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A Rich Life

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

  • "Valuation-Informed Indexing Is the Same Song We Sing. Glad You Belong to the Same Choir We Do."





    Carolyn McClanahan, Director of Financial Planning
    for Life Planning Partners, Inc.

  • "Retirees Now Frequently Base Their Retirement Decisions on the Portfolio Success Rates Found in Research Such as the Trinity Study.... This Is Not the Information They Need for Making Their Withdrawal Rate Decisions."




    Wade Pfau, Academic Researcher

  • "The P/E10 Tool Could Drastically Change
    How the Entire Investment Industry
    Operates and Measures Risk."





    Larry, A PassionSaving.com Site Visitor

  • "The Your Money or Your Life Book
    for a New Generation."





    Beatrix Fernandex, Book Reviewer
    for Dollar Stretcher Site

  • "A Newer School of Thought Believes That the Safe Withdrawal Rate Depends on How Stocks Are Priced at the Time You Begin Making Withdrawals."





    Scott Burns, Dallas Morning News Finance Columnist

  • "A Fascinating Retirement Calculator."







    Michael Kitces, Maryland Financial Planner

  • "The Evidence is Pretty Incontrovertible. Valuation-Informed Indexing...Is Everywhere Superior to Buy-and-Hold Over Ten-Year Periods."




    Norbert Schenkler,
    Co-Owner of Financial WebRing Forum

  • "Every Detail Shows Rob's Respect
    for His Information and His Reader."






    Audrey Owen, Owner of Writer's Helper Site

  • "You’ve Accomplished Something Radical
    With Your Idea of Passion Saving."





    Mark Michael Lewis,
    Money, Mission & Meaning Talk Show Host

  • "Big Moves Out of Stocks Should Not Be Done at All. But Strategic Asset Allocation Can Be Done At Very Rare Times, Maybe Six Times in an Investor’s Lifetime, Three Times When the Market Is Stupidly High and Three Times When Stupidly Low."



    John Bogle, Founder of Vanguard Funds

  • "Valuation-Informed Investing and Passive Investing
    Share More of a Common Ancestry
    Than It Might Appear at First."





    Jacob Irwin, Owner of Passive Investing Blog Carnival

  • "It Is Great to See a Finance Journalist Who Understands That Valuations Matter. Efficient Market Zealotry Is Rampant in the Journalism Community. I Just Love Your Valuation-Based Return Calculator."




    Rich Toscano, Pacific Capital Associates

  • "There Is Always An Unlimited Supply of Complainers Against Any Good Idea."






    Mr. Money Mustache Blogger

  • "Rob: This Has Been One of the Most Insightful and Helpful Comments I Think Anyone Has Ever Posted. Thank You for This Lesson and for Sharing Your Knowledge on This Subject!"




    My Money Design Blogger

  • "There Is An Extensive Literature About the Predictability of Long-Term Stock Returns. There Is an Extensive Literature About Short-Term Market Timing. My Question Is About Long-Term Market Timing. The Literature Seems Slim."



    Wade Pfau, Retirement Income Professor
    at The American College

  • "Your Ideas Are Sound."







    Rob Arnott, Financial Analysts Journal Editor

  • "For Years, the Investment Industry Has
    Tried to Scare Clients Into Staying Fully Invested
    in the Stock Market at All Times, No Matter
    How High Stocks Go. It's Hooey.
    They're Leaving Out More Than Half the Story."



    Brett Arends, The Wall Street Journal

  • "There Are Time-Periods Where Stocks Are a Terrible Addition to That Portfolio. Yet Inexplicably, We As Planners STILL tend to Suggest That It Is 'Risky' to Not Own Stocks When in Reality the Only Risk Is to Our Business."




    Michael Kitces, Maryland Financial Planner

  • "Valuation-Informed Indexing Provides More Wealth for 102 of 110 of the Rolling 30-Year Time-Periods While Buy-and-Hold Did Better in Eight of the Periods."






    Wade Pfau, Academic Researcher

  • "There Is a Growing Behavioral Economics Movement, But It So Far Has Had Limited Impact. Economists Are Not Fond of the Softness and Imprecision of Psychology. These Notions Are Considered Vaguely Unprofessional and Flaky."



    Robert Shiller, Yale University Economic Professor

  • "I Would Occasionally Get a Response Post
    Saying I Was 'the Best Since Rob Bennett
    Challenged Us to Think.'"




    A Popular Bogleheads Forum Poster Named "Retired at 48" Who Was Banned for Challenging Buy-and-Hold

  • "New Research by Rob Bennett Shows That
    Even a 4% Withdrawal Rate Could Cause Failure
    If You Start Retirement When
    Stock Market Valuations Are High.”




    Bernard Kelly, Consultant

  • "FuhGedDaBouDit!"




    William Bernstein, Author of
    The Four Pillars of Investing
    (When Asked Whether We Can Use the Old School Safe Withdrawal Rate Studies to Plan Our Retirements)

  • "This [The Stock-Return Predictor]
    Is a Very Handy Little Tool."






    Felix Salmon, Market Movers Blog

  • "A Much Simpler Way to Bring
    the Valuation Issue to Focus."
    (Referring to The Stock-Return Predictor)





    Karteek Narayanaswarmy, Blogger

  • "It's Informative, It's Based on Solid Data and It Provides Useful Results." (Referring to The Stock-Return Predictor)






    Political Calculations Blog

  • "Meet Three Couples Who Left the Corporate World to Do the Kinds of Work That Satisfied Them."






    Liz Pulliam Weston, MSN Money Columnist

  • "I Like Rob's Fresh Views and Tips
    on the Subject of Saving Money."






    The Digerati Life Blog

  • "A Very Solid Approach to Investing."







    Michael Harr, Founder of Walden Advisors

  • "Rob Bennett Has Been on a Tear With One Outstanding RobCast After Another."





    John Walter Russell, Owner of
    Early-Retirement-Planning-Insights.com Site

  • "It’s Time for a Different Way to Look at Investing, and Rob Is Onto Something Here."






    Kevin Mercadante, Owner of Out of Your Rut Blog

  • "My Afternoon Train Reading."
    (Referring to Rob's Article titled
    Why Buy-and-Hold Investing Can Never Work)





    Barry Ritholtz, Owner of The Big Picture Blog

  • "What Is It With Guys Named Rob?
    Longtime Index Agitator Rob Arnott Has Now
    Been Joined on These Pages by a
    Vanguard Diehard Agitator Named Rob Bennett."




    Jim Wiandt, IndexUniverse.com Publisher

  • "He Offers a Fresh New Perspective
    that Will Motivate You to Get on Track
    With a Solid Savings Plan."





    Lynn Terry, Click Newz Blog

  • "While Browsing at www.PassionSaving.com the Other Day, I Discovered an Article Featuring Ten Unconventional Money-Saving Tips. Each of These Offers a New Way to See Money."




    J.D. Roth, Owner of Get Rich Slowly Site

  • "Rob Has Ideas About Investing That Many Bloggers Find 'Interesting.' His Posts Are Often Controversial and Always Thought Provoking."





    Miranda Marquit, Planting Money Seeds Blog

  • "Is There a Way to Turn Saving Into Something Fun? If There Was, I Bet a Lot More of Us Would Do a Lot More Saving. I Found a Website Where This Basic Premise Is Explored in Great Depth."




    The Great WeiszGuy Blog

  • "I Have Much More Confidence in My Ability to Understand What Is Happening....I Thank You for Your Public Service, and, In Another Dimension, for the Personal Courage It Took to Make It Happen."




    Elizabeth, A PassionSaving.com Site Visitor

  • "I Was Hooked on the Idea of [Passive] Index Indexing, But Something Inside Made Me Wonder "Too Good to Be True?" and "What's the Downside?" I Happened on to Your Site and Valuation-Informed Indexing Seems to Make Sense."



    Coleen, PassionSaving.com Site Visitor

  • "Reads Like a Casual Conversation
    with a Likable Guy Who Wants Nothing More
    Than to Help Others Experience the Same Joy
    and Happiness He Has Found."




    Kara, Reader of Rob's Book

  • "Your 'Secrets' Are Exactly Like Magic Tricks: Once Revealed, They Look So Simple, Yet You Need Somebody to Show You How It Works."





    Kramerizio, Secrets of Retiring Early Reader

  • "Rob's Da Man! Never in the History of the Diehards Forum Has One Poster, Always Making Civil and Well Thought-Out Posts, Managed to Irritate So Many Without Anyone Being Able to Articulate a Good Reason As to Why."




    Mephistopheles, Bogleheads Forum Poster

  • "I’ve Been Surprised at How Controversial This Idea Is, but If Most People Are Buying and Holding, They Are Emotionally Invested in This Strategy."





    Jennifer Barry, Live Richly Blogger

  • "The Findings for [Long-Term] Market Timing Are So Robust That It Hardly Matters How We Do It."






    Wade Pfau, Asociate Professor of Economics

  • "The Elegant Simplicity of His Ideas Throughout Warms the Heart and Startles the Brain."






    Tom Gardner, Co-Founder of the Motley Fool Site

  • "Mr. Bennett Evidences an Unusual Skill....
    You'll Have to Buy a Copy....Extraordinary....
    A Massive Heap of Crap."




    John Greaney,
    Owner of the Retire Early Home Page Site

  • "By Reading All the Information on Your Website I Was Able to Develop a Part of Me I Didn't Know I Would Be Able to Become."





    Javier, PassionSaving.com Site Visitor

  • "Innovative Financial Thinking."







    No Limits, Ladies Blog

  • "Knowledgeable."







    Hope to Prosper Blog

  • "Holy Toledo! This Is Great Stuff!"






    Bill Schultheis, Author of
    The New Coffeehouse Portfolio

  • ""He Offers Down-to-Earth But
    Nevertheless Eye-Opening Insights About
    the Why and the How of Early Retirement."





    Secrets of Retiring Early Reader

  • "Challenges Unfounded Assumptions."







    Bill Sholar, Founder of the Early Retirement Forum

  • "Seminal."






    John Greaney, Owner of Retire Early Home Page Site
    (Pre-May 13, 2002 Version)

  • "It’s Always Good to Read Something New That Challenges Your Way of Thinking."






    Invest It Wisely Blog

  • "Rob, Thanks for All of Your Articulate, Well-Written and Well-Reasoned Commentary."






    Elle, a Poster at the Joe Taxpayer Blog

  • "Although Rob and I Don’t See Eye to Eye
    on Every Detail, His Site Is a
    Valuable Resource for Research."





    Ken Faulkenberry, Portfolio Manager

  • "Thanks, Rob. I Love Seeing So Many
    Personal Finance Bloggers Who Offer Such
    High Quality Content on Their Own Sites Come Here
    to Weigh In [on Your Ideas]."




    Married With Debt Blogger

  • "A Ton of Tremendously Useful Content."







    Network Abundance Radio

  • "Your Enthusiasm Is Infectious."







    Ruth, a PassionSaving.com Site Visitor

  • "I Woke Up at 4:00 am and Stared at the Wall for 20 Minutes....Thank You for Doing What You Do."






    Tasha, A PassionSaving.com Site Visitor

  • "It Might Just Give You
    a New Way of Looking at Saving."






    Kevin Surbaugh, Owner of Debt Free 4Ever Blog

  • "'Staying Too Long in a Job Where You Don’t Feel Relevant Takes a Toll,' Said Rob Bennett, Who Worked for Years in a Well-Paying Corporate Communications Job Where He Didn’t Have Enough to Do."




    The New York Times

  • "You Have Started One of the Most Interesting
    and Stimulating Discussions This Board has Seen
    in a Long Time."





    Poster at Motley Fool Site

  • "A Respected Author and Commentator, Mr. Bennett has Dedicated Himself to Educating Average Investors to Avoid the Most Common Errors."





    Liberty Watch Site

  • "I've Gone from Shattered Dreams of Early Retirement to Glimpses of Hope to Reassurance from Quantitative Research."





