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

“It makes me happy to know that people who lose half of their life savings in the next price crash will be able to come here and read this thread and decide for themselves whether The Big Black Mountain is real or imaginary”

Is that the crash that you said would happen in 2011 or the one you predicted would happen in 2012, or the year after that, or the year after that, etc.?

I was wrong in my prediction, Anonymous. You’ve got me on that one.

But does it really help Buy-and-Holders that much if the crash comes in 2018 or 2019 or 2020 instead of 2012? Returns have been dramatically sub-par for 19 years running. The annualized real return for the past 19 years has been 3.2 percent. That’s less than half of the average long-term stock return. So investors are well behind where they expected to be. And then they experience a 50 percent loss or perhaps more? That’s going to hurt. That’s going to hurt big time.

All of this is the result of our relentless promotion of Buy-and-Hold in the late 1990s. If we had been telling investors to practice price discipline, we never would have seen those insane gains from 1996 through 1999 and we wouldn’t have been trying to pay down that debt for the past 19 years. I don’t think the overvaluation is helping you at all. I think it is hurting you.

I said at the time that I made the prediction that I was not sure that it would happen as I said. What matters is whether or not it happens, not the precise date at which it happens. If market gains are caused by economic developments, they are real and you can count on them when planning your retirement. If they are caused by irrational exuberance, then they are cotton-candy nothingness fated to be blown away in the wind sooner or later.

You are placing all your chips on the fact that we cannot say precisely when your phony gains will disappear. I think you are focused on the wrong question. The question that matters is whether the gains are real or phony. Shiller’s research shows that they are phony. I believe that Shiller’s research is legitimate. I don’t think that you should be counting on phony gains to finance your retirement. I think you need to know the true and lasting value of your portfolio.

Those are my sincere thoughts.

Bad Predictor 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:

Again we see that everyone out there is a liar, except for Rob Bennett.

I was aware that Greaney’s retirement study did not contain a valuation adjustment in May 1999, when I put my first post to the old Retire Early board. I didn’t say that the study was in error until May 2002. Does that sound honest to you, Anonynmous?

Humans are liars. That’s a reality. Humans are also truth-seekers. That’s also a reality. The reason why Buy-and-Hold and Valuation-Informed Indexing are so different is that Buy-and-Hold is driven by marketing concerns while Valuation-Informed Indexing is the first true research-backed investment strategy. The core question on the table is — Are we as a society going to insist that honest posting re how stock investing works be permitted or not?

I believe that we are going to go there. I believe that we awarded Shiller a Nobel prize because we understand how important it is that we achieve this advance. If we are going to go there sooner or later in any event, everyone involved is better off if we just go there now. So that is what I advocate.

The Buy-and-Holders see that investing advice has always been marketing-dominated and believe that that will always be the case and that they will always be able to stomp out any brush-fires of honest posting. I think it is going to get harder and harder to do that after the next price crash, especially if valuation levels well below fair-value prices remain in effect for many years. I think that as a society we are ready to make this huge advance and that it is going to happen soon. I think that we have no choice but to make this advance. The pain that will follow from sticking with a pure Get Rich Quick approach will soon be just too great and too pervasive for us not to recognize Shiller’s great accomplishment.

We’ll see, you know? I have my opinion as to how things will go and you have yours. The drama of the thing is that no one can say with absolute certainty until events play out in the real world.

I am a liar. So are you. So is Bogle. So is Shiller.

We are all liars. Because we are all humans. But deep down inside we all would like to be more honest because we know that we would achieve better investing results if we could pull that off. Shiller has pointed out the way forward and I believe very strongly that each and every one of us would choose that way if only we were thinking clearly. As of today, there are enough of us NOT thinking clearly that a Ban on Honest Posting remains in place at all large investing sites. It remains to be seen whether that ban will remain in place for too long after the onset of the next price crash.

You’re a liar, Anonymous. I might just as well say that you are a human. It comes with the territory.

The question is whether you want to make use of the tools now available to all of us who want to be more honest and thus more successful stock investors. The price is saying the words “I” and “Was’ and “Wrong.” You obviously see that as being too big a price to pay today. Perhaps that will change in the days following the next price crash. We will have to wait and see.

I do wish you all good things, in any event. I hope that that helps at least a tiny bit.

The Honest Liar (and Dishonest Truth-Teller) 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 say that my points have been addressed. But the study has not been corrected. Does that reality not tell a tale? ”

Yes, it tells us that you still don’t get it. Hundreds of people, if not thousands, have addressed this issue with over the last 16 years. Wade Pfau even wrote a whole article explaining how you are wrong. That’s the point.

“You don’t get to decide for everyone. You get to decide for you, that’s all.”

