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

Yes, I still expect those things.

Shiller revolutionized our understanding of how stock investing works with the Nobel-prize-winning research that he published in 1981. In every other market that has ever existed, price discipline is 100 percent required. If anyone questioned whether price discipline is required in any other market, everyone would laugh at him. The stock market is the one big exception. In the stock market, investors exercise price discipline by engaging in market timing (changing their stock allocation in response to changes in valuations). But the idea that market timing might not work became popular because before Shiller there was a belief among academics that the market is “efficient.” If that were so, Buy-and-Hold (failing to engage in market timing) would be the ideal strategy. Shiller blew that one of of the water in 1981. Since then, it has been a cover-up. Our Wall Street Con Men friends don’t want to admit that they made a mistake. So they are in the process of destroying millions of lives with the relentless promotion of the Buy-and-Hold strategy 39 years after it was discredited by the peer-reviewed research.

Do I think that is going to change? Absolutely. It has to. Our economy cannot continue to function if we do not find some means to get honest and accurate investment advice out to millions of investors. This is not optional, it is 100 percent imperative. I believe that the only reason why it did not happen long ago is that we all have a Get Rich Quick urge residing within us and so we find a lot of appeal in the Buy-and-Hold lies. That appeal is going to diminish dramatically when prices fall to a CAPE of 8, which is nearly 70 percent down from where we were before the Coronavirus came on the scene. People are going to be angry at seeing their retirement hopes destroyed. They will all be a lot more willing to stand up to you Goons at that point and we all will be able to make enormous strides in our understanding of how stock investing works once we have placed you in prison cells, where you belong.

Once I learned that Buy-and-Hold is garbage (this happened for me on the evening of August 27, 2002, when John Greaney advanced his first death threat), I refused to write another word supporting that strategy. All of the work that I have done since is rooted in the Valuation-Informed Indexing strategy, which is identical to Buy-and-Hold in all respects except that it corrects the one error that the Buy-and-Holders made — it says that market timing always works and is always 100 percent required.

I have an encyclopedia’s worth of material on Valuation-Informed Indexing, which is the first true research-based strategy. Millions of middle-class people need access to this material. Nobody else has ever supplied it because everyone else is afraid of the criminal acts that you Goons employ to keep people in this field from offering research-based (that is, non-Buy-and-Hold) investment advice. I have a monopoly on the good stuff today. Not because I want to have a monopoly. Because everyone else is intimidated by the threats of physical violence and of career destruction that have keep Buy-and-Hold handing on for years after it was discredited by the peer-reviewed research.

My site goes 500 miles deep on how stock investing works. It is an amazing asset.

But it only goes about three inches wide because the penalty is so great for any other site that wants to link to my material. So the insights set forth here have not reached many people.

That is going to have to change if our economic system is going to survive. So I think it is going to change. Lots of people love this country. As prices continue to drop, people are going to work up the courage to stand up to you Goons and things will begin getting better and better and better for all of us. The site will no longer be only three inches wide — it will reach all over the internet. But it will still go 500 miles deep. Everyone in the country will enjoy an amazing leaning experience because of the thousands of powerful investment insights that I have developed over the past 18 years by working with the thousands of our fellow community members who have a genuine interest in learning how stock investing works and in passing along what they learn to others.

After your prison sentence is announced, the long national nightmare is over, Anonymous. It will be all downhill sledding from that point forward.

My sincere take.

Downhill Sledder (Not Quite Yet, But Soon!) Rob

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

I don’t recall any thread with “great excitement “. But even if there was a positive thread, so what? I see hundreds of positive posts every month that get people excited. None of that translates into a career. Just because you want a career in this field, doesn’t mean that someone is going to pay you for it. There are hundreds of people posting out there that provide significantly more value on a consistent basis versus your website, yet they do not have a career from it.

The last 39 years of peer-reviewed research in this field changes everything that we believed we knew about how stock investing works back in 1980. It is going to take decades to get the word out re what we have learned to everyone on the planet and to correct people’s misperceptions and to get all of the textbooks rewritten and all that sort of thing.

