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

So you think that after the next economic disaster hits, the internet will become a kinder, gentler place. Wow.

In the investing realm, yes.

There’s a saying that “pride comes before a fall.” The discussion board community that now goes by the name “Bogleheads Forum” used to go by the name “Vanguard Diehards.” There was a lot that I related to in that name. I like fighters. That name suggests that the community was a group of people who were willing to fight for what they believed. You Goons fight. I like that about you. I have often wished that some of my Valuation-Informed Indexing friends had a bit more fight in them. There are positive things to be said for being a fighter.

But there are also negative things to be said about being a “diehard.” Diehards are arrogant. Diehards are not willing to admit mistakes. Diehards are not willing to listen carefully to others even when they are making good point and diehards thereby often miss out on wonderful learning experiences.

The Buy-and-Holders have engaged in corrupt acts. It doesn’t follow that they are corrupt through and through. I think that the Buy-and-Holders are good and smart people. They made a mistake. They got caught up in something bigger than them. They got caught in a trap. So what happens when they see the ocean of human misery that we all are going to see appear before us in the event that Shiller is right and we all experience a 50 percent price crash?

They are going to feel anguish when they see that. They are going to wonder if they got something wrong. Their hearts will soften a bit, Their minds will open a bit. They are going to be willing to entertain questions that today they are not willing to entertain. And we only need a little bit of an opening at this point to bring on a flood of powerful insights about how stock investing works in the real world. We are all going to enjoy 37 years of powerful advances in the space of a few months. There is a mountain of pent-up energy that will be put to work helping us all figure out this stuff. We will all be working together. There will be no more nastiness or friction.

You seem to think that because the Buy-and-Holders have closed minds today that they will always have closed minds. I just don’t see it. Their minds are closed today because they cannot bear the thought of looking at all the pain they have caused in the event that Shiller really is right. It’s an unbearable thought and so they shut it down. But there’s not going to be much point in shutting it down once we experience the crash. Then the ocean of human misery will be standing there before us. You can’t deny it when it is being written up in the newspaper each morning. At that point the defenses just get broken down and you are willing to look at what you need to look at to make the pain stop.

I have many times made the comparison between Buy-and-Hold and alcoholism. An alcoholic knows that he is ruining his life. It is foolishness to point out to him how self-destructive his behavior is because he knows that 50 times better than you do. He doesn’t want to face the problems. He doesn’t want to learn how to live without alcohol. That is his driver. There’s no logic to it. The behavior is 100 percent irrational. Alcoholics are diehards.

Now —

There’s a thing called “hitting bottom.” When an alcoholic hits bottom, he often changes. He gives up the rationalizations. He attend AA meetings. An alcoholic who hits bottom and develops a desire to change can become an amazingly productive person, a more productive person than he would have been had he never been an alcoholic in the first place.

If you believe that the Buy-and-Holders got into this with good intentions, as I do, then it follows that the most diehard Buy-and-Holders are going to become the most diehard Valuation-Informed Indexers after the crash. They truly believe in research, The last 37 years of research supports Valuation-Informed Indexing. The Buy-and-Holders are going to reconnect with their research-believing inclinations in the days following the next price crash, when the human misery that appears before their eyes forces them to reevaluate their belief that there is no need to practice price discipline when buying stocks.

I believe that investing boards and blogs will become kinder, gentler places in the days following the next price crash. I have some fears that there will be people attacking the Buy-and-Holders in those days. I am going to do everything in my power to stop that sort of thing. I think that would be a tragic mistake. My job is to pull us all together, to help us all see that we all benefit when we learn new things about how stock investing works. I believe that it can be done. And I believe that in many cases it will be my Buy-and-Hold friends helping me make it happen.

I believe that a good number of you Goons will flip eventually. You might be the last group to flip. I could see that being the case. But I could see you flipping eventually. I could see us working together in the days following the crash. Please consider the hill-and-valley pattern that stock prices have been following since the day the market was formed. Prices don’t start heading upward again until every last Buy-and-Holder gives up on Buy-and-Hold. You could never get to a P/E10 of 8 unless every last Buy-and-Holder gave up the fight. Have you considered how crazy it is for an entire nation to value its portfolios at half of their real value? It’s insane. More insane than the prices we see today. If that is going to happen again, as it has happened in the wake of every bull market that we have ever seen in history, it’s going to be because every last Buy-and-Holder has given up the fight. That includes you Goons.

So, yes, I think that our boards will be kinder, gentler places in the days following the crash. They will be sadder places too. People will look at the ruin we have caused and feel terrible about it. But you know what? We will get past that. We will eventually stop focusing on the ruin that we have caused and begin looking forward to all the good we can do by opening every board and blog to honest posting. And then we will return to the original Buy-and-Hold idea of using research to make ourselves better long-term investors. And then we will all be energized for the future.

It all comes down to what you think of the Buy-and-Holders. Do you think that they are good but mistaken re one key part of the investing story? Or do you think that they are corrupt and evil and stupid through and through? I believe that my Buy-and-Hold friends are good but mistaken on one key point. So I think that we can turn it all around in the days following the crash. I obviously wish that it were not necessary for us to live though a crash to get there. I now believe that that is the case. But, yes, I do believe that our boards and blogs will be kinder and gentler and more intelligent and more life-affirming places in those days.

Goon stuff is always going to be popular when prices are where they are today. I don’t believe that it will be so popular after a crash wipes out the retirement hopes of millions of middle-class people.

You may say that I’m a dreamer….

Dream-Believing 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 USED to try. Now you’re hiding under the bed, looking for your Big Boy pants. Because you can’t handle rejection. But you’ll be back, as soon as you find a site with nice people who always agree with you.

Good luck with the internet, Rob.

