A Rich Life

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

“Shiller’s Findings Would Not Have Been Considered Revolutionary Had an Entire Industry Not Already Been Built Teaching the Opposite Belief. The Battle Between Buy-and-Holders and Valuation-Informed Indexers Is Not an Intellectual Debate. The Battle Is a Turf Battle.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

“But I don’t see that you have offered any justification for the belief outside of your assertion of it”

That statement applies to almost everything you post. When anyone asks you to back up a single thing, you merely reference something you posted.

There’s only one thing that I believe that you don’t, Sammy — I believe that valuations affect long-term returns. That’s the opposite of what Buy-and-Holders believe — Buy-and-Holders believe that the market is efficient (that is, that it is impossible for the market ever to be overvalued or undervalued because investors always collectively act in their self-interest and price things properly).

We start from differing starting points and so we end in very different places. That’s the entire story.

I wouldn’t say that I ask anyone to take my core belief on faith. Shiller showed with peer-reviewed research that valuations affect long-term returns But I do acknowledge that millions of good and smart people believe in Buy-and-Hold in the sense that they follow it themselves (whether these people possess a true confidence in their strategy or not is a different question).

And I of course acknowledge that Eugene Fama was awarded a Nobel prize on the same day that Robert Shiller was awarded one. So a good case could be made that both Buy-and-Hold and Valuation-Informed Indexing are academically respected strategies. What I find shameful about Buy-and-Hold is how many of those who believe in it engage in abusive behavior to block millions from hearing about the alternative strategy and how many more fail to speak up when they see their fellow Buy-and-Holders engaging in such tactics.

If you were to list the 20 most important beliefs about how stock investing works, you would find that you and I agree re 19 of them. We disagree only about the most important one of all, the one that has the greatest influence on whether an investor experiences long-term success — whether it is true that the market is efficient or that valuations affect long-term returns.

I believe that the idea that the market is efficient was a MISTAKE that was made because index funds were not available at the time Fama did his research and that, had Fama never done the research that was misinterpreted as showing that no form of market timing is required, every investor who today follows a Buy-and-Hold strategy would today be following a Valuation-Informed Indexing strategy because of what we learned when Shiller published his “revolutionary” (his word) findings of 1981. Those findings would not have been considered revolutionary had an entire industry not already been built teaching the opposite belief.

The battle between Buy-and-Holders and Valuation-Informed Indexers is not an intellectual debate. All of the intellectual content supports Valuation-Informed Indexing. The battle is a turf battle. Buy-and-Hold makes mountains of money for those who promote it and the rich and powerful people who promote the strategy don’t want to give up that money.

That’s my sincere belief re these terribly important matters, in any event.

I naturally wish you all the best that this life has to offer a person.

Rob

“The New Ideas Won’t Spread Until Some of Us Work Up the Courage to Stand Up to You Goons. Each Time One of Us Works Up the Courage to Do So, It Makes All the Others Thinking About It Feel More Confident About Doing So. We All Need to Stick Up for Each Other. That’s How the Good Guys Prevail in the End and How the Bad Guys Get Sent Down.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

I’ve noticed that the more evasive you want to be, the more words you type. I imagine that behavior leads to bans.

My policy of responding to a high percentage of Goon posts had indeed contributed to the bannings, in my assessment, Dan.

Please know that I do NOT respond to all Goon posts. I ignore those that contain zero useful content, just pure abusiveness. Those people can see through. So I don’t see any need to type words of my own in those cases.

However, a frequent Goon trick is to mix up a high percentage of garbage with a small amount of real stuff. For example, they might write a post saying “is this a conspiracy?” That’s a legitimate question. Lots of people are stumped by that one. If there really is 35 years of peer-reviewed research showing that valuations affect long-term returns, how is it that Buy-and-Hold still exists? Non-Goons have that question in their minds. So we need to answer it. I try to do so even when it is clear that the person asking the question has no good intent.

We need to call the Goons out on their b.s. Ignoring them does NOT do the trick. Their aim is to disrupt conversations. The ugly stuff drives people away. Most people just cannot stand all the ugliness. When people leave boards because of their nastiness and the conversations stop, that’s a win for the Goons. They are happy with that result. All the rest of us miss out on great learning experiences. But the Goons get what they want when we ignore them.

