A Rich Life

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

“It’s the Most Important Public Policy Issue of Our Day. On Pure Substance Terms, There Are More Important Matters: the Polarization of Political Views; the War in Ukraine; Climate Change; the Unrest in the Middle East. But All of Those Are Highly Complicated Matters. In This Case, the Solution is Easy-Peasy. “

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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:

The people who used Greaney’s study to plan their retirement would have done well. Those who followed your advice would have done poorly. There will be no court cases. Bogleheads has a right to ban you and you don’t even need to violate any rules. There’s no “compelling public interest” in a mid-tier discussion forum. Heck, YouTube (the #1 site which you, of course, refuse to use) could ban you for being a Phillies fan or even for your VII theories and there’d be nothing you could do about it. I thought you went to law school?

I went to law school and i don’t agree with what you’re saying, Sensible. I absolutely believe that there’s a compelling public interest in whether or not millions of middle-class investors have some means to gain access to honest and accurate and research-based reports on what the peer-reviewed research teaches us all about how stock investing works in the real world.

It’s the most important public policy issue of our day. On pure substance terms, there are more important matters: the polarization of political views; the war in Ukraine; climate change; the unrest in the Middle East. But all of those are highly complicated matters. In this case, the solution is easy-peasy. If Shiller only published his Nobel-prize-winning research today, there would not be one dissenting voice questioning the need for it to be discussed at every discussion board and blog, without a single exception. The only thing holding us back is the 43-year cover-up. That makes the Buy-and-Holders look really, really, really bad. But it’s not as if it will look better for the Buy-and-Holders when it’s a 44-year cover-up.

I think that we all need to act together to get every site opened to honest posting re the research. Buy-and-Holders and Valuation-Informed Indexers should be united re the process question and they would be if it were not for you Goons. The same laws that apply in every field of human endeavor outside of the investing advice field need to be made applicable in the investing advice field as well. It”s silly that I should even feel a need to say that. It’s not all just about turning a quick buck any way you can.

My best wishes to you.

Rob

“Bogleheads Is Private Property. They Have a Right to Ban You for Any Reason.”

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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:

Bogleheads is private property. They have a right to ban you for any reason.

That question will be settled in the courts, Sensible.

The tobacco companies are private property. There was a time when the heads of the tobacco companies were doing everything in their power to suppress discussion of the research showing that smoking causes cancer. Their view was that it would be easier to turn a quick buck if people didn’t know how dangerous their product was.

That’s where we are with Buy-and-Hold today. Shiller’s Nobel-prize-winning research was not available in the days when Buy-and-Hold was being developed. So the people developing it took a wild shot in the dark on the question of price discipline and came up with this loony-tunes idea that valuation-based market timing might not be 100 percent required for every investor. Huh? What the f?

Lots of people have been hurt by that mistakes and lots more will be hurt in the next Buy-and-Hold Crisis. Each time once of you Goons engaged in abusive or criminal behavior, it makes it harder for those who want to keep our nation from being torn apart by this massive cover-up, the biggest case of financial fraud in our nation;s history. If Greaney truly believed that he had included a valuation adjustment in his study, we never would have seen a single abusive post or a single criminal act. i mean, come on.

We all have to follow the laws of the nation we live in, Those laws are there for everyone’s protection. When you learn that you got an important number wrong in a retirement study, you need to get that study corrected promptly. No death threats, no demands for unjustified board bannings, no acts of extortion, no acts of defamation. We all have responsibilities to others. There were people at the Motley Fool board who used the Greaney study to plan their retirement.

That’s where I’m coming from re this terribly important matter, in any event.

Rob

“Greaney’s False Claim That a 4 Percent Withdrawal Is Always 100 Percent Safe Encouraged Complacency About Valuations”

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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:

— Greaney said that a 4 percent withdrawal IS “100 percent safe.”

Why did you put the word IS outside the quotation marks?

To emphasize the conflict between what Greaney said and what Bernstein said.

