A Rich Life

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

“Did Cooley Include In His Research a Discussion of WHY He Did Not Include a Valuation Adjustment? If He Had Some Intellectual Problem With Shiller’s Findings, He Would Have Discussed It. He Was in Denial. He Was in Emotional Pain. He Was Suffering From Cognitive Dissonance.”

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

Was Cooly (and the other Trinity contributors) ‘addicted’ to buy-n-hold when they undertook their original research? Really?

Thank you for asking an intelligent question, Banned.

At the time Cooley did his SWR study, Shiller’s revolutionary finding that valuations affect long-term returns had already been public knowledge for a good number of years. So, yes, the fact that Cooley did not appreciate the need to include a valuation adjustment shows that he was at the bare minimum emotionally resistant to the new model even at that time.

Did Cooley include in his research a discussion of WHY he did not include a valuation adjustment? If he had some intellectual problem with Shiller’s findings, he would have discussed why he did not see a need to design a methodology that reflected those findings. He didn’t even discuss the issue. He was in denial. He was in emotional pain. He was suffering from cognitive dissonance.

All that I am saying is that he was HUMAN.

Just like Bogle. Just like Bernstein. Just like Swedroe. Just like Burns. Just like Pfau. Just like Bennett. Just like Russell. Just like Shiller. Heaven help us all, just like Lindauer and Greaney.

Down here on Planet Earth, it’s just us humans, Banned. We are going to need to find a way to work together and make the best of it. We WISH we would wake up one morning and know it all. Morning after morning after morning, it never happens. You accept that or you end up paying a big price for not accepting it.

Here’s a woman who gets it exactly right:

http://arichlife.passionsaving.com/2013/02/20/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-sq/

Carol Osler tells me:

“I certainly have seen the academic profession in action squelching unfashionable ideas and have often been on the wrong side of it. While there’s no magic solution, especially in the short run for individuals with jobs at stake, I sometimes find it calming to see that both philosophy and science are on our side about academics sometimes being profoundly unreasonable. For philosophy, Kuhn was a good start for me. He shows how most pathbreaking scientific ideas are rejected at first, usually for decades. Popper was also helpful. He has very harsh words for scientists who worship math, for example. For science, I am just now reading Jonathan Haist’s book on the psychological basis of morality, The Righteous Mind (2011). He shows, for example, why most ‘scientists’ behave like Kuhn documented, and support the group’s big ideas even in the face of strong evidence to the contrary.”

That’s the story here, Banned. We are living through a revolution in our understanding of how stock investing works. It’s not a bad thing. It is a good thing. We are on the threshold of the greatest economic boom in our history. But to get there we have to survive all the bullets that fly during a revolution. I didn’t ask to be fated to live through a revolution. Neither did you. But here we are. We can make the best of it or we can destroy ourselves.

We will get to the other side of The Big Black Wall or we will all perish in the Second Great Depression. Those are the options available to us. I know which path I prefer.

Getting to the other side of The Big Black Wall means prison sentences for some of us for things that have happened during the bloodiest part of the revolution. That breaks my heart. That makes me want to cry. You sure are not going to be seeing me doing anything to cause those prison sentences to be extended. I want to see the prison sentences shortened. That goal is foremost in my mind every time I push the “Send” button on a post. If I remain true to myself, it always will be from this point forward.

We are the luckiest generation of investors who ever walked the face of Planet Earth because we are the first generation of investors born at a time where we can take advantage of The Shiller Revolution. Some of us have elected to destroy ourselves in a vain effort to keep The History Train from moving forward. That is a foolish idea. I have tried to persuade my friends that it is a mistake to get one’s self tied up in such foolishness.

I am sure.

Rob

Goon Description of Rob Bennett’s Thinking: “Smart People Who Actually Know Stuff Agree With Me. If They Say They Don’t Agree With Me, It’s Just Because You Are Intimidating Them. I Don’t Care What They Say, I Care How They Feel, and I Alone Know How They Really Feel.”

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Set forth below is the text of a comment advanced by one of the Greaney Goons to a blog entry at this site (I think it would be fair to say that the comment was intended as an exercise in sarcasm — he was describing his view of how Rob Bennett approaches the various issues that have come up during the first 11 years of our investing discussions):

I never lose an argument. Because I am always right. You could be always right too, except of course when you argue with me. Just follow these simple steps.

1) I am always right.

2) Words mean what I say they mean. A “friend” is anyone that I would like to be my friend, even if they detest me or have never heard of me. A “criminal” is anyone who disagrees with me, or has ever deleted my comments. Of course, I delete comments all the time, but that’s perfectly okay because I am always right.