So I try not to do that except in the most extreme cases (when there is zero content). Those of us who write about research-based strategies have every right in the world to share our thoughts at every discussion board and blog on the internet. I always follow the rules. I know from interactions with many thousands of people that there is HUGE interest in Valuation-Informed Indexing. But the new ideas won’t spread until some of us work up the courage to stand up to you Goons. So I make a sincere effort to do that.

I don’t want anyone to be afraid to post honestly. Each time one of us works up the courage to do so, it makes all the others thinking about it feel more confident about doing so. We all need to stick up for each other. That’s how the good guys prevail in the end and how the bad guys get sent down. Today, those who post honestly are quiet and timid and the gooniest among us are loud and bold. We need to flip that to learn what we all need to learn about how stock investing works in the real world.

Get Rich Quick/Buy-and-Hold strategies don’t just destroy our investment portfolios. They rot out our souls.

That’s my sincere take re these terribly important matters, in any event.

My best and warmest wishes to you and yours.

Rob

“I Look at the Same 14 Years of Abuse and Observe That That Abuse Is What Has Kept Lots of Other Smart and Good People From Walking the Path That I Have Walked and Thereby Has Left a Mountain of High-Dollar Opportunities Open to Me”

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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:

You don’t like anything that doesn’t fit with your fantasy. When you go 14 years without making a dime and the people get fed up enough that they have to ban you from almost every board, you would think that reality would step in. It seems you have gone to extreme lengths to avoid having to back to work, instead of spending your day playing out a fantasy on your computer keyboard.

The message is simple. Go get a job and support your family. Calling people goons doesn’t put food on the table.

14 years sounds like a lot of time when considered in isolation. The full reality here is that it is not that big a deal when the size of the advance in our understanding of how stock investing works is taken into consideration. Shiller’s “revolutionary” (that’s his word) findings have been for practical purposes ignored for 35 years now. The other and more positive way of looking at it is that we will all obtain access to 35 years of peer-reviewed insights in a single 24-hour time-period when we collectively work up the courage to call out the Buy-and-Holders on their b.s., Sammy.

It’s all in how you look at it. You look at the 14 years of Goon attacks and say “hey, we really taught that Rob Bennett fellow not to mess with Buy-and-Hold, huh?” I look at the same 14 years of abuse and observe that that abuse is what has kept lots of other smart and good people from walking the path that I have walked and thereby has left a mountain of high-dollar opportunities open to me.

I would never say that I am happy about the Goon stuff. I am not. I oppose it. But it’s an ill wind that carries no good in it. Going 14 years without making a dime has been a trial. I don’t say otherwise. But I am extremely proud of the work that I have done and honored to have been called to do it and grateful that I live in a country where I am certain to be very well compensated for it in the long term. That’s what counts in the end, no? It’s Jack Bogle that taught me to focus on the long term. I am 100 percent sure that the big guy got that one right.

But we’ll see, you know? We can watch together as it all plays out in real time. I naturally wish you all the best of luck with it.

Rob

“Steve Jobs Did Not Make His Fortune Posting on Message Boards. Bill Gates Did Not Make His Fortune Posting on Message Boards. But They Both Did Something Similar to What I Did. They Used a New Technology to Improve the World in a Very Big Way and They Were Properly Compensated for Their Efforts.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

I haven’t earned a dime with this for 14 years.”

Were you expecting to earn a living by posting on message boards?

Why on earth did you quit your job at the age of 43 without adequate savings? Why didn’t you just go back to work when you found out your plan wasn’t working?

Of course I was expecting to earn living from the work that I have done in the investing field. And of course I still do. And of course I base that expectation on a mountain of evidence.

You engage in deception when you employ the phrase “posting on message boards.” The suggestion is that there is something odd about a plan to make millions of dollars by posting on message boards. There isn’t. Message boards are a new communications medium of great potential to change the world for the better. The pioneers who master use of the new medium will be compensated well for their efforts. I have found myself in circumstances in which I stand to make a lot of money by mastering the new medium. I intend to take advantage of this huge opportunity. Why shouldn’t I?

