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

What rewards? What amazing places?

The entire site tells the story, Anonymous. Close your eyes and pick a page at random. Then just follow the links from there. If your mind is open to learning things about stock investing that we did not know at the close of 1980, you will be stunned and amazed. We’re talking “revolutionary” (Shiller’s word) stuff.

Or you could proceed chronologically. The Great Debate began on the morning of May 13, 2002, with a post that I put to the Motley Fool’s Retire Early board pointing out that the peer-reviewed research shows that stock investing risk is variable and not random and that thus the safe withdrawal rate cannot possibly be 4 percent at all times. A year later John Walter Russell posted his research showing that the reality is that the safe withdrawal rate has risen to as high as 9 percent at times of low valuations and dropped to as low as 1.6 percent at times of high valuations (2000). The implications of that finding to retirement planning are far-reaching indeed.

The last 36 years of peer-reviewed research is the most important 36 years of peer-reviewed research ever seen in the history of investing analysis.Buy-and-Hold is the past. Valuation-Informed Indexing is the future.

My sincere take.

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, Rob. ESI Money is targeting you. He believes financial experts should publish their net worth and financial education showing their own success in following the advice they give.

https://esimoney.com/dont-publish-net-worths-financial-experts/

He says what you say, Anonymous. Then below that he says that advisors should also tell HOW they made their money. He points out that some might make a lot of money as the result of some short-term project and then lose it; he says that it is the long term that matters. That’s what I believe.

If an advisor endorses Buy-and-Hold strategies and claims that he had made money with them, does he tell how much of what he made came post-1996, when the promotion of Buy-and-Hold strategies caused prices to rise to dangerous and unsustainable levels? Should the people who are listening to the fellow’s investing advice be counting the cotton-candy nothingness part of his portfolio as real wealth or should they be adjusting his numbers to show how much wealth he has accumulated when his wealth is measured REALISTICALLY?

You know what I think, Anonymous. Anyone who doesn’t make an adjustment for valuations is either uninformed as to the last 36 years of peer-reviewed research or is flat-out working a con on people, hoping that they will accept the nominal, unadjusted numbers as real. The reason why I am a big believer in using the peer-reviewed research as guidance is that the peer-reviewed research cuts through the cons, it exposes the con men (whether they are suffering from cognitive dissonance or not — most are, but still…) for what they are.

I favor investing strategies that work longer than a single bull/bear cycle. Why? Because we all invest for longer than a single bull/bear cycle. The typical bull/bear cycle lasts 35 years. Most of us invest for roughly 60 years. Valuation-Informed Indexing TROUNCES Buy-and-Hold over 60-year time-periods. It’s not even remotely a close call. The risk is far, far less and the returns are far, far greater.

People should indeed look at whether advisors are able to create wealth for themselves. But they need to be careful not to be fooled by the smelly bull market garbage. They need to look at real numbers. They need to turn to peer-reviewed research for guidance. They need to cut through the cons that have come to dominate the investing advice field in the Buy-and-Hold Era. The wealth that matters is the wealth that lasts for the long term. For lasting wealth, you want to go with the first true research-based strategy and run, not walk, from those pushing the pure Get Rich Quick approach.

My sincere take.

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 is not “science” if you determine a strategy before the evidence is established. This is the basis of your flawed thing.

Secondly, your continued lying is what has destroyed your credibility. You did NOT author a paper with Wade Pfau.

Have you been unemployed for over 14 years by choice or are you unable to find a job because of your significant and obvious flaws?

Science is the testing of various hypotheses. The mistake that the Buy-and-Holders made was to ASSUME that investors are engaged in the rational pursuit of their self-interests. Everything that came after that was tested. But the premise (that investing is rational) was never tested. And in fact there is zero support for that hypothesis in the historical record. Valuation-Informed Indexers see that because they test for it. But the Buy-and-Holders have never tested for it. Why test for something that is already “known” to be true?

