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 happy to talk about research. They are not happy when people keep repeating the same lies over and over again and refuse to listen to what others have to say.
There are two schools of academic thought re how stock investing works. Anonymous. It is a logical impossibility that both are correct because they are rooted in opposite premises. As a nation of people, we need to figure out which one is right. The only way we can do that is to talk it through, showing respect and friendship to those on “the other side.”
My sincere take.
Rob
A wise man once said” You go about it in a manner that is catastrophically unproductive by adding missionary zeal that inflates your importance and demeans others. The whole idea that there is a new school of Safe Withdrawal Rates reeks of personal aggrandizement.”
Scott Burns said those words. I believe that the shift from Buy-and-Hold to Valuation-Informed Indexing will be the biggest advance in the history of personal finance. I believe that we all need to know how to invest our retirement money effeectively for the long run. So I think this is a super big deal. I do feel a missionary zeal for the subject. I would not describe the idea of opening every site to honest posting re the research as “catastophically unproductive” but as “catastrophically productive.” I view the question of when we will open every site to honest posting as the most important public policy question before the United States today. It would help every single person live a better and fuller and richer and freer life. And it’s not even possible for the tational human mind to imagine any possible downside to permitting honest posting re the research at every site.
I am proud of the role that I have played in being the lead advocate for opening every site to honest posting re the research for 21 years now. But I ceetainly do not say that I am the only person who played a positive role. There have been thousands of my fellow community members who have expressed a desire that honest posting re the research be permitted. That took a lot of courage given what we have all seen re the behavior of those in the Buy-and-Hold Goon Squads. And we have all seen expert after expert evidence a desire to be permitted to engage in honest discussion re the research.
Yes, that includes Scott Burns. I had a telephone call with him before he advanced the comments you are referring to. In the telephone call, he evidenced a lot of excitement about the new school of safe withdrawal rate analysis. I am not able to say what happened between the day we had that phone call and the day he advanced the comments that you refer to. But I feel confident saying that we would all be living better lives today if whatever happened had not happened. Scott was capabnle of helping us all out and he had a desire to help us all out and we all should have been encouraging us to help us all out. It would have been a win/win/win/win/win. Obviouslhy.
I believe that we will get there in time. I hate it that we did not get there on the afternoon of May 13, 2002, as I recommended at the time. But I believe that we wil get there as a nation of people eventually. We are just too good a people for that not to happen. And I very much doubt that there will be even one person when we get to the other side who will be looking back to the Buy-and-Hold days and wishing that we could return to them. I include you Goons in that. If we had a magic wand that we could wave in the air and remove every comment you have ever made showing resistance to the idea of moving forward, I think you would wave that magic wand in the air.
Unfortuantely, I am fresh out of magic wands. So we are left with no alternative but to do it in this other crazy way instead. We all just need to make ourt best of it, you know. Humans!
Rob
“I am not able to say what happened between the day we had that phone call and the day he advanced the comments that you refer to.”
I am guessing you sent him some emails packed with hocomania.
“People are happy to talk about research.”
Not Rob Bennett.
Rob doesn’t want to talk about investing and investment research.
Rob wants to talk about Goons and board bans and how everyone is unfair to him.
I had no communication with Scott from the time that we had the telephone call in which he expressed great interest in the new school of safe withdrawal rate analysis and the day he published his column briefly describing the concept while some disparagement of it by saying that there were “loud voices” on the internet advocating for it. He spoke to someone else during that time.
I could have been Greaney. I don’t know if they had any personal relationship. Greaney wrote about him all the time. So I guess it is possible. It could be that he contacted the authors of the Trinity study, with whom he might have had some sort of personal relationship because he wrote about their study all the time. It could be that he just ran the idea of considering valuations when calculating safe withdrawal rates past some people in their field, other journalists or investment advisers. Whoever it was and whateveer they said spooked him. He didn’t speak to me beyond that brief phone call, in which he evidenced a great deal of interest and enthusiasm.
We communicated by emal after he wrote the column. It was in that email correspondence that he made the comment that you referred to.
