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 gave you simple objective facts about Wade’s paper. As usual, you replied with “I believe” over and over. What amazes me about you (and to be honest, an alarmingly large part of the US population today) is that they act according to their unfounded beliefs, and ignore objective facts. Going by your beliefs instead of facts has cost you so much. It’s no exaggeration to say it ruined your life.
Now tell me again how Greaney’s 20 year old study was the worst thing that ever happened. Or so you believe.
I believe that the posting of the Greaney study was a positive. I’ve said that on numerous occasions. I gave the Greaney study a five-star review on Soapbox.com. There were many people at the Retire Early board who would have used withdrawal rates of higher than 4 percent had Greaney not posted his study. He helped move people’s thinking in the right direction.
I also believe that he should have corrected the error in the study (it lacks a valuation adjustment) when it was pointed out to him. The cover-up of the error is in the process of causing an ocean of human misery. It is horrifying to think about what will happen to millions of middle-class investors during the next Buy-and-Hold Crisis in the event that stocks continue to perfrom in the future somewhat as they have always performed in the past. We have seen thousands of our fellow community members express a desire that honest posting be permitted at every site. I think they were right to do so.
Rob
Greaney is wrong? When did he go broke? When did he lose his house? When did his wife divorce him?
Um….
Well, if he has been wrong for 20 years, he must have hit the bottom, right?
The “idea” that price discipline/market timing is not 100 percent required for every stock investor has been wrong for as far back as there has been a stock market. There’s been Nobel-prize-winning research showing this only since 1981. But it’s always been so.
If we were all thinking clearly, we would all be grateful that we were living at a time when the most important piece of the stock investing puzzle had been snapped into place and we would be working hard at every discussion board and blog to bury the discredited Buy-and-Hold/Get Rich Quick stuff 30 feet in the ground, where it could do no further harm to humans and other living things.
My sincere take.
Rob
So Greaney is broke, divorced and lost his home, right? When did this happen?
Greaney got an important number wrong in a retirement study posted at his web site and then led a 20-year cover-up of the error. That’s 500 times worse than being broke or divorced or losing his home.
Fair enough?
Rob
I am thinking it is the broke/divorced/homeless guy that is wrong and not Greaney.
Do you attribute your failed retirement to a “get rich quick” attitude? I believe you were counting on writing income that never came, correct?
I am thinking it is the broke/divorced/homeless guy that is wrong and not Greaney.
We disagree, Anonymous.
I still wish you all good things, you know?
Rob
Do you attribute your failed retirement to a “get rich quick” attitude? I believe you were counting on writing income that never came, correct?
No. The attitude that I directed to putting together my early retirement plan was the farthest thing from a Get Rich Quick attitude than one could possibly get. It was a belt-and-suspenders plan. I wanted to be sure that it would work. Then I wanted to be sure that I was sure. Then I wanted to be sure that I was sure that I was sure. I owed that to my wife and to my two boys. There was a lot of blood, sweat and tears that went into the development of my plan. Years of it. I had to have bookshelves put in to handle all of the binders of materials that I put together over the years of planning it out.
It was all that planning and relentless thinking about every detail of the plan that caused me to see the error in the Greaney study. Something that I really liked about the Greaney web site (I was ecstatic on the day that I discovered it) was his focus on the safe-withdrawal-rate concept. Looking at the worst-case scenario is the analytically correct way to plan an early retirement, in my assessment. It’s not possible to ever get to “100 percent safe,” the term that Greaney uses. But it is possible to identify the withdrawal rate that is 95 percent safe, presuming that stocks continue to perform in the future at least somewhat as they always have in the past. I loved it that he put so much focus on that question. Because it’s a dangerous thing to hand in a resignation from a high-paying job. I think people should work the numbers before they do that. I don’t have a problem with people going with a withdrawal rate that is less than 95 percent safe. That’s an individual judgment call. But I strongly believe that people should work the numbers before handing in a resgination to inform themselves of the realities. I loved it that Greaney was encouraging them to do that.
I had been thinking about the safe withdrawal rate long before I discovered Greaney’s site. Something about the idea that the safe withdrawal rate is the same number at all times didn’t sit right with me. I couldn’t put my finger on the problem until I read Bogle’s book ‘Common Sense on Mutual Funds.” Bogle said that Reverrsion to the Mean is an “Iron Law” of stock investing, If that’s so, there is zero chance that the safe withdrawal rate is the same number at all times. There obviously is more Reversion to the Mean when prices are high than when they are at fair-value levels. So the safe withdrawal rate is obviously lower when prices are high. It was Bogle who persuaded me that the conventional safe-withdrawal-rate studies are in error, not Shiller.
