A Rich Life

The Old Ideas on Saving & Investing Don't Work -- Here's What Does

Buy-and-Hold Goon to Rob: “There Is No Job More Important Than My Job to Open Up the Internet to Honest Posting About Microwave Ovens in Tesla’s.”

by

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

There is no job more important that my job to open up the internet to honest posting about microwave ovens in Tesla’s.

My claim is just as valid as your claim.

Okay, Anonymous,

I do wish you all good things, in any event.

Rob

 

Comments

  2. He’s not saying that stocks are an equally good buy at all times. He’s saying that stocks are a better buy when prices are low than they are when prices are high. That’s why market timing is so important.

    “Keep buying it through thick and thin,” he said. “Especially through thin.”

    “Buffett explained that it can be incredibly tempting to sell when the market sells and to buy when the market buys. But doing so means not getting the best deal for your dollar.

    ““When you see bad headlines in newspapers, we say, ‘Well maybe I should skip a year.’ Just keep buying it,” he said.”

    Rob

  3. He is anti-timing. He says to “keep buying”. He is always buying. He is wealthy. You don’t buy and you are broke.

  4. He’s not always buying. I have seen articles reporting on how Buffett reduced his ownership of stocks because prices got too high.

    He is saying in this article that investors should not sell when prices drop. Which is of course precisely correct. Why do many investors feel that temptation to sell when prices are good. It’s the Buy-and-Hold minset that prompts them to feel that way. Buy-and-Holders say that stock prices reflect economic realities. If that were so, price drops would be a sign that something bad has happened. If all that a price drop means is that irrational exuberance has gone “Poof!”, that’s a reason to buy, not a reason to sell. That’s what Buffett is saying here. He says that investors should buy “especially through thin.” That means that they should buy MORE through thin. That’s market timing. Not short-term market timing. The kind of market timing that always works.

    Buffett is a VALUE investor. Sound familiar?

    I think that Buffett would agree with Bernstein that the safe withdrawal rate dropped to 2 percent at the top of the bubble. I think he would agree with Bogle that there are circumstances in which market timing can work. I think he would agree with Pfau that: “Yes, Virginia, Valuation-Informed Indexing works!”

    The 21-year-long Campaign of Terror againat our board and blog communities led by you Goons is bad news.

    Rob

  5. You can actually look at the purchases his company makes. He continues to buy in the markets that you say CAPE is too high. He never promotes market timing.

    Speaking of Bernstein, he has released the second edition of his Four Pillars book. Read it. He holds his allocation stable. He is not a market timer either.

    Both Buffet and Bernstein continue to say that Rob Bennett is wrong and has always been wrong.

  6. In my copy of Bernstein’s book, he says that the safe withdrawal rate was 2 percent at the top of the bubble. That’s what I say. It was 1.6 percent at the absolute top of the bubble but that rounds off to 2 percent.

    I have suggested on many occasions that you invite Shiller to the Bogleheads forum and ask him whether he believes that the safe withdrawal rate is the same number at all valuation levels. Why not do the same with Bernstein and Buffett?

    Why do I have a funny feeling that you will take a pass?

    Rob

  7. You need to read his recent book. He says you are wrong. Also, he holds the same allocation.

    Shiller also told us to not time the market with CAPE. You should have listen to him.

    Notice that none of these people promote market timing. Notice that none of these people will talk to you. In fact, no one will talk to you.

  8. Okay, Anonymous.

    I do wish you all the best that this life has to offer a person, in any event.

    Rob

  9. Bernstein also pointed out that the #1 factor to retirement success is working and saving. You haven’t done that for 24 years.

    Is there anyone alive that told you that you had a good plan and that it worked?

  11. I still don’t see a single person that told you that you had a good plan and that it worked.

  12. Say that there is a 1 in 100 chance that I was right in saying 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 (those 100 comments indicate that the odds are a lot higher than 1 in 100). If that’s so, then investors should be talking about what I said in my famous post of May 13, 2002, at every site on the internet.

    The core job of an investment adviser is to help people plan their retirements. If the Buy-and-Holders got the numbers wildly wrong in their retirement studies, then the issue that I have put on the table is the most important public policy issue before the United States today.

