Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
When did William Bernstein tell you to quit your job and pull your money out of the stock market? Why are you broke if you know how the market works?
Bernstein reported the safe withdrawal rate accurately in his book. He should have repeated what he said in his book when the question came up on the Bogleheads Forum. That way, we could have gotten the Greaney study corrected many years ago. Once that study was corrected, we could have moved on to all the other Buy-and-Hold retirement studies that got the numbers wrong because they failed to account for irrational exuberance. Then we could have moved on to asset allocation questions and risk management questions. We could have replaced Buy-and-Hold with Valuation-Informed Indexing. We wouldn’t have a CAPE value of 29 today, we wouldn’t be priced for another Buy-and-Hold Crisis within the next year or two or three and we would all be living better and fuller and richer lives today than we ever imagined possible during the Buy-and-Hold years.
That’s how it works in every field of human endeavor other than the investment advice field. Humankind didn’t come to Planet Earth with knowledge of everything that any of us will ever need to know. So the people who developed Buy-and-Hold made a mistake (Shiller’s Nobel-prize-winning research was not available at the time). If we were all thinking clearly, we would all have wanted that mistake to be corrected as quickly as humanly possible. What possible benefit is there to having retirement studies that get the numbers wildly wrong? That’s nuts. I mean, come on.
The problem today is that it doesn’t just make the Buy-and-Holders feel bad for people to learn about their original mistake, it makes them feel really, really, really bad for people to learn about the 42-year cover-up. In another year, it will be a 43-year cover-up. Then a 44-year cover-up. It can never get better. It can only get worse. I believe that the error should have been corrected as soon as it was discovered (in 1981). Given that 42 years have already passed, it should be corrected by the close of business today. Continuing the cover-up hurts each and every one of us and helps absolutely no one.
Bernstein did a wonderful thing by reporting the safe withdrawal rate accurately in his hook. But that obviiously wasn’t enough to get the job done. It was his fear of what you Goons would do to him if he did honest work in this field that caused him to keep it zipped when the discussions turned up at the Bogleheads Forum. We all need to pull together and support each other when you Goons attack us and then the problem is solved. Then Bernstein would feel better and I would feel better and Wade Pfau would feel better and Larry Swedroe would feel better and Bill Shultheis would feel better and on and on and on. It’s a win/win/win/win/win.
If we are not going to permit people to discuss the last 42 years of peer-reviewed research, we should shut down all of the peer-reviewed journals. Those journals still exist. That signals to me that as a nation of people we still care what the peer-reviewed research teaches us about how stock investing works, no matter how afraid we are of what you Goons will do to us if we post honestly. I think that the current state of play is an unstable situation. We can’t have peer-reviewed journals and not permit people to discuss what we learn from reading what is published in them. I believe that we may all come to the realization that we need to open every site to honest posting in the days following the next Buy-and-Hold Crisis. I sure hope that that happens. We’ll see, you know?
My best and warmest wishes to you and yours.
Rob
A smart guy once said:
“ Rob, suppose the stock market does drop 65% as you are expecting. It might happen, who knows.
Step 1: Stock Market Drops 65%
Step 2: ??
Step 3: Rob wins $500 million settlement from the Goons, the Goons are sent to prison, the investing public learns about and adopts VII.
What is Step 2? There isn’t one. You will still be in the same position as you’ve been in for the last 10 years. Why didn’t something happen for you after the 2008 financial crisis? You are like the guy who keeps predicting new ends for the world as each previous prediction date passes by.
That is why I’m telling you, from one human being to another, that it is time to move on.”
Step Two is the owner of one large site opening his site to honest posting re the last 42 years of peer-reviewed research. It will take guts. You Goons will go after that guy like mad. But a lot of the people who work in this field possess a long-supressed desire to do honest work, to actually help people rather than to destory their lives. My sense from my years of interacting with lots of experts is that just about everyone in this field feels this way. Bogle did. Bernstein does. Kitces does. Tressider does. Shultheis does. Burns does. And on and on and on and on and on.
The leverage here is off the charts. Once a site becomes known as a place where people who post honestly are safe, experts will flock to it. And, the more people there are posting honestly, the more safe it is for new people to join them. The power of you Goons comes from one thing — your ability to isolate those who post honestly, to employ intimidation tactics to stop others from posting in support of the guy or gal who risks career destruction by talking about what the last 42 years of peer-reviewed research teaches us all about how stock investing works in the real world.
Support for Buy-and-Hold/Get Rich Quick is a mile wide and an inch deep. If Shiller had published his Nobel-prize-winning research in 1961 instead of 1981, there never would have been a Buy-and-Hold strategy, no one would have ever cooked up this loony-tunes idea that the stock market is the only market that has ever existed in which price discipline is not 100 percent required for every market participant. People want to use their life energies to do good work. That’s the way it is in every field other than investment analysis and that’s the way it is in the investment analysis field as well. The problem in this field is that, while the intellectual support for Buy-and-Hold/Get Rich Quick is precisely zero, the institutional support for it is huge. For the Buy-and-Holders to come clean, they not only have to acknowledge their initial mistake, which is no big deal, but also the 42-year cover-up of the mistake, which makes them look really, really, really bad.