The premise of Valuation-Informed Indexing is that price discipline is required and of course produces good results on every occasion. A Valuation-Informed Indexer would tell you that we test for that. And indeed there are studies (such as the one that I co-authored with Wade Pfau) that show this. But I don’t doubt that there is a perspective from which to view these things that would indicate that this is our assumption rather than something that we came to believe because of tests. Why did we even test for this when the Buy-and-Holders never felt a need to? Because we believe it to be true. The belief had to be there at least in some tentative form before we would even feel the need to engage in the testing that “proved” the point to be legitimate.

Thanks for taking time out of your day to share your thoughts with us, my good friend.

Rob

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

“Mike Piper promotes Buy-and-Hold. It follows that Mike Piper is a liar.”
Wow! Glad to see you are still able to rock the Major League Mania, there, Hocus!

Okay, Mr. X.

Robert Shiller is the one who published peer-reviewed research in 1981 showing that valuations affect long-term returns. If Shiller’s research is legitimate (he was awarded a Nobel prize), then the market is not efficient and Buy-and-Hold (which is rooted in a belief in an efficient market) is indeed a lie.

Shiller doesn’t say it that way. Lots of people who believe that Shiller’s research is important don’t say it that way. I wish that they would. The clearer statement is always the better statement, in my view. If there is some reason to believe that Buy-and-Hold is not a lie, I want to have someone bring that evidence to my attention and it is far more likely that that will happen if I advance the clear statement. If Buy-and-Hold really is a lie, I want to get the word out to everyone who invests so that we can work together to build a model for understanding how stock investing works that is real and that helps people. I don’t see how anyone benefits from all of the beating around the bush that we see in this field.

I love the Buy-and-Holders. They made many amazing contributions to our understanding of how stock investing works. There would be no Valuation-Informed Indexing but for those many amazing contributions. But, if Shiller’s research is legitimate, Buy-and-Hold is indeed a lie. And we need to hear everyone who understands this saying it in clear and firm and unapologetic and uncompromising terms.

That’s my sincere take re this terribly important matter, in any event.

Please feel free to spread the word everywhere on the internet that Rob Bennett believes that Buy-and-Hold is a lie. To be fair, you should say that I believe that prior to 1981 it was a mistake. But 36 years after the mistake was uncovered by the publication of peer-reviewed research, I think it would be more than fair to say that the mistake has been transformed into a lie, a lie that I don’t want to be associated with in any way, shape or form. You would be doing me a favor by letting people know that this is my sincere position.

My best and warmest wishes to you.

Rob

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

Maybe you should lodge your complaint with the New York Times since they haven’t put you on the front page yet.

I’ve written to several reporters who work for the New York Times, Anonymous. Not recently. But I did that some time back. And I will obviously do it again in days to come.

The problem that we are having as a society is that we are all humans. Humans don’t want to be disliked. If your message is “you need to divide the amount reported on your portfolio statement by two to know the true amount that you have saved for retirement,” most people are going to react negatively. That’s not a message that most humans are excited to hear.

It is an important message. People cannot plan their financial futures unless they know how much they have saved. So we very, very much need to get that message out. But it is only the humans who can get it out. A good number of us have been trying for decades now to get the job done. But there is a lot of resistance to this message. People want to believe in Buy-and-Hold. It is a Get Rich Quick scheme and we humans are drawn strongly to Get Rich Quick schemes. Everyone with money in the market (and that’s just about everyone) wants to believe. Telling people that “it’s all a pile of smelly garbage” is not the path to winning a popularity contest. I know whereof I speak!

But it is not ONLY Get Rich Quick schemes that appeal to us. We humans love learning. We love reducing the risk of stock investing. We love planning effectively for our futures. We love earning higher returns and being able to retire sooner. We love the idea of sparing our nation from future economic crises. We love the idea of reducing the political frictions that we have seen develop following the onset of the economic crisis (it should be called “The Buy-and-Hold Crisis”). So, while there are elements of the Valuation-Informed Indexing concept that have held it back from becoming the dominant model for understanding how stock investing works for 35 years now, there are also elements that will cause it to skyrocket to the top in days to come.

