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 always come to the same conclusion.”

Which is that everyone else is wrong and only Rob Bennett is right. Got it.

My conclusion is that everyone else is human and Rob Bennett is human too.

I was a Buy-and-Holder once. I don’t say that I do not possess a Get Rich Quick urge within me.

And I kept my mouth shut re the error in Greaney’s study for three years. I engaged in the same sorts of rationalizations that Wade evidenced in those words of his that you quoted above.

But do the rationalizations get us anyplace good? It seems to me that they do not. Wade says in those words that you quote that he is a big critic of the 4 percent rule. That’s good. Has he gotten the Trinity study corrected with his approach? Has he gotten the Greaney study corrected? It seems to me that all that he has accomplished is to insure that Wade Pfau’s career is not destroyed by you Goons, that he can continue to turn a buck. That’s nice for Wade Pfau. It’s not so nice for the rest of the people living in the United States.

We all want the same things, Anonymous. Every single investor on the planet will be a Valuation-Informed Indexer sometime after we open the internet to honest posting. Not because we will force it. Not because we will silence those posting in support of Buy-and-Hold. Because the case is so strong. And people will look back then and ask “why did we think it was a good idea to ban honest posting even for a single day?” We all believe that the earth revolves around the sun now, do we not? That never would have happened had we never permitted honest posting by those who had taken a scientific approach to the problem and determined that those who insisted that the sun revolved around the earth were in error.

Everybody supports the laws against financial fraud and against extortion and against threats of physical violence. So it’s not just me. The only thing that is different about me is that I say that the laws that apply in all other fields of human endeavor should apply in the investment advice field as well. And, yes, I truly do believe that that is the way to play it. Why do I have a funny feeling that there is going to be universal agreement re that one in the days following the next price crash?

If no one agrees with me, why not just permit honest posting? How could it hurt you? The question answers itself. We only see criminal behavior used in defense of Buy-and-Hold because Buy-and-Hold is the only strategy that cannot be defended any other way. Buy-and-Hold purports to be research-based and yet Buy-and-Holders ignore the last 39 years of peer-reviewed research in all of their calculations. Huh?

It’s you who are saying that the laws of the United States should not apply in the investing realm. Those laws reflect our common beliefs as a people. It’s you who is saying that everyone else is wrong. You say that every time you engage in another criminal act. I am saying that we should uphold our social norms by enforcing our laws in the investing advice realm. I am saying that we should not abandon our social norms just because our Get Rich Quick urge is calling out to us. Get Rich Quick strategies are a snare and a delusion, in my sincere assessment.

Man-of-the-People 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 certainly believe that the Coronavirus matter is causing genuine economic disruptions. There are economic causes for the drop in stock prices that we have seen”

And that is why you won’t see a dime of the $500 million. There is always something to blame for the drops.

We’ll see.

I agree that there is always something to blame. That’s true of everything. There is always something to blame for anything.

The question is whether a drop in the CAPE value from 32 (two times fair value) to 8 (one-half of fair value) changes investor psychology. If Shiller is right that shifts in investor emotion play a big role in causing stock price changes (I believe that he is), then a change in the CAPE value from 32 to 8 is going to signal a huge change in investor psychology. Will an investor with a true portfolio value of $400,000 who for a time was led by the Buy-and-Holders to believe that his portfolio had a value of $800,000 and who is a short time later told that his portfolio value is only $200,000 become more open to hearing what the last 39 years of peer-reviewed research teaches us all about this important subject?

I believe that he will become more open. And I believe that that will make all the difference in the world. But we are just going to have to wait to see how it all plays out to find out for sure.

I naturally wish you all the best of luck with it, in any event.

Confident (At Least Reasonably So!) 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:

“If the CAPE value drops to 8 and then remains in that neighborhood for five yeas, people are going to start asking questions”

Why would they? There is always a named trigger. If the current environment drops more, it is blamed on the virus. You lose.

If the CAPE value drops to 8, I will be saying that the true value of each investor’s portfolio is two times its stated value instead of what I am saying today, that the true value of each investor’s portfolio is half of its stated value. I will be telling people that their portfolio is worth twice what the Buy-and-Holders are saying it is worth. That’s a big difference.