That is what everyone is trying to tell you. Rob Bennett does not get to decide. You are the one demanding things and the community has rejected you.

I think it would be fair to say that the community has rejected me. Only a small percentage of the community advanced death threats and other highly abusive stuff. But a large percentage of the community failed to speak up in opposition to the death threats and other highly abusive stuff or spoke up only on one or two occasions and then gave up in frustration. That’s rejection too. So I can give you this one.

But the community has also rejected you Goons. The laws against financial fraud are a rejection of you. The positive reviews that were written for Shiller’s book were a rejection of you. The thousands of posts in which community members expressed a desire that honest posting be permitted were a rejection of you. The decision to award Shiller a Nobel prize was a rejection of you. Wade Pfau’s decision to ask me to help him prepare research showing the superiority of Valuation-Informed Indexing was a rejection of you. Your Goon tactics have been rejected in a more permanent and comprehensive way than the last 37 years of peer-reviewed research in this field have been.

The community is conflicted, Anonymous. Yes, we are drawn to Get Rich Quick/Buy-and-Hold. Nothing could be more clear. But we hate where giving in to our Get Rich Quick/Buy-and=Hold impulse always takes us. We don’t like economic crises. We don’t like to see millions of failed retirements. We are currently being pulled in two directions and, because Buy-and-Hold/Get Rich Quick became dominate before Shiller’s research was published, we are stuck for the time-being with the long-discredited Buy-and-Hold dogmas.

Our laws against financial fraud reveal what we really are as a people deep down inside. Our love affair with Get Rich Quick/Buy-and-Hold is a temporary thing. Buy-and-Hold/Get Rich Quick looks good for so long as prices remain high. How do you think it is going to look when prices fall to fair-value levels or even lower, as they always do? Not so good anymore, right? That’s what I think too. If Buy-and-Hold/Get Rich Quick always remained popular, prices would never fall. The only way in which prices can fall is for Buy-and-Hold/Get Rich Quick to lose appeal. It is the collapse in confidence in Get Rich Quick/Buy-and-Hold that causes prices to fall. I mean. come on.

So that’s where we are headed. We are as a society working through a process by which we will all learn for the first time how stock investing works in the real world. Good for us, you know? I think that’s super. I certainly am not going to do anything to slow down that process. I would like to see us all living better lives. I want the learning process to move forward as quickly as possible. So I am going to continue posting honestly. Re safe withdrawal rates and re scores of other critically important investment-related topics.

Wade Pfau never wrote an article saying that I was wrong. He put his name to a few lines written by John Greaney when you Goons threatened to destroy his career if he did not agree to do so and when Jack Bogle signaled that he would side with you Goons over Wade. The very fact that you felt that you had to proceed in that manner shows that you don’t really believe that Greaney included a valuations adjustment in his study, that this entire thing has been a con (a con that you work on yourselves before working it on anyone else, to be sure) going back to the first day.

What did Wade say when threatened? That those of us who are aware of the errors in the Buy-and-Hold retirement studies can take lower withdrawal rates. How does that address the source of the friction? The friction did not start when I moved out of stocks because the withdrawal rate for stocks was so much lower than the withdrawal rate for TIPS. The friction began when I pointed out the error in Greaney’s study to my fellow community members. Taking a lower withdrawal rate does not address the problem that thousands of my fellow community members were taken in by the demonstrably false claims in Greaney’s study. It’s not a close call.

I am going to continue to point out the errors in Greaney’s retirement study and in all Buy-and-Hold retirement studies. And I am going to continue to encourage all others who do work in this field to do the same. I view a failed retirement as a serious life setback.

I have been rejected by the community at large. I don’t say different. But I say that financial fraud has also been rejected by the community at large. When large numbers of people see the fruits of relentless promotion of the pure Get Rich Quick/Buy-and-Hold approach, I have a funny feeling that the community will remember why it adopted laws against financial fraud in the first place.

But we will have to wait to see how things play out in the days following the next price crash to find out for sure.

I wish you the best of luck with it, in any event. I hope that that helps a small bit.

Rejected (But Only in the Short Term!) 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:

In short, they are all liars and onlyRob Bennett is the one person in this world that is telling the truth. Got it.

It certainly is true that there have been a lot of lies that have been told on the Buy-and-Hold side. And it certainly is true that I have put a lot of effort into the project of telling the truth re these matters. I believe that a failed retirement is a serious life setback. And I have formed friendships with a lot of the people in our communities. So I do feel an obligation to be honest with them re these matters. I haven’t lived up to that 100 percent. From May 1999 through May 2002, I didn’t point out the error in Greaney’s study. I wasn’t dishonest in a direct way. But I wouldn’t call that completely honest behavior. I held back on something that I knew people needed to know about. I don’t say that I am some perfect person. But I definitely say that I have made a major effort to be honest re these matters under very difficult circumstances.