The key thing that has to change is that people need to give up the illusion that there is some sort of payoff for following a Buy-and-Hold strategy. There is no payoff. Buy-and-Hold is a lose/lose/lose/lose/lose, according to the last 35 years of peer-reviewed research (based on 145 years of historical return data). But so long as prices remain high, there APPEARS to be a payoff. So for 15 years now I have been experiencing a wee bit of difficulty getting the word out re the future of investing analysis. Perhaps you’ve noticed!

I won’t be experiencing any difficulty following the next price crash. There won’t be too many people seeing a payoff from following Buy-and-Hold at that point in the proceedings. People will be threatening to string the advisors who recommended Buy-and-Hold to them up from the nearest tree (I will of course be telling them why that is not even a tiny bit appropriate). At that time, there will be reporters from the New York Times CALLING ME to ask me to tell them all that I know about what happened here. When that day comes, I will have a lot to say!

If I believed that there was someone I could call today to get this story on the front page of the New York Times tomorrow morning, I would not be too shy to place the call, Anonymous. I will place the call when the time is right. I don’t think that the time is right just yet. But we’re getting there. I continue to work this. But I don’t think it makes sense to call the New York Times over and over again until I come to be viewed as a pest. I have called. I will call again. For the moment, I am playing a waiting game.

It would be better for every single person concerned if the story ran in tomorrow morning’s paper. I am 100 percent sure. More people suffer with every day of delay. If I hadn’t done everything in my power to push this story, I would feel horrible about that. But the reality here is that I have done everything that a reasonable person could do and then some more on top of that and then some more on top of that.

I have given this my best shot. I have received some amazing responses to my efforts. I am of course grateful for those. But the amazing responses have thus far not been enough for me to overcome the negative efforts of you Goons. You’ve got the Wall Street Con Men behind you and that means that there is a lot of power and money on the side seeking to kill the story. Big papers like the New York Times earn lots of their revenue from advertising by Wall Street firms and so this is a risky thing for them to take the lead on. The people who work at the New York Times are good people and they will see the need to take this on when they see what the next price crash does to us with their own eyes. But thus far I have not been able to make the case compelling enough to persuade them to take on the very serious risks that really do apply here.

We’re getting there. Think back to the morning of May 13, 2002. I was a Buy-and-Holder then myself! There is so much that I know today that I did not know then. And my entire learning process is documented at this site. So anyone who wants to know everything that I now know can work through the steps of that learning process today. That’s an amazing plus for all of us. I am just going to keep adding to the materials that everyone in the world will be looking to for guidance re how to pick up the pieces in the days following the next crash.

Hang in there, man. A little patience, please. I love my country because we usually get it right in the end. However, it is not quite true that we always get it right immediately. On some occasions it takes us some time to work through the process from a bad place where we find ourselves to the good place that deep in our hearts we all really want to be. I think it would be fair to say that this is one of those occasions.

The New York Times needs to run this story. I’m working on it! I’m working on it!

I hope that helps a bit, old 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:

If these thousands believed what you say, why would they wait for the market to crash before posting?

There’s a premise implicit in your question, Anonymous. The premise is that people are rational. The way that I read your question is: “Given that people are rational, why would they wait…?”

People are not rational.

That’s what Shiller showed in 1981. That’s what you need to accept to gain the ability (it’s a superpower!) to understand all that has followed over the course of the last 35 years.

Do you believe that people are rational?

I think you do. You show it in your posts. All the time.

Shiller showed otherwise.

You dance around that reality all the time. Someday, you are going to have to face it. Once you do, all of the conflicts that we have seen evidence themselves between us over the past 15 years are going to disappear. The only real conflict that we have is that you think that people are rational and that I do not think that. All of these other things are manifestations of that one core conflict.

