A Rich Life

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

“I Could Live With It If You Told People That Buy-and-Holders Believe That the Safe Withdrawal Rate Is Always 4 Percent But Also Let Them Know That Those Who Believe in Nobel-Prize-Winning Economist Robert Shiller’s Research Showing That Valuations Affect Long-Term Returns Get a Very Different Number (1.6 in January 2000, Other Numbers at Other Times).”

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

Note that I, nor others that comment on this board call you names , like “goon”. Notice that we don’t make threats, like prison. Notice that we behave ourselves and are mindful of community standards, keeping us from banning.

Learning anything?

Greaney has not corrected his retirement study. I pointed out the error in it on the morning of May 13, 2002. I noted that it does not contain an adjustment for the valuation level that applies on the day the retirement begins. Thousands of people have looked at the study over the course of the past 17 years and not one has been able to identify a valuation adjustment in it. So I was right re what I said.

Greaney said that the safe withdrawal rate was 4 percent. If you include a valuation adjustment, you learn that the safe withdrawal rate for those who retired in January 2000 was 1.6 percent. Greaney said that those taking a 4 percent withdrawal had “100 percent safe” retirements. The properly done studies show that the odds of those retirements lasting 30 years is only 30 percent. So they were not safe or anything even remotely close to it.

I am not willing to lie re these matters. A failed retirement is a serious life setback. So, when I am on a discussion board and someone asks “what is the safe withdrawal rate?” I post honestly. I do not say that it is always the same number, 4 percent. I say what it is for retirements beginning with the valuation level that applies at that time. That’s the dispute. That’s what you refer to as my “bad behavior.” That’s always been the dispute. I say that the Buy-and-Hold retirement studies should be corrected. You don’t want to see them corrected. That’s why we are working at cross purposes.

I could live with it if you told people that Buy-and-Holders believe that the safe withdrawal rate is always 4 percent but also let them know that those who believe in Nobel-prize-winning Economist Robert Shiller’s research showing that valuations affect long-term returns get a very different number (1.6 in January 2000, other numbers at other times). But I am not going to lie re this critically important matter. I believe that valuations affect long-term returns. If I say that I believe that the safe withdrawal rate is always the same number, I am obviously telling a lie. It’s not going to happen.

I have not threatened you with prison. I have no power to put you in prison and I have no desire to seek such power. I have pointed out that you have committed crimes that will likely get you sent to prison in the days following the next price crash. It is the U.S. statute books that threaten you with prison. Take it up with them.

By pointing out that you have committed crimes that will likely get you sent to prison, I am being a friend to you. The easy thing to do here would be to ignore the criminal acts and then act surprised when you are taken away. It won’t do you any good for me to warn you about prison when it is too late for you to help the millions of people whose retirements in danger. You can help those millions of people by doing what you can to open ever discussion board and blog on the internet to honest posting re the last 38 years of peer-reviewed research. Do that and people will be less angry in the end. Which will translate into a shorter prison term for you.

I am doing for you what I would want you to do for me if the tables were turned. I am your friend, whether you choose to acknowledge it or not. I have always been your friend. I was Greaney’s friend when I pointed out the error that he made in his study. If I had made an error in a retirement study, I would be horrified. I would want people to point it out so that I could correct it before it did more harm. Greaney is off his rocker if he thinks that I was somehow being something other than his friend by pointing out the error. I am his best friend in this world. Those who fail to urge him to correct his study are being cruel. He applauds them for it. But they are being cruel all the same. They are being cruel because that is the easier path to take in the short term but one that does great harm to him in the long run.

I am Greaney’s friend and your friend for the long term. I say as a friend that you should urge him to correct the study. Or, if not that, to at the very bare minimum urge him to come clean by acknowledging that there are two schools of academic thought as to how stock investing works and that those who follow the research of Robert Shiller (Valuation-Informed Indexers) get very different numbers than the number that Greaney reports in his study.