3) If what I claim hasn’t been proven, it just hasn’t been proven YET. It will be proven, someday. I don’t have to say when. Might be tomorrow, might be a hundred years from now. The point is, I am right.

4) If your so-called “evidence” and “logic” and “reality” suggest that I may be wrong, then YOU are wrong. Because by definition, I am always right.

5) Smart people who actually know stuff agree with me. If they say they don’t agree with me, it’s just because you are intimidating them. I don’t care what they say, I care how they feel, and I alone know how they really feel. On the inside, they agree with me. Why wouldn’t they – I am always right.

It’s great to be me.

“Jack Bogle Has Done Wrong Things. So Have Larry Swedroe, Rick Ferri and Scott Burns. Jack and Larry and Rick and Scott Have Also Done Good Things.”

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

“Also, I don’t Jack, Larry, Rick or Scott would consider you a friend.

You’re wrong, Pink.

They don’t want to go to prison. So, yes, they are concerned about my exposure of the 11-year cover-up.

But that is only one part of what these fellows are.

Jack loved the idea of helping millions of middle-class investors when he started out. His amazing accomplishments testify to this reality. The part of him that wants to help investors is still present within him on some level of consciousness. That part of Jack Bogle LOVES the idea of coming clean on safe withdrawal rates and scores of other critically important investment-related topics. That part of Jack Bogle recognizes Rob Bennett as his best friend in the world. That part of Jack Bogle CANNOT WAIT to put all the ugliness associated with his “support” for John Greaeny and Mel Linduaer behind him and to return to being a ETHICAL and HONEST stock advisor.

The same is obviously true of all the others. There are REASONS why we have a ban on the tactics employed by those posting in “defense” of Lindauer and Greaney at EVERY investing board and blog on the internet. It is because those tactics are sub-human and we all want to protect our humanity. Bogle didn’t agree to follow the published rules of the Morningstar site just because he had to do so to be permitted to post there. He pressed the “I Agree” button because he appreciates the need for those rules. Bogle is SICKENED by the tactics employed by you Goons. He is just too afraid of what you will do to him if he says so to speak up at the moment. I intend to take care of that problem.

Bogle has done wrong things. So have all the others you mention.

Bogle and all the others have also all done good things.

Just because they betray the good of themselves from time to time because of their fear of you Goons does not mean that they are no longer “friends” with their good sides. I will be enjoying a good relationship with all these people for many, many years to come. Their pretend friendship with you Goons will come to a total and complete stop on the day your prison sentences are announced. Pretend friendships don’t stand the test of time, Pink.

I naturally wish you the best of luck in all your future life endeavors, Pink.

Rob

“How Do You Think We Got the Tobacco Companies to Stop Saying That Smoking Is a Benefit to One’s Health? Companies Learned That There Would Be a Big Price to Pay for Continuing to Work That Con. That’s How the System Works.”

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

The responses to the e-mails are available to anyone who cares to view them, What.

The Wall Street Con Men have been screwing millions of middle-class investors for 32 years now.

The losses they have caused have grown so massive that we are now in an economic crisis.

My site documents this massive act of financial fraud.

That’s how change is achieved, What.

How do you think we got the tobacco companies to stop saying that smoking is a benefit to one’s health? Companies learned that there would be a big price to pay for continuing to work that con. We got the word out to millions. Today, people know the realities. That’s good.

That’s how the system works, my old friend.

Your prison sentence changes everything. Not just yours. The prison sentences of all those who have posted in “defense” of Mel Lindauer and John Greaney change everything. Those prison sentences are how we as a society send a message re what forms of marketing we will tolerate and what forms go so far over the line that they cannot be permitted in a free society.

After your prison sentence is announced, we won’t have one academic researcher publishing honest research. We will have hundreds. Perhaps thousands.

We are in the process of accomplishing something very, very, very cool here.

I am the one who gets the $500 million. You are the one who gets the prison sentence. That’s just the way it happened to play out.

Not because I didn’t want you sharing the $500 million with me. I invited you to the party, remember? I practically got down on my knees and begged you to join the thousands of our fellow community members who expressed a desire that honest posting be permitted.

You chose the path you are on today, my old friend.

Please try not to be a crybaby about it now that you are getting a good sense of where it takes you.

Fair enough?

Rob the Big Fan of Crybaby Posts (Not!)

