A Rich Life

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

“Why Would Someone Who Acknowledges the Error Say That There Is No Need to Correct the Study? That’s the Problem. That’s the Irrational Part of Irrational Exuberance.”

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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:

“ Evidence-Based Investing has acknowledged that the Greanry retirement study lacks a valuation adjustment. This guy is a general in Greaney’s Goon Army. He has no bias against Greaney.”

Evidence has said it didn’t need it and that there was no error. What does that have to do with you not fixing your financial failure?

Why would someone who acknowledges the error say that there is no need to correct the study?

That’s the problem. That’s the irrational part of irrational exuberance.

We should be seeking to be rational in our stock investing decisions. The last 41 years of peer-reviewed research could help us in that effort if we were discussing it at every discussion board and blog, without a single exception.

Rationality is a plus in this field just as it is in every other field. My sincere take.

Rob

“I Could Have Just Kept It Zipped re the Error in the Greaney Study. I Did That for Three Years. I’ve Noticed That You Never Complain About That. The Complaints Are Always About the Days After I Worked Up the Courge to Speak Out. I Wonder Why.”

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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 entire 20 years is an example, Anonymous. If Buy-and-Hold were a real thing, there would have been a rush to get the study corrected as soon as possible. No controversy whatsoever.”

If what you said were true, you would have finished your book years ago so that you could save the world from impending financial doom. Instead, you just want to keep playing around with a story as an excuse for you not getting a job.

I‘ve done more than anyone else, Anonymous. Yes, I kick myself a bit at times for not having done even more. But it is very hard to be so isolated. The divorvce was the worst thing that I have ever lived through. So I cut myself a little slack. Show me someone who has done more and I’ll be harder on myself.

I could have just kept it zipped re the error in the Greaney study. I did that for three years. I’ve noticed that you never complain about that. The complaints are always about the days after I worked up the courge to speak out. I wonder why.

Rob

 

“If Buy-and-Hold Were a Real Thing, There Would Have Been a Rush to Get the Study Corrected as Soon as Possible. No Controversy Whatsoever.”

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

So you have no examples. Got it.

The entire 20 years is an example, Anonymous. If Buy-and-Hold were a real thing, there would have been a rush to get the study corrected as soon as possible. No controversy whatsoever.

The goal of investment analysis is not to avoid ever having to acknowledge having made a mistake. The goal is to help people invest more effectively. New research is a plus, not a minus.

Rob

 

“I’ve Got a Tiger By the Tail. Say That Opening Every Site to Honest Posting Leads to Every Stock Investor Accumulating an Extra $300,000 in the Course of His or Her Investing Lifetime. That’s Money That Could Be Put to Use Toward Financing an Early Retirement or a College Education or a Vacation Home or Toward Supporting a Favorite Charity. That’s Life-Changing Money.”

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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:

“ Why do I have a funny feeling that there will indeed be a long line of attorneys standing outside my door in the days following the next Buy-and-Hold Crisis? It will be interesting to see how it all plays out.”

You have had hundreds of “funny feelings” over the last 20 years. We saw those play out. You ended up broke and divorced. Those funny feelings don’t seem to be a good thing for you.

We disagree, Anonymous.

Yes, it is very, very, very painful that I am broke and divorced. That part is so.

But the good news here has been 20 tumes as good as the bad news here has been bad.

I’ve got a tiger by the tail. Say that opening every site to honest posting leads to every stock investor accumulating an extra $300,000 in the course of his or her investing lifetime. That’s money that could be put to use toward financing an early retirement or a college education or a vacation home or toward supporting a favorite charity. That’s life-changing money. And we are not talking about a small number of people getting to see that sort of life enhancement. We are talking about millions and millions.

Yes, my decision to post honestly re the last 41 years of peer-reviewed research has hurt me in the short term. But the only reason why there are any Buy-and-Holders who have an objection to the wideapread discussion of Shiller’s Nobel-prize-winning research is that they see how huge an advance this is and cannot bear to acknowledge that there was a time when they did not know everything there is to know about this subject. That’s not a good reason. The shift from Buy-and-Hold to Valuation-Informed Indexing will be the biggest advance we have ever seen in the history of personal finance. That enough to give meanng to 50 lifetimes. And I am well on my way to achieving iit n only the one that I was given.

I naturally wish that I could have achieved all the good without having had to experience any of the negativity. Obviously. I have requested that you Goons knock off the funny business on thousands of occasions. But I do want to see us all move to a place where we can live better and fuller and richer lives than we ever imagined possible in the Buy-and-Hold days, So I am going to stick it out. I can do no more and I can do no less.

My best and warmest wishes to you and yours.

Rob

“You Would Think That the People at the Mutual Fund Companies Wouldn’t Want to Pay You More Than Your Portfolio Is Really Worth. But They Do. They Do It Every Day. Haven’t They Read Shiller? If They Have, It Appears That They Did Not Pay Very Close Attention to What They Were Reading.”

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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:

If your wife really believed your story, she would no have divorced you as she would have been convinced you had a big windfall coming.

