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

Does Jeff still talk to you, or was he scared away by the goons as well?

He did not respond to the words of the e-mail set forth above, Critter. That tells the tale.

Jeff is like all the rest of us. He wants to be friends with me because he likes me. That’s why he made contact with me. He finds the idea of the Campaign of Terror absurd, which is why he said what he said in his e-mail to me. But he cannot bear to go against all the people on the other side, all the people who either promote Buy-and-Hold strategies or who follow Buy-and-Hold strategies themselves. He is a social creature, like all of us. And he can’t go there. So he didn’t respond to the e-mail. And so the cover-up continues.

To end the cover-up, we have to call it out. We need to have articles about the cover-up appear at every site on the internet. We need to have it written up on the front page of the New York Times. That’s how cover-ups are exposed. That’s how we bring them down. We all know this.

The hard part re this particular cover-up is that exposing this particular cover-up does not mean just exposing “bad” people whom we have never met and whom we will never see in the future. In this case exposing the cover-up means exposing our friends and our neighbors and our co-workers and our fellow community members. Jeff liked talking to me at the bloggers conference. He wanted to stay in touch with me. But I am not the only person that Jeff liked talking to. He liked talking to LOTS of people who attended the conference. And 90 percent of the people he liked talking to have blogs where they have posted positive words about Buy-and-Hold. What are all those people going to think of Jeff if he comes back from the conference and writes a blog post saying that he spoke to this Rob Bennett fellow and he now realizes that the whole Buy-and-Hold thing is a con that is in the process of destroying millions of middle-class lives? Jeff would get closer to me by doing that. How many people whom he likes would he distance himself from by doing that?

That’s the story, Anonymous.

Humans are social creatures. Humans possess a Get Rich Quick urge. Buy-and-Hold exploits our Get Rich Quick urge. It sounds great in the short term. It destroys us in the long term. We are in the process today of moving from the short term to the long term. Buy-and-Hold stopped “working” in January 2000. From January 2000 forward, investors have done better (on a risk-adjusted basis) earning the 4 percent real that was available at that time with IBonds and TIPS. But the Buy-and-Holders are still not doing that bad. They did great before January 2000 and they can live with the results they have seen since. So the social pressure still favors continuing the cover-up. You’ll make more friends speaking in support of Buy-and-Hold than you will saying that Buy-and-Hold is a smelly Get Rich Quick scheme. I know whereof I speak.

But what happens after the next crash?

Do we continue to tell these lies? Do we continue to exert social pressure to keep people like Jeff from telling the obvious truths about this garbage investing strategy that is killing us all? Or do we decide that it is too darn important to provide some means for the millions of investors whose lives are in the process of being destroyed to continue tolerating all this nastiness?

I think we are going to make the change. I think that following the next price crash Jeff is going to feel free to speak out about what he learned from me. I believe that following the next price crash he is going to come forward with a statement saying that he felt funny about this ever since he spoke to me and that he wished that he had had the courage to come forward sooner.

But I could be wrong.

When I put forward my May 13, 2002, post, I thought that the smear campaign against me would last perhaps two days, three days at tops, and then people would see that the numbers support me and come to their senses and that would be the end of it. So I have a record of being terribly off base re this stuff. If you want to say that you think it’s happening again, there’s nothing that I can say in response except that I continue to believe otherwise and that I am physically incapable of participating in the cover-up myself regardless of what happens. So I will just soldier on.

It’s not personal, Anonymous. I cannot lie about this stuff. When I was putting together my plan, I worked hard to get it right and I cannot bear to say things that would cause someone going through the same experience to get it wrong. It’s not in me. I cannot go there.

That doesn’t mean that I don’t like you. That doesn’t mean that I don’t wish you well.

I’ll do my thing and you will do yours, you know? It would seem to me that the next price crash will tell us who is going to prevail. If some space opens up to tell the truth about the last 35 years of peer-reviewed research, I will become one of the richest people on the planet and everyone who reviews the record will say that I earned every darn dime that came my way. I will extend the hand of kindness to my many Buy-and-Hold friends yet one more time and this time it will be accepted and we will all work together from that day forward to rebuild our broken economic system. And we will meet with great success because we will from that point forward be able to speak openly about the most important 35 years of peer-reviewed research that has ever been published in the history of investing analysis (or in the history of economics, for that matter).

