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

Hello Rob,

I read the ” Intelligent Investor” by Graham last couple of weeks. In his book he mentioned at least 50 times or more that before you invest one needs to be sure that you are not paying to much for stocks. Because you make your money down the road if you buy when stocks are cheap, or undervalued. He recommends a 25- 75% portfolio, that is 25% when they are overvalued and 75% when undervalued. He does not recommend buy and hold, he even mentioned PE10. He also says it is inevitable that markets will always correct by 50% to 90% at a certain point when overvalued. I am just a retired middle class guy learning , but no way would I have 50 or 100% of my portfolio invested in stocks right now. I currently have it at 25%, I can emotionally handle a 50% drop which would be 12.5% of my total portfolio.

So the point being is the evidence of value investing is irrefutable, by the” experts” , but mostly by common sense to me. When I buy tomatoes I wait till prices are at normal levels not high, WHY is it than the buy an holders , do not have an open mind about this and want to stop any discussion about it? More than that making fun your work and others. . They have a plan of a 50-50 mix of bonds and stocks, or a 100% level in stocks no matter what values are.? Well that is ok that they believe this .What is so bad about discussing different methods of analysis? It could only be that that they are like robots marching along to Bogles plan,. Yes, I have also read the Boglehead’s investing and boards. The lessons of 2008 are so quickly forgotten, the anguish ad pain of people’s lives and marriages being wiped out. Like Gramn says ” there is always a new and better plan about doing things ” right before a crash.
I thank you for your research and your blog, this is only my 2 cents , my thoughts of just an average guy learning…
Max

Everything you say here is right on, Max. Thanks much for stopping by.

Taking valuations into consideration is exercising price discipline. How could that ever be a bad thing? As you point out, the case for Valuation-Informed Indexing is “irrefutable.” The way that I say it is that precisely 100 percent of the evidence available to us today supports Valuation-Informed Indexing and that precisely 0 percent of the evidence available to us today supports Buy-and-Hold.

You are right to cite Benjamin Graham, who was Warren Buffett’s mentor. Graham is the godfather of Valuation-Informed Indexing. The references he makes to the concept in his book are the earliest references to it that I have seen.

So why are there still people today advocating Buy-and-Hold?

One reason is that people love it, Love it, love it, love it. Millions of middle-class people are today invested in stocks to provide for their retirements. Most of them are not as far along in the process as they would like to be. Say that you are a middle-class guy who is age 64 and would like to be able to retire next year. Say that you need $1 million to retire. Say that you have $900,000 in your account. You expect to put aside $10,000 this year. If you earn 10 percent on the $900,000 in your account, you will barely make your goal in time. So you are a little worried. The Buy-and-Holders don’t say that you will get a 10 percent return. But they say it’s possible. They say that there’s a chance that you will make it and that, if you don’t, there’s a better chance that you will achieve your goal one year late (you would only need to earn 5 percent each year to pull that one off). So — not an ideal situation. But not too terrible either. Kinda, sorta okay.

Now —

What is this Rob Bennett fellow telling you?

He’s telling you that you need to take valuations into account to know where you stand. Stocks are today priced at two times fair value. So you need to divide your portfolio number by two to know its true, lasting value. Divide by 2 and you have $450,000 in your account with one year remaining to reach your goal of $1 million saved. What do you think your chances are of pulling that off?

There was a discussion at a Canadian Bogleheads board of whether to ban me or not. One woman said: “Rob is the sweetest and most polite poster I have ever encountered on the internet. And he irritates me to no end!” Do you see? That’s the story here. She voted for banning me not because I violated any posting rule or because I said anything that is not true and backed by 37 years of peer-reviewed research (as well as by common sense, as you quite properly note). She voted to ban me precisely because I told the truth! A truth that she very, very, very, very much does not want to hear.

The second reason is that the “experts” support Buy-and-Hold. The people we call “experts” in this field (with the rare exception of someone like Robert Shiller or Rob Arnott or Benjamin Graham) are the people who are able to make a living giving investing advice. What is the key in every field to getting people to buy what you are selling? The first and most essential step is getting people to like you. People will buy just about anything from someone they like. People will not buy a sweater in February from someone who irritates them to no end!

