Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
You are really not understanding what Scott Burns said to you. It was not a complement. You somehow see yourself and you message as important, when that is not the case.
I certainly don’t think that Scott Burns was trying to compliment me. He was in pain. He saw that I had made a valid point. He also saw that it was his job to evaluate that point and either endorse it or criticize it. He also saw that, if he endorsed it, his own career would suffer. He also saw that there were no legitimate grounds on which to criticize it. He was trapped. His response was to lash out in an irrational way. He insulted me. He was not able to come up with any case for insulting me. He just advanced the insult and then refused to talk about it.
He preserved his career. That was his aim and he achieved that aim. But he did it at the price of sacrificing his rational mind. What he said made no sense. If what I said (that the Greaney retirement study lacked an adjustment for the valuation level that applies on the day the retirement begins) is so, that’s a very big deal. Millions of people have used the Trinity study (on which the Greaney study was based) to plan their retirements. If that study is in error, then millions of people’s financial lives have been placed in grave jeopardy and it is Scott Burns’ job to help those people by publicly exposing that error. By putting forward the nonsense insult, Scott protected his career. But he paid the price of acting in an irrational way that compromised his personal integrity. I think he paid too big a price for the career rewards that he obtained. But that is of course a personal choice that we all need to make for ourselves.
The message that I am putting forward is the most important message before this country today. Our economic system cannot survive is we do not find some means of getting honest and accurate investment advice out to the millions of people who desire it and need it. That’s absolutely imperative. There is no more important work being done today than the work that I am doing.
That is of course the reason why it is so hard. If it were not hard work to tell the truth about safe withdrawal rates and about scores of other critically important investment-related topics, everyone would be doing it and the reaction to my May 13, 2002, post would have been “of course Greaney’s study is in error, it needs to be corrected within 24 hours.” That was not the universal reaction to the painfully obvious point that I made. That’s why we are still here.
The puzzle is — WHY was that not the universal reaction?
The answer is that there had already been a 21-year cover-up of the obvious implications of Shiller’s peer-reviewed research on the day that I put forward that post. The difficulty in giving the obvious response to my post was not that there was anything tricky or questionable in what I said. The difficulty was the awareness of the 21-year cover-up. This field is run by wealthy and powerful and well-connected people. Scott Burns is not the only human who thinks twice before taking on lots of wealthy and powerful and well-connected people. If those people had acknowledged their error when it was first revealed to them (in 1981), Greaney would never have made the error in the first place. So there would have been no issue.
Those people did not acknowledge their error when it was pointed out to them. We are all today living the consequences of their unfortunate choice. Scott Burns decided that it was not his problem, that someone else would have to take on all these wealthy and powerful and well-connected people. I made the other choice. I don’t think that we can duck this one indefinitely. If Shiller’s Nobel-prize-winning research is legitimate research, the now 39-year cover-up will someday cause another economic crisis, perhaps another Great Depression. I love my country. I cannot live with having a decision to duck that one on my conscience. So I have made a decision to do what I can to get the word out.
Which, ironically enough, is what I think our Wall Street Con Men friends themselves would want me to do if they were thinking clearly re these matters. Our Wall Street Con Men friends have blocked out thinking about how much human suffering their continued cover-up is likely to cause because they could not live with their decision if they permitted their minds to work properly in assessing it. So even our Wall Street Con Men friends will be thanking me for my choice when we all get to the other side of The Big Black Mountain.
Or so Rob Bennett sincerely believes, in any event, you know?
I naturally wish you all good things, my dear Goon friend.
Wall Street Con Men Ally Rob
When has a 4% withdrawal rate not worked?
It has always worked.
Greany did not say that a 4 percent withdrawal has always worked. I have been saying going back to the first day (which was 18 years ago!) that, if Greaney said that it had always worked, that would be an accurate statement and that I would agree with it.
What Greaney said was that 4 percent was a SAFE withdrawal rate and I have properly pointed out that that statement is in error. I have pointed out that, if someone drives drunk on four occasions and gets in a serious accident each time but is never killed, that does not show that driving drunk is “100 percent safe” (those are the words that Greaney used in his study).
The fact that those who used a 4 percent withdrawal at times when stocks were priced low ended up with millions in their portfolio at the end of 30 years shows that in those sorts of circumstances a 4 percent withdrawal is super safe, that those people could have retired much sooner and still has perfectly safe retirements. And the fact that those who used a 4 percent withdrawal on the small number of occasions when stock prices were sky high had barely a few dollars remaining in their portfolio at the end of 30 years shows that taking a 4 percent withdrawal in those sorts of circumstance is not safe at all, it is a high-risk choice.