Scott could have changed the world by playing it straight. It’s a sad, sad, sad reality that this field had become so corrupt by that time that he didn’t believe that he could “get away” with writing a fully honest column. It’s a horrifying reality. We need to be applying the same ethical standards (and obviously the same laws) in the investment advice field that we apply in every other field of human endeavor.
My best and warmest wishes to you and yours, Evidence.
Rob
Not Rob Bennett.
Rob doesn’t want to talk about investing and investment research.
Rob wants to talk about Goons and board bans and how everyone is unfair to him.
I want to talk about research, Evidence.
Robert Shiller published research in 1981 showing that valuations affect long-term returns. He was awarded a Nobel prize for that work. Do you believe that that is legitimate research?
Rob
“I want to talk about research, Evidence.”
No you don’t, you want to keep repeating things that have already been discussed.
“Robert Shiller published research in 1981 showing that valuations affect long-term returns. He was awarded a Nobel prize for that work. Do you believe that that is legitimate research?”
There you go again.
There I go again. That’s a question that I believe that as a nation of people we need to answer by the close of business today, if not a good bit sooner.
That’s where I’m coming from re this one, in any event.
Hang in there, old friend.
Rob
Already asked and answered
https://arichlife.passionsaving.com/2023/02/13/buy-and-hold-goon-to-rob-if-you-were-right-you-wouldnt-be-broke-and-divorced/
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Evidence based investing says
February 14, 2023 at 7:14 am
“Do you believe that Robert Shiller’s Nobel-prize-winning research showing that valuations affect long-term returns is legitimate research, Evidence?”
Of course.
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I would love to discuss Wade Pfau’s paper https://mpra.ub.uni-muenchen.de/29448/1/MPRA_paper_29448.pdf
Would you be willing to discuss it?
“Of course” is a good answer.
I share your view re that one.
Rob
So how about you answer my question. Are you willing to discuss Wade’s paper that I linked to?
I am the co-author of that paper, as you know. I view it as the most important piece of research published in this field in the past 30 years. I believe that we should be holding discussions of the Bennett/Pfau research at every site on the internet, without a single exception, until the “idea” that there is some mystical, magical alternate universe 50 million light years away in which everything works the opposite of how it has always worked here on good old Planet Earth and market timing/price discipline is not always 100 percent required for every stock investor has been entirely dispelled in the minds and hearts of us all.
Rob
“I believe that we should be holding discussions of the Bennett/Pfau research at every site on the internet, without a single exception, ”
OK, I will put together my thoughts on that paper and post them here at come point this weekend.
Okay.
Rob
“ I am the co-author of that paper, as you know.”
What sections did you write? Why are you not listed as the co-author?
I didn’t do any of the writing. It was made posts at the Bogleheads Forum that gave Wade the idea of researching the question of whether long-term market timing works. During the time when he was working on the paper, we engaged in regular email correspondence. He had zero problem giving me fuil credit for my share in the project in the days before he was threatened. If he had never been threatened, he would be here today to tell yoi the story of how that amazing research came to be and he and I would be in complete agreement as to how it all went down.
The intimdation stuff affects what people say and do. That’s of course why you engage in it. That’s all that the “idea” that long-term timing/price discipline is not required has left 42 years after peer-reviewed research was published showing that valuations affect long-term returns.
Rob
So Wade is a liar and Shiller is a liar. Only Rob Bennett is the honest person in the entire investment community. Got it.
We’re all liars about stock investing who feel a desire to tell the truth and who do so when we feel we can get away with it.
We can’t have a bull market without telling lies,right? Nobody calls it a bull market when stocks go up by the 6.5 percent real per year that is justified by economic growth. It becomes a bull market when the price gains are out of control. For that to happen, we have to tell lies to ourselves and to others. There is no other way that it could happen.
Shiller is a hero. He has gone to amazing lengths to tell important truths about stock investing. Wade Pfau is a hero as well. He has done the same.
And yet Shiller holds back in important respects. And Wade does too.