The internet has the potential for great good, Anonymous. Please remember that I was a Buy-and-Holder on the morning of May 13, 2002. I obviously am not that today. A lot of the things that I learned that caused me to lose confidence in Buy-and-Hold and to gain confidence in Valuation-Informed Indexing I could not have learned but for the internet. You don’t learn new things by sitting in a room thinking up great thoughts. You need to interact with others. I have interacted with thousands of people that I could not have interacted with but for the internet. I am grateful for those learning experiences. I am grateful for the internet.

You are right, though, that the internet has a dark side. The mob rule stuff is not appealing and that sort of thing takes place more on the internet than it does in other communication mediums. I have seen a lot of the mob rule stuff. I have seen the dark side of the internet up close and personal.

What happens after the crash? It would not surprise me if the mob rule stuff turns in the opposite direction, if people become so angry over the losses that they have suffered that they go after the Buy-and-Holders in a mindless way. I obviously want no part of that. I want people to learn why Buy-and-Hold is flawed. I don’t want people to go from one emotional extreme to another. Maybe I will always be the man on the outside, you know? Maybe if you don’t go emotional, you cannot develop a following on the internet. I hope that’s not so. It’s possible that it is. If it is, there’s nothing that I can do about it. I have to be what I am.

I think that what may happen is that I will team up with Buy-and-Holders after the crash. I obviously don’t agree with Buy-and-Holders on valuations. But I very much relate to their basic approach to investing questions. The Buy-and-Holders were trying to develop a rational, research-based strategy. I think they were sincere about that. I cannot prove it, I cannot see into their minds. But everything that I can see points in that direction. So I think there is a natural kinship between the Buy-and-Holders and me. I think they made a mistake, I think they got caught up in something bigger than them. But I also believe that deep down inside they want to get it right. I believe that, following the crash, they are going to reevaluate their positions and I will probably be someone taking the side of the more open-minded Buy-and-Holders over the side of any mobs attacking them because of losses they have suffered.

If everything was mob rule left, right and center, we wouldn’t have Buy-and-Hold. You say “good luck with the internet.” Someone could have said to Bogle when he was starting out “good luck with a research-based investing approach” or “good luck with a focus on the long-term” or “good luck with persuading people that they don’t need to pick stocks” or “good luck with low fees.” I think that Bogle has been proven right about a lot more things than the number of things that he has been proven wrong about. And yet Bogle has been extremely successful in persuading people of the merit of his investment strategy. So it is not always mob rule that prevails.

Mob rule is about emotion. That is part of what humans are. We are emotional creatures. And that does us in sometimes. Mob rule hurts us in the investing realm and in lots of other realms too. But it is a mistake to conclude when mob rule hurts us in some way that all we are is mob rule. Mob rule holds us back from achieving the potential of the internet. But there’s a lot of good on the internet. So mob rule is not the entire story. I believe that it is possible to use the internet to do good. I believe that it is cynical to believe that mob rule is the entire story of the internet.

That’s my take, Anonymous. We are just going to have to wait to see how it plays out to know for sure. I am not capable of playing it any other way, in any event. So all that I can do is to give it my best shot. You are right that I have been hurt by rejection. You are not right to say that I cannot handle rejection. I have handled more of it than anyone else alive. I have done amazing things in the face of a mountain of rejection and still kept getting up and rushing in for more. So I offer no apologies. But, yes, there comes a point where the relentless rejection hurts. That is so. I wish that I were Superman. But I am not.

But I think that there are a lot of good people in this world who will be happy to help out when conditions change. And I think that conditions will change after we all experience a 50 percent price crash. I think that experience is going to change the thinking of millions of people and that people are going to want to find out where their hopes for a decent retirement went. And I believe that the materials at this site will help to provide them some answers. I believe that I will be able to tell them both where the Buy-and-Holders got it wrong and where the Buy-and-Holders got it right. It is my intent to tell a balanced story and I believe that there is going to be a great need for that in the days following the crash.

I see a happy ending to the story. Now the full reality is that I would almost have to see a happy ending or else I couldn’t get up in the morning, you know? I think we humans build narratives that help us cope with the circumstances in which we find ourselves and sometimes those narrative are right on and sometimes not so much. That’s my narrative. I believe that as a society we are very close to making some amazing advances in our understanding of how stock investing works. I have seen some very smart people enjoy the click moment re this stuff and it is very gratifying to see that. I want to see that with millions. And I think we are close to making that happen. So it is my intent to soldier on and wait for that change in attitudes that we need to see to travel together to the other side.

We’ll see, you know? That’s the best that I can offer you. Either it will happen or it will not. I am not a mob rule kind of guy. So I cannot be part of a mob cursing Buy-and-Hold any more than I can be part of a mob praising Buy-and-Hold. That’s just not in me. I am a guy who wants to take the good out of it and make sure that that lives forever while wanting to leave the bad — which can end up ruining the good if not addressed — behind. Time will tell the tale. Mob rule is a real thing on the internet. But it is not the only thing. It is certainly not my thing. I think that I can overcome it. I certainly hope so. But we are just going to have to wait a bit to find out whether I am right re that one or not.

I hope that helps at least a tiny bit, my mob-rule-embracing friend.

Rejection-Damaged 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 wonder how the idea entered my head that you were seeking something from me.”

You are the one telling us that you want full access to any board on the internet. Thus, the often given recommendation of you getting the help of a mental health professional was proposed once again. This is the key towards you getting the resolution you need. With proper help, perhaps you will then know how to behave and access can reopen for you.

I certainly want full access to every board on the internet, Anonymous. I don’t want that just for me. That benefits everyone. And of course I want to see every other person who wants to post at our boards to have full access to every board. About 10 percent of the population of investors holds doubts about Buy-and-Hold. I want all of those people posting. And I of course also want the 90 percent that has full confidence in Buy-and-Hold to be posting at every board as well. I enjoy hearing from people who agree with me. But I usually learn more from people who do NOT agree with me.