    Patricia, A PassionSaving.com Site Visitor

  • "Some of the Most Helpful and Insightful Market Discussions on the Web Take Place on These Pages."





    A Poster at the Safe WithDrawal Rate Research Group
    (Founded by Rob)

  • "Rob is the Only Person I Know (If Only via Message Board) Who has Completely Opted Out of Participation in the Stock Bubble. And You Know What? He Has Benefited Immensely from Doing So."




    Poster at Motley Fool

  • "Makes the Subject of Saving Edgy and Fresh."







    Maxine, A Reader of Rob's Book

  • "Rob Bennett, the Author of a Book Called Passion Saving, Thinks the Saving Problem Is Partly One of Packaging. So He Prefers to Couch it in the Language of Freedom."





    The Wall Street Journal

  • "This Tip Comes from Rob Bennett
    of the Finance Site PassionSaving.com."






    Lifehacker.com

  • "I LOVE This Article and
    Am Proud to be Publishing It!"




    Chuck Yanikoski, Executive Director of
    The Association of Integrative Financial
    and Life Planning

  • "Rob Bennett: Some People Disagree With Him, and He Rubs a Lot of People the Wrong Way. But He Has Interesting Ideas About Valuation-Informed Indexing, and He Delves Into a Lot of What Makes a Successful Investing Strategy."



    Miranda Marquit, Planting Money Seeds Blog

  • "Rob….Wow…..Your Response Sent Shivers
    Up the Ol’ Pilgrim Spine."






    Neal Frankie, Owner of the Wealth Pilgrim Blog

  • "I Have Counseled My Clients to Allocate a Percentage to Equities Based Upon Market Valuations....I Feel Like I've Found a Kindred Spirit. Fascinating Web Site."





    Tom Behlmer, Financial Planner

  • “A Simple Age-Based Asset Allocation Formula Is Not Appropriate, and Any Sensible Asset-Allocation Formula Should Combine Both Age/Investment Horizon and Market Valuation Levels.”




    RationalInvestor.biz

  • "Had a Guest Post This Week from Rob Bennett, Where He Discusses the Benefits of Value-Informed Indexing, Which I Find Very Intriguing."





    Sustainable Personal Finance Blog

  • "I Can Appreciate Rob's Comments.... Buy-and-Hold?
    For the Most Part, a Long Obsolete Theory."






    Neal Deutsch, Certified Financial Planner

  • "Utterly Brilliant!"







    Secrets of Retiring Early Reader

  • "Your Website Is So Enjoyable That It Is Keeping Me From My Research As I Am So Excited That I Have Found Such a Valuable Resource."





    Stuart, a PassionSaving.com Site Visitor

  • "What We're Talking About Here Really
    ...Is Empowerment."






    Motley Fool Poster

  • "The Return Predictor Is Based upon the Principle that Over the Long Term, Stock Market Prices Will Reflect the Ten-Years Earnings Growth of the Underlying Companies. Prices Return to a Common Growth Pattern."




    Links.com Review of The Stock-Return Predictor

  • "Rob’s Arguments in Favor of Value Investing Actually Make a Lot of Sense In a Way That Should Make Any Rational Buy-and-Holder Uncomfortable."





    Pop Economics Blog

  • "What I Don't Understand Is How Rob Can Correspond in Such a Sweet and Polite Way
    -- Yet He Irritates Me to No End!"





    Financial WebRing Forum Poster

  • "You Go About It in a Manner that is Catastrophically Unproductive by Adding Missionary Zeal that Inflates Your Importance and Demeans Others. The Whole Idea That There is a New School of Safe Withdrawal Rates Reeks of Personal Aggrandizement."



    Scott Burns, Dallas Morning News

  • "Inflammatory."







    Morningstar.com Site Administrator

  • “What Warren Buffett Did Was Essentially Quite Close to What Rob Bennett Has Written. Buffett Has in Fact Been Cleverly Incorporating Long-Term Market Timing Based on Valuation of the Market in His Allocation of Money to Stocks.”



    Investor Notes Blog

  • "This Report Offers A Fresh Perspective That Is Rarely Found In Other Financial Literature."






    Secrets of Retiring Early Reader

  • "Rob Bennett Says That Market Timing Based on Aggregate P/E Ratios Can Be a Far More Effective Strategy. This Claim Is Consistent With Shiller's Analysis and I Can See How It Might Be So."




    Rajiv Sethi, Economics Professor at Columbia Univeristy

  • "Retiring Early Was A Concept I Did Not Entertain. I Was Going to Retire at 65 After Putting in 40 Years. Now I Am Glad To Say That All That Has Changed."





    Secrets of Retiring Early Reader

  • "In a Couple of Days, I Had
    Devoured the Entire Book."






    Reader of Rob's Book

  • "FIRECalc May Not Be the Last Word
    on Safe Withdrawal Rates."






    Jonathan Clements, Wall Street Journal

  • "It Seems to Me That Some on This Board Feel Threatened by the Arrival of Rob and His Ideas. They Feel a Threat to Their Perceived Elite Status."





    Motley Fool Poster

  • "You've Got to Say One Thing for Rob. He Has NEVER Lowered Himself to Ad Hominen Attacks -- Subliminal or Otherwise -- on Any Other Person on This Board. Not Once. Ever. At Least Give Him Credit for That."




    Motley Fool Poster

  • "I Have Never Seen Rob Show Incivility. No Matter What. Truly Amazing. Either He Is Really the Output of an Artificial Intelligence Program, or the Man's on the Way to Becoming a Saint!"




    Early Retirement Forum Poster

  • "You're the Politest Guy on the Internet.
    Such a Soft Touch!"






    Jonathan Lewis

  • "Props for Keeping Your Cool in the Married with Debt Article. Best of Luck Combating Buy-and-Hold."






    Money Mamba Blogger

  • "I Caught Up [at the Financial Bloggers Conference] With a Fairly Controversial Financial Blogger
    Named Rob Bennett, Who Struck Me As the
    Nicest Guy Around. There -- I Said It!"




    Digerati Life Blogger

  • "In Rob Bennett's Case, He Was Banned for No Known Listed Forum Policy. Except His Viewpoint Was Different From Other Bogleheads and [He Was Perceived As] a Threat."




    Investor Junkie Blog

  • "Mr. Bennett, You Are Spot on About Integrating Some Type of Valuation Filter to One's Stock Allocation. Astute Investors Have Incorporated Some Type of 'Valuation Timing' Into Their Investment Decisions Since the Beginning of Time."



    Poster at the Psy Fi Blog

  • "His Insights Into What Is Really Going On In The Stock Market Are Quite Compelling."






    Future Storm Blog

  • "It Was an Epiphany...Valuation-Informed Indexing Beats Buy-and-Hold Over Most Long-Term Holding Periods at Much Lower Volatility."





    Sam, a PassionSaving.com Site Visitor

  • "I Am Intrigued By Your Ideas."







    Adam Butler, Portfolio Manager

  • "I Read the Book and I Loved It.
    The Philosophy Resonated with Me.
    I Am a Believer in Your Concept."





    Dr. Peter Weiss, Author of More Health, Less Care

  • "If Your Investment Ideas Can Do for Investing
    What Weston Price’s Ideas Did for Food,
    You’ve Got Our Attention."





    End Times Hoax Blog

  • "I Have Looked at His Website and Reviewed His Research and Find It Both Compelling and Completely Logical and Common-Sense-Based."





    Poster at Free Money Finance Blog

  • "If Investors Paid More Attention to Valuations, We Would Have Fewer Boom-and-Bust Cycles. The Investing Institutions Are Definitely Going to Avoid It Because It Affects Their Income."




    Hope to Prosper Blog

  • "The Calculators on Your Site Are Great Resources. It Amazes Me How So Many People Can Say 'Valuations Matter' Yet, in the Next Breath, They'll Say That We Should Ignore Valuations."




    John Marlowe, Logistics Analyst at Hess Corporation

  • "Must Read As Per My Viewpoint
    For All Value Seekers."






    Ajit Vakil, Value Investing Congress

  • "His Approach Is Both Mathematically Rigorous
    and Easy to Understand."






    Online Investing AI Blog

  • "There Is Nothing More Doubtful of Success Than a New System. The Initiator Has the Enmity of All Who Profit By Preservation of the Old Institution and Merely Lukewarm Defenders in Those Who Gain By the New One."




    Machiavelli

  • "Difficult Subjects Can Be Explained to the Most Slow-Witted Man If He Has Not Formed Any Idea of Them. But the Simplest Thing Cannot Be Made Clear to the Most Intelligent Man If He Believes He Knows Already What Is Laid Before Him."



    Tolstoy

  • "I Am Not Afraid. I Was Born to Do This."







    Joan of Arc

  • "I Certainly Have Seen the Academic Profession Squelching Unfashionable ideas and Have Often Been on the Wrong Side of It. Kuhn Shows How Most Pathbreaking Scientific Ideas Are Rejected at First, Usually for Decades.”




    Carol Osler, Brandeis International Business School

  • "First They Ignore You, Then They Ridicule You, Then They Fight You, Then You Win."






    Ghandi

  • "We Cannot Assume the Existence of Predictability Just Because There Are No Studies That Fully Reject It."






    Valeriy Zakamulin, Economics Professor

  • "I Am Also Extremely Grateful to Rob Bennett for Motivating This Topic and Contributing His Experience and Encouragement."





    Wade Pfau, Academic Researcher

  • "Rob Bennett Was an Early Pioneer in 3rd Generation Modeling by Advocating (Through Various Online Forums) that Withdrawal Rates Must Be Adjusted for Market Valuations Consistent with Research by Campbell and Shiller."



    Todd Tresidder, Financial Mentor Blog

  • "I Am Fascinated by the Growing Body of Research that Revolves Around the P/E10 Ratio by Robert Shiller, Doug Short, Wade Pfau, Michael Kitces, John Hussman, Crestmont Research, Jim Otar, Mike Philbrick, Adam Butler & Rob Bennett."



    Kay Conheady in Advisor Perspectives

  • "Rob Is an Enigma in the Personal Finance World. He Has Interesting Theories on Investing Based on Market Valuations. But He Weaves a Tale Which Makes the Stories of Alexander Litvinenko & Gareth Williams Seem Tame by Comparison."



    Don't Quit Your Day Job Blog

  • "In Recent Years, the 4 Percent Rule
    Has Been Thrown Into Doubt."






    The Wall Street Journal

  • "A Safe Withdrawal Rate Is Very Dependent
    on the Valuation of the Stockmarket
    at the Retirement Date."





    Economist Magazine

  • "I Have Read Everything I Can About Valuation-Informed Indexing. Buy-and-Hold Is Extremely Problematic. I Respect the Passion, Hard Work and Research That You Have Put Into This Very Important Issue. Your Work Has Huge Value."



    Carl Richards, Owner of Clearwater Asset Management

  • "The World of Personal Finance Blogging Needs More Rob Bennetts. He’s Passionate. He’s Intelligent. He’s Writing Things That Go Against the Grain."





    Financial Uproar Blog

  • "Beyond Awesome."







    Larry, a PassionSaving.com Site Visitor

  • "The Wealth Management Industry Seems Intent on Containing This Discussion for Fear Clients Might Discover that the Emperor Has No Clothes."





    Adam Butler, Portfolio Manager

  • "Recommended Reading."







    Jesse's Cafe Americain Blog

  • “All Who Are Still Holding Equities at Present Levels Because Their Financial Adviser Insists that Timing Market Cycles Is Impossible to Do -- Read This!"





    Juggling Dynamite Blog

  • "The Fact that Aggressive and Short-Term Market Timing Was Unproductive Did Not Mean That There Were Never Times When It Would Be Wealth-Maximizing to Get Out of the Market."



    Scott Burris,Director of the Center for
    Health Law, Policy and Practice

  • "The Amount of Return You Can Expect From a Diversified Equity Portfolio Is Inversely Correlated to the Market Valuation at the Start of the Holding Period. It Is One of the Most Robust Statistical Relationships in Modern Finance."