Steve Jobs did not make his fortune posting on message boards. Bill Gates did not make his fortune posting on message boards. But they both did something similar to what I did. They used a new technology to improve the world in a very big way and they were properly compensated for their efforts. If Steve Jobs had said “I intend to make my fortune by creating an iphone,” many would have thought that sounded odd because no one knew at that time what an iphone was. Now that Jobs has done what he set out to do, they know. Now there is nothing perceived as odd about his plan.

I learned by my participation at a message board (the Retire Early board at Motley Fool) that there are many people who see value in calculating the safe withdrawal rate when planning their retirements. I learned through my own planning efforts that the Buy-and-Hold retirement studies are rooted in error. Shiller showed in 1981 that valuations must be considered when estimating future returns but the Buy-and-Hold studies do not contain adjustments for the valuation level that applies on the day the retirements begins.

I pointed out the error in a post that I advanced on the morning of May 13, 2002, and the board exploded in excitement. Hundreds of posters came forward to thank me profusely for putting forward the most important post in the history of the forum; they had learned something very important about how retirement planning works in the real world that none of the experts in this field had ever bothered to tell them.

The Buy-and-Holders reacted strangely. They threatened to kill family members of any posters who posted honestly on the subject of retirement planning at a retirement planning board. I think it would be fair to say that the Buy-and-Holders know themselves on some level of consciousness that the Buy-and-Hold retirement studies do not contain valuation adjustments. There is no other possible explanation for their behavior.

Over time I have had thousands of people contact me and thank me for my efforts in the most profuse ways possible. I have had numerous economics professors tell me that they are going to add my insights about how stock investing works in the real world to their course materials. I of course always express gratitude for these kind votes of confidence. But I also always ask an obvious question: Why don’t these professors go out into the world and tell EVERYONE what they have learned in a very public and clear and simple and bold way?

The answer is — We didn’t have message boards back in 1981 when Bogle learned that the Buy-and-Hold Model was rooted in error. Bogle couldn’t bear to accept that he had made a big mistake (we all of course make mistakes — by itself this is no biggie) and so he went into cover-up mode. And, because we didn’t have discussion boards, the cover-up succeeded for 21 years until I came on the scene in May 2002. Then I put up my fateful post of the morning of May 13, 2002, and the world of investing knowledge changed in a very dramatic way.

Everything at my site exists because of what I have learned from my interactions with thousands of other investors on message boards, Sammy. I have talked to the biggest-name experts in the field and they have endorsed my work. I have worked with people with greater statistical skills than I possess to create calculators that exist nowhere else on the internet or off. I have explored in great depth the psychology that permits investors to kid themselves into thinking that Buy-and-Hold strategies might somehow work regardless of the mountain of evidence otherwise. I have written hundreds of columns examining every aspect of what we have learned over the past 35 years and added to my own knowledge by adjusting my thinking in response to the feedback that I have received from interested readers (including you Goons!) posting on MESSAGE BOARDS.

I love message boards. I obviously don’t like the abusive stuff that you Goons use to disrupt the conversations that people with good intent are trying to hold on them. But message boards themselves are wonderful. They allow for learning experiences that could not be created in the days when all we had available to us was newspapers and radio and television.

We have rules at all our message boards that prohibit the tactics that you Goons have employed to hold us all back. I am 100 percent certain that those rules will be reasonably enforced in the days following the next price crash. And then we are all off to the races. We couldn’t have done what we have done without message boards. And of course I will be making a mountain of money by virtue of being one of the pioneers in the constructive use of this powerful new communications medium.

And of course there will be many other entrepreneurially minded people joining in as the opportunities become more clear and more compelling. I invite any of such person to contact me to ask about how they can get on board this exciting ride to the future. I was blessed to be put in the circumstances in which I was put. I haven’t enjoyed the nasty stuff. But I think it would be fair to say that the good stuff here has been 50 times more good than the bad stuff here has been bad. And I think it would be fair to say that that rule will end up applying for every single person who gets involved in a positive and helpful and life-affirming way.

I hope that helps a bit, my long-time Goon friend.

Rob

Kirk Clements: “It Is Very Interesting As a Practitioner to Try to Point Out the Errors of Academic Finance to Professors That Admit It Is All Wrong But Easy to Teach. I Fear That the Advisory Business Lives By That Rule – It Is All Wrong But Easy to Indoctrinate the People Into Buy-and-Hold.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

It has always been that way.