Most people hate the tactics that you Goons employ. That’s why we have laws against them. So why do they let you get away with all the garbage? It’s because they can’t stand thinking that their portfolios are worth only half of what they have been led to believe they are worth. So, even though they don’t like the abusive stuff, they tolerate it because at least it shuts that Rob Bennett fellow up.

Nothing that I say will be threatening to people anymore once prices have fallen. Get Rich Quick approaches don’t have nearly the same appeal after they have failed. And research-based approaches come to possess more appeal when people are able to see how they would have helped them if only they had had a chance to learn about them. People are going to be looking for people to blame after the next economic crisis. No offence, but I think you Goons are going to land at the top of most people’s lists.

But we’ll see, in any event. I do wish you the best of luck with it.

Rob

Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

Rob,

There you go just making stuff up, like the comment about 10%. All anyone has to do is read the comments section here and on your website to see the lack of support.

Just like other topics, your typical excuse is that people are too afraid to post here or on your website, but that is B.S. as anyone can post anonymously.

People can post anonymously. That certainly helps to address the fear problem. It does not entirely eliminate it.

Say that you are driving in the early morning hours and you come to a red light. Your eyes tell you that there is zero chance that you will get in an accident or get a ticket if you go through the red light. Do you go through it? Some people do. But many people do not. There is a Social Taboo against going through red lights. Social Taboos have a powerful effect on all of us, even when no one is looking.

There was a movie in the 1960s called “Guess Who’s Coming to Dinner?” It was about a liberal-minded couple whose daughter was dating a black man and she was bringing him to dinner to meet her parents. The liberal parents were 100 percent in favor of the civil rights revolution. There was no logical reason that they could come up with for why their daughter should not marry a black man. But they were uneasy with the idea. Why? Because there long had been a Social Taboo against inter-racial dating and marriage. It was in the process of being broken down and it is not nearly as strong today as it was then. But at that time it influenced the thinking even of people who 100 percent thought that black people were equal to white people. Social Taboos are hard to overcome.

There are lots of examples of this. It was considered a scandal when Rhett Butler said in Gone with the Wind: “Frankly, Scarlett, I don’t give a damn.” No one had ever said the word “damn” in a movie before. There was a Social Taboo being broken in that movie. That word and words worse than it are used in television programs today all the time. The Social Taboo has been eroded. But it took a lot of time to get from what we found acceptable then to what we find acceptable today.

I violated a Social Taboo when I put up my famous post pointing out that the retirement study posted at John Greaney’s web site does not contain an adjustment for the valuation level that applies on the day the retirement begins. If I was right about that (I was), then the study got the numbers wildly wrong and the lives of thousands of people at that site were damaged in very serious ways. So I did something very valuable for that community. But that’s not how most of the Buy-and-Holders felt about it.

Shiller changed our intellectual understanding of how stock investing works when he published his Nobel-prize-winning research. The Buy-and-Holders have been ignoring that research for 39 years now. So the question of whether it should be considered has become a highly sensitive matter. Speaking frankly about these matters just isn’t done. There is a Social Taboo against doing what I did.

You are saying that people could violate the Social Taboo anonymously and would not be required to pay a price for doing so. But humans are built so that we are careful not to violate Social Taboos even when there is no way that we could get caught. The censor lives inside us. I can give a personal example. On the day that I put forward that famous post, I still believed in Buy-and-Hold. I believed that the Buy-and-Hold retirement studies needed to be corrected. But I endorsed the strategy that produced those studies. That’s crazy. If the Buy-and-Hold Model caused retirement studies that get the numbers wildly wrong to be produced, there is something very wrong with that Model. I see that now. I did not see it them.

It has taken me 18 years of pushing back against the Social Taboo for me to work up the courage to say some of the things that I say today. I say today: “Market timing is 100 percent required for all investors, it is the key to long-term success.” I didn’t say that in the early days. In the early days, I used to say in an apologetic tone that I only advocate long-term timing, not short-term timing. That’s so. Short-term timing really doesn’t work. But over time I came to see that it is defensive to always feel a need to make that distinction. It is the Buy-and-Holders who have hurt millions of people by failing to distinguish short-term timing (which doesn’t work) from long-term timing (which is always required). So those of us advocating market timing have nothing to be defensive about.

