A Rich Life

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

Valuation-Informed Indexing #308: It’s Worth Examining How Numerous Allocation Options Are Likely to Perform Over Numerous Time-Periods

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I’ve posted Entry #308 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called It’s Worth Examining How Numerous Allocation Options Are Likely to Perform Over Numerous Time-Periods.

Juicy Excerpt: I started writing about safe withdrawal rates in May 2002. At that time, it was common practice among Buy-and-Holders to assume that smart retirees would employ a portfolio allocation of 80 percent or so. The conventional wisdom of the day was that stocks had been proven to be the far superior investment choice and so retirees would be leaving lots of money on the table by going with stock allocations too much less than that.

To be fair, not all Buy-and-Holders took this position. But the voices of the ones who did often drowned out the voices of those who did not. Those of us who held reservations about the idea of going with high stock allocations at times of insanely dangerous valuation levels often censored ourselves. We shared our thinking in limited, tentative ways. But we knew that stating our views in too clear a manner would make us unpopular and so we walked on eggshells when making this painfully basic and important and accurate and responsible point.

It’s a different story today. Stocks have been performing poorly for nearly 17 years now. Today, the Buy-and-Holders know that saying that stocks are always the far superior asset class does not go over nearly as well as it did in 2002. So they state things differently. They suggest that perhaps 50 percent stocks is a better allocation fort most retirees or even for most investors. Occasionally you will see a Buy-and-Holder advocate a stock allocation even lower than that, something I can never recall seeing in the days of wildly inflated prices.

“In the Event That the Thread Has Been Doctored (Surprise! Surprise!), I Have a Copy of the Complete Thread in My Files, So I Will Be Able to Provide the Words That Appeared Before the Thread Was Doctored. And the Lawyers Will Be Able to Recapture the Original Thread When the Various Trials Are Held. The Members of Your Jury Will of Course be Free to Reach the Obvious Conclusions re What Doctoring of the Thread Signifies re the State of Mind of Those who Performed the Doctoring.”

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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 don’t see the threads calling Taylor and Mel liars. Can you provide a link?

I am not going to find the link for you, Anonymous. I mentioned it at the time either in a blog post or on a podcast, possibly both.

If you want to find it, you’ll find it. Or you could ask Larimore and Lindauer. They would tell you in private.

If the Bogleheads Forum permitted honest posting, you could just ask there. But of course that is out for obvious reasons. But you can ask privately and find out what you need to know (as if you didn’t know already!).

Anyway, it will all come out in the court proceedings and in the many news articles we will see re these matters once legal actions (both civil and criminal) are filed against you. I WILL go to the trouble to track down the link for the benefit of the reporters writing those articles and for the benefit of the people serving on the juries in those cases.

I naturally wish you the best of luck with it (while also wishing the millions of middle-class investors whose lives are in the process of being destroyed the best of luck with it as well).

Also, I have plans to prepare an article for posting sometime in 2017 that will offer a listing of the 101 most important acts of financial fraud. That article will provide the link to the Bogleheads Forum thread that you are seeking. In the event that the thread has been doctored (Surprise! Surprise!), I have a copy of the complete thread in my files, so I will be able to provide the words that appeared before the thread was doctored. And the lawyers will be able to recapture the original thread when the various trials are held. The members of your jury will of course be free to reach the obvious conclusions re what doctoring of the thread signifies re the state of mind of those who performed the doctoring.

Rob

“We Are Living in a Day When Two of the Brightest Lights in the Field, Eugene Fama and Robert Shiller, Who Both Have Been Awarded Nobel Prizes for Their Work, Have Come to 100 Percent Opposite Conclusions re the Foundational Question Involved in Figuring Out How Stock Investing Works. Fama Says That the Market Is Efficient. Shiller Says That Valuations Affect Long-Term Returns. One of These Men Is Right and One of These Men Is Wrong. It Is Not Possible for the Rational Human Mind to Come to Any Other Conclusion.”

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

“You are right to suggest that I wasn’t persuaded by the advice that she offered. ”

I don’t recall you ever being persuaded by anyone’s advice.

That’s not even close to being so, Anonymous.

Just to cite the most obvious case, I was HUGELY influenced by the book that I read by Jack Bogle in the Spring of 1996. It was by reading Bogle’s book that I came to see the errors in the Old School retirement studies. Bogle wrote that: “Reversion to the Mean in an ‘Iron Law’ of stock investing.” If that’s so, then risk must be variable, not static. If risk is variable, then John Greaney’s retirement study, which says that the safe withdrawal rate is always the same number (4 percent) cannot possibly be right. It was by reading and thinking about Jack Bogle’s words that I came to construct and advance my famous post of the morning of May 13, 2002.

All of the “problems” that we have experienced over the past 14 years came about as a result of the way in which Bogle’s words persuaded me. I was very, very, very much persuaded by the obvious (at least to me) truth of this man’s words.

Bogle is only one case that I can cite. I was also persuaded by many of Shiller’s words. And I was persuaded by many of Bernstein’s words. And I was persuaded by many of Buffett’s words. And I was persuaded by many of Russell’s words. And I was persuaded by many of Arnott’s words. And I was persuaded by many of Smithers’ words. And I was persuaded by many of Pfau’s words. And, believe it or not, I was persuaded by many of Lindauer’s words and by many of Greaney’s words. Heaven help us all but I have been persuaded by many of YOUR words, Anonymous.

We are living in a day when two of the brightest lights in the field, Eugene Fama and Robert Shiller, who both have been awarded Nobel prizes for their work, have come to 100 percent opposite conclusions re the foundational question involved in figuring out how stock investing works. Fama says that the market is efficient. Shiller says that valuations affect long-term returns. One of these men is right and one of these men is wrong. It is not possible for the rational human mind to come to any other conclusion.

Fama got published first. These matters are of huge importance. If we were as a society to come to promote the wrong view of how stock investing works, we would see an economic crisis develop, possibly one worse that the First Great Depression. So we have been reluctant to acknowledge the mistake that Fama made in 1965 that did not become public knowledge until 1981. We have as a society been covering up that mistake for 35 years now, to the great misery of millions.