    There’s hundreds of millions of dollars in the development and promotion of the Valuation-Informed Indexing concept. It’s impossible to overstate how much leverage there is with this.

    I’d say that that’s a pretty darn good plan. And, if you Goons didn’t believe that I was right about the Greaney study, you wouldn’t oppose honest posting so strongly. If you truly believed that the Greaney study contained a valuation adjustment, you would have posted a link to it many years ago. There’s a sense in which every abusive comment that you advance is yet another endosement of the merit of my plan.

    Fair enough?

    Rob

  13. There is a 100% chance it did not need an adjustment as it is a retrospective study.

    Market timing has never had a successful outcome. You are the promoter of VII, yet you are broke. Why would anyone want to pay you even one dime? You call being broke a “good plan”?

  14. It is a retrospective study that ignores the factor that in the past has always been the most important factor in determinging safety — the valuation level that applies on the day the retirement begins.

    I call telling the truth about stock investing a very, very good plan. The fact that it is so hard to gain access to research-based reports on how stock investing works in the Buy-and-Hold Era makes reports that are research-based all the more valuable. The more resistance I see to discussion of the past 42 years of peer-reviewed research, the more confidence I have that there’s value in exploring those 42 years of peer-reviewed research in great depth.

    That’s where I’m coming from re this one in any event, Anonymous.

    My best wishes, etc.

    Rob

  15. “ It is a retrospective study that ignores the factor that in the past has always been the most important factor in determinging safety — the valuation level that applies on the day the retirement begins.”

    Do you understand the difference between a retrospective study and a prospective study? Apparently not based on your comment.

    You say that you know how stock investing works, yet you depleted your savings. That does not align. Since your original plan failed, your revised plan was fully reliant on getting some unknown settlement payments. How is that an investing plan?

  16. I understand the meaning of the word “safe.”

    My $500 million settlement will be earnings, not investment returns. In a metaphorical sense, you could say that I was investing in myself by following this story to its conclusion.

    I didn’t ask to be put in circumsstances in which I would earn $500 million in this super strange way. I would have preferred to have earned a somewhat smaller amount through a far more ordinary process. But I wasn’t given that option. My two options were to keep it zipped re the error in the Greaney retirement study and thereby sell out all my friends at the Motley Fool board or point out the error in the Greaney study and thereby bring on the wrath of you Goons. Do you think I made the right choice?

    I do. Someone had to do it. We cannot survive indefinitely as a nation of people if we do not find some way to get accurate, sensible, research-based investment advice out to millions of people. Leaving the Ban on Honest Posting in place — now there’s a really, really bad plan for all of us!

    I believe that the same laws that apply in every field of human endeavor other than the investment advice field should apply in the investment advice field as well. Call me madcap, you know?

    Please take good care.

    Rob

  17. Most scammers have been able to trick a number of people to believe their stories. Fortunately, no one has fallen for your bag of tricks.

  19. If Shiller thought he could make hundreds of millions from market timing, he would have done it a long time ago. Instead, this is just your little smoke screen to draw attention away from your tremendous failures.

  20. If Shiller didn’t think that he would see all sorts of abuse directed at him if he talked extensively about the far-reaching how-to implications of his research, he would have included an entire chapter on the how-to implications in his book. Sure, he could make lots of money telling people about those implications. So could thousands of others employed in this field. Do you think those people want to see their careers and marriages destroyed because they dared to “croos” the Buy-and-Holders?

    Knock off all the funny business and you will soon he seeing so much honest posting that it will make your head spin. But, yes, we need to do that much to get to the place where deep in our hearts we all want to be. No more death threats. No more acts of extortion, No more demands for unjustified board bannings. No more acts of defamation. No more absiuive posting of any kind whatsoever. That’s what it takes, There are good reasons why we adopted the laws prohibiting the tactics that you Goons have employed for 21 years to block millions of investors from learning about the error in the Buy-and-Hold retirement studies (they lack an adjustment for the valuation level that applies on the day the retirement begins).