Or we will all go down together. That’s the other possibility. That’s where we end up if we all continue to live in fear following the next price crash, which I suppose is at least a theoretical possibility (one that I don’t permit myself to ponder much because I cannot bear to do so).

Or perhaps there is some third possibility that doesn’t occur to me because of my background or the set of life experiences that I have lived through, some possibility where the deepening of the economic crisis that comes with the next crash ends up not being so bad and people continue to lie about what the research says and nothing ever happens to stop them. I can’t see it but I have to accept that you must envision something like that playing out or you couldn’t continue to do what you do. I don’t think that something like that can happen. But I suppose that in fairness I should at least list it among the options given the possibility that I am once again getting it wrong, as has happened so many times before in my years of struggling to make sense of the things playing out before my eyes and failing miserably to do it properly.

Something is going to happen. I hope that we can all agree that that much is fair to say.

I will live with the results of that something. So will Jeff. So will Anonymous. So will Bogle So will Shiller.

I hope that we will do the best we can to see past our differences and remain friends no matter what that something is. That’s what I feel deep in my heart.

Is there anything else that can be said re these matters?

We still disagree. Obviously. I am never going to ban you from posting here no matter what. Obviously. I still believe what I believe and you still believe what you believe. Obviously.

I hope that helps. If it doesn’t, I don’t think that I have anything else to offer.

Please take good care, 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:

I think you have rationalized MANY things in the last two decades.

There’s no doubt but that I have, Anonymous. We all do.

The worst of it is that we don’t see it when we are the ones doing it. We often see it in others but rarely in ourselves.

I wish you all good things.

Rob

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

It is a simple question Rob. If you lack sufficient funds to last through your entire retirement, why don’t you get a job?

The answer is that the work that I am doing is important work. The fact that I am not able to make money today doing this work is trivial given how important it is that this story be told. I am confident that I will make plenty of money on the other side, after we all reach agreement that the implications of Shiller’s “revolutionary” (his word) findings must be explored in great depth by the many thousands of people who work in this field.

The big problem that I have, Sammy, is my claim that the story has been covered up for 34 years. That claim can easily be verified by anyone who cares to check it out. But it sounds implausible. We live in a free society and there is a mountain of money to be made by anyone who offers a better approach to stock investing. So it is just not believable that something like this could be covered up for so long. The way that you Goons often put it is that people would have to believe in a massive “conspiracy” to accept what I say.

I watched a movie Monday night that shows how such “conspiracies” really do happen in this world when authority figures say something and ordinary people feel intimidated into not speaking up about the absurdity of what the authority figures are saying. The story told in this movie is every bit as crazy as the story I tell about how the implications of Shiller’s Nobel-prize-winning research have been ignored for 34 years. The movie is titled “Compliance.”

Set forth below is a link to an article on the movie that calls it “the most disturbing movie ever made.” I agree with that assessment. I came within an inch of turning the movie off halfway through because the events that transpire are so insanely implausible. I rented the movie because it is “inspired” by true events. But it was obvious to me that the people making the movie took great liberties with their “inspiration.” At least I thought that until I checked it out. There was a 20/20 episode made about the events that are the focus of the movie. The events took place in a McDonalds and everything portrayed in the movie was captured in a surveillance video. One of the characters in the movie in real life was sentenced to prison for five years because of the role he played (he had zero intent to commit a crime when he was asked to drive to that McDonalds that night to assist in a law enforcement action). Every one of the many shocking events portrayed in the movie happened in real life.

http://www.huffingtonpost.com/…

The humans are strange creatures, Sammy. We are NOT 100 percent rational beings, as Buy-and-Hiold presumes. We are not. We get ourselves into a lot of trouble when we try to flatter ourselves by pretending that we are. We need to start telling the truth about what we have learned in the past 34 years about how stock investing works in the real world. That’s my sincere belief, in any event.

The strange and unfortunate events that transpire in the movie came to an end when one man took a stand and said that he just wouldn’t go along with the insanity. His sanity caused the manager of the McDonalds to place the phone call that revealed the entire pretend police investigation as a sham. Someone has to take a stand to bring these sorts of things to an end. Most people don’t want to be the one. Most people are scared. I am scared. I get it why other people are scared. But I am even more scared of what we are going to see if no one stands up. So I work up my courage each day and do what I can do. I can do no more and I can do no less.