And I think that in fairness we should note that a lot of the “liars” have made efforts from time to time get the truth out. I mentioned above that Bernstein pointed out that the Buy-and-Hold studies were off by two full percentage points at the top of the bubble. I think it would be fair to say that that was his conscience talking. He would LIKE to be more honest. And Pfau said that the Buy-and-Hold retirement studies were “dangerous.” Again, that was his conscience talking. Even today, after he was threatened and flipped, we see Pfau trying to be honest. He was asked at his Reddit Ask Me Anything session whether he thought that a 4 percent withdrawal was safe for a retirement starting today. He said “no.” He didn’t go into detail. He didn’t say that he thought that the studies that get the numbers wildly wrong should be corrected. He didn’t argue that we should open every discussion board and blog on the internet to honest posting, as I often do. So he wasn’t being entirely honest. But he certainly wasn’t being entirely dishonest either. I think it would be fair to say that this is a case where we have to take the good with the bad.

How much honesty do you think we would see in other fields of human endeavors if we made the penalty for being honest as high as we make it in the investment advice field? Do you think that the tobacco companies ever would have come up with the idea on their own to put cancer warnings on their packages if they hadn’t been required to by people outside their industry that demanded it? I don’t. I think that, if we had left it entirely to the industry to police itself, the tobacco industry would still be running advertisements telling people that one of the benefits of smoking is that it leads to good health — it relaxes you, you know? All people that work in a field want to make money by doing that work. That’s just a reality of human life. Sometimes, we need to have an outsider put some pressure on us to do the right thing. I bet that a lot of people who work in the tobacco field are happy that they are required by law to warn people buying their product that it may give them cancer. Most people want to do the right thing. But when there are huge financial rewards for doing the wrong thing, most of us are capable of being compromised. We need to work as a society to create conditions where people at least feel comfortable being somewhat honest re the most important stuff despite the pressures to turn a quick buck that otherwise might cause them not to live up to the standards that they would prefer to live up to.

I think that people in this field are like people in most other fields. They would LIKE to be honest. But this is a money field. And, where there is money involved, there are going to be pressures to be dishonest. That’s just the way it is. We have published rules at every site protecting those of us who want to do honest work from the sorts of individuals who have posted in “defense” of Mel Lindauer and John Greaney, do we not? That’s an indication that we would like to see honesty. We all had to check the “I Agree” button re those rules, right? So we all at one time expressed a desire to permit honesty. Even Lindauer and Greaney at one time expressed that desire. We have laws making financial fraud a felony. Shiller was able to get his book published. Shiller was awarded a Nobel prize. I have had thousands of my fellow community members express a desire that I and all others be permitted to post honestly re these matters. There are lots and lots and lots of indicators that as a society we would like to see more honesty in evidence in discussions of safe withdrawal rates and scores of other critically important investment-related topics.

When you make the price of honesty high enough, you get less of it, Again, that’s just a reality. Wade should not have been placed in circumstances in which he would have to give up his livelihood as his price for being honest. Lindauer and Greaney and those who posted in “defense” of them should have been removed from our communities when they first went off the rails. And of course that should have been done for the benefit of Lindauer and Greaney as well as for the benefit of all the rest of us. If we had banned Lindauer and Greaney, they wouldn’t be looking ahead to prison terms today. Was it not an act of dishonesty for the site administrators to fail to remove them when they first were asked to do so? It sure seems to me that it was. They chose not to act honestly because there were a few dollars to be made by letting these popular posters continue to engage in their acts of intimidation. That certainly wasn’t honest. But the fact that we have rules at every board prohibiting their behavior shows that we at least as a people DESIRE honesty.

Bull markets are liar’s markets, you know? That’s what it all comes down to. That’s what Shiller really showed with his Nobel-prize-winning research. Stocks are today priced at two times their fair value. Is it not a lie to price stocks at two times their fair value? It sure seems so to me. The honest thing to do would be to price stocks at their proper value. Buy as a society we have elected to price them at two times fair value. Because there is a temporary benefit to be had by doing so. We all get to pretend that we are closer to retirement than we would be if we priced stocks properly. So we tell ourselves a lie that makes us happy for a time. That’s the entire story here.

If you want to look at the dark side, you could say that we are bigger liars than any group of investors who ever came before us because we have kept prices higher longer than than any earlier group of investors. We are the biggest liars that ever walked Planet Earth!