Stock investing matters. It is important to get it right. The core Buy-and-Hold idea (that market timing is not required) is the OPPOSITE of what the research says. Getting everyone’s understanding of market timing 100 percent reversed is a big job. It’s not one career. It’s thousands and thousands of careers. It is not possible to exaggerate how big this is.

Take the safe withdrawal rate issue. We talked about Greaney’s study on a daily basis at the Motley Fool board in the old days. We obviously would not have done that if we did not all think that safe withdrawal rates matter. Greaney did not get the numbers a little wrong. He got them wildly wrong. He said that the safe withdrawal rate is always 4 percent. When the calculations are done honestly and accurately, the number for those who retired in January 2000 is revealed to be 1.6 percent. That’s huge. Have you ever thought about how many lives have been destroyed as a result of Greany’s unwillingness to correct his study and as a result of his Campaign of Terror against our board and blog communities? I am not sure that it is even possible for the human brain to process how much human misery was caused by the 18-year cover-up.

Galileo faced a tough situation when his research told him that the earth is not the center of the universe and the Catholic Church put him under house arrest because he was saying things that upset people who had come to believe that the Bible says that it is and that the Bible is infallible. Do you think that there were any careers that followed from Galileo’s investigations into this question? I believe that there were. His investigations told us something important about the world and then lots of other scientific findings were built on top of what he did and then one day many years later we put a man on the moon. I don’t believe that we could have ever put a man on the moon had we not at some point just acknowledged that we had made a mistake in those days when we came to believe that the earth was the center of the universe and then corrected the error. Galileo was right. Our society has over time come to accept that he was right. Thousands of careers were created as a result of that advance and millions of lives were enhanced as a result of the progress we achieved as a people.

That’s what we are going through re Shiller’s research finding that valuations affect long-term returns. The Buy-and-Holders made a mistake. They thought that the market was efficient. If that were so, market timing really would be a bad idea, just as they say. But it is not so. Shiller was awarded a Nobel prize for his research because it is of such great importance. It changes everything, If valuations affect long-term returns, stock investment risk is not constant but variable. Investors who want to keep their risk profile constant over time MUST, MUST, MUST practice market timing. There is no other way to pull it off. The safe withdrawal rate is not the same number at all times. It is a number that drops as low as 1.6 percent at times of insanely high valuations and rises to as high as 9.0 percent at times of insanely low valuations. We need to get these numbers right. Getting all the stuff that the Buy-and-Holders got wrong corrected will provide enough work to support thousands of very exciting and life-affirming careers.

Look at your own behavior. If permitting honest posting re the last 39 years of peer-reviewed research in this field were not a huge thing, do you really think that you would have risked going to prison to block honest posting at all of the boards and blogs? The question is absurd. You know perfectly well that the market for honest and accurate investment advice is virtually unlimited. This is the biggest thing to hit this field ever in history. That’s why you fight so hard.

I am just fighting on the other side. I am seeking to enrich millions of people’s lives, not to protect a small number of Wall Street Con Men from having to say the words “I” and “Was” and “Wrong.” I think it can be a liberating experience to acknowledge an error. I believe that our Wall Street Con Men friends are like most other people, they want to do good things with their lives. Once every site on the internet has been opened to honest posting re safe withdrawal rates and scores of other critically important investment-related topics, they will be freed to direct their life energies to good purposes once again. I think that will be just great. Their careers will have meaning again. Their careers will be serving positive purposes again.

And please note that their careers will be NEW careers. You can’t compare the work that someone is going when he is giving advice based on research that was discredited 39 years ago to the work that someone is doing when he is giving advice based on the current research. That change is a complete change of career. Everyone who works in this field who be pursuing a new career once we have opened every discussion board and blog on the internet to honest posting re the last 39 years of -peer-reviewed research.

We’ve got a tiger by the tale with this thing!

I am sure!

Career-Building 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:

Uh oh, Robert Shiller days you are wrong, Rob. The stock market dropping is due to the uncertainty of the Coronavirus and he never blames buy and hold. He even talks about the previous stock market strength has been the result is low unemployment, not buy and hold.

https://qz.com/1818061/robert-shiller-says-the-coronavirus-disruption-is-different-from-other-economic-crises/

There’s nothing that Shiller says in that article that I disagree with.