If I need help from a mental health professional because I believe that people with different views should all be allowed to post, then all of the owners of the sites need help from a mental health professional too. Every site that I have visited permits people with different views to participate in the discussions. No, the rules are not always administered properly. Most site owners are Buy-and-Holders; that biases them. And even the few who are not Buy-and-Holders don’t want to alienate the 90 percent of their potential readers who are Buy-and-Holders and thus are reluctant to permit Buy-and-Hold to be challenged too forcefully.

I offer zero apologies for my behavior, Anonymous. I am very proud of my work and I have gone to a lot of effort to respond to as many questions as possible at every board that I have visited. If I held back on stating my beliefs about how stock investing works just as strongly as I hold them, I would feel that I was letting the community down by failing to do my part to make the discussions diverse and spirited and provocative. I want the discussions to be friendly and respectful as well, to be sure, and so I make great efforts to praise the efforts of my Buy-and-Hold friends to argue their case forcefully as well. But I hope that I don’t pull my punches in stating the case for Valuation-Informed Indexing. And I don’t think it would be at all a good idea for me to begin going down a road where I would do that in return for being able to post again at the numerous sites that I love that have banned me.

Your suggestion that there might be some arrangement that I could agree to that would permit me again to participate in communities for which I have a deep affection exerts a tiny bit of pull on me only because my love for those communities is real and deep. But if I agree to post views other than those I hold, I would be betraying those communities rather than helping then. That possibility of course holds no appeal at all.

There is not one school of thought as to how stock investing works in the year 2018, Anonymous. There are two — Buy-and-Hold and Valuation-Informed Indexing. I am a Valuation-Informed Indexer. I have to post like one or not post at all. It breaks my heart to think that another day might pass in which I will not post at all. But it would break my heart worse to betray my fellow community members by pretending to be something that I am not. I am not a Buy-and-Holder. I am a Valuation-Informed Indexer. That has to show in my posts. I hold different views on how stock investing works from those held by my Buy-and-Hold friends. How could that not influence my posting?

There is no problem with my behavior. The problem is the hyper-sensitivity of some Buy-and-Holders. Every poster should be posting what he or she sincerely believes about whatever topics it is that he or she is addressing. Those who are made uncomfortable in some way by my posts of course have every right in the world not to read a word of any of them. That’s obviously so. But they do not have a right to decide for others what those others can read by banning posters who make a forceful and unapologetic case for Valuation-Informed Indexing.

I want to see Valuation-Informed Indexing grow in popularity. It is shocking to me that the concept has won over only about 10 percent of investors in the 37 years since it was born with the publication of Shiller’s “revolutionary” (his word) research findings of 1981. I think it would be fair to say that a big part of the reason why progress has been so slow is that most Valuation-Informed Indexers have been pulling their punches for 37 years so as not to annoy their Buy-and-Hold friends. Not this boy, you know?

I want the ideas to spread. I don’t want to pull punches. I have zero problem seeing the ideas not catch on if that happens despite my best efforts to explain them carefully. But I have a big problem with behaving in such a way as to make it likely that the ideas will not catch on until after we experience another price crash, at which time it will be too late for many of my fellow community members to protect themselves from its effect. I have to do my part. I have to post honestly. I have to argue the case forcefully. I have to answer questions carefully. If I do less than that, I am responsible for the board at which I am posting failing to achieve its full potential as a learning resource. Yucko, you know? That’s not me.

I hope that helps a tiny bit.

As always, I wish you all the best that this life has to offer a person, my dear Buy-and-Hold friend.

Non-Apologetic 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:

“Does Shiller believe that we will be returning to fair-value P/E10 levels in the not-too-distant future?”

He did in 1996. Wrote a whole paper about it. And he gave himself ten years to be proven right. But he was still wrong. So now he won’t answer that question. Maybe that’s why you like him so much. You never answer questions either. Because you believe if you never answer a question, you can never be proven wrong. When’s the last time you provided even a hint of new information about VII, or your financial situation, or your family, or anything else?

You won’t answer that, so I will. It’s been many years.

I agree that Shiller was proven wrong re his 1996 prediction.

I still believe that he has a lot to offer. I believe that he has a mountain of good stuff to offer. I believe that he merited the Nobel prize that he was awarded.

I believe that every person who has money to invest should be informed that Shiller got that prediction wrong. I think it is an important fact and that people need to know it. Some will decide not to follow Shiller’s advice as a result. That’s their right. Each person gets to decide how to invest his or her own money. If people want to decide that the one thing that Shiller got wrong is more important than the many important things that he got right that no one else got right, it’s up to them.

I think that Greaney got the safe withdrawal rate wrong. And I think that people need to know that too. And it’s not just Greaney. The authors of the Trinity study also got the SWR wrong. And Bogle got it wrong indirectly. He allows his name to be used at a discussion board that encourages people to use the old safe-withdrawal-studies to plan their retirement even though it has been public knowledge that those studies do not contain valuation adjustments for 16 years now. Bogle has not spoken up about this or taken steps to remedy the situation. That’s a wrong that Bogle has committed that is 500 times worse than the mistake that Shiller made, in my assessment. Shiller doesn’t deny his mistake. People can learn from it. Bogle hasn’t even acknowledged his mistake in failing to speak up about the errors in the Buy-and-Hold retirement studies for 16 years now.

We all make mistakes. Shiller has made them. Bogle has made them. I have made them. You have made them. The trick is to LEARN from our mistakes. That’s how we get better at things over time. Shiller presented us with a wonderful opportunity to get better at stock investing 37 years ago. To a large extent we have squandered that opportunity because speaking clearly about what we learn from Shiller means pointing out that our Buy-and-Hold friends got some important things wrong back in a day when not all the research they needed to become fully informed was available to them. I think that’s unfortunate, as unfortunate as unfortunate can be.

