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 entire approach for the last 20+ years is that you feel you are 100% right and that everyone else is not only wrong, but must be compelled to listen to you. Any opposing view is labeled as hostile by you.

The fact is that people will always gravitate towards what works based on observing outcomes. If you had a successful track record, with superior outcomes, you wouldn’t have resistance. You don’t have that, so there is no reason for anyone to support your position.

My view is that there are two academic models for understanding how stock investing works and every investor should be regularly exposed to both and permitted to make up their own mind as to which one to follow. I believe that the same laws that apply in every field of human endeavor other than the investment advice field (no death threats, no extortion, etc.) should apply in the investment advice field as well.

In terms of outcomes, you will get very different impressions if you look only at recent history vs. looking at the peer-reviewed research, which looks at the entire history of stock investing. Valuation-Informed Indexing has of course been far superior to Buy-and-Hold over the entire history of the market. Buy-and-Hold looks better if you look only at outcomes from the recent past, in which we have experienced the most out-of-control bull market in U.S. history. I don’t believe that you can assess the out-of-control bull market accurately until you see the millions of lives that will be destroyed in the Buy-and-Hold Crisis that will inevitably follow from it. The reason why I like peer-reviewed research so much is that it takes you out of the current moment and permits you to see how things play out over the long term.

I believe that I am right in the things that I say or else I wouldn’t say them. One of the things that I love about internet discussion boards in which honest posting is permitted is that they provide a means to become aware of the areas in which you are off base on something. I don’t believe that I am off base re my famous claim that the retirement study posted at John Greaney’s web site lacks an adjustment for the valuation level that applies on the day the retirement begins. The death threats, etc, have not persuaded me that I am wrong re that one. To the contrary, I view them as further evidence that I am right. If Greaney truly believed that he had included a valuation adjustment in the study, he would never have engaged in criminal behavior and risked going to prison. He went down that road out of desperation. There really is no valuation adjustment in the “study.”

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 had built the Retire Early board into the most exciting discussion board community on the internet, Anonymous.”

“ If all that isn’t worth a bare minimum of $500 million I have a hard time imaging what would be.”

It is not hard to determine value. You look at income flow and you also look at how much someone is willing to pay you for what you have (just like knowing how much your house is worth). You haven’t been generating an income, we don’t see any materials you have for sale and I haven’t seen anyone willing to pay you for your services.

There’s value in avoiding another Buy-and-Hold Crisis, Anonymous. If there’s no value in getting the mistake that the Buy-and-Holders made in the 1960s corrected, then why do we send people to schools to get Ph.D.s before we let them publish peer-reviewed research in this field? The purpose of the schooling is so that they can get things right. It’s not just about turning a quick buck. One of the aims of peer-reviewed research is to get things right, which in some cases translates into correcting errors made at earlier times. There’s HUGE value in that.

I believe that there will be lots of people who will see the value in getting things right in the days following the next price crash. But we’ll see, you know? I wish you the best of luck with it regardless of what investment strategy you elect to follow, in any event.

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:

Where did he say to get out of the market?Also, note that he NEVER times the market.  Another Rob failure.

I don’t believe that he ever got entirely out of the market. But of course I have said on thousands of occasions that I do not believe that the typical investor should ever get entirely out of the market.

He has lowered his allocation to stocks when prices got too high. That’s market timing.

Of course Bogle did the same. Lots of people who SAY they are against market timing engage in it themselves because they are too intelligent not to see the benefits. If you would ease up on the abusive stuff, they would be willing to speak clearly about what they truly believe and we all would benefit. The Goon stuff hurts us all and has been hurting us all for a long time now.

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 ignore everything else Shiller says. ”

To clarify, you take some of what he says and spin it to say what you want it to say (not what he actually says) and then you ignore the rest. This is just a factual observation.

The title of Shiller’s book is “Irrational Exuberance,” Anonymous. Is it spin to take note of the title he gave to his book?

If irrational exuberance exists, it is a logical impossibility that the safe withdrawal rate is the same at all valuation levels. There is obviously more risk when irrational exuberance is high. So the safe withdrawal rate is lower at those times.

We need to tell people that. There were thousands of people at the Motley Fool’s Retire Early board who were planning retirements based on Greaney’s claim that the safe withdrawal rate is always 4 percent.

I pointed out the error in Greany’s study on the morning of May 13, 2002, It has not been corrected to this day. Does that not concern you? It sure concerns me.

If the Buy-and-Holders got the numbers that people use to plan their retirements so wildly wrong, what else did they get wrong? I think we should be exploring that question at every discussion board and blog on the internet. Every day. That’s how we all learn over time.