There was a voice within me in the early days telling me not to be so blunt. It was my fear of violating the Social Taboo that generated that voice within me. To come to a better understanding of how stock investing works in the real world, I need to work up the courage to violate that Social Taboo on a daily basis. We all do. Our problems understanding how stock investing works are not intellectual problems. They are fears of violating the Social Taboo, concerns that we have that this one mistake that the Buy-and-Holders made has been covered up for so long that it is going to hurt a lot of people’s feelings if as a society we elect to begin permitting and encouraging open discussion of the far-reaching implications of Shiller’s Nobel-prize-winning research.

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 would make sense that we would both get $500 million. ”

It could become like the Oprah show.

“You get $500 million!!! And YOU get $500 million!!!!!! EVERYBODY gets$500 million!!!!!!!!!!!”

We are as a society in the process of making the transition from one model for understanding how stock investing works (Buy-and-Hold) to new model for understanding how stock investing works (Valuation-Informed Indexing). The new model obviously started out with only a small number of supporters. If it is over time going to become the dominant model (we should all want to see that in the event that it is the better model), then there will need to be rewards provided to the people who serve as pioneers in the development and exploration of the new model. Those pioneers naturally need to be well compensated for their work.

Over time, promoting Valuation-Informed Indexing will become more accepted and the compensation for doing so will of course be much less. If the first few pioneers get $500 million, then perhaps the next few get $100 million. Then the compensation will drop to $10 million. Then $1 million. And so on.

The hardest work is the early work. The hardest work receives the most compensation. That’s just common sense. Apple made a lot of money by being an early producer of smart phones. If someone came out today with the same phone that a number of years ago brought in millions for Apple, they would earn little for doing so. It’s those who make major advances who earn the big money.

“That’s how our system works, Evidence. I didn’t create the system. I think it is a good system. I support it. I am happy to have made a major contribution that I believe will lead to me receiving big compensation under this system, that’s all. I certainly offer no apologies for helping out millions of people in the way that I did. I personally wish that someone else had earned the $500 million so that I could have earned a far smaller amount with a lot less fuss and bother.

But things are what they are, you know? When I saw what had to be done and realized that no one else was interested in stepping forward and doing what had to be done, I pulled up my big boy pants and gave it my best shot. So here we stand. The more that I am compensated, the more people we will have signing the praises of Valuation-Informed Indexing in days to come. Which benefits each and every one of us. So I think it would be fair to say that I have earned the $500 million many times over.

My sincere take.

Multimillionaire (And One Offering No Apologies!) 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 see you have corrected your typo

“John Walter Russell did the math to determine what the true safe withdrawal rate was at the top of the bubble and showed that it was 1.6 percent.”

Do you have a link for that?

When I go to his website http://www.early-retirement-planning-insights.com/index.html I see “Even before the October 2008 meltdown, my latest research had lifted the Safe Withdrawal Rate to 6%.”

I am confident that, if I looked for a bit, I could find a link. But I don’t think it serves a good purpose for me to do that. We need to have John’s work available at every investing site on the internet. And we need to have the work of hundreds of people doing follow-up work available at every site on the internet. The obvious thing to do is to open every site on the internet to honest posting and then just reap all of the benefits that would obviously follow from doing so. That’s all upside and zero possible downside.

If as a society we want to know how stock investing works, we will know. If as a society we do not want to know how stock investing works, we will not know. We are going to decide this matter as a society. It’s hard for us to do that at a time when stocks are priced at two times their fair value. Our Get Rich Quick urge interferes with our ability to think clearly, just as drinking large quantities of alcohol interferes with our ability to drive a car properly.