You don’t have to look far to figure out why they hold back. Look at the things you say about me ona daily basis. People who tell the truth about stock investing lose their careers. People who tell the truth about stock investing lose their marriages. Maybe Robert and Wade don’t like the idea of seeing their careers and their marriages destroyed. So they hold back on the truth-telling stuff.
Which hurts all of us!
It enriches us when they tell the truth. So we should celebrate truth-telling re stock investing, just as we do in every other field of human endeavor. I would like to see that happen. So I make an effort to tell the truth no matter what the painful consequences are that result from doing so. I have a happy dream that truth-telling in the stock investing realm will be widely celebrated in the days and years following the onset of the next Buy-and-Hold Crisis. We’ll see, you know?
My best and warmest wishes to you and yours.
Rob
So that means you, by default, are the most important figure today in the investment community. You should be getting a Nobel prize and by the keynote speaker at every investment conference today, correct?
I think I am making a very important contribution. My aim is to open every site to honest posting re the last 42 years of peer-reviewed research. There’s huge leverage in that. Once every site has been opened to honest posting, we will be obtaining valuable contributions from thousands and thousands of people. It’s hard to imagine how I could be doing more important work than the work that I am doing.
But of course the very fact that I am working to open every site to honest posting shows that I value the contributions of the thousands of people who would be freed to do honest work in this field. I couldn’t have done what I have done without the help of scores and scores of people. There’s plenty of credit to go around. I learned about the error in Greaney’s study by reading Bogle’s book. Shouldn’t Bogle get a lot of credit. It sure seems so to me. Lots of people should be getting lots and lots of credit. We should direct less energy to worrying about who is going to get credit for us all living better and richer and fuller and freer lives and more to making sure that it becomes possible for us all to live better lives as soon as possible. That’s my take.
My best wishes, etc.
Rob
Bogle, Pfau and Shiller have all had their accolades, right? Shouldn’t you be getting your accolades? You are saving the world, right?
I’ve had lots of accolades. I’ve had thousands of my fellow community members put their lives on the line by saying in front of you Goons that they believe that honest posting re the research should be permitted. On the very first day, there were numerous people at the Motley Fool board who thanked me for starting the most exciting discussion in the history of the board. Wade Pfau devoted 16 months of his life to researching my investing ideas and told me that he thought that our research wax so important that he might be awarded a Nobel prize. Rob Arnott, who is a guy who I greatly respect, visited my web site and told me that all of my stuff checked out. Those are pretty darn big accolades.
Would I do more good for the world if I could post honestly re the research at every site? Obviously. That’s the “Step Two” that Wade talked about. But there has never been any shortage of accolades.
Rob
I will address issues one at a time
https://mpra.ub.uni-muenchen.de/29448/1/MPRA_paper_29448.pdf
I will use the page numbers at the bottom of each page of the document (the first page is unnumbered)
Figure II page 8 2nd line in table
Stocks return 8.60
Market Timing Return
historical median 8.80
historical mean 9.11
rolling mean 8.61
rolling median 8.59
Market timing based on the mean and median for the whole period showed out performance (9.11 and 8.80 versus 8.60), however the investor can’t know those averages ahead of time
The rolling mean and median are calculated using the figures that the investor would have known at the time. This shows no out performance (8.61 and 8.59 versus 8.60)
Conclusion, using valuation based market timing would not have outperformed the market using information available at the time of the investment decision. If you had a crystal ball and had been able to predict the averages ahead of time you could have out performed, however such a crystal ball does not exist.
My conclusion, this proves that VII (as defined in this paper) does not outperform the market.
Do you agree Rob? If not, why not?
Thanks for offering your thoughts, Evidence. I am going to post your analysis as a blog entry in the first available slot. That will be roughly two months out, I think that anyone considering going with a Valuation-Informed Indexing strategy should consider what you say before doing so. I dont view your comments as unreasonable.
I have said thousands of times that I would like to see every discussion board and blog opened to honest posting re the last 42 years of research. That way, there will be lots of different thoughts offered on lots of different questions. It is by being exposed to all sorts of ways of looking at things that we all enjoy a powerful learning experience. We haven’t even begin the learning experience because we have not yet opened every site to honest posting re the research. That’s the critical first step. All of the good stuff happens after we make that huge leap forward.
