Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
How many death threats have you received? When was the last one? Where is the evidence? What other criminal activities have occurred and where is the proof?
The death threats are only one of many types of intimidation tactics that have been employed by you Goons, Anonymous. We have seen demands for unjustified board bannings. We have seens thousands of acts of defamation. We have seen acts of extortion aimed at silencing academic researchers who dared to “cross” the Buy-and-Holders by publishing honest research. And on and on.
The proof is that the error in the Greaney retirement study has not been corrected to this day. People use retirement studies to plan retirements. The normal thing would be for the author of a retirement study that was found to be in error to correct the study within 24 hours of the moment that an error in it was brought to his attention. For Greaney, that was on the morning of May 13, 2002. And the second normal thing would be, in the event that the author of a retirement study found to be in error failed to correct his study within 24 hours, every responsible person who learned of the matter would insist that he do so. Motley Fool should not have banned me, it should have banned Greaney. It’s the same with Morningstar. And with the Early Retirement Forum. And with the Get Rich Slowly blog. And on and on and on and on.
It does not take 19 years to determine whether or not a retirement study contains an adjustment for the valuation level that applies on the day the retirement begins. It shouldn’t take more than 19 minutes.
If there haven’t been criminal acts of intimidation, including death threats and lots of other nasty stuff, how could it be that the Greaney retirement study has gone uncorrected for 19 years? Even Evidence-Based Investing, one of the generals in Greaney’s Goon army, now acknowledges that the study lacks a valuation adjustment. But he offers no explanation of why the study has not been corrected. That ain’t normal, Anonymous. The only possible explanation is a mountain of intimidation tactics.
I wouldn’t have believed what we have seen if you had told me on the morning of May 13, 2002. I expected Greaney to react to my post in an abusive manner. But I believed that he would be reined in within two or three days. No one could have anticipated what we have seen. But here we are. Now we have to cover up not only the error in the study and the error in the Buy-and-Hold Model that caused Greaney to make the error in the study and the errors in all the other Buy-and-Hold retirement studies but also the intimidation tactics, including death threats, that we employed to keep more people from learning about the error in the study and insisting that it be corrected.
Not this boy, you know? The normal and healthy thing would have been for a national debate on the far-reaching implications of Shiller’s Nobel-prize-winning research to have been launched in 1981, when the research was published. I believe that the advance achieved by Shiller was so huge that many suffered cognitive dissonance and failed to incorporate Shiller’s findings in their understanding of how stock investing works. Then, when something came up showing the dangers of Buy-and-Hold, they went into cover-up mode. Today we are dealing with the cover-up of a cover-up of a cover-up of a cover-up.
It’s not a healthy situation. If stocks continue to perform in the future anything at all as they always have in the past, we will see in not too long a time an economic crisis that will do great harm to millions of people. Harm that would have been avoided if we had launched that national debate in 1981 or even in 2002. I say that we need to launch the long-deferred national debate by the open of business on Friday morning, if not sooner. That is my sincere take. I think this 40-year cover-up is killing us, you Goons as much as the rest of us.
We are all in this together. We all need to know how stock investing works in the real world. We should all be doing everything in our power to see that we all enjoy an amazing learning experience together. Or so this trouble-making Rob Bennett fellow sincerely believes.
I think that I did a good thing when I worked up the courage to go public re the error in the Greaney retirement study. I see it as my finest moment. I showed in that moment beyond any doubt whatsoever that I was Greaney’s friend. The normal reaction of someone who learns that he has made an error in a retirement study is to THANK the person who brought the error to his attention and thereby spared him further embarrassment.
That’s my sincere take re these terribly important matters, in any event.
My best and warmest wishes to you and yours.
Rob
“Even Evidence-Based Investing, one of the generals in Greaney’s Goon army, now acknowledges that the study lacks a valuation adjustment.”
That is true. I know that it contains no valuation adjustment and no-one has ever claimed that it has.
“But he offers no explanation of why the study has not been corrected.”
That is not true. I have explained why it has not been corrected, because it does not need to be corrected, because it set out to calculate what inflation adjusted withdrawal rate survived 30 year periods in the past and did so accurately.
A fact that you have admitted with this quote “We agree that Greaney calculated properly the rate that survived all existing 30-year historical time-periods.”
I know that it contains no valuation adjustment and no-one has ever claimed that it has.