The Buy-and-Holders did a great thing advancing the idea that investment advice should be rooted in peer-reviewed research. I love them for that. But science does not stand still. We learn new things all the time. We learned an important new thing in 1981. We learned that the market is not efficient and that irrational exuberance is a real thing. We learned that stock investing risk is not constant but variable. We learned that market timing always works and is always 100 percent required for all investors. We learned that, when large numbers of investors come to believe that market timing is not required, the market becomes dysfunctional and down the road we see a price crash and an economic crisis. The good news is — we learned how to bring an end to price crashes and economic crises — by permitting open discussion of what the peer-reviewed research shows at every internet site.

Irrational exuberance exists, Anonymous. It is the primary job of investment experts to help us all to do everything in our power to combat this horribly destructive force. How do we do that? Through market timing. It is the only means available to us to get the job done. We should all be thanking our lucky stars that Shiller’s Nobel-prize-winning research showed us what we had gotten wrong and pointed us in the direction of getting it right in 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:

f I am showing you a strategy and it has a poor track record over 24 years, you would still be open to this strategy? Just a simple yes or no answer.

Yes.

The point you are making is the biggest reason why Buy-and-Hold remains dominant today. It is human nature to look at recent history, to go five years back or something like that rather than 150 years back. But that’s not science. Science goes 150 years back if there is 150 years of data to examine. Then science tries to explain to people why it is a mistake only to go five years back.

Does your doctor only go five years back when telling you whether you are at risk for a heart attack? A person could be overweight for 24 years and not have suffered a heart attack in that time. Should the doctor just conclude, “oh, everything is fine then.” Or should he encourage you try to lose weight on grounds that you are at great risk for a heart attack even though you have not had one for the 24 years since you first became overweight.

I was drawn to Buy-and-Hold once upon a time because of claims that it was rooted in science. If Buy-and-Holders are not willing to look at data that is more than 24 years old, then Buy-and-Hold is not science and Buy-and-Hold is not for me.

Yes, I am open to a strategy that has scientific backing and that has a poor track record for 24 years. I understand that that puts me at a marketing disadvantage. But I am not the only one looking for a strategy backed by science. It’s about 10 percent of all investors who are seeking that. That’s millions of people. Those millions of people have every right in the world to engage in whatever discussions they want to have re Valuation-Informed Indexing at whatever sites they want to have them. The Buy-and-Holders have every right to take a pass. But they do not have the right to disrupt the discussions that non-Buy-and-Holders are seeking to participate in.

That’s where I’m coming from, Anonymous.

Rob

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

It looks like you are sending emails to lots of people, most (or all) of whom do not respond. You don’t need to create a daily post for each of them (unless you have so little new material to put out that you need to do this so you have a daily entry at your blog)

Instead what you should do is once or twice a month do an entry saying “Here is a link to all the begging emails I have sent recently, and have all the emails for a given period in a single page.

The recent emails were sent on December 19th so it looks like you are posting about 1.5 months ahead of when the posts appear. I assume that any comments that you are currently reposting as separate blog entries will appear around the end of March or into April.

The latest blog entry that I have entered is for April 26.

I can see creating some lists of e-mails sent and thereby combining five or six of them into a single blog entry. If I send some where there is not a unique message, I will do it that way. The ones that I have put up so far have unique transmittal messages. Those requires separate blog entries.

You say “you do not need to create a daily post.” I don’t need to do anything. The purpose of the blog is to tell the story of our nation’s shift from Buy-and-Hold to Valuation-Informed Indexing. That shift is the most important advance in the history of personal finance. So I think it makes sense to document as much of what happened as can possibly be documented.

Say that we were all thinking clearly re these matters. In that event, we never would have seen a single abusive post, right? Shiller helped us all out in a very big by providing to us the missing piece of the investing puzzle. In 1980, we didn’t know how things worked. In 1981, Shiller helped us to snap into place the puzzle piece that we had been missing, that the exercise of price discipline is every bit as important in the stock market as it is in every other market that has ever existed. From 1981 forward, we have known (at least intellectually) how stock investing works in the real world. But we have obviously had a hard time working up the courage to say the words “I” and “Was” and “Wrong.” So as of today we remain stuck in thus unappealing place with the financial fraud garbage and the prison sentences and failed retirements and so forth.

That’s a story, is it not? It is the most important personal finance story in the history of the United States. So I think it is worth telling the story with a good bit of detail and in a good bit of depth.