    Todd Tresidder, Financial Mentor Blog

  • "Why Would Your Job Be Jeopardized
    By Such a Sensible Claim?"





    Marcelle Chauvet, Econmics Professor
    at University of California

  • "Received Worrisome E-Mail from Rob Bennett. Warns of Risk with Buy-and-Hold Investing
    -- I Have No Clue."





    Vivek Wadhaw, Business Week Columnist

  • "As Attorney, Tax Expert and Financial Writer Rob Bennett Told Us, the Problem Is That, By the Time Shiller Published His Research, Many Big Names Had Already Endorsed Buy-and-Hold."




    ZeroHedge.com

  • "This Seems to Me to Be a Fundamental Challenge to Some of the Most Basic Tenets of the Boglehead Paradigm."






    Bogleheads Forum Poster

  • "You Want to be Very, Very Wary of Anything Connected with Rob Bennett, the Most Infamous Troll in the History of Investing Forums on the Internet."





    Alex Fract, Owner of Bogleheads Forum

  • “I’ve Had My Fill of Those Long-Winded Posts that Include Distortions, Unsubstantiated Claims, Misquotes and Comments Taken Out of Context.”




    Mel Lindauer, Co-Author of
    The Bogleheads Guide to Investing

  • "Haven't You Noticed Yet That NO ONE Discusses Your Ideas, NO ONE Mentions Your Name, NO ONE Goes To Your Web Site."





    One of the Greaney Goons

  • "I've Had Similar Experiences. I Know of Two Young Professors Who Wanted to Do Research on Fundamental Index and Reported to Me That Their Colleagues Advised Them That This Line of Research Could Derail Their Career Prospects."



    Rob Arnott, Financial Analysts Journal Editor

  • "As with Drug Studies Funded by Drug Companies, It Would Be Churlish to Suppose that the Chicago School of Business Was in the Bag. But It Would Also Be Idealistic to Assume That There Was No Funding Bias at All."




    Bogleheads Poster

  • "This Sort of Intimidation Is Not Acceptable. The Cigarette and Pharmaceutical Industries Found Research Supporting Their Products By Funding It. But That Was Big Money Supporting Outcomes, Not Dissuading Others."




    Lyn Graham, 25-Year CPA

  • "Financial Economists Gave Little Warning to the Public About the Fragility of Their Models. There Is No Ethical Code for Professional Economic Scientists. There Should Be One."



    Paper Titled The Financial Crisis and
    the Systemic Failure of Academic Economics

  • "The Situation [Referring to the Intimidation Tactics Used to Silence Academic Researcher Wade Pfau's Reporting of the Dangers of Buy-and-Hold Investing Strategies] Seems Well Below Any Professional and Academic Acceptable Standards."



    Albert Sanchez Graells, Law Lecturer

  • Many Academics Can Become Quite Strident When Their Views Are Challenged. Academia Is Often Subject to Self-Serving Bias That Obliterates Ethical Bounds."





    Ted Sichelman, Law Professor

  • "I Don't Like Too Much the Conspiracy Idea. I Am Not Pressured By Anyone in My Research."






    Roberto Reno, Economics Professor

  • "This Is What Investing Should Be -- Calculated, Deliberate, Confident, Informed and Simple."






    Aaron Friday, Owner of Aaron's Blob Blog

  • "It Is Obvious that Rob, in Attempting to Identify New Safe Withdrawal Rate Strategies...Is Goring Your Ox. If Rob Improves on [the] Safe Withdrawal Rate Methodology, the Implication Is Clear: You Are All, Metaphorically, Out of Business."



    Bogleheads Poster

  • "I Applaud His Effort to Inject Another Piece of Objectivity Into a Very Complex, Highly Subjective Topic -- Making Money in the Market."





    Bogleheads Poster

  • "Naturally, I Am Finding That Valuation-Informed Indexing Can Allow You to Reach a Wealth Target With a Lower Saving Rate and to Use a Higher Withdrawal Rate in Retirement Than You Could With a Fixed Allocation."



    Wade Pfau, Professor of Retirement Income
    at The American College

  • "A Careful Examination of Past Returns Can Establish Some Probabilities About the Prospective Parameters of Return, Offering Intelligent Investors a Basis for Rational Expectations About Future Returns."




    Jack Bogle, Founder of Vanguard Funds

  • "The Ability to Estimate the Long-Term Future Returns of the Major Asset Classes Is Perhaps the Most Important Investment Skill That An Indivisual Can Possess."




    William Bernstein, Author of The Four Pillars of Investing

  • "The Stock Market Resembles Roulette. In Both Cases, the Accuracy of Sensible Forecasts Rises Over Time."






    Andrew Smithers, Co-Author of Valuing Wall Street

  • "Returns Are for the Most Part a Matter of Simple Arithmetic...Much of Our Industry Seems Fearful of Basic Arithmetic of This Sort."





    Rob Arnott, Financial Analysts Journal Editor

  • "How Can It Be That One-Year Returns Are So Apparantly Random and Yet Ten-Year Returns Are Mostly Forecastable? In Looking at One-Year Returns, One Sees a Lot of Noise. But Over Longer Time Intervals the Noise Effectively Averages Out and Is Less Important."




    Yale Economics Professor Robert Shiller

  • "The Notion That Rich Valuations Will Not Be Followed By Sub-Par Long-Term Returns Is a Speculative Idea That Runs Counter to All Historical Evidence. It Is an Iron Law of Finance That Valuations Drive Long-Term Returns."




    John Hussman

  • "It's January and the Temperature Is Below Freezing. If You Asked Me Whether It Will be Warmer or Cooler Next Tuesday, I Would Be Unable to Say. However, If You Asked Me What Temperature to Expect on April 9, I Could Predict "Warmer Than Today" and Almost Surely Be Right."



    Michael Alexanfer, Author of Stock Cycles

  • "If the Response Is "Who Knew?", It Won't Be Much Comfort for Retirees in the Employment Line at Wal-Mart. This is Especially True Since a Rational Understanding of History and the Drivers of Longer-Term Stock Returns Can Help Retirees To Avoid That Surprise."




    Ed Easterling, Author of Unexpected Returns

  • "New of the Demise of the Random Walk Has Only Very Slowly Spread, In Part Because Its Overthrow Came as a Shock. If the Random Walk Hypothesis Were Correct, the Most Likely Return Would Be the Historic Average Return. The Evidence, However, Is Strongly Against This."



    Andrew Smithers, Co-Author of Valuing Wall Street

  • "I Don't Think We Can Debate the Merits of This Type of Forecasting [Referring to the Numbers Generated by The Stock-Return Predictor] Unless We Believe 'This Time It's Different.'"



    Poster at Bogleheads Forum
    (Before the Ban on Honest Posting Was Adopted There)

  • "I've Seen Absolutely Nothing From You That I Can Use in a Tangible Fashion to Formulate an Investment Plan. Your Ideas Are So Mushy That It's a Complete Waste of Time to Even Consider Them."




    Bogleheads Forum Poster

  • "Do You Really Think Your Tool
    [The Stock-Return Predictor]
    Is 'Wiser' Than the Market?
    If It Was That Easy,
    Everybody Would Be Doing It."



    Bogleheads Forum Poster

  • "The Expected Return of Stocks [As Reported By The Stock-Return Predictor] Needs To Be At Least the Treasury Inflation-Protected Securities (TIPS) Rate for Stock Investing To Make Sense."




    Bogleheads Forum Poster

  • "I Have Used Valuations to Adjust My Asset Allocation For Many Years With Very Favorable Results."





    Poster at Bogleheads Forum
    (Prior to the Ban on Honest Posting)

  • "I Don't Care If You Do or Don't Believe That the Market Will Behave Similarly in the Future As It Has in the Past. Either Way, This [The Stock-Return Predictor] Is an Excellent Way to Understand What the Market Has Done In the Past."


    Poster at Bogleheads Forum
    [Prior to the Ban on Honest Posting]

  • "My Role Is To Give People Who Don't Like What the Historical Stock-Return Data Says About the Effect of Valuations on Long-Term Returns Somebody To Yell At On Internet Discussion Boards."



    Rob Bennett at Bogleheads Forum
    (Prior to the Ban on Honest Posting)

  • "It Really Is a Shame and Indefensible That So Many Feel the Need to Jump Into It With No Interest of Posting on the Topic But Just to Disrupt. Are You That Insecure? Some on the Forum Have an Interest in This Topic. If You Don't, Stay Out!"



    Poster at Bogleheads Forum
    [Prior to the Ban on Honest Posting]

  • "Irrational Behavior Does Follow Patterns. But How Many Experts in Behavioral Finance Believe That Such Knowledge Can Be Used to Predict Markets? Basically, None. Your Model Cannot Attain the Level of Predictive Value You Claim."



    Poster at Bogleheads Forum
    [Prior to the Ban on Honest Posting]

  • "The Safe Withdrawal Rate Studies Are Based on History. This [The Retirement Risk Evaluator] Shows, Based on the Same History, What the Probabilities Are for the Future at Various Starting Points. If the First Has Value, Then Surely This Does Too."



    Poster at Bogleheads Forum

  • "There Are Hundreds of People Who Contributed to This. This Calculator [The Stock-Return Predictor] Demonstrates in a Compelling Way the Power of This New Internet Discussion-Board Communications Medium."




    Rob Bennett at the Bogleheads Forum
    (Prior to the Ban on Honest Posting)

  • "A P/E10 of'26' Is Bad. Now Look at the 30-Year Return Predicted by the Calculator -- 5.4 Percent Real. That's Not Bad. There Are All Sorts of Strategic Implications That Follow From Understanding That Stocks Provide Different Sorts of Returns Over Different Sorts of Time-Periods."




    Rob Bennett

  • "I Would Never Invest in Anything Without Having Any Idea What the Expected Return Is. For Instance, I Would Not Walk Into a Bank And Say "I'll Take One Certificate of Deposit, Please" WIthout Asking What Rate They Are Offering."



    Poster at Bogleheads Forum
    [Prior to the Ban on Honest Posting]

  • "I've Seen Things Said on Investing Boards That I Have Never Heard Said in Discussions of Any Non-Investing Topic. The Question of Whether Valuations Affect Long-Term Returns Is a Topic That Causes People More Emotional Angst Than Does Abortion or Impeachment Proceedings or the War in Iraq."



    Rob Bennett at the Bogleheads Forum

  • "It's Not Possible For Those Who Have Come to Believe That Stocks Are Always Best to Accept that Valuations Matter. The Two Beliefs Are Mutually Exclusive. If Valuations Matter, There Is Obviously Some Valuation Level At Which Stocks Are Not Best. The Two Paradigms Cannot Be Reconciled."


    Rob Bennett

  • "The Great Safe Withdrawal Rate Is Over. Rob Bennett Has Won.The Technical Evidence Supporting This Assertion Is Rock Solid."




    John Walter Russell,
    Owner of the Early Retirement Planning Insights Site
    [This Statement Was Put Forward on August 3, 2003.]

  • "I Am Afraid that the Emperor SWR [for "Safe Withdrawal Rate"] Has No Clothes."





    A Poster at the Early Retirement Forum
    [This Statement Was Put Forward on October 8, 2003.]

  • "I Cite You and John Walter Russell in My Paper as the Earliest and Strongest Advocates of This Approach [New School Safe Withdrawal Rate Research]."




    Wade Pfau, Professor of Retirement Income
    at The American College

  • "Dear Rob -- I Just Became Aware of Your Past Research in September. Since Then, I've Read Archives From Many Discussion Boards and Websites, and I Always Find Your Writing to Be Very Interesting and Intriguing."



    Wade Pfau, Professor of Retirement Income
    at The American College

  • "I Think Rob Bennett Did Provide An Important Contribution in Terms of Describing a Way for P/E10 to Guide Asset Allocation for Long-Term Conservative Investors. I Also Think He Was Right on the Issue of Safe Withdrawal Rates."


    Wade Pfau, Professor of Retirement Income
    at The American College

  • "What Studies Show This [That Long-Term Timing Doesn't Work]? In Particular, Are There Some Academic Studies That I Haven't Found Yet? That's All I Want to Know."