“When I Am Up on That Stage With My Good Friend Jack Bogle Working With Him to Turn This Around, There’s Not Going to Be One Person Saying “Oh, Don’t Give That Fellow $500 Million, He Should Only Get $495 Million. Bogle Is Not a Bad Person. He Will Be the First One to Sign Off on the $500 Million Payday.”

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

Do you talk with your family about how you have 500 million coming your way? You may want to mention it.

I’ve made reference to “hundreds of millions” on a small number of occasions. I don’t believe I have ever referred specifically to the $500 million figure.

My wife doesn’t count the $500 million (or whatever amount) as real. It’s not her style. If I said that a friend of mine promised to give me ten bucks he owed me, she wouldn’t count it in the books until it was reduced to dollars bills. She’s a “Show Me the Money!’ kind of gal.

I’m not that way. I am a conceptual thinker (nice way of putting it) or a dreamer (harsh way of putting it). I see things that do not exist in concrete form and watch them take shape. The Myers-Briggs personality assessment system refers to my personality type as the “Seer.” We don’t use crystal balls. We see into the future because we see connections that other personality types miss. These connections are every bit as tangible to us INFJs as numbers are to the INTJs. We seem to be able to see into the future because we see things going on today that others do not see and we are able to see where those things are leading us.

I didn’t ask to possess this ability. But I don’t apologize for it. We all possess something. This ability to be a “Seer” is the gift that I was given. My job is to make good use of the power.

Anyway, my wife and my boys certainly know that I expect a big payday. They love me but they do not possess the confidence that this is how things will turn out that I possess.

I acknowledge that there’s a chance that the payday will not come. If Bogle never works up the courage to say “I Was Wrong” we all go down together. I don’t want that to happen. But it’s not like there’s anything I can do about it that I have not already done.

Bogle doesn’t want us to go down either, you know. That’s a comforting reality for me. When things get so bad that he sees no other option, he will say the magic words. I want him to say those words NOW. But it’s not my call. I get one vote, like everybody else, like it or not.

When I am up on that stage with my good friend Jack working with him to turn this around, there’s not going to be one person saying “oh, don’t give that fellow $500 million, he should only get $495 million.” The $500 million figure sounds big when you don’t understand what is going on. Once it all clicks for you, you will see that it is a trivial number in relative terms.

Bogle is not a bad person. He will be the first one to sign off on the $500 million payday, in my assessment.

I don’t think you’re an entirely bad person either, What. You may not be the second person to sign off. But I believe that there will come a time when you will sign off. I sure hope so. We will be friends then. Good!

Rob, the Fellow Waiting Patiently for His $500 Million Payday

Rob

“One of the Things I Love About the Wade Pfau E-Mails Is That You Can Hear In His Words How Much He Loves Helping People. As He Tapped Into New Insights, He Was Like a Kid Getting a Bike on His Birthday, Jumping Up and Down with Excitement About Things He Could Do Tomorrow That He Never Dreamed About Doing in the Past.”

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

They are not your friends and you aren’t even qualified to tie their shoes.

I couldn’t possibly disagree more, Anonymous.

One of the things I love about the Wade Pfau e-mails is that you can hear in his words how much he loves helping people. That is what caused him to enter this field in the first place. As he tapped into new insight about how stock investing really works following upon new insight about how stock investing really works, he was like a kid getting a bike on his birthday, jumping up and down with excitement about things he could do tomorrow that he never dreamed about doing in the past.

I am 100 percent confident that there was a day when my good friend Jack Bogle felt the same way. And that there was a day when my good friend Larry Swedroe felt the same way. And that there was a day when my good friend Bill Bernstein felt the same way. And that there was a day when my good friend Scott Burns felt the same way.

A Second Great Depression will cause vast amounts of human suffering, Anonymous. I have a funny feeling that these good people are going to respond to seeing that vast amount of human suffering playing out before them by swallowing their pride a little bit and learning how to pronounce the words “I” and “Was” and “Wrong.”

I’ll let you in on a little secret. I think that you, my friend, may do the same.

We’ll see.

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

Rob the Fellow Who Remains Confident of the Basic Goodness of His Buy-and-Hold Friends

“Prosecutors Go After Those Pushing Get Rich Quick Schemes After the Bottom Falls Out, After the Thing Has Collapsed and All the Investors Have Lost Their Money And Are Angry. You Will Go to Prison AFTER the Next Crash, Not Before.”

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

If the various acts of fraud have occured, as you allege, why have prosecutors failed to bring charges?

Why were charges not brought against Bernie Madoff for so many years?

