A Rich Life

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

“The Buy-and-Hold Team Has Failed for 23 Years to Insist That the Greaney Retirement Study Be Corrected. The Object of the Game Is Not to Avoid Admitting That You Ever Got Anything Wrong. The Object of the Game Is to Help the People Who Listen to Your Investment Advice. Acknowledging Mistakes Is a Key Part of What It Takes to Win the Game.”

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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:

When two sports teams compete, one side wins and the other side loses. The losing team accepts the fact that they were wrong (did not do the right things to win the game). The losing team doesn’t blame the winning team for their own failures. Get the picture?

You are broke. You are on the losing team. You made the wrong choices. The buy and hold crowd one the game with consistent retirement successes. Stop blaming those that made the successful people for making the right choices. Accept the fact that you were wrong and are broke as a result of your decisions.

The Buy-and-Hold team has failed for 23 years to insist that the Greaney retirement study be corrected. The Buy-and-Hold team lost the game.

The object of the game is not to avoid admitting that you ever got anything wrong. The object of the game is to help the people who listen to your investment advice. Acknowledging mistakes is a key part of what it takes to win the game.

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

Rob

“Buy-and-Hold Is Not Based on Research. Wade Pfau Devoted 16 Months of His Life to the Project of Trying to Find One Iota of Research Showing That Valuation-Based Market Timing (Price Discipline!) Is Not Always 100 Percent Required for Every Investor. He of Course Came Up Empty-Handed. There of Course Is No Such Research. It Is a Logical Impossibility That There Could Ever Be Any. It’s Like Looking for a Perpetual Motion Machine.”

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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:

Buy and hold is based on research.  Market timing is all speculation as there has never been one successful outcome.  Why go on speculation when we all know what works and what has failed.

Buy-and-Hold is not based on research. Wade Pfau devoted 16 months of his life to the project of trying to find one iota of research showing that valuation-based market timing (price discipline!) is not always 100 percent required for every investor. He of course came up empty-handed. There of course is no such research. It is a logical impossibility that there could ever be any. It’s like looking for a perpetual motion machine.

Rob

“I’m Not the One Who Permitted the CAPE Value to Rise to 37. That Was the Buy-and-Holders. That Number Suggests That It Is Today’s Stock Market That Needs a Therapist.”

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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:

Perhaps this is a topic best discussed with your therapist.

I’m not the one who permitted the CAPE value to rise to 37, Anonymous. That was the Buy-and-Holders.

That number suggests that it is today’s stock market that needs a therapist. I believe that the best possible therapy for a stock market that has produced a CAPE value of 37 is open discussion of the last 44 years of peer-reviewed research in this field.

Rob

“Price Discipline Works for Every Investor Who Employs It. It’s Impossible for the Rational Human Mind to Imagine Any Exceptions to That Rule.”

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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:

It didn’t work for you in the long term.  In fact, you can’t even name one person in which market timing has worked out.

Price discipline works for every investor who employs it, Anonymous. Ir’s impossible for the rational human mind to imagine any exceptions to that rule.

You don’t subtract for the effect of irrational exuberance when determining the size of your portfolio. That’s what confuses you. Irrational exuberance gains are imaginary gains. They are not real. They disappear into the mist in time.

Rob

“When an Idea is Discredited by New Research, That Doesn’t Mean That the People Who Came Up With the Discredited Idea Were Dumb. It Means That the Humans Did Not Come to Planet Earth With a Manual Telling Them How Everything Works.”

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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:

We are so lucky that you can tell us what research counts and how to interpret it since we are a bunch of stupid morons.  It has all worked out so well for you, that I am sure everyone wishes they were in your spot right now.

When an idea is discredited by new research, that doesn’t mean that the people who came up with the discredited idea were dumb. It means that the humans did not come to Planet Earth with a manual telling them how everything works. We learn more over time.

That’s the purpose of research, to learn new things. That’s what makes it do great.

Rob

“To Say That I Am an Expert Is to Say That the Peer-Reviewed Research Is an Expert.”

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

The primary mission of this website is to convince everyone that Rob Bennett is one of the leading experts on investing, regardless of results.  As part of this mission, everyone must keep it zipped unless they agree with Rob Bennett.

All that I have argued for 23 years is that we should permit discussion of the peer-reviewed research at every site. So to say that I am an expert is to say that the peer-reviewed research is an expert. I think that’s so. The great thing about research is that it reveals things that you didn’t know without having done research. I see that as a huge benefit.

