Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“I don’t do criminal.”
You don’t do sane either. In fact you don’t do much of anything.
Except waiting. Credit where it’s due. You are great at waiting.
Thanks for that much, Anonymous.
I don’t see that I have much choice. I felt like a creep for those three years when I didn’t speak up about the error in the Greaney retirement study. I have a tendency to over time become friends with the people that I post with on discussion boards. I sure don’t want to go back to feeling like a creep by selling those people out. But the shift from Buy-and-Hold to Valuation-Informed Indexing is a huge advance. It means rewriting all the textbooks, rejiggering all the calculators, explaining to millions of people an entirely new way of understanding how stock investing works. That’s not a one-person job. I am going to need some help from site administrators and academic researchers and investment advisers and policymakers concerned about the future of our economic system and so on. So, yes, I wait.
I believe that we will see a change in the days following the next price crash. It’s like what you see in an area where there is a high risk of flooding. You can tell people “don’t build your house here, the science says that someday in the not too distant future it will be washed away in a flood.” Lots of people who like living where they are are going to look at the sky and say “it seems like a sunny and pleasant enough day, I think I will just remain where I am, now go away, I don’t want to hear anymore about what the science says.” But, after the flood hits and many lives are destroyed, it’s a different story. Then people say: “Why didn’t you tell us about the flood back when there was still time to do something about it?”
I believe that there will be people who will work up the courage to stand up to Lindauer and Greaney (and their respective Goon squads) in the days after the flood hits. If Fama is right, it’s not even an issue. If Fama is right, the risk of a crash is not greater today than at any randomly chosen time. But, if Shiller is right, which I believe is the case, the risk is much, much greater today. The risk is probably greater today than it has been at any earlier time in U.S. history. A case could be made that the risk is greater today than it was in January 2000. That’s not so going by the CAPE value alone. But the amount of time that a bull market has been in place is another risk factor and we have had many more years of irrational exuberance today than we had had in 2000.
So, yes, I wait. I also pray that the crash will not be as bad as the past 40 years of peer-reviewed research in this field indicates it might be. And I pray that, in the days following the crash, we all find a way to put our differences behind us and to get together for a few frosty cold ones and have a laugh about the craziness we lived through in earlier times.
My best and warmest wishes to you and yours, old (Goon) friend.
Sentimental Rob
A wise man once said:
“You go about it in a manner that is catastrophically unproductive by adding missionary zeal that inflates your importance and demeans others. The whole idea that there is a new school of Safe Withdrawal Rates reeks of personal aggrandizement.”
It is too bad that those words fell on deaf ears.
I don’t see it as inflating my own importance in particular to say that we should permit honest posting re the last 40 years of peer-reviewed research at every discussion board and blog on the internet, Anonymous. I think that that inflates EVERYONE’s importance. We adopted the laws against death threats and against extortion and all the rest as a society. When we enforce the laws that apply in every field other than the investment advice field in the investment advice field as well, we are making an implicit statement that our system works and that we are a good people. When we elect not to enforce the law, we are saying something very different, something very sad and cynical.
You know someone who benefits when we open the entire interest to honest posting? Scott Burns. He gets a chance to do amazing work once the possibility of honest posting opens up to him. I have a funny feeling that that was what he intended to do with his life when he first got involved doing personal finance journalism. So, when I say that I believe we should permit honest posting, I am inflating the importance of Scott Burns.
We are a good people, Anonymous, That’s what I believe. That’s why I believe that there will come a day when honest posting will be permitted at every site. We’ll see.
Rob
So what you are saying is that you are the only one posting honestly and that the entire internet needs to be opened up to you so that you can post whatever you want on any board. After that, you then believe that everyone else will start posting honestly (which means they have been dishonest up to this point). Is that correct?
We have lots of people TRYING to post honestly. We have lots of people who long to post honestly and who will be happy to do it once as a society we signal that we will tolerate it.
Scott Burns wanted to post honestly. I had a telephone call with him in which he expressed a great deal of interest in reporting accurate safe-withdrawal-rate numbers. But then he considered what the Buy-and-Holders would do to him if he went ahead and did that and he watered down the message in the column that he wrote. I think it would have been better if he had said things as be believed them to be. That would have given others the courage to do that same. And soon we would all be enjoying an amazing learning experience.