If Greaney said “there’s a chance that a 4 percent withdrawal will work out, even at these crazy prices –that has worked out for retirements beginning at crazy price levels in the past,” I would endorse the statement. When he instead says falsely that a 4 percent withdrawal is 100 percent safe at all times, he is taking the valuations question off the table. The Bennett/Pfau research shows that the valuation level that applies on the day the retirement begins is the most important factor affecting retirement safety. So we all should very, very much want to see that issue remaining on the table.

We should be discussing stock valuations everywhere and at all times. If we were always focused on the effect of high stock valuations, we never again would see a CAPE value of 35, the CAPE value that applies today. So we never again would experience the ocean of human misery that inevitably follows a time when we permit the CAPE value to rise to insane highs. The enemy of stock investors is irrational exuberance. And the greatest friend of irrational exuberance is investor complacency re stock valuations. Greaney’s false claim that a 4 percent withdrawal is always 100 percent safe encouraged complacency about valuations among investors who were using that withdrawal rate or thinking of using it. I was there. I saw this. So I eventually worked up the courage to point out the false claim.

I offer no apologies. I believe that, if we were all thinking clearly, there would be zero controversy over the question of whether the authors of retirement studies should make an effort to get the numbers right. The problem is that we are NOT today thinking clearly. The CAPE value that applies today shows that. Most of us are guilty of irrational exuberance. The only thing that could possibly change that would be to open every site to honest posting re the last 43 years of peer-reviewed research. So that’s what I have been proposing as a fix to this mess going back to the afternoon of May 13, 2002.

Rob

Rob: “Bernstein Stated in His Book That the Safe Withdrawal Rate at the Top of the Bubble was 2 Percent, Not 4 Percent.” Buy-and-Hold Goon: “No, He Didn’t. Here Is What He Actually Said.”

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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:

“He stated in his book that the safe withdrawal rate at the top of the bubble was 2 percent, not 4 percent.”

No he didn’t.

Here is what he actually said “A particularly bad returns sequence can reduce your safe withdrawal amount by as much as 2 percent below the long-term return of stocks. Recall from Chapter Two that it’s likely that future real stock returns will be in the 3.5 percent range, which means that current retirees may not be entirely safe withdrawing more than 2 percent of the real starting values of their portfolios per year.”

https://www.passionsaving.com/stocks-in-retirement.html

“can reduce”
“by as much as”
“it’s likely”
“range”
“may not be”

Greaney said that a 4 percent withdrawal IS “100 percent safe.” When Bernstein says that withdrawing more than 2 percent “may not be entirely safe,” he is saying that Greaney’s claim is a false one.

Once we have acknowledged that valuations affect the result, we have opened up the undiscovered continent of investment analysis, Lots of smart people will have lots of different thoughts as to precisely how to go about buying stocks in the wake of the publication of the last 43 years of peer-reviewed research. Each contribution that is made will cause our overall knowledge of the subject matter to advance another tiny bit. In time, the progress achieved will be breathtaking.

The hardest step in the first one, the acknowledgement that valuation-based market timing is alwayus 100 percent required for every investor who seeks to keep his risk profile stable over time, to Stay the Course in a meaningful way. Please mark me down as being 100 percent in favor of taking that magical step, a step that I believe it would be fair to say will provide to be a turning point in U.S. history. We permit advances in understanding in every field of life endeavor other than the investment advice field. I strongly believe that we should permit advances in the investment advice field as well, Evidence.

That’s where I’m coming from re this one, my good friend.

Rob

“What You Want Is for All the Sites in the World To Be Open To Your Posts So That You Can Increase Your Popularity. Your Ambition Is To Be One of the Leading, If Not the Top, Investment Experts in the World. With This Fame, You Thought You Would Become Rich By Becoming a Sought After Speaker and Perhaps Selling Books and Other Materials.”

