Set forth below is the text of a comment that I recently posted to the Joe Taxpayer blog:

Rob is passionate on his beliefs. The market is very strange, and it takes decades for Rob’s thesis to be proven correct. (I don’t mean the analysis, but the actual results.) He is correct that the assumptions most planners use are in fact, dangerous.

Lots of people say this and I suppose that it is generally true. But there is one way in which it is not 100 percent true and I always feel that I should try to help people understand that so that they have the full story.

I don’t think of myself as a passionate person. I just think of myself as me. But enough people have used this word to describe me that I have come to accept that it applies. There once was a girl whom I had a crush on for years and we were friends and I couldn’t understand why she wouldn’t go on a romantic date with me. It drove me crazy! Finally she broke down and told me that I was too “intense.” This explanation of the problem had never crossed my mind! Other people pick up on this but for me it is just what I am so I don’t really see it.

But I am not particularly passionate about investing or about Shiller. I think Shiller is right. I think Valuation-Informed Indexing is the future. But by itself that is not a big deal for me. I started posting at Motley Fool in May 1999 and I never even mentioned Valuation-Informed Indexing until May 2002. For three years I wrote only about saving stuff. Investing is way down the list of topics re which I care about.

However, I AM passionate about the people in the internet communities to which I have posted. The thing that makes me feel intense feelings is people and their stories. When you post at a board regularly, you get to know people as people. From that point forward, you cannot not care. At least I don’t see how that could be possible.

There was a strange set of circumstances that caused me to become known as the lead proponent of Valuation-Informed Indexing on the internet. The truth that few newcomers know is that I dropped out of the debate on Day Five because of the abusiveness of the Goons. But after I left, hundreds of my fellow community members at Motley Fool picked up the ball and started talking about all the wonderful insights we had developed together in just those five days. That pulled me back in. At that point, I would have felt like a creep not to get involved just because of a few nasty personal attacks.

Then it just grew and grew. The mountain of evidence supporting Valuation-Informed Indexing got higher and higher and the Goons got more and more desperate in their tactics. I have ALWAYS said that we should have shut them down when Greaney advanced his first death threat. All that we have done is hurt them by failing to take effective action. Greaney and I had a lot of good times together and it causes me great pain to see what he has done to himself. I HATE it that as a community we have let these terrible events transpire. But I don’t control it and I have to accept the realities whether I like them or not.

The two things that I am passionate about are our country’s economic system and our country’s political system. It is a core principle that we permit both sides to speak and that we even encourage the expression of different ideas and new ideas. My cause is to make that general rule applicable in the field of investing analysis just as it is in every other field of human endeavor in our society. I couldn’t possibly feel stronger re that one. Please feel free to label me as “intense” and “passionate” re that one all over the internet.

If we permit people to post their sincere beliefs, I am confident that things will work out well. I don’t have any worries once we pull together to open the internet to honest posting in the investing realm.

I DO believe that people will go to prison over this. I of course HATE that reality and I of course acknowledge that it is a 100 percent crazy reality. But I have seen how people react when they learn that they have been lied to and have suffered huge financial losses as a result. It’s not a pretty scene to behold. Today we see all this emotion on the side of Buy-and-Hold. When things flip (I believe this will happen following the next crash), I believe that all that emotion is going to be on the other side. I will then be the guy saying “Hey, the Buy-and-Holders are good and smart people, let’s not get carried away here.” I LOVE the Buy-and-Holders. I only wish they loved themselves as much as I love them.

Anyway, the point here is that I fight for Valuation-Informed Indexing more because I want to see the boards and blogs run honestly than because I care so much about stock investing. Perhaps that’s part of the reason why I see things from a different perspective than most. The more intense you are about investing, the less able you are to acknowledge the evidence showing that you have been following long- discredited ideas. I don’t have that hang-up. I am able to just look at what the research shows because none of the investing stuff is a big huge deal to me. I am not personally invested in it. Whichever way it goes is okay by me. If the Buy-and-Holders are proven right in the end, that’s fine by me, so long as it happens as part of an honest process in which all “sides” feel free to express their sincere views.

If you had told me on the evening of May 12, 2002, that I would spend the next 12 years of my life leading the most controversial debate on stock investing ever held on the internet, I would have told you that you were out of your mind. I would have put the odds at zero. But here we are. Life has a way of playing funny tricks on all of us. You either develop a sense of humor or you don’t last long in this valley of tears. That’s been my experience, in any event.

It’s always nice to hear your voice up close and personal, Joe. Keep fighting re that fees things. When people become passionate about something, there is a reason for it, even if some others cannot see it immediately.

Hang in there, man.