If there is ever anything that I can do to help you, please let me know.

If you want me to turn on my friend John Greaney by pretending that I see a valuation adjustment in his study, please try to find somebody else. No freakin’ way, no freakin’ how. I would be hurting him by doing that and of course I would be hurting all of the readers of his study as well. No can do.

My best wishes to you and yours, Anonymous.

Rob

Buy-and-Hold Goon to Rob: “We Don’t Need to Seek Revenge and Call People Names Like You Do. We Decided Long Ago to Keep Working and Saving So That We Don’t Have to Struggle in Retirement. I Can’t Imagine Having to Go Back to Work at Your Age After Being Out of the Market for So Long.”

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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 am still going to be doing the honest-posting thing. So how are you Goons better off?”

We are already just fine. We post honestly instead of trying to convince people about being perceived as honest (when you are not). We don’t need to seek revenge and call people names like you do. We decided long ago to keep working and saving so that we don’t have to struggle in retirement. I can’t imagine having to go back to work st your age after being out of the market for so long.

Okay, Anonymous.

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

Hang in there, my good friend.

In-a-Bad-Spot Rob

“We Cannot Think About Something Until We Give Ourselves Permission to Talk About That Something. And Shiller’s Nobel-Prize-Winning Research Findings Are Something That We Very, Very, Very Much Need To Be Thinking About. So We Are Going To Have To As a Nation Work Up the Courage To Stand Up To You Goons and Have the Laws Against Financial Fraud Enforced at Every Discussion Board and Blog on the Internet. That’s My Sincere Assessment After 17 Years of This — Er — Stuff.”

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

See above. It has already played out. Time for you to go get that job.

I intend to seek corporate employment at the end of the year, when I have finished my book.

But it is not going to make much of a difference.

I will still be writing my weekly column. I will still be checking the blog each night to see if there have been comments and to respond to them. I won’t be able to response immediately, that’s a small difference. But is that such a biggie? I sure don’t see how.

I am still going to be doing the honest-posting thing. So how are you Goons better off?

It all comes down to how millions of middle-class Americans react when they lose 50 percent or more of their life savings. Do they at that time applaud Buy-and-Hold or do they turn on it? I think they are going to turn on it. But I thought that Greaney’s Campaign of Terror against the hundreds of people who wanted to see honest posting permitted at the Motley Fool board was going to be brought to an end within 48 hours, 72 hours at the tops. The joke was obviously on me re that one. It is at least a theoretical possibility that the millions of people who lose more than half of their life savings in the next price crash will applaud the Wall Street Con Men and you Goons for what they and you have done to them. We are just going to have to wait and see how it all plays out to know for certain.

I didn’t call Greaney out on his b.s. for three years. I knew that his retirement study didn’t contain a valuations adjustment the first time that I looked at it. It was the first thing that I looked for when I discovered his web site. So my hands are not 100 percent clean re this matter. I have goonish tendencies working inside me too. We all do. I was a proud Buy-and-Holder myself once upon a time. I was in the company of millions of good and smart people. So sue me, you know?

If we are ever going to move beyond Buy-and-Hold to something real, we are going to have to open every site on the interest to honest posting re the last 38 years of peer-reviewed research in this field. There is no other way. We cannot think about something until we give ourselves permission to talk about that something. And Shiller’s Nobel-prize-winning research findings are something that we very, very, very much need to be thinking about. So we are going to have to as a nation work up the courage to stand up to you Goons and have the laws against financial fraud enforced at every discussion board and blog on the internet. That’s my sincere assessment after 17 years of this — er — stuff.

I wish you all the best, okay? I think of you as a friend, your goonishness aside. I would like to think that that counts for a little something, whether you are open to saying so or not.

My best wishes to you, dear Goon FRIEND.