    Academic Researcher Wade Pfau at the Bogleheads Forum After His Own Search of the Literature Turned Up Not a Single Such Study

  • "Because the Precise Timing of This Mean Reversion Is Not Known in Advance, Expecting the Result to Happen in the Short-Term Will Not Be Possible. But Long-Term Investors Who Can Be Patient Can Wait for This Mean Reversion and Will Eventually Come Out Ahead."




    Academic Researcher Wade Pfau

  • "Your Work Is at Odds with the Ethos of the Board -- Here the Theme is John Bogle's Philosophy, Which Eschews Market Timing. This Board Came Into Existence to ESCAPE One Individual, the Very Individual With Whom You Have Openly Aligned Yourself."




    A Lindaurhead (to Researcher Wade Pfau)

  • "The Problem With Long-Term Market Timing Is That It Takes Too Long to Find Out If You Are Right or Wrong."






    A Poster at the Bogleheads Forum

  • "Why Is It Such an Odious Violation of the Tenets of Bogleheadism to Explore Whether Someone Who Has Enough Patience Might Be Able to Benefit from the Transitory Nature of Speculative Returns (the Idea That the P/E Ratio Eventually Ends Up Where It Started)?"




    A Poster at the Bogleheads Forum

  • "Let Me Explain Why I Posted About This Here. Valuation-Informed Indexing Has Had Critics for Years. But Until Norbert Did It In 2008, Nobody Seemed to Have Provided a Serious Investigation of It. I Couldn't Understand Why. That Bothered Me."



    Researcher Wade Pfau at the Bogleheads Forum
    (Prior to the Ban on Honest Posting)

  • "If You Really Don't Like Market Timing in Any and All Forms, You May Not See Any Point in an Empirical Investigation. You View Me as One of a Long Line of Hucksters Trying to Sell You Some Snake Oil. I Don't Want to Be Such a Person."



    Researcher Wade Pfau at the Bogleheads Forum
    (Prior to the Ban on Honest Posting)

  • "Having a Completely Ineleastic Demand for Equities Is a Bit Bonkers. No One Acts That Way with Life's Other Important Commodities. Campbell Advocates a Linear Valuations-Based Strategy so That You Wouldn't Be Making Big Changes. This Would Be Like Rebalancing But More Flexible."



    A Poster at the Bogleheads Forum

  • "The Whole Idea of Valuation-Informed Indexing Belongs to You. Do You Mind if I call the Paper 'Valuation-Informed Indexing'? I Would Give You Credit. I Have Been Toying With the Idea of Sending the Paper to the Journal of Finance, Which Is the Most Prestigious Journal in Academic Finance."


    Academic Researcher Wade Pfau, in an E-Mail to Rob

  • "I Definitely Need to Cite You as the Founder of Valuation-Informed Indexing, As I Have Not Found Anyone Else Who Can Lay Claim to That. Shiller Pointed Out the Predictive Power of P/E10 But Never Discussed How to Incorporate It Into Asset Allocation, As Far As I Know."




    Academic Researcher Wade Pfau

  • "I Tested a Wide Variety of Assumptions About Asset Allocation, Valuation-Based Decision Rules, Whether the Period Is 10, 20, 30 or 40 Years, and Lump-Sum vs. Dollar-Cost Averaging To Show That the Results Are Quite Robust to Changes In Any of These Assumptions."




    Academic Researcher Wade Pfau

  • "Yes, Virginia, Valuation-Informed Indexing Works!"




    Academic Researcher Wade Pfau
    (Wade Holds a Ph.D. in Economics from Princeton.)
    (The Buy-and-Hold Mafia Threatened to Get Wade Fired From His Job When He Reported His Findings.)

  • "I Wrote Up the Programs to Test Your Valuation-Informed Indexing Strategies Against Buy-and-Hold and I Am Quite Excited. You Say in the RobCast That VII Should Beat Buy-and-Hold About 90 Percent of the Time. I Am Getting Results That Support This."




    Academic Researcher Wade Pfau

  • "Never Underestimate the Power of a Dominant Academic Idea to Choke Off Competing Ideas, and Never Underestimate the Unwillingness of Academics to Change Their Views in the Face of Evidence. They Have Decades of Their Research and Academic Standing to Defend."




    Jeremy Grantham

  • "There's So Much That's False and Nutty
    in Modern Investing Practice."






    Warren Buffett

  • "Following Conventional Wisdom Has Led a Generation of Investors Down the Road to Ruin."






    Steve Hanke

  • "It Is Sad That the Idea That Price Doesn't Matter...Should Ever Have Been Seriously Considered".






    Andrew Smithers, Co-Author of Valuing Wall Street

  • "The Conventional Wisdom of Modern Investing Is Largely Myth and Urban Legend."





    Rob Arnott, Former Editor of
    Fianncial Analysts Journal

  • "Economics Is a Dog's Breakfast of Theoretical Ideas and Alleged Causal Relationships That Are At All Times Unproven and In Dispute."





    Terence Corcoran, Editor of National Post

  • "Since They Did Not Diagnose the Disease, There Is Little Popular Confidence That They Know the Cure. What If Economics Is, Actually, At the Same Level as Medicine Was When Doctors Still Believed in the Application of Leeches?"




    Gideon Rachman, Financial Times

  • "One of the Most Remarkable Errors
    in the History of Economics."



    Yale Economics Professor Robert Shiller
    (Referring to the Logical Leap from the Finding That Short-Term Price Changes Are Unpredictable to the Conclusion That the Market Sets Prices Properly)

  • "Everything Has Fallen Apart."






    Peter Bernstein, Author of Against the Gods
    (Referring to Old Views About How Markets Work)

  • "We Wonder Why Funds and Banks, Full of the Best and Brightest, Have Made Such a Mess of Things. Part of the Reason Is That We Have Taught Economic Nonsense to Two Generations of Students."




    John Mauldin, Thoughts From the Frontline

  • "Perhaps Most Scandalously, the Theory [Behind Buy-and-Hold] Remained Received Wisdom Long After Empirical and Theoretical Arguments Had Demolished It Within the Academic Community."




    John Authers, Financial Times

  • "I Love the Humans Dearly (the Title of the Book I Am Writing Is Investing for Humans: How to Get What Works on Paper to Work in Real Life) But They Can Be a Trial at Times. Hey! Helping the Humans Learn What It Takes to Invest Effectively Is Not All That Different From Being Married!



    Rob Bennett

  • "We Are Going to See Hearts Melt Following the Next Crash. I Will Be Working Side-By-Side With All of My Many Buy-and-Hold Friends to Rebuild Our Broken Economy."





    Rob Bennett

  • "Wow, I Did Not Realize You Had Achieved This Much Success and Had Many Devoted Believers/Followers. That’s Great, Then Ignore the Opposition. It Is Great to Have Opposition: That Means You Are Doing Something Right."




    Robert Savickas, Associate Finance Professor
    at George Washington University

  • "I Do NOT Believe I Know It All. I Believe That Shiller Discovered Something Very Important and It Appalls Me That More People Are Not Exploring the Implications of His Findings. My Aim Is To Launch a National Debate."




    Rob Bennett

  • "I Can See How Many Readers Would Be Put Off by the Somewhat Sensational/Scandalist Tone and Would Not Persevere to Read, Thinking You Are Losing Your Mind."




    Robert Savickas, Associate Finance Professor
    at George Washington University

  • "I LOVE Everything About Buy-and-Hold Other Than the Failure to Encourage Investors to Take Price Into Consideration When Setting Their Stock Allocations. That's a Mistake That Was Made Because Shiller’s Research Was Not Available at the Time The Strategy Was Being Developed."



    Rob Bennett

  • "Valuation-Informed Indexing Sounds Like a Real Thing. If It Is and I Can Thoroughly Understand It, Then It Will End Up In My Classrooms and in My Students' Minds (Of Course, With References to You and Wade)."




    Robert Savickas, Associate Finance Professor
    at George Washington University

  • "I Can Confirm Wade Pfau's Experience. Whenever I Send My Papers to the Financial Analysts Journal or Similar Traditional Journals, I Get Rejected."





    Joachim Klement, CIO at Wellershoff & Partners

  • "As a Fan of Thomas Kuhn's The Structure of Scientific Revolutions, I Know That Progress Can Be Frustratingly Slow and What Is Typically Needed Is Either a Crisis or the Ascent of a New Generation of Scientists Who Did Not Build Their Careers on the Old Models and Theories."




    Joachim Klement, CIO at Wellershoff & Partners

  • "We Trace the Deeper Roots [of the Financial Crisis] to the Economics' Profession's Insistence on Constructing Models That, By Design, Disregard the Key Elements Driving Outcomes in Real World Markets."




    Knowledge@Wharton

  • "Rob Gets Himself So Worked Up Over What Someone Else Is Doing With Their Own Money and Not Bothering Rob in the Least. As Long As They Aren't Knocking on Your Basement Door, What Do You Care? They Are Happy and Content. Leave Well Enough Alone and Focus on Your Own Account."


    Dab, One of the Greaney Goons

  • "I've Been on Forum Since the BBS Days and I Think Rob is Special. He Could Be an Internet Meme If He Put Some Effort Into It. Someday, He Will Realize That the Only Thing He's Good At Is Being an Epic Loser. He Just Needs to Embrace That Idea and Run With It. Watch Out, LOLCats, Here Comes Pathetic Guy!"


    Wabmaster, One of the Greaney Goons

  • "Your Lies Are Not Even in the Realm of the Possible, Much Less Actually Credible, Much Less Actually True."






    Drip Guy, One of the Greaney Goons

  • "I'm Your Friend. I Am Not a Boil on Your Ass."






    Rob Bennett, In a Response Comment
    to One of the Greaney Goons

  • "You Guys [the Greaney Goons] Are the Same Jokers Who Have Done This Before, Sparring with Rob Over Nonsensical Issues On This Site and Others, Leveling Personal Attacks, and You Don't Even Use Real Names! Rob Is Entitled to His Opinion, But the Fact That You Challenge Every Jot and Tittle of What He Says Makes It Clear You Have An Unholy Agenda. Please Take It Elsehwere."

    Kevin Mercadante,
    Owner of the Out of Your Rut Site

  • "Rob, Take This As Friendly Advice. You're a Smart and Articulate Guy and You Could Be Making Valuable Contributions to This Discussion. I've Dealt with the Mentally Ill Before and I've Found That They Sometimes Can Be Reasonable If Gently Redirected."



    Goon Poster

  • "Always Remember Others May Hate You, But Those Who Hate You Don't Win Unless You Hate Them, and Then You Destroy Yourself."





    Richard Nixon

  • "I’m a Numbers Guy. And I Believe I Understand Rob’s Thesis, that Future Returns, Over the Next Decade, Have a Tight Inverse Correlation to the PE10 for the Starting Point. Remember, Correlation Doesn’t Need to be 100%, Only That There’s a Bell Curve of Potential Outcomes that Shift Meaningfully Based on the Input."


    Owner of Joe Taxpayer Blog

  • "What a Difference a Threat to Get the Father of Two Small Children Fired From His Job Has on an Investing Discussion, Eh? Long Live Buy-and-Hold! It’s Science! With a Marketing Twist!"




    Rob, Referring to the Wade Pfau Matter

  • "I Respect Rob and His Analysis. He's Bright, Energetic and Passionate. [The Goon Stuff] Is Really Nonsense. I Enjoy a Thought-Provoking Conversation With People I Respect."





    Owner of Joe Taxpayer Blog

  • "The Fact that Shiller is a Proponent of the Approach Takes it from a Fringe View to Mainstream, in my Opinion."






    Owner of Joe Taxpayer Blog

  • "I Have had Academic Researchers Tell Me That They Dream of the Day When They Will be Able to do Honest Research Once Again. I Have had Investment Advisors Tell me That They Dream of the Day When They Will be Able to Give Honest Investing Advice Again."



