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 I proposed in my post of the morning of May 13, 2002, is that we look at the second calculation. “

Is this the proposal you are referring to?

https://boards.fool.com/price-adjusted-safe-withdrawal-rates-17209214.aspx?sort=whole

And here is the relevant quote

“What I am thinking would be useful is a calculator that allowed you to choose three options: (a) a purchase at a time period in which stocks were priced low, using the conventional valuation criteria; (b) a purchase at a time-period in which stocks were priced about average; and (c) a purchase at a time-period in which stocks were priced high. After entering your choice of (a), (b), or (c), <b>the calculator would tell you what sort of long-term safe withdrawal rates were provided to other investors investing at similar price levels obtained in earlier historical periods.</b>

My guess is that such a calculator would show an investor investing during a time when low stock prices prevail would be likely to obtain a safe withdrawal rate higher than the 4 percent return that the conventional calculators (those using all investment price levels in their data set) suggest. Presuming that we see such prices again in the future, that would allow people with money to invest at that time to retire with confidence of obtaining a long-term safe withdrawal rate greater than the safe withdrawal rates suggested by the conventional calculators (higher than the 4 percent figure we often hear cited on this board, that is).

On the other hand, it would show a lower safe withdrawal rate for investors putting money into stocks today. Personally, I would be willing to accept a safe withdrawal rate assumption of less than 4 percent, given the low rates paid by safe investments like ibonds today. However, if the modified calculator showed asafe wtthdrawal rate for stock investments made at today ‘s prices of less than 2 percent, my inclination would be to go with ibonds or some similar investment.”

Those words offer a very good overview of the issues that I believe we all need to be examining. I have learned a lot as a result of the last 20 years of discussions. So I don’t know that I would sign on to every word of the post today. But I believe that the part that you quoted does a great job of pointing to the sorts of trade-offs that should be considered.

This is not a situation where someone is going to craft a perfect three-sentence statement and that is going to be the end of it. The effect of valuations on long-term returns affects every strategic issue. We need to have thousands of people making contributions from thousands of different angles and we all need to be learning from those contributions and adjusting our own takes as we go. I have better formed views today than I did at the time I wrote those words. But I certainly don’t think that I today know it all. I want to continue learning. For that to happen, we need to make everyone feel 100 percent free to post their honest thoughts.

That’s where I am coming from.

Rob

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 agree that Greaney calculated properly the rate that survived all existing 30-year historical time-periods.”

Which is why you need to stop calling on Greaney to correct his study and start going about the business of calculating the different calculation that you think needs be be performed.

Over the course of the past 19 years, there have been thousands of community members who have expressed a desire to engage in discussions aimed at identifying the best number. This is an issue that affects everyone alive in the United States. So everyone alive in the United States should be wishing that such discussions happen and that they are successful. Are you willing to join me in doing everything in your power to see that such discussions move forward?

Rob

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 is amazing that a few unknown goons have been able to block these thousands of supporters from posting.  They must be sophisticated hackers that can track down those thousands and put up those barriers.  It is so amazing as to how you have all these answers and know everything, so that us stupid morons can learn everything from you.  Shiller should be working on getting you nominated for a Nobel prize of your own.  Will he be one of the many experts writing recommendations for your new book?

The story of what has happened over the past 19 years is an amazing one, Anonymous. You won’t get any argument from me. But the reality is that it is not the first amazing thing that has ever happened in the history of the United States. I find it amazing that there was a time when women were not able to vote. I find it amazing that there was a time when there were large numbers of people who defended slavery.

Those things changed over time. But those changes did not come easily. There was lots of resistance to the positive changes. That’s what we have seen with our efforts as a nation to move from Buy-and-Hold to Valuation-Informed Indexing. A lot of people are dug in re Buy-and-Hold and are not willing to hear what the last 40 years of peer-reviewed research in this field is trying to tell us all.

I won’t be asking Shiller to write a blurb for my book when I finish writing it. But I certainly believe that he will be part of the national debate that I believe we will be having re these matters after we see the damage that the next Buy-and-Hold Crisis will do to millions of people and that Shiller and I will engaged in extensive conversations about all sorts of matters in those days and that he will agree to write a blurb for the book when it is picked up by a major publisher. Why wouldn’t he?

Re how much I know about these matters at this point, I know a lot because I abandoned Buy-and-Hold on the evening of August 27, 2002, when Greaney advanded his first death threat and over 200 of my fellow community members endorsed it (while about 50 endorsed a post taking issue with the tolerance for death threats by Buy-and-Holders). There is no one else on the planet who has spent 19 years of his or her life studying these matters at the level of intensity that I have devoted to them in the 19 years since my famous post of May 13, 2002.