Rob

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

Just wondering, do you have any “friends” who are NOT going to prison? If so, they don’t seem to get any shout-outs here. You’ve even criticized Joe Taxpayer for not doing enough, and he’s the only blogger who has welcomed you in recent months (for one post, which you’ve been flogging for content for weeks now.)

We have to work it out as a society, Bizarro.

We are the luckiest generation of investors ever to walk the planet. And we are messing it up because we have not been able to work up the courage to face our emotional pain. It’s a sad reality. But it is also a very exciting one.

Joe could do more. Absolutely. He’s done more than just about anybody else. In relative terms, he gets an A+. In objective terms — Perhaps a C.

Joe could put up a post saying “I had Rob and the Goons posting at a thread at my site and it is really amazing to see how much pain these Goons are in. This tells me that Buy-and-Hold is truly bad stuff. Anything that causes people to act like this is truly bad stuff.” Then he could send a link to that article to everyone he knows from the Financial Bloggers Conferences and ask them to comment on it, to offer their own views based on what they have seen with their own eyes.

That’s how we break through. You Goons aren’t the first people who ever acted in unacceptable ways when you experienced emotional pain. We ALL have this within us. Most of us don’t act out in these ways. What makes the investing situation so different?

People are afraid. They are afraid that the Wall Street Con Men will use their power and wealth and connections to destroy them. They are afraid that you Goons will defame them and ruin their sites with your endless abusive comments. They are afraid that they will lose readers because most investors today believe in Buy-and-Hold. Finally, they are afraid of their own weaknesses. People wonder “Do I really know enough about investing to challenge the experts?” They don’t want to steer people wrong and so they hold back, even when they see the sick stuff put forward by you Goons.

There are grounds for the fears. But the reality is that support for Buy-and-Hold has been weakening for some time and that one big push is all it would take to bring it down at this point. You Goons made threats that the Wall Street Con Men would sue me if I continued posting honestly. That was years ago. The Con Men are a paper tiger. You Goons are not anything close to as strong as you were 12 years ago. People don’t call you out as they should. But people don’t put nearly as much credence in your b.s. today as they did in the old days. I was there. I know.

The toughest one is the fear that people who speak out will lose readers. They will. That one is real. But the opportunity to win ten times the number of readers lost after the next crash makes that one not so big a deal. After the crash, everyone is going to be getting on the Valuation-Informed Indexing bandwagon. People will trust the ones who got aboard early, prior to the crash. So the upside here is huge and the downside, while real, is not really that big in comparison.

The way to get over a fear that you don’t know it all is just to tell people that. Bogle doesn’t know it all. He shows that in all his comments on investing. Shiller doesn’t know it all. I don’t know it all. None of us do. So a new voice should not be expected to know it all. You Goons will make it sound like anyone who speaks needs to know it all. People should just respond with honesty. Our knowledge of how stock investing works is primitive. None of us know it all. At least some of us openly acknowledge that rather than adopting the arrogant pose of the Buy-and-Holders who claim that they got it all right on the first try and are not capable of ever making a mistake.

Yes, I would like to see Joe do more. But I am proud of him for what he has done.

I would like to see Shiller do more. But I am proud of him for what he has done.

I would like to see Pfau do more. But I am proud of him for what he has done.

I would like to see Bogle do more. But I am proud of him for what he has done.

I consider everyone who has provided me with a learning experience a friend, Bizarro. So, yes, I have lots of friends. I give them shout-outs all the time. I consider John Greaney a friend. I give him shout-outs. And of course there are hundreds of others.

I think Greaney is probably going to prison. But I think that is true of only a small percentage of my friends. Bogle is the one I am most concerned about. I see him as being on the borderline. I don’t know which way that one is going to go. I’ll tell you this. I will be singing his praises until the day I die. He has done some truly bad stuff. But he has also done some truly wonderful stuff. The genuine accomplishments don’t get wiped off the slate when he does bad stuff. He has done enough good stuff to rank second on my list of the best investing analysts of all time. Is that a big enough shout-out to satisfy you?

I have lots of friends (both Buy-and-Holders and Valuation-Informed Indexers) who will not be going to prison. But I also have some who will be. You know what? It horrifies me that there is even one. If you told me on the morning of May 13, 2002, that my famous post was going to generate reactions that would lead to even one of my friends going to prison somewhere down the line, I would have said that you were off your rocker, that the odds of such a thing happening were one million to one. Yet here we are, you know? Crazy things happen in this mixed-up world of ours.

I am going to continue trying to get those prison sentences reduced and I am going to continue trying to see that there are as small a number of prison sentences as there can possibly be given the circumstances that confront us today. That’s all any human being can do here. I hope that I can persuade some others to get involved. Because that is how we make good things happen.