    Rob Bennett

  • "Let’s Call a Spade a Spade, Shall We? Wade Pfau Stole Your Research and Put His Name on it, Throwing You Just a Tiny Crumb of Acknowledgement to Ward Off a Lawsuit. He’s Profiting Handsomely By His Theft, Leading a Charmed Life, Widely Published, Widely Respected. While Rob Bennett Continues to Toil in Total Obscurity. It’s So Incredibly Unfair, I Think If It Happened to Me, It Could Actually Drive Me Insane."

    One of the Greaney Goons

  • About Us
    • Rob’s Bio
    • Rob’s Bio
    • Contact Rob
    • Rob’s Book
    • Don’t Sue Me!
  • Blog
  • Passion Saving
    • 20 Dangerous Money Myths — They Think We’re Stupid!
    • 10 Unconventional Money Saving Tips
    • Why Your Money or Your Life Rocked the World
    • This Book Saves Marriages — The Complete Tightwad Gazette
    • How to Start Saving Money
  • Valuation-Informed Indexing
    • Why Buy-and-Hold Investing Can Never Work
    • About Valuation-Informed Indexing
    • The Stock-Return Predictor
    • The Retirement Risk Evaluator
    • The Investor’s Scenario Surfer
    • The Investment Strategy Tester
    • The Returns Sequence Reality Checker
    • Nine Valuation-Informed-Indexing Portfolio Allocation Strategies
  • The Buy-and-Hold Crisis
    • Academic Researcher Silenced by Threats to Get Him Fired From His Job After Showing Dangers of Buy-and-Hold Investing Strategies
    • Academic Researcher Silenced By Threats to Get Him Fired From His Job After Showing Dangers of Buy-and-Hold Investing Strategies — Teaser Version
    • Corruption in the Investing Advice Field — The Wade Pfau Story
    • The Bennett/Pfau Research Showing Middle-Class Investors How to Reduce the Risk of Stock Investing by 70 Percent
    • Buy-and-Hold Caused the Economic Crisis
    • The True Cause of the Current Financial Crisis — Questions and Answers
    • Investing Discussion Boards Ban Honest Posting on Valuations
    • Wall Street Journal Calls Buy-and-Hold a “Myth,” Endorses Valuation-Informed Indexing

“We’ll All Be Working Together in the Days Following the Next Price Crash. The Only Difference Is That There Will Be More Human Misery If We Wait.”

February 16, 2018 by 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:

Hi Rob. Come join us.

Love,

Robert, Wade, Bill and Michael

We’ll all be working together in the days following the next price crash, Anonymous.

The only difference is that there will be more human misery if we wait.

I vote for us all pulling together today.

But you know what? I only get one vote. Others get to decide what others do.

So we will have to wait a bit to see how things play out.

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

Rob

Filed Under: From Buy/Hold to VII

“None of Us Can Learn What We Need to Learn From a Single Discussion, Even an Honest One. We Need to Be Immersed in Honest Discussions, With Lots of People Coming at the Various Issues From Lots of Different Perspectives, and Those Discussions Need to Continue for a Long Time. Eventually, Things Start to Click for Us.”

January 18, 2018 by 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 moral here is that none of us can learn what we need to learn from a single discussion, even an honest one. We need to be immersed in honest discussions, with lots of people coming at the various issues from lots of different perspectives, and those discussions need to continue for a long time. Eventually, things start to click for us. From that point forward, our understandings gradually grows deeper and deeper and deeper.

My understanding is much deeper than anyone else’s (including Shiller’s). Not because I am smarter than other people. My understanding is deeper because I have been working this harder and longer than anyone else and thus I have naturally had many more click experiences and have been able to build on them to a greater extent than anyone else.

We humans learn by talking things over with other humans. I believe strongly that we need to give ourselves permission to talk over the implications of the last 36 years of peer-reviewed research. I am 100 percent confident that not one of us will ever look back in regret once we take that fateful step of opening every discussion board and blog on the internet to honest posting re safe withdrawal rates and scores of other critically important investment-related topics.

My best wishes.

Rob

Filed Under: From Buy/Hold to VII

“One of the Things That I Love About the Bogleheads Forum Is That Implications of Bogle’s Ideas Are Being Teased Out There on a Daily Basis. Bogle Got the Ball Rolling re Those Ideas. But Then Others Came Along and Applied Them in New Ways. Bogle Teaches Others and Then Others Teach Bogle. The Same Thing Will Happen With Shiller As We Permit Discussion of His Ideas at More Places.”

October 26, 2017 by 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:

Below is what Shiller is saying today.

“Spooky valuation story No. 1: The Shiller P/E ratio is now at 30.8, higher than it was right before the 1929 market crash.

The only time it was higher was right before the 2000 dot-com market meltdown, as you can see here. That does sound scary!

Especially when you consider that this valuation metric was invented by a Nobel Prize winner and Yale University professor Robert Shiller, who wrote The New York Times best-seller “Irrational Exuberance.” That’s an impressive list of credentials. He’s smarter than you and me, or at least me anyway, so his P/E ratio formula has to be right, no?

Not so fast. I checked with Shiller, and even he disagrees with this one. Shiller tells me he’s still got money in the U.S. markets, though he has been tilting toward Europe and emerging markets, in part, because they look cheaper. “For the immediate future, I am not that bearish,” says Shiller. “I am not thinking that the U.S. is a disaster.”

Shiller cites two reasons you shouldn’t buy the scare story that bears are concocting from his famous valuation metric. First, as many Shiller P/E commentators like to point out, Shiller says his P/E ratio is not a good predictor of short-term market moves, meaning one or two years. Instead, it’s better as a 10-year predictor. But even here, it’s not forecasting dire news. It’s still predicting gains over the next 10 years, even if they’re modest, says Shiller.”

So, Rob, what gives? Shiller says we shouldn’t buy your scare story. Not only is he not warning “divide your portfolio by two”, he’s still in the market himself. Doesn’t Shiller understand the last 36 years of peer-reviewed research? Doesn’t he understand his own research? If Shiller isn’t on your side, who is?

I don’t see any conflict between what I say and what you quote in that comment, Anonymous.

I certainly believe that you need to divide by two to know the true, lasting value of your stock portfolio. That’s what it means to say that stocks are priced at two times fair value.

But I certainly do not think of myself as a bear. I think of myself as someone who uses the peer-reviewed research as a guide to how to invest in stocks. I don’t see anything bearish or bullish about using peer-reviewed research as a guide.

I certainly agree that most investors should have some money in stocks today. But I certainly do NOT believe that most investors should have the same stock allocation today as they would have at a time when stocks are priced reasonably. If Shiller is saying that investors should go with the same stock allocation at all times, then we do indeed disagree. There’s a tiny bit of a suggestion of that in the words you quote. But I don’t think he says that. My take is that he is dancing around the issue. He doesn’t want to address the issue clearly because he knows that the Buy-and-Holders will go nuts if he does. So he offers some words that cut one way and some words that cut the other way.

I don’t quite agree with the fellow who is saying that Shiller’s words have credibility because he is “smarter than you or me.” Shiller is plenty smart. But Bogle is plenty smart too. If the test is which group has higher I.Q.s, I would feel comfortable with the Buy-and-Holders, there are plenty of smart people on that side of the table. I go with Shiller because he has 36 years of peer-reviewed research supporting him. That’s the biggie for me. The other biggie for me is that what Shiller says is consistent with what common sense tells me — price matters with everything else I buy so I have a hard time ignoring it when I buy stocks. Shiller is plenty smart but I wouldn’t say that that is the sole thing that makes him so persuasive for me.

I don’t like it AT ALL when Shiller says “for the immediate future, I am not that bearish.” Yucko! That one makes my blood run cold. He says this kind of thing all the time. He is saying here that he thinks that he can look at some sort of signal and identify the right time to get out of U.S. stocks. I am with the Buy-and-Holders re this one. I don’t believe that short-term timing works and I find it embarrassing when Shiller indicates that he believes in it. I believe that Shiller’s official position is that short-term timing doesn’t work but I have seen him refer to “indicators” and his confidence in them on many occasions. Nobody’s perfect and this is a case where my take is that Shiller is saying something that is outright foolish. I don’t see it as a super big thing. But I find it more than a little perplexing given how smart he indeed is. It shows once again that smart people get them wrong all the time. Being smart is a plus but it is not enough.

I don’t think that the U.S. is a disaster. I wouldn’t be looking around for undervalued markets. It can make some sense to do some of that. But my personal view is that the U.S. is a well-established market with a great track record. I think you can outsmart yourself trying to look for other markets at times when the U.S. market is insanely overpriced. My inclination would be just to lower your allocation in the U.S. market for a time.

I of course agree that P/E10 does not predict short-term returns. I agree that today’s P/E10 predicts a positive return over 10 years. But it predicts a very low positive return. If you are happy with a very low positive return and you understand that that’s what you are likely to get, a high stock allocation can work for you. But I think it makes more sense to go with a lower stock allocation today and then move to a high stock allocation when prices fall and the 10-year return going forward is much higher. Stocks have been providing a poor (about 2.25 percent) return for 18 years now. Most people cannot go for years and years with such a low return. People invested heavily in stocks have now lost out on close to two decades of compounding. What the f? Most people rely on compounding to meet their goals. Miss out on two decades of compounding and you are not going to make it. I think that the likely 10-year return at today’s P/E10 level is too low to be acceptable for any more than a small percentage of one’s portfolio.

I don’t have any “Scare story.” I have a research-based story. I think we should permit honest posting re the last 36 years of peer-reviewed research at every site on the internet. I see it as a win/win/win/win/win.

I do think that to some extent it would be fair to say that Shiller does not appreciate the implications of his own research. I don’t think there is anyone who ever lived who was able to appreciate all the implications of his own ideas. People learn from discussions with other humans. When we open every site on the internet to honest discussion of Shiller’s research, Shiller will hear lots of things that he has not heard until now. That will help him come to a better understanding of the far-reaching implications of his work. That will be a very good thing.

I don’t think that Bogle understands all the implications of his many powerful insights either. One of the things that I love about the Bogleheads Forum is that implications of Bogle’s ideas are being teased out there on a daily basis. I would bet $10 that, if you asked Bogle if he has ever read anything at that board that he did not think up himself, he would say “yes.” That’s super groovy, so far as I am concerned. Bogle got the ball rolling re those ideas. But then others came along and applied them in new and interesting and exciting ways. A win/win/win/win/win. Bogle teaches others and then others teach Bogle. I think that’s great. And I think that the same thing will happen with Shiller as we permit discussion of his powerful ideas at more places.

Shiller is on my side. So is Bogle. So is every American citizen. We acted as a people to make financial fraud a felony in the United States. I don’t know how anyone could be more on my side than to do that. If you asked Mel Lindauer or John Greanry on May 12, 2002, whether they thought that there is a place in investing discussions for death threats and demands for unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs, they would have said that there is no place for such garbage. They changed their minds under pressure. Humans do not always act rationally under pressure. But there is no problem here of the entire country not being united in opposition to the tactics that we have seen advanced by the Lindauerheads and the Greaney Goons over the past 15 years. We are entirely united. I mean, come on.

Everybody is on my side. But this has been a difficult transition. It hurts people to hear that they need to divide their portfolio balances to know the true and lasting value of their stock holdings. When people are hurt, they forget their true beliefs. This is something that happens with the humans all the time. I am 100 percent certain that we will all get things back on the right track in the days following the next price crash. Once there is no more need to divide by two, the marketing edge that Buy-and-Hold possesses today will disappear.

Or so the greatly flawed brain of Rob Bennett believes, you know?

I could be wrong, Anonymous. That’s the wild card here.

I naturally wish you the best of luck in all your future life endeavors.

Rob

Filed Under: From Buy/Hold to VII

“It’s Scary for Buy-and-Holders to Let in That Their Portfolios Are Only Worth One-Half of the Amount That They Have Thought They Were Worth. But the Benefits of Letting in That Research-Proven Reality Are Huge. So We Will Get There. It’s Just a Matter of Time.”

