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

Rob,

Not considering a variable in a study is not fraud and doesn’t require an immediate or any update.

If I publish a study showing a link between smoking and cancer but fail to account for family history it may be a less than perfect study but I am in no way required to amend that study.

You are welcome to post your own finding and highlight how the current study is insufficient. It seems like you have already done this Rob and now people are free to review everything available. That is how it works old studies aren’t updated new research is done on top of previous research and if it hold enough merit it just usurps the old as the gold standard. Maybe people aren’t willing to accept they need to consider Rob Bennett’s way of valuing stock and only Rob’s valuation when deciding on a safe withdrawal rate. Not including this very esoteric valuation metric from an internet troll into your study is not fraud.

If Greaney didn’t think it was fraud to lie about the numbers that people use to plan their retirements, he never would have threatened to kill my wife and children if I didn’t agree to stop reporting the accurate numbers. Give me a friggin’ break.

And if Bogle didn’t think it was fraud to continue telling people that the peer-reviewed research supports Buy-and-Hold 33 years after the research that once was thought to do that was discredited, he never would have gotten involved in the threats to get Academic Researcher Wade Pfau fired from his job unless he agreed to stop publishing honest research. Again, give me a friggin’ break.

I’m telling, Anonymous.

That’s the bottom line.

I’m telling the millions of people who will see a large portion of their retirement money disappear following the next price crash who did it to them. And I am going to help them organize and file lawsuits and get prosecutors to file criminal cases and all the rest.

That’s how our system works. There are always going to be some low-lifes who are going to be tempted to exploit human weaknesses for their personal profit. Fortunately, we were smart enough as a society to enact laws making financial fraud a felony. The announcement of your prison sentence will go viral. From that day forward, the rest of us will be learning about the first true research-based strategy, the strategy that lets us all reduce the risk of stock investing by 70 percent.

If you don’t think it is fraud to lie about the numbers that people use to plan their retirements, tell it to the jury, my old friend. It’s your jury that holds your fate in their hands. It’s your jury that you need to convince.

I want nothing to do with felonies and juries and prison sentences. It is my intent to continue to post honestly re safe withdrawal rates and scores of other critically important investment-related topics.

We’ll meet on the other side of the river following the next price crash and compare notes as to who has fell and as to who has been left behind. Fair enough, my long-time abusive posting friend?

Rob

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

who exactly is in the buy and hold mafia and how did they get so much power? do you have any real names of people who wield this type of influence over the universe?

Jack Bogle.

Bill Bernstein.

Larry Swedroe.

Scott Burns.

The owners of the Motley Fool site.

The owners of the Index Universe site.

The owners of the Morningstar.com site.

The owners of the Bogleheads.com site.

And on and on and on and on.

They got their power legitimately. There really was peer-reviewed research published in 1965 that appeared to many good and smart people to support the Buy-and-Hold concept. That wasn’t fraud. That was good stuff. I can go a step farther than that. I can say that that was heroic stuff. The Buy-and-Hold Pioneers took us out of the dark ages re our understanding of how stock investing works. Their huge insight — that short-term timing never works — is the second most powerful insight ever developed in the history of investing analysis. We all owe a great debt of gratitude to the Buy-and-Hold Pioneers.

It became fraud sometime between 1981, when Yale Economics Professor Robert Shiller published his “revolutionary” (his word) research showing that, while it is indeed so that short-term timing never works, long-term timing (price discipline) ALWAYS works and is ALWAYS 100 percent required for investors hoping to have any realistic hope of long-term success, and the morning of May 13, 2002. On the morning of my famous post pointing out the errors in the Old School SWR studies, the Buy-and-Holders responded with an insane level of defensiveness. So they obviously were aware on at least one level of consciousness that the research showed that Buy-and-Hold could never work. I have seen no evidence that they were aware of that in 1981. It appears to me that their confidence that Buy-and-Hold could be defended in civil and reasonable debate gradually declined over those 21 years until things got to the point where they stood on the morning of May 13, 2002. I can obviously only give personal testimony as to events that took place after that date.

They keep their power through the use of brutal intimidation tactics. The most obvious case is where they threatened to get Academic Researcher Wade Pfau fired from his job if he continued to publish and promote honest research. There are thousands of researchers who would love to be doing honest research today. But, like Wade, many of them have families and, thus, do not dare to “cross” my good friend Jack Bogle and the other Wall Street Con Men trying to keep the Buy-and-Hold fantasy alive another week, another month, another year.