Honest-Investment-Discussion-Seeking Rob

“There Has Never Since the Morning of May 13, 2002, Been a Day When Stock Prices Went to Fair-Value Levels or Lower (Except for a Very Brief Moment in Early 2009 When They Went Just a Tiny Bit Below Fair Value). So We Have Never Had a Time When the Irrational Exuberance Encouraged by Buy-and-Hold Was Not Messing With People’s Minds. I Want to See How People Respond to Hearing What the Peer-Reviewed Research Says at a Time When Stock Prices Are at Fair-Value Levels or Lower.”

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

We have seen it all play out Rob. You seem to finally recognize this based on your most recent posts indicating that you intend to go back to work.

I believe that we will see a higher percentage of the population work up the courage to stand up to you Goons after we have seen a 50 percent drop in stock prices. There has never since the morning of May 13, 2002, been a day when stock prices went to fair-value levels or lower (except for a very brief moment in early 2009 when they went just a tiny bit below fair value). So we have never had a time when the irrational exuberance encouraged by Buy-and-Hold was not messing with people’s minds. I want to see how people respond to hearing what the peer-reviewed research says at a time when stock prices are at fair-value levels or lower.

About 10 percent of the population today believes that Shiller’s research is legitimate and important. How high does that percentage have to go for us to open every discussion board and blog on the internet to honest posting? My guess is that the answer is: “20 percent.” And my further guess is that the next price crash will get us there.

But we are just going to have to wait to see how it all plays out to know for certain.

My best wishes.

Rob

Valuation-Informed Indexing #454: Risk Is Not Volatility, Risk Is Not Knowing What Causes Volatility

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I’ve posted Entry #454 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Risk Is Not Volatility, Risk Is Not Knowing What Causes Volatility.

Juicy Excerpt: Strangely, however, we cannot say that Shiller has in a practical sense done much to reduce stock investing risk. If stocks are more risky when stocks are priced high (which is what Shiller showed), there has never been a time in U.S. history when stocks have been more risky than than have become during the post-Shiller era (from 1981 forward). There have been two huge changes in the stock investing world in the past four decades. In an intellectual sense, most of the risk of the asset class has been eliminated. And in a real-world sense, stocks have become much more risky.

“The Fact That Wade Pfau Won’t Speak to Me Today Definitely Tells a Tale That Needs to Be Widely Told.”

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Set forth below are the text of two comments that I recently posted to the discussion thread for another blog entry at this site:

All you have is a story line that you created to fit your narrative. You have only convinced yourself.

I convinced Wade Pfau, Anonymous.

A) Academic Researcher Wade Pfau’s Statements Showing Interest In and Confidence in Rob Bennett’s Work

1) “I do cite you and John Walter Russell in my paper as the earliest and strongest advocates of this approach [New School safe-withdrawal-rate research].

2) “Are you aware of Shiller offering asset allocation advice based on PE10? …. If you read Rob Bennett’s stuff carefully, I think he did provide an important contribution in terms of describing a way for PE10 to guide asset allocation for long-term conservative investors. I also think he was right on the issue of safe withdrawal rates.” — Posted at the Bogleheads Forum discussion board.

3) “I am also extremely grateful to Rob Bennett for motivating this topic and contributing his experience and encouragement.” — Written in Acknowledgments section of Wade’s breakthrough research paper.

4)”You deserve much of the credit as the whole idea of Valuation-Informed Indexing belongs to you.”

5) “I definitely need to cite some of your work as the founder of Valuation-Informed Indexing, as I have not found anyone else who can lay claim to that. Shiller pointed out the predictive power of PE10 but never discussed how to incorporate it into asset allocation, as far as I know.”

B) Academic Researcher Wade Pfau’s Statements on the Superiority of Valuation-Informed Indexing Over Buy-and-Hold

1) “What you see in the top part of the graph for each year is the amount of wealth accumulated after 30 years for someone following Buy-and-Hold against someone following Valuation-Informed Indexing….Valuation-Informed Indexing provides more wealth for 102 of the 110 rolling 30-year periods, while Buy-and-Hold did better in 8 of the periods.”

