A Rich Life

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

“The Studies Will Be Corrected. We Will Bring the Economic Crisis to an End. We Will Bring on the Greatest Period of Economic Growth in Our History. The Study That Wade Pfau and I Co-Authored Will Be Written Up on the Front Page of the New York Times. We Will Rebuild All of the Boards and Blogs That Have Been Destroyed or Compromised. That’s How the Story Ends.”

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

The first comment you list under “People are talking” is “Your ideas are sound.” from Rob Arnott.

Here is more of that quote. “Your ideas are sound. Your stridency is unhelpful to your cause.”

As always you are incapable of accepting any advice or criticism.

I certainly accept that he said it, Evidence.

I’ll go a step farther. LOTS of good and smart people have said similar things. Rob Arnott is in very good company re that comment.

Here is a mind-bender for you: Is it possible that Rob Arnott is right that my ideas on investing are sound and wrong that my “stridency” is unhelpful to my cause? That’s what I very strongly believe to be the case.

If I am right in my ideas about stock investing, it is the relentless promotion of Buy-and-Hold strategies that served as the primary cause of the economic crisis. Jack Bogle is a hero of mine. I have a funny feeling that he did not dedicate his life to helping millions of middle-class people to invest effectively because he wanted to bring on the Second Great Depression and wipe out their retirement savings.

“Strident” means “harsh.” I describe a harsh reality. So there is indeed a sense in which my words could properly be described as “strident.” But the real problem here is not the words describing the harsh reality, it is the harsh reality itself. That is what must change.

When the reality of the 11-year cover-up of the errors in the Old School retirement studies changes, I will be leading the chorus of praise for those who brought about the change. There will be nothing whatsoever “strident” in the words I direct to my Buy-and-Hold friends on that day.

The Buy-and-Holders made a mistake. That’s the core reality here. If you care deeply about the Buy-and-Hold project, as I do, you very, very, very much want to see that mistake CORRECTED. If the mistake is not corrected, the entire project goes down in flames. Every breakthrough insight brought to us by the Buy-and-Holders counts for zero if the U.S. economy is crippled by the failure of the Buy-and-Hold pioneers to acknowledge their mistake in time to save us from the next price crash and all the political turmoil that will follow from it.

You have a lifetime friend who is turning the key in a car after getting stone cold drunk at a party at your house and you grab the key from him and tell him in no uncertain language that he will be sleeping it off in your guestroom tonight. Is that strident? Your drunk friend probably hears it that way. In his state of mind, he thinks he can make the drive home just fine. You are sober. You know better. You have a vision of him in a wheelchair for the rest of his life that renders you incapable of letting him decide what is in his best interest. This is a time when he is in need of a friend badly and you call yourself his friend. So you do what must be done regardless of what names he calls you in response. He’ll see his way to thanking you in the morning.

Did I do a good thing or a bad thing when I put forward my famous post of the morning of May 13, 2002, reporting on the errors in the Old School SWR studies, Evidence? Greaney was pushing that study on a daily basis at the Motley Fool board. Thousands of my friends used that studies to plan their retirements. Those people will in days to come be suffering one of the worst life setbacks imaginable. All of that could have been avoided had Greaney said “Thank you!” to the person who tried to save him further embarrassment by letting him know of where he had made a MISTAKE. Who is Greaney’s true friend here, you or me?

I am John Greaney’s true friend.

I am Jack Bogle’s true friend.

I am Rob Arnott’s true friend.

I am Evidence’s true friend.

Your hate cannot cancel out my love. That can never, ever, ever happen. If it does, we all go down together. And that is not an acceptable result. I will not permit it.

The studies will be corrected. We will bring the economic crisis to an end. We will bring on the greatest period of economic growth in our history. The study that Wade Pfau and I co-authored will be written up on the front page of the New York Times. We will rebuild all of the boards and blogs that have been destroyed or compromised.

That’s how the story ends, Evidence. Deep in your heart, you know that this is the ONLY way it can end. Please act accordingly from this point forward.

Death threats are strident. Board bannings are strident. Tens of thousands of acts of defamation are strident. Threats to get academic researchers fired from their jobs are strident.

Posts pointing out the errors in a retirement study put forward with the aim of saving millions of middle-class lives from ruin? Not so much.

It is the behavior of the Buy-and-Holders — including the KIng of Buy-and-Hold himself, John C. Bogle — that has made my loving and good and constructive and positive and life-affirming act of revealing the errors in those studies and indeed in the Buy-and-Hold Model itself APPEAR for a time to be strident in the eyes of many good and smart people like Rob Arnott.