October 21, 2017 by 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:

Again, you try your typical diversionary tactic. You cannot support any of your comments with facts.

The bottom line remains this:

1. There has never been a successful case of VII implementation, including your failed track record.

2. Numbers buy and hold strategies have had long track records of success

3. There has never been a 30 year period in which a 4% withdrawal rate has not worked.

The biggest joke is that your plan (which you have listed hundreds of times on your website) is that your entire retirement plan relies on a big stock market crash, followed by having your name splashed on the front page of the New York Times, those that don’t agree with you all going to prison and John Bogle helping you cash in on a$500 million windfall of settlement payments you think that unnamed Wall Street people owe you.

If you answer the question above, we will know where we stand, Sammy.

Of course the question is rhetorical. I know the answer. You do not divide by two.

If the market is efficient, there is no need to divide by two. If the market is efficient, Buy-and-Hold is the ideal strategy. If the market is efficient, the safe withdrawal rate studies are accurate.

But if valuations affect long-term returns, the safe withdrawal rate studies are in error and the market is not efficient and all investors need to divide the numbers on their portfolio statements by two to know the true, lasting values of their portfolios.

That’s it.

Shiller’s 1981 findings truly were “revolutionary,” just as he said. Shiller deseved his Nobel prize. There was a time when we did not know that we need to divide by two when stocks are priced at two times fair value. Now we do. At least we today know this intellectually. 90 percent of us still do not accept it emotionally.

We’re working on it! We’re working on it!

We are as a nation working our way through a process that will take us from Buy-and-Hold to Valuation-Informed Indexing. It’s scary for Buy-and-Holders to let in that their portfolios are only worth one-half of the amount that they have thought they were worth. But the benefits of letting in that research-proven reality are huge. So we will get there. It’s just a matter of time.

My job is to make the transition go as smoothly as possible for every single person involved. I cannot deny the reality that we all need to divide by two, no matter how uncomfortable it makes people feel to hear that. But I need to do what I can to help make the medicine go down as easily as possible. That’s what I always try to do.

I hope that helps a small bit, my long-time Buy-and-Hold friend.

Rob

Filed Under: From Buy/Hold to VII

“I Want Buy-and-Hold to Be Subjected to Sincere and Polite and Respectful Criticism Just As Every Other Idea Advanced in the United States Is Subjected to Sincere and Polite and Respectful Criticism. That’s All That I Have Ever Wanted. It’s a Very, Very, Very, Very, Very Big Thing, in My Eyes. I Find it Shocking That There Is Even a Tiny Bit of Controversy Over This Matter.”

October 17, 2017 by 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 have posted everything you have had to say, thousands of times. It is basically a decade+ of repeats. If you were allowed to post whatever you wanted on any site, which just be more repeats, what makes you think anything would be different? Don’t you think people would just respond the same way?

The Buy-and-Holders say the same things over again too. If I have heard the phrase “timing doesn’t work” one time, I have heard it 10,000 times. I don’t mean that as a dig. They believe it is true and they believe it is important. My point is that it is not at all unusual for the advocates of an investing strategy to make similar points over and over again. If you truly believe that timing doesn’t work, you are quite properly going to say that again and again. And, if you truly believe that exercising price discipline (that is, engaging in long-term timing) is essential, you are quite properly going to say that again and again. I believe that exercising price discipline (that is, engaging in long-term timing) is essential.

I absolutely believe that people would continue to respond the same way that they have responded for 15 years now if I were permitted to post honestly at every investing discussion board and blog on the internet. It would be very good news for Valuation-Informed Indexing if that were to happen.

What we have seen from the first day is that 10 percent of the population already believes in Valuation-Informed Indexing and that another 10 percent of the population has an interest in learning more about it while 20 percent of the population feels so strongly about Buy-and-Hold that they engage in criminally abusive behavior to stop others from hearing about Valuation-Informed Indexing and 60 percent of the population is generally sympathetic to Buy-and-Hold but not so intense that they are willing to engage in abusive behavior. If we enforced the laws on our boards and blogs, the 10 percent that wants to learn more would be able to ask the questions that they need to have answered to become converts. That doubles the number of people who believe in Valuation-Informed Indexing. Then that 20 percent would in time become 40 percent and then the 40 percent would become 80 percent.

No new idea takes over the world in 24 hours. Buy-and-Hold is backed by research done by a Nobel prize winning economist and the basic idea strikes people as being rooted in common sense and millions of good and smart people feel that they have enjoyed good results with Buy-and-Hold for a long period of time. This strategy is not going to pass from the scene because some fellow puts up a post saying that he does not think that it adds up. It is going to take years of effort put forward by THOUSANDS of people all coming at the question from different perspectives to cause people to gradually over time come to lose confidence in Buy-and-Hold and to gain confidence in Valuation-Informed Indexing.

I want to see that process get started. If the process had gotten started in 1981, as I believe it would have in an ideal world, I believe that 90 percent of the population of investors would today be Valuation-Informed Indexers. We are obviously not today in that magical place. How are we going to get there? We need to put one foot in front of the other and just make gradual progress day by day by day. We cannot get to first base without first reassuring the 10 percent who already believe in Valuation-Informed Indexing that their views are warmly welcomed at every investing discussion board and blog on the internet. That’s what I want to change. I want everyone who has doubts about Buy-and-Hold to feel comfortable expressing those doubts publicly. I don’t want anyone to say anything negative about Buy-and-Hold that he or she does not sincerely feel. But I want every last community member who sincerely feel doubts to express those doubts with as much strength of conviction as he or she feels about them.

I want to follow the process envisioned in the published posting rules of every site on the internet and indeed in the laws of the United States. I want Buy-and-Hold to be subjected to sincere and polite and respectful criticism just as every other idea advanced in the United States is subjected to sincere and polite and respectful criticism. That’s all that I have ever wanted. It’s a very, very, very, very, very big thing, in my eyes. I find it shocking that there is even a tiny bit of controversy over this matter. It is my take that every Buy-and-Holder alive should want what I want. I am not able to imagine any scenario in which there could be any negative arising out of what I want becoming the reality. I see what I want as being a 100 percent positive for every single person affected by it. But I do very much want this thing.

I do not see it as something that can be compromised away or negotiated away or ignored or forgotten about or whatever. This process-oriented concern is of huge importance to me. It would not be overstating things to say that the pursuit of this process-oriented thing has become the focus of my life for 15 years now. But it is only this one small (in my eyes!) thing that I care about. There is nothing else on my agenda.

So —

I see it as making all the difference in the world if I am permitted to post honestly re safe withdrawal rates and scores of other critically important investment-related topics. To me this is very, very, very much a biggie.

Perhaps it’s not that way for you. Perhaps for you it is no biggie so long as most people continue to have confidence in Buy-and-Hold, as I am certain they would if I were permitted to post honestly. Perhaps for you, there would effectively be no change so long as most people remained Buy-and-Holders.

But for me, that one small change would represent all the change in the world. I think that I am different than most people re the intensity of feeling that I have re this matter. I strongly suspect that this is why I became a journalist in the first place. I made journalism my life’s work because this process-oriented concern means the world to me. Others don’t react the same way because each of us is different in some ways and others just don’t see this aspect of things in the way that I see this aspect of things.

I hope that that helps you understand just a little bit better where I am coming from re this matter, Anonymous.

I naturally wish you the best of luck in all your future life endeavors.

Rob

Filed Under: From Buy/Hold to VII

“It Wouldn’t Work to Post a New Blog Entry Each Day Saying ‘It Has Been Shown for the 500th Time That the Buy-and-Hold Retirement Studies Really, Really, Really Do Not Contain Valuation Adjustments.” That’s the News That We Need to Act On. But As a Society We Have Not Acted in an Effective Way as of Today. So I Use These Longer Headlines to Reveal Points That Need to Be Revealed for Us All Over Time to Come to an Understanding of WHY We Have Not Acted.”

October 17, 2017 by 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:

This is a 56 word title, and it’s not even a particularly long one for you. Also, this is your second post of the day. Didn’t you used to take weekends and holidays off and limit yourself to one new post per day?

In ordinary circumstances, there would have been a headline at some point saying “Buy-and-Hold Retirement Studies Do Not Contain Valuation Adjustments” and then everyone working in this field would have pulled together and addressed the problem. That was the message of my famous May 13, 2002, post. But we have not pulled together and solved the problem. So we are in this strange twilight-zone world today in which it is public knowledge that the Buy-and-Hold retirement studies do not contain valuation adjustments and yet those studies have not been corrected.

Most of the short-headline blog entries that can be written about these matters have already been written. In the blog I document my conversations with the Goons. Those conversations reveal insights as to WHY we have not all pulled together to correct the discredited studies and to do all the other things that we need to do to get accurate and honest and informed investing advice out to millions of people. I don’t control how those insights are delivered to us. They are delivered via conversations with our Goon friends. I feature at the blog the conversations that have something of value to those trying to understand what has been going on. Sometimes I need to quote a good number of words from one of those conversations to make clear the point being revealed. So that’s what I do.

It’s an unusual procedure. But this entire matter is out of the norm. Given the circumstances we all face here, I think that this approach makes sense. The headlines that I choose are usually quotes from the conversation that sum up a point that either has not been made before or that has not been examined from the same particular angle before. I would prefer to tell the story with the usual sorts of headlines. But it wouldn’t work to post a new blog entry each day saying “It Has Been Shown for the 500th Time That the Buy-and-Hold Retirement Studies Really, Really, Really Do Not Contain Valuation Adjustments.” That’s the news that we need to act on. But as a society we have not acted in an effective way as of today. So I use these longer headlines to reveal points that need to be revealed for us all over time to come to an understanding of WHY we have not acted. I believe that we will be taking all these points into consideration in the days following the next price crash, when we can all see before us the downside of failing to act on reports that the Buy-and-Hold retirement studies do not contain valuation adjustments.

I hope that helps a small bit, Carl.

Yes, I used to put up one post each business day. I think that’s plenty. There have been more Goon conversations revealing something of value in recent months and I have fallen behind on posting about the ones that I need to post about. So I have temporarily adopted a practice of having two posts per day seven days per week until I get caught up. I followed a similar practice in the days after Wade Pfau flipped, when I had lots of blog entries examining what had happened and I fell far behind. It is usually possible to report on what needs to be reported with one blog entry each business day. But when things get to a point where I am several months behind re the posting of new blog entries, I feel that I need to make a change in the ordinary practice before things get too out of hand.

At one point I had fallen to about three months behind. As a result of the new posting schedule, I am now about five weeks behind. My intent is to return to the five-posts-per-week schedule when I get caught up.

Please take good care.

Rob

Filed Under: From Buy/Hold to VII

“You Are Absolutely Right That the Vast Majority of Today’s Investors Find the Claim that Buy-and-Hold Is Dangerous a Preposterous Claim.

October 10, 2017 by 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:

Rob, calling the long-term investment strategy known as buy-hold-rebalance may make your little troll heart flutter but normal people quickly see through the nonsense and see that you’re a nutjob. Making nonsensical statements such as that is Catastrophically Unproductive. Of course, Catastrophically Unproductive is the story of Bat$hit Crazy Hocomania.

I believe that you left something out of this one, John. I believe that you meant to say “calling the long-term investment strategy known as buy-hold-rebalance a Get Rich Quick scheme…” or “calling the long-term investment strategy known as buy-hold-rebalance an emotion-based strategy….” or something along those lines.

I like the comment because it succinctly explains the reason why we have seen so much friction over the first 15 years of our discussions. If it is true that valuations affect long-term returns (we have 15 years of peer-reviewed research showing this to be so), then there is precisely zero chance that a Buy-and-Hold strategy could ever work for a single long-term investor. This is ABC logic. If valuations affect long-term returns, then stock investing risk is variable, not static and, if stock investing risk is variable, then investors MUST adjust their stock allocations in response to big price swings to have any hope of keeping their risk profiles roughly constant. In an ideal world, Bogle would have given a speech acknowledging this within a week or so of publication of Shiller’s “revolutionary” (Shiller’s word) 1981 research and we all would have been off to the races. Everyone who works in this field would have been working hard to develop the Valuation-Informed Indexing concept from that day forward and we would have made huge progress by today without ever having experienced any nastiness at all.