I’ll ask Joe at FinCon14 to get more involved. Maybe he will say “yes” and maybe he will say “no.” There’s certainly no harm in asking, right?

And I’ll ask lots of others. I’ll ask scores of people. It only takes one if that one is brave enough and has a big enough blog.

Maybe none of this will work. Maybe we will all go over a cliff. I hate even to acknowledge the possibility. But after 12 years of this, I feel that I need to do so. But, if that happens, it was going to happen anyway, right? It’s not as if my efforts to steer things in a positive direction caused the problem. Sometimes the best-intended efforts don’t produce good fruit. It’s a sad reality but a reality all the same.

The key for me is that I always act in a spirit of love. If we win, we will all be able to look back and say that it was love that pulled us through. That will be very cool. If we lose, we will be able to look back and say that we put forward a loving spirit at every stage of the proceedings. There’s honor in that, right? So I think that’s the way to play it.

I naturally wish you the best of luck with whatever investing strategies you elect to pursue, my old soon-to-be-prison-dwelling friend.

Rob

Set forth below is the text of a comment that I recently put to the Joe Taxpayer blog:

Should you ever get tired of Rob’s schtick, or decide that you’d rather not have him be a guest blogger for you, he will make up similar stories about you.

I will tell the truth about Joe just as I have told the truth about so many others. If that’s the point you are trying to male here, you are right on. Perhaps they should put a sign on my back saying “Beware! This fellow has told the truth before and there is every reason in the world to believe that he will do it again! Beware all ye who participate in the greatest act of financial fraud in the history of the United States!”

Why do I make such a fetish out of telling the truth?

Because it was our collective dishonesty that caused the economic crisis.

Some are going to blame Jack Bogle. Some are going to blame Eugene Fama. Some are going to blame John Greaney. Some are going to blame Mel Linduaer.

They all played a role. They all did bad things.

But why is it that Jack Bogle is so darn reluctant to disassociate himself from the most vile Goons ever seen in the history of the internet?

HE WANTS TO BE POPULAR.

HE WANTS TO SELL STUFF. TO SELL STUFF, PEOPLE HAVE TO LIKE YOU.

So don’t we need to acknowledge that the people buying stuff played a role in all this? Didn’t those millions of middle-class people that I am always referring to sympathetically play a role in causing their own destruction?

It sure seems so to me.

We are ALL Goons!

To some extent. We all have that goon thing going on inside us. We are all drawn to Get Rich Quick. We all like to hear about the pretty Buy-and-Hold lies.

Wait!

I said “all.”

“All” includes a certain fellow named “Rob Bennett.” Am I a Goon too?

I knew about the errors in the Old School SWR studies when I put my first post to the Motley Fool board, in May 1999. I didn’t put forward my famous post detailing them until the morning of May 13, 2002.

Oh, noes!

It’s The Invasion of the Body Snatchers come to life!

We’re all Goons.

We need to acknowledge it.

Doing so is the key to long-term investing success.

If we acknowledge that we are all Goons, we can let this honest posting junk that I am forever talking about run wild and we can all retire many years sooner than we ever before imagined possible.

But, yes, that is the price of admission.

If we do not give ourselves permission to talk about our inner goonishness, we obviously cannot protect ourselves from the effects of our inner gooinishness. And it is our inner goonishness (our desire to believe that Buy-and-Hold can work for someone, somewhere, sometime) that is responsible for 70 percent of the risk of stock investing. If we want to see 70 percent of the risk of stock investing disappear, we need to see 70 percent of our inner goonishness disappear. That means calling out goonishness everywhere we see it, That means telling the truth about others.

And ourselves.

Yikes!

I’ll tell the truth about Joe. And I’ll continue to tell the truth about Jack. And Bill. And Larry And Rick. And — if I am true to myself and my beliefs — about that awful Rob character. The fellow who could stand to lose a few pounds. The fellow who was nervous about standing before a crowd of his friends and giving his Ignite presentation. The loser. The nutcase. The fellow who continually forgets to take his meds.

That guy! Goon!

And Joe probably too. I’ve never seen any evidence of it. But we never know what evil lurks in the heart of the friendliest guy in the world, do we?

That Wade fellow sure had me fooled for a time. Grrrr…

Rob the Goon

Set forth below is the text of a comment that I recently put to the Joe Taxpayer blog:

More of Rob’s fantasy that it is a vast conspiracy.

How about a vast cognitive dissonance, Bob? Or a conspiracy of ignorance?

Humans had the ability to fly for many years before the first airplane was put in the sky. Was the reason we did not fly for so many years that there was a conspiracy or was it just that we did not know it all.