I think it comes down to this, Anonymous — Did our Buy-and-Hold friends want to get it right when they started out? I think they did. I think they made a mistake. And I think that, if they were thinking clearly, they would have wanted to correct that mistake as soon as they learned about it, 37 years ago. I think that those of us who love the Buy-and-Holders for all of the amazing contributions they have made should be doing all in our power to help them find their way back to a better path as soon as possible. Our Buy-and-Hold friends want to help people and we all should be helping them get back to a path where they can do that again.

Shiller is a flawed human. But he also is a great human. Bogle is a great human. But he also is a flawed human. It’s only when we recognize both sets of realities that we can engage in positive learning experiences that permit us all to live better and richer lives from that point forward.

That’s my sincere take re these terribly important matters, in any event.

I naturally wish you the best of luck in all your future life endeavors, my dear Goon friend.

Mistake-Prone (and Mistake-Acknowledging) 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:

The premise is wrong and represents deeply flawed thinking. There will always be some kind of back-tested approach that ‘worked in the past’. it is logically impossible to show that long (or short) timing ‘doesn’t work’. There was always something that worked.

Either the premise of Buy-and-Hold is wrong or the premise of Valuation-Informed Indexing is wrong. It is a logical impossibility that both are right since the two premises contradict each other (it’s not possible that price changes are always caused solely by economic developments and also sometimes caused at least in part by non-economic psychological factors, it’s not possible that investors as a whole are always 100 percent rational and that investors as a whole are also sometimes highly emotional).

It’s natural that you would think that my premise is wrong and that it represents deeply flawed thinking. You believe in the opposite premise. You couldn’t believe in the opposite premise without thinking that my premise is wrong and represents flawed thinking. But of course the same is true coming from the other direction. I couldn’t believe in my premise without thinking that your premise is wrong and represents flawed thinking. The premise that one holds to determines one’s take on every stock investing question. We are essentially living in different worlds, speaking different languages.

The question is — What to do in such circumstances?

We could refuse to speak to each other. We could say “that guy says weird stuff, even his language is messed up, I am not going to have anything to do with him.” From the perspective of the person holding the premise, doing that makes a lot of sense. There are people talking about this sort of question in the political realm. They are saying that Trump supporters and Trump detractors disagree on fundamental questions and cannot get along and that they thus should not even try, they should just limit their communication to others in the same tribe and ridicule and dismiss anything they hear from people in the other camp. It is unsettling to hear ideas expressed that one does not believe in.

I do not at all think that this is the right way to go. I have sympathies for some things that Trump supporters say and I have sympathies for some things that Trump detractors say. I think there are good people on both “sides.” I put the word “sides” in quotes because I believe that all of us who live in America are on the same side, we all need to try to learn from people with different views and work with them to build the best country we can build. It’s hard sometimes. It’s confusing sometimes. It’s unsettling sometimes. But it works. I think that making an effort to understand where the other fellow is coming from pays huge dividends down the line. Personally, I believe that it is probably the only thing that works in the long run. None of us know it all, Just when we think we have it figured out, something unexpected comes along to throw us. Often it is the disparaged “Other” who possesses the background needed to come to terms with this unexpected development and it is only by listening to what the disparaged “Other” says that we shape ourselves into our best possible selves.

I agree that it is not possible to show with absolute certitude either that long-term timing works or that long-term timing doesn’t work. We are not Gods. We really don’t know anything with absolute certitude. And in this case our knowledge is particularly limited. We don’t have the amount of data that we would need to feel 100 percent confident of either position. We don’t disagree re that one (although I think it would be fair to say here that you ACT as if you believe you possess perfect knowledge when you demand that those who express views rooted in a different premise than the one you subscribe to to be banned from our boards and blogs — please note that I do not demand that Buy-and-Holders be banned).

We cannot wait until we have perfect knowledge. We need to make some decision as to how to invest our money TODAY. We would like to have perfect knowledge but we do not possess it. What to do?

I say that we should let both sides speak. That’s what the published rules of every site say. That’s what the laws of the United States say. That’s what our social norms say. I believe that that is the way to go.

That’s not the way we have gone as a people over the past 16 years. You have prevailed in your efforts to get the views of those holding the minority point of view suppressed. In some cases you have out-and-out banned them. In other cases they took note of what happens to people who express the minority view in clear and firm terms and adopted a policy of self-censorship so that they could continue to speak in a halting and vague and limited and apologetic way. That’s not the path that I have chosen. I have insisted on my right to speak honestly and I have gotten banned at the demand of those holding the majority point of view.

That’s where things stand, Laugh. You think my premise is flawed. I think your premise is flawed. You are in the majority, I am in the minority. Our social norms, reflected in our laws and in the published rules of all of our boards, say that the minority has a right to express its sincere views without hesitation or vagueness. Those social norms have not been reflected in the decisions of site administrators. I think those site administrators made bad calls. I think they hurt their sites by shutting down the clear expression of the minority point of view. I think that, once a board shuts down the expression of a minority point of view supported by 37 years of peer-reviewed research and a Nobel prize in economics, that that board becomes a corrupt entity. I don’t want to play a role in corrupting our boards. I want them to achieve their fullest potential. I don’t think they can achieve their fullest potential until then come to reflect our social norms and our laws. I think that it is only when every community member feels free to express his or her sincere views that our boards can do the good that they were set up to do.

You are the “Other” to me every bit as much as I am the “Other” to you, Laugh. I disagree with your views on how stock investing works. But I do not want to limit your ability to express your views (I of course DO want to limit your ability to violate the laws of the United States, which is not at all the same thing — the laws of the United States limit what you can do to block others from speaking, they do nothing to limit your ability to express your own views honestly). I do not dislike you. I view you as a friend. I view you as someone who happened to live through different experiences than me and who as a result came over time to believe that Fama’s research is legitimate and Shiller’s research is not while my life experiences caused me to believe that Shiller’s research is legitimate while Fama’s research is not.