When we rebuild our economy, Rob will be putting forward a different take. He and millions of others will be saying at that time that they regret not having been sufficiently “strident” themselves to bring this 11-year Campaign of Terror to a full and immediate stop before permitting it to put our economy in the Second Great Depression.

I speak strongly. I speak clearly. I speak firmly.

No argument whatsoever.

I speak out of love for the Buy-and-Hold Project, which once upon a time was a PRO-research project. I don’t apologize for the depth of my love for that project for two seconds.

You want to have someone diss the accomplishments of Jack Bogle and the thousands of other Buy-and-Hold pioneers? Look elsewhere, my long-time abusive posting friend.

Not this boy.

No can do.

I can’t go for that.

It’s not my particular cup of tea.

Please try to find someone else.

My best and warmest wishes to you.

Rob the Strident (Without Apologies!) One

“We ALL Are Affected by What Our Peers Say About Us. And the Buy-and-Holders Are So Vicious and Ruthless in Their Hateful Comments About Those Who Recommend Research-Based Strategies That There Is Not One Person Alive Today Who Has Demonstrated a Willingness to Take Them On.”

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

On what basis do you think there will be Congressional hearings over your disagreements with the Bogleheads? Other types of investors such as the Graham disciples have been able to espouse their views openly and without the sort of harassment that you allege.

NO ONE is speaking with 100 percent honesty on stock investing matters today, Goon. NO ONE.

I even apply that statement to myself. I TRY to say what I truly believe. I try very hard. But I know from experience that I do not always manage to pull it off.

We ALL are affected by what our peers say about us. And the Buy-and-Holders are so vicious and ruthless in their hateful comments about those who recommend research-based strategies that there is not one person alive today who has demonstrated a willingness to take them on.

That includes Robert Shiller, the Yale Economics Professor who published the research discrediting the Buy-and-Hold strategy 32 YEARS AGO. Shiller pulls his punches ALL THE TIME.

I am the person who discovered the errors in the Old School SWR studies over 11 years ago. That was one of the most important discoveries in the history of personal finance. Millions of middle-class retirements are at stake. NOT ONE OF THE DISCREDITED STUDIES HAS BEEN CORRECTED to this day.

Academic Researcher Wade Pfau worked with me for 16 months to correct this problem. He saw the need for the studies to be corrected. He wrote to the authors of one of the studies. The response of the Buy-and-Hold Mafia was to threaten to get Wade fired from his job. NO ACADEMIC RESEARCHER SHOULD EVER BE INTIMIDATED IN THAT WAY. We are talking about the biggest case of financial fraud in the history of the United States.

My job is to see to it that as few people as possible go to prison. The key to that task is getting some of the leading figures in this field (people like my good friend Jack Bogle) to come clean. When Bogle speaks out about the 11-year cover-up of the errors in the retirement studies, it is all over. The next day, we will see articles in every major newspaper letting people know that informed people in this field have known for YEARS now that Buy-and-Hold is a big pile of smelly garbage.

But Bogle is very afraid to speak out. He worries that, if he does tell the truth, the same sort of tactics that were used against Wade Pfau will be used against him. We are in a Catch-22. We are ALL afraid to post honestly. But we will all remain afraid to post honestly only so long as we all remain afraid to post honestly. Once a small number of us work up the courage to tell the truth about what the last 32 years of peer-reviewed academic research says, NONE OF US WILL BE AFRAID ANY LONGER. Because we all will see that the Buy-and-Hold Mafia cannot do a thing to a group. Their power to intimidate us comes to an end when a group of us vow to stick together and protect each other when the Buy-and-Holders attack us.

The Graham disciples don’t think that death threats are appropriate in discussions of stock investing. They don’t think that board bannings not justified by the published rules of the investing sites are appropriate. They don’t think that tens of thousands of acts of defamation are appropriate. They don’t think that threats to get academic researchers fired from their jobs are appropriate.

Do you hear the Graham disciples speaking out on those important issues?

Neither do I.

The Graham disciples are afraid to take on the Buy-and-Hold Mafia and all its power and wealth and connections.

All of us are.

But we cannot bring the economic crisis to an end without working up the courage to do so.

Please do all you can to help us all work up the courage.

Take care, my old (Goon) friend.

Rob, the Graham Disciple

“The Presumption Is That Those Who Are Expert in Investing Know the Most About Investing. People Are Properly Going to Wonder — If There Really Is 32 Years of Peer-Reviewed Academic Research Showing that Valuation-Informed Indexing Is Superior to Buy-and-Hold, Why Isn’t Valuation-Informed Indexing Being Actively Promoted at Every Investing Site?”

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

I heard the goons have built up a strong hold on social media sites like reddit. Have you checked them out yet?