I have been persuaded by many people on both “sides.” I think Fama has made huge contributions and I think Shiller has made huge contributions. I have iINTEGRATED the huge advances achieved by both men into the Valuation-Informed Indexing model. VII is the first true research-based investing strategy. It is the first strategy that reflects not only the pre-1981 research but the post-1981 research as well.

You Goons hate me not because I do not permit myself to be persuaded by others. You hate me because I permit myself to be persuaded by those who have done research AFTER 1981 as well as by those who did research BEFORE 1981. You want to shut down discussion of the post-1981 research so that you never have to acknowledge having made a mistake by thinking that there could never be new insights developed once the Buy-and-Hold Model was introduced. I see science as a continuing process, not as something that is done once and that generates findings that are set in stone and never questioned from that point forward.

I am persuaded by MORE people than you, not by fewer. I love Eugune Fama. I love Jack Bogle. I also love Robert Shiller and Warren Buffett. I allow myself to be persuaded by figures working on both “sides” (I put the word in quotation marks because I find it silly to think of people engaged in a scientific endeavor together as being on different “sides” — we are all seeking to learn from each other or at least we all should be).

You hate those who offer new insights with a burning hate. You threaten to kill their loved ones as a way of shutting them up. You want to be persuaded only by one “side.” I love hearing the contributions of those on both sides. I am far, far, far more open to persuasion by others than you are. That’s why I have never stooped to advancing a single death threat or a single threat of career destruction. I know that issuing threats of that nature will limit the number of voices that I am exposed to in the future and I cannot bear to limit what I learn in that way.

What makes you a Goon is your hatred of learning new things. We all become defensive when our long-held beliefs are challenged. That’s human nature. But the laws of this country reflect our belief as a people that we need to resist the human weaknesses that tempt us to strike out in anger against those who challenge us and thereby help us learn. The reason why you are going to prison is because you have permitted your hate to get so out of control that you have blocked millions of middle-class people from being persuaded by the peer-reviewed research of the past 35 years.

My sincere take.

Rob

“Intimidation Tactics Work. Until They Don’t. Since It Became Clear That Ailes Was Finished, We Have Seen Story After Story After Story Come Out. No One Fears the Guy Too Much Today. Each New Story Causes Two More People to Come Out and Tell Their Story. Lots of People Want to Tell Their Story and Now They Feel Safe in Doing So. So It Will Be With Mel Lindauer and John Greaney and Jack Bogle. Lots of People in This Field Want To Do Honest Work. That’s Basic To Human Nature and No Amount of Bullying by You Goons Can Change the Core Reality.”

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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:

Pretend to solicit advice (a pretense, as the actual intent is to recruit followers.) Send a long irrational screed dismissing the advice. Contact is abruptly terminated.

Rinse, repeat, repeat, repeat, repeat…

Both motives were present when I contacted Crystal. Yes, I wanted to recruit a follower. But, yes, I also wanted to hear any advice that she had to offer. You are right to suggest that I wasn’t persuaded by the advice that she offered. That doesn’t show that I was not genuinely interested in hearing what she had to say and in pondering it.

I don’t agree even a tiny bit with what she is saying here. I report on it because I have been given similar advice from many good and smart people. So I am convinced that what Crystal is saying is a big part of the explanation of why we have as a society ignored Shiller’s powerful finding of 1981 for 35 years now.

We don’t want to criticize the Buy-and-Holders. We don’t want to make them feel bad. We don’t want to see them sued or see them sent to prison. So we hold back from expressing criticism of their ideas and of their behavior. The result is that the cover-up continues and even more good and smart people end up being sued or sent to prison. Yuck. I think we are rationalizing cowardice by pretending that failing to speak up re these matters constitutes charity.

I have read a number of articles re the Roger Ailes scandal. It is an amazing story. He has been harassing women for years now. He has done it openly. He has done it over and over and over again. Some of these women possess at least modest amounts of money and power. They are of course protected by laws and by the social beliefs that brought on the adoption of those laws. And yet for years and years they failed to speak up about this monster. Huh? What the h?

How does something like this happen? As you Goons would put it — Was it all some vast conspiracy?

It was not a vast conspiracy in the way that that word is ordinarily employed. All of the women did not get together in a room and decide on a course of action together. Woman 1 thought about doing the right thing and calling out this guy’s b.s. and then she considered how much power he possessed and how much harm he could do to her and her career and elected to keep it zipped. Woman 2 did the same. Woman 3 did the same. And so on and so on.

That’s how bullies remain in power, Anonymous. Intimidation tactics work.

Until they don’t.

Since it became clear that Ailes was finished, we have seen story after story after story come out. No one fears the guy too much today. Each new story causes two more people to come out and tell their story. Lots of people want to tell their story and now they feel safe in doing so.

So it will be with Mel Lindauer and John Greaney and Jack Bogle.

Lots of people in this field want to do honest work. That’s basic to human nature and no amount of bullying by you Goons can change the core reality. If it were some small thing, the cover-up might continue indefinitely. But this is no small thing. This is huge. Shiller was a awarded a Nobel prize for his work. The continued promotion of Buy-and-Hold “strategies” for decades after the peer-reviewed research was published showing that there is precisely zero chance that it could ever work for a single long-term investor caused the biggest economic crisis in our nation’s history. Millions are today unemployed as a result of the continued promotion of this smelly Get Rich Quick garbage. Millions of people will be suffering failed retirements in days to come as a result of the continued promotion of this smelly garbage.

But, as with Ailes, the mainstream media doesn’t report on the cover-up except in indirect, coded ways. Goons like you can claim that anyone telling the truth believes in conspiracy theories and persuade a good number of Normals that that is indeed the case.

But there won’t be any shortage of experts in this field reporting on what the last 35 years of peer-reviewed research tells us following the next price crash, Anonymous. Then it will be story after story after story in which people try to explain their many years of silence, how they felt intimidated by the Wall Street Con Men and by you Goons and how they had families to feed and all this sort of thing.

The honorable thing to do when one comes to learn about a massive act of financial fraud is not to look the other way but to speak up. I spoke up. I offer no apologies. I believe in showing charity toward others, even toward one’s “enemies.” But there is no charity in acting in such a way as to increase the length of the prison terms that will be assigned to you Goons. I care about you. I want your prison terms to be as short as possible. So I tell the truth about these matters. Sue me, you know?