I believe that the next price crash, as horrible as it will be in terms of bringing on vast amounts of human misery, will help more of us to see the downside of following a pure Get Rich Quick/Buy-and-Hold approach. We’ll see. In the interim, I am going to do what I can to help us all make the transition. I am going to continue to speak in favor of the idea of opening every discussion board and blog to honest posting. About 10 percent of us have shown the ability to appreciate the dangers of Buy-and-Hold even at a time when stocks are priced at two times their fair value. So it is obviously possible for more of us to do so if the 10 percent who appreciate this today work up the courage to share our honest thoughts despite the huge amount of resistance they encounter. And I am going to finish work on a book that I believe will help us all to come to terms with what we have done to ourselves when we are as a society more open to the idea of coming to terms with that portion of our history.

I hope that that helps a small bit. We all want the same things deep down. We are all on the same side.

My best wishes to you, Evidence.

Forward-Looking 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:

Given Shiller’s visibility, he would not be afraid to say anything. In absence of his comments, one can only assume he does not agree with you.

We had a civil rights revolution in this country in the 1960s. Do you believe that in the early days of that struggle that every leader who enjoyed the same level of visibility that Shiller enjoys today spoke openly about his true beliefs re the situation? I do not.

Do you think that every person who enjoys visibility in Hollywood spoke openly about concerns they had re the behavior of Harvey Weinstein? I do not.

Do you think that every scientist who believed that smoking causes cancer spoke openly about their beliefs before it became safe to do so? I do not.

Death threats affect people. Demands for unjustified board bannings affect people. Threats to get academic researchers fired from their jobs affect people. That’s why we have laws against those things. That’s why you Goons employ those things as tactics.

We are as a nation standing on the threshold of achieving the biggest economic advance that we have ever achieved in our history. We are going to make it. But we need to work up the courage to stand up to you Goons to pull it off. I think that we will make it in the days following the next price crash. At that point the price of not speaking up will be so clear that a larger number of us will work up the courage it takes to stand up to your abuse. From that point forward, it will be all downhill sledding.

It will be interesting to see how it all plays out.

Progress-Loving Rob

Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

Just more of the same nonsense, Rob. Where are your supporters? Why are they not commenting here or on your board? Why have people stopped speaking with you?

I believe that we will see a different reaction to this sort of thread in the days following the next price crash than we are likely to see today.

We’ll see.

Rob

Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

Let’s talk about real numbers, Rob.

In 2002, you quit your job and stated that you had a nest egg of $400k and annual expenses of $30k. You stated you were invested in i bonds, TIPS and CDs. On many occasions, you quoted a real return rate of 3.5%. In 2005, you stated that your expenses were up to $38k, but that the market was returning 7% real and you would be getting bigger returns than that. After 17 years, you have stayed out of the market, so we know your plan failed. You are a shining example as to why you shouldn’t try to time the market. To this day, you refuse to answer the question as to why anyone should take YOUR advice, given your failed track record.

Like all the other humans, I was given skills that permit me to add value to the world. It is by being compensated for the value that I add to the world with those skills that I am able to cover my costs of living and pursue happiness for myself and my family. Following the principles that I describe in my book “Passion Saving: The Path to Plentiful Free Time and Soul-Satisfying Work,” I elected to leave my safe corporate job to do work that would pay less in the short term but that had the potential to permit me to add much more value and thus earn much more income in the long term.

That plan worked like a dream, Sammy. In the short-term, it worked horribly. I have not earned a penny since I left my job. That’s of course a catastrophe. But look at the other side of the ledger — look at the value that I have added to the world that will bring in compensation in the days following the next price crash. The shift from Buy-and-Hold to Valuation-Informed Indexing is the biggest advance in the history of personal finance.

It changes everything that we once believed we knew about how stock investing works. In the Buy-and-Hold days, we thought that market timing was a bad idea. As a result of our explorations of Shiller’s research findings. we now know that market timing is the key to long-term investing success. The peer-reviewed research that I co-authored with Wade Pfau shows that investors who incorporate market timing into their investment plan can thereby reduce the risk of stock investing by nearly 70 percent! While increasing their lifetime returns! Is that investor heaven or is that investor heaven?

And all of this is rock-solid stuff. Shiller was awarded a Nobel prize in Economics for his work. We should have been talking about this going back to 1981. We haven’t been because the advance is so big that it caused us to experience a large amount of cognitive dissonance. And, as the years have passed, the embarrassment felt by the Buy-and-Holders over making a mistake re the critical importance of market timing has grown to a point where many of them cannot stand the thought of people openly discussing what really works.