I hope that helps a bit.

My best wishes to you and yours.

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:

It has been 30 years for me. That is long term. My buy and hold strategy has worked just fine. I am now sitting on $2.6 million in diversified holds and adding more to my positions everyday.

Your words say one thing and your actions say another, Anonymous.

Your words say “I’m fine.” Your actions say “I’m worried.”

If you were confident, you wouldn’t behave the way you do. If you were confident, you would believe that what you say in this post would be enough to persuade others even if those who disagree with you were free to post honestly.

You are not the only Buy-and-Holder who lacks confidence. They all do. Not all Buy-and-Holders threaten to kill the family members of those who disagree with them and insist on their right to post honestly about why they disagree. But the vast majority tolerate such behavior even though it goes against the core beliefs of our society. And the small percentage of Buy-and-Holders who object to such behavior do so only timidly and tentatively and drop it when their Buy-and-Hold friends make clear their displeasure with them.

You don’t see that with Valuation-Informed Indexers. I have zero problem with the fact that you do not agree with my investing ideas. I call you “friend” with every post you put forward here, even after you have insulted me thousands of times. I acknowledge it when I learn from you. I say that I respect the Buy-and-Hold Pioneers because of the many powerful insights they have developed. I even say that I could be wrong about Valuation-Informed Indexing, that I have been wrong before and that, if it were happening again, I would probably be the last to know.

I could be wrong. But at least I possess enough confidence in the strategy that I follow to be see that those who believe in the school of academic thought that I have rejected help me out by posting honestly and thereby challenging my thinking and forcing me to sharpen my thinking.

I wish you the best of luck with your investing choices, Anonymous. I don’t believe that you have made good choices. But that doesn’t make me dislike you or wish you ill. Time will reveal which of us is right and which of us is wrong on the substantive issues. If I am the one in the wrong, I hope that something you say will cause it all to click for me one day. If that happens, I hope that I have the courage and grace to say the words “I” and “Was” and “Wrong.” If I failed to do that in those circumstances, I would only be hurting myself.

I 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 another blog entry at this site:

It sounds like it is all one big conspiracy and only you have it completely figured out and exposed.

I have gone farther than anyone else in two departments:

1) Exploring the implications of Shiller’s “revolutionary” (his word) findings; and

2) Using plain, easy-to-understand language re the massive act of financial fraud used to achieve the 34-year cover-up.

Thousands of people have commented on flaws in the Buy-and-Hold Model but not often enough or with enough detail to persuade most investors that they need to abandon it before it destroys them.

I see no evidence of a literal “conspiracy.” I have not seen any evidence that people got together in a room and decided to do this to us. I cannot say that there is zero chance that that happened. But I do not believe that that happened. The evidence that I have seen points away from that conclusion. Specifically, I get the same reactions at different sites. It is not possible that every site owner is in on a conspiracy. Yet owners of different sites and community members at different sites respond in very similar ways.

People DO respond in similar ways. That to me is the biggest clue to understanding what is really going on.

I wrote a column just a few weeks ago at the Value Walk site that I think does the best job of explaining what is really going on. I wrote about the famous literature in the psychology field from the 1950s (I believe it was — it could have been the 1940s, I didn’t check) in which those conducting the study showed study participants two cards, one with a line of 12 inches (again, I didn’t recheck the precise details, I am describing generally what was tested) and another with three lines of 12 inches, 18 inches and 24 inches. When asked to identify which line on the second card matched the length of the line on the first card, 95 percent of the test subjects did so successfully. But when four fake test subjects gave the same wrong answer, only one in three genuine test subjects were able to give the right answer. When asked why, they said that they wanted to be “polite.”

That’s the story here. Peer pressure is a huge influence on the human mind. Bull markets are the product of peer pressure. And Buy-and-Hold is the product of peer pressure.

No one believes in Buy-and-Hold. Not in a deep sense. Not Bogle. Not you Goons. Not anyone.

Yet the Buy-and-Holders really do follow the dictates of the strategy. The Buy-and-Holders lie about every subject under the sun. But they don’t lie about that. They “eat their own cooking.”

