Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
It is possible that there were a few at Motley Fool who used his study as one of many pieces of information when planning a retirement.
However it is likely that many more people used the Trinity or Bengen studies as they are much better known.
You talk about the Greaney study a lot, you have made no meaningful attempt to engage the authors of the Trinity and Bengen studies.
I agree with you that many more used the Trinity and Bengen studies.I would of course like to see those studies corrected as well. It would have been easy to get those studies corrected once we had gotten the Greaney study corrected. We would just go as a group to the various boards and tell the story and we would have lots of good people helping out. I cannot imagine such efforts not being successful.
It’s not like I work up one morning and said to myself: “I know what should do with my life, I should become the retirement study corrector!” I posted at the Motley Fool board for three years before I pointed out the error in the Greaney study. I was friends with Greaney at that time (I still consider him a friend but the feeling is obviously not mutual) and with a number of the regular participants at that board. We discussed the Greaney study there on a daily basis (I rarely did, I limited myself to posting on saving strategies).
Greaney became abusive when stock prices dropped a bit and was in the process of causing our best posters to leave the board. I felt that the only thing that I could do to save the board was to point out the error in the study. My thought was that that might cause him to be a bit less arrogance in his dealings with others. I also thought that we would all learn a lot about safe withdrawal rates. I had always felt like a bit of a creep for not having the courage to point out the error, which I had known about from the first day I posted there.
When I saw the reaction to my post, I realized that I had a tiger by the tale. This isn’t just a story about safe withdrawal rates. It’s about the entire Buy-and-Hold Model. Getting the Greaney study corrected would be a huge step forward toward getting the entire Buy-and-Hold Model corrected. Greaney didn’t make the error because he is dumb. He just followed the model. I don’t think that the people who followed the model were dumb either. They didn’t have Shiller’s research available to them when they were developing the model. They took a shot in the dark on the issue of valuation-based market timing and they made a mistake.
So what, right? It happens. The trouble is the cover-up of 43 years. Because there are lots of powerful and wealthy and well-connected people who will “look bad” when the cover-up is revealed, there’s a lot of pressure to continue the cover-up. But that of course makes things worsr, not better. I naturally would like to take things to a place where we can all begin making things better and better and better.
Rob
What formal education/training do you have to tell experts that they need to correct their studies? Why haven’t you done your own studies yourself? Why are you broke and divorced? Why have you sat on your lazy a$$ for the last 25+ years moaning and complaining?
I have enough formal education to be able to examine the Greaney retirement study and determine whether or not it contains a valuation adjustment. That’s all that anyone needs to see that this Buy-and-Hold stuff is garbage.
I don’t say that it started out as garbage. I like everything that the Buy-and-Holders came up with other than the loony-tunes “idea” that valuation-based market timing is not always 100 percent required for every investor. But, I mean. come on. Getting the numbers right in retirement studies is pretty darn important. People use retirement studies for help in planning their retirements.
I get it that the people who developed the Buy-and-Hold concept did not have Shiller’s amazing, Nobel-prize-winning research showing that valuations affect long-term returns available to them when they were doing so. That’s unfortunate. But that’s the way things go sometimes. We humans sometimes have to take a wild shot in the dark when trying to figure something out. When we take a wild shot in the dark, there’s always that chance that the wild shot in the dark will end up being off the mark. It’s just one of those things.
The other side of the story is that we now have 43 years of peer-reviewed research showing how stock investing works in the real world. My extensive formal training as a walking/talking human who doesn’t make a six-figure salary pushing the long-discredited Buy-and-Hold garbage tells me that we should be talking about the far-reaching how-to implications of that amazing research at every discussion board and blog on the internet, without a single exception. Talk about the benefits of formal training! Yowsa!
Correcting one’s retirement study when one learns that one got the numbers wildly wrong is important. Who’d a think it?
I wish you all good things, old friend.
Buy-and-Hold! Buy-and-Hold! Buy-and-Hold! Turning a quick buck is all that matters in this field. What happens to the poor investors following the long-discredited “advice” matters not a whit. Makes sense!
Hang in there, man.
Rob