That’s one way of looking at it. Another way of looking at it is that we are the people (through Shiller) who discovered The Big Lie of stock investing, that whatever price we assign to stocks is the right price merely because we assigned it and we are a perfectly rational people incapable of telling lies to ourselves. We are the people who awarded Shiller a Nobel prize, are we not? So maybe we are not the worst liars who ever lived, we are the people who celebrated a man for exposing The Big Lie of stock investing and for helping us all to protect ourselves from its negative effects. Both things are true, you know? Humans are liars and humans often engage in efforts to stop lying. We have both pro-lying and anti-lying instincts within us. There has never been a group of humans who told no lies and there has never been a group of humans who did not make any efforts to restrain lies.

The claim that the safe withdrawal rate is always 4 percent is a lie, Anonymous. I am sure of that much. If you want to say that at one time it was more a mistake than a lie, I am fine with that. That’s what I think. But it is more than a mistake today. People who are making honest mistakes do not advance death threats and demands for unjustified board bannings and thousands of acts of defamation and threats to get academic researchers fired from their jobs. I think that Greaney knew on some level of consciousness that there were problems with his study before I even advanced my famous post of the morning of May 13, 2002. That’s why he was so defensive. That’s why he immediately went into freak-out mode. And that’s why a lot of his friends did the same. And that’s why a lot of people who didn’t even think of themselves as friends of Greaney but merely as people who believed that Buy-and-Hold is a good strategy did the same. Lots of people sensed the lie at the root of all this before it was even exposed.

The good news is that as a society we are on our way to exposing the lie. I wish that the process had been completed a lot more quickly. But I guess that it takes whatever time it takes. After the next crash, we are all going to be feeling the pain brought on by our participation in this Big Lie in a very deep and intense way. Are we going to decide to give up the lie at that time? I think we are. And I will be happy to do whatever I can to help us come to terms with what we have done to ourselves by buying into this horrible Get Rich Quick lie that has over the years caused so much human misery. When we see lies told on our boards and blogs, we are seeing why stock prices are so high today. Do you get that? I am trying to tell the truth about stock investing and a lot of people are telling lies about me because they don’t want the truth about stock investing being told. They want those high prices to remain in place! They like thinking that they are closer to retirement than they really are!

It’s a circle. Tell the truth about safe withdrawal rates and people can plan their retirements more effectively. But do people even want that? If people really wanted that, they never would have priced stocks at two times fair value in the first place! People LIKE lies about stock investing, just as people once liked being told lies about how smoking is the key to good health because it relaxes you. A lot of lies survive for a long time because people like them. That’s the story here.

The smoking lie has been reined in a good bit over recent decades. I think that’s because of the research that was done showing that smoking causes cancer. The industry tried to stop the story of that research being told but they ultimately failed because there was just too much good to be done for too many people by the truth getting out. I think that’s what we are going to see in the investing advice field. The lie that the stock price is always right has survived for a long time. Shiller called it “one of the most remarkable errors in the history of economics.” It think it would be fair to refer to it as one of the most remarkable LIES in the history of economics. It’s a lie that we like to tell ourselves because it satisfies the Get Rich Quick urge that resides within us all. We believe this stuff because we like to believe this stuff. We are weak and imperfect humans.

But humans are not only weakness and imperfection. We are capable of engaging in research projects that expose the lies that we tell ourselves. We now have 37 years of research exposing the lie at the core of the Buy-and-Hold project. And I think that, when we see in flesh-and-blood terms what the Buy-and-Hold Lie has done to us all, we are going to begin taking that 37 years of peer-reviewed research seriously at all of our boards and blogs. We are as a society in the process of taking down The Great Buy-and-Hold Lie and we are today very, very close. We are one stock crash away, in my assessment.

I could be wrong. I would be lying to you if I told you otherwise, But that’s what all of the evidence that has appeared before me over the past 16 years tell me. The lie at the core of the Buy-and-Hold project (the lie that investors are purely rational and always price stocks properly) is well on its way to being exposed. But it survives today. And so everyone who works in this field feels pressure to pretend that he or she believes in it, at least to a small degree. Show no respect for The Big Lie and you threaten all of the powerful and wealthy and well-connected people who make a good living telling it to millions.

That’s my take, Anonymous All Get Rich Quick thinking is a lie. The Buy-and-Hold Lie is hurting us terribly. We are in the process of exposing it but we are not quite there yet. Until we get there, those who work in this field feel pressured to tell lies that they would prefer not to tell. Once they see The Big Lie is going down, things will change quickly. That will probably be in the days following the next price crash, when it will no longer be 37 years of peer-reviewed research telling us that Buy-and-Hold is a Big Lie but flesh-and-blood realities being reported in the newspaper every morning. Even Bogle will not be able to live with the results of The Big Lie when he sees them with his own eyes. And, when Bogle flips, everybody flips.