Humans had the ability to harness of the power of electricity for many years before we made use of it. Was it a conspiracy or was it just that we did not know?

Humans had the ability to cure many diseases before we did so. Was it a conspiracy or was it just that we did not know?

We did not understand the fundamental rules of how stock investing works in 1980.

In 1981 the research was published that took us where we all deep in our hearts long to be.

We now know what we need to know. Intellectually.

But we can’t talk about what we know. Because it hurts the feelings of those who went with what we once thought we knew to do so. So knowing by itself doesn’t do us a whole lot of good, does it?

I contacted someone I met at FinCon12 to see if she would like me to hire her to help me get my message before more people. She likes me. She hasn’t said precisely what she thinks of the message but she has certainly never demonstrated any hostility towards it. She is smart. She is particularly strong in some areas in which I am particularly weak. Sounds like a good match, right?

She has shown interest in the idea of working with me. But she doesn’t think I can succeed unless I stop talking about “the haters.”

I don’t agree. THE HATERS ARE THE ENTIRE FREAKIN’ PROBLEM.

I am not some investing genius. I saw that the Old School SWR studies get the numbers wildly wrong ten years before the Wall Street Journal saw it. Do you know how hard it was to see that? It was like seeing that 2 plus 2 does not equal 22. The studies don’t include an adjustment for valuations! There’s 32 years of peer-reviewed academic research showing that valuations is the most important factor in ANY investing analysis. So the numbers HAD to be wildly wrong! In ordinary circumstances, a five-year-old child could see that.

So why didn’t Jack Bogle and all these other Big Shots see it?

They didn’t see it because they do not want to see it.

That’s all.

That’s the entire story.

This is not a numbers story or an intellect story or a research story. This is an EMOTIONS story.

The fact that the Buy-and-Holders have spent 11 years engaging in hate rather than in sharing with millions of people all of the amazing breakthrough insights we have come up with together is THE ENTIRE STORY.

If I don’t discuss the hate, I am not telling the story. That IS the story. Our hate is the holdup. Our burning hate for what the last 32 years of peer-reviewed academic research tells us about stock investing was the primary cause of the economic criss. We have bankrupted tens of thousands of businesses with our hate. We have put millions of people out of work with our hate. And we are just getting started! We are still in the early days of this ultimate Buy-and-Hold Crisis.

We are on the 99-yard line. Our society works. Because it is a dynamic society. When people do things wrong, our social systems have ways of figuring that out and getting those wrong things replaced with right things. We are very, very close to doing that in the investing realm. There is one thing that stands in our way.

The people who have spent decades of their lives either promoting Buy-and-Hold strategies or following Buy-and-Hold strategies very, very, very, very, very much do not want us to go forward. It hurts their feelings to acknowledge that they have been taken. It hurts their feelings to know that they are going to need to rebuild their Big Shot status in a world in which lots of other people will be competing with them for that Big Shot status.

That’s it.

There is nothing else.

Wade Pfau researched this question. He wanted to know if there had ever been a single study published backing up the key Buy-and-Hold assertion that there is no need to engage in long-term timing. He searched and he searched and he searched and he never found a single study.

He went to the Bogleheads Forum and asked f anyone there knew of a single study supporting the key Buy-and-Hold claim. Jack Bogle did not know of a single study supporting Buy-and-Hold. Bill Bernstrein did not know of a single study supporting Buy-and-Hold. Larry Swedroe did not know of a single study supporting Buy-and-Hold. Rick Ferri did not know of a single study supporting Buy-and-Hold.

Do you want to know what I think?

I think none of these people knew of a single study because there has never been a single study. I think Wade was right. I think that’s why they threatened to get him fired from his job if he continued to publish honest research.

And I think the cover-up is doomed.

Perhaps no one on the internet will be willing to take on the Goons. I find that an amazing reality. But perhaps it is so. It has certainly been largely so for 11 years.

But there’s this other thing.

The next stock crash. The 65 percent price drop. The Second Great Depression.

People are going to notice that.

It’s going to be written up in all the papers.

THEN people are going to work up the courage to speak out.

Aren’t they?

If they don’t, we all go down together. If we all think it is such a horrible, horrible thing to say out loud that Old Saint Jack dropped the ball re this one, then it’s out of my hands. At least I will have the small consolation of knowing that I gave it my best shot.

It wasn’t a conspiracy when it started. Had Shiller published his research in 1971 instead of 1981, the famous book would have been called “A Valuation-Informed Walk Down Wall Street.” The Buy-and-Hold Pioneers were trying to do what I am trying to do, They are trying to help people.