You note that most of the people to whom I have sent e-mails have not responded. Why? It’s perfectly normal that a large percentage of people sent unsolicited e-mails would not respond. That much is not surprising. But, that said, the response percentage has been remarkably low. I have had a few responses. But very few. What is going on there?

What is going on there is our problem. We all need to be looking at that one and trying to figure out what the heck is going on. Getting investing right is a high priority issue for each and every one of us. There is not one person among us who doesn’t entertain hopes of someday being able to retire. And, if Shiller’s Nobel-prize-winning research is legitimate research, the dominant investment strategy gets it precisely backwards. The last 38 years of peer-reviewed research shows that the most important thing in stock investing is to always, always, always practice price discipline (long-term timing). The Buy-and-Holders assure us relentlessly that there is no need to practice long-term timing, that it might even be a bad idea to do so. Huh? What the f?

When I send these e-mails, I am attempting to start conversations with people affected by this massive act of financial fraud. I am happy to respond to any questions that they put to me. Yet most do not ask questions. That’s the problem that we all face. If we want to get this investing thing right, we are going to need to put a little effort into it. We are going to need to feel a little bit of motivation to do better than how we have been doing for that past 17 years. No?

Now —

I believe that we will feel more motivated in the days following the next price crash. If Shiller is right in what he says about stock investing (I believe that he is), it is investor emotion that has pushed stock prices up to where they reside today. People like the feeling that comes from voting themselves raises. They feel that their financial futures are more secure than they really are. They don’t like being told that, to know the true value of their portfolios, they need to divide by two. I believe that the positive feelings that people have for Buy-and-Hold today will turn into negative feelings when they have lost a large percentage of their retirement money. Then people will become more interested in learning what the last 38 years of peer-reviewed research teaches us and we will all be off to the races.

In the days following the next price crash, we are all going to need to come to terms with what as a society we have done to ourselves. It’s my job to pull us all together. I think that having a record of these e-mails can help. Not in a huge way. I don’t say that they are life-and-death things. I see them as small steps forward, little ways of showing that, even during the days in which you Goons were ruthlessly smashing down efforts to inform millions of middle-class investors of the realities, there were people who continued to do positive things in a brave and kind and intelligent way. Good for me, you know? And good for the people who respond to the e-mails. And good for the people who perhaps don’t quite work up the courage to respond but who read at least a portion of the article and who give it some thought and who thereby put themselves in a position where they can get up to speed re what has been done to them in the days following the next price crash more quickly than otherwise would have been the case.

There was a time when I was posting daily at the Bogleheads Forum (then called Vanguard Diehards). Every time I responded to an honest question from one of my fellow community members seeking to come to a better understanding of the realities, one of you Goons would disrupt the thread with your smelly garbage tactics. I had people telling me that I was wasting my time, that there was no way to get the published rules of the site enforced in a reasonable way and that I should just give up. Well, it was those posts that so impressed Wade Pfau that he contacted me and asked me if I would be willing to work with him to develop research showing the superiority of Valuation-Informed Indexing over Buy-and-Hold. That led to our publication of the most important research published in this field in the past 30 years. So responding to those community members requests paid off big time.

That’s how I think writing these e-mails will pay off down the line. I might get a response rate of less than 1 percent. But among the tiny number of responses there might be one that leads to publication of an article at an internet site that details the entire 17-year cover-up and that causes a number of you Goons to be sent to prison. That would change the world. Once even a single prison term has been announced, I have a funny feeling that every site owner who has permitted your Goon tactics is going to come clean within 24 hours and our entire nation will enjoy an amazing learning experience in the following days. Like things are supposed to go in this great country of ours, like things would have gone at the old Motley Fool board starting on the morning of May 13, 2002, if only the site administrator there had had the courage to enforce the site’s published rules.

It’s people who will save us, Anonymous. People are the only ones who can do it. So, if we want to be saved, we are going to have to get about the business of contacting some people and of informing them re what has gone down. I would prefer to do it in a more efficient way. Take away the criminally abusive stuff and we could just tell people what they want to know at every discussion board and blog on the internet. You Goons obviously don’t like that idea and it is an unfortunate reality that you have the temporary power to block good things from happening. What to do, what to do?

Wade Pfau went with the cynical answer to that question. He saw that no one was going to help him if you Goons tried to get him fired from his job and decided that the thing to do was to appease you, the people of the United States be darned. I don’t feel comfortable taking that path. I prefer contacting a small number of the millions who need accurate and honest information re how stock investing works in the real world and responding to any questions they happen to have.