Yes, my plan called for $20,000 of annual ncome from my writing business. That was a super lowball number. I had earned $15,000 in six months from my Soapbox report (“Secrets of Retiring Early”) while holding down a full-time job. Once I was free to write reports like crazy, I obviously could earn a lot more. So the plan was super safe. The fact that I am still here 20 years later despite never earning that $20,000 shows how super safe the plan was. There were a good number of personal finance bloggers who were less popular than I was who became millionaires in those days. My “mistake” was in telling the truth about safe withdrawal rates. That was a powerful anti-marketing engine. People used to be pulled unto my site by the saving stuff and then pushed back out by their reaction to the investing stuff. I didn’t just earn zero from the investing stuff. I earned a huge negative number from it. The research-based truth about how stock investing works is not even a tiny bit popular (but 10 percent of the population of investors loves it to death).
The plan would have worked easily if it hadn’t been for Greaney’s abusive and in some cases criminal behavior. No, the truth about stock investing is not popular at times of insanely high stock prices. But 10 percent of the population of investors loves hearing about it. And another 80 percent is okay with the thought of being exposed to it and can be brought around with regular reiteration of the message. Only 10 percent of investors are out-and-out Goons who advance death threats and engage in extortion when they see people being exposed to dicussions of the last 41 years of peer-reviewed research. Those are the people who have kept me from earning many millions by being the lead person on getting this important message spread far and wide on the internet.
But the Goons couldn’t have gotten away with it without the complacency of a lot of the Normals! There was no way that any reasonable person could have known in advance that the site administrator of the Motley Fool site would have permitted Greaney to continue to post there after he had advanced death threats. That is just too crazy. And of course we have seen hundreds of cases of behavior like that. There was nothing even a tiny bit Get Rich Quick in my belief that the laws of the United States would be applied in the investment advice field in the same manner as they are applied in every other field of human endeavor.
I still believe that we will all see the day when that will indeed happen (after the next Buy-and-Hold Crisis), Then I will collect the millions that I would have collected at an earlier time had the investing field not gone so bonkers in the Buy-and-Hold Era. No one could have possibly anticipated what we have seen. My plan was sound. It is the Buy-and-Hold stuff (no market timing now!) that is infected at the root with Get Rich Quick thinking. In the real world, price discipline (market timing!) is 100 percent required. As the last 41 years of peer-reviewed research clearly shows.
My best wishes to you.
Rob
“ It is horrifying to think about what will happen to millions of middle-class investors during the next Buy-and-Hold Crisis in the event that stocks continue to perfrom in the future somewhat as they have always performed in the past. ”
Are you worried about a crash in which someone won’t have a job? Are you worried that they might deplete their savings? Are you worried that their wife might divorce them for not bringing in money? Are you worried they might lose their house?
I have never seen this happen to any buy and hold person. Only to this one market timing guy……..what was his name?
If you look at what happened in earlier Buy-and-Hold Crises, you will see that millions of Buy-and-Holders suffer huge setbacks every time we suffer another Buy-and-Hold Crisis. It’s not possible to imagine any other way it could turn out. Buy-and-Holders do not encourage market timing/price discipline. Without market timing, stock prices are sooner or later going to drift so high that we see a crash and an economic crisis. The trick is to always, always, always encourage market timing/price discipline. Irrational exuberance is a negative.
My sincere take.
Rob
You are the one that has already suffered a huge setback, yet here you are lecturing others that have been successful. Further, every prediction you have had has failed. We are all fine. Fix your own problems.
“ Yes, my plan called for $20,000 of annual ncome from my writing business. That was a super lowball number. I had earned $15,000 in six months from my Soapbox report (“Secrets of Retiring Early”) while holding down a full-time job. Once I was free to write reports like crazy, I obviously could earn a lot more. So the plan was super safe. The fact that I am still here 20 years later despite never earning that $20,000 shows how super safe the plan was.”
No that is not super safe. Perhaps it would have been safer if you had a long history of writing many reports that all sold that amount on a regular basis. You never wrote and tried to sell another report after that one, as far as we know. Further, if this was your plan and you were not generating this income after the expected period of time, why did you not go back to work? You admitted that you were able to write the first report while, working, so you could have taken a job and continued writing reports until getting back on track. Your story does not make sense.
You are the one that has already suffered a huge setback, yet here you are lecturing others that have been successful. Further, every prediction you have had has failed. We are all fine. Fix your own problems.
The thing that would fix all of my problems in ten mintutes is for us all to pull together as a nation of people to see that every discussion board and blog on the internet is opened to honest posting re the last 41 years of peer-reviewed research in this field, without a single exception. I have advocated that. On numerous occasions. So I have already done what I can do. When it happerns is out of my control.
My best wishes to you.
Rob
“ Yes, my plan called for $20,000 of annual ncome from my writing business. That was a super lowball number. I had earned $15,000 in six months from my Soapbox report (“Secrets of Retiring Early”) while holding down a full-time job. Once I was free to write reports like crazy, I obviously could earn a lot more. So the plan was super safe. The fact that I am still here 20 years later despite never earning that $20,000 shows how super safe the plan was.”