    Shiller would be 100 percent happy to shoot straight with you. So would thousands of others. It’s up to you as to when you will lift the ban on honest posting at every site. It’s up to you when you will put the abusive posting and the criminal behavior in the past and let the shift from Buy-and-Hold to Valuation-Informed Indexing, a shift that will enrich every last one of us in very big ways, begin.

    I vote for —

    NOW!!!!!!

    Rob

  21. It seems Wade Pfau pointed out as to whom was actually causing harm and making threats. I am sure you remember this private email he sent you with his candid thoughts:

    “Hi Rob,
    I forgot that I was still saying things like this even 2 weeks after the initial incident.
    This was more than a year ago now, but I am thinking that I was just trying to explain politely to you that I’d rather have you quit writing about me, or at least stop using my name. I suppose that I figured the only way you might understand why is if I explained it in terms of your favorite conspiracy theories.
    I will make one more attempt at a reality check for you. You go on and on about how I allegedly lack personal integrity because I allowed the Goons to threaten me into silence.
    The reality is that though I may have for a brief moment got a bit too caught up in YOUR drama, I do not have any fears about the Goons.
    The reality is that you are causing me 1000x more career damage than the Goons ever could have by filling Google with so much nonsense about me, and sharing embarrassing private details such as my overly ambitious journal submission strategies, etc. Those in particular are highly private. People don’t publicly share where they submit articles to unless those articles are accepted. You’ve violated my trust in so many countless ways and yet you still proclaim to be my friend.
    And the further reality is that if I *did* lack personal integrity, I could have made this all stop just by saying the meaningless sentence you want so desperately to hear: “I think the errors in the traditional safe withdrawal rate studies must be corrected by using Rob’s analytically valid method.”
    But I don’t believe that. I do not believe you have offered a valid correction to the safe withdrawal rate question. And I believe that retirement income strategies go much further than the question of a safe withdrawal rate. And so that is why I’ve had to endure your ongoing harassment for months on end now.
    Usually I can figure out the Rob-logic behind what you are thinking, but I really don’t know how you think you come out of this whole episode looking like the good guy. I guess it is because you think you are saving my soul and putting me back on the path of righteousness, or something, huh? If only you had the power to do a little bit of self reflection…
    Now that the whole email history is on display, we have the reminder of how angry you got at the very beginning when I referred to you as dogmatic. Yet, look at the way you’ve treated me for disagreeing with you on something which you don’t even understand. You quote numbers from JWR’s statistical work, but I’m not sure if you can even distinguish a mean from a median. So how can you be sure his work is right? I don’t know either, as I never did get around to digging into it, and I doubt I ever will now. But I’m not sure how a properly calculated lower confidence bound for a 2000 retiree could have been higher than zero.
    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. You are a smart guy, and you could use your talents for something productive. While warning people about the 4% rule is helpful, the way that you go about doing it is rather “catastrophically unproductive” as one wise fellow said to you years ago. I provide a loud voice that is critical of the 4% rule, and so spending your days assassinating my character is counterproductive to your underlying cause. So perhaps you can start fresh with a new issue of social import that carries less baggage for you. What happened in the past is a sunk cost, but you still have a chance to turn things around and start afresh today. And you can do all of this while still being honest and true to yourself.”

  23. Only Rob Bennett (the broke guy) knows how investing really works. Not Shiller, Not Pfau, not Bernstein, not Bogle, not Buffett, etc.

  24. Everyone knows on some level of consciousness, Anonynous. You know. If you didn;t know in your heart that the safe withdrawal rate cannot possibly be the same number at all valuation levels, you wouldn’t work so hard to keep the ban on honest posting re Shiller’s research in place.

    You know but you don’t want to know. Having to hear about what the research says is upsetting because what Shiller showed makes so much sense. All that he showed is that we need to buy stocks in the same way we buy everything else, by taking price into conideration at all times.

    That’s it. I say that we must consider price, you don’t want to. Because taking price into consideration would mean that your portfolio is only worth about half of what you have been led to believe it is worth and very, very much want to believe it is worth.

    Shiller wouldn’t have been awarded a Nobel prize if there weren’t a lot of people who suspect that he is onto something very important. I wouldn’t have have had thousands of my fellow community members praise my stuff to the skies if there weren’t great demand for hearing about the last 42 years of research. You wouldn’t fight so hard if you hadn’t seen how much interest there is in knowing the realities.