I certainly believe that the Coronavirus matter is causing genuine economic disruptions. There are economic causes for the drop in stock prices that we have seen. The trouble with Buy-and-Hold (price indifference) is that it greatly increases the odds that economic disruptions will cause terrifying price crashes rather than manageable price drops.

If we were at fair-value prices (a CAPE of 16) when the Coronovirus became an issue, we would see a price drip, perhaps down to a CAPE value of 13. That’s a 20 percent drop. But we were at a CAPE value of near 30 when the Coronavirus became an issue. A drop from 30 to 13 is far more devastating to millions of people than a drop from 16 to 13. A price drop that big can transform the irrational exuberance into irrational depression and bring the CAPE value all the way down to 8. Then you have a total price drop of near 70 percent, which would bring on a huge economic contraction because of the massive loss of consumer buying power.

I believe that Shiller would agree with these ideas if he were presented with them and asked to comment on them. It is of course entirely possible that he would offer a somewhat different spin. That would be normal and healthy. What is not normal and healthy is this insane situation where we have groups of insanely abusive Buy-and-Holders (the Lindaurheads and the Greaney Goons) engaging in criminal acts to block millions of people from hearing what the last 39 years of peer-reviewed research in this field teaches us all about how stock investing works. We should be encouraging EVERYONE to post honestly because it is through honest posting that we all learn. There should not be a ban on honest posting re safe withdrawal rates or any other investment-related topic at even a single site.

Once we open every site to honest posting re the peer-reviewed research, we should all pull together and make it a community project to always keep the CAPE value as close to 16 as possible. Small moves away from fair-value price levels do not hurt much, So I wouldn’t be concerned if I saw the CAPE value rise to 18 or drop to 14. There are always going to be small ups and downs. But we should all be working to see that we never again experience a CAPE value of 25 or more. Those sorts of CAPE values create extremely painful experiences for all of us. It is because we have tolerated insane CAPE values in recent years that we are in the mess that we are in today.

It all comes down to permitting honest posting. Investors love, love, love the idea of being able to reduce the risk of stock investing dramatically. The peer-reviewed research that I co-authored with Wade Pfau showed investors how to reduce the risk of stock investing by nearly 70 percent (by being sure to always, always, always practice market timing/price discipline when buying stocks). There’s a reason why you Goons threatened to get Wade fired from his job if he continued doing honest work in this field. When people learn the realities, Buy-and-Hold goes down because all of the research shows that market timing/price discipline is 100 percent required for the stock market to function smoothly, just as it is for any other market to function smoothly.

That’s my sincere take, Anonymous. The continued promotion of Buy-and-Hold for 39 years after the peer-reviewed research was published showing that there is precisely zero chance that such a :”strategy” could ever work for even a single investor has put us all in a very bad situation. The answer is to let Buy-and-Hold go down and let the first true research-based strategy (Valuation-Informed Indexing) replace it.

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:

The market is crashing. Why are people blaming Coronavirus instead of buy and hold?

Because as of today Buy-and-Hold remains the dominant model for understanding how stock investing works.

The CAPE value has gone to 8 by the end of every earlier bull/bear cycle. If the CAPE value drops to 8 and then remains in that neighborhood for five yeas, people are going to start asking questions. When enough people are open to questioning, the 10 percent who believes that Shiller’s Nobel-prize-winning research is legitimate research will begin to feel safe posting their sincere views at investing boards and blog. And then knowledge of the realities will begin to spread.

That’s the way it is done. That’s the only way that it CAN be done. A paradigm doesn’t change in a day or a week or a month or a year. It takes time for people to work up the courage to question fundamental beliefs about a subject, thing that they have felt for a long time were certainly so. Galileo was put under house arrest by the Catholic church for saying that the earth was not the center of the universe, as the Bible indicated. Why didn’t people just refer to the same scientific information that Galileo was referring to? Because they had believed for a long time that it was impossible that the Bible could contain error. Their minds clicked off when evidence was presented that the earth is not the center of the universe, just as the minds of Buy-and-Holders click off when evidence is presented that it is not possible to calculate the safe withdrawal rate accurately without taking into consideration the valuation level that applies on the day the retirement begins.