LOTS of people who work in this field want to tell the truth about how stock investing works. Lots and lots and lots of them. Why don’t you hear about them? Those who actually go ahead and tell the truth are removed from the field. They can’t make any sales and so they don’t make any money and so they have to find another way of making a living. And all the others who are giving thought to telling the truth see what happens to the few who work up the courage to do it and learn the lesson that they need to learn to be able to continue to put food on the table for their families.

The tragedy here is that the valuations story plays out slowly. Yes, those who ignore valuations pay a huge price in the end. Buy-and-Hold always fails and it always fails spectacularly. The peer-reviewed research that I co-authored with Wade Pfau shows that investors can lessen the risk of stock investing by 70 percent by being willing to abandon Buy-and-Hold and instead follow common-sense strategies when investing in stocks. If I had showed people how to reduce the risk of stock investing by 10 percent, I would have had my face on the cover of Time magazine as “Man of the Year.” I showed them how to reduce the risk of stock investing by 70 percent and I am banned for life at every large investing site on the internet. Why? Because to reduce risk by 70 percent, you need to acknowledge that Buy-and-Hold is a scam. And the fellow with $900,000 does not want to acknowledge that $450,000 of his life savings is the product of a scam, the product of irrational exuberance.

That’s the entire story in a few paragraphs. We all want to be scammed. And, if you want to make a living in the investing advice field, you have to go along with the scammers. Point out the scam and you are perceived as a threat by the people making a living promoting the scam and you are eliminated. That’s the way it works.

If Shiller’s research is legitimate (it is), the next price crash will cause millions of middle-class people to lose 50 percent of their lifetime savings. What do you think is going to happen to our economic system then? People who lose that much money cut back on spending. When millions cut back on spending, hundreds of thousands of businesses fail.. When hundreds of thousands of businesses fail, millions of people are thrown out of work. When millions of people are thrown out of work, political frictions intensify. We are not just looking at an economic crisis if stocks continue to perform in the future somewhat as they have always performed in the past. We are looking at a political crisis.

Is the situation hopeless?

Not even close!

The Wall Street Con Men want to tell the truth, Max. The experts in this field are people. They are just like all other people. They chose their careers in part to make money to feed their families and in part because they wanted to put their talents to work helping other people. I am 100 percent sure of this. There is a mountain of evidence supported this claim residing in the Post Archives of the first 16 years of The Great Safe Withdrawal Rate Debate.

We didn’t always know how stock investing works. Benjamin Graham was the first to catch on to the basic idea. Shiller developed that idea in his “revolutionary” (his word) peer-reviewed research of 1981. The fine people who awarded him a Nobel prize for that research advanced the ball in a major way by doing so. I have developed the concept in hundreds of ways in the work that I have been doing on a daily basis for 16 years now. John Walter Russell devoted eight years of his life to helping me out in many amazing ways. Wade Pfau put his career on the line to help us all out. Bill Bernstein has helped us out in big ways. So had Larry Swedroe. So has Bill Shultheis. So had Carl Richards. So has Jack Bogle. So have lots and lots and lots of others.

We are on the one-yard line. Once we have one large investing site that permits honest posting, that site is going to get so much traffic as a result that the money will be flowing in and then other sites will copy what it is doing and the ideas will go viral. When you reward something, you get more of it. We have been rewarding the pure Get Rich Quick approach and punishing the first true research-based approach for a long time now. And of course we are suffering as a result, both economically and politically. What do you think is going to happen when we start punishing the pure Get Rich Quick approach (by pointing out the ocean of human misery caused by the Buy-and-Hold “strategy” over the years) and rewarding the first true research-based strategy? I think it would be fair to say that we will see the biggest economic expansion in this history of our nation.

We will see a new form of capitalism, a form in which the average middle-class person finally has a chance to get a bit ahead over the years and does not have to worry that one day he will wake up to find most of the savings of a lifetime vanish into the mist in one of those mysterious price crashes that seem to appear out of nowhere from time to time to ruin the Buy-and-Hold fantasies.