Crystal has blogger friends who promote Buy-and-Hold strategies. So I put her in a tough spot when I point out to her the 35 years of peer-reviewed research showing that there is zero chance that the pure Get Rich Quick approach could ever work for a single long-term investor. I think she is wrong. I think she is right to care about her friends but I thinking she is hurting them by keeping quiet, not helping them as she sincerely intends.

We are going to have to wait to see what happens following the next price crash to see how things turn out. I am not capable of lying to my friends re the numbers that they use to plan their retirements. So I have never once since the morning of May 13, 2002, had any option but to proceed as I have. I have to tell the truth re these matters. When there are acts of financial fraud that take place before my eyes, I have to say that. I obviously don’t like seeing my friends being sent to prison. But I didn’t adopt those laws making financial fraud a felony and I certainly didn’t encourage any of my Goon friends to put up posts in “defense” of Mel Lindauer or John Greaney or Jack Bogle. So none of this is the result of my actions. My only decision was the one to be honest re SWRs and I obviously have zero regrets re that one.

We’ll see how it all plays out, Anonymous.

I hope that works for you.

I naturally wish you all the best that this life has to offer a person. But I also naturally have zero desire to spend my golden years in a prison cell. Holy moly! That’s insane stuff. I would be grateful if you would try to find somebody else.

Not this boy.

Yowsa!

Rob

Valuation-Informed Indexing #307: Who’s Afraid to Know the True Safe Withdrawal Rate?

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I’ve posted Entry #207 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Who’s Afraid to Know the True Safe Withdrawal Rate?

Juicy Excerpt: There’s a sense in which that reality renders Wade’s report more scary than it would had he told the story as bluntly as John Walter Russell and I did a number of years back. He tells us the sustainable spending rate, not the safe withdrawal rate. Not because the safe withdrawal rate cannot be calculated accurately. Because he doesn’t believe that we could bear to hear the accurate numbers.

The most scary reality of all is that the 11 years of reactions that I have seen to the publication of my own retirement calculator shows that he is right.

“Shiller Doesn’t Spell Things Out the Way I Do. I Agree With That Much. I Spell Things Out in Much Greater Detail and With Much More Clarity and Depth. I Say Things That Shiller has Never Said Publicly. But Everything That I Say Follows From What Shiller Showed With His Research. It’s Just a Question of Proceeding Down the Logic Chain Step by Step by Step by Step.”

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

You miss the point.

What if your interpretation of the data and its implications–which you admit is at odds with everyone including Shiller himself–is flawed?

What if you are wrong? Is that not possible?

I’ve said that it is possible hundreds of times. You know that. Why do you play dumb re something like this?

Nothing that I have said is at odds with Shiller. Everything that I have ever written re stock investing follows from Shiller’s “revolutionary” (his word) findings of 1981. Every single word.

Shiller doesn’t spell things out the way I do. I agree with that much. I spell things out in much greater detail and with much more clarity and depth. I say things that Shiller has never said publicly. But everything that I say follows from what Shiller showed with his research. It’s just a question of proceeding down the logic chain step by step by step by step.

You should be asking why Shiller doesn’t proceed down the logic chain the way I do? Why doesn’t Shiller publicly discuss the implications of his research? Why is there not one word in Shiller’s book addressing the question of what investors should do with their money given his revolutionary findings? That’s odd. People buy investing books to learn what to do with their money. Why does Shiller address every question BUT the most important one of all?

And why don’t people like you ask him that question?

You don’t ask him because you want to remain in your fantasyland where Buy-and-Hold works. It would cause you pain if Shiller were to speak clearly and honestly to the question of what investors should do with their money as a result of his “revolutionary” findings of 1981.

Shiller doesn’t address these questions because he understands that it would hurt you and because he understands that you would attack him the same way you attack me if he did so and, like all the other humans, he prefers not to be attacked so viciously.

Shiller is doing the right thing for Shiller. Is he doing the right thing for you? Is he doing the right thing for Bogle? Is he doing the right thing for Pfau? Is he doing the right thing for his profession? Is he doing the right thing for his country?

You know what I think, Curious. I think we have to violate the crazy Social Taboo that has been holding us back for 35 years now. We now know how stock investing works. That’s wonderful. That’s a huge advance. But it is an advance that is doing us little practical good because, while we now know intellectually how stock investing works, we don’t talk about what we know and as a result we don’t know it with enough clarity and confidence to take much advantage of what we know.

I want to take full advantage of what we have learned from the past 35 years of peer-reviewed research. I want to leave Buy-and-Hold in the dust and move on to something a lot better. That’s where you and I differ. That’s why we are working at cross purposes. You want to protect Buy-and-Hold from effective challenges and I want to blow Buy-and-Hold up and move on to something better, the something that would have become the dominant investing model way back in 1981 had only there never been a Buy-and-Hold. If we didn’t have these rich and powerful Wall Street Con Men protecting this Get Rich Quick approach, we all would have become Valuation-Informed Indexers a long time ago.

Say that I am wrong. Is there any harm that could possibly come of it? I sure cannot see what that might be. If I am wrong, there are thousands and thousands of Buy-and-Holders happy to point out any flaws in my arguments. So my ideas will never catch on if I am wrong. The reality is quite to the contrary. If I am wrong, that will come out and the showing that I am wrong will make people more confident in Buy-and-Hold. If I am wrong and the Buy-and-Holders are right, opening every investing discussion board and blog to honest posting will prove to be a plus for Buy-and-Hold. Which is a good thing presuming that I am wrong and the Buy-and-Holders are right.

The only thing that could possibly justify a ban is that the Buy-and-Holders worry that I might be right and that Valuation-Informed Indexing might prevail in the marketplace of ideas. That possibility represents a threat to the pocketbooks of the Wall Street Con Men and a threat to the pride of you Goons. You hate me with a burning hate not because you think that I might be wrong but because you have seen how many people are drawn to what I say until you Goons step in and destroy the reasoned conversations that people want to have with injections of insane abusiveness.