If people were rational. how the heck could the P/E10 number reveal the stock return that applies ten years down the road? What the h? Is P/E10 some sort of fortune teller? How does the P/E10 number know what economic developments are coming? How did Shiller do what he did? How was that even possible?

Shiller showed that we are not rational. Fama showed before him that the stock market (like all other markets) aims for rationality. It is the conflict between the irrationality of the humans who comprise the market and the market itself (which again is comprised of humans) that produces the stock price that applies at any given point of time. We always want to vote ourselves huge unmerited pay increases because we have a nasty Get Rich Quick urge residing within us and we also always want stock prices to be rational so that we can plan effectively for our futures. It is the conflict between these two forces that determines the price that applies on any given day. When one force gets too powerful, as we saw happen in the late 1999, there is a strong snapback over the coming years to a middle ground. We call the snapback an “economic crisis.”

We are rational and we are irrational. That’s us humans! You don’t have to like it. But you do need to acknowledge the reality if you want to be able to get stock investing right. This tension between rationality and irrationality is what determines stock prices. It is the ABCs of investing analysis. It is the fundamental reality around which everything else turns.

Why aren’t the thousands who have said publicly that I am their favorite writer on stock investing present and accounted for here today? They are freakin’ scared, Anonymous. My own freakin’ wife is one of them! That’s why I write about her here from time to time. I love her to death. She is a good woman and she loves me and she does everything in her power to get over her fears. But the bottom line is that she is one of those darn humans and her fears poke through her goodness from time to time and cause her to believe crazy stuff. She says “Why if Valuation-Informed Indexing doesn’t prevail in our lifetimes?” or some such nonsense. It is that human thing. I have my moments too. We all do.

That’s the story.

There should be thousands of people posting here daily. Bogle should be screaming his fool head off telling the world how great I am for taking his Buy-and-Hold concept and fixing it so that it works in the real world, for realizing his dream at last. You Goons should be shouting from the rooftops about Valuation-Informed Indexing in hopes of getting your prison sentences reduced. Wade Pfau should be leaving Lindauer and Greaney in the dust and making plans for the party he is going to have on the night he is awarded the Nobel prize. The Democrats should be congratulating themselves for having been the political party smart enough to lead the fight to get the internet opened to honest posting on safe withdrawal rates and scores of other critically important investment-related topics. Or the Republicans should be. We all should be retiring a lot earlier than we imagine we will be able to retire today. We all should no longer be thinking of stocks as an investment class much riskier than certificates of deposit.

All of that stuff became possible as a result of the contributions of Shiller and Bogle and Pfau and Russell and Kitces and Schultheis and Bernstein and Richards and Arnott and on and on and on. We just haven’t yet freakin’ taken advantage of the mountain of good stuff we have learned about stock investing over the past 35 years because we are too freakin’ scared of admitting that once upon a time we didn’t know it all and so we made a mistake and then instead of promptly acknowledging it and moving on we covered it up.

It’s always a battle between rationality and emotion. When prices are where they are today, it looks like emotion has won and there is no hope for rationality. So people are afraid to post here. That Rob Bennett guy, he talks about what the peer-reviewed research says! That’s rational! The humans will kill him!

The humans are not going to kill me, Anonymous. The humans are going to love me. By a factor of 500 over how much they loved me in the days when I was a frightened little kitten too and I only wrote about how to save effectively. The humans really are nut cases. You are right that they don’t post here. But the humans really do love their rationality too. That’s why we have air conditioning and cell phones and Beatles records and cures for all those nasty diseases that used to wreck our lives. Yes, we are crazy nutcases working over time to destroy ourselves. But we are also loving, intelligent beings determined to overcome the hurt and make the world a better place. We are two, two, two beings in one!

That’s the reality.

The thousands are afraid. They don’t like hearing you Goons yell at them. They don’t like hearing death threats, even when they are directed at me and not them. They don’t like saying out loud that millions of their friends are going to experience failed retirements. They don’t like being social outcasts. They don’t like telling other humans things those other humans very much don’t want to hear. So they keep it zipped.