It’s SORT of a conspiracy now that we are in the cover-up stage. But it’s not all people trying to make a buck. The woman I contacted to help me get my message out stands to make a buck by taking it the other way. Hundreds of my blogger friends could make a buck taking it the other way. They could build blogs explaining how Valuation-Informed Indexing works and after the next crash hits, they would become famous because they would have one of the few blogs that tell the truth about how stock investing works in the real world.

Why do all these people who in ordinary circumstances are perfectly happy to make a buck not have much interest in making a buck re this one?

It’s the Social Stigma.

The woman told me that the people sitting around her during my Ignite talk felt that I was “bitter.” She doesn’t want people saying that about her. None of us want lots of other people saying that sort of thing about us. So when we have doubts, we keep it zipped. It’s not our fight, we tell ourselves. Let someone else take on the haters.

I expect to make many hundreds of millions of dollars from this.

And I expect to feel good making it. Because this is the biggest advance in our understanding of how stock investing works in the history of investing analysis.

I don’t like having the hate directed at me. Obviously. But I don’t like posting dishonestly about what the research says either. So I have never given two seconds of consideration to playing it the other way.

Either we will all win (which means I will win most of all) or we will all lose (which means my loss is no worse than anyone else’s loss). Those are the only two possible outcomes.

It’s not a conspiracy in the sense in which that word is usually used. There were not a bunch of evil people who got together in a smoke-filled room to do us in. But there WERE humans. And those humans DID make the sort of mistakes that humans have since the beginning of time been known to make. And those human mistake-makers HAVE been engaging in brutally abusive behavior to cover up their mistakes for 11 years now.

Why are these so intense?

Because it matters so much. Because the mistake was so darn big.

Is that a bad thing?

It is not.

It is a good thing.

Correcting a huge mistake takes us forward in a huge way.

I can’t wait to see all the human enrichment that will follow when we get down to the business of CORRECTING the mistake.

Do I need to tell people about the haters to get the mistake corrected?

I do.

There is no other way to explain to people why we didn’t reduce the risk of stock investing by 70 percent back in 1981, when we first learned intellectually how to do it.

I believe we will survive. I don’t believe that I am the only person alive who appreciates the good things that our economic and political systems have brought us all. So I think there will come a day when I will be able to persuade others to help out. It won’t take many. We have 32 years of peer-reviewed academic research behind us. When we have ten people standing by each other so that the Goons can no longer destroy us one by one, it will be over.

In ordinary circumstances, Buy-and-Hold would have died gradually, a little bit at a time year by year by year. Because of the 11-year cover-up, things have been set up so that it will die all at once, once we get those 10 people willing to stand up for each other in the face of the brutal assaults of the Buy-and-Hold Goons.

It’s getting better. I have had a front-row seat to all this going back to the first day, and I can tell you that there are lots and lots of signs that it is getting better.

When I get those 10 people assembled in one place (my site!), it’s going to get a LOT better very, very quickly. There will be HUNDREDS of blogs promoting Valuation-Informed Indexing in days to come. They will be the most popular blogs on the internet. Their owners will get very, very rich. And they will feel rich inside too because they will know how many human lives have benefitted from their courage.

Yours in eternal bitterness,

Rob

Set forth below is the text of a comment that I recently put to the Joe Taxpayer blog:

That is Robert Shiller’s thesis (not Rob Bennett’s). I don’t think there is any disagreement about it. It’s an established empirical observation. The disagreement is about whether investors can change their asset allocation to take advantage of this. Open and honest debate takes place about this at the Bogleheads site and other places, as you can see from Bob’s link. Again, please don’t be confused by the idea that it is Rob’s ideas that are controversial. He is banned because of his boorish behavior. And as others have pointed out to you, once you finally grow weary of Rob spamming your comments or fail to give him a guest blogger spot, you will instantly join Rob’s list of goons who will be given long prison sentences for financial fraud. At least you’ll be in good company when that happens with people like J.D. Roth and Mike Piper.

Both J.D. and Mike are friends of mine.

J.D. played a role in me getting the interview with ABC News that appears on the home page of my site. When I went to the first financial bloggers conference (FinCon11), I was worried about what sort of reception I would receive. When I was getting my badge, J.D. saw me from across the room where he and a group of my fellow bloggers were sitting and called out to me and invited me to join them. That was a very kind thing to do and I much appreciated it. One time when J.D. was going on vacation, he invited me to write a guest blog entry on saving strategies at the Get Rich Slowly blog, which was the biggest finance blog on the internet at the time. J.D. and I had a long talk at this year’s conference in connection with a book that he is writing about early retirement.