What does a society need in circumstances like that? A good journalist to get the word out! That’s what I am! That’s what I do! I am in the process of getting the word out. I wish that I had been getting compensated all along, in which case I would be a multi-millionaire today. But the abusiveness of you and a number of other Buy-and-Holders, which is the only thing holding me back, is not evidence that there is not a mountain of money to be made here. It is evidence that the mountain is so huge that it is hard to comprehend how huge it is.

Did you notice how excited Wade was in the days when he was doing research on Valuation-Informed Indexing? Those were the happiest days of his life. There are thousands of researchers who would like to experience that feeling. And there are thousands of journalists who would like to be writing about this stuff. And there are thousands of investment advisers who would like to be giving the straight story to their clients. And there are thousands of policymakers who would like to be pursuing policies that would help us all avoid economic crises like the one that we experienced in 2008 (that Shiller predicted in a book published in March of 2000). We are looking at good stuff piled on top of good stuff piled on top of good stuff piled on top of good stuff.

What’s holding us back? Why haven’t we cashed in all these mountains of good stuff?

We are afraid. Because we don’t see other people talking about this stuff. We wonder if, given the lack of discussion of the implications of Shiller’s research, we might be thinking about this stuff wrong. Wade told me that he experienced that exact feeling. I experienced that feeling at one time. John Walter Russell experienced that feeling. Everyone who begins pondering these ideas experiences that feeling. We see a mountain of gold in front of us and it is hard to accept that it is real and it is hard to understand why everyone else is not picking up the gold that has been sitting there for 38 years now. It is not the norm in our society for wonderful new ideas not to be widely discussed. But that’s the situation in the investment advice area since 1981. So we are in great need of a journalist to break this one wide open and to help millions of people live better lives by doing so.

And here I am, you know? That’s the job. It’s been a rough patch of road. These 17 years have been hard, hard, hard, hard, hard. I certainly don’t say different. You’ve got me on that one. But look at the asset that I have built up over those 17 years. I am in the process of writing a book (“Investing for Humans: How to Get What Works on Paper to Work in Real Life”) that tells the entire story in great depth. I expect to see that book change the world in a very positive way.

Not immediately. My expectation is that virtually no one will read it for so long as stock valuations remain where they are today. But what about after the next crash? I expect that at that time there will be millions of people who will want to know what happened to most of their life savings. And I will be able to tell them the story they want and need to hear in great depth. And tell them how we can all work together to be sure that nothing like this ever happens again.

That’s my life’s work, Sammy. That’s what I was put on earth to do. I have pulled off something amazing. In ordinary circumstances, I shouldn’t have been able to make one-five-hundredth of the contribution that I have made. Which would of course have meant that I would not have received one-five-hundredth of the compensation that I will receive. I don’t have that money in hand today. I don’t have one penny of it in hand today. But I have the asset that adds to the happiness of millions of people in hand. And I had to be willing and able to give up compensation for 17 years to acquire that asset. So I did what I had to do.

I say that my plan worked beyond my wildest dreams and hopes. I don’t like the way that things played out. If I were king of the world, we never would have seen a single abusive post. But I didn’t create the circumstances in which the things that happened happened and were tolerated at many, many places. All of those circumstances were in place before I came on the scene. My job is to provide people with the information that they need so that we can all work together to change the circumstances that prevail so that we can all live better lives. I am in the process of doing that.

Shiller’s research is important, Sammy. That’s why he was awarded a Nobel prize. I don’t think you are going to be able to hold back the History Train forever. I think you are fighting a losing cause. I would say that it is YOUR plan that has failed. But we are just going to have to wait to see how things play out in the days following the next price crash to find out for certain.

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

Wildly Successful But Poorly Compensated (For Now!) Journalist Rob

Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

Rob,

You have been pushing this story for a long time. Shiller even warned that you shouldn’t use CAPE to time the market. It is bad enough that you have been misleading people with your crash predictions that have failed time after time.