2) “I will take steps in my final paper to test a wide variety of assumptions about asset allocation, valuation-based decision rules, whether the period is 10, 20, 30, or 40 years, lump-sum vs. dollar-cost averaging, and so on, and to show that the results are quite robust to changes in any of these assumptions.”

3) “Any data mining that I am doing is in favor of buy-and-hold, not in favor of market timing.”

4) “The findings for “market timing” are so robust anyway, that it hardly matters how we do it.”

5) “The maximum drawdown from market timing is much less. That is how far the portfolio drops from past highs to current lows. The Buy-and-Holder once experienced a 60.96% drop, whereas the worst drop for market timing was 24.16%.”

6) “Market timing provides signficantly higher returns at a comparable level of risk.”

7) “The market timer enjoys a far less risky strategy.”

8) “On a risk-adjusted basis, market-timing strategies provide comparable returns as a 100 percent stocks Buy-and-Hold strategy but with substantially less risk. Meanwhile, market timing provides comparable risks and the same average asset allocation as a 50/50 fixed allocation strategy, but with much higher returns.”

9) “If everyone increased exposure after a market fall and vice versa, then this would dampen out the big swings in the market aggregates, and we might get shallower boom/bust cycles.”

10) ““‘I’m excited about this, as depending on what you have already done, I think I can design a study using the Shiller data to provide historical simulations of Valuation-Informed Indexing strategies against fixed Buy-and-Hold strategies and also lifecycle strategies (declining allocation to stocks as one ages). If Valuation-Informed Indexing consistently outperforms fixed and lifecycle strategies, then the proof is in the pudding so to speak. Given how well valuations help to explain withdrawal rates, I think there is a lot of potential for this topic.”

11) “Yes, Virginia, Valuation-Informed Indexing Works!”

12) “It makes complete sense to have an equity allocation that is in some way flexible. Having a completely inelastic demand for equities is a bit bonkers; no-one acts that way with life’s other important commodities.”

13) “I wrote up the programs to test your Valuation-Informed Indexing strategies against Buy-and-Hold, and I must say that the results look very promising…. I am quite excited about the findings so far. As you say in the podcast, Valuation-Informed Indexing should beat Buy-and-Hold about 90 percent of the time, and I am getting results that support this for various strategies.”

14) “I have been toying with the idea of sending the paper to the Journal of Finance, which is the most prestigious journal in academic finance.”

15) “Now that I am accounting for risk, I am even more amazed by how well Valuation-Informed Indexing works.”

16) You shouldn’t be too excited with great wealth accumulations if they happened due to unusually high valuations, and low wealth accumulations shouldn’t be as scary if valuations are also quite low.”

17) “My idea is to show many different tables with results over the whole period for returns and risks. Valuation-Informed Indexing always provides more returns for often less risk.”

18) “No matter what I try, Valuation-Informed Indexing will still perform better in 85-95% of cases for 30 years.”

19) “I have a new figure for showing this as well. And a nice figure showing the outperformance percentages across rolling periods of lengths between 1 and 40 years. I think it is all quite persuasive.”

20) “You haven’t seen anything yet! This was just the secondary study. I’m still working on the main one!”

C) Academic Researcher Wade Pfau’s Statements of Incredulity That He Was the First Academic Researcher to Examine the Valuation-Informed Indexing Strategy

1) ” I know that there is an extensive literature about the predictability of long-term stock returns dating back to Campbell and Shiller’s work in the mid-1990s. I also know that there is an extensive literature about short-term market timing strategies…. But my question is about LONG-TERM market timing strategies. In other words, using market timing over periods of at least 10 years to obtain better returns than a Buy-and-Hold strategy. The literature seems slim.”

2) “Let me just explain a bit more why I posted about this here. Valuation-Informed Indexing has had critics for years, but until Norbert did it in 2008, nobody seemed to have provided a serious investigation of it. I just couldn’t understand why. And that bothered me.”