    No one is dumb. That’s not the issue. We are moving from the dark ages of investing analysis to a much better place and there are some outlier personalities (You!) who can’t stand accepting that there was a time when they didn’t know it all. I think that we all will make the journey that we need to make in the days following the onset of the next Buy-and-Hold Crisis.

    We all want the same thing. We are all in this together. We all are smart and good people. The stuff that we have seen during the first 21 years is 20 times more good than it is bad. I think that I know a thing or two about stock investing at this point. If I didn’t know a thing or two, I wouldn’t presume to write a book about the subject. But I didn’t learn those things by sitting in a room thinking great thoughts. I learned what I know by listening to lots of others, including the people you mentioned. If I am the only one who knows anything, how is it that I learned so much from those people?

    Heaven help us all but I have even learned some things from you Goons. Scary, I know. But I believe that that’s the full reality here.

    That’s my sincere take, in any event.

    Rob

  25. “ We all want the same thing. We are all in this together. We all are smart and good people. ”

    We??? Do you have a mouse in your pocket? Sorry, but we don’t want what you want. The rest of us prefer to have fully funded retirement accounts. The rest of us prefer to remain married. The rest of us prefer to keep our homes.

  27. Given you know how investing and how the stock market works, you should have no problem making a fortune on your own. Go ahead. We will all sit here and watch.

  28. I’m giving it my best shot, Anonymous. I didn’t ask to be placed in these circumstances. It is something that happened.

    Shiller’s research has been available to anyone who works in this field for 42 years now, His book was published 23 years ago. He was awarded his Nobel prize 10 years ago. Is it my fault that the Buy-and-Holders have been supressing discussion of the far-reaching how-to implications of his amazing research for many years now?

    I am the one saying that we should open every site to honest posting. That’s what we should have done many years ago, even before I came on the scene, no? Is that not the obvious answer for everyone? Would that not leave every single person involved better off?

    I know what I know because, once I saw that there were problems with Buy-and-Hold (the widespread support for the death threats was a pretty big clue), I made an effort to learn. Anyone could have done that. Anyone could do it today. The field is wide open. If you Goons would chill about 7,000 notches, you would see lots of people taking advantage of the opportunities to the benefit of each and every one of us.

    Do you think it would have been better if I had just kept it zipped re the error in the Greaney study? Do you think that that would have been the better way to go? Seriously?

    I don’t think that. I didn’t think it then and I don’t think it now.That cannot be the way. The thing to do when you learn that you got an important number wrong in a retirement study posted at your web site is to get that error corrrected immediately and put it behind you, not engage in crazy behavior that stretches out the pain for you and lots of others for as long as possible.

    That fact that there is even one Buy-and-Holder who does not see that (there is more than one) proves Shiller’s core finding that stock investing is a highly emotional endeavor. HIGHLY emotional. Holy moly!

    Rob

  29. “ I’m giving it my best shot, Anonymous. I didn’t ask to be placed in these circumstances. It is something that happened.”

    You put yourself in your precarious position, yet you are not doing anything to change it. You may the decision to quit your job. Since that time, you haven’t done anything to earn a dime. Instead, you just blame everyone else for your problems and continue to want everyone else to do things, while you avoid any responsibility.

    No one is going to do a darn thing for you. We all warned you, but you wouldn’t listen. Now, we will just sit here and watch you continue your slide into the pit.

    So you just show us how you VII is going to somehow rescue you from disaster.

  30. If Shiller is right, the reason why irrational exuberance can remain in place for so long is that investors develop an emotional attachment to it. Hence, the abusive posting. It would follow that the emotional attachment would dissipate when the irrational exuberance disappears.

    The emotion would usually turn in the opposite direction, so the CAPE value would drop to lower than fair-value levels. So the emotion could turn AGAINST irrational exuberance and the investment strategy that encourages it, Buy-and-Hold.

    If that happens, I could see the owner of one large site opening his site to honest posting re the last 42 years of peer-reviewed research. There is so much pent-up desire for honest discussion in this field that I believe that that site would take off like a rocket and the idea of permitting honest posting would spread across the entire internet.

