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

“What you are describing has never once happened in the 145 years of stock market history available to us for study,”

This was also the data that lead you, in 2012, to believe there would be a 60-70% stock crash by the end of 2015, correct?

It’s the data that led me to believe that, yes.

It’s also the data that led me to include a caveat to the prediction pointing out that precise predictions are not possible.

You insist that we live in one of two worlds: (1) a world in which stock market prices cannot be predicted; or (2) a world in which stock market prices can be predicted with precision.

Both of those worlds are fantasy worlds. The data does not lend support to a belief in either of those fantasy worlds. Stock market prices have always been highly predictable in the long term but precise predictions have never been possible. The data has been telling this same story over and over again for 145 years now.

You hate this reality with a burning hate. It burns your buns.

Please try to understand that I did not create this reality. I am not the author of the 145 years of U.S. stock market history. I am a humble blogger who REPORTS on what the 145 years of data tells us about how the stock market works, nothing more and nothing less.

The data says what it says. The data doesn’t care how emotional you get when someone tells you what the data says. The data doesn’t even know that you exist. Getting angry at the historical stock-return data is like getting angry at a rock or a tree or an ocean. The data is not responsive to your anger. The data doesn’t even freakin’ know that you exist.

Your getting even more angry will not change a thing. The data will just keep on saying what it has been saying for 145 years now. That’s what data does — it tells us the truth about how the stock market works. The data doesn’t need to make you happy so that you will hire it and pay you money. The data is objective. The data isn’t trying to be popular. The data isn’t compromised in the important way that every investing analyst alive is compromised. Your insane rage at the fact that Buy-and-Hold never works in the long run doesn’t even leave a mark on the data that shows this to be so.

I am not without emotion. I held back on what I knew about the data for my first three years of posting at the Motley Fool board. Then I offered a phony apology for telling what I knew on the fourth day of our proceedings after being hit with a hailstorm of hate for having told the tale straight. And even today I don’t work it as hard as I know I should because seeing the humans (both the Goon variety and the non-Goon variety) get angry at me for telling the truth about what the data says brings me down a notch emotionally and I of course can only take so much of that, being a human rather than a tree or a rock or an ocean.

But I TRY to be as much like the data as possible. I try to tune out the hate and just REPORT stuff as it is rather than letting considerations of what message will make me popular or unpopular interfere with transmission of my words or cause me to compromise my words or whatever. I make an effort to rise above that stuff, not to say things stronger than they really are but also not to say things weaker than they are, just to tell the story straight, with no chaser. I doubt very much that I get it 100 percent right every time. But I think it would be fair to say that I work it harder than any of my fellow humans and that I have been doing so in the face of bitter opposition to a greater extent than anyone else around for 14 years running now.

That’s our story. I don’t know everything and I don’t claim to know everything. But I do know with a high degree of confidence that Shiller discovered something of huge importance in 1981 and that my Buy-and-Hold friends have failed to incorporate his finding into their model for 35 years now to the great financial pain and emotional embarrassment of millions.

Every investor alive needs to know that stock returns are highly predictable in the long term. Every investor also needs to know that precise predictions are not possible. And every investor needs to know that the Buy-and-Hold claim that returns are not predictable AT ALL is a LIE. There is zero support for this claim in the peer-reviewed research in this field.

This irresponsible claim was not always a lie. There was a time when it was just a mistake. But a mistake that is covered up for 35 years becomes a lie. A lie that in some cases can lead to the imposition of prison sentences by the members of a society seeking to defend itself from Goons like you, Anonymous.

That’s my sincere take re these terribly important matters, in any event. I COULD BE WRONG. Perhaps you will never spend a day in the clink. Feel free to believe that. Please do so with my blessing.

Please just also understand that I am going to continue to say WHAT I BELIEVE. I believe that this saga is going to come to an end with a prison sentence being announced for you and a good number of your Goon friends. I believe that and my belief re that informs my every post. I care about you. I don’t only care about you, I also care about the millions of middle-class Americans whose lives your lies are in the process of destroying. But I do care about you as well. I believe that you got caught up in something 50 times bigger than what you imagined you were getting caught up in and that makes me sad for you. So I care and I will continue doing what I can to get that prison sentence of yours reduced a wee bit.

Do I believe that my efforts re this particular matter are going to bear good fruit? I do not. I have seen too much to believe that you are going to come clean by the close of business today or even by the close of business tomorrow. If you were capable of such a thing, you wouldn’t be a Goon in the first place and then of course we would not be having this conversation. So please understand that I am not living under the illusion that these words are going to make a difference.