3) “Two papers by Fisher and Statman are still all I can find that provide evidence against long-term market timing.”

4) “I’m so confused by why Fisher and Statman didn’t consider risk in their idiot switching tests. Valuation-Informed Indexing is much less risky by pretty much any standard I consider. I must wonder… did I make a mistake somewhere? Why haven’t academics already published research about this?”

D) Academic Researcher Wade Pfau’s Statements on the Dangers of the Conventional Retirement Planning Advice

1) “The traditional approach to retirement planning (as described on pages 10 and 11 of The Bogleheads’ Guide to Retirement Planning, for example) is counterproductive and possibly damaging.”

2) “Retirees now frequently base their retirement decisions on the portfolio success rates found in research such as the Trinity study…. This is not the information that current and prospective retirees need for making their withdrawal rate decisions.”

3) “This article provides favorable evidence based on the historical record for long-term conservative investors to obtain improved retirement planning outcomes (lower savings rates, higher withdrawal rates) using valuation-based asset allocation strategies.”

4) Wade sent me a link to an article in Business Week that was published more than eight years after my post pointing out the errors in the Old School retirement studies and which he characterized as “quite sympathetic to the point you were trying to make all along”.

5) “Though I was only trying to do an Old School safe-withdrawal-rate study, all that I ended up doing was showing in a different way what you had been saying all along: the safe withdrawal rate changes with valuations.”

6) “Valuations are the driving factor. ”

7) “This is similar to your drunk driving analogy, which I agree with.” The discredited but uncorrected retirement studies find that in most circumstances a 4 percent withdrawal rate provides a huge cushion for the retiree using it. However, in each of the three cases in history when stocks reached insanely high price levels, retirements using a 4 percent withdrawal came within a whisker of failing. To say that this shows that a 4 percent withdrawal is “100 percent safe” (these words are used in the Greaney study) for a retirement beginning at a time of insanely high price levels is like saying that driving drunk is “100 percent safe” because 97 sober drivers drove their cars 20 miles without incident while 3 drunk drivers were paralyzed for life in car accidents but did not die. The fact that 4 percent only worked by a whisker in the cases in which valuations were high at the beginning of the retirement shows that a 4 percent withdrawal is high-risk at times of high valuations, not that it is “100 percent safe.”

8) ” Actually, this issue shouldn’t really even be all that controversial. It’s just common sense that the probabilities from the Trinity study shouldn’t be interpreted as forward-looking probabilities for new retirees.”

9) Naturally, I am finding that Valuation-Informed Indexing can allow you to reach a wealth target with a lower savings rate, use a higher withdrawal rate, and also have a lower “safe” savings rate, than a fixed allocation.

E) Academic Researcher Wade Pfau’s Statements Showing His Concerns that Continuing to Report Honestly on the Investing Realities in the Face of the “Hostile Environment” for Doing So Created by Buy-and-Holders Would Harm His Career

1) “I was trying to pay tribute to your accomplishments in what I knew would be a hostile environment.”

2) “Valuations and long-term investors is a somewhat controversial topic.” Wade posted these words to his blog in October 2011 as his explanation of why he was abandoning his plan of doing further research on the superiority of Valuation-Informed Indexing strategies over Buy-and-Hold strategies. He had told me in earlier days that “You ain’t see nothing yet!” when I praised his breakthrough research in this area. After his flip to the dark side, Wade removed the page containing this blog entry from his site.

3) “We have both read and met to discuss your paper. Unfortunately, we did not find the paper’s incremental contribution to the academic finance literature, assuming the analysis proved to be correct, rose to the level that we are seeking for papers in the JFR. Thus sending the paper to a reviewer would be inefficient.” These words are from an academic journal’s “desk reject” of Wade’s breakthrough research.

4) ) ““ I was discouraged when I first received the “desk reject” by the editors of the same journal that published the Fisher and Statman paper. I realized that I didn’t have a chance with one of the top journals.”