Not this boy, you know? I was once a Buy-and-Holder. I once told myself lies (we all do that, everyday) and so I didn’t know what I know today. I know today that I don’t want to be part of it. I am grateful for all the good that the Buy-and-Holders have done and I love them as people, But I cannot tell lies to my friends about the numbers that they are using to plan their retirements. That’s not me.

I believe that there will come a say when you will declare that it is not you either. But we will just have to wait to see how it all plays out to know for sure.

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

Liar Rob (I’d Be Telling Yet Another Lie If I Said Otherwise, No?)

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

“I am not going to say that I believe that Greaney’s study contains a valuation adjustment. If I did that, I would be at risk of going to prison myself. So no freakin’ thanks, you know?”

The question had nothing to do with Greaney. No one ever asks you about Greaney. In fact you completely missed the point of the comment, which was that Bogle said the market is overvalued. You should have found that encouraging. Instead you spiraled off yet again with your standard deranged angry rant. So “Bogle f’d up”? Chill, dude.

I’ve never advanced death threats. I’ve never advanced demands for unjustified board bannings. I’ve never advanced thousands of acts of defamation. I’ve never advanced threats to get an academic researcher fired from his job. It’s not me who needs to chill. It’s the people who have put up posts in “defense” of Mel Lindauer and Jack Bogle and John Greany who need to chill. I mean, please give me a freakin’ break.

All questions that relate to stock investing have something to do with Greaney. Greaney got an important number wrong in a retirement study that he posted to his web site. That error will directly cause thousands of failed retirements, in the event that stocks continue to perform in the future anything at all as they always have in the past. Indirectly his behavior may well cause MILLIONS of failed retirements because it was my intent to share with the entire world what we learned at that board about safe withdrawal rates and that would have helped the MILLIONS of investors who followed other Buy-and-Hold retirement studies that got the numbers wrong because they did not include an adjustment for the valuation level that applies on the day the retirement begins.

Now —

That’s news, right?

The discovery of an error in a retirement study that saves millions of people from suffering failed retirements is big news in this field. The primary purpose of investment advice is to help people plan their retirements. And we have discovered an error that has hurt millions of investors. So we should have seen that error written up at every investing site on the planet within a few days, right? There’s never been a bigger story in this field than the discovery of the error in Greaney’s study that I wrote about in my famous post from the morning of May 13, 2002.

Why hasn’t that story been written up at every site? Bogle’s attitude toward the development is a big part of the explanation. I wrote to Bogle asking him to deal with the Lindauer Matter. Did you see him do anything? I sure didn’t. That’s why that board was destroyed. That’s why that board became a corrupt enterprise. That’s why the best posters at the Bogleheads Forum were either banned or driven off the board. Those of us who were trying to use the board for the purposes for which it was created asked Bogle for his help in dealing with the Lindauerheads and he sat on his hands.

Bogle is a leading figure in this field. People watch how he reacts to determine how they are going to act themselves. Wade Pfau loved doing honest work in this field. Loved it, loved it, loved it. When Lindauer started defaming him and threatening him, Wade watched how Bogle reacted. Bogle did nothing. That’s one of the things that made Wade afraid that his career would be destroyed if he continued doing fully honest work. I liked it when Wade was doing fully honest work. I learned a lot from him. And I know that lots of others did too. Bogle should have spoken up for him and in opposition to Lindauer. He did not. That’s why things are what they are today.

I guess that I am a tiny bit encouraged that Bogle acknowledged that the market is overvalued. That’s a step in the right direction. It’s better than the alternative. But has Bogle said how much today’s valuation levels pull down the safe withdrawal rate? Has he said how much investors should be lowering their stock allocations to keep their risk profiles where they want them to be? People need that practical, how-to information. It’s not enough for them to know that stocks are overvalued. They need to know WHAT TO DO ABOUT IT.

It’s when investors respond to overvaluation by lowering their stock allocations that they exercise price discipline and thereby help pull prices back down to where they should be. That’s the only way it can be done. That’s the way it is done in every other market that exists. It’s because we don’t provide investors the information they need to practice price discipline when buying stocks that prices go to such insane levels and wreck our economy as well as our personal retirement dreams. I don’t like seeing people’s retirement dreams destroyed. I don’t like seeing our economy destroyed. So I like to see Bogle tell people WHAT TO DO about today’s crazy stock prices. And I am not seeing that. I am not seeing that AT ALL. An acknowledgment that stocks are overpriced just doesn’t get the job done. So, yes, I believe that Bogle f’d up. Big time.