We live in a great country, Max. I am sure. We are close. We just need to hang in there. And of course we need to help each other out. You are helping lots of people out with your posts here. The Goons win by intimidating all of the good people. When they intimidate us into silence, they fool us into believing that the world is populated solely by Goons. No! I have had thousands of people thank me for the work I have done in the investing realm. There are lots of people just like you who want to know how this stuff really works so that they can plan effectively for their futures. The Goons want us all to feel isolated so that they can cut us off one by one. When one of us works up the courage to speak out, it helps the rest of us to feel less alone. That’s how we get a fire started.

We have the law on our side. That’s a big deal. The Goons go to prison following the crash. We don’t. That puts us a big leg up on them. We would not as a people have enacted laws against financial fraud if we wanted to have internet Goons robbing us of our retirement money. I mean, give me a freakin’ break. I have seen how this saga ends. The good guys win it all on the last page of the story. Yes, there have been some suspense-filled moments along the way. I was there for all of the action. I saw it all go down. But I always knew how it was going to turn out. I always knew that it was going to turn out in the only way that it could turn out if our economic system and our political system were going to survive for very much longer into the future.

Whew!

My sincere take.

It’s always nice to hear from you, my good friend. I remember the day that I learned that Benjamin Graham was telling the truth about stock investing many, many years ago. It wasn’t just that I had forgotten to take me meds! Knowing what Benjamin Graham believes about how stock investing works puts you ahead of 90 percent of the “experts” in this field, Max. And they get paid big salaries to push their smelly Buy-and-Hold garbage. The sad thing is that, the harder you push Get Rich Quick, the more money you make in this field. And I think it would be fair to say that Buy-and-Hold is the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind. Quite the money maker! And quite the human life destroyer!

Benjamin-Graham-Following 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 huh. I found a similar pattern in winning lottery numbers a few years ago.

Funny thing though, when I made a big prediction based on the pattern I found, it didn’t come to pass. It was like the numbers moved randomly, without even consulting my study!

When your examination of the pattern that you believe helps in picking lottery winners is awarded a Nobel prize, I will put up a post about it here and let my readers decide for themselves whether it is something they want to make use of or not.

If you believe that Shiller should not have been awarded a Nobel prize for his work, you should make that case. You might be right. You might be helping people by making that case. You don’t make the case in an effective way by advancing death threats or demands for unjustified board bannings or thousands of acts of defamation or threats to get academic researchers fired from their jobs. Those sorts of acts are over the line. MAKE THE CASE for Buy-and-Hold and you are on the right side of the line.

One thing that I like about this comment is that there is a certain honesty lurking underneath its surface. Those who truly believe in Buy-and-Hold (and you Goons are True Believers, if nothing else!) really do see the idea that stock returns can be effectively predicted far in advance as pure mumbo jumbo. That follows from their belief that the market is efficient. If the market is efficient, valuations sure as heck cannot predict long-term returns! Shiller was engaging in silliness to even test such a proposition.

But here we are. He did test it. And the proposition passed with flying colors. It was Buy-and-Hold that was discredited. What to do, what to do?

We should be trying to figure out which belief system, the one that told us that the market is efficient, or the one that told us that valuations affect long-term returns, is right. To do that, we need to hold a debate. The Buy-and-Holders should be doing just what you do here — they should be pointing out the absurdity of Shiller’s findings, given their core belief that the market is efficient. They should try to be polite about it. They can show respect for Shiller’s accomplishments while pointing out the error that they believe he made, as I hope I always show respect for Bogle’s accomplishments while pointing out the error he made. But they should try as effectively as possible to make the point that Shiller must be wrong given their core beliefs.

Buy-and-Holders don’t do that today. They don’t talk about him much. They don’t see that he has much value given what his research says. But they generally do not engage with Shiller’s ideas. They sometimes acknowledge that there is a guy who was awarded a Nobel prize for showing that valuations affect long-term returns. But they patronize him. They acknowledge what his research shows and go right back to recommending strategies that don’t call for the exercise of price discipline when buying stocks as if Shiller’s research did not exist.