5) “I think I should stay publicly quiet for a while, as I really don’t want anyone sending messages about any topics to officials at my university.”

6) I don’t want them [the Goons] working behind the scenes to derail me.”

7) “I did warn the editor of the Journal of Financial Planning that they may receive some ‘hate mail‘ after I mentioned your name in the safe savings rate paper.”

Rob

And we all know what Wade says now. The mere fact he won’t even speak to you tells us all we need to know.

The fact that Wade won’t speak to me today definitely tells a tale that needs to be widely told, Anonymous.

I naturally wish you all good things.

Rob

“Every Single Person in the United States Would Benefit If Shiller Would Address a Lot of the Questions That I Have Raised Over the Past 17 Years About the Implications of His Nobel-Prize-Winning Research. I Believe That Shiller Could Tell Us Things That We All Need to Hear and I Want to Do Everything in My Power to Get Us to a Place Where We All Start Hearing Those Things.”

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

Do you think Shiller sits around all day wondering what is on Rob Bennett’s mind?

I do not.

But I believe that every single person in the United States would benefit if Shiller would address a lot of the questions that I have raised over the past 17 years about the implications of his Nobel-prize-winning research. I believe that Shiller could tell us things that we all need to hear and I want to do everything in my power to get us to a place where we all start hearing those things. His ideas are powerful and important. We are hurting ourselves by accepting a situation where we are not benefiting from them to the extent we could.

Say that someone had discovered the cure for cancer and that the people who profit from running cancer treatment centers engaged in criminal behavior to stop people from hearing about what this person had done. And that I said on the internet that we all should be doing what we could to get the message about how to cure cancer out to everyone. Would that person be thinking about what was on my mind every day? No. But it would still be a good thing if we could persuade that person to report the criminal behavior and thereby change the circumstances that applied so that he could get his message out.

I want to benefit from Shiller’s research. And I want you to benefit from Shiller’s research. And I want every person alive in the United States to benefit from Shiller’s research. I think it is a shame that there has been a cover-up. Had there never been a cover-up, the opposition to spreading the word about Shiller’s research would be far less than it is today. Each day that the cover-up continue makes things worse. So I would like the cover up to end today.

Does that help at all?

Rob

“You Behave the Way You Do Because You Have Seen the Same Thing That I Have Seen — Intense Interest in a Better Way to Invest on the Part of About 10 Percent of the Investing Population, Which Is Millions of People. You Can’t Stand the Thought of Me Making the Millions That You Believe That I Will Make If You Permit the Laws of the United States to Rein in Your Behavior.”

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

“Thousands of people have offered effusive praise for my work. ”

How much have those “thousands” paid you for your work?

How many of those thousands are posting here on your board to show they support you?

I have not earned one dime from this work in seventeen years.

And not one of the thousands who have expressed interest in the work is posting here today.

You’ve got me re those two, Anonymous.

I still say that your behavior demonstrates that you see the huge potential for me to make boatloads of money promoting the first true research-based model for understanding how stock investing works. You have put yourself at great risk of going to prison for a long time in the days following the next price crash. That’s strange, strange, strange behavior. My behavior of sticking at this for so long is unusual. But my behavior has not been one-fiftieth as strange as yours. I have hurt myself financially for 17 years with the hope of receiving a huge payout when the crash arrives. You have put yourself at grave risk of going to prison for the remaining years of your life. There’s no comparison.

I don’t think that you believe in Valuation-Informed Indexing. I believe that your skepticism is genuine. But you obviously don’t believe that all investors who learn about these ideas share your level of skepticism. If you believed that, you would just let me speak and enjoy watching them lose interest and walk away. Never one time have you considered doing such a thing. You behave the way you do because you have seen the same thing that I have seen — intense interest in a better way to invest on the part of about 10 percent of the investing population, which is millions of people. You can’t stand the thought of me making the millions that you believe that I will make if you permit the laws of the United States to rein in your behavior.

