Set forth below is the text of an e-mail sent to me by Ken Evoy, owner of the SiteSell web hosting company, on April 16, 2014:

Hi Rob,

I think you’d be perfect for this! How much time could you spend on it? If this happens, we can talk more about it at the time.

You emailed 30,000 people on SSRN?! Individually? Wow!

Re the academic, Wade sounds like he’d fill the bill. It’s Momentum-based, pushed in interesting directions. If he’s interested in getting involved, please let me know. If not, don’t waste time contacting anyone else, not until/if I feel we have a product.

And re the rest of your letter, we’re on pretty much the same page. I can see several possible ways to enable folks to get better-than-passive returns without having to do what I’m doing (and that’s IF this works).

This part of it, very few could do it well. But we can turn what works into simplified models that pretty much guarantees they get similar results without forcing folks to do exactly the same thing with the same EFTS.

Anyway, it’s still hazy. My first priority is to wrap up Phase 1 of this research and put a model into play. I have a former fund manager who’ll sanity-test it. If Wade is interested at that time, so much the better.

Or if he wants to communicate with me before then, we could talk any time during the next few weeks.

No need to go further than that for now. We’d only turn this into a product when we’re sure that we’re doing something that works and is better than anything else out there. For that, I need third party verification.

All the best,
Ken

Set forth below is the text of an e-mail that I sent to Jaime Tardy, owner of the EventualMillionaire.com site, on November 7, 2013:

Jaime:

Thanks for being honest. That is 100 percent appropriate and helpful.

Thanks also for the report on what the millionaires said. What I told my family when I
got back from the conference is that “I wish I knew what people who heard the talk
were thinking after they heard it.” Your group isn’t everyone. But my guess is that
their views are widely held. So you have told me something valuable.

I agree 100 percent that letting the haters into the story turns the story into a negative one.
LOTS of people I respect have told me what you are telling me. I still respect them.
I believe that they are right about the general rule. I don’t believe that the general rule
applies in this case.

I DON’T think the talk was filled with bitterness. I intentionally chose images that were
playful to avoid giving the talk a bitter feel. But I know from the reactions I get that
the millionaires are giving voice to what they truly feel. People HEAR bitterness.
But I am going out of my way not to project it (while still reporting on the essential
elements of the story that must be told).

I agree 100 percent that the haters will join my side somewhere down the road.
I ALWAYS work to get us all to that place. I PRAISE the haters to the skies.
I say that Jack Bogle is my hero. He is. I say that the Buy-and-Hold Pioneers
have been responsible for huge advances in our understanding. They have been.
I say that I want to work with these people. I do. I say that I consider these people
my friends. I do.

The hate comes all from one side, Jaime.

I REPORT on the hate. I certainly don’t dispute that part. But reporting on hate
is not the same thing as ENGAGING in hate. I report on the hate with the aim of
bringing the hate to an end. In ordinary circumstances, we ALL would be united
in saying that the hate should be brought to an end. Every board and blog on
the internet has rules for dealing with this sort of problem. This is the only case
I know of where a large number of the people participating at the boards and blogs
have elected not to seek enforcement of those rules.

Please understand that Shiller did not publish his findings last week. He published
them 32 YEARS ago.

Is it not an amazing fact that the findings were published 32 years ago and
Wade Pfau, who holds a Ph.D. in Economics from Princeton, had never thought
through a number of fairly obvious IMPLICATIONS of those findings? I worked with
Wade for 16 months. He told me over and over again how AMAZED he was when
he found that the 140 years of data available to us backs up everything I have been
saying for 11 years now. He couldn’t get over it. He kept asking himself: “Am I missing
something? Why wasn’t the research that Rob and I are doing today done many years
ago?”

Now he knows.

The reason why research on the implications of Shiller’s findings hasn’t been done
for 32 years is that the researchers who see why it needs to be done are AFRAID
to do it. If they publish the research we all need to see, they will be hated as much as
I am. And, if they ask that something be done about the torrent of hate directed at
them for publishing accurate and honest research, they will be called haters themselves
for having called attention to the hate directed at them by others.

To understand this, you need to go outside the world of investing and see how the
same general phenomenon has played out in other areas.

I was watching an old episode of “Mad Men” a few weeks ago and I laughed when
I saw the phenomenon play out on that show. The heads of a tobacco company were
talking about how to respond to an article in Reader’s Digest that reported on research
showing that smoking causes cancer. The conclusion was — We don’t need to respond
with any logic, our customers already WANT to smoke, all we need to do is to provide
them some silly excuse to continue doing what they want to do and they will do it.