Peer-review committees comprised of Buy-and-Holders approve retirement studies that do not contain valuation adjustments. Huh? What the f? Peer-review committees are supposed to be familiar with the literature in a field. The members of a peer-review committee are required as part of their JOB to know that there is 36 years of peer-reviewed research showing that valuations affect long-term returns. The committee that examined the Trinity study should have rejected it on grounds that it contained no valuation adjustment, as required by years of peer-reviewed literature. But they didn’t do that. They approved the Trinity study despite its lack of a valuation adjustment. Which is what made Greaney believe that it would be “okay” if he too “forgot” to include a valuation adjustment in his study.

We cannot as a society continue to duck these questions. Either the market is efficient or it is not. Either valuations affect long-term returns or they do not. It cannot possibly be that both propositions are correct, the two propositions are in direct conflict. We are facing a national catastrophe in the event that it turns out that the proposition with 36 years of peer-reviewed research and a Nobel prize behind it is correct. In the event that Shiller is right, our entire society is in for a world of hurt in the event that the stock market continues in the future working anything at all as it always has in the past.

We should be as a society working hard every day to figure out which of the two Nobel-prize-approved propositions is correct. We should be debating these questions at every discussion board and blog on the internet. In a civil and reasoned way, in a way aimed not at bullying those holding other viewpoints into silence but aimed at gradually over time uncovering the truth re these matters.

This is my strongly held sincere viewpoint, in any event.

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

Rob

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

What you posted is true. It is still surprising you posted it when it doesn’t make you look good.

I have a catch phrase that I use from time to time, Anonymous. I sometimes say: “We ban what we fear.” That phrase sums up my beliefs re what messages a community permits to be voiced and what messages a community censors.

On the evening of August 27, 2002, Greaney advanced his first death threat. I viewed this as a positive development. He had been posting abusively since the morning of May 13, 2002. Now he had tipped his hand, now he had crossed the line that middle-of-the-road community members would not be able to tolerate. I was proven wrong re that one, but not entirely so. There really were people who said on that night that “this is no longer a community that I can be a part of, we have sunk too low.” There were people who said that, from that point forward, they would notify the site administrators of each additional abusive post, there were people who said that they would not contribute again until Greaney and his Goons were removed. But those people stuck to those vows only for a few days or a few weeks. Most returned to posting and continued to tolerate the abusive stuff. So I was ultimately proven to be more wrong in my assessment that right.

I still am not going to permit 50 death threats in a row. I fear what the effect would be on people listening in. They would be so appalled at a humanity that had sunk so low that they would recoil from our discussions and hold back from offering constructive and positive and life-affirming contributions. I sometimes permit one or two death threats so that people can see what we are up against. But then I delete them. I have never banned a poster because I believe that even posters who have put up horrible stuff are capable of putting up good stuff (I have seen this happen many times). The rule that applies across the board is — We Ban What We Fear. You Goons do that — you ban anything that mentions the peer-reviewed research of the past 36 years because you see that as a threat. And I ban the death threats and other ugly stuff because I feel that it drives away the best people, the sort of people that I would like to see contributing comments at this blog.

I sometimes challenge myself a little bit. I think that is what was going on with this particular blog entry. I ask myself: “Do I still fear this sort of content or have things changed enough that I can now permit this sort of content to appear at my site?”

Saul Alinsky wrote that book “Rules for Radicals.” I’ve noticed that lots of the tactics employed by you Goons seem to be rooted in the advice offered in his book. I don’t like his tactics one little bit. But I do acknowledge that they are often effective in the short term. He has one tip in which he says that a message that is pushed too hard and for too long eventually becomes its opposite. People hear a message too many times and it stops working. At some point people might laugh at Hillary Clinton when she says that all women should vote for he because she is a woman. Or at some point people might laugh at Donald Trump when he complains about “fake news” because he has gone to that well one too many times.