We are looking at things from different perspectives, Anonymous. We are working at cross purposes. I love you as a person. But I don’t agree with you that it is okay that Greaney’s retirement study remains uncorrected 16 years after he became aware of the error in it. If we were all thinking clearly, there wouldn’t be one person on the planet who did not agree with me that Greaney needs to correct his study by the close of business today if not sooner. But clearly there is at least one. Otherwise, it would have happened by now. Clearly there is more than one. A LOT more.

I would like to see the same ethical standards that apply in every other field of human endeavor apply in the investment advice field.

Oops! I went and said something controversial again!

I believe that the people who work in the investment advice field are in many respects like the people who work in all other fields. I believe that deep in their hearts they also would like to see the same ethical standards that apply in all other fields apply in the investment advice field too. But they don’t feel safe asking for change. They see what has been done to me and to all others who stuck their necks out trying to make this much needed change take place and they elected to keep quiet about the corruption that has come to dominate this field in the Buy-and-Hold Era. It’s someone else’s problem. it’s someones else’s fight.

Well, it became my problem and my fight when Greaney got down to the business of driving every intelligent poster off the Retire Early board because it was the intelligent ones who often challenged his Buy-and-Hold/Get Rich Quick views in one way or another. So, yes, for me Greaney is the issue. Not Greaney himself. The all-encompassing corruption that permits people to watch Greaney destroy millions of lives and not speak up about it because discussing the last 37 years of peer-reviewed research has become “controversial” in the Buy-and-Hold Era. I don’t like the corruption, Anonymous. I have seen it hurt too many people. So I want to expose it and to thereby end it.

Bogle’s silence in the face of the corruption that he has witnessed when he visited the Bogleheads Forum hurts me in my efforts to clean up this field. People respect Bogle, for one thing. His name is a much bigger name than my name. So they tend to think that he is probably right and that I am probably wrong. And Bogle has a lot more power and influence and money that I have. So he has those things going for him too. I have a big job in front of me cleaning up this field. I could use Bogle’s help. With Bogle’s help, I could make enormous strides in very little time. But I have not received much help from this great man thus far. His acknowledgment that stocks are overpriced today is a small plus. But it does not by itself offer much in the way of help at a time at which we all very much need to see the Buy-and-Hold corruption cleaned up big bunches.

That’s where I am coming from, in any event. Does that help at all?

Greaney-Obsessed, Bogle-Disappointed 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:

And someday, Jack and Wade will come crying to you, saying that they have been wrong about you all along and will plead to work with you to solve the economic crisis. They will also be the first to help you get the $500 million you so richly deserve. You will be featured on the front page of the New York Times, books will be written about you and every financial conference will want you as the keynote speaker. Meanwhile, all the goons will be headed to prison, with John Greaney and Mel Lindauer facing the longest prison terms for their part in the massive cover up, death threats, etc…………………………….and then you will wake up from your dream and return to reality.

And Bogle will get credit for all of his many genuine contributions because he really is a giant in this field. And Wade will be awarded the Nobel prize that he so richly deserves. And we will pull out of the Buy-and-Hold Crisis and enter a period of prolonged economic growth. And millions of middle-class people will learn how to invest in way that provides far higher returns at greatly reduced risk. And all of our Wall Street Con Men friends will be able to make more money than ever before because people will feel safer investing in stocks once the risk of stock investing has been greatly diminished. And all of our blogger friends will be having a blast exploring all of the hundreds of exciting debate that were taken off the table during the Buy-and-Hold years but which finally can be discussed freely. And the number of people who can retire early will be greatly expanded.

Please tell me the downside, Anonymous.

Of all the things that Bogle got right, the most important one was the one where he said that investors should look to the peer-reviewed research for guidance on how to invest in stocks. He should have just stuck with that.

My sincere take.

And my best wishes to you.

Dream-Weaver Rob

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

“I think it is you Goons who are in denial.”

Because you’re irrational. So once again, we circle back to the beginning. A merry-go-round you refuse to ever step off.

One side or the other is deeply irrational, I think that at least that much is more than fair to say.

It all comes down to how one elects to deal with the emotionalism of the investing experience. The Buy-and-Holders pretend that it doesn’t exist. If there is never a mention of investor emotion, then investor emotion does not matter, right?

The Valuation-Informed Indexers acknowledge the emotionalism of the investing experience and make an effort to come to terms with it. The hope is that by coming to terms with investor emotionalism we can reduce its negative impact.

I naturally wish you the best of luck with your choices, even though my personal view is that your choices are not the best that could be made.

Please take good care, old friend.

Merry-Go-Rounder 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 said the same thing over and over and over and over again. Then he was threatened and he took it all back. Gee, I wonder what was going on there.”