People need to know that. A failed retirement is a serious life setback. Retirements beginning in January 2000 had only a 30 percent chance of survival if they called for a 4 percent withdrawal, presuming that stocks continued performing in the future somewhat as they always have in the past, Anyone who hears someone saying that a 4 percent withdrawal is safe in those circumstances should be warning the investors whose lives could be destroyed by those false claims. If the investors know of the risks and take the 4 percent withdrawal anyway, that is their business. If they take the 4 percent withdrawal because they believe the claim that that withdrawal is safe and the voices of those trying to warn them of the dangers were suppressed by those making the false claims, the people who pushed the false claims are responsible for the losses suffered. And we are talking about losses in the many trillions of dollars in the event that stocks continue to perform in the future anything at all as they have always performed in the past.
I had become friends with a lot of the people who participated in the Motley Fool community. So not this boy, you know?
My best and warmest wishes to you.
Friend Indeed Rob
“ It has always worked.”
That is all you needed to say.
“ People need to know that. A failed retirement is a serious life setback. “
Totally agree. You are a good example of a failed retirement. You should be telling people where you went wrong, so that they don’t repeat your errors. That would be offering true value to your readers versus all this nonsense you have been doing up to this point.
“ I had become friends with a lot of the people who participated in the Motley Fool community.”
What friends? You chased everyone away.
“That is all you needed to say.”
No. If all that I had ever said was “it has always worked,” there never would have been any controversy. It was the stuff that I said after that that got me banned. When I say that we need to open every site to honest posting, it;’s the stuff that I said after that that I am talking about. We need to be warning people about the dangers of the Buy-and-Hold retirement studies. Saying “it has always worked” doesn’t do the job. It is not even a remotely close call.
“What friends? You chased everyone away.”
This is half true and half false.
The single biggest thing that drove people away was the abusive posting by you Goons. That sickened people.
There were hundreds of people who said that my famous post of the morning of May 13, 2002, started the most exciting debate ever held at the board. I certainly didn’t drive those people away. I gave those people exactly what they were looking for at that board.
But there were indeed a number of people who didn’t enjoy hearing what I had to say. I don’t mean just Goons. The Goons hate me with a burning hate. But there were a number of non-hater Normals who did not enjoy hearing what I had to say. That’s not because I said anything inappropriate or that I said what I said in an inappropriate way. That’s because there had never heard what I was saying from anyone else and because I was telling them that it was going to take them longer to be prepared to begin their retirements than they had come to believe was the case by listening to others.
It is not the job of people working in this field just to pump out a lot of happy talk. Yes, that makes you popular, and, yes, that makes you rich. But planning one’s retirement is a serious business. Those who do not take the job seriously are not our friends even if they are telling us what we want to hear. There comes a time when you have to tell people the truth even if it hurts them a bit for them to hear it.
Greaney’s retirement study lacks an adjustment for the valuation level that applies on the day the retirement begins. I checked numerous times before I put forward that famous post of May 13, 2002. I have noticed that in the 18 years since not one time has Greaney put forward a screen shot showing where the valuation adjustment is in the study, I cannot help but wonder if that is because I was right in what I said in my famous post of the May 13, 2002, there really is no valuation adjustment in the study.
The answer re the people who got upset by the true thing that I said is not for me to stop posting honestly. The answer is for everyone who works in this field to begin posting honestly re what the last 39 years of peer-reviewed research teaches us all about how stock investing works in this field, When that happens, no one will be surprised or upset when someone like me points out that the Buy-and-Hold retirement studies get the numbers wildly wrong.
If we are not going to permit the safe withdrawal rate to be calculated properly, we should just not bother calculating it at all. Inaccurate calculations ultimately do more harm than good. I don’t think that Buy-and-Hold started out as a scam. But that is what it is today. Prior to 1981, it was just a mistake that was made because all of the research needed to know the realities had not yet been published, Today, Buy-and-Hold is a scam. The fact that the Buy-and-Holders got the numbers wrong is a small thing today. The much bigger problem today is that, because the Buy-and-Holders do not want people to know about the 39-year cover-up of their error, they have engaged in criminal behavior to stop anyone else from reporting accurate numbers. Not good.
My sincere take.
Accurate Calculating (But Hopeful That One of His Friends Will Let Him Know If This Ever Turns Out Not to Be the Case!) Rob
You keep taking about goons, but your board has been virtually dead for years. Same goes for the place you call goon central. Your explanation as to a lack of fans and followers does not make sense.
And what’s the name of Shiller’s book?
Irrational Exuberance.
Do you see?
When the CAPE value is where it is today, you shouldn’t expect the investing field to make sense. We are all telling each other lies about stocks because we want to keep that CAPE value up where it is. If we were to start making sense, that CAPE value would tumble and our portfolio values would be cut in half. There are trillions of reasons why as a people we don’t want that to happen just yet.