Of course it did not play out that way. I believe that Bogle was suffering from cognitive dissonance when he learned about Shiller’s findings. He of course understood them in an intellectual sense. But he truly believed in Buy-and-Hold and he was not able to process what he learned because the emotional pain of doing so was just too much. So he ignored Shiller’s work and just continued promoting the Buy-and-Hold concept as if Shiller’s work did not exist. There were already lots of powerful and influential people promoting Buy-and-Hold at that time who also were alarmed by what they heard about Shiller’s research who also suffered cognitive dissonance and who followed Bogle’s lead. Since there were no terrible results that quickly followed from this terrible “choice” (it was not a true choice given the cognitive dissonance behind it), it became the accepted thing to do.

The longer the “cover-up” (again, it was not a true cover-up in an important sense because of the cognitive dissonance) continued, the harder it became to reverse course and come clean re what Shiller’s revolutionary research signified. Levels of overvaluation became truly dangerous in 1996. But by that time the cover-up had been continuing for 15 years. What were people going to do at that time, say “hey. remember all that Buy-and-Hold stuff that we’ve been telling you about for years now, that was all a mistake, everyone who follows the research in this field has known this for years, some funny joke, huh?” These people need to be recognized as experts to make a living in their chosen field. It does not look good for an expert to reveal that he has been ignoring 15 years of peer-reviewed research in all of his public statements about a matter of great importance. So, even though valuations had now reached a point where the cover-up was exceedingly dangerous, it continued.

Eventually, the cover-up caused an economic crisis. That made it ever more dangerous to permit the cover-up to continue. And it also made it even more difficult to reverse course and come clean. The cover-up of the obvious meaning of Shiller’s revolutionary research findings has over time become more and more and more dangerous to every last one of us while also becoming harder and harder and harder for us all to acknowledge. And here we are.

“Buy-and-Hold” and “Get Rich Quick” are synonymous terms. We didn’t know that before 1981. I don’t believe that the Buy-and-Holders started out aiming to do any harm. But we did learn that in 1981 and we should have promptly gotten to work spreading the word far and wide and working together to build the first true research-based investing strategy, Jack Bogle’s dream from his younger years. If valuations affect long-term returns, then Buy-and-Hold is the purest and most dangerous investing strategy ever concocted by the human mind and every investor alive needs to be aware of the dangers he is facing when he falls for this garbage strategy.

But you are absolutely right that the vast majority of today’s investors find the claim that Buy-and-Hold is dangerous a preposterous claim. So, yes, you are right that most people tune out those of us who make such claims. 90 percent of investors think that Buy-and-Hold is perhaps the safest strategy and that it works just fine or at the very bare minimum that it works well enough. That’s where we are today.

We all deep in our hearts want to be in a better place. I think it would be fair to say that I have been elected to lead us to a better place. We don’t get there by being afraid to stand up to the relentless abuse dished out by you Goons. We have to insist on our right to post honestly. There is no other way. When one of us insists on his right to post honestly, it helps all the rest of us work up the courage to do the same. Had those who had doubts about Buy-and-Hold before I came along expressed those doubts in stronger and more honest terms, I would not have faced the wall of opposition that I faced when I pointed out that the retirement study posted at your site lacks a valuations adjustment, John. I don’t want anyone who comes after me to have to face what I had to face. So I am going to continue to post with complete honesty

With complete charity as well, to be sure. That’s the other side of the story. The Buy-and-Holders are our friends. They have made many hugely important contributions. There would be no Valuation-Informed Indexing today were it not for the amazing work done over the years by our Buy-and-Hold friends. Posting in a fully honest way requires telling that side of the story as well as the cover-up side of the story.

But the cover-up side does need to be told. People have a hard time understanding how there could be 36 years of peer-reviewed research showing that there is precisely zero chance that a Buy-and-Hold strategy could ever work for even a single long-term investor and yet this never became generally known. The story of the cover-up tells the tale. So that needs to get out there if we ever are as a society going to get things back on a good track.

Lots of people do indeed think that I am a nutjob, John. Most would not be so rude as to say so in those words. But lots of people really do think something along those lines.

But I intend to continue posting honestly. The reality here is that your study does not contain a valuations adjustment. It gets the numbers wildly wrong. The safe withdrawal rate was not 4 percent in 2000, it was 1.6 percent. You have hurt millions of people in very serious ways with your criminally abusive posting tactics. You hurt thousands of people who read your stuff on the internet and believed that your claims were rooted in legitimate research. You hurt millions more when you stopped those of us who wanted to launch a national debate on these matters from doing so.

I cannot be a part of this massive act of financial fraud. In part because I don’t want to go to prison. And in part because it is just not what I am about. A good number of those people had become friends of mine over the years. I care about them. I cannot sell them out. I will never do so.

I wish you the best of luck in all your future endeavors. But that is as far as it goes for this boy.

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

My best and warmest wishes to you.

Rob

Filed Under: From Buy/Hold to VII

“He Has Not Yet Been Able to Put the Story Together in His Head. Because It Is Not Discussed By Lots of Different People at Lots of Different Web Sites. That’s How We All Learn About Any Subject That We Come to Learn About Over Time — By Talking Things Over With Lots of Different People Coming at the Subject From Lots of Different Perspectives.”

October 4, 2017 by 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 now you probably think Barton is a supporter and agrees with you, right?

Yes and no, Anonymous.

He didn’t say the words “I endorse Valuation-Informed Indexing and I am going to follow the strategy myself starting today and I am also going to tell all my friends to do the same.” In that sense, which I suspect is the sense that you have in mind, I would not call him a supporter.

But there is another sense in which, yes, I very much think he is a supporter. He wrote an article that made some important points. Those points relate to the Valuation-Informed Indexing story, to the story of why, 36 years after the publication of peer-reviewed research showing that there is precisely zero chance that a Buy-and-Hold strategy could ever work for even a single long-term investor, there are still people advocating this strategy. He obviously sees the importance of those points. But he has not yet been able to put the story together in his head. Because it is not discussed by lots of different people at lots of different web sites.

That’s how we all learn any subject that we come to learn about over time — by talking things over with lots of different people coming at the subject from lots of different perspectives. When Barton has a chance to hear what he needs to hear to fully appreciate the case for Valuation-Informed Indexing — as I believe he will in the days following the next price crash — I 100 percent believe that he will become a big-time supporter.

So perhaps the best way to describe him today is not as a supporter or a detractor but as a person in the state of BECOMING a supporter. I cannot make him a supporter by sending him a single e-mail no matter how many words I include in that e-mail or how powerfully I arrange those words. All that I can do at this point in time is to send an e-mail that makes some points that have particular relevance to him and then wait for the rest of the magic to happen as he hears more points of views expressed in different ways and with different words in the days following the next price crash. Since that’s the best that I can do at this moment in time, that’s what I did. We all have to play the cards that are dealt to us to the best of our abilities.

I don’t see Barton as being that different from lots and lots of others in this regard. Jack Bogle is not a full-throated supporter of Valuation-Informed Indexing today. But he has put forward a good number of statements indicating that he supports the basic principles of the research-based approach. I believe that in the days following the next price crash, Bogle will hear things from lots of different people that will cause things to click for him in a way that they have not clicked to this day and that he will become a full-throated supporter.

I believe that the same will happen with Bill Bernstein and with Scott Burns and with Bill Shultheis and with Wade Pfau and with Larry Swedroe and with Carl Richards and with thousands and thousands of others. All of these people will then be working hard to help us bring the Buy-and-Hold Crisis to an end and to make the transition to the other side of The Big Black Mountain and to live far richer (in every sense of the word) lives than any of us imagined we could ever possibly lead in darker, earlier times in our lives. That’s a good thing, right? That’s something that we all should be looking forward to, right?

I am sure looking forward to that day.

If you’re not, it is my strongly held view that you should be asking yourself why you are not. Learning is a positive. Human progress is a good thing. Knowing how to invest effectively for the long-term is better than not knowing how to invest effectively for the long-term. Reporting the safe withdrawal rate accurately is a plus. Learning together is a win/win/win/win/win. It’s not even possible for the rational human mind to imagine any possible negative following from a Learning Together experience.

These are my sincere thoughts re these terribly important matters, in any event. I naturally wish you the best of luck in all your future life endeavors, good friend.

Rob

Filed Under: From Buy/Hold to VII

“For Us to See Successful Valuation-Informed Indexing Outcomes, We Are Going to Need to Start Talking About VII at Every Investing Board and Blog on the Internet. That’s How It is Done. You Tell People About What the Research Says and Then Those People Ask Questions to Firm Up Their Understanding, and Then Those People Try Out VII, and Then Over Time You Have Reports of Successful VII Outcomes.”

October 1, 2017 by 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:

Can you show anyone with a successful VII outcome?

What I can show you is 36 years of peer-reviewed research, Anonymous.

That’s enough for me. It’s up to you whether that is enough for you or not, it’s not up to me to decide for you. But it is up to me to decide for me. I have decided that it’s enough for me.

The problem is not that you and I have come to different conclusions as to what is enough. That’s normal. That’s what you should expect to see. In any community, there are going to be different positions taken on different issues. It’s a 100 percent healthy thing that that be the case.

The problem is that you are using abusive tactics to decide for others. You are saying “no one is going to get to hear what Rob Bennett has to say because I have decided that what he is saying is not enough for me.” No. That’s over the line. That is not acceptable.

If no one speaks up about your abusive tactics (and the abusive tactics of other Buy-and-Holders — you obviously are not the only one causing a problem re this matter), then we will never be able to point to millions of people using Valuation-Informed Indexing successfully because no one will ever know about Valuation-Informed Indexing. For us to see successful VII outcomes, we are going to need to start talking about VII at every investing board and blog on the internet. That’s how it is done. You tell people about what the research says (or, if you want to stare things more diplomatically, what you BELIEVE the research says) and then those people ask questions to firm up their understanding, and then those people try out Valuation-Informed Indexing, and then over time you have reports of successful VII outcomes, more and more and more of them as time passes.

We cannot get to the successful outcomes until we permit people who believe in Valuation-Informed Indexing to post honestly. That’s the very first step in the process that must be followed if we are ever to have reports of lots and lots of successful VII outcomes. I am trying to get the process started. I am refusing to post dishonestly because I believe that it is my right to post honestly and because I believe it is my responsibility to the community to post honestly. You are demanding something of me that I obviously cannot deliver until the possibility of honest posting is opened up and at the same time you are refusing to permit the possibility of honest posting. It doesn’t add up.

I am 100 percent confident that we will in time see millions of cases of successful VII outcomes. But I continue to insist that my right to post honestly be recognized because THAT IS HOW IT IS DONE.

I didn’t cause any of this problem. I was a Buy-and-Holder myself on the morning of May 13, 2002. I gave up on Buy-and-Hold on the evening of August 27, 2002, when Greaney put forward his first death threat and 200 Buy-and-Holders endorsed it (in fairness, there were 50 others — presumably some Buy-and-Holders and some Valuation-Informed Indexers — who spoke out in opposition to the death threat). If I could turn back the clock to 1981, so that we could all begin posting honestly 36 years ago, I would do it and I am 100 percent certain that Jack Bogle and all of my other Buy-and-Hold friends would participate in the process that would have led us to a place where we would have millions of successful VII outcomes today. But I of course do not have the ability to turn back the clock.

The best that we can do today is to work together to open up every investing board and blog on the internet to honest posting starting at the close of business today. That’s what I propose. I think it would be fair to say that, if we take that path, we will all look back someday to today as a Second Independence Day for the people of the United States. The last 36 years of peer-reviewed research is the most exciting 36 years of peer-reviewed research in the history of the United States. It is truly exciting and liberating stuff. We all should be exploring the far-reaching implications of Shiller’s amazing research findings on a daily basis.