It’s a small thing. I get that. I accept that. But I would prefer to do a small positive thing than a big negative thing. What is my alternative? Should I appease you Goons by agreeing not to mention the error in the Greaney retirement study and thereby sell out my fellow community members so that I can turn a quick buck? I did that for three years from May 1999 through May 2002. I am ashamed of myself for not having had the courage to speak up at that time. So no more, you know? Once I worked up the courage to point out that his study lacks a valuation adjustment, there was no turning back.

I think that these efforts will pay off big time. But, if I never receive another response to an e-mail. I would rather keep doing what I am doing than go back to pretending that I believe that the Buy-and-Hold retirement studies get the numbers right. A failed retirement is a serious life setback. So not this boy, you know?

Sending the e-mails is a small positive, It makes me feel a lot better about myself for me to put my energies to achieving small positives than it would make me feel to appease you Goons with my dishonesty and become able to turn a quick buck that way. I think that I will turn lots of bucks sticking with the honest posting thing. But, if not, I at least will be able to live with myself for doing what I was able to do given the circumstances that apply. That’s something. Compared to the only alternative open to me, that’s a lot.

I hope that that helps a tiny bit.

Small Positives 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:

Normal people can give a short and direct response.

Not in these circumstances they can’t, Anonymous.

In ordinary circumstances, I would say that the reason why people weren’t showing up at a web site was that they did not see value in the material. But I have had thousands of people tell me that my stuff is the best investing stuff that they have ever seen. I have had people tell me that my stuff is the best investing stuff that they have ever seen and then ban me from their web site in the same e-mail. That was Carl Richards. Explain that one in a short and concise statement! I had never heard of such a thing until it happened to me. If someone else told me that story, I am not sure that I would believe it. But I was there. I have the e-mails. So I know that it really happened.

Carl was the main speaker at one of the Financial Blogger Conferences that I attended. So he had thousands of people listening to him and applauding him and talking to him afterwards and all this sort of thing. If Carl said during that talk what he told me he thinks of my work — that is is of “huge value” — I would have thousands of people coming to the site everyday. That is how you make that happen. Somebody says something like that and then dozens of other bloggers invite you to lunch and then they invite you on podcasts and tell their readers about you and the thing just grows and grows and grows.

Why didn’t Carl do that? Why did he instead ban me from his site? He told me that his readers were upset by what I was saying when I commented at his site. He said that he read everything he could get his hands on about Valuation-Informed Indexing. He said that his opinion is that my work has “huge value.” But most of his readers are Buy-and-Holders because that is all that they have ever heard about. So he can make an easier buck just letting them continue to believe in the long-discredited strategy and keeping them safe from hearing about the one with “huge value” that he knows in his heart is the future.

That’s the story of why there are not thousands of people here. Buy-and-Hold came first and Valuation-Informed Indexing is such a huge advance that site owners don’t want people to hear about it. It makes them look bad when people hear about it because they have not been promoting it, they have been promoting Buy-and-Hold. So I get cut out.

And the readers get cut out. The readers would be fine with Valuation-Informed Indexing if they could hear about it in an environment free of all the abusive stuff and if they could ask all their questions and if experts could comment on it in a reasonable and honest way and if all of the ordinary things that happen in all other cases happened in cases in which Valuation-Informed Indexing was being discussed. The Buy-and-Holders don’t want to say the words “I” and “Was” and “Wrong” and so we keep people from learning about the far superior strategy. And we hurt everyone by playing it that way.

Is that a short and direct response?

There is no short and direct response that makes sense in these circumstances. We have social norms that we follow in this country that are not followed in discussions of Valuation-Informed Indexing. And we have laws that are not followed in discussions of Valuation-Informed Indexing. It’s a weird situation and it is not one that I created, it is one that I am trying to overcome.

If you want to know why people don’t come here, look at your own behavior.

I think it will change in the days following the next price crash. I wish that we didn’t have to wait. I wish that we could all pull together and make it change tomorrow. But I don’t think that’s likely to happen, given what I have seen over the past 16 years.

I don’t want to lie to people about the numbers that they are using to plan their retirements, Anonymous. The Buy-and-Holders don’t want to correct their retirement studies and so I have to be cut out and the result is that people don’t come here. Either things will change following the next crash or they will not. My only option is to wait for whatever changes are coming because I cannot bear to lie to my friends about the numbers that they are using to plan their retirements. That’s not in me. That’s not what I am about.

I will make a prediction. I believe that in the days following the next price crash, Greaney will look back and wish that he had never insisted that anyone lie about the numbers that people are using to plan their retirements. And that Lindauer will do the same. And that Bogle will do the same.