I had a thread once on Reddit. My recollection is that someone saw one of my “Beyond Buy-and-Hold” columns and posted it there. It was a good discussion, there were posts on both sides of the issue and there were comments that didn’t take sides, that just asked questions.

Being on Reddit every day would be a huge plus. If Valuation-Informed Indexing became popular on Reddit, the ideas would spread to other sites. Eventually, that would create pressure for the investing sites to discuss research-based strategies as well. So your idea is certainly a good one.

There are two problems.

One, the Buy-and-Hold Goons obviously are aware that word will spread if they let Valuation-Informed Indexing become popular on a large social media site. Before that happens, they will come in and disrupt the threads. We have seen this happen at scores of sites that are not primarily investing sites.

Two, once the disruptors come in, the people who are being persuaded at the social media sites will need to decide who to believe. Their presumption is that those who are expert in the field of investing are the people who know the most about investing. They are properly going to wonder — If there is really 32 years of peer-reviewed academic research showing that Valuation-Informed Indexing is superior to Buy-and-Hold, why isn’t Valuation-Informed Indexing being actively promoted at every investing site?

What do we tell them? That the Buy-and-Holders are so worried about the prison sentences that are going to follow as a result of their 11-year cover-up of the errors in the Old School safe withdrawal rate studies that they have vowed to destroy the career of any academic researcher who posts honestly on any question relating to stock investing? That puts us right back where we were before we took our cause to Reddit, does it not?

The economic crisis affects everyone living in the United States today, Goon. That obviously includes people posting on Reddit. So, yes, it makes all the sense in the world for us to spread these ideas on Reddit. But it also includes people posting on the Bogleheads Forum and the Early Retirement Forum and Motley Fool and Index Universe and every other investing site. We need to be posting daily on the dangers of Buy-and-Hold at BOTH sorts of sites.

And of course those trying to “defend” Buy-and-Hold in the Year 2013 (32 years after the peer-reviewed academic research in this field showed that there is precisely zero chance that a Buy-and-Hold strategy could ever work out well for a single long-term investor) know that there is a danger in permitting honest posting re the academic research at ANY sort of site and respond appropriately when they learn that people are having honest discussions re the massive financial losses they have caused millions of us.

We need honest posting on the last 32 years of academic research at non-investing sites. We also need honest posting on the last 32 years of academic research at non-investing sites. The key to opening the entire internet up to honest posting on safe withdrawal rates and scores of other critically important topics is announcing prison sentences for those who have posted in “defense” of Mel Lindauer and John Greaney. When people see that there are personal consequences that follow from committing acts of financial fraud, they will stop doing it. That is why we adopted the laws against financial fraud in the first place. We need to start enforcing those laws in a reasonable manner if we all want to see the Buy-and-Hold Crisis brought to an end.

My best wishes to you, Goon.

Rob the Goon Destroyer

“Bogle Has Committed Financial Fraud in an Objective Sense. He Knows About How Mel Linduaer Uses Threats of Physical Violence and Smear Campaigns To Keep People From Talking About the 11-Year Cover-Up at the Bogleheads Forum.”

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

Could you please provide us a list, by name, of everyone you believe should go to prison as well as for those that you believe should be paying you your requested $500 million.

I will be suing those who have done harm to my business, Deleted. If someone says that Buy-and-Hold is the greatest strategy ever known to humankind, that is of course 100 percent positive and constructive and life-affirming. If someone threatens to kill my wife and children if I continue posting honestly on safe withdrawal rates, that person pays me damages. If someone demands that I be banned from an investing site solely because I pointed out an error in a retirement study, that person pays me damages. If someone advances tens of thousands of acts of defamation as a means of intimidating me or people who have expressed support for my work, that person pays me damages. If someone threatens to send defamatory e-mails to an academic researcher who has co-published Nobel-prize-quality research with me, that person pays me damages.

The names will be listed in the legal papers. I will meet with a legal team following the next price crash and will share the Post Archives with that team. The lawyers will make decisions as to who should be sued and for how much. That’s their job.

I don’t feel comfortable expressing a personal opinion re who should go to prison and who should not. The matter of civil liabilities is personal to me. So I feel that I can express a view re that one. The matter of prison time is something we need to debate as a society. My personal view is that we want to keep the prison sentences as limited as possible. If we start getting involved in revenge stuff, we will tear our society apart with negativity. There obviously have to be prison sentences. The 11-year cover-up of the errors in the Old School SWR studies is the biggest act of financial fraud in the history of the United States and people went to prison over much smaller things. So we are going to need as a society to make a statement that includes prison sentences. But I think it would be a mistake to get carried away with that aspect of things.