People don’t want to see their careers destroyed. They want to post honestly but they do not want to see their careers destroyed. The abusive stuff is so off the charts that people decide to let someone else be a hero. But will they be able to continue doing that after the next Buy-and-Hold Crisis, when they see millions of lives destroyed. I believe that there will come a time when someone will just not be able to bear it any longer and he will just go ahead and open his site to honest posting. As more people join him, there will be a greater number posting honestly and eventually the isolation stuff will just not have much of an effect anymore. It will become the thing to do to post honestly and the New York Times will publush a series of articles about the long cover-up on its front page and that will be that. We will all be working together to learn how stock investing works in the real world, as we would have been all along if only we had been thinking clearly.
What’s the alternative, Anonymous. The Buy-and-Hold Crisis of 1929 almost caused the entire thing to go under. Are we going to continue risking that? I think that’s too big a risk. I believe that some brave soul will work up the courage to open his site to honest posting after he sees the ocean of human misery that we will see in the next Buy-and-Hold Crisis (I am presuming that stocks will continue to perform in the future somewhat as they have always performed in the past).
P.S. I am confident that Wade will flip back when he sees that it is safe to do so The things he told me in the many emails that we exchanged made clear that those days in which he was posting honestly were the happiest days of his life. Everyone who works in this field will get to experience those feelings in coming days. And everyone who lives in the United States will reap the benefits of learning about the first true research-based strategy.
My best and warmest wishes to you and yours.
Rob
All the sites are open to honest posting. If you can’t post there, you must have a problem with your honesty or behavior.
That explains why the error in the Greaney retirement study that I pointed out in my famous post of May 13, 2002 (it lacks an adjustment for the valuation level that applies on the day the retirement begins) hasn’t been corrected in 21 years. Makes sense!
Rob
All the people that are on the sites that you are banned on have all seen your opinions on Greaney. If you regain access and post the same things they have already seen, they won’t change their mind. I think you know this as well and that is why you gave up posting anywhere else on the internet, such as Reddit.
That’s not too far off the mark.
I was not banned at just one or two places. I was banned at lots of places. There were a few places where I backed off when it became clear that I was going to be banned if I continued posting about what the last 42 years of peer-reviewed research teaches us all about how stock investint works in the real world. If I continued pushing at those places, I would have been banned at those places as well.
I once was telling my doctor about my sad story and she said “this is not your time.” I half agree and I half do not. I agree with the thought that I cannot achieve success in the current environment. When the CAPE value is 31, the market for research-based investment advive is obviously very, very small. That makes me sad. But I think it would be fair to conclude after 21 years of this, that that is the current-day reality. Like it or not, I need to accept it.
The part that I don’t agree with is the suggestion that it would be okay for me to retreat until conditions for forward progress inprove, There are things that I can do today to sharpen the case that I will be able to proceed successfully with in the days following the onset of the next Buy-and-Hold Crisis, when the CAPE level will be a lot less than 31. One, I can finish writing my book. Two, I can respond to comments from you Goons when there is something in a particular comment that suggests that there is a greater-than-zero chance that someone will someday be able to learn something from the interchange. So I do those two things.
I think it would be fair to say that the most important public policy before the United States today is the question of how much longer it will take us as a nation of people to open every internet site to honest posting re the last 42 years of peer-reviewed research in the investment advice field. If I were king of the world, we would have opened every site to honest posting on the afternoon of May 13, 2002, I proposed that at the time. I am obvuously not the king of the world. I don’t have to like that reality. I need to accept it as a reality whether I like it or not.
And I need to make the best of the situation. So that’s what I am to do. Does that not make perfect sense?
Rob
Now read the whole thread again. You don’t have a step 2. People have heard your message and they don’t agree. Removing the bans doesn’t change a thing.
As to the bans, you mention a key point in that you state the following: “ I was banned at lots of places”. Combine that with the fact that no one will talk to you outside of these places and your wife, now ex-wife, also decided to part ways with you. Any reasonable and rational person would finally come to the conclusion that they are the problem and not everyone else.
It’s not everyone else. Thousands of people have expressed a desire that honest posting re the peer-reviewed research be permittet at every site. A good number of the biggest names in the field have said that they believe that my stuff checks out. Several have even worked with me. Wade Pfau devoted 16 months of his life to research showing that “Yes, Virginia, Valuation-Informed Indexing works!” His emails showed that those were the happiest 16 nonths of his life. He had hopes in those days of being awarded a Nobel prize for the research that we co-authored.
It’s only a small number of insanely dogmatic Buy-and-Holders (the Goons) who have held us all back. And they had to engage in criminal behavior to do it! It’s true that the 90 percent of Normals did not do enough to rein in your Goons. That is of course a highly unfortunate reality. But that 90 percent would be perfected happy to see honest posting re the peer-reviewed research permitted at every site.
