Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Is it irrational to base your retirement plan on the hope of getting a $500 million windfall?
Sure. When you’ve done the work to earn that $500 million. When you’ve pointed out an error in a retirement study that millions of people need to know about because lots of other retirement studies contain the same error and the study has remained uncorrected for 20 years because lots of good and smart people who work in the field want to tell the truth and help people but are afraid to do so because the error has caused so much human misery that the people who made it can’t bear to sat the words “I” and “Was” and “Wrong.” When that’s the situation, someone has to work up the courage and do what it takes to earn the $500 million. And, once he has earned it, why shouldn’t be plan his retirement on it?
Do you think it would have been better if I had kept my mouth shut about the error in the Greane retirement study?
Have you considered that over the years I had become friends with a good number of the people who posted at the Motley Fool’s Retire Early board?
Rob
“ When that’s the situation, someone has to work up the courage and do what it takes to earn the $500 million. And, once he has earned it, why shouldn’t be plan his retirement on it?”
So if some guy has $6 million in his investment account, you don’t think he should plan his retirement on it, yet if you don’t have your $500 million, you think that you should plan your retirement on that, even if you haven’t collected one dime?
Yes.
If someone has $6 million of nominal value in his account at a time when half of the value of the stock market is irrational exuberance and not anything of real, lasting value, that guy should plan his retirement only on the $3 million of real value and disregard the irrational exuberance. That’s the entire point of Valuation-Informed Indexing — to get the numbers right by taking into consideration the last 40 years of peer-reviewed research as well as the stuff that was around at the time when the Buy-and-Hold strategy was being developed.
As for the $500 million, one should certainly take it into consideration. I think it would be fair to say that I have earned a whole big bunch more than $500 million with the journalism work that I have been doing for the past 20 years. Even Evidence-Based Investing, one of the lead Goons, now acknowledges that the Greaney retirement study lacks a valuation adjustment. If that doesn’t prove the case beyond any doubt whatsoever, I have a hard time imagining what would. And it wasn’t only Greaney who put forward the crazy 4 percent rule. That was cited in thousands of newspaper articles. That rule was used in the planning of millions of retirements. So discovering the error in the rule is a very big deal. Had we opened to entire internet to honest posting re the last 40 years of peer-reviewed research on the afternoon of May 13, 2002, as I proposed at the time, we would all be a lot better off now. I would obviously have a number far in excess of $500 million in my account today if you Goons had never engaged in any criminal acts to stop the discussions that so many of our fellow community members wanted to see go forward.
Would I prefer to have the $500 million in cash today? Sure. Of course. Obviously. Who wouldn’t?
But the cases that I have are real cases. If the laws of the United States are given respect in the investing advice field in the days following the next price crash, I will be collecting that money in days to come. That’s a good thing for all of us. From the day that I collect the $500 million, there won’t be one person who will be afraid to share his or her thoughts about how the far-reaching implications of Shller’s amazing, Nobel-prize-winning research findings “revolutionize” (Shiller’s word) our understanding of how stock investing works. I will be invited to be the keynote speaker at the FinCon event for 10 years running once I receive that settlement payment. LOTS of people have doubts re the Buy-and-Hold dogmas today. Most don’t speak up in clear terms because they want to be able to make money in this field and they have seen how the Buy-and-Holders react to discussions of the far-reaching implications of Shller’s amazing research. All of that fear of speaking honestly goes away when the primary advocate of Valuation-Informed Indexing, the first true research-based strategy, receives a check for $500 million for his efforts to get this stuff out to every investor on the planet.
I would have preferred that we all just played it straight from the first day. That would have been a lot easier on me and it would have saved us from both the 2008 economic crisis as well as the one that we should be expecting to see in the next year or two or three. Now, if we had been playing it straight going back to 1981, I wouldn’t have earned $500 million by working up the courage to post honestly. If we had been playing it straight going back to 1981, much of what I have said would have come out long before I came on the scene. There certainly would not have been any thought in anyone’s mind that the safe withdrawal rate is the same number at all valuation levels if we had all been playing it straight going back to 1981.
I didn’t ask for the realities to be covered up from 1981 through 2002. It’s something that happened that in one way worked to my detriment (all the abuse that has been directed at me) and that in another way worked to my benefit (because so few dared to post honestly it became possible for me to add a lot more than $500 million worth of value to the world’s understanding of how stock investing works). I didn’t even know about the 21-year cover-up on the day that I advanced my famous post saying that I didn’t believe that the Greaney study contained a valuation adjustment. That didn’t click for me until I saw the death threats on the evening of August 27, 2002.
Do you think it would have been better if I had never mentioned the error in the study? I sure don’t. Do you think it would have been better if I ignored the death threats and just remained a Buy-and-Holder despite it all? I sure don’t. We NEED to know how stock investing works. It’s important. To me, that is as obvious as obvious could be. And we cannot ever make progress if we all live in fear of what the Buy-and-Hold Goon squads will do to us if we work up the courage to post our honest thoughts. Opening up that possibility for everyone on the planet is just an amazing advance. The idea that doing that isn’t worth a whole big bunch more than $500 million is just silliness.
You Goons get that deep down inside. If you didn’t see how important this stuff is, you never would have advanced a single intimidation post much less any of the criminal stuff. If you thought this stuff didn’t matter much, you would just say “oh, let that Rob Bennett fellow say what he believes about safe withdrawal rates, what harm could it do?” Given your behavior over the past 20 years, I think that it would be fair to say that your secret belief is that permitting honest posting on safe withdrawal rates and scores of other critically important investment-related topics would produce far in excess of $500 million in value for millions of middle-class investors.
