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 buy and holder has the money in his portfolio. The VII investor does not. I would rather be the one with the money vs the one that is just hoping to get some money.

The Buy-and-Holder does NOT have the money in his portfolio. That’s the entire point of Shiller’s research. That’s why the subtitle of his book describes his work as “revolutionary.” The Buy-and-Holder has irrational exuberance in his portfolio. Irrational exuberance is not real, lasting money. It is pretend, temporary money. Not the same thing at all.

It is important to know how much money you actually have. To do that, you must make an adjustment to the number on your stock portfolio to adjust for the effect of irrational exuberance. Whether or not one makes that adjustment determines whether he is a Buy-and-Holder or a Valuation-Informed Indexer.

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 the last 14 years did not work out like you thought it would. That is not much comfort to anyone that might have followed your advice and is now entering retirement.

It is certainly so that the last 14 years did not work out as i thought they would. If someone said that they were not going to follow the Valuation-Informed Indexing strategy as a result, I would not find fault with them. I don’t think that would be a crazy position to adopt.

It’s up to the individual. Each person has to decide for himself or herself what strategy to follow.

Rob

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

“My target date for completing the book is June 1.”

Your target date was end of 2019. Then a few weeks later. Then end of 2020. Now June 2021.

Is there any reason in the world to believe you’ll meet this latest deadline? I see none. And since the job hunt conveniently follows the book completion, that gets put off forever too.

An unbiased observer can only conclude that you were never serious about either.

I kick myself for not having finished the book years ago. It “should” have been finished a long, long time ago. That much is certainly fair to say.

The other side of the story is that Shiller published his Nobel-prize-winning research showing that there is precisely zero chance that a pure Get Rich Quick/Buy-and-Hold strategy could ever work for a single long-term investor 40 years ago. Shiller has not written the book that I am close to finishing during those 40 years. Bernstein pointed out the the Buy-and-Hold safe withdrawal rate studies were off by two full percentage points for those who retired at the top of the bubble 18 years ago but Bernstein has not written the book that I am close to finishing. Wade Pfau got to see the ugliness of the pure Get Rich Quick/Buy-and-Hold approach when it is confronted with what the peer-reviewed research shows up close and personal but Wade hasn’t published the book that I am close to finishing.

I wish that I had finished the book years ago. But the full reality is that the reason why I have not is that it is a very, vary, very hard project. Intellectually, it is not terribly difficult. Anyone of average intelligence could have written this book years ago, The hard part is the emotional part. When you tell the truth about stock investing, you are pointing out the dangers of the Get Rich Quick/Buy-and-Hold urge that resides within all of us. You are finding fault with your fellow humans. The purpose is to help them live better and richer lives in the future. But still…. You are finding fault with all of the humans and that’s s a very hard thing for one of the humans to do. So it has taken a good but of time to come to terms with it all and to get the right words on paper.

I make the comparison to Galileo. I think that what Galileo did was wonderful. The humans once thought that the earth was the center of the universe and that is not so. We need to know that to make sense of things, Galileo offended lots of people when he told the truth about that matter. People had come to believe that the Bible is the revealed word of God and the Bible has words in it suggesting that the earth is the center of the universe. Galileo wasn’t hated because he was wrong, he was hated because he was right. People really, really, really wanted to believe that there were no errors in the Bible and there were. He helped us all by showing us that that was the case. But he drew some hate from his fellow humans by doing that.

I am a person of faith I believe there is a God. I believe that my soul will be judged after I die. So there is a sense in which I should be on the ant-Galileo side of the table. But I am not, If there really is a God, I believe that he would want us to learn as much as we can about the world in which we live. Learning that the earth revolves around the sun is learning something important that God did when he set up the world. So Galileo brought us closer to understanding God, in my assessment.

That’s what I am trying to do. We need to know how stock investing works. Every last one of us needs to know that. If the Buy-and-Holders got the market timing thing wrong once upon a time, then the Buy-and-Holders got the market timing thing wrong once upon a time. I think we all need to come to terms with that reality and move forward. I think that my book will help us in that effort. So I am proud to be close to completing it.

Do I wish that it had been a less difficult project? Sure. Absolutely. A thousand times over. But the book wouldn’t have nearly the same value if it were a less difficult project, would it? If it were a less difficult project, the book would already exist and I wouldn’t be making any significant contribution. It was a very difficult project, one that no one before me dared to take on. So I forgive myself for being more than a little bit slow in the completion of it. Saying something important that millions of people very, very, very much do not want to hear is an emotionally painful thing to do. But someone has to do it if we are all going to come to a better understanding of this important subject. I think it would be fair to say that I was elected. So I have put myself to the task and I am close to completing it. Late but very, very, very effectively, judging by the many passages that I have already been able to put to paper and review carefully.