Is it unsettling for someone who believes that Fama’s research is legitimate and who has his retirement money riding on that belief to hear that there are people who do not believe that? Sure. The reason why our laws say that the minority may speak even in cases where the voicing of their views is unsettling to the majority is that there are circumstances in which permitting the voicing of minority views leads over time to amazing growth experiences for everyone and our social norms favor the creating of amazing growth experiences. I love my country and its social norms. That’s why I love the idea of permitting honest posting on the last 37 years of peer-reviewed research at every discussion board and blog on the internet.

I hope that helps a small bit, my dear “Other” friend.

Deeply-Flawed-Premise Advocating 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:

“So we are close. Very close…When I have a community of people helping me out, amazing and magical things will happen. ”

You’ve been saying that for many years. Even back in the days before you were banned from everywhere.

But after all this time, there’s still no community. Nothing amazing. No magic. So I guess you weren’t that close after all.

We’re close.

If one large site started reporting on what has happened over the past 16 years, we would see huge change in a short amount of time. We have seen thousands of our fellow community members express a desire that honest posting be permitted. Shiller published his research in 1981. We didn’t even have that in the days when the Buy-and-Hold strategy was developed. We have published posting rules at virtually every investing site prohibiting the posting tactics that the Buy-and-Holders have employed to block debate. That’s huge. That shows what is in our hearts. That shows how as a people we believe things should be done. That’s what the Buy-and-Holders are ultimately up against — our fundamental beliefs about how new ideas should be permitted to grow over time in this country. Shiller was awarded a Nobel prize. Could we send a bigger sign as to how we want things to go? I have had numerous professors tell me that they are now including my ideas about how stock investing works in the courses they teach in universities. We have had numerous researchers indicate that they would like to be free to do honest work in this field. We have even had a good number of the Wall Street Con Men slip in some honest advice along with the Buy-and-Hold garbage. That sort of thing doesn’t just happen by accident. Those people have consciences. Those consciences are going to be exerting an even stronger pull in the days following the next price crash. I mean, give me a freakin’ break.

It has taken longer than I thought it would take. A LOT longer. You’ve got me re that one.

But it remains a reality that we are very close. The issue is no less important today than it was on the morning of May 13, 2002. So this is certainly no time to be giving up hope on the future of this country.

We have a secret weapon, Anonymous. The Buy-and-Holders. The Buy-and-Holders love their country too. What do you think they are going to do in the days following the next price crash? They are going to flip to the side of the American people. If they felt that they could do it today, they would do it today. As soon as people start sensing that it is safe to tell the truth about what the last 37 years of peer-reviewed research teaches us about how stock investing works in the real world, there is going to be a run for the exits in Buy-and-Hold World. The thing will go viral at that time.

There has to a transition from one paradigm to another. The natural thing would have been for us to launch a national debate in 1981, when Shiller published his “revolutionary” research findings, and then for people to gradually make the transition to Valuation-Informed Indexing as they learned more. That would have been 100 percent groovy for every single person involved. It didn’t happen that way. But that doesn’t mean that the transition is not going to take place. It just means that, after 37 years, there is a huge amount of pent-up energy that thousands of people in this field want to put to use telling millions of investors the long-covered-up realities of how stock investing works.

When Bogle flips, it’s over. What the heck is Lindauer going to be able to do to hold back the tide once Bogle flips? There will be nothing that he will be able to do at that time. It will be over. I think Bogle will flip. If Bogle doesn’t, someone else will. It could be Bernstein. It could be Swedroe. It could be Schultheis. It could be Pfau. It could be Richards. It could be lots of people.

There are lots of people who work in this field who love their country, Anonymous. You can put forward your threats of physical violence and your threats of career destruction from now until doomsday, but there comes a point when you will not be able to hold back the love that many people who work in this field feel for their country. I think that all the magic is going to begin happening in the days following the next price crash. But we’ll see, you know? It is my sincere belief that we are very close indeed.

Eyes-on-the-Prize 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:

 

99.999999% of people didn’t respond to your tweets because they never saw them. The rest didn’t respond because you’re a nut.

You’re wrong. There are many cases in which people who did not respond have told me that they think my work has great value. There are cases that I have written about on the blog in which people who BANNED me told me that they thought my work has great value. That’s not the normal situation, Anonymous. It is because those people are afraid to speak up that we have this problem.

You are of course right that the vast majority of people don’t see a tweet. And it is also true that, when someone makes a claim that seems out there, most people are going to be highly skeptical even though they do not know the facts. That’s normal too. But it was not normal for Motley Fool to ban me when I was the most popular poster there in the days before I pointed out the error in Greaney’s study and when it was Greaney putting forward death threats and not me. And it was not normal for Wade Pfau to thank me profusely for teaching him more about how stock investing works than anyone he had run into before and to tell me how much he couldn’t stand you Goons and then to flip to the other side when you threatened (with Bogle’s implicit approval) to destroy his career. It’s not normal for someone like Bogle not to speak up when he sees threats of violence and career destruction at a discussion board with his name on it and not to do anything about it. None of this is normal.

People are skeptical of all new ideas. That’s normal and healthy. But the discussion of new ideas is permitted in this country. So while we should expect support for new ideas to grow only slowly in the early days, we should expect support for new ideas with merit to grow gradually over time. Shiller’s idea has so much merit that he was awarded a Nobel prize for it. And that idea has been public knowledge for 37 years now. And honest posting re the many far-reaching implications of that idea is not today permitted at a single large web site. That ain’t normal. It’s not a close call.

That’s where the financial fraud comes in. That’s where the criminal stuff comes in. The criminal stuff has blocked Shiller’s idea from gaining the level of support that it needs to attain for more and more people to get involved helping us to learn more about it. That has to change. Valuation-Informed Indexing will probably remain at a disadvantage to Buy-and-Hold for as long as prices remain high. We all have a Get Rich Quick urge within us and so Buy-and-Hold comes to the table when prices are where they are today with a big marketing advantage.