His fraud was no secret. There was an accountant who had looked at the numbers and sent a letter to the SEC letting them know that the fund was a fraudulent enterprise. Why did the SEC not act?

Bernie was popular, Questions. He was pushing a Get Rich Quick scheme and investors LOVE, LOVE, LOVE Get Rich Quick schemes.

Prosecutors go after those pushing GRQ schemes AFTER the bottom falls out, after the thing has collapsed and all the investors have lost their money and are angry.

You will go to prison AFTER the next crash, not before.

That’s the way it works. That’s the way it has worked with every economic crisis caused by the ruthless promotion of Buy-and-Hold “strategies.” There is nothing even a little bit new in this.

Rob, the Fellow Who Doesn’t Need to Worry About What Will Happen to Him After the Next Crash Because He Started Insisting on His Right to Post Honestly Years Before

“People Who Endorse Buy-and-Hold Strategies Need to Know That There Will Be Consequences for Doing So. Those People Should Be Laughed at as Woefully Uninformed. In Cases in Which Buy-and-Holders Engage in Criminal Acts in “Defense” of Their Get Rich Quick Claims, They Need to Be Put in Prison. It Is Through the Announcement of Prison Sentences That We Send a Signal as a Society re the Sorts of Behavior We Will Not Tolerate.”

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

If you really had discovered something so revolutionary, would you have a strong vocal following by now?

Take a look at the “People Are Talking” section of the site, Questions. If you added together all the endorsements that every other financial blogger has ever obtained, they wouldn’t match the power of the endorsements that I have obtained just by myself. That’s an amazingly impressive reality.

No, I don’t have millions of people singing my praises, as you would expect given those endorsements. All you have to do to solve that puzzle is to go to the statements of the people who made the endorsements. One of the endorsements is from a New York Times blogger who said that he has read everything he can find about Valuation-Informed Indexing and that he believes that the work I have done is of HIUGE value. The same fellow banned me from his site! Why? He wants to make a buck. And Get Rich Quick schemes are the quickest way to make a buck in this field. Buy-and-Hold is the purest Get Rich Quick scheme ever concocted by the human mind. So he doesn’t want to upset the applecart.

Just about everyone in this field experiences that same tension today. Bill Bernstein has said important, honest things about stock investing. But he buries them in endorsements of Buy-and-Hold so that you Goons don’t come after him. It’s the same with Jack Bogle. It’s the same with Larry Swedroe. It’s the same with Scott Burns. Since you Goons threatened to destroy Wade Pfau’s career if he dared to continue to “cross” you by publishing honest research, it’s the same with Wade Pfau.

This is why I stress the importance of your prison sentence. People who are considering endorsing Buy-and-Hold strategies need to know that there will be consequences for doing so. Those people should be laughed at as woefully uninformed given that there is now 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. In cases in which the Buy-and-Holders engage in criminal acts in “defense” of their Get Rich Quick claims, they need to be put in prison. Once prison sentences are announced, we are going to see a lot fewer Buy-and-Holders engaging in criminal acts of financial fraud.

We are working through this as a society. It pains people to acknowledge that they have been taken. We are experiencing feelings of shame and regret and anger and envy and all sorts of other ugly emotions. We need to focus more on the positive. We are the luckiest generation of investors that ever walked Planet Earth. We live at a time in which stocks have become virtually a risk-free asset class. But a lot of good it does us when we have adopted a Ban on Honest Posting on safe withdrawal rates and other critically important investment-related topics!

We need to get those prison sentences announced. Not because we like the idea of seeing our friends carted off to prison. Because we want as few people going to prison as possible and we want the sentences of those who do go to be as short as possible. The sooner we bring the economic crisis to an end and enter the greatest period of economic growth ever seen in our history, the less public anger there is going to be about what was done to us during the Buy-and-Hold years. The less public anger there is, the fewer prison sentences there are and the less lengthy are those that cannot be avoided.

Anyway, the intensity of my following is off the charts. There has never been anyone in this field who has received as many over-the-top endorsements of his work as I have received over the first 11 years of our discussions. But, no, you cannot expect lots of ordinary people to post here so long as the price paid for doing so is to receive death threats and to be banned from every board and blog on the internet and to see their reputations destroyed through tens of thousands of acts of defamation posts by you Goons.

There are good reasons why as a society we have adopted laws insuring that people who behave as you have will be sent away for long prison terms, Questions. Those long prison terms send a message to all members of our society as to the type of behavior we absolutely will not tolerate.

I naturally wish you all good things.