The Buy-and-Holders are trapped. I didn’t trap them. I have been trying for 19 years now to help them get out of their trap. The Greaney study does not contain a valuation adjustment. Every investor on the planet needs to be talking about that. There were thousands of newspaper articles that cited the 4 percent rule in advising people how to plan their retirements.
My sincere take.
Rob
“We have lots of people TRYING to post honestly. ”
What does that mean? Either they post honestly or not. Which is it?
Scott Burns told you that he was posting dishonestly and wanted to post honestly? Really?
What does that mean? Either they post honestly or not. Which is it?
Scott Burns is the perfect example. You bring up that line where he said that I had engaged in behavior that was “catastrophically unproductive.” He didn’t say that he believed that Greany had included a valuation adjustment in his study. The catastrophically unproductive part is that he cannot image standing up to the many wealthy and powerful people who have endorsed Buy-and-Hold. Say that Shiller had published his research before Fama had published his. Scott Burns would today be the biggest advocate of Valuation-Informed Indexing alive on the planet. He just cannot bear having to deal with the abuse that the Buy-and-Holders will direct at him if he does honest work in this field.
He says that it is catastrophically unproductive to post with full honesty. I see it just the other way around. People should have been posting honestly all along. Then the Buy-and-Holders wouldn’t be in the fix there are in an we would all be living better lives today. I see it as catastrophically PRODUCTIVE to do honest work in this field. Maybe not in the short term. But in the long term. That’s my focus. I believe that in the long term it is better to be honest.
Rob
Scott Burns told you that he was posting dishonestly and wanted to post honestly? Really?
Sure. He didn’t say those words directly. But read between the lines of the words he said and that is the message that is delivered.
That’s true of just about everyone. It’s true of freakin’ Greaney! How many times have you heard Greaney say “I absolutely included a valuation adjustment in my study!” I don’t ever recall hearing him say that. That’s one tiny way in which he has been honest. He hasn’t corrected the study. That’s dishonest. He advanced death threats and engaged in acts of extortion. That’s dishonest. But he has never directly claimed that he included a valuation adjustment in the study. At its root, that’s the same game that Scott Burns and thousands of others have been playing.
People want to be honest. They understand that that is the norm and they endorse the norm. But they have a problem. Post honestly about the last 40 years of peer-reviewed research and you end up concluding that more than 50 percent of today’s stock market value is just irrational exuberance, cotton-candy nothingness that will be blown away in the wind with the next price crash. Greaney does not want to say that and Burns does not want to say that and thousands of others do not want to say that. Say that and the bull market collapses.
So they fib a little. Then, in time, they end up fibbing a lot. What would you have them do, cause stock prices to collapse?
I would have them cause stock prices to collapse. I think that the best way out of this mess is just to acknowledge the mistake that was made back in the 1960s, accept the consequences that follow from doing that and begin a rebuilding process rooted in what the peer-reviewed research teaches us about how stock investing works. But lots of people cannot bear the thought of going there. So for the time-being we are stuck in this twilight zone where we know how stock investing works but dare not say what we know out loud.
But many of us hint at the truth. You see that all the time. That shows that we want to be honest. It’s just that the 40-year cover-up has put us in such a fix that we cannot bear to go there at this point. It’s like someone who is 200 pounds overweight being afraid to go to the doctor. He knows what the doctor is going to tell him and he cannot stand the thought of doing what the doctor is going to tell him. So he doesn’t go. It doesn’t follow that he is so dumb that he does’t think he needs to go. He knows perfectly well that he needs to go, He just cannot bear to do so at this point in time.
When he has a heart attack, he will go. When prices crash and we experience another economic crisis, we will open up the internet to honest posting re the past 40 years of peer-reviewed research.
Or so this Rob Bennett individual sincerely believes, you know?
Rob
“The catastrophically unproductive part is that he cannot image standing up to the many wealthy and powerful people who have endorsed Buy-and-Hold. ”
Uhm….no. He is talking about you. He said that what you are doing is catastrophically unproductive. In short, you are wasting your time.
He acknowledged implicitly that I am right when he failed to argue that the Greany study contains a valuation adjustment. So why am I wasting time. Is he suggesting that the investment advice field is so corrupt that it is impossible to imagine it ever coming clean?