The con men want to come clean. It was an honest passage in Bogle’s book that taught me that the Old School SWR studies were in error. Bernstein gave a partly honest response when one of you Goons sent him an e-mail asking if the methodology used in the Old School studies is analytically invalid. Swedroe stood up to Linduaer once and got himself banned from the Bogleheads Forum. Pfau wrote to the authors of the Trinity study and asked them to correct the errors in their study. And on and on and on.

The problem is that the Wall Street Con Men know that, if they come clean, they go to prison. Bogle should have acknowledged his mistake when Shiller first published the research discrediting the Buy-and-Hold Model. He rationalized not doing so. I presume that he told himself that it would all somehow work out. And now that 33 years has passed, it is 1,000 times harder for Old Saint Jack to work up the courage to say the Three Magic Words.

Everybody who works in this field knows that his career will be destroyed if he tells the full truth re these matters. So everyone keeps it zipped.

But keeping it zipped re financial fraud only causes the financial fraud to spread. Financial fraud is a cancer. The longer it continues, the more lives are ruined. The more lives that are ruined, the longer are the prison sentences that are ultimately assigned to those participating in the massive act of fraud.

My job is to bring it to an end and get us back to the original Buy-and-Hold idea — rooting one’s strategies in the peer-reviewed research.

I hope that helps a bit, Laugh.

Rob

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

Hi Rob,

What would you do if you found someone operating a blog preaching an approach to investing with obvious flaws; who incorrectly confused correlation with causation; and who improperly believed that the past was bound to repeat itself?

Would you reach out to that person, try to engage them in a discusion of their beliefs in an attempt to illuminate them? Or would you just chalk it up to yet another kook with a website and move on?

What if, as a result of those conversations, that person said you were a goon who deserved jail time for their approach to investing?

What would you do — as a friend?

Ryan Howard plays first base for the Phillies. He was a great player at one time and was signed to a very big long-term contract. He is a horrible player today. But when people talk about trades the team may make, his name never comes up. People are embarrassed to talk about the subject because Howard is a nice guy who once was a great player and because there are no teams interested in taking him today.

Today the front office began to lower the boom. They brought up a possible replacement. And there there were several interviews in which the idea was put forward that they will be releasing before the beginning of next season. Now everything has changed. Now it is considered fair game to mention the realities concerning Ryan Howard.

That’s what is going to happen re Buy-and-Hold following the next price crash.

People are afraid to talk today because the Buy-and-Hold Mafia is powerful and there are still people holding out hope that we will not see another crash. But following the next crash someone big will say things out loud that lots of people have been thinking for many years now. And then everything will open up. People will be rushing for the exits.

Once the taboo is broken, things are never again the same.

When it turns, it turns fast.

Where will you be then?

I am the best friend you have in this world, Curious.

That’s the real deal.

I can help. But only if I get cooperation.

You do deserve jail time. Put yourself in the shoes of the millions of people in the process of suffering failed retirements. Or in the shoes of the millions of people who lost their jobs in the economic crisis.

I have the credibility on this issue to help you get your jail time reduced. And that’s obviously all that I have. I cannot put you in jail and I cannot keep you out of jail. I have no such powers. I can try to help, I can try to put things in the light most positive for you. That’s all I can do.

I haven’t confused correlation with causation. I have explained WHY valuations affect long-term returns. The new model is based on a new understanding of how the market sets prices. The new model is consistent with the data. The old model is not.

I don’t say that the past is bound to repeat. I say that it very well might and that every person working in this field has a responsibility to let millions of middle-class people know what will happen to their retirement money if that turns out to be the case. If you tell the truth while still promoting Buy-and-Hold, you are in good shape if we have a crash and in good shape if we do not have a crash. That’s where you should want to be. That’s sane. Because you don’t know for sure what is going to happen.

I don’t know with certainty what is going to happen either. I have my strong beliefs, just as you have your strong beliefs. The difference is that I have never blocked anyone from hearing the Buy-and-Hold story. Everyone knows the Buy-and-Hold story. You have blocked people from hearing the Valuation-Informed Indexing story. That puts you on the hook for losses if things don’t go as you expect.

The jury wil hear testimony re whether I am just a kook with a web site. Wade Pfau will be testifying. And so will lots and lots of others. And the testimony will be given FOLLOWING the next crash. At that time it won’t be just me saying it might happen. It will be a present-day reality. It will be in all the papers.