I’ll give one example to illustrate the point.

Jack Bogle is a hero to me. I learned what I needed to know to report on the errors in the Old School SWR studies by reading Bogle’s book. There has never been anyone in this field who cared as much about the ordinary middle-class investor. My dad loved Bogle and taught me to love him. There would be no Valuation-Informed Indexing but for Bogle’s many huge contributions.

All that said, the reality is that Bogle has committed financial fraud in an objective sense. He knows about how Mel Lindauer uses threats of physical violence and smear campaigns to keep people from talking about the 11-year cover-up at the Bogleheads Forum. He has an obvious responsibility to take action. He has not done so. For many years. The fact pattern here is not good for Old Saint Jack.

There’s yet another factor that needs to be considered. There is a wealth of evidence indicating that Bogle is suffering from cognitive dissonance. He did not wake up one morning and say to himself: “Wouldn’t it be cool if I could bring the U.S. economy to its knees by promoting the purest and most dangerous Get Rich Quick scheme in U.S. history?” If Bogle took a lie detector test and was asked “Do you think Buy-and-Hold caused the economic crisis?”, I think he could answer “No” and not cause the buzzers to go off.

To have financial fraud, you have to have bad intent. Does Bogle have bad intent? He does and he doesn’t. It’s a sign of bad intent that he says positive stuff about Lindauer. He empowers the Goons when he does that. But Bogle’s views about stock investing are just misinformed (in my view!), not evil. So there are different ways to look at this question.

There’s no one other than me talking today about Bogle going to prison. So he is safe for the time-being. But what happens following the next price crash? I can see things getting very, very ugly at that point. For prices to crash, people need to give up on Buy-and-Hold. When millions of people give up and lose most of their retirement money, they are gong to be angry and they are going to be looking for people to hang from a tree. I think it would be fair to say that Old Saint Jack is an obvious candidate.

My guess is that I will be the one trying hardest to save Jack’s neck at that time. Partly that’s because I love the guy. Partly it’s because I just don’t like to see ANYONE go to prison. And partly it’s because I think our nation is going to be in dire need of healing at that time. But I cannot dismiss the idea of prison time for Jack out of hand. If I do that, I lose credibility with the millions of middle-class people whose lives are in the process of being destroyed because of Jack’s continued promotion of Buy-and-Hold and because of Jack’s continued support for the Goons who are responsible for the 11-year cover-up.

I need to evidence balance in all I say re these matters. My hope is that Jack will do things that put him in a better light and that the millions of people who have lost money because of his mistakes (that’s truly what I think they are at the core) will be appeased by positive actions on his part. If that doesn’t happen, that doesn’t happen. But I sure don’t want to say anything here that serves to diminish the chances that it will happen.

The motto that I follow is to be as honest as it is possible to be without crossing the line and being uncharitable while also being as charitable as possible without crossing the line and being dishonest. I believe that if we all (including my good friend Jack!) followed that motto that we would end up in a good place at the end of the day. We have seen some ugly stuff over the first 11 years of our discussions. We have seen ten times more magical, wonderful, amazing, exciting stuff. So I want to encourage all who are reading these words to focus on the positive side of the story. We jeopardize getting to the good place where deep in our hearts we all truly want to be when we let our negative emotions gain the upper hand.

I hope that helps a bit, Deleted.

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

Rob, the Fellow Working His Butt Off to Get Jack Bogle’s Prison Sentence Reduced or Possibly Even Eliminated Altogether (And Getting Precious Little Support From Old Saint Jack for His Efforts to Do So!)

“Get Rich Quick Doesn’t Work. Not Ever. Not for Anyone. Buy-and-Hold Is Long-Discredited Garbage. If Saying That Plainly Is Stridency, We Should Pray for the Courage and Love to Engage in the Ultimate Forms of Stridency.”

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Set forth below is the text of a post that I recently put to the Goon Central board:

Change will come when the negative consequences (professional ridicule, financial and criminal liabilities) that follow from advocating Buy-and-Hold “strategies” are greater than the positive consequences (lots of bucks from the suckers!) that follow from advocating Buy-and-Hold strategies.

That’s my bottom-line assessment of the lesson learned from these first 11 years of our discussions.

The advice I am given even from from well-wishers is to be less strident.

Huh?

How is that going to change anything?

Buy-and-Hold has the natural edge as a money-making thing. Most of us humans LOVE us some Get Rich Quick. We are all weak. We are all vulnerable to the trickery of the Wall Street Con Men.