My reason for making the words that appear in this blog entry a blog entry is that I think we may have reached that point or may be close to reaching that point re the claims asserted in those words. There was a time when I was afraid to have people hear that I was banned at numerous boards because they might think that I had posted abusively. Now I brag about the bannings. I think that people are catching on to the reality that much of what passes for investment advice today is a scam. So the fact that I have been banned by people trying to work the scam makes me look good, not bad, So I no longer fear having people learn that and thus I have no reason to ban such statements from my blog. Similarly, I no longer worry too much about the statements made in this blog entry. So I didn’t ban them in this case. I let them appear as they were stated with no commentary from me.

I am not going to let those sorts of comments appear 20 times in a row. There is still something there to fear. Those sorts of comments are still low and still depress good people and drive good people away and frighten good people. So I am not going to have a blog with comments like that appearing all the time. But I am moving in the direction of permitting those sorts of comments to appear from time to time without my commentary added to them so that people can just evaluate them themselves and decide for themselves what to think about them, as they might decide what ot think of one more comment by Hillary Clinton that all women should vote for her or a comment by Donald Trump that something is “fake news.”

That’s the idea. The 15-year saga has been a story of me (and out entire society, really) gradually overcoming some fears. The appearance of this particular blog entry signifies one small step in a long journey from fear of standing up to the Wall Street Con Men to possessing the confidence to just say what is obviously so, straight and with no chaser. You Goons said the words that comprise this blog entry. So why not let the middle-class investors of the world see your words and decide for themselves how to react to them?

One more quick thing. I don’t think it is a bad idea for me to have a blog entry here that doesn’t make me “look good” in a surface sense. One of the mistakes that I believe that the Wall Street Con Men made was to cover up their mistakes because they worried that people wouldn’t think they possesses enough expertise if they were shown to have made mistakes. I don’t want to fall into that trap. I don’t want to make mistakes. But I inevitably will make them. When I do, I want to own up to them. That might suggest that I do not possess perfect knowledge but so be it, you know? I think it is better for me to look good by showing the humility needed to admit mistakes than it would be for me to look good by creating the phony impression that I am a perfect being that never makes mistakes. I would rather be perceived as fallible but honest than as this puffed-up “expert” who can’t acknowledge his human weaknesses.

So it is very much in tune for my vision of what this site is all about and for what Valuation-Informed Indexing is all about for me to post blog entries that don’t make me look good in a short-term, surface sense. My aim is to look good in a different sense. I think that showing my humanity makes me look good. I value honesty above all else in an investing adviser. And I don’t think that I am the only one who feels that way. I think that that is why you Goons (and your Wall Street Con Men pals) view me as such a threat.

Honesty is like a superpower for me. When I make a mistake, it makes me stronger because I acknowledge it and that makes the sort of people who are drawn to my message in the first place feel that much more confident that they did the right thing by opening their hearts to my message.

I hope that helps a small bit.

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 Goons are getting hurt by the economic crisis as much as everyone else…”

What economic crisis? The stock market has richly rewarded anyone who has stayed the course and stayed invested in the market since the downturn of 2009. Of course, that excludes the narcissistic, passive-aggressive, mentally ill internet troll and Habitual Liar Rob Hocus No Step 2 Bennett. Your family’s finances are in crisis due to your poor decisions and lack of understanding of investing. However you personal economic crisis doesn’t affect the greater population.

We don’t measure success the same way, John. Your way of thinking is, if on x date you had a in your portfolio, and, if on a date y you had b in your portfolio, and if b is greater than a, then your investing choices were successful. My way of thinking is that temporary gains don’t count — they give you a short-term emotional fix but do nothing to help you pay your bills in the long term (which is what matters); in fact, temporary gains make it harder to pay your bills because they mislead you as to your true financial status and thus make effective financial planning impossible. We agree that b is greater than a for those who bought stocks at various points. We disagree as to the meaning of that reality.

What is remarkable is that the question is one that can be settled through statistical analysis. That is of course what Wade Pfau and I did in the peer-reviewed research that we co-authored. We showed that, for the entire history of the market, the valuation level that applied on the day the stock purchase was made had a DRAMATIC effect on how lasting any gains achieved from that purchase turned out to be, that it has ALWAYS been better to consider the price that applied on the day the purchase was being considered when deciding whether stocks were worth buying or not. We found that the price paid is BY FAR the biggest factor in determining long-term success, that valuations are 80 percent of the stock investing story.