We don’t have enough years of historical data to know precisely how things are going to go in any onw time-period. We have 150 years of data, which sounds like a lot. But it takes 40 years or so for a bull/bear cycle to play out. So we only have three fully completed cycles to look at. That’s not enough to achieve much precision. We know a lot. But we certainly don’t know all that we would like to know. Any claims advanced should be advanced with caveats attached to them, in my viee. We are still on a learning curve.
If Shiller’s Nobel-prize-winning research is legitimate research, it is a logical impossibility that market timing/price discipline would not work on a risk-adjusted basis. That’s my sstarting point. We know that irrational exuberance is a real thing. We know that it hurts investors. So we should all be working together to do battle with it. And the only tool we have to overcome irrational exuberance is market timing/price discipline. So I believe that we should all be making use of that tool. That said, I have zero problem with people saying that they only intend to make limited use of it. Those people may see something that I do not see. I feel that it would be foolish for me to try to silence them when they are sharing views that might end up helping me to become a more successful investor.
The only one that really bothers me is when someone says that he is so certain that the market timing should not ever be employed that he advocates silencing of all Valuation-Informed Indexers. That “idea” has been holding us all back for 21 years now, or for 42 years if you count back to when Shiller published his Nobel-prizr-winning research. I would permit each community member to post his or her sincere thoughts, without a single exception. I oppose the use of abusive posting or criminal acts to suppress honest discussion of this critically important topic.
That’s where I’m coming from re this one, Evidence. Please take good care.
Rob
In short, you don’t know if your timing scheme works or not. That is why people need to look at outcomes. It failed for you. You are broke. We haven’t seen anyone else with a successful outcome with VII. There is no logical reason for anyone to follow it. End of story.
My best and warmest wishes to you and yours in any event, Anonymous.
Please take good care, old friend.
Rob
“ My conclusion, this proves that VII (as defined in this paper) does not outperform the market.”
The data in the paper goes until 2010. If we extend it out to 2023, we see that VII is even worse.
That’s a good point. It’s one that should be brought up in discussions in which honest posting re the research is permitted. If Buy-and-Hold were a real thing, there would not be one Buy-and-Holder objecting to the idea of permitting honest posting re the research.
I believe that it starred out as a real thing. But 42 years after research was published showing that valuations affect long-term returns, not so much. For so long as honest posting re the peer-reviewed research is prohibited, it’s a scam.
My sincere take.
Rob
Buy and hold is a real thing. Otherwise you wouldn’t even post about it. What is now apparent is that VII isn’t what you portray it to be and the track record is getting even worse. As such, people really don’t need to waste more time adding to the hundreds of thousands of posts already out there. It is just like smoking. We know it is bad for you. At this point, we don’t need to keep repeating it given the clear evidence.
We have laws and cultural norms that apply to everything in the United Staes except for Buy-and-Hold. The cultural norm is that, when you learn that you made a mistake at an earlier time when all of the information was not available to you, you correct the mistake and move on to better things. We didnt have Shiller’s Nobel-prize-winning research available to us in the days when the Buy-and-Holders came up with the idea that market timing/price discipline might not always be 100 percent required. Now we do. I think that the investment advice field will have to come into compliance with our cultural norms in the days and years following the next Buy-and-Hold Crisis. We’ll see.
I know that I want to be on the side saying that honest posting re the peer-reviewed research should be permitted (and encouraged!) at every site, without a single exception. Please feel free to tell everyone on the internet that I am a Valuation-Informed Indexers, NOT a Buy-and-Holder.
My best wishes.
Rob
“ The cultural norm is that, when you learn that you made a mistake at an earlier time when all of the information was not available to you, you correct the mistake and move on to better things. ”
You made a mistake with your retirement plan and then you didn’t correct it. You also didn’t move on. You just kept doing the same thing over and over again. Meanwhile, buy and holders have always done well and have continued to do even better. You say you want honest posting, but you won’t allow it here.