No need to wonder. It’s obvious. Just one small but typical example is in this same comment:

“the 1996 prediction did not pan out”

“long-term timing always works”

You fail to the contradiction there, which proves that you are irrational and impossible to reason with.

Wade disowned you in 2012, and your reaction was an epic psychotic break from which you have never recovered. I could post the link but it’s ancient history. It’s sad that you won’t ever get past it.

I agree that Shiller’s 1996 prediction did not pan out. I do not agree that that shows that long-term timing does not always work.

If prices fall over the next year or two or three by 75 percent (that would take us to a P/E10 of 8 — there has never once in U.S. history been a bull/bear cycle that did not get us to a P/E10 of 8 or lower before it fully resolved and a new cycle was able to begin), those who followed Shiller’s 1996 advice to lower their stock allocations will be FAR ahead of those who followed Buy-and-Hold strategies instead. Presuming that stocks continue to perform in the future at least somewhat as they always have in the past. this will be one more case in which exercising price discipline when buying stocks (by engaging in long-term timing) will have paid off big time, even though the precise prediction advanced by Shiller (that prices would drop hard within 10 years) did not in fact pan out.

Remember when Wade said re long-term market timing that “It hardly matters how we do it” because the evidence that it works in every possible circumstance is so strong? That’s what he was getting at. Long-term timing is price discipline. How could there ever be a circumstance in which exercising price discipline would not work? Shiller once said that the conclusion that the Buy-and-Holders jumped to, that because short-term timing does not work, the market price is the product of rational choices and reflects reality, is one of the most remarkable mistakes in the history of economics. I would add that it is in the process of causing more human misery than any earlier mistake ever made in the history of personal finance.

It doesn’t matter too much WHEN the pretend gains caused by irrational exuberance disappear into the wind. What matters is that they always do. If you know that those gains are going to be disappearing in coming days, you should not be counting them as part of your retirement portfolio. That’s what the Buy-and-Holders do. The Buy-and-Holders count those pretend gains as real (because they believe that those gains are the product of economic developments, not irrational exuberance).

That’s the core difference between Buy-and-Holders and Valuation-Informed Indexers. We have different views as to where excess price gains come from. If you believe that big price gains are the product of economic developments, then they signal something very positive — a growing economy. But if you believe that big price gains are the product of irrational exuberance, then they signal something very negative — a market that has become insanely emotional. How you feel about that core question is going to determine how you feel about every other question that comes up in stock investing. If you think that the market has gone insanely emotional, you are not going to feel comfortable putting too much of your money in it. If you think that high prices just signal a super strong economy, you are going to celebrate the big gains because you will want to participate in the benefits of the super strong economy to the greatest extent possible.

Wade didn’t disown me. The 16 months in which we were working together were the happiest and most exciting months of his life and he properly remains immensely proud of the research paper that we co-authored. He stopped promoting the paper and stopped working with me to get the word out about the realities of stock investing to millions of middle-class investors because he saw what you Goons do to people who post honestly re these matters and he saw how Bogle failed to act when he saw what was going on and he concluded that he needed to pull back to keep his career from being destroyed. Those who want to know Wade’s sincere views re what works in stock investing can read the items under the “Wade Pfau” category at this blog and learn some amazing stuff. Wade will be flipping back to work with the good guys in the days following the next price crash and I believe that he will be awarded a Nobel prize for his amazing work at that time. We’ll see.

Buy-and-Hold was a mistake. Now that the mistake has been covered up for 37 years through insanely abusive behavior, I think it would be fair to characterize it as a scam. It’s a scam that is killing us as a nation. I OPPOSE the scam. I am proud to be able to say that I have been publicly OPPOSING it for 16 years now. Who else can say that?

It will be interesting to see how things play out.

I naturally wish you all the best that this life has to offer a person, scam promotion or no scam promotion. My personal belief is that, in the days following the crash, when you have seen the effects of Buy-and-Hold on your own retirement hopes, you will flip too and we will be working together as friends to get the word out about the exciting last 37 years of peer-reviewed research in this field to every investor alive on the planet. I sure hope it turns out that way, in any event.

My best and warmest wishes to you, Goon pal.

Psychotically Broken 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 has never been 1 documented case of anyone that has successfully implemented VII, yet we have endless data on successful buy, hold and rebalance portfolios. You are just too scared to show this actual data on your website. That won’t look good to your jury.

It’s obviously not possible to have documented cases on successful implementation of a strategy in the days before the research showing the merit of that strategy is published. That covers up to 1981. In the days since 1981, there has been a brutal cover-up. Those who have argued in support of Valuation-Informed Indexing have seen their loved ones threatened with physical harm and have seen their careers threatened by powerful and wealthy and well-connected people. And yet we still have 10 percent of the population that today believes that Shiller’s research was legitimate.