If we are not going to permit discussion of the peer-reviewed research, why have peer-reviewed journals? It seems like a waste. It’s only when you apply what you learned from the research that research comes to have value. If the peer-reviewed journals just collect dust, what good are they? I believe in making use of new knowledge. That’s progress.

You Goons act like Shiller’s Nobel-prize-winning research is a curse. I see it as a blessing.

Rob

“How Long Have You Been Seeing a Therapist? Has it Been Helping?”

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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:

How long have you been seeing a therapist?  Has it been helping?

It’s been a bit less than two years. I’ve been seeing the current person (who I like a lot) since October 2023. I was seeing someone else for about three months before that.

The pace of progress on the book has picked up a small bit over the past three months. But I am nowhere close to finishing it. So I am not satisfied with the extent of the progress. I intend to stick with it for so long as I see signs of progress even if things don’t happen as quickly as I would like.

Rob

“Buy and Hold Is Completely Superior to Any Market Timing Scheme”

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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:

Buy and hold is completely superior to any market timing scheme, including VII.  It is not even close.  Wade Pfau even confirmed that this past year.  Notice that Robert Shiller will not even mention VII.  That speaks volumes.  We even see that you (Rob Bennett) went broke when trying to follow this plan.  Yuck!  Who wants to be broke?  No one I know.

Okay, Anonymous.

Hang in there, old friend.

Rob

“No One Has Ever Claimed It [the Greaney Retirement Study] Has an Adjustment. What We Have Said Is That it Doesn’t Need an Adjustment and That Has Been Explained to You Hundreds of Thousands of Times As to Why That Is”

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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:

We already know that.  No one has ever claimed it has an adjustment.  What we have said is that is doesn’t  need an adjustment and that has been explained to you hundreds of thousands of times as to why that is.  It is up to you to do your own study if you want something different.  Stop demanding that everyone else needs to do what you want and to believe what you say.

Do you think it would have been better if I had kept it zipped re the error in the study? It made me feel like a creep to do that. There were people at the board who thought the study was legitimate.

Rob

 

“What It All Really Comes Down to Is Emotion vs. Reason.”

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

The financial community is focused on having a financially secure retirement. Your focus is trying to set yourself up as one of the premier thought leaders because you seek the fame and accolades. You figured you would do this by trying to come up with a timing scheme that you could leverage to promote yourself. Unfortunately for you, it has failed miserably.

The only “human misery” is being experience by you and those that were either dependent on you or happened to take your horrible advice. No one has to take your word or my word for anything. Instead, they can just look at the results. You went broke and your predicted crashes never happened when you said they would. Those of us that kept working our jobs, kept saving our money and followed buy and hold, have ended up with very successful retirements that are financially sound. Just look at the numbers.

I didn’t even want to write about investing. From May 1999 to May 2002, I hardly advanced a word on the subject. It just wasn’t my thing. But I was eventually left with no choice because Greaney repeatedly pushed his study purporting to show that a 4 percent withdrawal rate is always safe. I had read John Bogle’s book where he says that reversion to the mean of stock prices is an “iron law” of stock investing. So I knew that there was zero chance that the safe withdrawal rates is always the same number. I could see that lots of people at the Motley Fool board believed that the Greaney study was legitimate. At some point, you just have to speak up.

What it all really comes down to is emotion vs. reason. Valuations OBVIOUSLY affect long-term returns. All that Shiller did was to confirm that what common sense tells us must be so really is so. Buy-and-Hold is an effort to deny common sense. Get Rich Quick strategies are huge money-makers because deep down we all like the idea of getting something for nothing and, if irrational exuberance gains are as good as real economic-based gains, we can create as much phony wealth as we want and never pay a price. To persuade people that valuation-based market timing is not always 100 percent required for every investor, you have to persuade people to give up on logic and reason and research and go with a purely emotion-based approach. That’s just not me. In the days when I was a Buy-and-Holder, it was because I liked it that they often referred to what the research says.

I’m a research guy. That’s the issue. The Buy-and-Holders can’t stand that because their “strategy” is pure emotion and they cant’t stand for people to learn that. They cant even stand to acknowledge it to themselves. I believe that in time they will need to. We permit people to make use of their reason in every other field. I don’t believe that we can have just one field in which reference to the peer-reviewed research is absolutely forbidden, no matter how much money it makes in the short term to tell people that irrational exuberance gains are real. I believe that the arc of history in the investment advice field bends toward rationality.

We’ll see.

Rob