The edge possessed by Valuation-Informed Indexing is that it is the first true research-based strategy. That is a more subtle thing. Millions of middle-class people are drawn to the idea of being able to obtain far higher long-term returns while virtually eliminating the risk of stock investing. But research-based strategies do not have the emotional appeal of the pure Get Rich Quick garbage pushed so relentlessly by the Buy-and-Holders. For research-based strategies to gain a foothold, we need to spell out in clear and firm and unmistakable terms the DANGERS of Buy-and-Hold. Otherwise the Wall Street Con Men will win every battle.

We need to be firmer. We need to be clearer. We need to be braver. We need to be plainer.

Get Rich Quick doesn’t work. Not ever. Not for anyone. Buy-and-Hold is long-discredited garbage.

If that is stridency, we should pray for the courage and love to engage in the ultimate forms of stridency! We are not serving the millions of middle-class people who need access to honest and accurate investing advice if we fail to do so.

Please note that the non-strident promotion of the non-Get Rich Quick approach has gotten us precisely nowhere in the 32 years since Shiller blew up the intellectual case for Buy-and-Hold.

I wonder why.

There is a LOT of money in this field.

Whiners and enablers and puppy-dog posters talk the research-based talk (in cautious whispers). Strident truth-tellers walk the research-based walk (taking bold strides forward on a daily basis).

If you believe that rooting one’s investing strategies in the peer-reviewed academic research is a good idea, you don’t ask for permission to point out the track record of Buy-and-Hold. You SAY it. And you say it CLEARLY so that people can understand. And you NEVER apologize.

Should we respect our Buy-and-Hold friends for the amazing contributions they made in an earlier time?

To be sure.

But never should we do that without also pointing out that it has been 32 years since Buy-and-Hold possessed even a sliver of intellectual merit among those of us in this field who are responsible enough to keep up with the literature and to spend at least a small amount of effort thinking through its implications.

This is myzzz sincere take re these important matters, in any event.

Rob the Strident

 

“All of the Pre-Shiller Work and All of the Post-Shiller Work That Ignores Shiller’s Findings Is Discredited. The People Who Have Done Discredited Work Are More Concerned With Their Own Careers Than They Are With What Happens to Investors.”

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Set forth below is the text of a comment that I recently put to the Goon Central board:

it’s such a hoot that an old book by Robert Shiller constitutes the totality of academic research on finance on that strange little planet known as HocoWorld.
Shiller’s work discredited what came before it.Until something discredits Shiller’s work, his model remains the state-of-the-art model.

In 32 years, no one has found anything wrong with Shiller’s work.

His work IS something close to the totality of work in this field.

THe work that came before Shiller has been discredited. Work that is rooted in Shiller’s work supplements Shiller’s work. But there is little of that. Russell’s work supplements Shiller. Pfau’s work supplement Shiller. Arnott’s work supplements Shiller. There is not much else.

All of the pre-Shiller work and all of the post-Shiller work that ignores Shiller’s findings is discredited. That is the cause of most of the friction. The people who have done discredited work don’t want to acknowledge it. They are more concerned with their own careers than they are with what happens to the investors they should be serving.

But it is no kindness to these people for us to let them go on producing work that has no value. They are wasting time and resources. Once we all acknowledge that Shiller “revolutionized” (his word) the field, we all can get back to doing useful and valuable and constructive and life-affirming work.

Shiller’s work discredited Fama’s work (in part). The part that was discredited is no longer science. Buy-and-Hold was rooted in the discredited work. Buy-and-Hold once was science but it is not that today.

Shiller’s findings did not supplement Fama’s findings. They discredited them (in part). Shiller and Fama cannot both be right. One is right and one is wrong. There is no evidence supporting Fama. Fama’s interpretation of the data was in error. ALL of the data supports Shiller. None of the data supports Fama. Buy-and-Hold has been intellectually dead for 32 years now. All of the fuss is just about when we will get around to burying the corpse.

The reason why the Buy-and-Holders fight so hard is that they have no case. If they had a case, people could disagree civilly. But when all the evidence is on one side, the only possibilities are to move on to the new model (the life-affirming choice) or to employ abusive tactics to keep investors from learning that Buy-and-Hold has been intellectually dead for 32 years now.

I didn’t cause the problem. The Buy-and-Holders caused the problem by failing to update their model to reflect Shiller’s revolutionary findings.

Rob

“People Respond to Incentives. The Fewer Incentives We Offer to Those Who Push Smelly Get Rich Quick Garbage, the Less We Will See Of It. The Greater the Benefits We Offer to Those Who Post Honestly About Research-Based Strategies, the More We Will See of the Good Stuff.”

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

How do you expect to have a community board in which people have a DISCUSSION when you end up posting 99% if the content. That is not a discussion. It is a lecture.