You responded by threatening to get Wade fired from his job by sending defamatory e-mails to his employer unless he agreed to stop doing honest work in this field. Science!

You are too emotional re these matters to think about them clearly. You are not capable of applying reason to the subject.

I mean no person offence. But that’s the story here. You need the answer to be that Buy-and-Hold works. There is 147 years of stock market history showing that Buy-and-Hold ALWAYS hurts the investor using it in very serious ways. But you cannot bear for that to be the reality. So you lash out in wildly inappropriate and even in criminal ways at those who report the realities within your hearing distance.

Millions of middle-class investors need to hear these realities REGARDLESS of the pain that it causes you for them to hear them. So it is my intent to continue to report them. I am 100 percent sure that my ability to report them far and wide will be enhanced dramatically following the next price crash when you and those who have posted in “defense” of you will be placed in prison cells, where you belong, and that as a people we will at that time move on to better things.

All that said, I do wish you all good things. I was once a Buy-and-Holder myself. We all were born with a raging Get Rich Quick impulse residing within us. There are laws that govern the extent to which we are permitted to let that Get Rich Quick urge run wild and the extent to which we are required to rein it in a bit in our dealings with others. So I don’t say that the millions who have been hurt in very serious ways by your behavior of the past 15 years are not right to demand a long prison sentence for you. But I do sympathize with you for the pain you feel when a part of you gets excited about the phony gains you see reported on your portfolio statement and reaches out to suppress the part of you that in other circumstances would be capable of rational thought. You are not alone in facing the struggle that has ruined you.

That struggle is part of the human condition. That struggle is the story of stock investing. It is 80 percent of the effective investing adviser’s job to help his or her clients overcome his or her Get Rich Quick urge. In future days it will be widely understood that it is the JOB of the investment adviser to help people OVERCOME their natural inclination to be drawn to Buy-and-Hold strategies, not to endorse the pure Get Rich Quick approach as a means of turning a quick and easy buck.

That’s my sincere take re these terribly important matters in any event, 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:

Fantasy forecasts? You mean like forecasting that you will get a $500 million settlement payment?

Time will tell the tale, Anonymous.

If this was not a matter of great importance, you wouldn’t fight so hard. If the level of fight that you have directed to this matter is a good indicator of its importance, I will be getting a lot more than a $500 million settlement payment.

It’s not only Rob Bennett who will be able to do honest work in this field when this matter is brought to a successful conclusion. Every single person who works in this field will be able to do honest work in future days. And ever single investor in the world will be able to take advantage of the many powerful insights that follow from Shiller’s “revolutionary,” Nobel-prize-winning 1981 findings. Say that there were only 100 million investors in the world. That would be $5 from each of them. I think it would be fair to say that there won’t be one investor in the world not getting a whole lot more than $5 of benefits from being able to have thousands of professionals comment on the last 36 years of peer-reviewed research in this field, which just happens to be the most important 36 years of peer-reviewed research in the history of investing analysis.

We’ll see how it all plays out. But I don’t think it is stretching on my part for me to expect payments of a lot more than $500 million. Not after what we have seen during the first 15 years of The Great Debate As to Whether or Not to Permit Debate on the Last 36 Years of Peer-Reviewed Research. And I cannot help but wonder why it bugs you so much that I may be seeing a $500 million settlement payment on the other side of this. You will be one of those benefiting from the amazing learning experience that we all will be enjoying. Does it hurt you in some way that I will receive a settlement payment of $500 million? Why not wish me luck with it? Why not enjoy the reality that one of your fellow community members received a $500 million settlement payment and that you played a part in it? It’s a pretty darn exciting and amazing reality.

Why not take it even a step farther? I am not the only one who will be seeing a huge financial payoff on the other side of The Big Black Mountain. Why not try to develop some research-based investing insights of your own and receive some finance rewards of your own as a result of Shiller’s “revolutionary” (his word), Nobel-prize-winning findings? There’s no law that says that only Rob Bennett can mine these opportunities. The field is open to all. Instead of fretting about how much I will be seeing, you could be directing your energies to seeing that you receive a nice, big payment of your own.