Once we open every discussion board and blog on the internet to honest posting, the percentage of the population following a Valuation-Informed Indexing strategy will increase dramatically. You will have as many successful implementation cases as you desire. The Bennett/Pfau research shows that 100 percent of the people who follow VII will do better on a risk-adjusted basis than those who follow Buy-and-Hold. It’s not possible to do better than 100 percent.

Has Buy-and-Hold had any success? All of the elements of Buy-and-Hold other than the crazy idea that it is not necessary to practice price discipline (long-term timing) when buying stocks have been proven successful. Naturally I incorporated all of those elements into the VII model. So all of the successful elements of Buy-and-Hold will be generating success for Valuation-Informed Indexers.

The only element of Buy-and-Hold that I did not incorporate into the VII element is the one that has been discredited by 37 years of peer-reviewed research. I say that valuations matters. Always. I say that investors need to consider valuations when making investment decisions because the valuation level that applies when making the decision is the most important factor bearing on the question being considered.

Price matters when buying stocks just as it does when buying anything else. ALL of the research shows this. Wade Pfau spent months trying to locate one sliver of research supporting the core Buy-and-Hold claim that it is not necessary to consider price when buying stocks. He came up empty-handed. I wonder why. That one false claim of the Buy-and-Holders has caused more human misery than any other false claim ever made in the history of personal finance.

John Bogle has caused more human misery with that one false claim than Bernie Madoff did with his false claims. 500 times more. I don’t say that he did so intentionally. Bogle developed the Buy-and-Hold strategy before Shiller published his “revolutionary” (Shiller’s word) research. So his mistake was at one time just one of those things. But we can no longer say that 37 years down the road. Bogle should never have tolerated death threats and demands for unjustified board bannings and thousands of acts of defamation and threats to get academic researchers fired from their jobs at a discussion board with his name on it. Bogle was asked to take action re the behavior of the Lindauerheads and he failed to do so. As someone who admires this giant greatly, I urged him to take prompt action I still do.

It will be interesting to see how it all plays out in the days following the next price crash, Anonymous.

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

Unapologetic VII Advocate (and True Bogle 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:

“I speak for people re the process issue but never re the substance issue.”

Wrong, Sluggo. You speak for many peopl, with Robert Shillerbeing the most commonly used person. For example, Shiller says not to use his work for timing, but you say he means short term and not long term. You have also said he wants to say many other thangs, but pulls his punches. What about Wade? You make many comments about what you say he really means, but then say he is too scared to make those comments.

Wade said the same thing over and over and over and over again. Then he was threatened and he took it all back, Gee, I wonder what was going on there.

All of Shiller’s work shows why long-term timing (price discipline) is required. And of course he advocated it himself in the paper he wrote in 1996 saying that those going with high stock allocations would regret it within 10 years. Yes, he pulled back from making those sorts of predictions when the 1996 prediction did not pan out. And I of course have never said that Shiller continues to make those predictions. But the Nobel-prize-winning research that shows that long-term timing always works and is always required is still out there. So why shouldn’t I tell people that and give Shiller credit for being the one who prepared the research?

If I did not say that long-term timing always works and is always required, Wade would never have contacted me to ask if I would be willing to work with him on research showing that Valuation-Informed Indexing is superior to Buy-and-Hold. Where would we be then? I think it would be fair to describe that research as the most important research published in this field in 30 years. So I sure wouldn’t like us to be without it. And you Goons obviously think it is pretty darn important too or else you never would have threatened Wade. Please give me a freakin’ break.

The big mistake was made in 1981. Bogle should have come out within days of the publication of Shiller’s “revolutionary” (his word) research showing that Buy-and-Hold can never work in the long term and told all the people who follow his advice that there was now serious research casting doubt on the Buy-and-Hold strategy. If he still believed in Buy-and-Hold, he of course could have said that too. But he certainly should have let people know that the research cast doubt on the merit of the Buy-and-Hold strategy. Then we never would have experienced any of these problems.

Now we have a huge mess on our hands because the big problem for the Buy-and-Holders is not the mistake they made in thinking that it is not necessary to practice price discipline when buying stocks but the 37-year cover-up. I didn’t cause that cover-up, Anonymous. I have been working hard to bring it to a full and complete stop for 16 years now. Once the cover-up is brought to a full and complete stop, we all live better lives from that point forward. That’s the path that gets my vote.

No one should be afraid to post honestly at any board or at any blog. My sincere take.

My best wishes to you. It will be interesting to see how it all plays out.

Non-Punch-Pulling, Non-Scared (Kinda, Sorta) Rob (AKA Sluggo)