But the criminal stuff has to go. Get Rich Quick urge or no Get Rich Quick urge, there are lots of people who want to know what the peer-reviewed research says about how stock investing works. Those people have a right to be able to talk with others on the internet about what they want to learn. And, when we get to a point where they feel free to do that, support for Shiller’s work and interest in exploring Shiller’s work will grow dramatically. The hard part is getting the level of support up to a place where at least the criminal stuff is no longer a viable option for the Buy-and-Holders. We will all be living better lives once we get to that place. And a lot of people who today consider themselves confirmed Buy-and-Holders will begin rethinking their ideas about how stock investing works in those days. Hearing the ideas discussed by more people makes a difference. We may well be working on the same side in those days, Anonymous. I look forward to that.

We are in an ugly place today, Anonymous. I wish we weren’t. But we are on our way to a very magical place. We are close to making the transition. And all we need to do is to insist on compliance with the laws of the country we live in. People like me who believe that Valuation-Informed Indexing is the future need to work up the courage to stand up to you Goons no matter how brutal you are with your intimidation garbage. That’s what it takes to get us all to this much better place where we all would want to be were we only thinking clearly and sufficiently informed to know what is in our best interest. So I try to remain steadfast.

Why did the opposition to this one particular new idea become so intense? Because the change is so darn important. We all need to know how to invest our retirement money effectively and Buy-and-Hold and Valuation-Informed Indexing are about as different as it is possible for any two ideas to be different. So the people who advocate Buy-and-Hold feel a lot of shame and embarrassment over the idea of having their mistake exposed to the world. Their shame gets worse the longer the cover-up goes on. So none of us are doing them a favor by keeping our mouths shut. Things just get worse the longer the cover-up continues. The life-affirming thing to do here is to EXPOSE the cover-up and thereby to bring it to an end and thereby to help out our Buy-and-Hold friends as well as our Valuation-Informed Indexing friends.

The criminal stuff is over the top. It never should have been tolerated by even a single person for even a single day. That is not how we do things in this country. It is a shame that our Buy-and-Hold friends turned to criminal stuff in desperation and it is a shame that a good number of us Valuation-Informed Indexers failed to quickly work up the courage to call out those who had wandered onto that dark path in clear and firm language. This sort of thing is a lose/lose/lose/lose/lose/

When did 22 years become “short-term”? And what risk adjustment formula makes a 113% gain preferable to a 282% gain?

Everything is relative. Most of us invest over roughly a 60-year time period, from age 20 to age 80. 22 years is not a super long time-period considered in the context of a 60-year investing lifetime. It is how you do over the 60-year investing lifetime that matters, not how you do over any 22-year time period. It is the losses suffered over a 22-year time-period in which you go with a Get Rich Quick approach that can cause you to miss out on the progress that you could have made on obtaining strong lifetime numbers by following a more sensible (and research-based!) approach.

If you thought that the lifetime numbers didn’t matter, you wouldn’t be so angry, Anonymous. If you truly believed that all that mattered was putting up good-enough numbers for 22 years, you would be okay with letting others do as they pleased while you did what you thought was best for you. The rage comes from the part inside you that entertains doubts whether that really is the answer. You hate me because I stir up those doubts.

If I don’t do it, who is going to do it, you know? Someone has to stir up the doubts while you still have time to do something about them. Would you rather that I wait until after the crash and start telling you then how you could have protected yourself from it? My bet is that we will see a lot of people doing that and a lot of others complaining that waiting until after the crash hits to talk about this stuff was a pretty darn lame way of proceeding. I am proud that I had the courage to say some things when people still had time to put the knowledge to good use if they cared to (and of course to ignore it if they preferred to play it that way instead).

My best wishes to you and yours.

Recognized Tweeting Nut 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:

Everyone knows there will be a crash someday. Even Fama (whose ideas you clearly don’t understand.) Everyone knows valuations affect returns. You’re saying nothing that isn’t already common knowledge.

Oh, except that “long-term timing ALWAYS works.” I could give you a hundred links to that exact quote. Yes, ALWAYS works. Except for every time that it’s been actually tried. Those times, it didn’t work.

Now here’s where you babble incoherently about being right even though you were wrong. Take it away.

Buy-and-Holders acknowledge that there will be a crash someday. But they don’t acknowledge the implications of that reality. Buy-and-Hold survives today despite 37 years of peer-reviewed research showing that it could never work for even a single long-term investor because Get Rich Quick strategies possess a huge emotional edge. People cannot bear to acknowledge that the real, lasting value of their stock portfolios is only one-half of the number written on the portfolio statement. You get away with insanely abusive posting behavior because of the edge. That edge disappears when all portfolio values are reduced by 50 percent. At that point the emotional advantage shifts to those recommending research-based strategies. That will be a big change.

Everyone does not know that valuations affect long-term returns. Shiller wasn’t awarded a Nobel prize because he said something that everyone knew. He was awarded a Nobel prize because he said something “revolutionary” (his word), something that stands everything that we once thought we knew about how stock investing works on its head. Many Buy-and-Holders are okay with saying “oh, yeah, valuations affect long-term returns” because they are aware that there is 37 years of peer-reviewed research showing that and they don’t want to look foolish. But how many are willing to acknowledge the far-reaching implications of Shiller’s findings? If valuations affect long-term returns, there ain’t no way on God’s green earth that anyone could calculate the safe withdrawal rate accurately without taking the valuation level that applies on the day the retirement begins into account. But how many Buy-and-Holders objected when Greaney resorted to death threats to shut down the discussions about safe withdrawal rates that hundreds of us wanted to have back at the old Motley Fool board? If the Buy-and-Holders thought through what it means to say that valuations affect long-term returns, they would want those discussions to proceed so that we all could enjoy a learning experience together and save millions of people from suffering failed retirements.