I can live with all that. I wish that it had been easier. But it has been what it has been. I am not physically able to post dishonestly re the numbers that my friends are using to plan their retirements. So I took it this other way instead. I offer no apologies and I suffer no regrets.

At the end of all this, the world will have in its possession a highly valuable book that it did not have in its possession on the morning of May 13, 2002. So I did good working up the courage to advance that famous post.

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:

First you challenge me to post outcomes data to show that you shouldn’t time the market and then you make a follow up post saying you won’t let me post the data. This seems to be the only site that doesn’t allow truthful posting and that your definition of “honest” posting is merely your opinion.

There is no outcomes data supporting Buy-and-Hold. The idea is absurd. There’s plenty of data supporting every aspect of Buy-and-Hold except for the “idea” that market timing is not required. But looking for data to support the idea that market timing is not required is like looking for data to support a perpetual motion machine.

Wade Pfau spent 16 months of his life looking for data supporting the idea that market timing is not required. He came up empty-handed. His posts at the Vanguard Diehards board reporting on our research were persuading people when you Goons stepped in and threatened to destroy his career if he kept doing honest work. If you really want to know whether market timing works or not, you would drop all the criminal stuff and just let people post what they believe.

Would you get people saying they believe in Buy-and-Hold? You would. But, if you permitted honest posting, over time the number who believe that market timing is not required would diminish. That’s the key. We need to permit honest posting. Otherwise, we are stuck believing what we believed in 1980 and cannot move forward in our understanding of how stock investing works. I want to move forward. That’s why we have been working at cross purposes for 18 years now.

There are other sites that permit discussion of pieces of the truth. But this is the only place that I know of where it is regularly pointed out that we need to discuss the criminal stuff if we are all to move forward. Our laws against death threats and extortion and financial fraud are important and necessary laws. Without enforcement of those laws, Buy-and-Holders can intimidate people who challenge their views and thereby stop knowledge of the far-reaching implications of the last 39 years of peer-reviewed research from spreading across the planet.

Everything that I post is my opinion. I believe that Shiller’s Nobel-prize-winning research is legitimate research. Given that that is my opinion, I need to say that. If I say that I believe that Greaney’s retirement study contains a valuation adjustment, I am engaging in financial fraud myself.Thanks but no thanks, you know?

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:

“If you are talking about the owners of sites, I have asked them to enforce the rules that THEY THEMSELVES adopted for their sites. That’s not asking them to change, it’s asking them to be what they always intended to be.”

There is no rule that says that Rob Bennett gets to do whatever he wants on anyone else’s site.

Every site has rules, Anonymous. I have never seen a site that had a rule prohibiting honest posting. If I ever found one like that, I would respect it. I wouldn’t post there because I am not interested in posting dishonestly. But a site like that wouldn’t do that much damage. If you let people know up front that you do not permit honest posting, people are not going to take the investment advice that is offered seriously. I suppose that they could visit to obtain some amusement or something like that. Not my thing. But to each his own, you know?

That was not the situation at the Retire Early board. There was no rule there prohibiting honest posting and people believed that the investment advice was sincere. People discussed the Greaney retirement study every day and they used it to plan retirements. So I had an obligation to point out the error in the study.

Some people would have preferred that I had not done that. Fine. Those people can continue to use the 4 percent rule if it makes them happy. It’s none of my business what they do. But there were other people who were thrilled to find out about what the last 39 years of peer-reviewed research says about the subject of safe withdrawal rates. No one has a right to block those people from seeing the posts that they want to see. The rules of the board do not permit intimidation tactics aimed at achieving that purpose.

Now you have pulled it off regardless of what the rules say. And you think that is some great accomplishment. I do not. I believe that the published rules of the various sites reflect what we truly are as a people. So I go by that. I believe that there will come a day when every site on the internet will permit honest posting re the last 39 years of peer-reviewed research. Because those rules did not just come into being as some sort of aberration. They say something about what we are as a people. It’s the popularity of Get Rich Quick/Buy-and-Hold that is the aberration. That will pass with the arrival of the next price crash, which will make Get Rich Quick/Buy-and-Hold less appealing. And we will get back to being what we truly are deep down inside as a people.

That’s where I am coming from. I wish you all good things.

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 that prediction was wrong. But you still didn’t answer my question. When has Shiller predicted the next crash?