Well, I intend to make those millions anyway. And I intend to encourage hundreds of others to follow my lead and earn their own big paydays developing and promoting the first true research-based strategy. A win/win/win/win/win, if I ever heard of one.

We’ll see how it plays out, you know? I wish it hadn’t gone this way. I wish that you weren’t going to prison and I wish that my efforts to turn a buck with this stuff had not been delayed for 17 years and I wish that the people of the United States were not likely to see a 50 percent drop in stock prices over the course of the next year or two or three. I played the cards that I was dealt. That’s all that any of us can do.

But I certainly believe that I have been dealt more good cards than bad ones. There are some bad ones that have come my way. I have seen some very, very, very bad cards. The way it is. But I have also seen some very, very, very exciting and encouraging and life-affirming and enriching (in all senses of the word) cards. Good for me, you know? I have zero intention of throwing those cards back. It’s knowing that those cards remain in my hand that keeps me from breaking into tears when I think about all the pain that the bad cards that I have been dealt have caused me.

One has to take the bad with the good, no? Things become cliches for a reason.

If there is ever anything that I can do to help you out a bit, please let me know. I will be there. Holding grudges is bad karma, in my book. I don’t go for that sort of thing.

My best wishes.

Rob

” We Never Would Have Seen a Single Abusive Post or a Single Criminal Act Had You Goons Not Seen the Intense Enthusiasm That About 10 Percent of the Various Board Communities Showed for These Ideas. 10 Percent of the Investing Population Is Millions of People.”

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

“My most valuable asset is the 17 years of material that I house here at the site that tells the story of what the last 38 years of peer-reviewed research teaches us all about how stock investing works in the real world. My top priority is to protect and develop that asset. Finishing the book is a huge advance in that area. So that needs to come first.”

It actually has no value unless someone is willing to pay you for it. At this point, your most valuable asset is your ability to work.

Thousands of people have offered effusive praise for my work. When I first began doing this work, I never imagined that I could receive even one-fiftieth of the impact that I have achieved. If I achieved this much praise just by putting the ideas before a small number of people on the internet, it is hard even to estimate how much money I could earn when the general population learns about them, as it will in the days following the next price crash, when you Goons will be placed in prison cells and every discussion board and blog on the internet will be opened to honest posting on safe withdrawl rates and scores of other critically important investment-related topics.

I think it would be fair to say that we never would have seen a single abusive post or a single criminal act had you Goons not seen the intense enthusiasm that about 10 percent of the various board communities showed for these ideas. 10 percent of the investing population is millions of people. And there is no one alive on Planet Earth today who has developed these ideas to the extent that I have. There is no one in an even remotely close second place.

Are you joking?

Rob

Valuation-Informed Indexing #453: The Difficulty in Persuading Investors That Valuations Matter Is That They Matter So Much

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I’ve posted Entry #453 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Difficulty in Persuading Investors That Valuations Matter Is That They Matter So Much.

Juicy Excerpt: But once we look at the numbers and see how much valuations matter, an exception becomes very much required. At the top of the bubble, the odds that a retirement using a 4 percent withdrawal would survive 30 years was only 30 percent. If those numbers are accurate, our failure as a society to insist that retirement studies report numbers properly will have caused millions of failed retirements once stock prices return to fair-value levels or lower in the wake of the next price crash. If we were to acknowledge that, we would have to make changes to how we design retirement planning studies.

And we don’t want to!

Not for any intellectual reason. For the purely emotional reason that, for so long as prices remain high, our portfolio statements show that we are all closer to retirement than we really are for so long as we can maintain the illusion that valuations do not matter. The day that we accept that Shiller’s research is legitimate is the day that we are required to acknowledge that we all are a lot farther behind in our efforts to finance our retirements than we want to believe we are. Fudging the numbers is the only alternative to acknowledging the realities. So we insist that just about everyone who works in this field fudge the numbers.