That’s the suggestion. But I am not that cynical. I believe that, if we all worked together, we could have it come clean. It’s a question of motivation. The price for being honest in this field is very high today. But after the crash we will have seen with our own eyes the human misery that Get Rich Quick/Buy-and-Hold always brings in. Then we will work up the courage to post honestly. And we will never look back.
I don’t think that I am wasting my time. I think that deep down inside we all want the same things. We are in a trap today. We all need to be working together to figure out how to escape the trap. The trap doesn’t help anyone. It hurts every last one of us. I believe that the work that I am doing is catastrophically productive. And I believe that Scott Burns would be having the time of his life today if he were working beside me.
Why have peer-reviewed research is we are not going to permit ourselves to discuss the findings after it is published? The purpose of research us to facilitate learning. I think we should permit learning in this field. I see no downside.
Rob
Wrong again. After your long response to him after the first comment, he then followed up by saying:
“Sadly, your response is exactly what I wrote you about.” He then banned you from the Asset Builder website.
If Buy-and-Hold were a real thing, no Buy-and-Holder would be banning anyone from anything. If it were a real thing, the Buy-and-Holders would be inviting challenges to their thinking. That’s how you deepen your understanding of a subject over time.
The appeal of Buy-and-Hold is the Pretend Money that it creates. The downside is that the Pretend Money always disappears in time. Millions of people get hurt in very serious ways when that happens. I believe that we would be better off just telling people the truth about how stock investing works in the real world. Then there are no price crashes and no economic crises and many fewer failed retirements. I can live with that.
Rob
So you agree that he says you are wasting your time.
“I don’t see it as inflating my own importance in particular to say that we should permit honest posting re the last 40 years of peer-reviewed research at every discussion board and blog on the internet, Anonymous. ”
No, he was saying the exact opposite. You continually makes comments boosting your importance. You say that your work will save us all from a market crash. You say that your work will save millions of retirements. You say that you rank in the top few of investing experts. How is that not inflating your importance?
You say that you are posting honestly, which then says everyone else is dishonest. How is that also not inflating your own importance.
So you agree that he says you are wasting your time.
I agree that that is what Burns was saying.
I believe that he would be thrilled if we could all move on to something better. But he doesn’t believe that we can make the transition. So he has convinced himself that we just need to live with what we have. I believe that we can move on to something better if we all support those who challenge Buy-and-Hold (while also supporting the Buy-and-Holders as well to the extent we find that appropriate).
Rob
“I don’t see it as inflating my own importance in particular to say that we should permit honest posting re the last 40 years of peer-reviewed research at every discussion board and blog on the internet, Anonymous. ”
No, he was saying the exact opposite. You continually makes comments boosting your importance. You say that your work will save us all from a market crash. You say that your work will save millions of retirements. You say that you rank in the top few of investing experts. How is that not inflating your importance?
You say that you are posting honestly, which then says everyone else is dishonest. How is that also not inflating your own importance.
I don’t believe that it is only me who should be permitted to post honestly. I believe that everyone should be permitted to post honestly. I want to see THOUSANDS of people challenging the Buy-and-Hold dogmas that have been discredited by the last 40 years of peer-reviewed research in this field. I am saying that the advances that we have achieved together as a nation will save us from the next price crash if we give ourselves to engage in honest and informed discussions. I think my role has been a highly positive one. But I have obviously learned lots of things from lots of people, from Robert Shiller to Jack Bogle to William Bernstein to Wade Pfau to Michael Kitces to Rob Arnott and on and on and on. I am celebrating the importance of all of those people. I celebrating the importance of the U.S. system, which generally permits and encourages the sort of breakthrough advances that we have achieved over the past 40 years.
I certainly do not apologize for pointing out the error in the Greaney retirement study. That was huge. If we were all thinking clearly, we would all want to see people have access to accurate and honest retirement planning numbers, without a single exception. We all should be celebrating the amazing work that we have done together. We all should be doing everything in our power to get the word out about those advances to every investor on the planet.
Anyone who doesn’t appreciate that errors in retirement studies need to be promptly corrected just doesn’t get what being in the investment advice field is all about. It is catastrophically productive to get errors in retirement studies corrected.
Rob