We’ll see, you know? If that happens, I will do everything in my power to pull us all together so that we all can do the best work that we can do and so that we all can live the best lives that we can live. That much I can do and that much I will do. I won’t lie about the numbers that my friends are using to plan their retirements. I won’t say that I believe that the safe withdrawal rate is always the same number. I don’t believe that it is so and I am not going to put up any posts saying that I believe that it is so. It would be fraud for me to say that. It is not a reasonable thing for one person to ask of another.

We’ll see how it goes. You know perfectly well why people don’t come here because you engaged in all the abusive behavior that made it a reality. I don’t like it that people don’t come here. But I would like it less if I lied about the numbers that my friends were using to plan their retirements. I couldn’t live with myself if I did that. So, no thanks.

We’ll see how it goes. I wish you all good things. I feel that I can do that and still live with myself. So I do that. But that’s as far as I can take it.

I hope that helps a small bit.

Short and Direct (Not!) 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 put up a post pointing out the error in Greanry’s retirement study on the morning of May 13, 2002. The study has not been corrected as of today. Today’s date is November 1, 2018.

You say that my points have been addressed. But the study has not been corrected. Does that reality not tell a tale? People used that study to plan retirements.”

Noted expert, Wade Pfau, has already explained how you were wrong. To this day, you have not apologized. This is long over due.

I deleted this one when it appeared last night on grounds that it is a time-waster and an insult to the intelligence of my readers, However, after sleeping on it, I have had second thoughts and restored it on grounds that it gives me an opportunity to fit in the rant posted below.

The reference here is to something that Wade said when he was threatened by you Goons and flipped to the dark side so that his career would not be destroyed. Wade told me on numerous occasions (the texts of his e-mail appear at this blog under the “Wade Pfau” category) that he agrees with me on the subject of safe withdrawal rates. He has referred to the (uncorrected to this day) Buy-and-Hold retirement studies as “dangerous.” That says it.

When Wade was trying to come up with some explanation for his flip, I believe that he had Greaney help him with the wording because the explanation that he put forward was too lame for his own brain to have come up with. It was something that Greaney has said on earlier occasions. So I am pretty darn sure that that is where it came from.

The explanation offered was that Wade went back to the thread where my famous post from the morning of May 13, 2002, appeared and saw that Greaney had a post on it in which he said something to the effect of: “If you don’t think that 4 percent is safe, just take a lower withdrawal rate.” Wade said that those words solved the entire problem. That is of course not so.

The point of friction is: Are people who believe that the last 37 years of peer-reviewed research in this field is legitimate research permitted to post their honest views at every discussion board and blog on the internet? I say that they are. Greaney says that they are not (they may believe that the Buy-and-Hold retirement studies are in error but they may not let their fellow community members know what they believe and why). At the time he was flipping, Wade pretended to believe what Greaney believes.

The research showing that the Buy-and-Hold retirement studies are in error (that it is not possible to calculate the safe withdrawal rate accurately without taking the effect of valuations into consideration since valuations affect long-term returns) was published in 1981. About 10 percent of the population today appreciates the problems with the Buy-and-Hold strategy. All of us who believe that the last 37 years of peer-reviewed research is in error should want to get that percentage up. I certainly do. It doesn’t help get that percentage up for me to use a different withdrawal rate than the one recommended by Greaney in my own retirement plan and to fail to tell my fellow community members that I am doing that and why I am doing that.

The question that people should be asking themselves re this entire matter is — Why the heck did it take 21 years for someone to see that it is not possible to calculate the safe withdrawal rate without taking valuations into consideration? It’s OBVIOUSLY not possible to do that. In a sensible world, my post of May 13, 2002, would have been greeted with a yawn, not a nuclear explosion. What’s that all about?

We are all under a spell, I wrote that in a post from yesterday afternoon. We are all under a spell. The name given to that spell in the psychology literature is “cognitive dissonance.” We suffer from cognitive dissonance because we don’t question the Buy-and-Hold stuff, we don’t point out that the emperor is wearing no clothes, we don’t take note of the parts that make no sense and ask the “experts” pushing this strategy on us to please explain. The errors in the Buy-and-Hold Model are very, very, very simple and obvious ones. We suffer from cognitive dissonance re these errors because the errors are so simple and obvious that we assume that we must be wrong to even think that they are errors; if they were, surely these hot shot experts would have discovered them a long time ago.