Mike gave me a guest blog entry at his site PRIOR to the 2008 crash. Not many people were willing to do that in those days. He offered an introduction to it that I thought was perfect. He told a joke! He asked (I am paraphrasing): “How can I resist an opportunity to have someone come to my blog and tell people that everything I say about stock investing is wrong?” Mike HATED the idea of banning me from his blog. We exchanged DOZENS of e-mails about it. I once put forward the idea that I would not post any further comments at his blog on a daily basis but that he would give me one guest blog entry per month to tell the other side of the story. He rejected that idea but only after giving it serious consideration. I had a long talk with Mike at FinCon11 and he told me that there was nothing he would more like to see than an end to the Ban on Honest Posting and the Campaign of Terror and that he agreed that Mel Linduaer is a cosmic jerk. He also said that he was afraid of what Mel would do to him and his blog if he raised any objections to his behavior in his postings at the Bogleheads Forum. Mike and I gave a joint presentation on retirement planning at FInCon12. He was 100 percent cordial in all the work we did together planning for that event.

So I like J.D. and Mike and J.D. and Mike like me. Everything is groovy, right?

Everything is not groovy.

Mike banned me from his blog. Not because I broke any of the rules that apply there. He banned me because I posted honestly on what the peer-reviewed academic research of the past 32 years says about how stock investing works. He feels that he will no longer be able to persuade his readers of the merit of his investing claims if they are able to hear the other side of the story. Yes, that is financial fraud. If stocks perform in the future somewhat as they have always performed in the past, Mike’s readers are going to lose most of their life savings. They are going to be looking for someone to hang from a tree and Mike is going to be an obvious choice given that he banned honest posting at his site. I am Mike’s friend and so I care about what happens to Mike. So, yes, it is so that I have said both to Mike personally and in public comments that he has committed financial fraud in an objective sense and that I think that this was a terrible, terrible, terrible choice for my good blogging friend to make.

J.D. did similar things. He feels very funny about bans. So he never went quite so far as to ban me from Get Rich Slowly. But he did direct Goon language at me. He said that I was obviously “mentally ill” to think that there was anything wrong with the Old School safe withdrawal rate studies (this was before the Wall Street Journal and the Economist magazine and Smart Money and about a dozen other major publications all reported that I was right all along about this issue). When I posted at a thread at his discussion board, he sent e-mails to every other poster participating on the thread asking them not to respond to my comments. I once had another blogger suggest that I ask J.D.’s help in resolving the problem with the Greaney Goons since he is a leader in the personal finance blogosphere and since there are responsibilities that go with that role. I thought that was a good idea and I asked for J.D.’s help. I asked him to speak out in opposition to the death threats and the tens of thousands of acts of defamation and the board bannings and so on. J.D. elected not to help out.

So am I friends with these people or am I not friends with these people?

We’re friends as long a the subject of the last 32 years of peer-reviewed academic research doesn’t come up.

We should be friends on EVERY issue.

Why should J.D. and Mike be friends with someone who doesn’t share their views on stock investing?

Because if is often the people who do not share your views on a subject who provide the most help to your efforts to come to a better understanding of it.

Yes, Mike Piper’s readers get upset when I post comments at his blog. He’s telling the truth re that one. It is BAD MARKETING for Mike to permit me to comment at his blog.

But it is GOOD SCIENCE. And Buy-and-Hold is supposed to be rooted in science. Academic researchers are not supposed to over-educated marketing assistants.

If Buy-and-Hold is real, Mike’s readers will be able to handle anything I say in stride.

If Buy-and-Hold is Get Rich Quick garbage DISGUISED as science, their reaction to reports of what the academic research really says will be a massive freak-out. If we see a massive freak-out (we obviously have — that’s why Mike reluctantly banned me), we know that there is something seriously wrong with this Buy-and-Hold “idea.” When we learn that there is something seriously wrong with this Buy-and-Hold idea, the proper thing to do is to INVESTIGATE, not to cover up.

J.D. and Mike (and many, many others — we are obviously only referring to these two particular individuals as examples of people engaging in behavior that we have seen from the vast majority of those advocating Buy-and-Hold strategies) are playing a very dangerous game. Buy-and-Hold has been tried four times in U.S. history. On every one of those four occasions, it made the people following it very, very happy when it filled their minds with Get Rich Quick fantasies while prices were going up to unsustainable levels. And on every one of those four occasions (we are still in the early stages of the fourth ride down, but we are already beginning to see the same pattern play out), people became very, very angry when following Buy-and-Hold caused them to lose most of their life savings, as it always does and as basic common sense tells is it always must. “Widespread and intense anger” translates into “lawsuits for civil damages and prison sentences for repeated acts of financial fraud” in today’s world.