We know intellectually what works today. But we have not yet given ourselves permission to make use of the huge advances that we have achieved over the past 34 years.

If the last 34 years of peer-reviewed research is valid, this will end in an economic collapse. I believe that, when that becomes apparent to everyone involved, we will all join together to rebuild our broken economy. I should be working WITH Bogle. My work makes his good ideas (of which there are many) workable in the real world. I am his biggest supporter, his best friend, his partner in realization of his vision. He doesn’t see it today. But I believe he will see it tomorrow. I sure hope so.

I will be there for my friend when he is ready to do positive work, Anonymous. And I will be there for you Goons when you are able to say the words “I” and “Was” and “Wrong.”

You give the impression of wanting something else from me. But I have nothing else in me to give. I love my country and I do not want to see her done harm in this way. I believe that there is a part of you buried down deep where you don’t want to see her done harm in this way either. But that part is not dominant in you or in Bogle or in lots of others today. I don’t like that reality. But I have to accept it, like it or not.

That’s where things stand.

I don’t call this a conspiracy, I call it a weakness in human nature. It’s done a lot of people a lot of harm, regardless of what one calls it. I want to get us back on the right track and I will do anything short of committing a felony myself to make that happen. But I won’t be crossing The Felony Line. Not in 13 years and not in 13 billion years.

I wish you all good things. If that counts for anything, you’ve got that much from me.

I don’t have any more to give unless you come back to the right side of The Felony Line yourself, you nasty, dumb Conspirator!

Rob

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

None of this is about having information or lacking information, Anonymous. It is about giving in to the Get Rich Quick impulse or reining in the Get Rich Quick impulse.

The Get Rich Quick impulse is risk. There is now 34 years of peer-reviewed research showing that. That research is based on 140 years of historical data. When you give in to the GRQ impulse (that is, when you fool yourself into thinking that there might be some mystical,magical alternate universe where price discipline might not be required when buying stocks), you add to your risk. When you make use of tools showing you how dangerous Buy-and-Hold strategies are, you add to your risk. It’s been that way since the first stock market opened for business.

There were institutional investors who had information coming out of their ears who jumped out of windows during the Great Depression. Their tons of information didn’t help them one whit. Books and articles and calculators and podcasts that told them about the importance of price discipline when buying stocks would have helped them a great deal.

When my mother was alive she used to say to me that she couldn’t understand why my older brother still smoked because “he’s so smart.” He’s plenty smart. But being smart or not being smart has absolutely nothing to do with why somebody smokes or doesn’t smoke. Having lots of information has nothing to do with why one becomes addicted to a Buy-and-Hold strategy or not. The Get Rich Quick impulse is an emotional thing. It is not rooted in one’s brain.

That’s the problem I have with you. You are plenty smart. But you use your intelligence to avoid the findings of the peer-reviewed research in this field, not to explore them. I call this model “Valuation-Informed Indexing,. So I make a suggestion that being informed makes a difference. However, the full truth is that it is not being informed that does the trick. Not by itself.

If you never become addicted to smoking in the first place because you are informed of the dangers, then in that case being informed can make a difference. And being informed can make a difference once you have an epiphany and come to see how much a pure Get Rich Quick approach can hurt you. But there is something beyond being informed that is needed to make one an effective long-term investor.

I don’t today have an entirely clear understanding of what that something is. Why do some people get this stuff and others have such a hard time with it?

I look at the people who get it and try to identify similarities. That has given me little clues but nothing that has impressed me enough for me to be able to write full articles describing the secret. I think that part of it is caring about something other than investing enough to overcome the power that the Get Rich Quick urge has to fool us all about what works in investing.

I care deeply about journalism. I once believed in Buy-and-Hold. So I have as much of a Get Rich Quick urge as you. I think that what pulled me out was my love of journalism. In the early months of these battles, I saw a story. And I couldn’t let that go. I had to figure it all out, learn what I needed to learn to tell the story properly. I think that is what helped me see things that others couldn’t see and rise above all the emotional pressures.

John Walter Russell and Wade Pfau cared about their statistical craft. They are researchers and getting the numbers right means something to the. So they overcame the emotional pressures too, completely in John’s case and partially in Wade’s case. I think they both saw this as sort of a puzzle and they wanted to see the puzzle pieces click in. That gave them what they needed for the information to have an effect.