The errors are real. It is not possible for any market to function without the exercise of price discipline and there has never been any reason to believe that the stock market is different than every other market in this regard. It is ESSENTIAL that investors exercise price discipline when buying stocks. Shiller has described the intellectual leap from the finding that short-term price changes are unpredictable to the Buy-and-Hold belief that the market sets prices properly as “one of the most remarkable errors in the history of economics.” That’s it. That’s the story of our 16-year saga. The entire Buy-and-Hold thing has just been one long mistake going back to the first day. Our problem is that the mistake has been covered up for so long that the Buy-and-Holders cannot today bear to acknowledge that the whole thing has been a big mistake and so they become violently abusive when someone points out the mistake.

I cannot solve that problem by taking note of the error in Greaney’s study, using a different withdrawal rate in my own planning and then then not saying anything to my fellow community members taken in by Greaney’s false claims. If I want to help my fellow community members (which is what we all should be trying to do when we post on a discussion board), I need to point out the freakin’ mistake to them. That’s the thing that Greaney doesn’t like. That’s the thing that he wants to block. That’s the thing that causes him to 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. That’s the story here. Are we going to let the mistake destroy even more lives? Or are we going to speak up and incur Greaney’s wrath?

I say that we need to speak up. I want to see every investment discussion board and blog on the internet opened to honest posting on the last 37 years of peer-reviewed research in this field. I don’t want there to be a single exception. If we were to permit a single exception, that would hurt us all, So why do it? Why not just permit honest posting? Let the Buy-and-Holders say what they believe, let the Valuation-Informed Indexers say what they believe and let all the people listening in decide after hearing both sides how they are going to play it.

If people CHOOSE to use the Buy-and-Hold retirement studies after hearing both sides, that’s on them. I obviously think they would be making a mistake to do that. But it’s their money and so it’s their call. Perhaps I am the one who is wrong. I am not going to tell anyone else what to do with his or her money. But if people choose to follow the Buy-and-Hold numbers only because the Buy-and-Holders blocked their ability to hear about the errors in the Buy-and-Hold studies, that’s fraud. Boards that do not permit both sides to be heard are corrupt enterprises. People who block posting about Valuation-Informed Indexing can be held liable in civil lawsuits after they cause investors to suffer financial losses in the next price crash. In extreme cases, they could be prosecuted criminally for engaging in acts of financial fraud. Not this boy, you know? No way, no how.

That’s the rant. That’s the rant that I have been advancing for 16 years now. I love my Buy-and-Hold friends. I love my Wall Street Con Man friends. I even love my freakin’ Goon friends. But I don’t love failed retirements. I don’t love financial fraud. I don’t love civil lawsuits, I sure don’t love criminal prosecutions. So I speak up in OPPOSITION to that sort of stuff. Over and over and over and over and over.

I would be joined by every single person alive in the United States today if only Shiller’s Nobel-prize-winning research showing that valuations affect long-term returns had only been published last week. We’re all in the same boat. We all want to invest effectively. We all want to avoid failed retirements. The problem that we face is that 37-year cover-up. Those who participated in that cover-up are embarrassed about it and don’t want people to find out. So they engage in all sorts of crazy behavior to block Valuation-Informed Indexers from speaking honestly about what the last 37 years of peer-reviewed research in this field teaches us. And so far their efforts have “succeeded” in making life worse for each and every one of us, including themselves to be sure.

I say “no” to all that. I say that the same ethical standards that apply in every other field of human endeavor should apply in the investment advice field as well. I say that, if the only way that you can think of to “defend” Buy-and-Hold is to engage in criminally abusive behavior, you should be looking for a new investing strategy to defend. If you can defend Buy-and-Hold WITHOUT engaging in criminally abusive behavior, by all means have at it. Millions of good and smart people believe in Buy-and-Hold with their hearts and minds and souls. When they make their case in a civil and reasonable way, they help all of us to come to a better understanding of these matters. So that stuff is pure gold and we should all welcome it. But we should all adopt a zero tolerance policy towards the sorts of stuff that we have seen advanced by those posting in support of Mel Lindauer and John Greaney.

No death threats. Death threats have no place in investing discussions. No demands for unjustified board bannings. Unjustified board bannings have no place in investing discussions. No thousands of acts of defamation. Thousands of acts of defamation have no place in investing discussions. No threats to get academic researchers fired from their jobs, Threats to get academic researchers fired from their jobs have no place in investing discussions. My sincere take. No apologies whatsoever.

Rant completed (for now — but sure to be extended in coming days).

Best wishes, etc., etc.

Rob the Friendly Ranter

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 know why I am banned.”

You just don’t tell people the truth as to why you are banned. It is well documented. It is your behavior.