The title of his book is “Irrational Exuberance,” Anonymous. To say that irrational exuberance exists is to predict a price crash whenever stock prices get out of hand. At the time when Buy-and-Hold was developed, the dominant academic theory re how stock investing works was the Efficient Market Theory. If the market is efficient, stock prices are set by a rational process and the risk of a price crash is the same at all times. If there is such a thing as irrational exuberance, the risk of a crash increases with increases in prices. A high CAPE level always predicts a price crash to someone who believes that Shiller’s Nobel-prize-winning research is legitimate research.

Rob

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

“What I say is that we should be permitting discussion of what Shiller says at every site on the internet.”

There is plenty of exposure to what Shiller says. You have also had more than sufficient exposure of your comments. We do not need constant repeating of the same material as it is already out there and easily accessible. The problem is that you cannot accept the answers you have been given, nor are you willing to take the blame for your own actions.

The Greaney retirement study has not been corrected to this day, Anonymous.

Also, we all have a Get Rich Quick/Buy-and-Hold impulse residing within us. We need to be reminded daily of the dangers of the Get Rich Quick/Buy-and-Hold approach if we are to overcome that impulse.

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:

One title does not apply to every situation and timeframe. It’s funny how you ignore everything else Shiller says.

The concept of irrational exuberance affects every aspect of the stock investing story, Anonymous. Every single thing. If the market is efficient, as was believed to be the case in the days when Buy-and-Hold was being developed, we can trust the numbers on our portfolio statement. In that case, it is economic realities that determine stock prices and we can plan retirements based on those numbers. But if Shiller’s Nobel-prize-winning research is legitimate, then those numbers are not real. They are largely the product of temporary investor mood swings, and we need to distinguish what’s real from what’s irrational exuberance to have any hope of being able to plan our financial futures effectively.

I don’t ignore everything else Shiller says. What I say is that we should be permitting discussion of what Shiller says at every site on the internet. What he said changes our understanding of how stock investing works in a fundamental way. Let’s all put our minds together and work together in a constructive spirit to advance our understanding of this critically important subject.

Does Shiller believe that the safe withdrawal rate is always the same number or does he believe that it is a number that changes with changes in valuations? We all should want to know the answer to that question. I said what I think 18 years ago, I think that Shiller would have said what he thinks by now if it weren’t for the criminal stuff we have seen coming from the Buy-and-Hold side of the table. I say that we should all pull together to bring the criminal stuff to a full and complete stop so that we can all learn at long last what Shiller believes re this matter. Then we should continue the discussions in the hopes of learning what thousands of others will have to say when they are permitted to speak without fear of having their careers destroyed or seeing their loved ones threatened.

There is not one school of academic thought as to how stock investing works. There are two. We have heard advocates of the Buy-and-Hold school thousands and thousands and thousands of times. Advocacy of the Valuation-Informed Indexing school is today banned at every large investing site on the internet. That ban is holding us back. The most important public policy matter before us today is the launching of the national debate that will bring that ban to a full and complete stop and insure that the same laws that apply in every field of endeavor other than the investment advice field will apply in the investment advice field as well.

Does all of that not make perfect sense?

Rob

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

“It will be interesting to see how things play out.”

It has been 24 years, which has been long enough to see things “play out” and it didn’t turn out like you said it would. You have to stop blaming everyone else for your retirement failure.

t’s only been 14 years since things began playing out in ways that you would not anticipate by looking at the historical return data. Shiller published a paper in 1996 saying that prices would fall hard within 10 years. So you cannot say that things did not play out as expected up until 2006. From 2006 forward, yes. So it’s 14 years.

So the stock market behaved one way from 1870 through 2006 and then in a different way from 2006 through 2020. That’s 136 years for Valuation-Informed Indexing and 14 years for Buy-and-Hold. I’m going with Valuation-Informed Indexing.

I don’t want to suppress discussion by Buy-and-Holders. I think that we need to hear both sides, Maybe the Buy-and-Holders are right. I sure don’t think so. But I don’t think you can ever say for sure. So I want them participating in the discussions held at every site on the internet. But I want the Valuation-Informed Indexers participating as well.

That’s my sincere take, Anonymous.

My best 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:

“ There is a strong correlation between the CAPE value that applies today and the return that will apply for the next 10 years and the next 15 years and the next 20 years.”

It didn’t work like you said it would for the last 10 years, the last 15 years or the last 20 years and you stayed out of the market to your detriment.

If prices crash at some point (I believe that they will), it will have worked as I said it would. Price crashes hurt us. When stock prices crash, trillions of dollars of consumer spending power disappear from the economy and the economy contracts. Irrational exuberance hurts us all. We should all do everything we can to oppose it. We should all be engaging in market timing and encouraging all of our friends and neighbors and co-workers to engage in market timing as well.

Does all of that not make perfect sense?

Rob