But today it would be hard to find a reasonable person who believes that the earth is the center of the universe. Things change. People learn new things over time. Society advances in its understanding of how the world around it works.

Shiller is not our enemy. Shiller’s Nobel-prize-winning research promises to help us all live better lives. We just all need to unite on insisting on reasonable enforcement of the laws of the United States in discussions of how stock investing works for that to happen.

My best wishes to you.

Science Believing Rob

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

Can you show us a single 30 year period in which a 4% withdrawal rate did not work?

Of course not.

What I can show is that there is 39 years of peer-reviewed research showing that valuations affect what is safe and that, if valuations are considered in the calculation, the safe withdrawal rate for those who retired in early 2000 is revealed to be 1.6 percent, not 4.0 percent. We should have been telling that to people who were putting together retirement plans at the time. A failed retirement is a serious life setback.

If someone drives drunk three times and gets in an accident each time but is still alive, is it reasonable to conclude that driving drunk is “100 percent safe” (Greaney’s phrase). I say “no.” That’s the situation we have with the 4 percent rule. We have three complete bull/bear cycle on records and 150 years of historical return data. A 4 percent withdrawal is super, super, super safe at times when valuations are at reasonable levels or at low levels. A withdrawal all the way up to 9 percent is safe when stocks are priced as they were in 1982. But 4 percent barely squeaked by for retirees who employed it for retirements that began when stocks were priced as they were just prior to the onset of the 1929 crash and the Great Depression that followed from it. For a retiree to have only $1 remaining in his portfolio after 30 years does not show that his plan was “100 percent safe.” It shows that it was insanely risky. And of course the risk of a 4 percent withdrawal was much greater in 2000 than it was in 1929 since the CAPE value was much, much higher.

In the days before you Goons threatened to get Wade Pfau fired from his job if he continued doing honest work in this field, he endorsed my drunk driving analog. Would he do so today? Probably not. He is afraid of what the Buy-and-Holders would do to him if he returned to speaking honestly re these matters. I think that that is unfortunate in the extreme. Extortion is a crime in the United States. It is a felony. That means prison time. I believe that the same laws that apply in discussions of every other subject discussed in the United States should apply in discussions of stock investing as well. Call me madcap.

The fact that “defenders” of Buy-and-Hold feel that they need to engage in criminal acts to keep discussion of the last 39 years of peer-reviewed research in this field suppressed shows how desperate the case for Buy-and-Hold has become as the mountain of evidence showing that long-term market timing is always 100 percent required for every stock investor has grown larger and larger.

My best wishes.

Mountain Builder 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:

Wade Pfau’s form says you can’t time the market. Sounds like you are pushing a fraudulent timing scheme.

https://retirementresearcher.com/occams-cant-time-markets/

Wade Pfau didn’t write that article. Wade wrote what he believed about market timing in the peer-reviewed research that we co-authored. He summed up the conclusions he reached as the result of his 16 months of study of the question by saying: “Yes, Virginia, Valuation-Informed Indexing works!”

One thing that I like about the article is that it sums up all of the important arguments that I have heard against market timing over the years. There’s value in having them all presented in one place.

The flaw in the article is the one made by Buy-and-Holders over and over and over again. The article looks only at short-term timing. The arguments that it makes against short-term timing are all valid. People who follow the peer-reviewed research have known for many years now that short-term timing never works. There’s no harm in repeating those arguments since they are valid and all investors need to hear them. But an argument that short-term timing doesn’t work is not an argument that long-term timing doesn’t work.

Long-term timing always works. The Bennett/Pfau research shows that. And the core reason why short-term timing never works is pretty close to the same core reason why long-term timing always works (and is always 100 percent required). Stock price changes are determined by shifts in investor emotion. Short-term timing doesn’t work because it is not possible to predict shifts in emotion. People who are in a committed relationship sometimes change their mind and leave it. Is there a certain number of arguments that it takes for that to happen? There is not. Outsiders will say “I have seen so many arguments that I cannot believe that they are still together” and yet the couple will remain together. And then one day over seemingly nothing one member of the couple will end it. That’s how stock price changes happen. They are rooted by shifts in emotion and you cannot predict when they will happen.