The long-term reality remains that we would all live better lives if we permitted ourselves to talk about the far-reaching implications of the last 39 years of peer-reviewed research in this field. I think we are going to see the merit of making that big advance once the CAPE value has fallen and the horrors of the pure Get Rich Quick/Buy-and-Hold approach have revealed themselves once again.
We’ll see.
I hope that you Goons will be willing to say a prayer for me when we are all living through it. I certainly will be including my Goon friends in my prayers at that time.
Hang in there, man.
Pious Rob
You made the claim that goons are driving people away, yet there hasn’t been anyone around in years.
At every site that I have ever posted at, there has been a significant minority (about 10 percent) that very much wants to hear what I say. If we were permitted to engage in peaceful discussions, those people would get their questions answered and then tell their friends about what they had learned and these ideas would spread all over the world. Eventually, Valuation-Informed Indexing would become the dominant model for understanding how stock investing works.
You Goons have stopped that from happening with your criminally abusive behavior. There aren’t too many people who want to know about a new approach to investing so much that they are willing to see their careers threatened and the lives of their loved ones jeopardized. The criminally abusive stuff has “worked” for 18 years. I don’t think that it will continue to work after stock prices have fallen by 50 percent or more. But we will have to wait a bit to find out for sure.
I hope that helps a tiny bit.
New Investing Model Advocate Rob
“At every site that I have ever posted at, there has been a significant minority (about 10 percent) that very much wants to hear what I say.”
If that is true, why is the comment section on Valuewalk empty of comments from these people that want to hear what you say?
You’re asking a good question, Anonymous. I ask myself that question all the time.
I had a guy call me from California about three weeks ago. He loves my stuff. He has seen my column at ValueWalk and he put in a Google notification thing so that he would be informed whenever there was an article with my name on it and the term “CAPE” in it. We talked for several hours and we have exchanged a good number of e-mails since. The guy did not understand that I had an article at ValueWalk every week. He was just seeing some of them, those that Google brought to his attention. So he had questions about issues that were not addressed in those particular articles and he wanted to talk through some things with me.
Now, he saw an article by me that appeared at Seeking Alpha not long ago. The people at ValueWalk often send my articles to other sites. So Seeking Alpha runs my stuff sometimes. For this particular article, there were a number of comments at Seeking Alpha and most of them were positive. This guy was impressed. He told me that it is a smart group that shows up at Seeking Alpha and that I should be happy that they thought highly of my article.
So smart people thought that that particular article had merit. Yet no one at Value Walk commented on it. I think that that’s weird, It would be a big help to me if people at Value Walk would comment. Those people have a chance to really get to understand my stuff because I appear there every week. So it would make all the sense in the world that they would comment. But the reality is that they do not. That’s a fact.
And I have had that same general experience over and over and over again. If you go back to May 13, 2002, at the Motley Fool board, there were scores of people on the first day saying that I had launched the most exciting debate ever held in the history of the forum. So people absolutely loved my stuff. But there was also a larger group that was hostile from the first day. That’s also always a part of the dynamic. The hostile group is more intense and has more staying power. The group that is interested in exploring the issues always gets tired and eventually walks away. So the hostile group prevails. That same pattern applies over and over and over again.
Most people are complacent re this stuff. That’s how I would sum it up. There is a small group of Buy-and-Holders (the Goons) who very, very, very much do not want people to discuss the far-reaching implications of Shiller’s research. There is a much larger group that is fine with it. But the Goons are 50 times more intense than the Normals. The Normals are complacent. They figure that, if things were really as bad as I say they are, someone would have done something about it. Their common sense tells them that things simply CANNOT be as bad as I am saying, so they drop out of the conversations when they get too contentious And you Goons always make sure that any conversations about the far-reaching implications of Shiller’s research quickly become very, very contentious indeed.
That’s the best explanation that I can give you. It’s a fact that people don’t comment on my stuff at Value Walk. I wish they did. It makes me sad that they do not. But I have had thousands of people comment on my stuff, some in the most laudatory way possible, And that includes numerous big-name experts. So I know that there is extraordinary value there. We just need as a society to figure out a way to overcome you Goons. If we put you in prison cells for your criminal acts, that would obviously do it. But the same people who are too complacent to post in the face of your brutal abusiveness are also too complacent to contact prosecutors and to demand that criminal actions be taken against you. So we are where we are.
The only thing that I can imagine that might change it is a price crash. I think that people might become less complacent after they see most of their life savings vanish into space. So I believe that that might be the turning point. So I see it as my job today to prepare myself for that day, to get the book finished and to continue writing the column so that I am learning new things every week and to do my best to respond to your Goon comments and all that sort of thing. So that’s what I do.