For you.

I say them because they make a difference FOR ME. It is going to hurt me to hear your prison sentence announced. I consider you a friend despite it all. I don’t fully understand what makes you do what you do. But I believe that, if I knew everything that has ever happened to you, I would possess a better understanding of what motivates you than I do in fact possess. I make an effort to do what I would do if I possessed a better understanding of your illness than I do in fact possess. I aim to treat you how I would want you to treat me if it were me suffering from the illness. So it is important for me to know that I have put these words forward. My desire to cover all possible bases is what motivates me. I want to be able to sleep in peace after that long-delayed prison sentence of yours is finally announced and the rest of us come to enjoy our Second Independence Day.

That’s the deal.

Don’t let the bad guys get you down, my old friend.

Um — good question!

Rob

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

Did Jaime give you the contacts you asked for? No. She didn’t even acknowledge the request. She knows how important the issues are, and could have helped, but didn’t. If that’s not goonish, it’s certainly very disappointing.

I agree that it was disappointing, Anonymous.

Do you know what else was disappointing? My own behavior re these matters from May 1999, when I put my first post to the Motley Fool’s Retire Early board, to May 2002, when I worked up the courage to put forward my famous post noting the errors in Greaney’s retirement study (errors shared by every Buy-and-Hold retirement study). I was the most popular poster at that board. I knew about the errors from the first time I looked at Greaney’s site, which was prior to the formation of the Motley Fool board. I was a coward for those three years. I hurt my friends for those three years. All that I had to do to help them was to tell a simple truth and I was too worried about what would be done to me to do so. That’s truly disappointing stuff.

We all should be disappointed in ourselves. Every last one of us. That’s one of the arguments that I will be advancing on behalf of you Goons. You couldn’t do what you have done without the complicity of a big number of policymakers and economists and researchers and investment advisors and journalists and bloggers and ordinary investors. We ALL have goonishness within us, each and every last one of us.

The humans sometimes do disappointing things.

Those same humans also sometimes do inspiring things.

You have to try to catch them in their best moments!

Or else blot the bad moments out of your brain!

Someone had to speak up. Someone had to bring this crazy detour on the journey we have taken together to learning how stock investing works in the real world to a full and complete stop. Only a crazy person would volunteer for the job. I would have a hard time finding anyone for vouch for me as a non-crazy person but even I was level-headed enough not to actually volunteer for this job. I sort of got roped into it. You were there. You saw how it went down.

It’s my job today, whether I like the idea or not. I will make the best of it. I think it would be fair to say that I have no other options available to me.

Jaime has other options. Wade has other options. Jack has other options. Robert has other options. I do not.

Maybe that’s the difference maker. Maybe it’s not that I am more ethical than other people. Maybe it’s just that I am the only one with no other options. I won’t object too much if you tell the story that way. It seems to me that it is possible that there might be some truth to that way of looking at things.

In any event, here we are.

We are all just going to have to try to make the best of the situation as it exists, like it or not.

Is that not so?

Rob

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

Rob,

We have already experienced drops, including the 2008/2009 market, yet nothing changed for you. What would be any different in future market downturns?

There are little drops all the time, Anonymous. If a drop doesn’t take us below fair-value valuations levels, the Get Rich Quick stuff is still making people feel that they are ahead of the game.

There’s only one time in many, many years when we dropped slightly below fair-value valuation levels. That was in early 2009. Then we went to a P/E10 of 13, a wee bit below the fair-value number of 15. And we did indeed see attitudes changing at that time. That’s when we saw people working up the courage to call Mel Lindauer and Taylor Larimore liars at the Bogleheads board. We never saw people saying things that bluntly in the days when I was there.

The dissatisfaction was not strong enough to change ownership of the board. But prices shot back up far above fair-value levels within a few months. What will happen when we see the P/E10 level remain below 10 for several years? That’s what has happened in all earlier bull/bear cycles before the irrational depression that always follows irrational exuberance comes to an end. I believe that we will see the ownership of the board change hands at that time. And, yes, I believe we will see prison sentences announced at that time.

But again — I CANNOT PROVE THIS.

I am telling you what I believe will happen. I am NOT telling you what I want to see happen or what I will push to see happen. If anything, I intend to play it the other way. I intend to put forward some words aimed at getting your prison sentence REDUCED. I want to put the nasty stuff behind us. I believe that any energy wasted on retribution is a big waste of energy and even a dangerous use of energy. I want to see us all working together. I see it as my job to steer things so that we all begin working together to achieve goals that benefit all of us.