But the market must ultimately reflect reality. The core purpose of any market is to set prices properly. We cannot say when the emotion will shift and prices will move in the direction of fair value but we can say with absolute certainty that sooner or later it will happen. Long-term timing always works. It has always worked in the past because there is no possibility that it could ever not work. The market cannot remain at emotional extremes indefinitely. The farther away the market gets from setting prices properly, the more dysfunctional it gets. Sooner or later, it just collapses.

The thing that they call a price crash is really an emotions crash. If investors were willing to engage in market timing, we would never see a price crash because prices would just adjust to reality naturally. But when large numbers of investors refuse to practice market timing (price discipline!), the only way left for the market to set prices properly again is to crash them. When causes us all great pain by causing an economic crisis. We would be better off if we all just practiced market timing and didn’t have to live through bear markets and economics crises and all the pain associated with them.

I’ll sign off on a statement saying that short-term timing never works. There is a lot of evidence that that is so.

But, when Wade studied long-term timing, he was amazed that no researcher had done so before him given how strong the case is that long-term market timing always works. We should be permitting Wade and all other academic researchers to do honest work re these matters. Those researchers would love to help us all out if only they were not made to feel that they were putting their careers at risk by doing so.

My sincere take.

Honest Research Advocate 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:

It seems you are still trying to come up with reasons as to why everything else is wrong in the investment world, versus you just accepting the fact that your investment strategy and retirement plan failed.

What I am saying is that what we all believed about how stock investing works in 1980 has been proven wrong. Shiller published research in 1981 showing that the market is not efficient. The idea that the market is efficient is the foundation stone for the entire Buy-and-Hold Model. If Shiller turns out to be right, then everything that the Buy-and-Holders have ever said about how stock investing works is wrong. That’s simple logic, Sammy. If the market is efficient, risk is constant and market timing is a bad idea. If valuations affect long-term returns (this is impossible if the market is efficient and yet this is what Shiller showed is so), then risk is variable and investors seeking to maintain the same risk profile over time MUST practice market timing.

For 39 years now we have been living in a twilight zone where we know intellectually (because we have access to Shiller’s research) that market timing is required but in which we cling to Buy-and-Hold emotionally because we prefer thinking that the numbers on our portfolio statement are real and that we do not need to divide by two to identify the true and lasting value of our portfolio. We are going through a process taking us from a discredited model to a true research-based model. Progress has been slow. But we are seeing progress. We awarded Shiller a Nobel prize. That shows clearly that we care deeply about getting these matters right, even though we really, really, really want it to be the Buy-and-Holders who are proven right (because our portfolios are assigned a higher value by the Buy-and-Holders at times of insanely high prices).

My primary argument is that we need to launch a national debate on the question of whether is is the Buy-and-Holders or Shiller who is right. We need to hear from people from all points on the spectrum of opinion re these matters. The Buy-and-Holders need to feel 100 percent safe to express their sincere beliefs. And the Valuation-Informed Indexers need to feel 100 percent safe to express their sincere beliefs. And the people in the middle (that’s the majority) need to feel safe to express their sincere beliefs.

That’s where I am coming from, in any event, Sammy. 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:

Is this part of your vast research into what constitutes peer reviewed research?

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3525096

The link goes to a paper titled “The Value Premium,” by Eugene Fama and Kenneth French. Here is the abstract:

“Value premiums, which we define as value portfolio returns in excess of market portfolio returns, are on average much lower in the second half of the July 1963-June 2019 period. But the high volatility of monthly premiums prevents us from rejecting the hypothesis that expected premiums are the same in both halves of the sample. Regressions that forecast value premiums with book-to-market ratios in excess of market (BM-BM_M) produce more reliable evidence of second-half declines in expected value premiums, but only if we assume the regression coefficients are constant during the sample period.”

Yes, that is one paper. It is part of the universe of research papers available to us.