I was brought into the brokerage business because the head office noticed that I was doing arbitrage trades that their research department had not thought of yet. I got to look at the business from behind the scenes until the crash in 87. I was short index futures hedged with index future calls after that Labor Day and did quite well. I had to bail out family members that had borrowed against their homes because they were sold the buy and hold mantra. It killed the business because nobody wanted to talk to a broker so I went back to university. There I was exposed to MPT, CAPM, EMH and could see the insanity of it all. It is very interesting as a practitioner to try to point out the errors of academic finance to professors that admit it is all wrong but easy to teach. I fear that the advisory business lives by that rule – it is all wrong but easy to indoctrinate the people into buy and hold.

I am a value guy and I am at 70% cash. After the dollar finishes its run I might make a few more purchases. Baidu and Tencent look like the most miss-priced compounding machines out there right now. Whether looking at net nets or compounders or anything in between my holding period is about 5 years under normal conditions. Markets are not operating normally so I watch and wait for a better opportunity set. Waiting for the reversion to the mean. It will kill the buy and hold crowd again.

Okay. Thanks so much for taking the time to respond.

I agree that it’s always been that way. I have hopes that we are on the threshold of a big change because of Shiller’s research and because he was awarded a Nobel prize for his work. I think that, as our society has become richer, stocks have become more important to more people. So I believe that as a society we are going to have to advance in our understanding of how the market works. With Shiller’s research and with the interest that I have seen both among experts in the field and with everyday investors, I see us as being ready for a great leap forward.

We never had computers until some fool worked up enough courage to give the idea a good shot. We never went to the moon until some fool worked up enough courage to break the sound barrier. We never had the Beatles until Ed Sullivan took a chance by putting them up on his stage.

People have to do things for things to happen. I was amazed when I learned in 2002 that Shiller’s research had been around for 21 years and yet people planning early retirements didn’t realize that what Shiller showed meant that the safe withdrawal rate could not possibly be a constant number. So I got off my duff and did some things. And here I am.

I haven’t earned a dime with this for 14 years. I just got a lot of people mad at me. So maybe it will continue always to be the way it has always been in the past.

But I sure hope not! I’ve got a lot riding on my bet that we are all going to see a giant leap forward in coming days.

Rob

“What If Some Views Are Suppressed So Brutally That the People Who Hold Those Views Stop Expressing Them Publicly? Then You Get Into a Situation Where the Market Cannot Do its Job of Mixing All Views Together and Coming to a Reasonable Aggregate of Lots and Lots of Different Takes.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

Thanks Rob:

Frank Martin and Seth Klarman agree that sometimes it is best to hold a larger than normal amount of cash and wait for a better opportunity set. The way I look at it is…

First the value guys stop buying and might trim back a bit so they can sleep well.
Then the garp guys stop buying and might trim back a bit until they can
sleep well. That leaves only the momentum guys buying but the momentum
list gets smaller and smaller and volatility gets stronger and stronger.
A bit more selling by the value and garp guys to sleep better and then
the Doors start playing ” This is the End “. Is it a waterfall or does
it just grind down lower 1% each day or week or month.

I do not care as  long as the cash holdings that let me sleep at night is ready for finding
bargains.

And that is how it works.

Thanks much for stopping by, Kirk.

We agree much more than we disagree. Basically, there are lots of people who have differing views and all those views get mixed together to create a market. My own view is that valuations count for a lot more than most people think, but that’s just me. I could be wrong. The market as a whole is better able to assess things than any one individual. So as a general rule I think it would be better for people to listen to what the market is saying than to listen to what Rob Bennett is saying.

There is one more element of the story that causes me to be a bit more alarmed than most others are re where valuations stand today. What if some views are flat-out censored? What if some views are suppressed so brutally that the people who hold those views stop expressing them publicly? Then you get into a situation where the market cannot do its jobs of mixing all views together and coming to a reasonable aggregate of lots and lots of different takes.