    The abusive stuff is only effective when you can use it to isolate people. Take the abusive stuff out of the picture and Valuation-Informed Indexing prevails.

    Or so Rob Bennett sincerely believes, you know? No one can say for certain because we have never as a nation of people been in this situation before. We have seen earlier Buy-and-Hold Crises but we did not have Shiller’s Nobel-prize-winning research available to guide us at those times.

    The exception is the 2008 Buy-and-Hold Crisis. In that case, stock prices returned to high levels within a year’s time. Price were not at low levels for long enough for investors to lose confidence in Buy-and-Hold. The next crisis might cause enough people to turn to consideration of the peer-reviewed research to bring Buy-and-Hold down.

    But we’ll have to wait and see to find out for sure, you know?

    My best wishes, etc.

    Rob

  31. All the sites that banned you are open to honest (truthful) posting. Even when you were allowed to post on those sites, it did not change a thing for you. Real change comes from actually doing something instead of just making repeated posts. Just do SOMETHING. Get a job, finish your book, etc. No one needs to lift a finger for you. Earn your own money and be responsible for yourself. It is bad enough you made your wife work 6 jobs to support you. Don’t expect the rest of the world to also have to do your bidding.

  32. Is there something that you want from me, Anonymous? Is there something that I can do for you to make your life better?

    Rob

  33. It is not just me. It is the everyone else. Stop asking all of us to do things for you. We don’t need or want to give you unfettered access to our websites. Stop harassing us with your threats. Get a job and stop leaching off of others.

  34. It’s only the Goons (who make up 10 percent of the populations of the board communities) who have a problem with the idea of permitting honest posting re the peer-reviewed research at every site. The 90 percent of Normals are fine with it.

    It doesn’t make them jump up and down to hear that their portfolios are worth only 50 percent of what they thought they were worth. But they are interested in hearing the other side of the story. They ask a lot of questions and, if they didn’t see any abusive posting follow in the wake of those questions, they would ask a lot more.

    The boards were not formed as marketing vehicles for Buy-and-Hold. They were formed to help people learn how to invest effectively.

    Valuation-Informed Indexers should have the same access as Buy-and-Holders, nothing more and nothing less. That’s what the published rules of all the sites (and the laws of the United States!) provide for and that is how it should be played.

    That’s where I am coming from re this one in any event, Anonymous.

    Rob

  35. This has nothing to do with goons, normals, etc. You are telling other people that you should have access to their websites and that is my point – you always tell people what they need to be doing, yet you haven’t done one single productive thing.

  36. I pointed out the error in the retirement study posted at John Greaney’s web site (it lacks an adjustment for the valuation level that applies on the day the retirement begins). That’s a hugely productive thing for aspiring early retirees. There were people at the Motley Fool board who used that study for help in planning their retirement. I know. I was there.

    Rob

  37. What you did is given an opinion on someone else’s work. You didn’t actually DO anything. We have told you countless times as to how you are wrong, but that is besides the point. The point in this discussion is that you haven’t done anything productive, nor do you have any plans to do anything in the future. You just talk about how everyone else needs to do things. You even made your ex-wife work 6 jobs while you are married.

  38. You’ve said this 10,000 times and I have responded 10,000 times that I sincerely believe that the Greaney retirement study lacks a valuation adjustment.

    Is there something that you want from me? You must get it by now that I am not going to say that I believe that the Greaney study contains a valuation adjustment. So why keep posting here?

    Is there something that I can do for you that would make your life better? I cannot say that I believe that the Greaney study contains a valuation adjustment. Is there something else?

    Rob

  39. “ Is there something that you want from me.:

    Your question has already been answered on my post at 9:53 am. Read it again.

  41. Funny that you admit that you have been told 10,000 times that Greaney did not make an error. Why continue asking people to let you on their website to discuss it after it has been answered so many times? No one is changing their mind, so stop asking. You have been banned at all the major boards and have been told that it has been because of your bad behavior. Stop asking/demanding access. You have already been told “no”. Stop asking people to believe your made up stories about fraud, death threats, criminal acts, etc. You have already been told that we don’t believe you. Stop asking for settlement payments. No one is going to pay you a dime.