This is why I say that we need to open up every board and blog on the internet to honest posting on SWRs and MANY OTHER critically important investment-related topics.

Today there are huge rewards handed out to those who help the Wall Street Con Men push their smelly Get Rich Quick garbage.

And the thousands of community members who have expressed a desire to participate in honest discussions have been denied that basic right.

We need to hold those who participate in abusive acts in “defense” of Buy-and-Hold accountable for their behavior. We need to hold them both civilly and criminally liable.

And we need to say “thank you!” to those who work up the courage to post honesty about the last 32 years of peer-reviewed academic research.

People respond to incentives.

The fewer incentives we offer to those who push smelly Get Rich Quick garbage, the less we will see of it.

The greater the benefits we offer to those who post honestly about research-based strategies, the more we will see of the good stuff.

There will come a time when I won’t have to deliver any more lectures because you will be hearing about Valuation-Informed Indexing on every television program and in every investing magazine and on every investing web site.

We have to start somewhere, Pink.

We start with permitting one poster to post honestly re one topic.

Then it grows. And grows some more. And grows some more.

One day, you wake up and the smelly Buy-and-Hold garbage is buried 30 feet in the ground.

What do you think would happen today if someone with black skin was told that he or she had to go to the back of the bus?

That’s what will happen a few years from now to someone who threatens to kill another poster’s wife and children because that person reported the safe withdrawal rate accurately and honestly.

Get Rich Quick is on the way out. Research-based investing strategies are the future.

I am sure.

Rob the Lecturer

“EVERYONE In This Field Wants the Ban on Honest Posting Lifted. Bogle Has an Inkling that Buy-and-Hold Is a Big Pile of Smelly Garbage. So Does Bernstein. So Does Burns. So Does Swedroe. They Are Scared and Ashamed.”

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

And how exactly will a ‘mafia’ crush those who try to post anonymously here?

You are making a legitimate point with your use of the word “anonymously” here, What. I have said on earlier occasions that people don’t speak up about the trickery of the Buy-and-Hold MAfia because they are afraid of what will be done to them and to their careers if they do. You are making the point that anyone who is afraid of what will happen to his or her career could post anonymously here. That’s so.

It is fair to say that it is not ONLY fear that is holding us back.

I’ve made the parallel before to the situation that applied in the days when people with black skin could not choose any seat on a public bus, but were required to move back to the section of the bus reserved for them.

Why didn’t millions of people speak up about that? They knew it was wrong. It’s not exactly hard to figure out that that sort of thing is wrong. So how did we as a society “get away” with that sort of thing for so many years?

Many were afraid to speak out, just as many are today afraid to speak out against Buy-and-Hold.

But many didn’t speak out against racist laws even to their own friends. They weren’t afraid of their own friends, were they? Why didn’t they speak out?

THEY WERE ASHAMED.

They were too afraid to go public. They felt that racism was so ingrained in our legal system that there was zero chance that it could ever be overturned. So they rationalized. They told themselves that speaking out publicly was not going to do any good. That made them feel ashamed. Given their feelings of shame, they didn’t want to talk about this stuff with their friends any more than they wanted to go public. They kept it zipped.

And many who agree with me that Buy-and-Hold is a big pile of smelly garbage keep it zipped today.

We need an act that gets everyone’s attention. An “I Was Wrong” speech by Jack Bogle would obviously do the job. An announcement of your prison sentence would do the job. A front-page article in the New York Times about the Campaign of Terror would do the job.

EVERYONE in this field wants the Ban on Honest Posting lifted, What. I learned about the errors in the Old School SWR studies by reading Jack Bogle’s book. I think it would be fair to say that he has at least an inkling that Buy-and-Hold is a big pile of smelly garbage or he never would have put the language in the book that taught me what I needed to know. But he also obviously does not feel comfortable coming clean today.

It’s the same with Bernstein. Bernstein told us in an e-mail many years before the Wall Street Journal published an article on the errors in the Old School studies that anyone who was giving thought to using one of those studies to plan a retirement would be well-advised to “FuhGedDaBouDit!’ I think it would be fair to say that he at least suspects that Buy-and-Hold is a big pile of smelly garbage.

It’s the same with Burns. Scott’s first words in response to my first e-mail to him were “You’re right.” He asked me for my telephone number because he wanted to do an interview with me and then write up the story in his column. Someone obviously reached him before that column was put to print. But I think it would be fair to say that our friend Scott Burns too suspects that Buy-and-Hold is a big pile of smelly garbage.