Rob, the Fellow Who Cares for the Goons and Thus Wants to See Their Prison Sentences Announced as Quickly as Possible

“Most of the People In This Field Have Spent Years Learning What Is In the Textbooks. The Stuff In the Textbooks Is Wrong. That’s Always the Case When There Is a ‘Revolutionary’ Advance. So Intelligence and Experience Can Actually Be a Drawback. The More Study a Person Has Directed to the Old Model, the Less Capable He Is of Understand Why It Is Wrong.”

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

There are extremely smart people in the investment industry and the ability to invest successfully in order to maximize returns would compel those extremely smart people to follow the money. If you really had discovered something so revolutionary, wouldn’t you have a strong vocal following by now?

Yes and no, Questions.

The people who work in this field have high I.Q.s. No dispute there.

But Shiller’s findings are truly “revolutionary” (that’s the word used in the subtitle of his book).

Most of the people in this field have spent years learning what is in the textbooks. The stuff in the textbooks is wrong. That’s always the case when there is a “revolutionary” advance.

So intelligence and experience can actually be a drawback here. The more study a person has directed to the old model, the less capable he is of understanding the case for why it is wrong.

And the more of a motivation he has to convince himself that the new model is not a huge advance.

Please read the quote from Machiavelli that I put in the “People Are Talking” section of the site. He points out that it is very hard for new systems to gain a foothold. That’s because there are lots of people with an intense desire to keep the old system going (they built their careers around their knowledge of the now-discredited, old system) and not too many with an intense desire to push the new system (it’s hard to make any money promoting the new system until there are a good number of adherents to it).

Buy-and-Holders are today using their intelligence and industry to stop progress. They have become the thing they once opposed. People tried to stop Bogle once upon a time just as Bogle today tries to stop me.

It won’t work. It cannot work. The advance is too big.

The smart thing for someone like Bogle to do is to abandon Buy-and-Hold and promote Valuation-Informed Indexing. No one cares that he made a mistake. No one. What people want is investing advice that works. Bogle played as big a role as anyone in building the Valuation-Informed Indexing Model. Once he endorses it, he gets credit for his huge contributions.

And Valuation-Informed Indexing isn’t a dead thing, like Buy-and-Hold. Valuation-Informed Indexing is the future.

Once Bogle realizes that and says so publicly, lots and lots of other smart people are going to join the program. There’s an old saying that “the harder they come, the harder they fall.” It has been very, very hard to knock down Buy-and-Hold. But once it falls, it falls entirely and completely. The transition will be short because there is now a mountain of material showing the dangers of Buy-and-Hold and the wonders of Valuation-Informed Indexing.

My guess is that it will be the next price crash that will start the collapse.

Rob

“If the Bennett/Pfau Research Is Not Worthy of a Nobel Prize, Why Did You Threaten Wade? You Would Have No Motive to Risk a Prison Sentence Unless the Research Was Very, Very, Very, Very Important. Your Own Criminal Behavior Tells the Tale.”

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

Wade said you are wrong and even mentioning the Nobel prize is just silly exaggeration.

He only said that after he was threatened, Pink.

The problem with threatening academic researchers is that it becomes impossible to have confidence they believe anything they say once they agree to change what they say in response to threats.

Wade made MANY comments indicating that he believed that the work was Nobel prize quality prior to when the threats were made.

In fact, you have done the same, Pink.

You said for years that my claim of May 13, 2002, that the numbers in the Old School SWr studies were wildly wrong was unbelievable because none of the “experts” had said this at the time. Now every “expert” in the field says that I was right all along.

My guess is that several of the “experts” had doubts about the Old School numbers but were afraid to post honestly because they know what the Buy-and-Hold Mafia does to honest researchers.

We have been making huge strides in our understanding of how stock investing works for 32 years now. But we have gained no benefits because the Buy-and-Hold Mafia has intimidated all who understand what the research really says into silence.

You obviously didn’t know about the errors.

Now you do.

That’s what Nobel Prize quality research does, Pink. It brings you up to speed on realities you never imagined.

My peer-reviewed research shows millions of middle-class investors how to reduce the risk of stock investing by 70 percent. That is BY FAR the biggest advance ever made in this field.

The idea that that research is not worthy of a Nobel prize is pure Goon nonsense.

If the research was not worthy of a Nobel Prize, why did you threaten Wade? There would be no motive to risk a prison sentence unless the research was very, very, very important.

Your own criminal behavior tells the tale.

Rob, the Fellow Who Believes that Every Investor Should Have Access to Honest Research and that the Buy-and-Hold Mafia Should Be Put in Prison Before the Close of Business Today