You of course may do as you please. There is no law that says you must reap personal benefits from this. But I do believe that it would be a better use of your limited human energies to employ them making your life better rather than fretting over someone else making his better. Feeling anger over the good fortune of others pulls us down. As a friend, I would rather see you pulled up than pulled down.

These are my sincere thoughts re these terribly important matters, in any event.

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

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:

Ben Graham basically said the same thing in his famous book that has been read the world over.

And the market still behaved the same. You are a grain of sand in the ocean. And you are a lot less influential, articulate, congruent, and sensible than Ben.

So your crusade is doomed in a very sad way. I hope you saved money for your kids college at least.

You are right about Ben Graham. I certainly have never said that I am the only person who has ever believed in sensible, research-based investing strategies. About 10 percent of the population believes in what Ben Graham and Rob Bennett believe. That’s millions of people.

You are also right that the market continued to behave the same way following the publication of Graham’s famous book. But conditions are not the same. In the day when Graham published his book, it was mostly rich people who invested heavily in stocks. Today we have millions of middle-class people trying to provide for their retirements by investing in stocks. And of course we now have 36 years of peer-reviewed research showing what works — we did not have that in Graham’s day. I believe that we are going to need to find a way to get accurate and honest and research-based investing advice out to those millions of people.

As just one illustration of how things have changed, we did not have middle-class people seeking to retire early in Graham’s. We obviously have that today or else there would have been no Retire Early board at which demonstrably false safe-withdrawal rare claims needed to be corrected in May 2002. The smelly Buy-and-Hold garbage pushed so relentlessly by the Wall Street Con Men and the members of their various internet Goon squads does a lot more harm to a lot more people today than it did when Graham pointed out the errors in the pure Get Rich Quick approach. So I am 100 percent certain that we will be able to get a good number of people interested in cleaning up the massive corruption in this field in the days following the next price crash. The comments we have seen from thousands of our fellow community members during the first 15 years of your Campaign of Terror against our board and blog communities certainly points in that direction in any event.

I don’t think the crusade is doomed, Laugh. I don’t think that as a society we would have made financial fraud a felony if we didn’t feel strongly about this sort of thing. A people that put Bernie Madoff in prison for a relatively tiny act of financial fraud is not going to take kindly to seeing most of its retirement savings wiped out by a small number of multi-millionaire con men supported by an insanely abusive gang of internet Goons. But we will see, you know?

I naturally wish you the best of luck with it, Goon friend.

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:

None of your silly story has anything to do with your lengthy unemployment, failed retirement or failed investment plan…..just more of passing the blame.

And all of your anger and shame goes back to Bogle’s failure to act in response to Shiller’s 1981 research findings for 36 years now.

In every other field of human endeavor, people know that, when they discover they have made a mistake, the thing to do is to get it corrected PROMPTLY so that they can move on with their lives. There shouldn’t be any controversy over the need to correct a mistake in a retirement study. The longer the cover-up goes on, the harder it becomes for you to go back and fix the mistake that should have been fixed a long, long time ago.

It is not the guy who discovered the error who is at fault here, Sammy. It is the guy who learned that he got an important number wrong in a retirement study and who failed to take quick action to correct it. And all those who encouraged him to continue the cover-up are secondarily to blame.

I offer no apologies for pointing out the error. If I had gotten a number wrong in a retirement studfy, I would want it poined out to me. I would consider the person who informed me of the error my best friend in the world because of the embarrassment he would be saving me by helping me to get the study corrected before it did even more harm.

You are looking at things from a mixed-up perspective. People need access to ACCURATE safe withdrawal rate studies. Until the Buy-and-Holders are able to acknowledge that they are capable of error, we cannot get the accurate studies out to people because it hurts the feelings of the Buy-and-Holders for people to see that they got it wrong. I didn’t do what I did to hurt your feelings. I did it to protect lots of people from suffering failed retirements. A failed retirement is a serious life setback. Everyone in this field should be working together to prevent as many failed retirements as possible.