Not everybody who invests is going to be a journalist or a researcher. So we need to identify other motivators for seeing through the garbage GRQ stuff. I have a vague idea that the answer is to have positive investing emotions. People in this field cite fear and greed as investing emotions all the time. Those are both negative emotions. Greed brings on bull markets, fear brings on bear markets. I think there have to be positive investing emotions too. People need to nourish hope and love as investing emotions that could counter the two negative investing emotions.

For example, you might have hopes for an early retirement. Those hopes might give you what you need to counter all the Buy-and-Hold garbage and to become able to study and understand clearly the last 34 years of peer-reviewed research. Or you might feel love for a son or a daughter and want to help them obtain a strong financial footing and that love might empower you to see through the Get Rich Quick fantasies of a world where price discipline doesn’t really matter all that much.

Do we care enough about our long-term investing results? We think we do. I am beginning to question whether we really do on a deep level. The long term is a distant thing for most of us. It is an abstraction. We get a little surge of positive feeling every time prices go up because seeing that makes us feel that we are smart, it flatters us. To overcome that, we need to have as strong a feeling about the long-term. And to care about the long-term, we need to have positive investing emotions like love and hope as well as negative ones like fear and greed.

That’s part of the reason why I use that catch phrase in my conversations with you Goons where I point out that “I love my country.” That’s a positive emotion. I try to focus on that, how our country will be better off when honest posting is permitted, to help me work up the courage to violate the Social Taboos that tell us all that we should not hurt people’s feelings by telling them about what the peer-reviewed research shows us about the chances that GRQ strategies will be successful in the long run. I love my country. That’s a reason for wanting people to know the realities of stock investing.

These are still sketchy ideas. I think coming to a better understanding of this aspect of the question is an important project for coming days. Why is it that the peer-reviewed research clicks for some while other perfectly smart people remain mired in all the Buy-and-Hold/Get Rich Quick garbage? Informing people is important. I am a journalist, I obviously care about informing people. But there is another element here, some sort of emotional element, that is needed for the information side of things to click.

I am no smarter than you Goons. But I get it and you don’t. Why? What do I possess that you lack?

I didn’t get it myself prior to the evening of August 27, 2002. Why does the current-day me get it when the prior-day me did not?

Why does Bogle sort of, kind of get it and sort of, kind of not get it? Why is the same so for Bernstein and Burns and Swedroe and Schultheis and Piper and Tresidder?

Hope and love are the counters to fear and greed, I believe. But what do we need to do to help people to feel more hope and love and for the information we supply them to therefore make a difference in aiding their efforts to understand this stuff?

I think I feel a column coming on!

Rob

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

“We need to overcome you Goons.”

That’s easy. Just delete 100% of the Goon comments (a small increase from your current 90+%.) Since you post nowhere else anymore, the Goons can no longer reach you. Problem solved. Then watch as your fans slowly crawl out from under their beds and start posting honestly here.

If you fail to take this simple step, one has to wonder what your goal for this site is. Or if you even have one.

One more thought that hit me when I read back your comment and the quote from me to which you were responding.

I favor banning Goons when they engage in insanely abusive behavior, as you know.

However, I don’t believe that we truly “overcome” you Goons by banning you.

I wrote to Motley Fool in June 2002 asking that they ban John Greaney. Had they done so, I would have gone before the community six months later and asked that he be reinstated. I believe that the community would have gone along with that. I also believe that Greaney would have posted in accord with the published rules of the site from that point forward.

We would have had the best of both worlds from that point forward. There wouldn’t be any more abusiveness, so all the community members who had doubts about Buy-and-Hold would have felt comfortable posting their sincere thoughts. But we also would have enjoyed the positive contributions of my good friend John Greaney and of all the many community members who felt a friendship for him. Pretty sweet deal, eh?

I do not support the abusive behavior of you Goons. It’s not a close call. I believe that every board and blog community should insist that you honor the published posting rules. And the laws of the United States too! I believe all that very strongly.

But I do NOT believe that you Goons are the sole source of our economic problems.