I have seen this sort of thing play out many times. I posted at a Retire Early board at Motley Fool where there were thousands of people using the Buy-and-Hold retirements studies to plan their retirements. Those studies say that the safe withdrawal rate is always 4 percent regardless of how high or low valuations go. That cannot be so according to the 35 years of peer-reviewed research showing that valuations affect long-term returns. People who know about the last 35 years of peer-reviewed research know that those retirement studies get the numbers wrong, wildly wrong at times of outlier valuation levels. The demonstrably false claims made in those studies are going to cause millions of people to suffer failed retirements in day to come, in the event that the stock market continues in the future to perform anything at all as it has performed during the 145 years of stock market history for which we have good records.

Not one of those studies has been corrected in the 14 years since I put up that post. Instead, I have been banned at over 20 investing discussion boards and blogs run by Buy-and-Holders who do not want their readers to know what the last 35 years of peer-reviewed research says on this subject. I have had many top-name experts tell me that they think that my point is right on, that the retirement studies should be corrected. But they have also told me that they are afraid to say so in public. I have had University professors contact me. I have had academic researchers contact me. I have had investors advisors contact me. Those people live in fear that their true beliefs about how the stock market works will be discovered and they will lose their jobs as a result.

The market cannot function when people live in fear of giving voice to their true beliefs. The purpose of a market is to set prices properly and the means by which a market works this magic is through the transmission of information. For example, a car dealer can ask for a certain price for a certain model of car. But if the person with an interest in buying the car learns by reading Edmunds that the price being asked is too high, the market punishes the person who set his price too high by giving the potential buyer the information he needs to obtain a better price from a different dealer.

It doesn’t work that way in the stock market. Treasury Inflation-Protected Securities (TIPS) offered a 4 percent real return in 2000. The most likely 10-year real return for stocks when they are selling at the price at which stocks were selling in 2000 is a negative 1 percent. Every investor could have raised his annual return by 5 percentage points for 10 years running just by shifting money from the stocks asset class to the TIPS asset class. That’s a total increased return of 50 percent of the initial portfolio value. Increase your portfolio value by 50 percent through a 10-minute transaction (backed by 35 years of peer-revirewed research!) and you can retire many years sooner. This is a very big deal.

There are of course reasons why the Buy-and-Holders are so hotly opposed to the idea of permitting millions of investors to learn what the peer-reviewed research says. These people have built careers promoting Buy-and-Hold strategies. They put themselves forward as “experts.” If they acknowledge the mistake that was discovered by Shiller’s 1981 finding that valuations affect long-term returns, they are going to cause their customers to doubt their expertise. The fact that they have covered up the error for 35 years makes them look like salesmen (at best!) more than true experts. This is a turf war. There is a mountain of money to be made by keeping millions of investors in the dark re what the research says.

The other side of the story is that the market cannot do its job (setting prices properly) if people cannot be informed as to what the research says. People cannot make intelligent, rational choices if they cannot gain access to important information relating to those choices. I believe that as a society we all need to pull together to work up the courage to stand up to the Buy-and-Holders and DEMAND (not ask!) that they follow the laws prohibiting the use of the tactics that have been employed for 14 years now to keep people from learning what they want and need to learn.

I hope that helps a bit. That’s where I am coming from, in any event.

I hope we get another chance to talk things over a bit. Your comment brought a nice bit of sunshine to my Wednesday morning, my new friend.

Rob

Valuation-Informed Indexing #324: Valuation-Informed Indexers Only Temporarily Miss Out on Gains When Bull Markets Continue Longer Than Expected

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I’ve posted Entry #324 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Valuation-Informed Indexers Only Temporarily Miss Out on Gains When Bull Markets Continue Longer Than Expected.

Juicy Excerpt: Valuation-Informed Indexing strategies often do not pay off for a good bit of time. That much is certainly true. But they always pay off (at least on a risk-adjusted basis and usually even on a nominal basis) to those patient enough to permit the various waves of investor emotion to play out. Stocks were not worth buying at the prices at which they were being sold in 1996. The insanity of the last four years of the century did not render the smart choice to protect one’s portfolio by lowering one’s stock allocation a less-than-smart one. The power of that second wave of investor emotion delayed the day of reckoning for Buy-and-Hold investors while increasing the price they paid.