No that is not super safe. Perhaps it would have been safer if you had a long history of writing many reports that all sold that amount on a regular basis. You never wrote and tried to sell another report after that one, as far as we know. Further, if this was your plan and you were not generating this income after the expected period of time, why did you not go back to work? You admitted that you were able to write the first report while, working, so you could have taken a job and continued writing reports until getting back on track. Your story does not make sense.
It makes sense. I had been writing about the Passion Saving concept for three years before I wrote the Secrets report and my work had been hugely successful. Even Greaney was on board. He wrote a note to be read by newcomers to the Retire Early board urging them to read my stuff before they did anything else because my stuff was “seminal.” So it wasn’t like there was any question that my further work was going to bring in lots of money. There’s a lot more money to be made selling a successful book than selling a successful report. So, when Soapbox shut down, I turned to developing a book expanding on that material. Judging by the reactions I saw from people who read the book, I would have made millions from the book had you Goons not junped in to destroy me. There were people who were pleasing with you to permit me to post just about saving issues. But you understood that, any popularity that I gained writing about saving strategies would come back to bite you in that I was undoubtedly going to post honestly about stock investing as well and then Greaney’s study (and Buy-and-Hold!) would go down. So no dice.
The only problem that I have ever experienced is the insane Campaign of Terror that you Goons have led against any board or blog community that permitted honest posting re the last 41 years of peer-reviewed research in this field. You believe (properly so) that to permit honest posting re the last 41 years of peer-reviewed research will be the beginning of the end for Get Rich Quick/Buy-and-Hold strategies. I agree. The difference is that I see that as a very good thing and you see it as a very bad thing. We have been working at cross purposes for 20 years now.
It would be crazy for me to take on some other form of work when I have not yet opened every discussion board and blog on the internet to honest posting re the last 41 years of peer-reviewed research, without a single exception. This is the most important public policy issue facing the United States today. If stocks continue to perform in the future anything at all as they have always performed in the past, we are looking ahead to millions of failed retirements, hundreds of thousands of business failures, millions of people losijng their jobs, a significant increase in political tensions. You think I am going to find a journalistic enterprise with more potential than this one? In what century?
I have indicated that I may take up employment after I finish my book. That would make sense because, when the next Buy-and-Hold Crisis hit, I would have the definitive statement about what caused it already in hand and I could quickly shift again to doing the more important (by a factor of 500 ) work. Outside of that, though, thanks but not thanks. I love my country. I am going to continue to do everything in my power to open every discussion board and blog to honest posting re the past 41 years of peer-reviewed research in this field, without a single exception. I am not even able to imagine any possible downside.
I believe that the people of this country are fundamentally good. We are not perfect. But we are not Goons, you know? If we were all Goons, we would not have laws in place protecting us from the tactics employed by the small pervcentage of us who are Goons. I believe that we are going to work through this thing and that we will from that time forward all live lives better and richer and fuller than we ever imagined possible back in the Buy-and-Hold Era. We’ll see, you know?
My best and warmest wishes to you and yours in any event.
Rob
No one has blocked you from writing any new reports or new books. No one has blocked you from selling anything. Instead, as you have admitted, you have failed to finish anything to put up for sale. Look at how many years you have been working on your current book and how many missed deadlines you have had. There has also been nothing to keep you from getting a job.
It is by talking things over with other people that we develop ideas. I wouldn’t even be working on a book today if I hadn’t worked up the courage to put forward my famous post pointing out the error in the Greaney study on the morning of May 13, 2002. That started the ball rolling. Then we had thousands of our fellow community members express the view that I had launched the most exciting discussion in the history of the Retire Early board. And we had Wade Pfau, an academic researcher, become so excited about the Valuation-Informed Indexing concept that he elected to devote 16 months of his life to researching my investing ideas and concluding that: “Yes, Virginia, Valuation-Informed Indexing works!” The key to overcoming Buy-and-Hold/Get Rich Quick at every stage of the process has been getting discussions started on the dangers of going with a strategy that does not emphasize the importance of market timing.
If we all want to live better and fuller and richer lives than we ever imagined possible in the Buy-and-Hold days, we need to open every discussion board and blog to honest posting re the last 41 years of peer-reviewed research in this field, without a single exception. That’s the answer, Anonymous. I’m sure of it. Greaney has not corrected the error in his study to this day. Do you think he is just going to wake up one morning and say “Gee, I feel like I should start being honest about what the researfch says about safe withdrawal rates today”? It’s not going to happen. We need as a nation of people to just go ahead and have the discussions about how stock investing works in the real world that we need to have without first obtaining Greaney’s approval. Greaney doesn’t want to acknowledge the error. No way, no how. Nothing could be more clear.
My sincere take.
We learn by talking things over, We need to be talking over the far-reaching how-to implications of Shiller’s amazing, Nobel-prize-winning research at every site on the internet, without a single exception, That’s the future of investment analysis. I mean, come on.
Rob