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 good friend.

Rob

Filed Under: From Buy/Hold to VII

“Bogle Needs to Address the Blame Issue in a Public Statement That Is Written Up on the Front Page of the New York Times. A Public Statement By Bogle Will Put All the Nasty Stuff in the Past Where We All Want It. From That Point Forward, We Will All Be Able to Engage in Fun and Exciting Discussions About How Stock Investing Really Works.”

September 19, 2017 by 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 said “Greaney” sixteen times in that one comment. This is not what healthy people do.

It’s not just Greaney, Anonymous. Please feel free to quote me re that one. There is no one individual so powerful that he could do so much harm to a society. It is not just Greaney and that one is not even remotely a close call. That’s the sort of thing that I intend to say in the days following the next price crash to help out my friend John Greaney.

Greaney didn’t do this by himself. And we don’t know how we would have reacted in similar circumstances. Greaney is an engineer and engineers care deeply about getting the numbers right; they take a justified pride in it. So the pain he felt when he was publicly embarrassed (it was not my intent to embarrass him but that was clearly how he felt) was acute. The full reality is that Greaney’s study was top-notch stuff. I gave it a 5-star review and he merited that. Greaney’s understanding of the safe withdrawal rate was miles ahead of Peter Lynch’s understanding of the safe withdrawal rate and Lynch was paid millions to manage a big mutual fund.

And ALL of us participated at least in some small way in this massive act of financial fraud. I held back from saying what I knew about safe withdrawal rates for three years. So in a technical sense I was guilty of financial fraud too. A lot of cognitive dissonance has been evidenced in this story. By no stretch of the imagination am I seeking to put this all on Greaney. I very strongly OPPOSE that sort of take.

I refer to Greaney in my explanations because it is important to get basic facts right. Greaney was the first individual to get abusive. There were other Buy-and-Holders who got abusive on the morning of May 13, 2002. But Greaney was a leader at the Retire Early board. Those people looked to him for signals re how to behave. If he had said in response to their abuse “Wait a minute, Rob is making an interesting point, I would like to talk this through a bit and see if we can so some good with it,” those others would have cooled it. When one becomes a leader in a community, one takes on added responsibilities. Greaney sent very bad signals when he advanced death threats. It’s not possible to make complete sense of the story without speaking clearly and firmly about the negative role that Greaney played.

Those early days of the discussions were very important. We are not able to say where we would be today had Greaney played it in a different way. But my guess is that we would be in a very good place. My understanding of how safe withdrawal rates work was limited at the time. Had we as a community taken a different path, we would have been combining the knowledge held by lots of different people and thereby generating some amazing insights. I think we would be in a very good place today had we chosen that path. Greaney was the primary force seeing that we got on a bad path instead. There were hundreds of community members whose first reaction to my famous post of the morning of May 13, 2002, is that it had started the most amazing discussion ever held at that board. People were open to enjoying a great learning experience. Greaney and those who followed his signals made that impossible and things went downhill from there.

I mentioned Bogle also. Bogle has never put forward a death threat. So why do I mention him as well? It’s because of that responsibility thing that I noted above in regard to Greaney. Bogle is far, far, far, far less abusive than Greaney. But he is also in a position of far, far, far, far greater responsibility. So Bogle played a negative role. Bogle could have shut Greaney down when he learned about the controversy (when it traveled to the Bogleheads Forum). That would have taken us off the bad path chosen by Greaney and put us on the good path that Greaney could but did not elect. By failing to speak out in opposition to Greaney’s tactics when he learned of them, Bogle took us farther down the dark path that Greaney (and Lindauer) had chosen before him. So Bogle also played a big role.

I don’t believe that Bogle would have chosen the dark path if the question had been presented to him in a fresh manner. By the time Bogle weighed in, Greaney and Lindauer had already poisoned the discussions. So Bogle faced a high percentage of a board population that was positively enraged about the situation. And of course they were enraged about something that Bogle himself believes in. In fairness to Bogle, this put him in a tough spot. If he came out in support of following the law, he would be viewed by many insanely angry board members as coming out in support of this Rob Bennett fellow, who was in the process of “trashing” (not really, but that’s how it was seen) all that Bogle stood for. As with Greaney, there are two sides to the Bogle story.

The biggest problem that we are dealing with is the cover-up problem. If we had taken the good path on the first day, there would have been disagreements. People just do not agree on these matters. But there also would have been good fruit and people on both sides would have been enjoying the learning experience. It’s important to remember that Shiller was awarded a Nobel prize for his “revolutionary” (his word) research findings of 1981. As a society, we are highly skeptical of Shiller’s findings; the idea that stock returns can be effectively predicted 10 years in advance when they cannot be effectively predicted 10 weeks in advance seems fantastical. But we also respect the work that Shiller has done because of its obvious potential to make all of our lives better in the event that it is explored in depth and checks out as valid.

So I don’t think that Bogle is necessarily inclined to shut down discussions in the right circumstances. Shiller’s findings really make all of Bogle’s genuine contributions 10 times more important. So there is no reason why Bogle would be opposed to moving forward if he were thinking clearly about these matters. I believe that the way in which the issue was put before him hindered his ability to think clearly.

In the early days, I didn’t have the peer-reviewed research that Wade Pfau and I co-authored to point to. If I had had that research at the time, I would have won the debate in 24 hours and it would have come to a successful conclusion. The reality is that I didn’t have it. I did the best I could to present the ideas in an effective manner but the cold reality is that the ideas just were not sufficiently developed at the time for me to be successful. So everything should have flipped when Wade and I published our research in a peer-reviewed journal, right?

Yes, that’s what SHOULD have happened. Why didn’t it?

It didn’t happen because the cover-up had been going on for years at that time and those who had posted in “defense” of Greaney and Linduaer and Bogle were afraid that they would be going to prison if the story got out. This matter is no longer one where there are just intellectual differences of opinion. People on one side are looking ahead to long prison terms. That makes people very, very, very reluctant to permit free and open debate. That’s our primary problem today. That’s why I often make reference to the upcoming prison sentences. We cannot take this to a good place unless we are willing to face the true obstacles in our path and the biggest obstacle today is the concern over upcoming prison sentences. So we need to speak about that aspect of the question no matter how distasteful we all find it to consider the matter.

You raise a concern that I refer to Greaney too often and the issue that you are getting at when you do so is the issue of BLAME. I possess no desire to blame Greaney or anyone else. So you have an ally if you are looking for one as part of a project to set things up in such a way that Greaney and lots of others avoid being assigned excessive blame for what has happened. You don’t have to persuade me. I am on board. My job is to pull everyone together and the biggest obstacle to realizing that dream is the concern that many feel over being assigned too much blame. Show some spirit of cooperation and we will be able to address the problem in at least a somewhat satisfactory way. Continue the delay tactics and you make it worse and worse and worse and worse.

The problem with cover-up is that they can be exposed. Then you find yourself needing to cover-up the cover-up. And next it is covering up the cover-up of the cover-up. And so on. We have 50 levels of cover-ups holding back progress re these matters. We would all like a do-over. But there are no do-overs. So our job is to put our heads together and come up with the best means of passage forward for every single person involved. We ALL should want to achieve that. We ALL should be working to achieve that goal.

The good news is that cognitive dissonance is a real thing and this has been shown in the psychological literature very clearly. And this is not a case where one or two evil people engaged in evil acts. This is a case where literally the entire society participated in some way in the massive act of financial fraud. I participated myself for three years. That’s powerful testimony for those seeking to make a case that assignments of blame should be restrained.

And the potential intellectual breakthroughs are just off the charts. The research that I co-authored with Wade shows how to reduce the risk of stock investing by 70 percent. This is not like the Madoff case in which you had thousands of people who were very angry to learn that their retirement accounts had been wiped out. This is a case where generations of people will be able to invest with far less stress than has ever been possible before and will be able to retire many years earlier than has ever been possible before. When the millions of people who are affected by the bad stuff hear that side of the story, their anger may be diminished and they may respond in a different manner than the Madoff investors responded. We should at least hope so. We should at least all be doing all that we can to make it so.

Bogle needs to address the blame issue in a public statement that is written up on the front page of the New York Times. I have some ideas re what should be said in that statement which I have referred to in outline form in this comment. But it will not be my statement, it will be Bogle’s statement. He needs to develop it in consultation with all of the many people who will be affected by it. A public statement by Bogle will put all the nasty stuff in the past where we all want it. From that point forward, we will all be able to engage in fun and exciting discussions about how stock investing really works.

I am happy to help with the statement if there is a feeling on the other side of the table that that would be helpful. I am also happy to let others craft it and just keep my nose out of things that are not entirely my business. Bogle needs to be able to live with the statement and all the people on his “side” need to be able to live with it. I will be 100 percent cooperative. So long as the statement is even remotely honest, I will endorse it regardless of how much it attempts to spin things in the favor of the Buy-and-Holders. I am obviously not going to say that Greaney’s study contains a valuation adjustment or deny that there is 36 years of peer-reviewed research showing that a valuations adjustment is required. But I am not going to be seeking to win points. My aim is to get us all on a positive path going forward. I love my Buy-and-Hold friends. I want them to feel good about where things are headed.

Does that help?

Rob

Filed Under: From Buy/Hold to VII

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Rob on the Internet

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  • Google Search Results for the Term "Valuation-Informed Indexing"
  • Favorite RobCasts

    • Bogle and Valuations

    • When Stock Losses Are True Losses and When They Are Not

    • There Is No Free Lunch! Or Is There?

    • Risk Tolerance in the Real World

    • Cash Is a Strategic Asset Class

    • Nine Valuation-Informed-Indexing Portfolio Allocation Strategies

    • Why the Stock Market Does Not Set Prices Properly (Even Though Other Markets Do)

    • Only Valuations Matter -- Everything Else Is Priced In

    • Low Stock Prices Are Better Than High Stock Prices

    • 30 Investment Myths in 60 Minutes

    Links That Matter

    • Ten Bogus Investing Truths

    • Study by Associate Professor Wade Pfau Showing That Long-Term Timing Provides Higher Returns at Reduced Risk

    • Study by Associate Professor Wade Pfau Showing That Valuation-Informed Indexing Beat Buy-and-Hold in 102 of 110 Rolling 30-Year Time-Periods in the Historical Record

    • Wall Street Journal Article Pointing Out That the Idea That Long-Term Market Timing Does Not Work Is a "Myth" of Stock Investing "That Will Not Die" Because "This Hoary Old Chestnut Keeps Clients Fully Invested" Even When It Is Contrary to Their Best Interests

    • Wall Street Journal Article Pointing Out That" "This Ratio (P/E10) Has Been a Powerful Predictor of Long-Term Returns" and That "Valuation Is By Far the Most Important Issue for Investors"

    • The Internet Blowhard's Favorite Phrase: Why Do People Love to Say That Correlation Does Not Imply Causation?

    • Michael Kitces (One of the Bravest of the Good Guys in This Field) Asks: "Who's Really at Risk When Avoiding Overvalued Stocks?"

    • Financial Mentor Article Reporting on How Our Knowledge of How to Calculate Safe Withdrawal Rates Has Grown During the First Nine Years of The Great Safe Withdrawal Rate Debate

    • Does the Trend Matter?

    • Improving RIsk-Adjusted Returns Using Market-Valuation-Based Tactical Asset Allocation Strategies

    • A Value Restoration Project Blog Post That Sums Up in Three Paragraphs All You Need to Know to Become a Highly Effective Investor

    • Year 20 Annualized, Real, Total Return v. P/E10

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    • Valuation-Informed Indexing Always Superior to Buy-and-Hold Over 10-Year Periods

    • The Valuation-Informed Indexing Advantage

    • What P/E10 Predicted vs. What Actually Happened

    • Normal and Valuation-Adjusted Wealth Accumulation

    • Valuation-Informed Indexers Can Retire Five Years Sooner

    • Following Valuation-Informed Indexing Strategies Reduces Stock Investing Risk by 80 Percent

    • S&P 500 Tracked by P/E10 Level

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