Yes, I have learned a lot. I believe that Valuation-Indexing is the future of investing analysis and that Buy-and-Hold is the past. I believe that it makes sense to devote my energies to preparing for the future. I encourage all others doing work in this field to do the same. The more hands we have working these fields, the more forward progress we will make and the sooner that forward progress will be achieved.

Rob

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

Those are the same comments you make, so you must be the goon.

I believe that all humans have goonishness within them, Anonymous. We all also possess the ability to employ reason to enrich our lives. Shiller’s amazing advance points us to the way to make stock investing a less goonish experience and a more reason-filled one. Which means that we all will get to live better lives once we make the transition from Buy-and-Hold to Valuation-Informed Indexing. We are today in the process of working up the courage to achieve that transition.

Wish us luck!

Rob

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

You know that you are wrong, so you try and compensate with long winded posts, delete most posts and never let anyone else have the last word.

I don’t believe that there can ever be a last word. There’s always going to be new research. So people are always going to be learning new things. If everyone converted to Valuation-Informed Indexing today, tomorrow someone would come up with some new wrinkle that hadn’t been considered prior to today. So there would be a Valuation-Informed Indexing Plus. And the discovery of that wrinkle would lead to the discovery of even more new wrinkles. Learning how things work is a never-ending process.

People believe different things. And that’s healthy. There might be some threads in which a Valuation-Informed Indexer wrote the last post in the thread. That’s fine so long as there are other threads in which a Buy-and-Holder wrote the last post. That’s not the way it was at the Retire Early board in the days prior to May 13, 2002. There were hundreds and hundreds of threads discussing Greaney’s retirement study and none of them pointed out that it lacked a valuation adjustment. That led people to believe that the study was legitimate. The Valuation-Informed Indexers were afraid to point out the error in the study because you Goons had made clear that there would be consequences if anyone did that.

I am proud that I eventually worked up the courage to post my sincere view that that study lacks a valuation adjustment. I think that people using the study to plan a retirement need to know that. If there are people who want to use the study regardless, that’s their business. But, if I truly believe that the study lacks a valuation adjustment and I fail to say anything, that’s on me. I should post honestly, whether my post happens to be the first in the thread or the last or somewhere in the middle. The big thing for me is that we all feel free to post our honest views.

Rob

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 have enough put aside to pay the bills for some time.”

So now you say that you don’t really need to work? What changed?

I have always said that I would get a job after the book is finished.

It would be insane to throw away a $500 million payday to get s small amount of money coming in a few months sooner.

What matters here is getting every discussion board and blog on the internet opened to honest posting re the past 40 years of peer-reviewed research in this field, without a single exception. I do that and I am one of the richest people on planet Earth. I fail to do that and I am pretty much screwed. Everything else is of tiny significance compared to that.

And that’s always been the case. This is not a news flash. I never would have let things get to a place where I was banned from the Motley Fool board if I didn’t think that it was a matter of critical importance that millions of middle-class investors be provided access to accurate and honest information re the last 40 years of peer-reviewed research in this field.

Rob

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

“My new deadline is the end of the year.”

As with so many things, you have a weak grasp on the concept of “deadline”. Deadlines have consequences for being missed. The book is more along the lines of a new years resolution. Something you briefly pay lip service to, and then fail to deliver, as everyone expects.

I have a poor record re the self-imposed deadlines for completion of the book. The other side of the story is that no one else has written a book telling this story. So I am ahead of every other soul residing on Planet Earth today. When you look at it that way, it doesn’t sound so bad.

It’s not an intellectually difficult project. It is an EMOTIONALLY difficult project. Say that I were to get everything that I want by the close of business tomorrow. A reporter from the New York Times says that he wants to publish a ten-part series on the front page detailing the 40-year cover-up and describing all of the criminal stuff that we have seen and telling people about the amazing how-to implications of Shiller’s Nobel prize-winning research. Sounds pretty good for me. right? What would happen? We would see an economic crises, perhaps a Second Great Depression.

That’s what makes this so hard. My job as the person writing this up is to make the best possible case for Valuation-Informed Indexing. I should want the sentences to be hard-hitting. But, if they do their job of persuading millions of middle-class investors of the merit of following a research-based investment strategy, there are almost certainly going to cause an economic crisis. I don’t want to cause an economic crises! So there is a part of me that holds back, that doesn’t want to go there. I think that that’s true of everyone. We want to tell the truth. But, given the spot that the relentless promotion of Buy-and-Hold has put us in, we also do NOT want to tell the truth.

So it has been a hard journey. I think it will end up being worth it 50 times over, though. I doubt that there will be one person who will be wishing that we could go back to the Buy-and-Hold days once we have opened every site on the internet to honest posting re the peer-reviewed research. The transition is very, very, very difficult. But the end point will be well worth all the trouble.

Or so this fellow who often forgets to take his meds sincerely believes, in any event.

My best and warmest wishes to you and yours.