If it were common knowledge that the Buy-and-Hold retirement studies were in error, my famous post of May 13, 2002, would not have generated any controversy. The reaction to that post tells the tale. Yes, we all “know” that valuations affect long-term returns. The evidence that this is so is overwhelming. 100 percent of the evidence available to us today shows that this is so and 0 percent of the evidence available to us supports the Buy-and-Hold strategy. But we know this only in a hyper-technical, intellectual way. We have not processed the information and integrated it into our understanding of how retirement planning and asset allocation and risk management works. To integrate the powerful insight, we need to give ourselves permission to talk it over and to explore the implications of it from hundreds or thousands of different perspectives. We need to open every discussion board and blog on the internet to honest posting re safe withdrawal rates and scores of other critically important investment-related topics. That’s the critical next step. That’s when Shiller’s breakthrough insight begins paying huge dividends for every investor alive on the planet. We don’t learn about something by reading a few words and then going about our business as if those words had zero significance. We learn by participating in discussions in which the many practical ways in which the new knowledge changes how we think about the subject matter in a fundamental and far-reaching way are explored.

Long-term timing is price discipline. Price discipline is the key to every market that has ever existed. It is not possible for the rational human mind to imagine circumstances in which long-term timing, reasonably executed, would not work. If you look at the historical record, you will see that long-term timing has produced results superior to Buy-and-Hold in 90 percent of the return sequences that have turned up. The fact that Buy-and-Hold produced better numbers in 10 percent of the return sequences doesn’t mean that Buy-and-Hold was the better choice in those cases. The investor didn’t know in those cases what sort of return was going to turn up in the particular case. He took a huge risk by going with a Buy-and-Hold strategy. Measured on a risk-adjusted basis, Valuation-Informed Indexing is ALWAYS better. And that shouldn’t be even a tiny bit surprising to anyone who has spent a little bit of time thinking this stuff through. Long-term timing is price discipline. How could exercising price discipline when buying something ever be a bad thing?

I wish you all good things, Anonymous. But I believe that Buy-and-Hold is the past and that Valuation-Informed Indexing is the future. I am 100 percent sure. Could it be that I am wrong? It has been known to happen. If it were the case that I was wrong, I would probably be the last to see it because my biases blind me more than they blind anyone else. So maybe I am wrong, you know? We will have to wait a bit and see how things play out to know for sure. But I believe that the last 37 years of peer-reviewed research is legitimate research and that Shiller merited his Nobel prize and that Greaney’s study got the numbers wildly wrong, putting the retirements of thousands of friends of mine at grave risk of failing somewhere down the line. I am going to continue saying what I believe in my posts. Even if there were not laws making it a crime to do otherwise, I would do that because I think it is the right thing to do. I don’t want to see my friends suffer failed retirements because I didn’t have the guts to stand up to you Goons so I am going to continue doing so. I believe that it will all work out in the end far better than any of us can even imagine today. But we are just going to have to wait a bit to see all the amazing and wonderful stuff take place in the real world.

I naturally wish you the best of luck in all of your future life endeavors, my dear friend. Please take good care.

Incoherent Babbling 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 think it matters, Anonymous.”

No one else does.

That’s not a conclusion that a reasonable person who reviewed the materials at the site would come to, Anonymous.

Lots of people think it matters. Those of us who think it matters are not a majority, that’s for sure. We’re about 10 percent of the population. But if Shiller’s research is legitimate (I believe it is), it is very important for that 10 percent over time to become 20 percent and then 40 percent and then 80 percent. For that to happen, people need to be able to talk over the ideas among themselves, to ask questions, to probe, to hear the ideas explored from different angles until they become more comfortable with them.

It’s that learning process that has been blocked by the intimidation tactics of the Buy-and-Holders. I have asked people to help me out when you Goons crossed the felony line. People often don’t do it because they are afraid. Well. I am afraid too. I could theoretically do what others do, I could silence myself, censor myself, keep my doubts about Buy-and-Hold hidden so as not to draw the wrath of the Buy-and-Hold Goons down on me.

How would things ever change if I did that? I want things to change. Cowardice is not the formula for change. So I don’t want to go there. I want to take it exactly the other way. I want to develop Shiller’s insights to the fullest extent to which they can be developed and I want to share the implications of those powerful and life-affirming insights with every person on the planet. That’s my mission. That’s my job. That’s my life’s work. That’s what gives me a kick when I get up in the morning and when I go to bed at night. That’s the story for me.

You want the new ideas to die. You want the state of humankind’s knowledge of how stock investing works to return to where it stood in 1980. You and I are working at cross purposes. So you do what you do instead.

You say that it doesn’t matter. Your actions tell a very different story. You think it matters a great deal. That’s why you fight so hard. I think you are right re that one. I think it matters a great deal too. Every time you advance another death threat or another demand for another unjustified board banning or another act of defamation or another threat to get another academic researcher fired from another job, the message that you want me to hear is: “You are in scary territory, you better back down.” But the message that I hear is: “This is truly important stuff and the people on the other side have come to the conclusion that Buy-and-Hold can only be defended with the lowest tactics imaginable, this is worth fighting for.”

I love my country. What I love about it is that we have processes in place to resolve conflicts of this sort in ways that work to the good of every single person involved. I like that. I like being part of a process with the promise to enhance millions of lives in very big and important ways.

Is it possible that our country will fail us this time? It’s possible. I don’t say that it can’t happen.

But I don’t believe for two seconds that that is what is going to happen. I believe that the American people are going to win this one. I don’t have any doubts about it.

I think that you Goons are going to be with us when we all get to the other side. Losing 50 percent of your life savings is going to change your perspective on things. So we will be friends then. We will be working together then. I think that will be perfectly groovy, you know? I look forward to that.