Goons show up at all sorts of internet sites. On non-investing sites, the problem is generally taken care of by enforcement of the published posting rules. That what I believed in the early days would happen in this case. I was shocked when Greaney threatened to kill my wife and children if I continued to “cross” him by posting honestly re safe withdrawal rates. But I was ever MORE shocked that Motley Fool did not ban him when they learned about the death threats.

Greaney’s behavior is a big problem. But, if anything, the owners of the Motley Fool site are guilty of WORSE behavior. Motley Fool has a responsibility to enforce its published rules in a reasonable way. When they don’t, they send a very, very bad signal both to you Goons and to the Normals who in ordinary circumstances are not willing to tolerate the behavior that you have employed to block people from learning about the implications of the last 33 years of peer-reviewed research in this field. You are guilty of financial fraud. But so is Motley Fool and all the other sites that have failed to take effective action to rein in your abusiveness. That’s my sincere take re this terribly important matter, in any event.

My point here is that “overcoming” you Goons means doing more than simply banning you. You SHOULD be banned when you put forward death threats. Obviously. But there is Goonishness in a lot of comments advanced by people who never in a million years would advance death threats. Jack Bogle is being Goonish when he says that the most that anyone ever needs to lower his stock allocation is by 15 percentage points. Jack Bogle pulled that number out of his backside. I am sure. The peer-reviewed research says it is 60 percent. Jack is not even close. He hurts millions of people in very serious ways when he puts forward such insanely dangerous and irresponsible statements.

Greaney never would have advanced his death threats had Bogle behaved more responsibly. Greaney was embarrassed for people to see that he got all the numbers wildly wrong in his retirement study. It was Greaney’s embarrassment that caused everything to go off the rails. Greaney never would have made his mistake had people like Bogle been more forthright about the decades of peer-reviewed research showing that a Buy-and-Hold strategy can never work for even a single long-term investor.

Banning any one individual Goon or even all of those who have behaved in an insanely Goonish manner is not going to solve our problems. The ultimate goal is to overcome the Goonishness that resides within ALL of us. When we root out our Goonish desire to develop confidence in Get Rich Quick strategies, we reduce the risk of stock investing by 70 percent. Banning a small number of abusive posters from our sites is not going to get us where we want to go. We are going to have to acknowledge as a society that the reason why we have tolerated you Goons for so long is that you are using your abusive posting tactics to achieve goals that a lot of us want to see achieved.

Do you see?

You Goons are cartoon versions of the inner selves of MILLIONS of middle-class investors. We cannot have reasoned and productive and life-affirming discussions until we remove posters who are putting forward death threats. But that is only our FIRST step toward becoming far more effective investors, certainly not the last.

Jack Bogle is going to need to look inside and ask himself what sort of investment advisor he wants to be in the future. It’s the same with Bill Bernstein. And with Larry Swedroe. And with Carl Richards. And with Scott Burns,. And with Michael Kitces. And with Wade Pfau. And with Mike Piper. And with Todd Tresidder. And with Rob Bennett. And on and on and on and on and on.

I hope that makes some sense to you, Anonymous.

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

Rob

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

Oh, don’t worry! I never said I knew the extent to which valuations might affect future stock prices. Correlation data suggests historically they may have to some extent, some of the time, though correlation doesn’t always mean causation. I’ll be the first to admit that the future’s a very uncertain place. No boorish hocomania here. I focus on the things I can control, like gainful employment and a high savings rate.

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

You always seem to read everyone’s mind since you know what they are thinking and when they are lying. Perhaps you should have a second career as a mind reader .

Do you not know when politicians are lying to you, Anonymous?

We all do. Give me a break.

Ataloss sent Bill Bernstein an e-mail asking him if he agreed with me that the methodology used in the Old School retirement studies is analytically invalid or not. Bernstein said that “of course” the methodology was valid but that anyone who used the numbers generated by those studies to plan a real retirement would have to be out of his or her mind. Does that sound like straight shooting to you?

Bernstein’s lie is almost a charming one. He is pretty much holding up a sign when he tells it that says “Don’t believe a word I say!” I mean, come on.

The lie is easy enough to see. A child could see it. BUT ONLY IF HE CARED TO SEE IT.

You are capable of seeing every lie that I see. YOU JUST DON”T WANT TO SEE THEM.