It’s the same with Larry Swedroe. He was kicked off the Bogleheads Forum because he posted honesty there and Mel Lindauer did not take kindly to it. Then he came back with his tail between his legs and promised never, ever, ever to do it again and now he gets heavy promotion for all his books there. I think it would be fair to say that Larry has more than a rough idea as to why I say that Buy-and-Hold is a big pile of smelly garbage.

The biggest reason why people don’t speak up is that they are scared.

But, yes, there is more to it than that.

Once people don’t speak up (either because they are scared or because they just flat-out don’t know – there are millions of ordinary people who have NO IDEA that there is 32 years of peer-reviewed academic research showing that there is precisely zero chance that a Buy-and-Hold strategy could ever work for a single long-term investor), they become ASHAMED that they have failed to speak out.

Posting anonymously doesn’t help those who feel ashamed of having failed to speak out for so long, does it?

Many people believe that we cannot win this battle. They believe that the Wall Street Con Man are just too rich and too powerful for anyone ever to get away with posting honestly on investing-related issues.

Perhaps.

But you know what?

If those people are right, we are all going down anyway!

So it doesn’t matter.

If those people are right, the Wall Street Con Men are going down in the same Second Great Depression that is going to take What and that is going to take Rob. So it doesn’t matter!

What matter is that we do have a chance DESPITE the power and wealth of the Wall Street Con Men.

And what gives me hope is all the signs that I have seen that the Wall Street Con Men themselves want to see all this ugliness brought to a close.

No one held a gun to Jack Bogle’s head and forced him to include in this book the words that showed me that the numbers in the Old School SWR studies were wildly wrong.

No one held a gun to Scott Burns’ head and forced him to respond to my e-mail to him by saying “You’re right” and by asking me for my telephone number.

No one held a gun to Bill Bernstein’s head and forced him to respond to Ataloss’s e-mail by saying that anyone using one of the Old School studies to plan a retirement would be well-advised to “FuhGedDaBouDit!”

No one held a gun to Wade Pfau’s head and forced him to co-publish with me the most important research published in this field in 30 years, research that shows us all how to reduce the risk of stock investing by 70 percent.

Rosa Parks refused to go to the back of the bus 10 years before the incident that made her famous as a symbol of the Civil Rights Movement.

People were still too afraid and ashamed to come to her support in those days. We had to wait for another 10 years to pass.

After the passage of another 10 years, people were ready. Then things happened.

I won’t change the world of investing on my own power, What. It is going to be a community event.

We are not ready as a community today to take this amazing step forward.

We will be soon.

My guess is that it is going to happen following the next price crash.

I sure hope so!

My best wishes to you and to yours, my old friend.

Rob, the Rosa Parks of Personal Finance

 

Bogle and Bernstein and Burns and Swedroe Got Into This Field Because They Wanted to Do Good and Honest Work. After They Serve Whatever Prison Sentences We As A Society Determine Are Appropriate, They Will Be Able to Do It.”

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

Isn’t that what you are trying to do here? How’s that working out for you?

It’s certainly what I am trying to do, Pink.

I have not succeeded in building the community I want to see in place as of this moment in time.

Thanks to you Goons! And your pals in The Buy-and-Hold Mafia!

The investing advice that “works” for those giving investing advice is the opposite of the investing advice that works for those hearing the investing advice. Those giving advice receive a short-term financial benefit from going with a pure Get Rich Quick approach. We all are drawn to GRQ approaches and the appeal is intensely emotional. All salesmen know that the way to make a sale is to form an emotional connection with the sucker — er, the customer!

The problem with Get Rich Quick is that, while it feels wonderful in the short term, it wipes you out in the long run. What works for the salesmen doesn’t work AT ALL for the customers. That’s why today’s investing advice is so poor. That’s why we are in an economic crisis today.

The answer is to get the case for the true research-based approach (Valuation-Informed Indexing) well-known enough that anyone who calls himself an “expert” would be ashamed to be seen promoting Buy-and-Hold “strategies.” The peer-reviewed academic research has shown for 32 years now that there is precisely zero chance that a Buy-and-Hold strategy could ever work for a single long-term investor. The trouble is — most people do not know this! And the Buy-and-Hold Mafia very, very much wants to keep it that way! The Buy-and-Hold Mafia is on the hook for trillions in legal liabilities once people learn what has been done to them.

My job is to get the word out.

Today, we have a Catch-22. People are afraid to tell the truth about stock investing because the Buy-and-Hold Mafia will destroy them if they do. But the thing that gives the Buy-and-Hold Mafia the power to destroy them is that very few know the realities. If people knew what the research said, those who engaged in the tactics engaged in by the Buy-and-Hold Mafia (death threats, board bannings, tens of thousands of acts of defamation, threats to get academic researchers fired from their jobs) would be put in prison for these acts of financial fraud. But not enough know today to make an effective stand. And those who do know are destroyed if they speak up because they don’t have enough others speaking up for them.