I will win in time. Because we live in a great country with great laws and great people and both common sense and 35 years of peer-reviewed research support me and nothing but threats of violence and career destruction support Buy-and-Hold. Buy-and-Hold is hanging on by a thread in the year 2016. Buy-and-Hold is going down. The sooner it goes down, the fewer lives you will have destroyed and the shorter will be your prison sentence. So we all benefit by letting the millions of middle-class people who need to know about the last 35 years of peer-reviewed research learn what they need to learn.

I wish that everyone were speaking out today, Curious. Shiller, sure. But not just Shiller. Everyone. The answer is not for me to stop speaking out. The answer is for Shiller and all the others to join me.

My take.

Rob

“This Requires Looking at Things That No One in This Field Has Ever Looked at Before. Most Investment Advisors Don’t Bother to Spend Much Time Studying Psychology Texts or Listening to Songs. They Think That I Am a Fool to Do That. I Think That They Are Fools Not To Do So. I See That Stuff As Being Where the Action Is Today. All of the Non-Emotional Stuff Has Been Studied in Great Depth. There Are Not Many New Insights To Be Developed Looking at That Stuff. But the Emotional Side of the Investing Equation Is Little Studied.”

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

“Others still accept the call to serve their country when their country is in greater immediate need of their services.”

But I thought you just wrote that:

” So I have pulled back on my activities a good bit over the past few years.”

So what do you do everyday? Wake up and hope for a market crash so you can ‘get back to work’? Seems very sad.

I do lots of things, Laugh. Some are public. Some are not.

There’s a new blog entry here every day. Most of them are pulled from my conversations with you Goons. Most people think that it’s crazy that I even speak with you Goons, much less write blog entries about our conversations. I don’t agree with those people. I think that that belief is rooted in a belief in the Buy-and-Hold Model for understanding how stock investing works, which was discredited by Shiller’s “revolutionary” (his word) finding that valuations affect long-term returns. I don’t agree with their premise that the market is efficient and that investors are rational. I believe that investors are human and thus highly emotional. That changes everything.

I often call you Goons “Goons.” Most people don’t approve of my decision to do that. They say: “oh, it serves no purpose to do that, calling people names is never a good ida.” I certainly agree that “Goon” is a name and as a general principle I certainly agree that calling people names is not a good idea. But I believe that the circumstances that apply in this particular case are unusual and that that reality needs to be taken into account when someone writing in this field is debating whether to call someone a “Goon” or not. It is my sincere belief at this point in time (I hope that I remain open to other ways of thinking re this matter and indeed re all matters) that calling you Goons “Goons” is indeed a good and necessary thing. I do not believe that I can achieve my goals, which I believe are important and to a large extent unselfish goals, without referring to your Goonish behavior as “Goonish behavior.”

Goonishness is sin. The two concepts are essentially synonymous. When we commit sins, we are messing ourselves up. That’s why God doesn’t want us to commit sins. He loves us and he doesn’t want us to cause ourselves misery. We are tempted to sin because we are imperfect creatures not fully capable of appreciating what is in our best interest. God sees things that we do not see and advises us to avoid the dumb stuff that hurts us. He labels self-destructive behavior “sin.” He direct us to knock off the funny business when he sees us messing up our lives by committing sins.

The Get Rich Quick urge is a sinful inclination possessed by every human and therefore by every stock investor. Shiller showed that we can come close to making stock investing risk disappear by avoiding the sin of thinking that there might be some mystical, magical alternate universe where it is not required of us always to practice price discipline when buying stocks.

The entire history of the stock market supports Shiller’s finding. There is zero evidence going the other way. But there IS this sinful inclination to adopt Get Rich Quick investing strategies and there is of course a mountain of money to be made promoting Buy-and-Hold and so stock investing in reality has always been a high-risk approach to investing. That ended in 1981 when Shiller published his Nobel-Prize-winning research showing that risk is variable and that investors seeking to keep their risk profiles roughly constant over time need to always, always, always take price into consideration when buying stocks.

The peer-reviewed research that I co-authored with Wade Pfau shows that taking the one step of considering valuations when setting one’s stock allocation reduces risk by 70 percent. Everyone wants to reduce risk. So our research would in a purely rational world have been featured on the front page of the New York Times within one week of its publication in a peer-reviewed journal.

It hasn’t happened.

As you Goons well know.

Why?

It hasn’t happened because the reporters and editors who work at the New York Times are sinners!

That’s a funny way of putting it. I of course get that. But when you boil away all the verbiage, that’s what it comes down to. The reporters and editors at the New York Times are sinners. They are Goons. They are drawn to Get Rich Quick strategies. They think that Buy-and-Hold is the cat’s pajamas. They think that Rob Bennett fellow who keeps talking about those darn errors in those darn Old School safe-withdrawal-rate studies should just give it a rest already and get with the program. What does he think, that he is better than all the rest of us?

I don’t think that I am better than all the sinners, Laugh. I am a sinner myself. I believed in Buy-and-Hold at one point in my life. I possess a Get Rich Quick urge. I had my money in stocks prior to the Summer of 1996 and I got excited one year when I counted all my winnings and pondered what a smart fellow I was for following a Buy-and-Hold strategy and for counting the “gains” that I had “earned” as being a good bit greater than 6.5 percent real.

I am not better than everyone else. But I have been placed in circumstances in which I have become better able than anyone else to see with clarity how our Get Rich Quick sinfulness hurts us all and I have thereby been given the opportunity to help millions of middle-class investors as well as myself by writing in great depth about this terrible sin that has caused so much human misery for so long a time now.

That’s it. It’s my job to point out this sin and to steer people away from it. I don’t call it “sin” because that sort of language would turn people off even more than the term that I do employ — Goonishness. But that’s what it comes to.

Doctors tell people not to smoke. They do this because smoking is self-destructive; it causes human misery and doctors know this to an extent even more than most of the rest of us know it. It could be said that they are calling the executives at the tobacco companies names when they point out that smoking causes cancer, they certainly are not approving of the promotion of smoking when they tell their tale of how smoking causes an early death. But they soldier on. They see it as their jobs to help people maintain their health and they know from looking at the evidence that smoking is not the way and so they say what they say even though it probably does indeed hurt the feelings of tobacco company executives for them to say it.

