Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
People are not able to hear both sides on this website. Also, you didn’t answer as to who decides what is honest and you also didn’t answer as to who decides what the research really says. You make all the decisions Here, so shouldn’t others decide so for their own boards?
People should make the decisions that they need to make to run their own boards. I certainly agree with that. But, if a board owner publishes rules for participation in which he declares “I will have zero tolerance for death threats,” then he should evidnece zero tolerance for death threats in his site administration decisions. If he doesn’t, he creates an unjustified confidence in the minds of the people who visit his site re the things said by the people advancing the death threats. One of the people making use of death threats states that “the data shows that a 4 percent withdrawal rate is always 100 percent safe” and people think that the claim is a valid one because they do not see other community members challenging it. But of course there would be LOTS of people challenging it if not for the death threats.
Abusive behavior affects what is said. It is only Buy-and-Holders who we have seen engage in abusive behavior. Why is that? It’s because they are desperate. They got there first. They put forward this crazy idea that market timing is not always required and built an entire industry around it. Then this Shiller fellow published Nobel-prize-winning research showing that valuations affect long-term returns. What to do? The sensible thing to do is to rewrite all the books that were written in the Buy-and-Hold Era to reflect the findings of the new research. That’s not what happended. We still have people today saying that the safe withdrawal rate is the same number at all valuation levels In their desperation, the Buy-and-Holders want to suppress discussion of the how-to implications of the last 41 years of peer-reviewed research. I think that is a very, very, very bad idea, I think we all need to know what the research says. So I “cross” the Buy-and-Holders by pointing out to people that the Buy-and-Hold retirement studies lack a valuation adjustment.
As a society, we are of two minds re these questions. We very strongly believe that people should be permitted to post honestly. That’s why every site has rules prohibiting the tactics that the Buy-and-Holders have employed to suppress discussion of the research. But we also love love, love us some Get Rich Quick investing advice, We want to believe that those numbers on our portflio statements are real. We want something for nothing and, if it means causing an economic crisis to pretend for a time that the irrational exuberance gains that we created have some lasting economic significance, then we can live with that.
But we haven’t ecperienced the inevitable economic crisis yet, you know? We are like the guy who has been eating sugars and carbs for decades but hasnm’t yet had a heart attack. That guy often tries to change his earing habits after he has his heart attack. I believe that the next economic crisis will help us to see the merit of permitting honest posting re the peer-reviewed research in the stock investing realm. These economic crises that always follow times in which Buy-and-Hold “strategies” are heavily promoted are now optional. We now have the peer-reviewed research needed to help people think more clearly about these matters and enjoy far higher returns earned by taking on dramatically redused risk. I think we are on the verge of making a decision as a society to start eating better.
We’ll see. It’s sure not going to happen if the 10 percent of us who believe that Shiller’s Nobel-prize0-winning research is legitimate research fail to point out the dangers of the Buy-and-Hold “strategy. I sincerely believe that the Greaney retirement study lacks an adjustment for the valuation level that applies on the day the retirement begins. So that’s what I say when the subject of safe withdrawal rates turnd up on discussion boards and blogs at which I participate.
My best and warmest wishes to you.
Rob
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