I don’t say that J.D. and Mike have committed financial fraud in an objective sense because I view them as enemies. I say this because I view them as friends.

And of course I say that same thing about Jack Bogle and Bill Bernstein and Larry Swedroe and Scott Burns and Rick Ferri and lots and lots of my other Buy-and-Hold friends.

We have a way of handling differences of opinion that does not involve people being sued for civil damages and people being sent off to prison.

It is called “letting the other fellow have his say.”

It is no crime to believe in Buy-and-Hold with all your heart and mind and soul and for it to be proven wrong at a later date. It IS a crime to advance death threats and demands for board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs as part of an 11-year effort to keep millions of people from learning about errors that were made in studies that those people used to plan their retirements.

I didn’t create this messed-up situation.

I am the fellow who built the Retire Early board into the most successful discussion board in the history of the Motley Fool site. There were responsibilities that fell to me as the leader of that board community. When we saw a fellow coming forward with posts threatening to kill family members of any poster who dared to “cross” him by posting honestly on the subject of retirement planning (at a retirement planning board!), I had zero choice but to call this fellow out and demand his removal from the site.

Had Motley Fool removed him when I sent my first e-mail to them demanding his removal (this was in June of 2002), J.D. and Mike and Jack and Bill and Larry and Scott and Rick and all the rest of us would obviously be in a very, very different place today than the messed-up situation we find ourselves in.

I will continue to show my love for my Buy-and-Hold friends.

NOT by rationalizing to myself that it somehow doesn’t matter if my friends destroy themselves and their lives and their blogs and their financial futures. I will show my love by following the rule that I have followed from the first day of this seemingly endless saga — Alway Be as Charitable as It Is Possible to Be Without Being Outright Dishonest While Also Always Being as Honest as It Is Possible to Be Without Being Outright Uncharitable.

Say that Buy-and-Hold were a legitimate strategy.

In that case, we wouldn’t have to tell lies to defend it, would we?

And we wouldn’t have to advance threats of physical violence to defend it.

And we wouldn’t have to destroy the reputations of our long-time friends to defend it.

And we wouldn’t have to threaten to get academic researchers fired from their jobs to defend it.

And we wouldn’t have to subject ourselves to huge lawsuits to recover financial damages suffered and to prison terms to defend it.

There is something seriously wrong with an investing strategy that compels those seeking to “defend” it to destroy their own lives and the lives of their friends in the way we have seen so many destroy their own lives and the lives of their friends during the first 11 years of our discussions of the realities of stock investing.

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

I continue to feel deep feelings of friendship for J.D. and Mike. That’s why I intend to continue to do all I can do to make the millions of middle-class investors whose financial futures are in the process of being destroyed aware of what the Buy-and-Holders did to stop Wade Pfau from reporting to them on the most important research in this field since Shiller’s “revolutionary” (his word) findings of 1981.

More hate is not the answer.

Love is the answer.

I am sure.

Rob

Set forth below is the text of a comment that I recently put to the Joe Taxpayer blog:

Joe:

You get the numbers part of it perfectly.

But I feel a need to add a non-numbers reality that I believe explains the problem we are seeing with the signal-to-noise ratio.

Say that all scales and mirrors were removed from the world. And say that a law was passed saying that no one was permitted to tell someone else that he was putting on weight. And say that we all were forbidden from looking to see how much our bellies had come to stick out. Do you think that the average weight would increase over time or decrease over time?

It would increase. A LOT. We all love chocolate ice cream. We all struggle not to let our weight get too out of hand. But, to do that effectively, we need FEEDBACK. We need people telling us how we are doing and we need scales and we need our own eyes.

Buy-and-Hold took away our feedback!

Buy-and-Holders say it doesn’t matter. If you ask them whether valuations matter, they say “yes.” But they never say to do anything about it! That’s the practical equivalent of saying they don’t matter. They say one thing with words but their actions (staying at the same stock allocation at all price levels) send a very different message.

Say that you go from 160 pounds to 240 pounds because you are not receiving any feedback on your habit of indulging yourself with too much chocolate ice cream. How do you now feel when someone says: “You are really, really FAT, brother! You’re probably going to die soon because you are so fat.”

You don’t like it. Nobody likes to hear that kind of message.

We need to be reminded on a regular basis of the dangers of overvaluation so that things never get too far out of hand. It’s a terrible mistake to wait until stocks are priced at three times fair value because at that point people freak out when you give them an accurate report on what the numbers mean. What we need are tools that tell us — stocks just went up x and that means that your long-term return just went down y, so you need to reset your stock allocation so that it continues to make sense for someone with your particular risk tolerance.”