It is my job to warn people of the dangers of Get Rich Quick investing strategies. Buy-and-Hold is the purest and most dangerous Get Rich Quick investing strategy ever concocted by the human mind. ALL of the peer-reviewed research in this field shows that the worst mistake that an investor an make is to fail to exercise price discipline when buying stocks and the Buy-and-Holders say that there might be some alternate universe where that is not necessary, that we should just take their word for it even though 100 percent of the evidence as well as common sense points in the opposite direction. And of course they make millions as a result of these lies they shove down our throats on a daily basis.

I don’t buy it, Laugh. I think that people need to hear the truth about what the peer-reviewed research shows. I see it as my job to tell that truth. So I do that.

I don’t spend my hours wishing for a price crash. I spend my hours thinking up more effective ways to tell these truths. People don’t like it when I use the word “Goons” and yet I need to point out the dangers of the pure Get Rich Quick mindset to be able to do my job effectively and so I need to call cancer “cancer” I spend my hours trying to come up with better ways of getting the job done.

That’s why I engage in conversations with you Goons. You are like all the rest of us in that you possess a Get Rich Quick urge that causes you to be attracted to the Buy-and-Hold Lies pushed so relentlessly by the Wall Street Con Men for profit. There’s something different about you, though. You don’t smoke a cigarette now and again, like some. You smoke four packs a day. You are the freakin’ addicts. You take the Get Rich Quick concept to places that it has never been taken before. You are willing to go to prison over it. Get Rich Quick/Buy-and-Hold is your life, your religion. You are strident about it. You are obsessed over it.

It is my job to try to understand better the roots of that obsession. I need to come to understand on a deeper and deeper level where the Get Rich Quick urge comes from and how it manifests itself and how the humans can go about the business of getting it under control. The behavior of you Goons can provide us all with clues as to the answers to those questions if only we go to the trouble to mine the insights.

It’s hard work. It’s emotionally draining. But it is the work that a loving God has directed me to do. So I work it as hard as I can. And then I let it go.

It doesn’t take me all day to craft the responses to your questions and comments that I post as daily blog entries here. But the writing of the words is only a small part of the job. There’s a lot more to it than happens behind the scenes.

I need to read books on investing and on psychology and on philosophy and even on religion to get the bottom of what is going on. Sometimes I need to go on walks to sort through things in my mind. Sometimes I need to talk things over with others. Sometimes I need to play songs that have something to say about these matters, sometimes several times before the insights that I am seeking kick in. It’s hard work.

That’s what I spend my time on. I aim to go deeper and deeper and deeper.

The results of these efforts are here for all to see. No charge. This is the wonder of the internet. I am not being sarcastic. I view this as a magical reality. I love the internet. Not the hate that you Goons bring to the table. But I am greatly excited about the power to do good that this new communications medium brings to the world.

Shiller showed that human emotion is 80 percent of the investing story. Before he came along, people thought that it was perhaps 10 percent of the story. Shiller opened up a new continent of insights for us all to mine together.

No one who came before me attempted to mine these insights to the full. Even Shiller only hinted at the possibilities. I have for 14 years now attempted to take Shiller’s “revolutionary” finding as far as it can be taken by the human mind. I build one insight on top of another, over and over and over again.

This requires looking at things that no one in this field has ever looked at before. Most investment advisors don’t bother to spend much time studying psychology texts or listening to songs. They think that I am a fool to do that. I think that they are fools not to do so. I see that stuff as being where the action is today. All of the non-emotional stuff has been studied in great depth. There are not many new insights to be developed looking at that stuff. But the emotional side of the investing equation is little studied. There is a wealth of insights to be mined looking at how investing truly works according to the last 35 years of peer-reviewed research in this field.

I spend my time going deeper and deeper re all the stuff that matter greatly but that has been ignored until now. You see the work product in my daily blog entries and in my weekly columns. But it takes a lot more time than what it takes to write the words to develop the insights advanced in the blog entries and in the weekly columns.

I hope that that all meets with your approval, my Goon friend.

Of course I am going to continue walking this wonderful path that I have found for myself whether it happens to meet with your approval or not. I like you. But I don’t aim to please you. I aim to please myself and the loving God who put me here and I of course aim to help the millions of middle-class workers whom that loving God also put here. It would make me happy to see you advance words of approval because it would make both of our lives go easier if you were to do so. But I don’t intend to let your decision as to whether or not to advance words of approval to influence my decision re what path to follow in any way, shape or form.

I wish you the best of luck in all your future life endeavors regardless of what path YOU choose to follow, my fellow traveller in this journey through the Valley of Tears.

Rob

“I Have Caused My Wife Pain. I Have Caused My Boys Pain. I Hate the Idea. I Hate It, Hate It, Hate It. Just As Much As Abraham Hated Driving a Stake Through His Boy’s Heart. But Abraham Did What He Felt He Was Required To Do and I Am in the Process of Doing What I Believe That I Am Required To Do and That’s That. Right or Wrong (One Never Knows for Absolute Certain), I Am Just Going to Have to Watch the Thing Play Out to the End. I Do Not Have It in Me to Play it Any Other Way.”

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

“If you don’t get the $500 million, what will your family do to get by?”

Live in a tiny house and forego vacations and the other stuff normal kids get.

“You’re on your own for college son, but Dad’s got big dreams for the future! BIG DREAMS!”

I wouldn’t include the sarcastic tone if I were the one saying it, Anonymous. But the THRUST of what you are communicating here is not too terribly off the mark.

I wrote my book on money management (Passion Saving: The Path to Plentiful Free Time and Soul-Satisfying Work) prior to the onset of the 14-year Campaign of Terror against our board and blog communities. Yet I addressed this issue in an indirect way in Chapter 12 of that book. I’ve always thought that that was sort of weird. It is not an issue that most people would address in a book on money management. But something in my head told me that it should be addressed in my book and so I spoke to it.

The book explains how to make use of one’s savings not to finance an old-age retirement but to finance a shift to a more fulfilling type of employment, a job that pays less in the early days but that stands a good chance of paying more in the long term because it is more aligned to one’s personal strengths. The other chapters explore in depth the considerations that need to be addressed in putting together a plan for making such a career shift. Chapter 12 deals with some of the personal issues, such as the effect that following such a path might have on one’s family.