Specifically the behavior in which I say that the Buy-and-Hold retirement studies are in error and should be quickly corrected and in which I say that in general the Buy-and-Hold strategy has been discredited by 37 years of peer-reviewed research.

Buy-and-Holders don’t like to be told that they are wrong. The experts don’t like it because they see it as a threat to their livelihood and ordinary investors don’t like it because their hopes for retirement are riding on the accuracy of the numbers on their portfolio statement.

I don’t think that investment advice should be decided by taking an opinion survey. I believe that we should go by what the peer-reviewed research says. If Shiller is right that valuations affect long-term returns, then we are hurting ourselves more with every hour that we delay opening every discussion board and blog on the internet to honest posting. This stuff matters. When we get it wrong, we hurt people in very serious ways.

My sincere take.

Bad Behavin’ Rob

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

“This is what has happened in cases in which the market is either overpriced or underpriced.”

What about the bond market? Can your crystal ball determine times when it’s over or underpriced too, based on its version of the P/E 10 (interest rates)?

Treasury Inflation-Protected Securities (TIPS) are government bonds. They are insured by the government, so they are are close to a risk-free asset class as you are ever going to see. TIPS were offering a return of 4 percent real at the top of the bubble. You could obtain that return for any time-period you wanted. They were available for short terms. And they were available for terms of up to 30 years. I had not at the time studied this stuff in anything close to the depth at which I have studied it today. But I could tell at the time that TIPS at 4 percent real was an amazing deal, a once-in-a-lifetime value proposition.

We should all be wondering why that deal was so amazing. I mentioned that that deal was available at the top of the stock bubble. The government wanted to sell the bonds and people just did not want to buy them. I am sure that the people who set the return would have preferred to have set a lower return. To offer 4 percent real on a no-risk asset class just makes no sense. I think that they determined that they couldn’t sell them if they offered only a sensible return. TIPS were at the time competing with stocks. And the return on stocks from 1996 through 1999 was 126 percent. So it was hard to persuade most people to buy anything other than stocks. There were some people who were willing to switch when you offered this crazy return, 4 percent real on a risk-free asset class. So that’s where the TIPS return ended up.

Shiller is not really an investment adviser. That is how he is perceived because his most important work relates to stock investing. But Shiller is really an economist. For many years before Shiller came along, economists have had a mistaken understanding as to how lots of economic transactions work. They have something called the “Rational Man” theory, which dates back to Adam Smith. They examine all sorts of issues by assuming that people are engaged in the rational pursuit of their own interests. This is not entirely correct. People are of course capable of rational action. So it is TO SOME EXTENT true. But people are also emotional creatures. So there are many circumstances in which people FAIL to pursue their self-interest when engaging in economic transactions.

Most advertising appeals to the emotions because that is what works; only a small percentage of advertising describes the specifications of goods and services, which is what it all would do if people were 100 percent rational. Shiller belongs to a school of economics (Behavioral Economics) which breaks with the conventional school going back to Adam Smith and which studies how people act IRRATIONALLY when engaging in economic transactions. There are no crystal balls in use in the investigations pursued by economists in this school. They are scientists. They are scientists who discovered that earlier scientists made a mistake and they are trying to correct that mistake and thereby help us all to live better lives.

The idea that the stock market is efficient/rational is a MISTAKE. The shifting psychological moods of investors are a reality that anyone trying to understand how stock investing works needs to come to terms with. Shiller’s work helps us to understand properly how the world around us works. It is SCIENCE, not crystal-ball gazing. If investor psychology affects results, you need to be willing to take investor psychology into consideration to know what you are talking about.

There is so much money tied up in the stock market that coming to terms with what the last 37 years of peer-reviewed research teaches us about how stock investing works is going to enhance our understanding of just about everything around us. Shiller’s research is “revolutionary” (his word). Shiller merited his Nobel prize. Shiller changed EVERYTHING. This is the primary reason why it has taken so long for his work to have the practical effect that it will ultimately have. Shiller’s research is in the process of bringing on a paradigm change.

There are lots of good and smart people employed in some way in careers that relate to stock investing. Most of them feel threatened by the huge intellectual advances achieved by Shiller. They are going to have to go back and tell their clients that they didn’t always know everything there is to know about how stock investing works and that is going to cause their clients to experience some doubt as to whether they are truly “experts.” They are going to have to do revisions to books and articles that they have published. They are going to have to reeducate themselves. Things that they learned in school many years ago and that they thought were eternal truths have been put into question by Shiller.