There is no getting around the price that follows from following Buy-and-Hold strategies. But the price can arrive in several different forms. There are always a variety of wave scenarios that may apply in given circumstances. Investors need to consider the possibilities, note how they apply to those in their particular circumstances, make the choices that follow from those considerations, and then exercise the patience needed for the various wave scenarios to play out.

It can be frustrating and unsettling waiting for the various wave scenarios to play out. But Valuation-Informed Indexing strategies always work if given enough time. The reason why is that they MUST always work. Long-term timing is how price discipline is exercised in the stock market. It is absurd to think that there might be a market in which it were a good thing to fail to exercise price discipline. Price discipline is a positive, valuations always matter and Valuation-Informed Indexing is always superior to Buy-and-Hold in the long term.

“Have You Considered That You Wouldn’t Be Worried About a Prison Sentence Today Had Bogle Come Clean Back in 1981? Each Day That the Cover-Up Continues, More People Get Hurt.”

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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:

When you wrote to Bogle, did you tell him he was a con-man?

I played it with Bogle the same way that I played it with Greaney, Anonymous.

When I first pointed out that Greaney’s retirement study does not contain an adjustment for the valuation level that applies on the day the retirement begins, I didn’t call him a “Goon.” It was when he responded by threatening to kill my wife and children that I began referring to him as a “Goon.”

So it was with Bogle. My assumption was that he would correct his error when it was pointed out to him. He didn’t. That’s what made him a con man. So that’s when I started referring to him as a con man.

Are you able to suggest any better way of proceeding in circumstances like this?

Have you considered that you wouldn’t be worried about a prison sentence today had Bogle come clean back in 1981? Each day that the cover-up continues, more people get hurt. Including Goons like you.

There’s no charity in covering up an act of financial fraud. The charitable thing to do is to INSIST that the fraud be brought to a full and complete stop. It’s also charitable to take the circumstances into account, to try to understand that someone can get caught up in something and make a mistake without meaning to. But there’s no charity in permitting the mistake to go uncorrected. That’s a negative for every single person concerned.

No?

Rob

“I Hereby Promise NOT to Take Any Action Whatsoever to Bring Criminal Charges or to Encourage Others to Bring Criminal Charges.”

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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:

Actually, Rob, you would have to push for criminal charges, because no one else is. As for the civil part, you would need to file the lawsuits. It is all in your hands.

Steve Jobs had a net worth of over $10 Billion and Bill Gates has a net worth over $80 Billion. Shouldn’t you adjust your expectations?

You’re making my point, Anonymous. $500 million is a mountain of money. But given what we are talking about here, it is a 100 percent reasonable number.

If you truly didn’t believe that anyone was going to be bringing criminal charges when this gets written up on the front page of the New York Times, you have nothing to worry about. I hereby promise NOT to take any action whatsoever to bring criminal charges or to encourage others to bring criminal charges.

I’ll tell the truth about what happened, to be sure. But if no one else pushes for criminal charges, there will be no criminal charges. I talk about criminal charges because I want to bring the nasty side of this to a full and complete stop before the lengths of the sentences grow even greater. That’s my part in this. I would be 100 percent happy if there were no prison sentences. I don’t believe that it is going to play out that way. But it is fine with me if it does.

Rob

“Even If My Site Did Not Exist, This Would Get Out. Shiller’s Book Is Still Out There. The Research That I Co-Authored With Wade Pfau Is Still Out There. Shiller’s Nobel Prize Is Still Out There. The Massive Act of Financial Fraud Is Eventually Going To Be Written Up On the Front Page of the New York Times Regardless of Anything I Do.”

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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:

You could help out Bogle and the goons by not filings charges and by not trying to after them for settlement payments. Then all would be well. What do you think about that? Consider it a Christmas gift.

I am going to post honestly about what the last 35 years of peer-reviewed research says. If I do anything else, I am committing financial fraud myself. So long as I do that, the word is going to get out about the 35-year cover-up. Probably not today or tomorrow. But following the next price crash. I am not the United States. When you commit a crime, you are committing the crime against the people of the United States. I don’t personally have much to do with it.