    No, we are not “in it together”. You are on your own. Get your own job. Earn your own money. Post on you own website (no one is giving you access to their website). Period.

  42. I believe that the noes will turn to yeses in the days and years following the onset of the next Buy-and-Hold Crisis. A stock investing strategy that lives by investor emotion may come to die by investor emotion when the emotion shifts as the result of the onset of yet another Buy-and-Hold Crisis.

    I prefer the research-based stuff. I believe that that’s the future.

    Rob

  44. Again — Whatever.

    If you didn’t believe that the noes will be turning to yeses in the days and years following the onset of the next Buy-and-Hold Crisis, you wouldn’t be posting here.

    I want a stock investment strategy that works at all times. not just at times when the majority of stock investors have taken temporary leave of their senses.

    Rob

  45. Again, this is why you are banned at these boards. People should not have to answer the same point 10,000 times. You have your answer. The answer is “NO”. Once answered, that should be it. Making the same comments/points for 20 years is way beyond just irritating. Is is downright abusive. Thus, the banning.

  46. Valuation-Informed Indexing is never going to surpass Buy-and-Hold in popularity unless we tell people about it. Buy-and-Hold is promoted as a research-based strategy. Research is a living thing. There are always new things to be discovered by new research. If the Buy-and-Holders were people of their word, they would want people to know about the new research.

    If Buy-and-Hold were a real thing, the Buy-and-Holders would welcome challenges to their thinking. They would want their mistakes to be brought to their attention and they would want to correct them.

    There’s nothing abusive about someone posting about a different strategy that is rooted in research that did not exist when your favorite strategy was being developed. You always have the option of ignoring posts that upset you.

    There were thousands of people who expressed a desire to hear about Valuation-Informed Indexing. The real abuse here is denying those people the right to have the discussions they want to have, a right that is nominally protected by the published rules of all the sites.

    Buy-and-Hold/Get Rich Quick investment strategies hurt humans and other living things!

    Rob

  47. Website owners do not have to open up their website to you so that you can promote your failed market timing scheme. You obviously choose what you allow on your site and others are free to do that as well. In fact, it would be irresponsible for anyone to promote an investment scheme like VII given the poor track record. You are the leader of this strategy and you are broke.

    If people really want to hear about VII, as you say, they can just come to this website. There is nothing special about you or your message that obligates other board owners to bow to your wishes.

  48. I strongly disagree, Anonymous.

    Someone could put up a warning at his site saying: “This place is strictly a fantasy strategies place. It upsets us to hear what the last 42 years of peer-reviewed research teaches us all about how stock investing works in the real world. So we don’t permit that sort of thing here. Fantasy Get Rich Quick/Buy-and-Hold stuff only! We mean it!”

    An argumrent could be made that a site like that would not be really engaged in fraud because the readers would know what they were getting into. The warning would need to be in big type and in red and repeated somewhere on every page of the site. Something like that ,might get you to the right side of the felony line.

    But if you are banning honest posting re the peer-reviewed research without warning people that your site is a strict fantasy site, you are putting yourself at serious risk of civil or criminal liability. What if stocks continue to perform in the future at least somewhat as they have always performed in the past? The people who visited that site are going to suffer huge losses that might well have been avoided if honest posting re the research had been permitted. How do you think the people who suffer those losses are going to feel about the decision of the site owner to ban honest posting after they suffer their losses? They are not going to be happy, Anonymous. Holy moly!

    I would not go there and I would not encourage my worst enemy to go there. The laws against death threats and extortion and all the rest don’t only protect the millions of investors who need access to honest, research-based investment advice. They protect those of us who have Goon inclinations. They send a signal to not go there even if a buddy gets the numbers wildly wrong in a study posted at his web site and really, really, really doesn’t want to acknowledge the error.

    We live in communities. Communities draw lines that cannot be crossed for the benefit of everyone in the community. Following the law is a good idea. I shouldn’t need to say that. It’s amazing that things have gotten so messed up in this field that I feel a need to say that.

    Honest, research-based posting should be permitted! Everywhere! There should be no exceptions.

    That’s my sincere take re this terribly important matter, Anonymous.

    My bsst wishes.

    Rob