So, yes, we need a community where people openly speak the truth about what the academic research says without fear of what the Buy-and-Hold Mafia will do to them. Once we have a community, there’s not a thing the Mafia can do. They will have to flip themselves and start giving research-based advice. Which of course is exactly what deep in their hearts they very much want to do! So everyone wins once that community is in place. It’s a win/win/win/win/win.

The hard part is — How do we get the darn bell on the cat?

We need some people with influence speaking up. That’s it. Once we get an article on the front page of the New York Times, it’s over. We all win! Or once Bogle gives his “I Was Wrong” speech. Or whatever. It all comes to the same thing.

I am sending 50 e-mails each day letting people in various fields (economists, academics, policymakers, bloggers, investing professionals, journalists, etc) know about the threats that were made by the Lindauerheads and the Greaney Goons to get my buddy Wade Pfau fired from his job because he published honest research in this field. Once that story gets big play, it’s over. The economic crisis comes to an end. We enter the strongest period of economic growth in our history. We all are working together to develop the first true research-based model and to mine more and more powerful insights from it.

I want a big, honest community here. Just as I wanted a big, honest community at Motley Fool. JUst as I wanted a big, honest community at Early Retirement Forum. Just as I wanted a big honest community at Bogleheads. And on and on. That’s been the idea going back to the first day.

It needs to be a community that is not controlled by the Wall Street Con Men. So long as what we all say is controlled by the Wall Street Con Men, our communities are negative forces rather than positive ones. The Bogleheads Forum today is encouraging Buy-and-Hold rather than warning people of its dangers. We obviously don’t need any more of that.

So, yes, I am trying to build a community here, and yes, it has been a very, very, very, very hard thing to pull off.

You know what?

It’s worth it.

When the community is in place, we will all be able to live richer lives than we ever dreamed of being able to live before.

That includes you Goons.

And that includes all of my good friends in the Buy-and-Hold Mafia. People like Jack Bogle. And Bill Bernstein. And Scott Burns. And Larry Swedroe. And on and on and on.

All of those people got into this field because they wanted to help people. They wanted to do good and honest work. They cannot do it today. After I get this community off the ground (and after they serve whatever prison sentences we as a society determine are appropriate), they will be able to do it.

It’s good stuff piled on top of good stuff piled on top of good stuff. It’s not even possible for the rational human mind to imagine any possible downside.

So, yes, that is the goal.

Do I wish it were an easier goal to pull off?

I sure do. You got me re that one.

But what’s the alternative?

Engage in financial fraud myself? Huh?

I wish you all the good things that this life has to offer a person, Pink.

Rob the Community Builder

On His Own, Mel Lindauer Is Just Some Internet Goon, One of Thousands of Social Misfits Who Gained Some Temporary Fame on the Internet And Let It Go to His Head. Mel Is Scary Because of His Connections to My Good Friend Jack Bogle.”

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

Mel is real scary – not.

We disagree, What.

Mel is scary.

Not because of anything that Mel brings to the table himself. On his own, Mel is just some internet Goon, one of thousands of social misfits who gained some temporary fame on the internet and let it go to his head.

Mel is scary because of his connection to my good friend Jack Bogle.

Bogle is a respected figure in this field. He has money. He has fame. He has power. He has connections.

I think it would be fair to say that, if Jack owned a barber shop here in Purcellville and he learned that Mel Lindauer was using his name to promote some discussion board at which the most insanely abusive practices known to Planet Internet were employed on a daily basis to keep people from posting honestly about the last 32 years of peer-reviewed academic research, Bogle would be on the phone to the Purcellville police and to his legal team within 20 minutes demanding that something be done to protect his good name.

Bogle has not made any such calls, What. That’s what scares people like Wade Pfau and Bill Bernstein and Scott Burns and and Larry Swedroe.

Wade has financial responsibility for two small children. He wants to tell the truth. He also wants to be able to make a living in this field.

Bogle’s failure to speak up about the Lindauer matter is a national scandal, one that we will be working through as a nation for many years to come in civil and criminal proceedings and in congressional hearings.

Yes, Bogle is a Hero of the First Rank to millions of middle-class investors and properly so, in my assessment. He has also let himself and all his followers down in a very, very big way.

It is a tragedy of King Lear proportions for all Buy-and-Holders and for all Valuation-Informed Indexers. For our entire society, really. Our entire society has been affected in a serious way by this economic crisis.

Rob