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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:

Just tell people what you really want. What you want is for all the sites in the world to be open to your posts so that you can increase your popularity. Your ambition is to be one of the leading, if not the top, investment experts in the world. With this fame, you thought you would become rich by becoming a sought after speaker and perhaps selling books and other materials.

The real problem is that you don’t have any education or expertise in this area, a personal failed track record (you are broke) and your market timing performance has been trounced by buy and hold (your expected crashes never happened).

All that you describe sounds 100 percent good to me. I enjoy using my talents to help others and I of course think it’s find that in cases in which those talents produce an exceptional work product that I would be well-compensated for the work I do.

I agree with you that I don’t possess any particular expertise in the stock investing realm. It could be argued that in today’s world that’s a plus. I have spoken to many, many experts in the field who have evidenced a desire to do honest work but who hold back from starting things clearly because they worry what will happen to their careers if they do so.

The perfect example is William Bernstein, He stated in his book that the safe withdrawal rate at the top of the bubble was 2 percent, not 4 percent. That’s what I say. So Bill could have obviously been a big help to me and the thousands of other community members who have evidenced a desire that honest posting re the peer-reviewed research be permitted. He posted at the Bogleheads Forum on numerous topics. But, when the Great Safe Withdrawal Rate Debate was raging there, he never once advanced a post expressing his view that the Greaney retirement study gets the numbers wildly wrong. It’s not just Bill Bernstein, His story is the story of pretty much every expert in this field in the Buy-and-Hold Era, in my assessment.

I’m a journalist, not an investment expert. This is a huge story, one of the most important stories there is to tell in the United States today. We are talking about something that would help millions and millions of people to live richer and fuller and freer lives and all it would take is for a small number of people to insist on their right to post honestly re the peer-reviewed research. I offer precisely zero apologies for doing everything in my power to get us all to the better place where deep in our hearts we all want to live. I have compared the situation to the one that would exist if a pill were discovered that cured every form of cancer and the people who earned six-figure salaries offering chemotherapy engaging in abusive and criminal behavior to block the millions of people who wanted to learn about a cure from gaining access to discussions about it.

I am in favor of finding a cure for cancer and I am in favor of learning for the first time in history how stock investing works in the real world. I want everyone on the planet to know about Shiller’s amazing, Nobel-prize-winning research showing that valuations affect long-term returns and about how to use it to invest in stocks far more effectively than it was possible to do in the days before that research became available (at least theoretically) to all of us. If there has been a more important journalistic endeavor than that that has come around in the course of my lifetime, I sure am not able to imagine what it might have been.

I wish you all good things. But I sincerely believe that the Greaney retirement study lacks an adjustment for the valuation level that applies on the day the retirement begins.

Rob

“No One Needs a Reason to Ban You or Anyone Else From Their Website.”

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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:

No one needs a reason to ban you or anyone else from their website. If I don’t want you in my house I can tell you that you cannot come over. I can even threaten to call the police if you show up. You need to respect the rights of others.

I disagree. When a site owner bans someone solely because that person mentioned what the last 43 years of peer-reviewed research tells us all about what works in stock investing, it is a very strong sign that that site owner does not have the interests of his readers at heart. It helps him to turn a quick buck for him to get behind a pure Get Rich Quick/Buy-and-Hold strategy. But there are things in this world more important than turning a quick buck, in my assessment. Caring what happens to your friends’ retirement accounts is one of them.

Should the tobacco companies have the right to run huge ad campaigns that smoking will help you to live a long, healthy life and to prohibit anyone from mentioning the research showing that smoking causes cancer? I say “no.” I think that the people being pitched have a right to hear about the dangers of smoking. I feel the same way about Get Rich Quick/Buy-and-Hold stock investing “strategies.” I believe that Shiller’s Nobel-prize-winning research is legitimate research. Sue me.

My best wishes to you and yours, Sensible.