I love my country and I will continue to fight to protect her from you, Curious. That’ the bottom line here. I have a funny feeling that love of one’s country is a virtue that is going to be coming into style following the next price crash and that turning a quick buck may be viewed as less of a sign of the ultimate “success” in those days. We will see.

I naturally wish you the best of luck in all your future endeavors regardless of what investing strategies you elect to pursue.

When lots of others are saying that Old Saint Jack cannot get around on a fast ball anymore, I will still be singing his praises. I will be recalling to people the day when he really was something special. The word “friendship” means something to me, old friend.

Rob

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

I doubt you have many friends who twist a difference in opinion about the future into the other side having been “mistaken”.

It’s not a difference of opinion, Anonymous.

If John Greaney was putting forward statements at the Motley Fool board that “It is my OPINION that a withdrawal rate of 4 percent will work for those beginning retirements today,” I never would have felt a need to put forward that famous post of May 13, 2002.

He didn’t say that.

He said “the historical data shows that a 4 percent withdrawal is 100 percent safe.”

That’s a lie. Backed by threats of physical violence and threats to get academic researchers fired from their jobs, it is a criminal act of financial fraud.

Greaney BELIEVES that 4 percent is going to work. Bogle BELIEVES that Buy-and-Hold is going to work. That is not in dispute. That is not the issue.

Greaney is telling lies about what the academic research says. Bogle is telling lies about what the academic research says.

That’s the act of financial fraud.

Most people don’t check this stuff out as carefully as I have. Most people at the Moltey Fool board heard what Greaney was saying and noticed that no one was calling him out on what he was saying and assumed (quite understandably) that he was telling the truth. It’s the same with Bogle.

But Greaney and Bogle ARE NOT TELLING THE TRUTH.

The truth is that Greaney and Bogle believe that Buy-and-Hold can work and probably will work. But the further truth is that Greaney and Bogle are engaging in abusive practices to block millions of people from finding out about the 33 years of peer-reviewed research showing that they are wrong to believe what they believe. Greaney and Bogle have a responsibility to tell people about that research and to warn people that they may be wrong in their claims and to permit and invite and encourage posts exploring the implications of the research showing that they are wrong.

This is not about opinions.

It stopped being about opinions when the Buy-and-Hold Pioneers adopted the wonderful practice of rooting their investing claims in the peer-reviewed research. Once you do that, you take on a responsibility to correct your claims when subsequent research finds them to be in error.

Now –

There’s a thing called cognitive dissonance. It is possible for humans to know one thing with their minds and to be unable to acknowledge that thing with their hearts. There are circumstances in which humans say things that in an objective sense are falsehoods but that in a subjective sense they believe to be truths. I believe that that is what is going on here. That part of the story needs to be told too and that part of the story cuts against a finding of financial fraud.

But there are limits.

Death threats are over the line. Demands for unjustified board bannings are over the line. Tens of thousands of acts of defamation are over the line. Threats to get academic researchers fired from their jobs are over the line.

If as a society we are going to elect to permit a finding of cognitive dissonance to excuse any crime, then we cannot justify keeping Bernie Madoff in prison. Madoff told a writer with New York magazine that he thought he was helping people. It may well be that that’s a lie he tells to himself and a lie that he believes about himself. The bottom line is that he created documents reporting on transactions that never took place. That’s a line you cannot cross. There’s no point in having laws against financial fraud if we are going to permit a claim of cognitive dissonance to cancel out their effect in all cases.

I will be claiming that cognitive dissonance applies in this case. I owe that to my Buy-and-Hold friends. I believe that to be the case.

I will NOT be claiming that prison sentences are inappropriate for those who crossed the line and for those who helped out those who crossed the line or who covered up for those who crossed the line.

That’s where things stand, Anonymous.

I have zero problem with you stating an opinion different from my own. I believe that you really do hold a different opinion. I believe that you have both a right and responsibility to express it.

But I also know that you have crossed the lines that make you guilty of financial fraud on thousands of occasions. And I am telling. My expectation is that papers will be filed following the next price crash. I will argue for a good measure of charity when the time comes. But I will also argue for at least a small measure of justice. Our society cannot survive to face another day without any justice whatsoever being achieved re this matter.

And I love my country.

The more you evidence your hate of it, the more I will rise up in protection of it.

I love my country. Deal with it.

My best wishes to you and yours.

Rob