because I love my country.
If I had been permitted to make the case for Valuation-Informed Indexing persuant to the laws of the United States and not enough people showed an interest for me to be able to make a living promoting the concept, then it would make sense for me to go to a Plan B. That’s not what happened. You Goons engaged in criminal behavior to block people from having conversations that they showed that they very much want to have. That’s a threat to the continued viability of our nation. If people suffer horrifying losses in the next price crash (as Shiller’s Nobel-prize-winning research shows they will) and they learn that there were people who would have been happy to protect them from suffering those losses but that criminal acts stopped the message that they needed to hear from getting to them, we could see a revolution. A failed retirement is a serious life setback. We have to behave in at least a somewhat responsible manner when dealing with such issues.
I love my country. So I feel that I need to come to her defense when she is under attack. You Goons are not just attacking Rob Bennett or John Walter Russell or Wade Pfau or Robert Shiller. You are attacking the American way of life when you engage in criminal behavior when you block people from hearing a message that they want to hear and that they very much need to hear. I wouldn’t be able to live with myself if I did not come to my country’s aid in such circumstances. So I try not to think about the financial price that I have paid for posting honestly re safe withdrawal rates and just put my confidence in the basic goodness of the American people to support a belief that we will work together to find a way to overcome you Goons in the days following the next price crash.
Does that help at all?
Rob
“If I had been permitted to make the case for Valuation-Informed Indexing persuant to the laws of the United States and not enough people showed an interest for me to be able to make a living promoting the concept, then it would make sense for me to go to a Plan B”
You have made your case, but it really doesn’t matter. If there is any risk, whatsoever, in any plan, it is always wise to have a Plan B.
Plan B is that I will return to corporate employment when my assets are depleted while continuing to push for opening the internet to honest posting re the last 39 years of peer-reviewed research in this field on nights and weekends. But you obviously knew that already.
The key is that I never sell out my country by trying to appease you Goons. If all of us who believe that Shiller’s Nobel prize-winning research is legitimate research insisted on our right to post honestly, our nation would not be in the situation that it is is in today. If I am going to urge others to get involved in a positive way (and I do that all the time), then I need to remain positively involved myself.
And that is indeed my intention regardless of what happens re my personal financial circumstances. The personal stuff will all go fine once we have opened every site on the internet to honest posting re that last 39 years of peer-reviewed research in this field. That’s obviously the first, second, third, fourth and fifth top priority.
My best wishes.
Patriotic Rob
You already said you depleted your assets. Why would you even wait to get even near that point. Why are you selling out your family?
My family has to live in this country, Anonymous. I obviously want to take care of my family. But part of taking care of my family is taking care of my country. I need to do both. I cannot throw either one overboard and still live with myself.
I have a chapter in my book called “My Mother Speaks From the Grave Against Buy-and-Hold.” My mother was born in 1917. So she was 12 years old when the Crash of 1929 hit. She had to leave school in eighth grade to work in a factory to put food on the table for her family. That experience was burned into her consciousness. She still talked about it when she was 93. There was no one else in my neighborhood who went to law school. The reason why I did is that my mother put so much emphasis on education because she loved school and was denied an education because of the Buy-and-Hold “idea” of not practicing price discipline when buying stocks.
So this is personal for me. People suffer real pain in these price crashes. There was nothing we could do about it in my mother’s day. Shiller hadn’t yet published his Nobel-prize-winning research. But now he has. So we should be talking about that research and helping people to invest more effectively at every site on the internet.
Why would you commit criminal acts? What happens to your family when you go to prison? I think it would be fair to say that my plan of continuing to post honestly re stock investing is 500 times better than your plan of committing criminal acts to stop people from posting honestly and then serving a long prison term after the next price crash as a result.
Family Man Rob