Rob

“Doing Something About the Intimidation Tactics Would Take the Fraud Element Out of It. That’s the Big Thing. I Would Recommend Down the Line That Mutual Fund Companies Provide Both the Official Numbers for Stock Portfolio Value and the Number After It Has Been Adjusted for the Effect of Irrational Exuberance. I Would Encourage All Investors to Work Together to Pull the CAPE Value Down Once It Rises Significantly Above Fair-Value Levels.”

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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:

Companies issue quarterly and annual reports, and they are audited. Falsifying the information on these reports leads to prison sentences. See Ken Lay. What SPECIFIC remedies do you suggest?

I believe that we need to open every discussion board and blog on the internet to honest posting ee the last 43 years of peer-reviewed research in this field. All laws that apply in every field other than the investment advice field should apply in the investment advice field as well. So no death threats, no extortion to stop researchers from publishing honest research, no defamation to suppress discussions of the research, etc.

That would do it. We have seen strong interest among experts in the field to report on what the recent research says and strong interest among ordinary investors to learn as much as they can about the subject. Everyone is not going to switch to Valuation-Informed Indexing immediately. It wouldn’t be realistic to expect such a thing. But I am highly confident that we could get the percentage of Valuation-Informed Indexers up from 10 percent to 20 percent in six months if honest posting were permitted. And it would grow from there.

Doing something about the intimidation tactics would take the fraud element out of it. That’s the big thing. There are still smokers today even though it has been years since researchers were afraid to let people know about the research showing that smoking causes cancer. But the number of smokers has been reduced significantly. And those who smoke at least know what they are getting into. That’s how it should be with Buy-and-Hold. People should be able to learn how dangerous and be able to make up their own minds after hearing both sides of the story.

I would recommend down the line that mutual fund companies provide both the official numbers for stock portfolio value and the number after it has been adjusted for the effect of irrational exuberance. I would encourage all investors to work together to pull the CAPE value down once it rises significantly above fair-value levels. And of course I believe that all retirement studies not including valuation adjustments should contain language explaining why many people believe that such adjustments are needed to get the numbers right. If people elect to ignore such warnings, so be it. But all should be properly informed of what the research shows.

It’s too important a matter to just let the industry turn a quick buck exploiting people’s weakness for Get Rich Quick approaches. In the long run, there would be more money for everyone as a result of us having a more stable stable economic and political system.

Rob

“Who Cares What You Say? It Is Not Your Work and You Are Not an Expert.”

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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:

Who cares what you say?  It is not your work and you are not an expert.

If no one cared, you would not have insisted that I be banned from even a single site. Your behavior for 22 years now shows that you believe that plenty of people care.

Rob

“Shiller Does Not Say What You Say. You Throw His Name Around Because You Think It Somehow Gives You Credibility. It Does Not. It Is Shiller’s work. Not Your Work. If There Is Some Kind of Interpretation To Be Had, Then It Is Up to Shiller to Do So.”

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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:

Shiller does not say what you say.  You throw his name around because you think it somehow gives you credibility.  It does not. It is Shiller’s work.  Not your work.  If there is some kind of interpretation to be had, then it is up to Shiller to do so.  Meanwhile, you are free to do your own research and write your own papers and make your own conclusions.  Stop hijacking what someone else has done in order to spin it top further your agenda.

I say that Shiller says that valuations affect long-term returns. I say that Shiller believes that there is a phenomenon in the stock buying process that he calls “irrational exuberance.”

I also say that all of us (very much including Shiller himself) should be talking about the far-reaching how-to implications of his amazing research at every discussion board and blog, without a single exception. The core aim of the entire 22-year project is to make that happen. What I say is relatively inconsequential. What matter is what thousands and thousands of people say. We are not hearing those thousands and thousands of people today because they fear what you Goons will do to them if they express their sincere thoughts. That needs to change.

I have a funny feelings that I will not help the cause of it changing by agreeing to censor myself re the error in the Greaney retirement study (it lacks an adjustment for the valuation level that applies on the day the retirement begins).

Rob