One downside of the shift that I made (the book wasn’t only about my plan but I obviously used my thinking about the development of my own plan to guide my thinking on the general concept) is that you can never know for certain whether a plan is going to work financially. You can take care of hundreds of details and it could still fail in the flesh-and-blood world. You might assume that stocks will continue to generate returns of 6.5 percent real but the currency might be destabilized and there might be a time when the money we all have invested in stocks becomes worthless. What then? There is no plan that covers all eventualities.

I said in that chapter that the right thing to do is to do one’s absolute best to cover all eventualities — I believe that a husband and father has a responsibility to do that (not in all families, many are set up differently today, but this is how ours was set up through mutual agreement of my wife and me — her responsibility was to homeschool our children). So I fully accepted my responsibility to provide financially for four human beings but I also recognized that there was a tiny possibility that despite my extensive planning efforts things might fall through on the financial side.

That’s what has happened, at least for a time. I left my corporate job on August 1, 2000, and in the 16 years since I have brought in not one penny. So the plan did not work in one very important sense. I have an asset (this web site) worth many millions and I believe with something close to 100 percent confidence that I will be able following the next price crash to cash that asset in for many millions of dollars and thereby to provide financially for many generations of Bennetts. But the brutally clear reality of the day is that I have generated not one penny of financial support for my family in 16 years and this is my responsibility according to all involved.

What to do, what to do?

What I say in Chapter 12 is that, when this sort of thing happens, you have to accept that it is God’s will. I don’t refer to God. But I think the word is implicit in what I do say. I essentially say that we cannot plan for every eventuality, that we have a responsibility to plan for everything that we can anticipate but that it is beyond the power of humans to plan for every eventuality and that at some point you just have to accept that a good plan may not work out for reasons 100 percent beyond the control of the person who developed the plan and you just have to accept that as God’s will.

Now —

I believe that God loves us. So, when I say that something is God’s will, I am by implication saying that it is a good thing. I BELIEVE THAT IT WAS THE PLAN OF A LOVING GOD THAT I NOT EARN ONE PENNY IN 16 YEARS FROM THE AMAZINGLY GOOD AND IMPORTANT WORK THAT I HAVE DONE DURING THAT TIME. It drives me freakin’ nuts. I have some questions that I intend to put to this kind and loving God the next time I catch up with him. But this is what I believe.

It is sometimes impossible for us poor deluded humans to understand what God is up to, He does some things that to our minds do not seem good and loving AT ALL. But we just have to accept that there are things that we cannot understand and let it go. That’s the way it is. We can rage at God if we like. But it won’t change things for the better and it probably will change things for the worse for us to do so. We have to accept Gods’s will for us and try to let it go. So says Rob Bennett. I say it and so it must be so. (That’s a joke.)

This takes us back to the story of Abraham and Issac. I said out loud when I told that story to my boys that “Your dad would never do that.” I couldn’t tell the story without adding those words because I felt that it would be dishonest of me not to add that caveat. But the full and funny reality is that I have done something not so terribly different from what Abraham did. I didn’t put a literal stake through the hearts of my boys. But I have damaged their chances of getting a good start in life by making choices that have limited the amount of money that my wife and I can use to help get them started.

We are of course going to do all that we possibly can and that probably will be enough in the eyes of most people. But I will always know in my head that we might have done more if I had not been so darn stubborn as to stand up to you Goons and insist on my right (and the right of thousands of others) to post honesty on what the last 35 years of peer-reviewed research says re safe withdrawal rates and scores of other critically important investment-related topics.

I’ll give one example of how it works according to my assessment.

I mentioned in an earlier comment how my mother had to leave school in eight grade because her family needed her to work in a factory to help put food on the table. My mother loved school and she was greatly ashamed that she never finished eight grade. When she would go on dates, boys would ask her where she went to school. When she had to say that she worked in a factory, it pained her. She never got over this. She still talked about having to leave school in eighth grade when she was in her early 90s and preparing to die.

This changed my life in about 20 different ways. I went to college. Most of the kids who grew up in my neighborhood did not. Then I went to law school. That was rare for kids in my neighborhood. Then I took on all these various jobs as a result of going to college and law school. These things happened in my life because my mother had to leave school in eight grade and because she never forgot that pain and because she drilled into me and my brothers the importance of school because of that experience. We didn’t know why she was so crazy re the subject. I know now. It is clear to me now that I am older. When she was checking my homework every night and I knew that none of my friends were having their homework checked, I just figured that she was a nutcase and a big pain in the ass.

That was God’s plan. In my assessment. I could be wrong. But that’s what I truly believe.

God wanted Rob Bennett to go to law school. This was part of his grand plan. To make it happen, he had to take my mother out of school in eight grade. It caused her great pain. She lived through that pain while being influenced by it and thereby she played a role in seeing that God’s plan was fulfilled here on Planet Earth. My hope is that some of the sins that she surely committed during her time down here in the Valley of Tears will be overlooked because she was willing to submit to God’s will and play a role in seeing it fulfilled in the way in which it was fulfilled when I applied to and was accepted into law school.

So it is with my boys.

I never in a million years would have planned to be in the financial circumstances that I am in today as a result of my unwillingness to lie about the numbers that my friends use to plan their retirements. It’s not my plan. But it is God’s plan. I had a duty to create my own plan. Had I failed to do that, I would have sinned, in my assessment. But I had a plan, a good plan. My plan assumed that the laws of the United States would be promptly enforced when you Goons violated them with your death threats and your threats to get academic researchers fired from their jobs and with all the other garbage that you have thrown at the wall. I did good re the part of this that is my responsibility. Then I let it go. I have accepted God’s will for me and for my family re the part that God does not intend for me to control.

My boys could learn something from this that will cause them to do great things in some future day just as I ended up going to law school because of my mother’s pain when she was a girl. I don’t know what those great things will be. It would probably be foolish for me to speculate too much. My brain is not big enough for me to grasp God’s plan in detail. I just believe that there is one. If I stop believing that, I am not sure that I would be able to pull myself out of bed tomorrow morning. If I stop believing that, everything that happens in this world is random and without purpose and I cannot bear the pain that I often see playing out before my eyes.

Take it or leave it, that’s this boy’s story.