So what I am describing is not what I want to see but only what I expect to see. I think about how pissed I would be if people who called themselves “experts” had been lying to me about all this stuff for years. The answer is — I would be pretty darn pissed. The lies haven’t had any effect of me for a long time now. I saw on the evening of August 27, 2002, that Buy-and-Hold is just a con, a money-making thing, with zero support in the peer-reviewed research. So it hasn’t cost me any money (the “defenses” of it of course have, but that’s something different).

I am not going to hold people back from going nuts unless I have credibility in their eyes. That’s why I have worked so hard to get so many posts in my file showing that I have OPPOSED this massive act of financial fraud for 14 years running now in every possible way. Those thousands and thousands of posts will add to my post-crash credibility and help me to help you.

Or at least so I believe. It’s not possible for me to say precisely what will happen. I worry that people are just going to freak out and that nothing I say in your behalf will make much difference. I will give it my best shot, that’s all. I obviously cannot control results. All that I can do is to push for settling this matter BEFORE we see the massive crash and so that’s what I do.

This one will not be like any earlier crash. The amount of money lost in a crash is determined by how much overvaluation there was at the top of the bull market that caused it. In two of the earlier Buy-and-Hold Crises, the highest P/E10 level we saw was 25. The one time we went to 33 we created the Great Depression. This time we went far, far beyond the number that caused the Great Depression. This time we went to 44. So we will be losing an unprecedented amount of phony baloney wealth this time. The Wall Street Con Men have never before pushed Buy-and-Hold so hard as they did this time (for example, they never before told the lie that there is peer-reviewed research supporting the pure Get Rich Quick “strategy”) and so of course we all should be expecting them to cause more human misery this time than they have ever caused before (I am assuming here that stocks may continue in the future to perform at least somewhat as they always have in the past).

Please don’t mis-interpret any of my words here as “doom and gloom.” The reality could not be further from the truth. The last 35 years of peer-reviewed research provides the missing key to understanding how stock investing works that humankind has been looking to find for a long time. The good news here is 50 times more good than the bad news here is bad. Yes, we may go into a Second Great Depression. I hope not but that’s certainly a possibility. But the Second Great Depression should not last as long as the first one did.

We need to get one large web site to permit honest posting on safe withdrawal rates and scores of other critically important investment-related topics. It’s all downhill sledding from that point forward. We all want the same things. Bogle and the other Wall Street Con Men did not INTEND to cause the Second Great Depression. They BELIEVE the garbage that they have been pumping out for decades now. When they see the results of their trickery, I am 100 percent certain that they are going to come clean and flip to the research-based side.

Then it will be easy. We will be able to spread the word quickly re what really works when we have the money of the Wall Street Con Men behind us. We can outdo the damage of the past 35 years in perhaps one year when we are all working on the same side. I think it is entirely realistic to expect us to experience the greatest surge of economic growth in our history in the days following the onset of the Second Great Depression. This is big stuff. We now know how to reduce the risk of stock investing by 70 percent while increasing returns dramatically. It is impossible to exaggerate how big an advance that is. This is how we restore people’s faith in the capitalist system. When we show people that capitalism can work for ordinary people, not just Wall Street Big Shots, we change the political dynamic in a big way.

Anyway, those are my thoughts re these terribly important matters.

I naturally wish you the best of luck in all your future life endeavors regardless of how things play out, my old friend.

Rob

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

Rob,

Doesn’t it come down to perception? You don’t feel you were bitter, but they do. As they say, you must know your audience. Your intentions don’t matter as it is opinions that count.

There’s a good bit of truth in what you are saying here, Anonymous.

What does this say about what happens following the next price crash? When millions of people lose most of their retirement savings, will that change perceptions of Buy-and-Hold?

I say “yes.”

But we are going to have to wait until it plays out to know for sure.

Perceptions of Bernie Madoff sure changed after his con was exposed. Jack Bogle is Bernie Madoff times 500, in my assessment. I love the guy, as you know. I am his biggest fan. But still….

Rob

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

Was Jaime really sitting next to millionaires? If they are not following VII, then their money is all cotton candy, right Rob?

This is a 100 percent on-point observation, in my assessment, Anonymous.

In most cases, a large portion of the money they are counting on to finance their retirements is cotton candy. Absolutely. And that explains the behavior.