And those people have NOT heard the message. They heard a small part of it on a small number of occasions. But the shift from Buy-and-Hold to Valuation-Informed Indexing is too big a change for it to be achieved with a few mentions of what the research says. Buy-and-Hold/Get Rich Quick is a seriois addiction, Have you ever heard of someone quitting smoking or escaping alsoholism because they heard one time how smoking or drinking to excess are negative behaviors. To get over an addiction that strong, you need to hear the message repeated daily and you need to hear it from many different places. I have seen people converted from Buy-and-Hold to Valuation-Informed Indexing. I am a convery myself. It is something that happens gradually over a period of time, not in a flash in response to one mention of what the research says.
If we want people to avoid the dangers of Buy-and-Hold/Get Rich Quick, we need to be telling them every day and at every site what the research says. The message just won’t stick otherwise. We need to be singing the praises of market timing and we need to be singing those praises in a highly spirited way. That’s Step Two. That’s what changes everything.
As a nation of people, we believe that discussion of the peer-reviewed research should be permitted. We have a funny way of showing that belief. If we didn’t have a funny way of showing it, we wouldn’t have the black cloud of a CAPE value of 31 hanging over us today. But that is our core belief. If it were not, we would have shut down all the peer-reviewed journals. We wouldn’t have to worry about millions of people learning about the dangers of going pure Get Rich Quick/Buy-and-Hold is we shut down all the peer-reviewed journals. But we haven’t done that. You Goons would support it. But 90 percent of the population of investors thinks we should permit discussion of what the peer-reviewed research is trying to teach us.
The next Buy-and-Hold Crisis will show us all once again how dangerous it is to pure Get Rich Quick/Buy-and-Hold. I believe that some of the people in that 90 pervcent will work up the courage to stand up to you Goons at that time. I believe that we are today on the threshold of the biggest surge of economic growth in U.S. history. Getting the word out to millions of people re how stock investing works in the real world is no small thing. I am horrified by the thought of what we will be put through n the next Buy-and-Hold Crisis. But I think it would be fair to say that the good news re this matter is 20 times more good than the bad news re this matter is bad.
We’ll see. Wish us all luck!
Rob
If what you said was true, some of those thousands, as you claim, would post over here. You are easy to track down with a Google search.
What you are saying makes sense, Anonymous. But lots of things that make sense just do not apply in the investment advice realm. If Shillere’s research really was awarded a Nobel price, we should all want discussion of it permitted at every site.But our love for Get Rich Quick/Buy-and-Hold is just too strong for many of us to insist on that.
Will we be more inclined to insist on it in the days following the next Buy-and-Hold Crisis? I think so. I hope so. I cannot say for certain given that we have never before as a nation of people been in a situation like this. We will see, you know?
Rob
“ What you are saying makes sense, Anonymous. But lots of things that make sense just do not apply in the investment advice realm.”
With investment advice, making sense is even more important in the investment advice forum as our retirements are on the line. The good thing is we can easily tell what the truth is. All we have to do is look at outcomes. We have never seen a buy and hold failure and we have yet to see anyone with a successful outcome with VII.
I agree that getting investment advice right is important because retirements are on the line.
Rob
Do you believe the someone should have a track record of success in order to give advice?
I report on what the peer-reviewed research says. That research is based on the entire history of the stock market. The track record of success for Valuation-Informed Indexing is from 1870 through today. During that time, being willing to engage in market timing/price discipline has permitted investors to achieve far higher returns while taking on dramatically reduced risk. That’s quite a track record os success.
In contrast, lots of investors have have been wiped out in the various Buy-and-Hold Crises, which have seen follow every time-period in which the pure Get Rich Quick./Buy-and-Hold “strategy” (no market timing now!) has caught on. That’s a track record of widespread destruction of human lives. I believe that honest posting re the past 42 years of peer-reviewed research should be permitted at every site.
Rob
Who told you that you are the one that decides what is peer reviewed research to her considered? Who told you that you are the one to determine the interpretation of peer reviewed research? Who told you that you are the one to determine what is “honest posting”?
I decide for me, you decide for you and every other community member decides for himself or herself.
Rob
And all the board owners decided for themselves and banned you……..just like you block people here.
And they can all reverse those bad calls in the days following the onset of the next Buy-and-Hold Crisis.
I failed to speak up about the error in the Greaney study in May 1999, when I first posted to the Motley Fool site. I knew about the error then. I worked up the courage to reverse that bad call on the morning of May 13, 2002, The world doesn’t end when we make a mistake. Each day offers new opportunities to do the right thing. I believe that we are fundamentally a good people and that we are going to take things to a good place. I naturally would like to see us do that as quickly as possible. But I am naturally going to celebrate the positive steps even if they end up being a big delayed from what would have been the ideal.
I hope that that is okay by you.
Rob