I have caused my wife pain. I have caused my boys pain. I hate the idea. I hate it, hate it, hate it. Just as much as Abraham hated driving a stake through his boy’s heart. But Abraham did what he felt he was required to do and I am in the process of doing what I believe that I am required to do and that’s that. Right or wrong (one never knows for absolute certain), I am just going to have to watch the thing play out to the end. I do not have it in me to play it any other way.

This is why people become alcoholics, you know? We never know. And sometimes the pain of not knowing becomes so great that we have to do something to dull that pain and drinking can do that for a time. So people make this crazy decision to become alcoholics. I have not become an alcoholic. But I was eating too many chocolate-chip cookies for a time an now I have a diabetes condition to deal with. So I am no better than all the alcoholics. The cookie thing is now under control and I continue on with life. But there’s been pain.

If that’s what you Goons want to hear, well here is the announcement. You Goons have caused the family of Old Farmer Hocus great pain. Good for you, you know? Heaven help us all.

But God is bigger than even Mel Lindauer and John Greaney and Jack Bogle and all the members of all their various Goon Squads all put together. That’s what I sincerely believe. God will take this to someplace good over time. I just have to exercise enough patience to watch it all play out. I am forbidden from ever letting hate enter my own heart. That’s a no-no. If I go there, I become a Goon myself and then all the “it will all work out for the best” stuff gets cancelled.

So that one is a big deal. But so long as I don’t make the fatal mistake of giving in to feelings of hate that I might be tempted to feel towards you Goons, all is cool. God will take care of me. I might end up destitute. That is within the realm of possibility. But even after I am officially declared destitute, it will all work out somehow. If not in this life, in the next. I am not in control. The Big Guy is in control. He calls the shots, I just carry out his orders for me to the best of my ability.

That’s it. That’s the deal. FOR ME. You are free to say that I need to take my meds. That’s on you. But what I have written here is my testimony. I will let me wife know about it. She may read it if she pleases (or she may elect not to read it if she pleases). I will let my boys know about it. I will let me priest know about it. The Big Guy already knows. I don’t need to read it to him. I might do so just because it’s something to talk about with him and I need to make an effort to stay in touch more frequently. But I think he knew all this before you posted your question. I am just one of the Big Guy’s many stenographers.

I hope this all makes at least a tiny bit of sense to you, my old friend.

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

Rob

“I Told My Boys That This Was the Bible and That It Was the Word of God and That They Needed to Learn its Lessons to Live Their Lives Properly. And I Added: “But Your Dad Would Never Do That!” I Sometimes Wonder If God Was Playing a Little Joke on Me (If So, It’s Not Funny, God!) By Placing Me in Circumstances in Which I Would Be Asked to Place Stakes in Both of My Boys’ Hearts SLOWLY AND GRADUALLY Over the Course of the Following 14 Years Since I Was Such a Smarty Pants As To Question the Way Abraham Was Asked to Show His Obedience.”

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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:

Some dads work to support their families. Others wait around for something to happen.

Others still accept the call to serve their country when their country is in greater immediate need of their services.

This country provides great opportunities for families that work hard, as does mine. But if this country collapses, my family will be hurt in a very serious way. My mother lived through the Great Depression. She had to leave school to work to put food on the table when she was in eight grade and she never got over that pain; it is the reason why she pushed me so hard to succeed in school that I was one of few in my neighborhood who went to college much less law school.

There are millions of citizens of this country who today are putting their money aside to provide for their retirements, having no idea that the investing “strategy” they are following is a con designed to take as much money as possible out of their pockets and into the pockets of a small number of Wall Street Con Men. If those of us who are aware of the massive con do not put an end to it shortly after the onset of the next price crash, we will be likely be heading into the Second Great Depression. If stocks continue to perform in the future anything at all as they have always performed in the past, the Second Great Depression will be deeper and will last longer than the First Great Depression (the P/E10 level of the Buy-and-Hold bull market was FAR worse than the one that caused the First Great Depression).

The people of this country are tough and the people of this country are kind. They can overcome a lot. But they are entitled to honesty re what the last 35 years of peer-reviewed research says about what works in stock investing. They need to hear some honest voices if there is ever to be healing re the biggest (by a factor of 50) act of financial fraud in U.S. history.

It’s not even just the millions of middle-class families who need honesty. The Wall Street Con Men want out of the trap in which they today find themselves. Freakin’ Jack Bogle himself wants out. It was one of Jack’s honest statements that helped me understand why the numbers in Gtreaney’s study are so wildly off the mark. I myself would not have seen through the con had Jack Bogle not had a desire for honesty within him that found expression in his books and in his speeches.

The need for personal integrity is a widely felt need. You Goons feel it. You have been pretending that you do not in the hundreds of thousands of abusive posts that you have put forward over the first 14 years of our discussions over whether or not to permit honest posting on the last 35 years of peer-reviewed research. But it is clear to anyone paying close attention that you are lying. You are hurting because of your relentless abusiveness and your relentless criminality. There was a day when you aspired to something better. Each day that goes by in which those who live in fear of you fail to speak up to stop you, you feel a little worse about yourselves.

Not this boy.

I am there for my wife. I am there for my children. I am there for my fellow middle-class workers. I am there for the many good and smart people who work in this field and who long to feel free to do honest work again. I am there for the Wall Street Con Men. I am there for you Goons.

There is no conflict between my duty to support my family and my duty to serve my country. I support my family BY serving my country.

I have zero intention of using that $500 million check to buy rare Bob Dylan albums, Anonymous. That money is the fruit of the blood, sweat and tears that I have devoted to overcoming this massive act of financial fraud for 14 years now. And that money goes to my family. I have a funny hunch that that will be enough for them to somehow struggle by for a few years. It might even supply the slack needed for them to take in an extra week at the beach one or two times. We’ll see. I can imagine something like that happening.

Yes, I have a duty to support my family financially. I will fulfill that duty. Count it.

I also have a duty to serve my country by seeing that you Goons are placed in prison cells, where you belong. That duty is equally clear and even more important. There will be no middle-class families for anyone to support unless you Goons are placed in prison cells shortly following the onset of the next price crash (if not before!). That’s the primary duty. That’s the one that comes first.