The claim that I frequently make is that: “there is now 39 years of peer-reviewed research showing that there is precisely zero chance that a strategy that rules out market timing could ever work for a single long-term investor.” I obviously do not believe that every paper published during that time makes that point. The vast majority of papers don’t even look at that question. And there are of course many good and smart people who believe that market timing is a bad idea and who believe that that view is research-based.

However, the reality remains that there is 39 years of peer-reviewed research showing that market timing is required. If valuations affect long-term returns, as Shiller’s Nobel-prize-winning research shows, then stock investment risk is not constant but variable and any investor seeking to keep his risk profile constant over time MUST engage in market timing. It is a logical impossibility that any investor could keep his risk profile constant without engaging in market timing in a world in which valuations affect long-term returns.

There is not a consensus today re how stock investing works. There are two schools of academic thought and the primary researchers for both schools have been awarded Nobel prizes. What we need to do to advance knowledge is to explore the merits of the case for each school of thought at every discussion board and blog on the internet. That’s the scientific process. You learn new things over time and you explore the implications of the new things that you have learned and then you incorporate the new knowledge into your old understanding of the subject.

The problem in the investment advice field is that we have not been doing this for 39 years now. There is a mountain of money to be made promoting Buy-and-Hold strategies during an out-of-control bull market. So the idea has taken hold that discussion of the implications of the last 39 years of peer-reviewed research must be suppressed at all costs, even if it takes criminal acts to get the job done. I don’t buy it, Anonymous. Engaging in criminal behavior is not science. It is intimidation. It is the OPPOSITE of science. Science is about learning and intimidation blocks learning.

90 percent of the population today believes in Buy-and-Hold. What percentage would believe in Buy-and-Hold had we been permitting honest posting for the past 39 years? We don’t know. We didn’t play it that way, so we have no way of knowing. It could be that the percentage would be 0 percent. We just do not know.

Buy-and-Hold started out as science. Today it is a scam. Any strategy that can only be “defended” with death threats and demands for unjustified board bannings and thousands of acts of defamation and threats to get academic researchers fired from their jobs is a scam. I obviously don’t say that every Buy-and-Holder has engaged in criminal acts. But a small percentage had done so at a good number of places and on a good number of different occasions. And how many of the Buy-and-Holders who have not engaged in criminal acts have spoken out in opposition to those who have? Some have done this. Most have not. And even those who did it on one or two occasions stopped doing it when the Goons turned their attention to them. That doesn’t inspire confidence in the strategy in the minds of reasonable people.

If Buy-and-Hold was real, we never would have seen a single abusive (much less criminal) act. If Buy-and-Hold was real, the Buy-and-Holders would welcome questioning and challenges. They would see challenges as potential learning experiences, not as deadly threats that must be suppressed at all costs.

Please mark me down as saying that Buy-and-Hold was a wonderful thing when it was developed and has become a scam in the days since the Buy-and-Holders gave up hope that the strategy could be defended in civil and reasoned discussions and concluded that the only way it could survive is with the ugly abusive and even criminal stuff. Not this boy, you know? Your own behavior shows how weak the case is for this “strategy.” I put the word “strategy” in quotes because the idea that market timing (price discipline!) is not required is not the product of human reason. It is the product of the Get Rich Quick impulse that resides within all of us. There is no thought associated with it.

Market timing is price discipline. It is required always and everywhere. The claim that there might be an exception to that rule on some alternate universe is preposterous on its face. That’s why it gets the Buy-and-Holders so angry to hear the claim questioned There is no research-based case for ANY Get Rich Quick strategy. Get Rich Quick strategies are supported by emotion, not reason.

This is why Wade Pfau was not able to find a single piece of peer-reviewed research supporting the Buy-and-Hold claim that market timing does not work. The claim that market timing is not required is a marketing gimmick, a money-making thing. It is not reasonable to expect peer-reviewed research to support marketing gimmicks. Research is aimed at getting at the truth, marketing gimmicks are aimed at turning a quick buck.

My sincere take.

Marketing Gimmick Challenger 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:

Your problem is not with Sammy or any of the other hundreds you have called a goon. Your problem is that you have this ambition for people to consider you a leader in the investment community and for that to happen you need others, like Shiller, to say you have offered some unique understanding or other significant contribution to the investment community. Unfortunately, you haven’t done that. Your attempts have failed you have become frustrated to the point that you have made outrageous comments to overcompensate. All you have to show for it is ridicule and embarrassment.