You often ask me “Is this all a massive conspiracy?” It is. But not in the way you suggest when you ask that. I call it a “Conspiracy of Ignorance.”

None of us understood how stock investing worked prior to 1981. Many possessed clues, to be sure. But no one had ever put the entire puzzle together. Then the Buy-and-Holders pushed the idea of using peer-reviewed research to develop a systematic way of developing knowledge of how investing works and generated a mass of hugely important insights, swinging and missing on the biggest issue of all, the importance of always including adjustments for valuations in one’s calculations. And then Shiller fixed the big mistake that caused Buy-and-Hold to go so wildly off the mark by showing in 1981 that valuations affect long-term returns and that therefore stock investing risk is variable rather than fixed. That of course changes everything.

So now we have it all. Now we’re set.

Except for this darn conspiracy that “defends” and even promotes Buy-and-Hold to this day. Huh? What the h? What’s that about?

It’s partly that there is so much darn money to be made with the promotion of Get Rich Quick schemes and the uncorrected version of Buy-and-Hold is the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind (unintentionally, to be sure — but still). Part of this is a money thing, a financial fraud thing. That’s real. And that’s a big problem.

But that is not the entire story. Not by a long shot.

There are millions of people whose lives are in the process of being destroyed by the continued promotion of Buy-and-Hold. The Buy-and-Hold Crisis is a huge economic issue and even a huge political issue. It is simply not possible that a bunch of Wall Street Con Men could pull something like this off by themselves. We live in a free country. There are lots and lots of smart people who love this country and who will step up to the plate and speak up against the Wall Street Con Men and their Internet Goon Squads when they see their country under attack. And yet they have not done so in this case. To understand this story, we have to come to terms with this important reality. This is not solely a money thing. How do we explain this additional aspect of the story?

I was on that stage when that speech was being delivered. I heard the reaction not only to my own speech but to all the other speeches. The reaction to my first slide, the one that contained the title of the speech [“How to Become the Most Hated Blogger on the Internet”] was the strongest positive reaction of the night. It wasn’t a close call. People LOVED the title. The crowd was eating out of my hand at that point.

The reaction to the second slide was also positive, but a bit less so. I would say that the intensity of the positive reaction was cut in about half with the second slide. Then it dropped off a cliff. The mood became cold for the remainder of the speech. There was no booing. But there was no further positive reaction. Perhaps a small smattering of applause here and there. I don’t recall there being much more laughter, again perhaps a small amount here and there.

Things got cold enough that I was worried that people would not cheer at the end of the talk. That would be very embarrassing because they cheered at the end of every other talk. I was very aware of how cold things had gotten and I just soldiered on, a bit concerned. They did applaud, no more and no less than for the other speakers. So I would say that most were not outright angry at me. But the crowd was certainly not eating out of my hand at the end like they were at the beginning. By the end of the talk, people were either neutral or probably in some cases borderline hostile.

There were four or five people who came running up at the end of the talk offering the most effusive praise imaginable. That small group loved me. We sat around and had beers for about two hours. But I don’t at all think that that group was representative of the group as a whole.

So I found Jaime’s comment very helpful. I need to understand why people react as they do. It is AMAZING that people told her that I seemed bitter. I 100 percent believe that she is telling the truth. Her comment is 100 percent consistent with other things I have been told or that I have seen with my own eyes. People think I am bitter. It’s not just you Goons who see it this way. You Goons are more vocal about it and more blunt about it. Most people are too polite to say out loud that they think I am bitter. But most people don’t think you Goons are nuts when you say it. They think you are a bit rude. But they get where you are coming from.

They generally do NOT get where I am coming from. They are fine with me saying to pay attention to valuations. They have heard that thousands of times and consider it a reasonable point. So they have no distaste for the expression of that general point. They don’t relate when I say that returns are highly predictable or that Buy-and-Hold caused the economic crisis or that retirement studies get the numbers wildly wrong or that financial fraud is being practiced or that people will be going to prison. That sort of language is a big turn-off to most people. I am sure. I have lots of experience with this. I know whereof I speak re these matters.

Even my wife feels this way. I read my Value Walk column at the lunch table each Tuesday so that my boys get to know what their dad does with his life. Every now and again, my wife will offer a sort of bitter (!) side comment. She will say something like: “You make good points in that column. I can’t help but notice that you didn’t call anyone a Goon in that one. Hmmm…” So this is an almost universal phenomenon.