Greaney never claimed that his retirement study contained a valuation adjustment. But he claimed on thousands and thousands of occasions that it identified the safe withdrawal rate. In a world in which valuations affect long-term returns, it is a logical impossibility that anyone could accurately calculate the safe withdrawal rate without taking into consideration the valuation level that applies on the day the retirement begins. Shiller showed in his Nobel-prize-winning research published in 1981 that valuations affect long-term returns.
it does not need to be corrected, because it set out to calculate what inflation adjusted withdrawal rate survived 30 year periods in the past and did so accurately.
Why say that it identifies the safe withdrawal rate if it was not intended to do that? What good purpose is served by that deception?
A fact that you have admitted with this quote “We agree that Greaney calculated properly the rate that survived all existing 30-year historical time-periods.”
I stand by that. I also stand by my claim 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 also stand by my claim that a failed retirement is a serious life setback.
My best and warmest wishes to you and yours, Evidence.
Rob
Your only quibble with Greaney is the definition of “safe”. His definition for the purpose of his study is objective and precise. Your definition, near as anyone can tell, is subjective and squishy, and therefore unmeasurable. It boils down to “I don’t know what safe is, I only know that Greaney is wrong.” Which is useless hot air.
Perhaps your precise definition is in your book, which you said would be done by the end of the year. Yet another missed deadline?
My definition of “safe” is the dictionary definition of the word. I don’t consider my difference with Greaney to be a “quibble.’ People use retirement studies to plan retirements. A failed retirement is a serious life setback. We all should want to numbers reported in retirement studies to be accurate.
Gresney obviously doesn’t consider my objection to the methodology used in his study to be a “quibble.” He wouldn’t threaten to murder my loves ones over something he viewed as a quibble. He wouldn’t engage in extortion to silence an academic research who worked with me for 16 months and concluded from his research that “Yes, Virginia, Valuation-Informed Indexing works!” Greaney gets it that Valuation-Informed Indexing and Buy-and-Hold are very, very different models for understanding how stock investing works
The difference is that one is a pure Get Rich Quick approach and the other is the first true research-based model. Buy-and-Hold treats irrational exuberance as if it were something real, something that you could use to finance a retirement. Valuation-Informed Indexing treats irrational exuberance as empty air and counts economic-based gains as something real.
That’s a very big difference. The reason why many Buy-and-Holders get so upset when someone cites the last 40 years of peer-reviewed research in this field is that spreading knowledge of Shiller’s Nobel-prize-winning research to every investor on the planet will cause the Buy-and-Hold house of cards to tumble to the ground. I see that as a very good thing. Greaney wants to maintain confidence in Buy-and-Hold. Greaney and I are working at cross purposes.
I consider us friends. I had a lot of good times with Greaney in the days prior to May 13, 2002. And I believe that his study caused a lot of people at the Retire Early board to take lower withdrawal rates than what they would have taken if he had not prepared the study. But once it became clear that I was not buying into the core Buy-and-Hold dogma that market timing is not always 100 percent required for every investor, he could see that we were working at cross purposes. The fact that thousands of our community members reacted positively to what I said freaked him out completely.
I have fond feelings for the guy. But I do not believe to this day that his retirement study contains an adjustment for the valuation level that applies on the day the retirement begins. I didn’t believe that on the morning of May 13, 2002. I really, really, really don’t believe it after seeing the past 20 years of behavior of Greaney and his Goon pals. Buy-and-Hold is rooted in emotion. The “idea” that irrational exuberance gains are real is the product of an emotional Get Rich Quick impulse, nothing more. Buy-and-Hold is what sells, Valuation-Informed Indexing is what works.
That’s my sincere take re these terribly important matters, in any event.
My best wishes to you and yours, Anonymous.
Rob
Since that deranged non-response ignored my question about your book, we can assume it won’t be finished by the end of this year. Or any year.
It won’t be finished by the end of this year, as I had hoped. I can now see light at the end of the tunnel. Before, when I would rework a section, it would often cause changes in a number of places throughout the book. I now have all the chapters divided up properly and in the right place. So things are much more stable. I can focus on one chapter and get that in better shape and then move on to something entirely different. The work proceeds a lot more quickly and efficiently that way. So things are improving.
But, no, I am not done or even super close to being done. My new target date for completion is June 2022. I think I’ll make this one. But then I thought I would make the earlier ones too.
Wish me luck!
Rob