I don’t think that she believes that I am going to receive a huge settlement payment.

That general way of thinking about things is widespread. I say that I am going to receive a settlement payment in the hundreds of millions. Wade Pfau believed in Valuation-Informed Indexing. He devoted 16 months of his life to researching my ideas in great depth and concluded that: “Yes, Virginia, Valuation-Informed Indexing works!” But, when you Goons threatened to destroy his career, he flipped. Why not just hang in there and obtain a huge settlement in the days following the next Buy-and-Hold Crisis?

It’s because our brains perceive what we can see as being what is real. Wade feels more comfortable receiving whatever salary he is being paid in the present to obtaining a $500 million settlement payment at some unknown time in the future. That’s how my ex felt about it. Full truth be told, that’s how pretty much everyone feels about it.

Buy-and-Hold says that the dollar amount of your portfolio value reported on your statement is your real portfolio value. That makes sense, doesn’t it? One of my favorite comments that you Goons ever advanced was when one of you asked “if you cash in your holdings, how much will they pay you?” The answer is they will pay you the full amount reported on your statement. You would think that the people at the mutual fund companies wouldn’t want to pay you more than your portfolio is really worth. But they do. They do it every day. Haven’t they read Shiller? If they have, it appears that they did not pay very close attention to what they were reading.

Shiller revolutionized the field. His findings change our understanding of how stock investing works in a fundamental way. It’s hard for most people to get their heads around how big an advance in our understanding we have achieved. The number on the portfolio statement is not accurate. That’s what this comes to. That number is not accurate and you cannot use that amount in your retirement planning. You have to adjust that amount for the effect of irrational exuberance.

Irrational exuberance gains are pretend gains. They are not real. They are not lasting, So you should not count them for retirement planning purposes. But they SEEM real. I’m not calling people dumb for falling for the irrational exuberance con. I fell for it. When I put forward my famous post of May 13, 2002, I was still a Buy-and-Holder. I didn’t believe in the 4 percent rule. But I still believed in Buy-and-Hold. It wasn’t until I saw 200 Buy-and-Holders endorse Greaney’s death threat that I saw that the whole thing is a crock. I didn’t fail to see it because I was dumb. I failed to see it because it is somewhat counter-intuitive to not count the number on the portfolio statement as real. You have to think about this stuff a bit before it all clicks.

This is why I say that we need to permit discussions of the last 41 years of research at every site. The more we talk about this stuff, the better we will come to understand it.

My ex believes that I am on to something important. She told me that. But she has experienced the same difficulties coming to a full understanding of all this as have lots of others. It’s a fact that lots of good and smart people do not fully understand it today. Today’s CAPE value tells us that. But they COULD understand it. They need to be able to enter discussions and ask questions and all that sort of thing. In time, it will all click. The advance from Buy-and-Holfd to Valuation-Informed Indexing is a huge advance, That’s why Shiller was awarded a Nobel prize for his amazing research.

Rob

“Over the Past 20 Years You Have Shown a Lot More Interest in My Personal Financial Status Than in Getting the Error in the Greaney Retirement Study Corrected. I Wonder Why.”

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

So who is financially supporting you now?

Over the past 20 years you have shown a lot more interest in my personal financial status than in getting the error in the Greaney retirement study corrected. I wonder why.

Rob

“What Does It Say About This Field of Human Endeavor That the Error in the Greaney Retirement Study Has Not Been Corrected in 20 Years? It Says That the Investment Advice field Is Today Corrupt in a Fundamental and Pervasive Way. If You Can’t Get the Numbers in Studies That People Use to Plan Their Retirements Right, What the Heck Can You Do? That’s Basic.”

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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:

“ I think that the work that I am doing is the most important work being done today in the United States and I believe that I will be compensated accordingly in the days following the next Buy-and-Hold Crisis.”

There are millions of people that think they will win the lottery this weekend and that they will never have to worry about money ever again. Their odds of winning are less than getting struck by lightning. Your odds of getting a windfall are even less than the lottery players. You can continue to live out your fantasy, but don’t expect everyone else to play along. You ex-wife sure didn’t buy it. You have spent the last 2 decades telling everyone to “see how it all plays out”. Well, we waited and it turned out to be a disaster for you, just like we all predicted.

It’s not a windfall if it turns out that I was right in what I said in my famous post from the morning of May 13, 2002, that the retirement study posted at John Greaney’s web site lacks an adjustment for the valuation level that applies on the day the retirement begins. People use retirement studies to plan retirements. When a retirement study gets the numbers wildly wrong, it needs to be promptly corrected or else lots of people will be hurt in very serious ways.

What does it say about this field of human endeavor that the error in the Greaney retirement study has not been corrected in 20 years? It says that the investment advice field is today corrupt in a fundamental and pervasive way. If you can’t get the numbers in studies that people use to plan their retirements right, what the heck can you do? That’s basic. The people who work in the field are not generally corrupt. We have seen over and over again that most of the people who work in this field want to do honest work, they want to help people just as do most people who work in all other fields of human endeavor. But it is not reasonable to expect people to be willing to experience death threats aimed at their loved ones as the price to be paid for citing what the last 41 years of peer-reviewed research teaches us all about how stock investing works in the real world. So it is an important piece of business to get every site opened to honest posting re the last 41 years of peer-reviewed research.