The criminal acts are detailed at my site, that’s pretty much the extent of my involvement re the criminal side of this. But even if my site did not exist, this would get out. Shiller’s book is still out there. The research that I co-authored with Wade Pfau is still out there. Shiller’s Nobel prize is still out there. The massive act of financial fraud is eventually going to be written up on the front page of the New York Times regardless of anything I do.

The full reality is that it is probably a plus that I have detailed the criminal acts at this site. I make an effort to put the criminal acts in the best possible light. I say that Bogle’s mistake was the product of cognitive dissonance. How many people do you think there will be saying that following the next price crash? I have said it on numerous occasions. And you can point to time-stamped posts in which I said it and you can say “this is a fellow who had no reason to be biased in favor of the Wall Street Con Men or the members of their various Goon Squads who was saying this.” So my posts have a high degree of credibility. And I think you can point to some of the things that you Goons said to show that there really was cognitive dissonance at play.

The cognitive dissonance play is the best play you have. And the materials at this site help you make that play. The materials at this site do not really hurt you. They reveal the truth. The truth has certain aspects that put you in a bad light. But the truth also has certain aspects that put you in a good light or at least in a not-so-bad light. You can use the materials at this site to develop a defense that I think might cause a good number of reasonable people to react in a moderate way. And I am 100 percent happy to encourage people to look at things in that sort of way, in a way that works to your favor.

Look at Wade Pfau. He is a very smart guy. He holds a Ph.D. in Economics. He was skeptical about a lot of things that I said in the early days. Even today I believe that he is skeptical about some things I say. You can point to someone like him and argue that, if that guy didn’t get it, how could we be expected to get it? You can point to John Walter Russell. John asked that we use phony numbers on the Risk Evaluator because he found the real numbers too shocking. John was as honest as the day is long. But he felt enough social pressure that he asked that we use phony numbers.

You can even look at my history. I was a proud Buy-and-Holder at one time. I once speculated that the SWR at the top of the bubble was probably somewhere around 3 percent. This stuff is not easy. It is easy in a way. It is intellectually easy. But it is very, very, very hard emotionally. That is your defense. You tell people that “we really did believe in it and we did not want to see people hurt and so we did some things that might seem wrong looking back but that seemed to make sense to a lot of us at the time we did them.” I am not saying that that gets you off 100 percent. But I believe that it is best you can do at this point in the proceedings. It is not a crazy position. And it is something that I can back you up on. If someone in my position feels okay backing you up, lots of people will feel okay backing you up.

We are looking at something very big here. It’s hardly possible for the human mind to let in how big this is. Again, look at Wade Pfau. He was AMAZED when this stuff started to click for him. This is like harnessing the power of the silicon chip. The goal is not to put people in prison. That’s petty. The goal is to get the word out, to improve everyone’s life in a very big way. Our problem is to figure out how we do that without having people go to prison for a long time. The answer is to focus on the good being done and thereby try to get the focus away from the 14-year delay, which is a big deal but perhaps is not as big a deal as it at first seems when you put things in perspective and consider how huge an advance it is we are looking at here.

Unlike the criminal actions, the civil suits are my thing. It is my aim to approach those in a generous spirit. I obviously expect to be paid for my work and this is very, very important work that caused me a lot of trouble for a long time. I am going to be paid very well. I don’t know how much Steve Jobs or Bill Gates ended up with but I am sure that we are talking about a numbers in the hundreds of millions. This is a lot bigger. So the $500 million figure that I have advanced is not at all out of line.

And I have offered to direct 10 percent of that to helping get the word out (by promoting my site and by funding blogs that would explore different aspects of the VII question). I can understand people not wanting to go to prison. I cannot understand the Wall Street Con Men being too worried about a payment of $500 million. These people have lots of money. Paying the $500 million will revitalize the entire industry. It helps everyone. And it puts them in a good light. I don’t see much of an issue there.

We cannot go back in time. If I could push a button and take us back in time, I would push the button. We have to deal with the world as it exists and make choices that work the best for every single person involved. That’s my aim. The good here is 50 times more good than the bad here is bad. So if we all approach this in the right spirit I am 100 percent confident that we will all end up in a very good place.

The entire thing is a Christmas gift. We need to start looking at it that way. Learning new things is wonderful. This is an advance. There is nothing even a tiny bit bad about it. We all just need to let that in.

Rob