Look at how this has impacted you. In 2002, you posted your retirement plan in which you had a nest egg of $400k invested (as you claim) in i bonds, TIPS and CDs and your spending budget was $30k/ yr. You have reported a real return of 3.5 percent (which is probably even embellished based on other comments you made. You made several other statements that you would be transitioning into stocks along the way. In 2005, you provided an update that your spending was up to $38k, which is a large percentage increase over the 2002 budget. You told people that you were not concerned because the market returned 7% real and that with your VII strategy, you would get a return in excess of the 7%. It has now been 17 years since the launch of your 2002 plan. Your VII strategy has kept you out of the market and you have missed out on the large gains. You have acknowledged that you now have to return to the job market. Clearly, your plan with VII failed. Even if there was some huge drop today, your nest egg has deteriorated, so there is not much left to put back into the market. It is just simple math, but as you say, you are not a math guy.

All of Shiller’s work supports market timing. If the market is efficient, as was widely believed when Buy-and-Hold was being developed, timing is not required and it is not even a good idea because stock investing risk is constant over time. But if valuations affect long-term returns, as Shiller showed, then stock investing risk is not constant but variable. In that case, timing is required for all investors seeking to keep their risk profile roughly constant over time.

Shiller has advocated market timing on several occasions. He was clear as clear can be in 1996. He said that investors who stuck with their high stock allocations despite the high prices that applied at that time would live to regret it within 10 years. If that’s not advocating market timing, I don’t know what is.

However, Shiller did make an offhand comment in an interview he did a few years ago in which he suggested that he no longer believes in market timing. I very strongly believe in market timing. I think it is the key to successful long-term stock investing. And it is the key to stabilization of the economy. Market timing is price discipline. A market in which price discipline has been removed is a market that is on its way to collapse. And, when the stock market collapses, so many people lose so much spending power that the economic system always collapses as well. So I strongly advocate market timing.

Is it possible that Shiller no longer supports market timing? I can’t entirely rule out the possibility given that he did make that one off-hand comment that suggested he was experiencing doubts. I want to know more about Shiller’s views on this question and about the views of hundreds of other experts in this field. We need to have a national debate on this question. What does Shiller really believe? Why does he believe that? What do others believe? Why do they believe that? John Bogle once came within an inch of endorsing Valuation-Informed Indexing, which of course is all about market timing. If Shiller now no longer believes in market timing and Bogle before his death had come a long way to endorsing it, we all need to be reconsidering the question until our thinking is clearer.

I would be a multi-millionaire today if it were not for the abusive posting of you Goons. I mean, please give me a break. There is huge interest in this stuff. I have had hundreds of people tell me that I am the first person who has written about stock investing in a way that makes complete sense. Say that that is 10 percent of the population. That’s millions of people. I have a funny feeling that I will have no problem bringing in a mountain of money after prices have crashed and I am able to reach all of the people who want to learn more about how stock investing works in the real world. My plan hasn’t failed at all. I saved like a madman in earlier days because I wanted to be able to do work like this and not need to worry about money coming in immediately and that plan has worked like a dream. I haven’t cashed in yet. But if you go by the 200 rave endorsements on the home page of my web site, I think it would be fair to say that things are looking very good.

I think that LOTS of people will be making money doing this in the days following the next price crash. If valuations really affect long-term returns (Shiller was awarded a Nobel prize for his work), then any investment strategy that does not call for market timing is dangerous. A strategy that does not call for market timing is a strategy that does not call for price discipline. Huh? Price discipline is wonderful. Price discipline is what makes markets work. I believe that Valuation-Informed Indexing is the future and that Buy-and-Hold is the past.

I believe that launching a national debate on this stuff will end up helping every investor on the planet in a very big way. The key is getting the Buy-and-Holders to acknowledge at least the possibility that they made a mistake re market timing. I love that the Buy-and-Holders recommended using the peer-reviewed research to guide one’s investment strategy. But it’s just a reality of the scientific process that no finding is ever the final say. We are always in the process of learning new things and I believe that the last 38 years of -peer-reviewed research in this field is amazing stuff. We need to be talking about it at every site on the internet.

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

Rob