This is a big deal. Shiller’s Nobel-prize-winning research revolutionizes our understanding of how stock investing works. So we are having a hard time as a society letting it in. We are not ignoring Shiller’s research because it is unimportant. We are ignoring it because it is so super important that we cannot bear the thought of going through all the changes that we are going to have to go through once we let it in. If we had launched a national debate on Shiller’s breakthrough research findings back in 1981, this wouldn’t have been so hard. Now that there has been a 39-year cover-up, it has become a very, very, very hard transition to make. But a very very, very important one to make as well.
That’s my explanation.
Paradigm Changer Rob
Other people that write blogs and articles have plenty of followers/fans posting in their comments section, but you don’t. That speaks volumes.
“Other people that write blogs and articles have plenty of followers/fans posting in their comments section, but you don’t. That speaks volumes.”
It shows how threatening Shiller’s research findings are to Buy-and-Holders, Anonymous. The normal reaction when someone sees someone on a discussion board say something that they do not agree with is to just let it be, to accept that different people have different opinions and that’s fine. That’s not the way that Buy-and-Holders react to Shiller’s research findings. They go into a panic. They start advancing death threats or keeping quiet when death threats are advanced by others. That’s not normal behavior.
That tells me that this stuff is very, very, very important. It tells me that we all need to be looking at this stuff. The purpose of the criminally abusive stuff is to intimidate me into silence. It has the opposite effect. It tells me that there is something really important going on here. If Shiller is right, the Buy-and-Holders should be insanely emotional when the CAPE value is where it is today. And what have we seen from Buy-and-Holders for 18 years now? Death threats. Acts of extortion. Acts of defamation. Demands for unjustified board bannings. That’s emotional behavior, Anonymous. That behavior tells us that Shiller is on to something that we all need to look at.
The stuff that we cannot bear to talk about is the stuff that we most need to talk about. That’s my sincere take.
Non-Emotional (Not Really, But I Try to Rein My Emotions In By Taking a Look at What the Peer-Reviewed Research Says) Rob
“ It shows how threatening Shiller’s research findings are to Buy-and-Holders, Anonymous.”
Articles by Shiller have plenty of comments and following. It is specifically your posts that do not. Thus, your comment is not valid.
If Shiller put forward a statement that “The Buy-and-Hold retirement studies are in error and should be corrected within 24 hours because of the harm that they will otherwise do to lots of people,” he would get the same reaction that I have gotten. It is not that it is Rob Bennett saying the things that I say that causes Buy-and-Holders to lose their freakin’ minds, it is the content of the message.
If Shiller is right that valuations affect long-term returns, there is zero chance that the safe withdrawal rate is the same number at all valuation levels. By not saying that, he stays out of trouble. But is that a good thing for the millions of people who have used the discredited retirement studies to plan their retirements? It’s not. All of us who believe that Shiller’s Nobel-prize-winning research is legitimate research should be speaking up.
The Buy-and-Holders need to get over the fact that 39 years ago research was published showing that they had made a mistake in thinking that the market is efficient. That’s the bottom line here. We are not helping our Buy-and-Hold friends by keeping quiet. We are hurting them. We are making things worse by permitting more time to pass without seeing a correction.
That’s my sincere take, Anonymous.
I naturally wish you all good things.
Buy-and-Hold Critic (and True Friend!) Rob
Can you show me just one failed buy, hold and rebalance portfolio and then just one single person that has been successful with VII?
Every single Buy-and-Hold portfolio that was ever assembled has been a failure if you go by the last 39 years of peer-reviewed research. And every single Valuation-Informed Indexing portfolio has been a success if you go by the peer-reviewed research. If valuations affect long-term returns, it is a logical impossibility for an investment strategy that does not call for long-term market timing to ever produce good results.
Look at what happened in 1929, Millions of people were hurt in the Great Depression. That was caused by Buy-and-Hold. Had Shiller’s research been available at the time and if people had felt free to discuss it, the CAPE value would never have reached 33 and caused an economic collapse. Was it worth it? I am sure that the Wall Street Con Men of that time turned a few extra bucks because Shiller’s research was not available to the people of that time. But was it worth it? The Depression caused an ocean of human misery, even to a lot of the Wall Street Con Men. I think it would have been better had Shiller’s research been available and if people had felt free to discuss it and if we could have avoided the Great Depression.
The key to every market that has ever existed is price discipline. Take that away by telling people that it is not necessary to engage in market timing and sooner or later you are going to cause an ocean of human misery. It is not even possible for the rational human mind to imagine a scenario in which it would not turn out that way. Given that there is precisely zero indication in the peer-reviewed research that market timing is not required (Wade Pfau researched this question very carefully), I think we should tell people that it is always required and that it always works. What possible downside could there be other than our Buy-and-Hold friends needing to learn how to pronounce the words “I” and “Was” and “Wrong?”
My sincere take.
Great Depression Foe Rob