So they came up with this slogan saying “Luckies — They’re Toasted!” ALL cigarettes
are toasted. The slogan is meaningless. But the fellow who wants to smoke and whose
conscience is bothering him because he suspects that the research is getting at something
real now feels better. HIS brand is toasted! So he is okay.

The killer is that the executives who were coming up with the trickery were smoking
while they were doing it! They weren’t just killing millions of others. They were killing
themselves at the same time! They believed their own marketing garbage.

That’s Buy-and-Hold.

That’s the story here.

People hate me because I am holding a mirror up to them and urging them to face
the fears that they carry around inside their heads. I don’t use force. I am 100 percent
friendly. But I don’t go along with the b.s. either. I insist on recognition of my rights.
I afford the Buy-and-Holders no easy way out, no way to pretend that there is not 32 years
of research showing that their “strategy” never works in the long run.

Valuation-Informed Indexing is the future. Buy-and-Hold is the past. You have to believe
that and to understand why it is the case to be able to help me. Watering down the message
is not the answer. The message has to be potent to prevail over the powerful forces lined
up against its transmission.

There are changes in the way I transmit the message that could be made. I am obviously
not perfect. It could be that different ways of saying things would be more effective.
But I cannot ever apologize for telling people the truth (according to 32 years of peer-reviewed
research) about stock investing. And I have to have some answer to the obvious
question. If there really is 32 years of research showing that Valuation-Informed Indexing
is so wonderful, why doesn’t everyone know about it already?

Few know about it because no one prior to me was willing to take on the haters.
If this is every going to go mainstream, someone needs to do that. If we are going
to persuade people to quit smoking, we need to say clearly that it causes cancer
and that cancer is bad, bad stuff. We beat cancer by saying it is awful and that smoking
causes it. We beat Get Rich Quick investing by saying it is awful and that believing in
Buy-and-Hold principles causes it. There is no other way to get from the horrible place
where we all are today to the wonderful place where deep in our hearts we all want to be tomorrow.

The fact that following Buy-and-Hold strategies makes people so intensely emotional is the reason why it doesn’t ever work. I am saying that the primary goal of investment advice should be to make people
LESS emotional. Buy-and-Hold makes people more emotional than any other strategy. That
aspect of the question MUST be addressed. Avoiding emotion to the extent possible is the key
to long-term success, according to the last three decades of research.

I definitely respect you and I definitely like you. I am obviously not happy to hear what those
millionaires said. But I NEED to hear what you told me. I need to win them over. I believe that
their views will change following the next price crash. I believe that I will be in an amazing spot
then because I will have the only site on the internet that explores all the stuff that today
is being called “hate” but that I believe in the future will be called “the stuff you need to look at to avoid
the #1 pitfall in investing — becoming so emotional about pretend gains that you become
defensive when people report on what the research says.”

I FULLY understand if you do not care to go forward. I don’t regret exploring the possibility
because I have learned from our interactions.

You may have run into Joe Taxpayer at the conference. We have been having one of
those insane discussions (insanely great and insanely awful in about equal portions)
at his blog for the last day or two. My guess is that both “sides”
read the words and draw opposite conclusions as to where the hate is coming from.

Good Bye St Louis

Thank you again for being blunt about things. That’s what is great about you. I wish you
every possible success and will take joy in hearing about them (as I know I will).

Rob

Set forth below is the text of an e-mail sent to me by Jaime Tardy, owner of the EventualMillionaire.com site, on November 7, 2013:

Hi Rob!

So I’m going to be completely honest here. If thats ok! (If not, stop reading! 😉

I think you need to let go of the attacks. I think it makes the story a negative one instead of a positive one. Yes- there are haters, but we can’t let the haters get into the story.

I saw your speech at ignite. I was sitting with a few millionaires, and their reaction was that you were very bitter about this. They didn’t understand why you were talking about the haters so much.

I know you are starting a movement – and a movement has haters. (just look at politics!) But they don’t need to be a part of the story in my opinion. (they are a product of the movement – and hopefully one day they will see the light and join your side!)

Does that make sense?
🙂

Hope you have an amazing day Rob. I know you are passionate about what you do- your persistence in the face of everything is inspiring!

Set forth below is the text of an e-mail that I sent to Jaime Tardy, owner of the EventualMillionaire.com site, on November 4, 2013:

Jaime:

The same Goons are still doing the same things. I don’t go to other sites as often as I once did because I have seen the same dynamic play out so many times. But, when I do, they do all the same things and generally obtain the same results.

Part of what you are saying makes sense to me and part does not.