Whatever, Anonymous.
Please take good care.
Rob
Rob,
It goes beyond the fact that your VII story does not hold up. Your attack from the beginning is that buy and hold has worked. You then try to convince people it doesn’t, when they have plenty of history, facts and successful outcomes that show you are wrong. You then think you can scare those people by telling them they are going to go broke and to prison for not believing you.
If you want to change minds, you need to stick with proving how your system works and show successful outcomes. Using your go to phrases like “peer-reviewed” or “honest posting” is just word salad. It is not facts or data. Telling successful people that they are wrong, going broke, etc., will never work. They are successful and you are not, so your credibility is not there.
Every community member should get to decide for himself or herself. You get to decide for you. That’s fine, You get no argument from me re that one. But every other community member gets to decide for himself or herself after hearing both sides.
That’s where I’m coming from re this one, Anonymous.
Rob
They have decided. If people valued what you have to offer, they would be over here on this board supporting you. I am sure we can all agree that thousands upon thousands of people have seen your posts. People clearly know who you are and what you have had to say. There is no lack of awareness.
There is a lack of having had the experience of talking things over in a civil and calm and reasoned way.
I knew that the Greaney study was in error on the morning of May 13, 2002, right? I was still a Buy-and-Hold at that time! Explain that. It’s crazy. In my brain I just comparmentalized things. I thought, well, the Buy-and-Hold retirement studies are wrong but Buy-and-Hold in general is still good stuff. Then I spent several months talking things over with people at the Motley Fool board. On the evening of August 27, 2002, I concluded that Buy-and-Hold was garbage, that anything that made people so emotional that they endorsed death threats cannit possibly be good stuff.
If someone who saw the error in the Greaney study clearly could be fooled by this stuff, anyone could be fooled by this stuff. The thing that worked for me was talking things over. The same thing worked for John Walter Russell. He was a Buy-and-Holder on the morning of May 13, 2002. Then he engaged in discussiosn in response to my May 13, 2002, post. Then he became such a believer that he devoted eight years of his life to researching the Valuation-Informed Indexing concept for free. It was the same story with Wade Pfau. He was a Buy-and-Holder until he saw my posts at the Bogleheads Forum. Then he talked things over with me in emails. Then he became such a believer that he devoted 16 months of his life to researching my investing ideas and concluded that: “Yes, Virginia, Valuation-Informed Indexing works!”
When you are dealing with a revoltionary advance in the understanding of a subject, the talking-it-over part is an essential stage of the learning process. We cannot get from the horrible place where we are today (a CAPE value of 30!) to the wonderful place where we all deep in our hearts want to be tomorrow without passing through the talking-it-over stage of the learning process. We need to open every site to honest posting re the past 42 yeats of peer-reviewed research. By the close of business tomorrow. If not a good bit sooner.
My sincere take.
Rob
“ There is a lack of having had the experience of talking things over in a civil and calm and reasoned way.”
You had that chance. Further, everything you have posted on this board was posted a long time ago on the boards that ultimately banned you. You haven’t posted anything new or in a different way on this board vs what you posted on the other boards prior to banning. It is not civil, calm and reasoned when you post it thousands of times while refusing to listen to what others have to say. You always want things to go your way and on your terms. That is not how it works. Like described above, you just go to those same catch phrases of “peer-reviewed” and “honest” posting to somewhat elevate what you have to say.
Sorry, but you have to learn the meaning of the word “no”.
I want things to go according to the published rules of the sites and the laws of the United States. I don’t believe that we can indefinitely have a situation where the laws and social norms that apply in every field of human endeavor other than the investment advice field do not apply in the investing advive field. I believe that we will see a change in the days and years following the onset of the next Buy-and-Hold Crisis. We’ll see, you know?
In the interim, I naturally wish you all the best that this life has to offer a person regardless of what investment strategy you elect to follow.
Rob
“ I want things to go according to the published rules of the sites and the laws of the United States.”
They do. I am not aware of any rules or laws that say Rob Bennett is the decision maker for other people’s websites.