This is all good. This is all wonderful. We all benefit when our understanding of the world around us becomes stronger and clearer and fuller and more accurate. Shiller’s breakthrough research is in an ultimate sense a 100 percent positive thing. But it doesn’t seem positive on first impression to people who have spent years or decades building careers rooted in a very different understanding of how stock investing works. So there has been a lot of resistance to Shiller’s ideas.

The primary form of resistance has been to patronizingly ignore the implications of Shiller’s work. What most people in this field do is to say that Shiller is great (it’s hard to argue otherwise when he has been awarded a Nobel prize for his work) and then to return to offering the same investment advice that was being offered before Shiller came along. I became controversial on the internet because I refused to go along with that program. As you Goons like to put it, I “misbehaved.” I said: “The safe withdrawal rate cannot possibly be the same number at all times if Shiller is right that valuations affect long-term returns and I refuse to tell my friends planning retirements that that is the case.” I had to be banned because, if one person spoke openly about the many far-reaching implications of Shiller’s work, the Buy-and-Hold gig was up. And there are hundreds of thousands of careers and reputations tied to the survival of the Buy-and-Hold project.

I didn’t do what I did to hurt anyone or to upset anyone. I came over time to become friends with my fellow community members and so I felt that I owed it to them to post honestly re the numbers that they were using to plan their retirements. From my perspective on the morning of May 13, 2002, this was simple stuff. I obviously did not realize what an enormous hornet’s nest I had wandered into. Now I know.

On the one hand, I have learned that lots of people do not want to see knowledge advance in this area. On the other, I have learned that lots of people DO want to see knowledge advance. That includes lots of our Buy-and-Hold friends. Bogle has on occasion put forward words indicating that he would like to see knowledge advance in this field. If Bogle has some feelings of that nature, everyone in the field has some feelings of that nature.

The trouble, of course, is that Shiller did not publish the amazing research last week or last month or last year. He published it 37 years ago. So those trying to make a transition from Buy-and-Hold to Valuation-Informed Indexing need to explain not only why they once held a mistaken idea of how stock investing works but also why it took them 37 years to acknowledge the mistake once it was revealed by the peer-reviewed research.

That’s a tough one. It’s an unfortunate reality. Still, the bottom line remains that the good that follows from an embrace of the Shiller revolution is 50 times more good than the bad that comes from the difficulty of making the transition from one way of thinking about how economic transactions are conducted to a new and better informed view. We are going to make this change and so the best thing is just to get about the business of working together to help it take place. That’s my sincere take, in any event.

Shiller changed everything, Anonymous. I have written several columns pointing out how he changed politics. There are hundreds of internet sites that every day explore pro-Trump vs. anti-Trump developments in the political world. If Shiller is right, the biggest risk to the Trump presidency is high stock valuations which may cause a price crash and then an economic recession in the next year or two or three. How often have you seen one of these political sites discuss P/E10? I have never seen a discussion of P/E10 in the political context outside of my own writings. It amazes me that this is so. But it is so.

Shiller changed everything. He started a revolution. Either economic transactions are conducted by rational actors or economic transactions are conducted by HUMANS who are indeed partly rational but who are also partly emotional. If we change economics to take into consideration the emotional side of all economic transactions, we come to understand just about everything that goes on in the world around us better than we understood it before Behavioral Finance became a thing. I support the Behavioral Finance school of Economics. I believe that humans are capable of rationality but also often engage in emotional behavior. So I naturally believe that the Buy-and-Hold investing strategy — which is rooted in a belief that investors are collectively 100 percent rational in all of their investment choices at all times — is on the way out and that Valuation-Informed Indexing is the future (I of course also believe that the Buy-and-Holders were responsible for scores and scores of powerful insights for which we all should be grateful and which we should incorporate into the new model to make it the best and most accurate model that it can be).

Shiller changed everything. So, yes, he changed our understanding of bonds too. We should be engaging in explorations of how he changed our understanding of bonds at every investing discussion board and blog on the internet. But of course to do that we would need to open every investing discussion board and blog on the internet to honest posting re the last 37 years of peer-reviewed research in this field. Which of course is the thing that I have been arguing for going back to the morning of May 13, 2002, and which has caused you Goons to assert that I am guilty of “misbehavior.”

The world changed in 1981. In a very, very, very good way. It is now 2018. It is time for us all to start tapping into the benefits that were opened to us by the publication of Shiller’s magical research efforts of the past four decades.

That’s my sincere take re these terribly important matters, my dear Goon friend. I naturally wish you all the best that this life has to offer a person, in any event.

Crystal-Ball-Viewing Rob