I agree 100 percent that people listen only to people they LIKE. The negativity is POISON and it hurts me in very serious ways. I am in favor of having more videos and of doing more to have my site visitors identify with me as a person. All of that is 100 percent right on, in my assessment.

I don’t agree with the part about forgetting the attacks. The attacks are a huge part of the story that needs to be told. Valuation-Informed Indexing is so far superior to Buy-and-Hold that the two are not in the same universe. So there has to be some explanation why for 32 years people have ignored what the research says. The explanation is that Buy-and-Hold has emotional appeal and the attacks demonstrate how emotional Buy-and-Hold makes people.

I believe that the big change will come when we have the next stock crash. I believe that people are then going to turn on the Buy-and-Holders. They are going to be looking for someone to blame for their troubles and the Buy-and-Holders will be the obvious choices.

My role is to pull everyone together. I will have a level of credibility that no one else will have because I have been talking about the dangers of Buy-and-Hold publicly for 11 years. I see that changing from a detriment to a benefit when Buy-and-Hold fails in a concrete way rather than just in a theoretical way. I will be able to say following the next crash that the losses that people have suffered show the benefits of HONEST investing advice and that I am the  only one out there who possessed the integrity and courage to be fully honest on a whole host of important issues.

Here is a post about a woman who gets the “vision” that I have re this matter:

Carol Osler, Program Director for the Lemberg Masters in International Economics and Finance at the Brandeis International Business School: “I Certainly Have Seen the Academic Profession in Action Squelching Unfashionable Ideas….My Other Suggestion Is to Tone Down Your Rhetoric (‘Goons,’ Etc.). Prose Like That Almost Always Backfires.”

 

She points out that Kuhn (who wrote “The Structure of Scientific Revolutions”) “shows how pathbreaking scientific ideas are rejected at first, usually for decades.” That is what is happening here and there is strong reason to believe that the days of rejection for Shiller’s ideas are close to coming to an end.

I of course do not enjoy the attacks. But the attacks point to a huge opportunity. The attacks show that Shiller is RIGHT (people do not attack when they have confidence in their position). And Shiller’s model changes EVERYTHING we think we know today about how stock investing works. Once Shiller’s ideas catch on (and we have already seen a big move in the right direction since the first crash), we will be seeing THOUSANDS of new millionaires in this field. I want to be one of them and I want to help lots of others become others of them. I intend to earn my millions doing good and important work.

I undertand that not everyone who tries something like this succeeds. All that I can say is that I am a VERY cautious person and that I have checked for every possible hole in the plan and I have not found any. I AM going to make changes in the site with the aim of bringing out my personality. But I am more inclined to playing UP the attacks than to playing them down. I titled my Ignite presentation “How to Become the Most Hated Blogger on the Internet.” I could see doing more of that sort of thing, letting people know right up front that they get honesty from me and that I have paid a price for that honesty and that they can take it or leave it (those who take it will of course be good customers).

I think this is a winning message, so I don;t want to water it down. I want to promote myself as “The One Investing Advisor Who Will Not Compromise on Issues of Integrity.” I’ve EARNED that designation and I want to cash in on what I have earned with 11 years of difficult work.

The reason I approach you is that you are strongest where I am weakest. I need to approach big names and persuade one to endorse my work. I have been successful in doing this in a limited number of cases. I had a researcher agree to spend 8 years of his life researching my stuff. That was a big win. I persuaded another researcher to publish research he co-aurthored with me in a peer-reviewed journal. That was another biggie. And I have had people like Mr. Money Mustache say that he agrees with my ideas but that he doesn’t want to put his name on them because of the attacks. He COULD change that view just enough for me to be a big hit. Or someone else as big as Mr. Money Mustache might come to see the opportunity in this (which I think is huge — we are talking about rewriting ALL the rules of investing)
and do for me what Mr. Money Mustache elected not to do. I on occasion force myself to go up to big names and ask for their help. But I think I need to do a LOT more of that. My sense is that doing that comes a lot easier to you and that you might be able to help me see  how to proceed re that side of things.

My question to you is whether you see any possibilities. What I need is someone either to connect me to big names or to point me to big names that I did not think of pursuing and possibly to give me some advice on how to proceed so as to win them over.

I am grateful for the thoughts you have offered in any event. You will not hurt my feelings if you respond with a gentle “no.” I approached you because I thought that it was POSSIBLE that you possess the skills needed to make the key turn. I am not trying to say that I know for sure that our working together is a good idea. I saw something in you that I lack and thought that I should make an effort to see if it would be a good idea for us to work together.

Rob