They rationalize their behavior. They say “that Rob Bennett fellow is clueless. How much money has he ever made with all his precious honesty? Who needs it? Who wants to take advice from some idiot like that?” And they stay away from a site that they would love to death if they got over their fears.

We are as a nation in the process of getting over our fears. That’s my bet, Anonymous. I see it everywhere. You want me to be afraid too, so you will say that I am imagining what I see. I can’t stop you from trying. But I have never been known to imagine things in the past (at least not to this extent) and I don’t believe that I am imagining this either. The curve ball is that, if I really were a nutcase, I would swear to heaven that I am not. So you can’t really go by what I say. The humans are right to be somewhat fearful. Skepticism really is called for when you are wondering what to do with your retirement money.

I am not going to beat you Goons if our nation does not get over its fears re learning how stock investing works in the real world. I believe that the big thing holding us back is that we don’t want to acknowledge that the last 35 years of peer-reviewed research in this field tells us that we need to take our portfolio values as they are reported today and divide by two to know how much we have to retire on. Once prices crash again, the division will have been done for us by The Big Reality Principle in the Sky and then our fears will turn in another direction and we will come to look at the last 35 years of peer-reviewed research as our friend and as our protection against the products of our fears rather than the thing we should be fearing.

That’s my take, of course. I am not God. I could be wrong. You asked your question here and so I told you what I believe. What would you expect, you know? That’s the way it is done at Mike Piper’s site too. He just believes some different things. If you want a different sort of answer, please go there and I guaranty that you will get what you are looking for today.

I say that the thousands are in the process of getting over their fears and that they will be posting here like mad men and mad women in the days following the next price crash. I’m ready for them!

Until then, we are just going to have to make do with what we’ve got — a bunch of flawed humans. God knows I love them. I could do without a bit of the fearfulness — it sure drags me down at times. But then I remember my favorite things — the air conditioners and the Beatles records and the disease cures — and I don’t feel so bad about all of my dear fearful human friends.

We will have to wait and watch together as it all plays out before our eyes.

I love you, my long-time Goon friend. Somewhere deep, deep, deep down, you love me and the rationality that I fight so tirelessly for too. I know because you love Buy-and-Hold and rationality is the entire freakin’ point of that flawed and yet wonderful-in-its-way-because-it-served-as-a-building-block-to-something-better strategy.

Take care, man.

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:

Quote from your blog:

“But the bottom line is that she (Mrs. Bennett) is one of those darn humans and her fears poke through her goodness from time to time and cause her to believe crazy stuff. She says ‘What if Valuation-Informed Indexing doesn’t prevail in our lifetimes?’ or some such nonsense.”

First of all, that was in fact an excellent question. But more importantly, do you often dismiss your wife’s concerns as “crazy stuff” and her questions as “nonsense”?

No, I don’t.

But I do believe that it is crazy to believe that Valuation-Informed Indexing is not going to become the dominant model for understanding how stock investing works following the next price crash. Shiller was awarded a freakin’ Nobel prize in 2013. If you really wanted to stop this, you had to do something to stop him from being awarded a Nobel prize. It’s a little too late to get this particular genie back in the bottle, in my assessment.

My wife is a smart and grounded person. But she is one of those darned humans. So, yes, she is capable of having her fears poke through her goodness from time to time, causing her to say crazy stuff. I am too, to be sure. I was a Buy-and-Holder once. I failed to speak up about the errors in John Greaney’s retirement study for the first three years that I posted at the Motley Fool site. I don’t say that I am smarter or less crazy than my wife, just that I have watched this one play out from a front-row seat and that it is not too hard to see how things are going to play out in time if you are familiar with a lot of what has gone on over the past 15 years.

We’re all a little crazy in certain ways, Dan. We need to acknowledge that to be able to make sense of ourselves and of our world. When we try to convince ourselves that we are 100 percent rational (this is the Buy-and-Hold mistake), we end up putting pressure on ourselves never to make mistakes and we end up becoming MORE crazy. Paradoxically, it is the fellow who can acknowledge his own irrationality who is thereby best able to control it and it is the one who insists on perfect rationality from himself who goes totally bonkers.