I like the sound of that rule. I move that we adopt that rule forthwith!
The people of the United States are going to do what the people of the United States are going to do, Anonymous. I’m obviously not in charge.
I am a guy who posted at a discussion board community in which Greaney was pushing his retirement study on a daily basis, There were people in that community who I considered friends who were using it to plan their retirements. I know this. I was there.
Do you think it would have been better if I had kept it zipped re the error in the study? That didn’t feel right to me. So I did what I did. Given the reaction that I have seen from the “defenders” of the study (and of Buy-and-Hold in general), I’ve never regretted my decision.
What’s going to happen in the days and years following the onset of the next Buy-and-Hold Crisis? We’ll see, you know?
I believe we are going to see a change in attitude toward the pure Get Rich Quick/Buy-and-Hold “strategy” (no market timing now!). If Shiller’s Nobel-prize-winning research is legitimate research, it would make sense that we would see a change in attitude. His research shows that, when prices are where they are today, it’s because investors have gotten caught up in the irrational exuberance and have become insanely emotional. When the irrational exuberance goes “Poof!”, the emotion would swing in the other direction, would it not?
The irrational exuberance could not go “Poof!” without a swing in emotion. So that’s what I believe we will see. I think it would be fair to say that the emotions that it stirs up are the only thing keeping Get Rich Quick/Buy-and-Hold going at this point in the proceedings. If there were a rational case to be made for it, you Goons would be happy to permit honest posting at every site so that you could advance that case.
So we are going to see a shift in investor emotion and that shift is likely to cause the internet to open up to honest posting re the research and everyone will over time come to understand Valuation-Informed Indexing and embrace it as the first true research-based investment strategy.
I don’t need to make decisions for other people’s sites for that to happen. They will make the decisions for themselves. I will applaud those decisions because I think we all should be taking the last 42 years of peer-reviewed research into consideration when putting together our investment strategies.
But that’s as far as my role goes. I ENCOURAGE site owners to permit honest posting re the research. Always have, always will. The full truth is that it shocks me that there is even a single investor who believes that honest posting re the research should be prohibited. It would be fair to say that the joke has been on me re that one. For 21 years running now. Oh. my! Humans! Whachagonnado?
My best wishes.
Rob
Everyone else has moved on with their lives. You can sit here and do the same things with zero results or you can try to do something with your life for what remaining years you might have, given your advancing age.
I will contimue to say that I believe that the retirement study posted at John Greaney’s site lacks an adustment for the valuation level that applies on the dsy the retirement begins. I can do no more and I can do no less.
And I will continue to wish you all the best that this life has to offer a person.
Rob
And you will continue to be broke and ignored by the investment community.
Um — Thanks for the encouraging words. Anonymous.
I thought we were friends!
Rob
You are looking for encouraging words? Okay. I strongly encourage you to get a job and bring in an income while you are still physically able to do so. You are in your mid 60’s, so you don’t have much time left.
Okay, Anonymous.
Thanks for the tip.
Rob
I had hoped that you would address the specific point I made about the difference between the historical (whole period) figures and the rolling figures (what would have been available to the investor).
But you simply went back to your comments about opening up discussion boards.
This demonstrates why letting you post on boards is a waste of time, you actually can’t (or are unwilling to) debate investing matters.
I had also hoped to go over why trying to get “everyone” to market time wouldn’t work and why VII in general would not work but if you can’t be bothered to discuss the simplest point that I made it would be a complete waste of time.
So, in an attempt to have an actual investment focused discussion …
Do you accept my point that the Pfau paper showed that market timing (as defined in the paper) did not improve investment results (8.61/8.59 versus 8.60)
If you don’t accept that, why not? (with references to actual numbers)
Thank for sharing youe thoughts, Evidence. I will post this comment as a blog entry here as well when space opens up. That should be in about two months.
I continue to believe that we need to open every site to honest posting re the peer-reviewed research, with a single exception, and that we need to do that by the close of business today, if not a good bit sooner. I stand by the comments that I made in my earlier response.
My hest wishes to you.
Rob