You have a large percentage of the accumulated wealth of a lifetime rising on Buy-and-Hold. YOU ARE COMPROMISED. I could show you a mountain of lies told by the Buy-and-Holders and you would shrug your shoulders. You want it all to be true. So for you it is true.

The question is — How are you going to feel about all those lies after the next price crash. Suddenly, the lies will all become visible to you. Suddenly, this massive act of financial fraud won’t seem like such a big joke to you anymore.

The lies that Bernie Madoff told were obvious. Some very smart people lost money by investing in his fund. How did this happen? Being smart doesn’t make you immune from Get Rich Quick pitches. If anything, it makes you better skilled at rationalizing away the lies that would otherwise serve as warning signs.

You WANT to be tricked, Anonymous. There is nothing difficult in tricking somone who wants to be tricked.

I notice when people are lying by comparing what they say in different circumstances and checking whether the stories match up. Jack Bogle says that investors should use the historical data as a guide to how to invest. The data says that a 60 percent reduction in one’s stock allocation is needed when prices go from where they were in 1982 to where they were in 2000. But Bogle says that a reduction in stock allocation of 15 percentage points is plenty. Huh?

It doesn’t take any superhuman power to see that the people who advocate Buy-and-Hold strategies are telling lies (often to themselves as well as to others). I don’t need to be a mind reader to pick up on lies that obvious. But I do need to know what the last 33 years of peer-reviewed research tells us about how stock investing works.

That’s why the Buy-and-Holders feel such a burning hate toward anyone who reports on what the peer-reviewed research says. The story told by the peer-reviewed research and the story told by the Buy-and-Hold advocates do not match. It’s not a close call. The two stories are OPPOSITE stories. One says that price always matters when buying stocks. The other says that it is okay to ignore price when buying stocks. Huh?

I hope that helps a bit.

Rob

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

“I said on the morning of May 13, 2002, that the numbers in the Old School safe-withdrawal-rate studies were wildly wrong. “You Goons said that I must have forgotten to take my meds.” Here is a link to the thread in question. http://boards.fool.com/price-adjusted-safe-withdrawal-rates-17209214.aspx?sort=whole and a juicy excerpt or two ” As I read the data, it appeared to me that had I made an 80 percent stock allocation in 1969, I would now (31 years later) have lost all of my investment and be bankrupt. Is that true? It’s possible that I don’t understand how the calculator works, but that result was disturbing to me. The actual portflio figure that the calculator gave was that I would now have a negative $31,035. I don’t understand the concept of a negative portfolio value. That’s what makes me a little uncertain as to whether I am reading the results correctly.” and “I was wrong and intercst was right. Please read my apology to him and to the board in general at this link: http://boards.fool.com/Message.asp?mid=17225279 “

And yet the Wall Street Journal and the Economist magazine and Smart Money magazine and the Financial Mentor site and even Vanguard said 10 years later that I was right afterall. Doesn’t that tell the entire story, Evidence? I really was right in my May 13, 2002, post in saying that Greaney’s study (and in fact all of the Old School studies) lacked a valuation adjustment. That was a big deal. That was a big advance. But I am human like all the others and social pressure caused me to doubt myself. Just as Bogle has doubted himself when his common sense has told him that Buy-and-Hold is a big pile of smelly garbage. And as Bernstein has doubted himself. And as Piper has doubted himself. And as Pfau has doubted himself. And as Shiller has doubted himself.

We achieved the greatest intellectual breakthrough in the history of investing analysis 33 years ago. And we have spent 33 years doubting whether what we learned was really so and therefore denying ourselves the ability to explore all of the many wonderful implications of what we learned by denying ourselves the freedom to talk about what we learned and thereby THINK THROUGH TOGETHER what we learned.

Well, it stops here and it stops now and it stops with me. No offense. But we need to get this right. I am not going to settle for anything less. Following the next crash, there are going to be a lot of good and smart people who are going to work up the courage to stand with me. That’s that. You can bet against us if you want, Evidence. That’s betting against your country. That’s betting against science. That’s betting against the future. Given that you have committed felonies as part of your effort to make sure that we don’t learn what we need to learn, that choice will be putting you in prison following the next crash. I ain’t betting against us. No way, no how.

I am leading the charge forward. That’s where things stand.

I naturally wish you all good things.

Rob