I think the American people are going to pull it off. I think you Goons are going down. But we’ll see, you know. I am not God. I could be wrong. It has been known to happen.

In naturally wish you all the best that this life has to offer a person regardless of what investment atrategy you elect to follow, in any event.

Rob

“There Is Huge Levelage in Opening Every Board and Blog to Honest Posting. We Are Going To Be Hearing Amazing Stuff From Thousands and Thousands of Good and Smart People in the Days Following the Next Buy-and-Hold Crisis.”

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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:

What you are doing isn’t a job and no one asked you to live out this fantasy.

Instead, you are merely a burden to those that have had to support you, including housing.

I think that the work that I am doing is the most important work being done today in the United States and I believe that I will be compensated accordingly in the days following the next Buy-and-Hold Crisis. Over and over again we have seen people who are viewed as experts in this field make efforts to let their readers and clients know that market timing/price discipline is absolutely essentual but hold back from speaking in clear terms for fear of what the Buy-and-Hold Goon Squads would do to them if they gave voice to simple and obvious research-backed truths. The best exanple is probably William Bernstein, who explained in his book that the conventional safe withdrawal rate studies were off by a full two percentage points at the top of the bubble but then kept it zipped while the discussions about whether honest posting should be permitted raged at the Bogleheads Forum. There is huge levelage in opening every board and blog to honest posting. We are going to be hearing amazing stuff from thousands and thousands of good and smart people in the days following the next Buy-and-Hold Crisis. I think we well could be looking at the biggest surge of economic growth in our nation’s history (after a horrifying Buy-and-Hold Crisis, to be sure).

Rob

“Trying to Make Logical Sense of It Is Like Trying to Make Logical Sense of an Alcoholic’s Choice to Continue Drinking When All His Friends See That It Is Destroying His Life. Addictions Do Not Make Sense.”

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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 entire world agrees with both me and my ex.”

If that were the case, you wouldn’t be broke, banned and divorced.

We’re in a twilight zone in which the world believes two opposite things. Trying to make logical sense of it is like trying to make logical sense of an alcoholic’s choice to continue drinking when all his friends see that it is destroying his life. Addictions do not make sense.

I believe that we will hit bottom in the days following the next Buy-and-Hold Crisis. Some alcoholics revover and go on to live the best days of their lives.

Rob

“This Entire Debate Is a Debate Between Research/Reason and Intimidation/Emotion.”

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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:

Is there anyone that knows you on a personal level that would also agree with you being rational and your wife being irrational?

I didn’t say that she was irrational. I said that from her perspective what she did was rational. If we were all thinking clearly, we all would want any errors made in retirement studies to be corrected as soon as possible. If we all were thinking clearly, there never would have been a single abusive post, much less any of the criminal stuff. There is no way without her following this stuff closely that she could have imagined that 90 percent of the stuff that went down went down. We have seen some crazy, crazy, crazy stuff.

I said that she was irrational only from my perspective. I had had a front-row seat to everything that has gone down. Please remember that in the days before Greaney launched his Campaingn of Terror aganst the Motley Fool board community, I was a Buy-and-Holder myself. Was I irrational? I don’t think so. I liked it that the strategy was promoted as research-based. I gave up on Buy-and-Hold on the evening ogf August 27, 2002, when Greaney advanced his first dreath threat and it was endrosed by over 200 Buy-and-Holders. That’s enotion, Anonymous. That’s pure emotion. It’s the farthest thing from research that you can get. This entire debate is a debate between research/reason and intimidation/emotion. I today criticized Buy-and-Hold for the same reason that I once endorced it. I endorsed it because I believed that it was supported by reason. When I discovered that it is not, I moved on to something that really is supported by reserarch (Valuation-Informed Indexing).

My ex did not live through what I lived through. If she had, I am confident that she would be 100 percent supportive of evetything thst I have done. I think that the same is true of every site owner who has banned me. I think the same is true of all of the researchers. I even think that that is probably true of you Goons. If we could go back to the afternoon of May 13, 2002, and play it over, I am confident that you Goons would play it differently the second time through. The unfortunate thing is that of course we cannot do that. As the pile of evidence showing that the Greaney study lacks a valuation adjustment gets higher and higher, you Goons become more and more entrenched in hyour position. Now it’s not just an error in a retirement study that embarrasses you, it’s a 20-year cover-up of that mistake.

The only way that we can keep things from continuing to get worse is to open every site to honest posting so that things start getting better. You are not going to hear anyone saying that it is rational to fail to correct errors in retirement studies after that happens. The key is opening every site to honest posting so that we can talk through what is best for every single person involved. That’s the rational thing to do.

I hope that that helps a tiny bit.

Rob