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

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

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

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

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

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

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

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

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

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