I’m a leader, Anonymous. I pointed out the error in the Buy-and-Hold retirement studies in a post that I put to a Motley Fool discussion board on the morning of May 13, 2002. 18 years have passed and those studies have not been corrected to this day. If everyone in the field had been calling for them to be corrected, they would have been corrected by now, So I must be ahead of a lot of people in this field. That makes me a leader.

The question here is HOW did I become a leader? I should’t be one. I don’t have the training or experience that it would ordinarily take for someone to become a leader in this field. It doesn’t take an I.Q. of 140 to notice that the Buy-and-Hold retirement studies lack an adjustment for the valuation level that applies on the day the retirement begins. Everyone in this field should have noticed that those studies lack a valuation adjustment long before I came on the scene. If everyone else had spoken out years ago, I obviously wouldn’t be any sort of leader.

But I am. A few others have spoken out. But not enough to get the job done. As you Goons have noted from time to time, even Shiller himself has never advanced a simple statement that the Buy-and-Hold retirement studies are in error and should be corrected immediately. So I am a leader. But I shouldn’t be. It is an exceedingly strange situation.

The job of a journalist (which is what I am — I am certainly not an investing expert) is to explain how this strange set of circumstances came to be. That’s what I try to do. I try to tell the story. I believe that there will be many people trying to make sense of things in the days following the next price crash and I see it as my job to tell them the story in a complete and honest and fair way. It’s a big job. I think that I can do that job better than anyone else alive because of the experiences that I have lived through over the past 18 years. I certainly am going to give it my best shot.

You Goons have ridiculed me thousands and thousands and thousands of times. But I have also had people like Wade Pfau marvel at my work. Wade told me that he learned over time never to question what I had told him because in the early days he did that numerous times and every time after he did some research he learned that I was right. Wade told me that I taught him lots of things that he never learned in his Ph.D. program. That ain’t ridicule!

Those sorts of reactions have taught me that I am on to something very important. And then the response of you Goons — to threaten to get Wade fired from his job if he continued doing honest work in this field — doubled my confidence that that is so. You wouldn’t risk going to prison if you thought that there was a rational case that could be made that the safe withdrawal rate could be calculated accurately without taking valuations into consideration. You engage in the criminal stuff because you see no other option other than urging corrections of the studies — and you just cannot bear to do that.

Your behavior hurts me. It holds me back But it doesn’t persuade me. There are some exceptions to that general rule, cases in which you have made reasonable points. But the Goon stuff has zero persuasive power. Actually, it has a negative persuasive power. When I see the Goon stuff, it tells me that the case for Buy-and-Hold is very weak because you Goons have all the motivation in the world to make a case for it and have not been able to come up with anything. If you have not been able to come up with anything in 18 years, how likely is it that someone else is going to come up with anything?

The idea that market timing is not required was just a mistake. There has never been any research showing that that is so. There is research showing that short-term timing doesn’t work but that is very different from a showing that market timing in general is not required. Market timing is price discipline. How could exercising price discipline ever be a bad idea? Once you think about it for a little bit, you come to see that the Buy-and-Hold claim is preposterous. The research shows that it isn’t so. But all you need is common sense to understand that it CANNOT be so.

Being willing to apply common sense to stock investing shouldn’t make me any kind of a leader. But the reality is that it does. The reality is that the Buy-and-Holders still say to this day that market timing is not required. And most people don’t correct them when they do it. I do. So, yes, that makes me a leader. I will be happy when everyone who works in this field is saying openly that market timing is always, always, always required, I won’t be a leader anymore at that time. But I will be living in a better world. I can accept that trade-off!

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

Rob the Leader (Who Will Be Happy When He Isn’t One Anymore)

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 are scores and scores of places where all kinds of people who work in this field say that they are afraid to tell the truth about Buy-and-Hold. That’s the entire story.”

The entire made up story.

t’s not a made-up story, Anonymous.