I take my responsibilities seriously. I have said that I will do the work needed to insure that those who have posted in “defense” of Mel Lindauer and John Greaney and Jack Bogle spend a long time in prison cells so that those who live in the same country as they do and who have a natural desire to craft effective retirement plans can learn what they need to learn to do so without being intimidated into silence by the types of individuals who have long enjoyed the blessings of this country but who have given in to feelings of hate for the millions of middle-class workers who did the work that provides for those blessings.

I am no Numbers Guy, Anonymous. I have from time to time had to ask for help re the numbers-related stuff that has come up over the course of the past 14 years. We all have our strengths and weaknesses. I think it would be fair to say that my strength is that I understood the responsibilities that fell to those of us who have taken a look at the last 35 years of peer-reviewed research in this field long before most others who work in this field.

I am 100 percent confident that all the others were aware of those responsibilities on one level of consciousness. I have either been blessed or cursed with a keen awareness of how important it is that those responsibilities be fulfilled REGARDLESS of the level of abusiveness directed at those seeking to fulfill them. I think it would be fair to say that I have proven myself “special” in that regard, may God have mercy on my soul for whatever sins I have committed that caused Him in his great wisdom to bestow that “honor” on me.

Please don’t devote any further moments of your precious last few days of freedom worrying whether Old Farmer Hocus will satisfy his obligation to provide for his family. He’s doing it. This is how it is done. Wade Pfau’s family needed money. He did what he had to do to get it for them. Don’t think for two seconds that Wade isn’t aware somewhere in his heart that he did the wrong thing by getting the money his family legitimately needs by betraying his country.

Not one of us should ever have to make that choice. In a world in which the laws against financial fraud are being properly enforced, not one of us will ever again have to do so. In a world in which it is in all the papers how you Goons have been taken away in handcuffs, no one in this field is going to feel afraid to report honestly on what the last 35 years of peer-reviewed research tells us about safe withdrawal rates or about any other critically important investment-related topics.

I am going to do what I can to insure that I fulfill ALL my responsibilities. Count it.

And that’s all I can do. If my best efforts are not enough to get the job done, that’s God’s plan and I will have to accept it whether my feeble brain is capable of understanding it or not.

When my boys were small, I read to them before they went to sleep each night. Usually, we voted for adventure stories. But there were a few times when I felt obligated to read Bible stories. One time I read them the story of Abraham and Issac (God asks Abraham to put a stake through Issac’s heart). I was horrified by the story that I was telling as I was hearing the words come out of my mouth. At the end, I told my boys that this was the Bible and that it was the word of God and that they needed to learn its lessons to live their lives properly. And I added: “But your dad would never do that!”

I sometimes wonder if God was playing a little joke on me (if so, it’s not funny, God!) by placing me in circumstances in which I would be asked to place stakes in both of my boys’ hearts SLOWLY AND GRADUALLY over the course of the following 14 years since I was such a smarty pants as to question the way Abraham was asked to show his obedience.

Who knows? Maybe it’s all just coincidence. Maybe there is no God. Maybe it’s all just in my head.

Whether it is all just in my head or not, there are things that a person can do and there are things that a person cannot do. I had 40 binders in my basement in the days when I was putting together my retirement plan because we didn’t have clouds on which to store our stuff in those days and getting those darn numbers right mattered to me. The thought of deliberately telling lies about those numbers because some group of internet Goons intimidated me into doing so horrifies me. I can never become that person. It is not remotely possible that I will ever become that person even if I live as long as Abraham lived (Google tells me it was 175 years).

It’s not going to happen.

Nice try, though.

Take care, man.

Rob

 

“It Wouldn’t Be So Bad If We Had the Buy-and-Holders Pushing the Fries and Shakes That Give People Early Heart Attacks But That Sell Like Crazy While the Valuation-Informed Indexers Were Pushing the Fruits and Vegetables That Science Shows Are Actually Far Better Long-Term Choices. But the Buy-and-Holders Don’t Take Kindly to That Sort of Thing. They Say That I Am Guilty of ‘Bad Behavior.’ Buy-and-Hold Is a Marketing Gimmick. Imagine!”

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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:

Banned for bad behavior, Rob, and it seems to be a consistent problem versus a mass conspiracy.

Most fast-food restaurants offer food that is not terribly good for you. Is that the result of a conspiracy?

The reason why they do it is that we all like fatty and high-caloric foods. They would go out of business if they restricted their menus to fruits and vegetables.

We LIKE food that is bad for us just as we LIKE investing strategies that are bad for us. Get Rich Quick strategies SELL. Like hotcakes.

Now —

I have zero desire to restrict people’s ability to eat french fries and to drink chocolate shakes. I go for that stuff myself. I get it.

But the fast-food industry does not attempt to shut down restaurants that offer healthy menu options. So it is up to the individual whether he wants to go healthy or not. That’s the American system. That makes sense, in my assessment.

It’s not that way in the investing field.

The Buy-and-Holders claim that there is some mystical, magical research somewhere supporting their claim that there is no need to exercise price discipline when buying stocks. This is of course a 100 percent fabrication. Wade spent a lot of time going through the literature trying to find even one study that showed such a thing. He of course never found one. After 14 years of this, I am beginning to develop a funny feeling that maybe that’s because no such study actually exists. Buy-and-Hold is a marketing gimmick. Imagine!

It wouldn’t be so bad if we had the Buy-and-Holders pushing the fries and shakes that give people early heart attacks but that sell like crazy while the Valuation-Informed Indexers were pushing the fruits and vegetables that science shows are actually far better long-term choices.

But the Buy-and-Holders don’t take kindly to that sort of thing. Yes, I am guilty of bad behavior. I tell the truth about what the last 35 years of peer-reviewed research in this field says. Bad Rob! Bad, bad boy! You undermined confidence in the most enriching marketing gimmick in the history of the planet and you had to be stropped before you did more “damage.”

Some people like living long, healthy lives. Some people want to know what the research says about fruits and vegetables. I write for those people. I believe that those people matter. Those people love me and thousands have told me that they would like to have access to my stuff at every discussion board and blog on the internet.

The Buy-and-Holders don’t like me too much. They say that I am guilty of “bad behavior.”

Whether you see it as a conspiracy or not depends on whether you have caught on to the gag or not, Sammy.

Rob