I think it would be fair to say that market timing is 70 percent of what it takes to become a successful long-term stock investor, The peer-reviewed research that I co-authored with Wade Pfau shows that. Yet we still have people today saying that there might be some mystical, magical alternate universe where market timing is not always 100 percent required for every investor. Huh? What the f? Opening up the entire internet to honest posting changes everything, It is a huge advance. It OBVIOUSLY is worth a lot more than $500 million to our nation if someone works up the courage to do that, That’s why we have laws ensuring that, when we see the sort of behavior we have seen from you Goons over the past 20 years, compensation is paid to the person at whom that abuse was directed. The laws that ensure that are good and necessary laws. They don’t make the person at whom the abuse was directed whole. Nothing could do that. But they take a stab at it. Which is probably the best that can be done in this imperfect world of ours.
So I support those laws. And I think that it would be fair to say that the people who adopted those laws are basically a good and smart people. So they are going to see that those laws are enforced in the days following the next price crash, when we will all be able to see up close and personal what it means for our country to have a pure Get Rich Quick/Buy and-Hold investing “strategy” promoted morning, noon and night for 40 years after the peer-reviewed research showed that there is precisely zero chance that it could ever work out for even a single long-term investor.
My sincere take.
Rob
A guy with $6 million that is retired will have a 100% stock allocation? Really? The fact is that this person will have plenty of money in cash and bonds and will easily ride out and drop and the will rebalance and ride the wave back up yet again. The guy with the $6 million can buy his retirement house now. Can you buy the same house now with you $500 million fantasy? What is you and the $6 million guy needed long term care in 5 years. Who is able to cover that bill? Not hard to figure that one out.
Say that an angel came down from heaven and told me that she can see into the future and that I am not going to get the $500 million. I still wouldn’t be able to tell my friends that I believe that the Greaney retirement study contains a valuation adjustment.
I believe that I will collect the $500 million in the days following the next price crash. But that’s not really the point. I am not doing this primarily for the money. I am doing it because I cannot not do it. I care about the people affected by it. The $500 million is a nice extra. I earned it. I deserve it. I have no intention of turning it down. But the feeling that comes from helping millions of people counts for even more in my assessment. And the feeling that comes from not hurting millions of people counts for a lot too. Those two feelings, one a good feeling and one a bad feeling, are the drivers here.
Does that help at all?
Rob
You haven’t earned anything. Just stating, doesn’t make it true. Someone would have had to of agreed to pay you.
Are you okay with having the matter go to a jury, Anonymous. We have seen that 10 percent of all of the board communities see my stuff as the best stuff on stock investing that they have ever seen. When everyone has lost a large percentage of their life savings in the next Buy-and-Hold Crisis, they are going to look at those comments made in earlier days and regret that they were never able to hear about the realities revealed by the peer-reviewed research. Those are the people who will be sitting on juries. I do not believe that most of them or perhaps all of them will conclude at that time that they would have HAPPILY paid something to have heard about the realities at a time when doing so could have saved them from experiencing the downside of following a pure Get Rich Quick.Buy-and-Hold approach.
But we’ll see, you know? I don’t have the ability to post dishonestly re the Greaney retirement study in any event. a lot of the people who posted at the old Retire Early board had become friends of mine over the years.
Rob
What jury? What 10%? Neither exist. Let’s say we go another 5 years, your 68 and there still isn’t one dime paid out. By then it is unlikely you can or will get a job. What then?
Say that the Planet Earth is hit by a giant meteor and we are all killed. What then?
I have to live my life based on what is in front of me. What is in front of me is 40 years of peer-reviewed research showing that market timing is always required for investors who want to keep their risk profile constant. So I tell my friends that that’s what I believe they should do.
It’s you Goons who have done the weird thing. You are the ones engaging in criminal behavior to ensure that investors who want to hear about the research-backed realities cannot do so. If I say that I believe that Greaney’s study contains a valuation adjustment, then I become a Goon too and I go to prison as well. Um — thanks but not thanks, you know? Not this boy.
Rob
Rob
I am a long-time casual observer going back to your days posting on Bogleheads before your ban. Is there a plan B if the $500 million settlement doesn’t come through? It seems you have been at this for decades with little to show for it.
-CO
Rob
I am a long-time casual observer going back to your days posting on Bogleheads before your ban. Is there a plan B if the $500 million settlement doesn’t come through? It seems you have been at this for decades with little to show for it.
-CO
I’ve got an entire book to show for it, Casual. It’s not finished. But its close. I expect to finish in June.
I believe that it is the most important book ever published in the personal finance field. I worked with Wade Pfau for 16 months on research showing the superiority of Valuation-Informed Indexing over Buy-and-Hold. We showed that by adding market timing to the mix an investor can reduce the risk of stock investing by nearly 70 percent and without reducing his return one whit. That’s freakin’ amazing. If you are aware of any other research that stands to help as many people in so bog a way as the Bennett/Pfau research, I would sure like to hear about it.
That’s how I measure success. How many people have I helped? How much have I helped them. Shiller has described the intellectual leap from the finding that short-term price changes are unpredictable (University of Chicago Economics Professor Eugene Fama showed this in research published in the 1960s) to the Buy-and-Hold belief that the market sets prices properly as “one of the most remarkable errors in the history of economics.” Can you imagine how much better life will be for the people living in the United States when we work up the courage to overcome you Goons and get the word out to every investor alive about what the research says about how stock investing really works? We are on the threshold of achieving some amazing advances.
Once the entire internet is opened to honest posting re the peer-reviewed research, the money will follow. All that the fact that I haven’t earned a dime in 20 years shows is that you Goons appreciate how important honest posting re the peer-reviewed research really is. If you didn’t see how important it is to get the word out, you wouldn’t fight so hard to stop it from happening. There is no other possible explanation for your behavior. I mean, come on.
Rob