Shiller was awarded a Nobel prize for his work. So he must be saying something very, very, very different from what the Buy-and-Holders who came before him are saying. Please identify 20 ways in which the Buy-and-Hold strategy has been changed to reflect Shiller’s findings.

You can’t identify 20 changes. The fuller truth is that you cannot identify 10 changes. Or even five. Or even one.

The Buy-and-Hold of today is the same as the Buy-and-Hold of 1980, And yet research that is so important that it has been awarded a Nobel prize was presented to us all during the past 39 years. We just haven’t yet incorporated it into our thinking re how stock investing works. That’s the issue. That’s the dispute. That’s the conflict.

How do you think that happened? The piece that Shiller provided to the stock investing puzzle is the most important piece ever supplied. It would make all the difference in the world if every expert in this field encouraged investors to always practice market timing instead of being in a situation where there is this relentless promotion of the “idea” that there might be some magical, mystical alternate universe where market timing (price discipline!) is not 100 percent required. The market for accurate, honest investment advice is huge, People could be making millions promoting Valuation-Informed Indexing. So why aren’t they?

The only possible explanation is that the Buy-and-Holders are engaging in intimidation, making people feel that there will be a price to be paid if they say what they really believe about how stock investing works in the real world. And of course I have 18 years of documentation of just that sort of thing. Death threats. Demands for unjustified board bannings. Thousands of acts of defamation. Threats to get academic researchers fired from their jobs.

That’s Buy-and-Hold. That’s the economic crisis of 2008. That’s the entire story. All of that criminal stuff is what Buy-and-Hold IS. All of that criminal stuff is how Buy-and-Hold survives today, 39 years after the peer-reviewed research showing that there is precisely zero chance that this “strategy” could ever work for a single long-term investor.

I don’t say that that is all that Buy-and-Hold ever WAS. Buy-and-Hold started out as a beautiful thing. It was the first research-based strategy. But research never stands still. We learn new things over time. Those new things need to be incorporated into the old understanding for the old understanding to remain research-based. That hasn’t happened over the past 39 years. The Buy-and-Holders act as if Shiller’s research dos not exist. They still denigrate market timing 39 years after Shiller showed that valuations affect long-term returns and that therefore stock investing risk is not stable but variable (and that any investor seeking to keep his risk profile stable over time MUST practice market timing to have any hope of doing so).

I love what the Buy-and-Holders believed in when they started out. That’s why I have incorporated all of the Buy-and-Hold insights that checked out (which is all of them except for one the about market timing not being required) into the Valuation-Informed Indexing model. Valuation-Informed Indexing is what Buy-and-Hold would be today had the Buy-and-Holders remained true to their core belief that investors should look to the peer-reviewed research for guidance re how stock investing works. The message of the peer-reviewed research changed in 1981. Valuation-Informed Indexing reflects the change. Buy-and-Hold does not.

And the Buy-and-Holders do not want the world to know that. So we see all this ugly stuff to keep discussion of the past 39 years of research suppressed.

I like the last 39 years of peer-reviewed research. I think it is important. So I am working at cross purposes to the abusive Buy-and-Holders. Not because I do not like them as people. Because I believe that we all need to know what the research says. If Buy-and-Hold as it is currently promoted can survive that, fine. But the Buy-and-Holders themselves obviously do not believe that Buy-and-Hold can survive as currently promoted if word get out re what the research says. Otherwise, they wouldn’t behave in the manner that they do.

It’s all intimidation. That’s all that Buy-and-Hold is today. There was a time when that was not so. But today there is 39 years of peer-reviewed research showing that valuations affect long-term returns that did not exist in the old days. And, if valuations affect long-term returns, then there is precisely zero chance that a strategy that does not call for market timing could ever work for a single long-term investor. So there is a conflict between what we once thought the research said and what those who follow the peer-reviewed research know today that it really does say. The Buy-and-Holders have the edge in that conflict because they got there first and have built an entire industry around the idea that market timing is not required, with all the wealth and power and connections that go with it.

What Valuation-Informed Indexing has going for it is the millions of investors who need to know the realities and who will be upset if they see 50 percent of their life savings disappear into thin air That’s why I believe that we will see things move forward in the days following the next price crash.

We’ll see.

Rob