This has been my experience in my travels through the Valley of Tears, in any event.

Take good care, man.

Rob

 

Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

Again I quote: “the e-mails in which he expresses his fears of you Goons are posted at my web site.”

I looked for such posts. The only pertinent ones I found directly contradict your statement, as in the link I posted. You have posted no link to support your claim. Why not? This is your site, you should know exactly where they are.

There are umpteen posts where YOU express Wade’s supposed fears. But none where Wade himself expresses fear.

When you make a provocative claim, you need to provide evidence or be dismissed as a crank. For some reason you consider yourself an exception to that rule.

The posts are there, Dan. Go to the blog, look for the “Wade Pfau” category and they will come up.

I don’t post links here because the idea that there is some sort of question re these matters is 100 percent silliness and I do not want to dignify these phony requests for links by acting as if i take them seriously. 50 links will not persuade a Goon. It is in the very nature of goonishness that you are not open to being persuaded.

Links would persuade reasonable people. But reasonable people don’t need links. They know what they need to know by seeing your behavior on this thread. The trouble is that lots of people who are reasonable in all other respects lose their ability to make use of their reason when stock prices rise as high as they are today. We humans find it hard to acknowledge that we have been taken to the extent that we need to be taken to permit prices to rise this high. Bull markets are liar’s markets and we are today living through the tail end of the biggest bull market in U.S. history.

Rob

Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

Again, you avoid the main point that you refuse to work a job. There you are hiding behind your VII lies.

I think it would be fair to say that you are too angry to listen to any words relating to investing with an even partially open mind, Sammy. I will try to provide some context for the benefit of any who are reading these words and who are a bit more open to understanding what is going on here.

John Greaney has a Buy-and-Hold retirement study at his web site. He employed the same methodology as is used in all Buy-and-Hold retirement studies — that is, he did not include an adjustment for the valuation level that applies on the day the retirement begins. So he got all the numbers wrong. In 2000, the safe withdrawal rate was 1.6 percent real. He said that it was 4 percent real. People who relied on that study to plan their retirements have been hurt in very serious ways. The odds of a retirement which began in 2000 and that employed a 4 percent withdrawal surviving for 30 years are 30 percent.

How do we solve that problem? How do we get accurate retirement information out to the millions of middle-class people who need it?

The Buy-and-Holders need to acknowledge that they made a mistake in thinking that the market was efficient. Shiller showed that they are wrong in research published in 1981. If they cannot bear to acknowledge that (there is strong evidence that the Buy-and-Holders are suffering from cognitive dissonance), then at the very least they need to let people know that their retirement studies are not the final word on the subject, that there are Valuation-Informed Indexing retirement studies that report very different numbers. If you leave it to the reader to decide which sort of study to use, you are covered. If you fail to let your readers know the other side of the story, I think it would be fair to say that you are going to find yourself in very serious trouble following the next price crash.

I have spoken to university professors who want to tell the truth re stock investing and who are afraid to do so today. It’s the same with personal finance bloggers. It’s the same with economists. It’s the same with policymakers. It’s the same with investing advisors. And on and on and on.

We are caught in a trap. We didn’t always have Shiller’s research available to us. So we made some mistakes. Those mistakes hurt people. We didn’t correct them when we first leaned about them because we thought they wouldn’t cause too much harm. But then the wrong ideas that we put in people’s heads caused the bull market to go completely out of control and we caused more harm than anyone once imagined possible. Now we are trying to dig ourselves out.

I’m trying to do my part, that’s all. I cannot take you back in time to a place where you could make different decisions and feel better about yourself. I can make the case for how lots of good and smart people once really thought the market was efficient. At some point, we need to move on. At the very bare minimum, we need to make it a practice to tell both sides of the story. Reasonable people need to absolutely insist on that much.

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

Rob