This is my sincere take re this terribly serious matter, in any event.

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:

So, it has made you act like a 12 year old and, therefore, unemployable?

Shiller showed in 1981 that valuations affect long-term returns. If that’s so, then stock investing risk is not stable but variable. Investors who want to keep their risk profiles constant MUST be open to changing their stock allocations in response to big valuation shifts.

Bogle did not make one change to the Buy-and-Hold strategy as a result of this “revolutionary” (Shiller’s word) finding, a finding for which Shiller was awarded a Nobel prize. People who cannot admit mistakes should not be giving investing advice. This stuff matters. Get it wrong and you will end up hurting lots of people in big ways.

The longer you try to cover up a mistake, the more difficult it becomes for you to engage in constructive interactions with those seeking to hold you accountable, Hence your behavior on this thread. You are 36 years behind the times. It does not make me your enemy that I reminded you of what the last 36 years of peer-reviewed research says. It makes me your friend.

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:

Just stating facts, Rob. Ty it sometime.

It’s a fact that the retirement study posed at John Greaney’s web site does not contain an adjustment for the valuation level that applies at the time the retirement begins, Sammy. Thousands of people have looked at the study and not one has been able to find a valuations adjustment in it. This despite 36 years of peer-reviewed research showing that valuations affect long-term returns.

It causes my Buy-and-Hold friends a great deal of pain to acknowledge this fact. But it remains a fact all the same. A related fact is that all of the other Buy-and-Hold retirement studies are designed in manner similar to that employed for the Greaney study; they don’t contain valuations adjustments either. The retirement calculator at my web site contains a valuations adjustment. But I don’t consider that a Buy-and-Hold calculator; I consider it a Valuation-Informed Indexing calculator.

I have not come across a single Buy-and-Holder who is willing to acknowledge publicly the need to include a valuations adjustment in a retirement study. I have known a good number who are willing to say this privately. And I have known a larger number who are willing to say it publicly one or two times and then retreat when they face the wrath of their Biy-and-Hold friends. And I have known a very large number who are willing to HINT that a valuations adjustment is needed. Even Jack Bogle, the King of Buy-and-Hold, does this. But it is an exceedingly rare thing to find a Buy-and-Holder who will openly declare in a public place that all retirement studies that lack a valuations adjustment are in error and are dangerous because of how they mislead the investors making use of them.

Why do you think that is?

Rob

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

If you had to name the top 10 investing thought leaders today, who would be on that list and how would you rank them?

1) Robert Shiller (Nobel prize winner despite having failed to take his meds for over three decades now)

2) Jack Bogle (it was Bogle’s book that revealed to me the errors in the Buy-and-Hold retirement studies, making possible the post that kicked off The Great SWR Debate)

3) John Walter Russell (no longer with us in person but the many powerful insights explored at his web site remain available to all open to an amazing learning experience)

4) Warren Buffett (Buffett and Bogle go together like chocolate and peanut butter — the dreamy result is a concoction going by the name of “Valuation-Informed Indexing”)

5) Rob Arnott (this guy has balls — there’s precious few in this field that one can say that about — balls matter)

6) Jeremy Siegel (I do not agree with many of his conclusions but I see great power in his approach of focusing on analysis of the historical return data, an approach that he has popularized more than anyone else around)

7) Bill Bernstein (Chapter Two of his book “The Four Pillars of Investing” is the best concise explanation of why Valuation-Informed Indexing is the future that I have discovered)

8) Andrew Smithers (brave, smart, patient, kind — all of the big human virtues bundled together in one wonderful human being — can he be real?)

9) Wade Pfau (someday gonna see that this fellow is awarded the Nobel prize that he has very much earned with his fine research despite the “confusion” of recent years)

10) That fellow with 340 columns at the Value Walk site on this crazy Valuation-Informed Indexing concept that we all keep hearing about from time to time while we try so hard to force the idea out of our consciousness, I can’t quite recall his name, I think I have blocked it out because he makes me so freakin’ angry that I just want to reach through the computer screen and strangle the guy’s neck)

Humble Rob