My FinCon talk was NOT bitter!

I was very aware when I was preparing it that there was a risk that it would be perceived that way. So I went to a good bit of trouble to remove any hint of bitterness from the presentation. Every slide was humorous. There was one of a boy standing in a corner with a dunce cap on. That’s a humorous way of making a point, not a bitter way of making a point. Another was of a baby crying. Again, that’s a humorous way of making a point, not a bitter way of making a point. They were all like that.

People find the CONTENT of my message bitter. That’s what is killing me.

If Shiller is right (I obviously believe that he is), then the real value of every stock portfolio is about half of its nominal value. People hate hearing that. They hate it, hate it, hate it, hate it, hate it. Everybody hates it. Not just Goons, not just Buy-and-Holders, not even just investors. EVERYBODY hates it.

Journalists hate it because they did not speak up when the bull market was getting out of control. Policymakers hate it because they permitted forces to be unleashed that have costs millions of people their jobs. Economists hate it because it shows that their Rational Man assumption is bogus. Even Behavioral Finance advocates hate it because it puts them on the spot — they want to push new ideas but they don’t want to have to embarrass their friends in the process of doing it. Even Valuation-Informed Indexers hate it. John Walter Russell used to say that you Goons would hold up a red flag and that I would charge every time. He tried to doctor the numbers in the Retirement Risk Evaluator because he didn’t want to offend people by reporting the numbers accurately and honestly.

Nothing that I say is even the tiniest bit advanced in an intellectual sense, Anonymous. Everything I say is pretty much two plus two equals four if you believe that Shiller’s research is legitimate. But people don’t like hearing it. So people who are able to add two and two and get four avoid saying it. Except for me. I am different in that I am the first person stupid enough to just say this stuff out loud and thereby get people who once loved me to hate me with a burning hate. You don’t talk honestly about the damage that a society does to itself by permitting a bull market to get out of hand. It violates a Social Taboo to do what I have done. It is just not something that civilized people do.

I think that we all need to start discussing in an honest way what the last 35 years of peer-reviewed research shows. That’s what I truly believe. I don’t want to violate any Social Taboos. I don’t want to start any controversies. I don’t want to upset people. I don’t want to make people hate me. But I very, very much want to post honestly re safe withdrawal rates and scores of other critically important investment-related topics. I can’t even imagine playing it any other way. So I soldier on. I do the best that I can do given the cards that have been dealt me.

A good portion of the money that the people sitting next to Jaime have accumulated over the course of their lives is today invested in cotton-candy nothingness. That’s what Shiller showed with his research. It’s a big deal. People need to know the true size of their portfolios if they are to plan effectively for the future. These are smart people we are talking about; you don’t get to be a millionaire without possessing some smarts. And yet they ignore common sense when they invest their retirement money. That’s not smart at all. When I point that out to them, it makes them hate me. That’s the story here.

I think this will change following the next price crash. I think their anger will be redirected following the next price crash. I saw that happen with Bernie Madoff. The people invested in his fund LOVED him so long as his con worked its magic on them. Once they saw through the con, they hated the man. That’s what I think is going to happen with Bogle and with those who have posted in “defense” of him following the next price crash.

I am not God. I could be wrong. I have obviously been wrong about things in the past. It could be that it is happening again. I don’t have a time machine. I cannot take you into the future and prove this to you. I am just stating my sincere opinion.

That’s it, you know?

If you saw things from my perspective, you wouldn’t give two seconds of consideration to the idea of agreeing to post dishonestly to appease you Goons.

I suppose that, if I saw things from your perspective, perhaps I wouldn’t give two seconds of consideration to the idea of coming clean by the close of business today. That’s speculation. I am not able to see things from your perspective. So I cannot be entirely sure. I say that because it seems like something that perhaps I should say given what I said about how you would behave if you could see things from my perspective.

I cannot do other than what I am doing. So my intent and expectation is that I will just continue doing it.

I love you guys (and witches). I wish you all good things. I don’t see any benefit that follows from being nasty about any of this. So I make an effort to avoid taking that dark path.

I wish you all good things. But I intend to soldier on all the same. I believe that the reaction that we will see following the next price crash will tell the tale.

I believe that I will be friends with most of Jaime’s millionaire friends following the next price crash. And I believe that I will be friends with Bogle then. And I believe that I will be friends with you Goons then.

But this is all just one fellow’s opinion, you know? Nothing more and nothing less.

I hope that helps a tiny bit.

Rob