Rob

 

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

” My objection to your behavior comes when you try to limit what others can hear about these matters. You get to decide for you. I get to decide for me. Others get to decide for others.”

What behavior? You are the one blocking posts on your website. If you can do so, why can’t others block you? Why a double-standard?

“There is not one academic model for understanding how stock investing works. There are two.”

No, there are not just two. There are so many different models out there, but you only focus on two.

The only two models for understanding how stock investing works that are rooted in peer-reviewed research that I know of are Buy-and-Hold and Valuation-Informed Indexing.

There are opinions that are put forward that are not rooted in either of the two academic models. But I left the idea of going with opinion-based strategies behind me a long time ago. I was frustrated with the multiplicity of opinions on this subject and then I heard about Buy-and-Hold and how it is rooted in peer-reviewed research and I knew that this was for me. It was The Great Safe Withdrawal Rate Debate that caused me to switch from Buy-and-Hold to Valuation-Informed Indexing.

Most Buy-and-Holders are proud of the fact that their model is rooted in peer-reviewed research (at least according to their belief). That’s the reason why The Great Safe Withdrawal Rate Debate has been so contentious. When I questioned whether the Greaney retirement study contained a valuation adjustment, I was really questioning the entire Buy-and-Hold Model. I did not intend to do that at the time. I did not even realize that that is what I was doing. But you Goons got it from the first moment. Over time, I came to see that you were right. I was questioning the entire model.

I of course see that as a good thing. Even if it turns out that I am wrong and that the Greaney study really does contain a valuation adjustment after all, the questioning generated lots of discussion and thus supplied us all with an amazing learning experience. I view my famous post from the morning of May 13, 2002, as my finest moment. What I said should not have been so controversial. The obvious thing to do was just to check the study and to see if a valuation adjustment could be found in it. I think it would be fair to say that the Buy-and-Holders don’t want to do that. For obvious reasons.

We would not have seen one-hundredth of the reaction that we have seen had I questioned one of the opinion-based strategies. The people who follow those strategies wouldn’t have cared that there was someone in the world who followed a different one. The Buy-and-Holders believe in research and they very much want to believe that theirs is the only true research-based strategy. So my question posed a major threat to them. Again, that was not my intent. I just didn’t want my friends to suffer failed retirements. But that’s what happened. If Shiller is right, Buy-and-Hold tumbles to the ground. His research findings challenge the premise of the Buy-and-Hold Model — that market timing is not required because stock investing risk is stable, not variable.

Rob

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 don’t believe that any of us has sole possession of the truth. I believe that, if we all post honestly, the truth will reveal itself over time.”

What is it that you believe that people don’t already know? What information is not out there?

People need to understand that the value proposition of stocks is not constant but variable. Investing rationally means looking at the pros and cons of various stock allocations at a particular point in time and choosing the one that makes the most sense for someone in your particular circumstances. That process of thinking things through is cut off when investors come to believe that market timing is not required. Market timing is the act that permits reason to enter the stock investing project. That’s why the payoff for engaging in it has always been so huge.

There was a poster at the Bogleheads Forum who said: “No one would ever go into a bank and announce that ‘I will take three certificates of deposit please’ without first checking on the rate being offered. But that’s how all Buy-and-Holders make stock purchases. They don’t even check how the current CAPE level affects the value proposition of the thing they are buying before making a decision. I would like to see people making use of their reasoning abilities when buying stocks. To do that, they have to give up any aversion they feel to market timing.

Once every investor appreciates how important it is to engage in market timing, there will be mountains of material generated to help them do it effectively. There will be all sorts of good stuff available to us, things that we cannot even imagine today. We don’t today even appreciate what we are missing because so many of us have fallen for the line about market timing not always being 100 percent required and 100 percent beneficial.

Rob

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

https://www.fool.com/retirement/2021/07/07/how-to-retire-with-2-million-on-an-80000-salary/?source=eptyholnk0000202&amp;utm_source=yahoo-host&amp;utm_medium=feed&amp;utm_campaign=article

Just confirms success with buy and hold for the long term and then use a 4% SWR.

Articles like this will say something different after we have opened every discussion board and blog on the internet to honest posting re the last 40 years of peer-reviewed research in this field. Adding a Get Rich Quick/Buy-and-Hold component to a retirement plan adds nothing — it always subtracts by increasing risk and diminishing returns. The best thing to do is to Stay the Course. In a world in which valuations affect long-term returns, that requires market timing to keep irrational exuberance from getting out of hand.

The only thing holding us back today is the unwillingness of the Buy-and-Holders to say the words “I” and “Was” and “Wrong.” I have a funny feeling that, in the days after the next price crash, we will all be working together to encourage each other to engage in market timing (price discipline!) at all times and to keep irrational exuberance to a bare minimum.

We’ll see.

Rob