We are prisoners of time. I can tell you what I see. I cannot persuade you that it is real until you are able to see it with your own eyes. We are going to have to wait a bit to see how things play out in the days following the next price crash to find out for sure whether Greaney’s study really does lack a valuations adjustment, as I have been saying, or whether the problem is just that I went off my meds somewhere along the line.

I certainly wish you the best of luck with it, dear friend. Does that help at all?

Med-Taking (or Not?) 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:

When a tree falls in the woods and no one is there to hear it, does it make a noise?

When Rob Bennett posts on the internet and no one reads it, does it really matter?

I think it matters, Anonymous.

If Shiller is right (I obviously believe that he is), we are going to see another price crash within the next year or two or three. Millions of middle-class Americans will see 50 percent of their lifetime saving disappear into thin air overnight. It will have been the relentless promotion of Buy-and-Hold strategies that will have caused that. If we permitted honest posting re the last 37 years of peer-reviewed research, we could never have another bull market. Stock prices are self-regulating so long as investors have access to the information they need to act in their self-interest (that is, so long as they are able to learn when stock prices are so high that they no longer offer a strong long-term value proposition). Once we rule out future bull markets, we also rule out future bear markets because it is the insane irrational exuberance of bull markets that produces the insane irrational depression of bear markets. And once we rule out future bear markets, we rule out future economic crises because it is the huge loss of consumer buying power that we experience in bear markets that causes economic crises.

So we are close. Very close. The bad news here is genuinely bad. It breaks my heart to think of the ocean of human misery that we have collectively brought on with out participation in and tolerance of the Ban on Honest Posting. But it remains the case that the good news here is 50 times more good than the bad news here is bad. We live in a great country. We have processes in place by which we as a people overcome these sorts of problems. I am 100 percent certain that we are going to prevail in the end. Could I be wrong? It certainly has been known to happen. I could be wrong. But I don’t think so. I think I am right. I think we are going to get to the other side of this mess stronger than ever. We’ll see, you know?

When we get to the other side, we will all be united. We all are on the same side. We all want to learn about a better way to invest. It is silliness to think that there could even be a single exception to that general rule. Some of us have gotten caught up in our personal dramas over the course of the past 37 years and we don’t see it that way at the moment. But after the crash? After the crash, the realities that Shiller pointed to in his Nobel-prize-winning research are no longer theoretical. After the crash, we will all be seeing the results of ignoring those realities discussed in our daily internet news feeds. That changes things. In a big way.

Which side do you think Jack Bogle is going to be on in the days following the next price crash? I have a funny feeling that Bogle is going to be on the side of the American people at that time, not on the side of the Lindauerheads. Where does Mel Lindauer go when Jack Bogle calls for his removal from the Bogleheads forum (a forum named for Jack Bogle, not Mel Lindauer)? Your guess is as good as mine, you know? I think he goes somewhere whehe can no longer disrupt the conversations that we are trying to have. Again, we will see. But that is certainly what I expect to see happen.

All of the material housed at this web site will be available at that time to every single person interested in learning what happened to us. Yes? That’s a pretty darn freakin’ big deal. I think it would be fair to describe the 16-year cover-up as the biggest case of financial fraud in the history of the United States. Thanks to the power of this exciting new communications medium, we will all be able to quickly make complete sense of what went down. Which means that we will all be able to quickly come to terms with what down and move forward into a brighter future for all of us. I am obviously humbled and honored to have been able to have played the role that I have played in making it all happen.

And you will see in that day how I will be helping you. The stuff that you Goons did will be reported. That’s part of the story. That cannot be covered up if we all are going to move forward. But the other side of the story is that lots of Normals TOLERATED your behavior. That puts your behavior in a different light than it would be placed in had the reality been otherwise. That helps you. And, yes, I will be reporting how I was one of those cowardly Normals for a time, how it took me three years to work up the courage to point out to my fellow community members (my friends!) 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. It will all come out And each and every one of us will be better off as a result so long as I continue to follow my policy of being as honest as I can possibly be without ever crossing the line and becoming uncharitable while also being as charitable as I can possibly be without every crossing the line and becoming dishonest. That’s the American way and that’s the way that I intend to continue playing it, my dear Goon friend.

The noise will come in the days following the next price crash. I predict lots of noise. I predict hundreds of visitors at this site every day. Perhaps thousands. Perhaps tens of thousands. Perhaps — Hundreds of thousands?

I don’t know. We’ll see. I’ll do my best to keep up with whatever flow of traffic appears before my eyes.

I could be wrong. I said that before. It doesn’t hurt to say it again. I could be wrong. But I don’t think so. I think that I am right. So long as playing it the other way translates into a prison cell for Old Farmer Hocus too (I obviously do not believe that Greaney included a valuations adjustment in his study), I am going to continue to keep to the right side of the felony line and let things play out however they play out. I wish you the best of luck in all of your future life endeavors. But I also need to watch out for myself. And that is my sincere take re what is in my personal best interests (as well as in the best interests of the world at large, to be sure).

Does all of that work for you? I sure hope so. It sure would give me some mental relief to know that my plans were all A-OK in your book.

I think there is going to be plenty of noise. I heard lots of noise on the morning of May 13, 2002, and that noise told me that something terribly important was going down. That something important has not been resolved in a successful way in the past 16 years. Too bad! That unfortunate reality makes me want to cry. It really does. But the bottom line here is that I am not Superman. I have done all that one human being can do. We live in communities. When I have a community of people helping me out, amazing and magical things will happen. I am sure. We will have to wait a bit to hear that amazing and magical noise. I think it would be fair to say that not one of us will at that time question whether it all was worth the wait 10,000 times over.

I think it matters.

But I could be wrong.

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

— My dear, Goon FRIEND.

Insignificant (for Now!) Rob