We didn’t do that when stock prices started rising. The primary reason is that we didn’t know enough to tell people what worked back in those days. Shiller didn’t come out with his research until 1981 and it really was revolutionary stuff. People are not able to absorb the significance of revolutionary stuff overnight. So it took some time before we were able to develop tools like The Stock-Return Predictor (a calculator at my site that applies a regression analysis to reveal to investors the most likely annualized 10-year return starting from any possible starting-point valuation level).

We NOW know what we need to know to inure that we never see another bull market. Which means that we will never see another bear market (every bear in history was caused by the runaway bull market that preceded it). Which means that we probably will never see another economic crisis (every economic crisis in U.S. history was caused by the loss of wealth we experienced in one of those bear markets that was caused by the bull market that preceded it).

We are in a very, very good place today. Intellectually.

We are not yet in such a good place emotionally. We need to break it to investors gently that we didn’t always know it all and as a result we made some mistakes and as a result they are in the process of suffering some very big losses. The future is bright. But for the good stuff to happen, we need to explain what works. And that requires acknowledging that we did not understand things perfectly back in the days when the Buy-and-Hold concept was getting off the ground.

The story here is a very positive one. But we cannot talk about the positive stuff until we explain why just about everything we have told people about how stock investing works for the past 30 years is wrong. People get angry with me when I spill the beans because it is upsetting to learn that you have been doing everything wrong for so many years. But how else do we get to the good place where we all deep in our hearts want to be?

If we cannot acknowledge that there was a time when we did not know it all, we have ruled out all learning experiences. Why do that? We are looking at the most wonderful learning experience in personal finance history.

The change is small in one sense. Everything stays the same except instead of ignoring valuations we make it Job #1 to ALWAYS, ALWAYS, ALWAYS pay attention to valuations when buying stocks. The payoff for making that change is so great that it is impossible to overstate it.

Think about the payoff that comes from paying attention to your weight. It’s huge, no? You live longer. You look better. You have a higher energy level. It’s good stuff piled on top of good stuff piled on top of good stuff.

Imagine that we once had research that seemed to show that the key to keeping your weight in line was always to eat six bowls of ice cream a night and that the people who gave that advice didn’t want to acknowledge the mistake once it was discovered. We would all die early deaths. For no good reason.

The Buy-and-Holders did not intend to cause this problem. We certainly should show them great respect and gratitude and affection for all of the many good things they did for us all. But we are not being kind to them to pretend that they didn’t make a mistake. Their intent was to help us. Instead, they caused the biggest economic crisis in U.S. history. We are making them feel worse about themselves by pretending that the mistake doesn’t need to be corrected.

We all want the same things. We all should be working together to learn the realities. We all should be grateful to those speaking from the other side because it is by being challenged re our current beliefs that we become capable of learning new stuff.

We need to inject the consideration of valuations into our consideration of every possible investing topic. Getting your stock allocation right is 80 percent of the game. If you get that part right, you can get everything else wrong and you will still probably do very well. If you get that one wrong, you can get everything else right and you will still probably do poorly. Valuations is pretty much everything you need to know to become a successful long-term investor. And, because of a mistake we collectively made 30-some years ago, we have as a society prohibited the intelligent discussion of the effect of valuations on investing decisions. This MUST change (in my view!).

The numbers stuff is important. But the non-numbers stuff is important too. Because all the investors are humans and humans are influenced by emotions as well as numbers. We have created circumstances that make it hard for people to hear this message. But we just have to do the best that we can do. We all lose from any further delay in getting the message out. Learning the realities causes some short-term pain. But the long-term benefits are so big that it is hardly even worth taking note of the short-term downside. After you get over that initial shock, it’s good stuff piled on top of good stuff piled on top of good stuff.

The purpose of my talk was to highlight the FUNNY side of this. My thought was that, if people could learn to laugh about this stuff, we could all come to see the wisdom of working together. A very smart and fun person that I met at the conference told me this morning that the people sitting around her said that I sounded “bitter.” That’s the OPPOSITE of how I was trying to sound . And I worked this one hard. Viewed objectively, those slides were lighthearted, not bitter. I am SURE.

People need to take the defensiveness down about seventeen-thousand notches. I mean, come on.

Rob

Set forth below is the text of a comment that the author of the Joe Taxpayer blog recently put to a discussion at his site:

It’s fascinating to me how the signal to noise ratio dropped like a rock. I’m a numbers guy. And I believe I understand Rob’s thesis, that future returns, over the next decade, have a tight inverse correlation to the PE10 for the starting point. If someone disagrees, I’ll look at the counterpoint. Remember, correlation doesn’t need to be 100%, only that there’s a bell curve of potential outcomes that shift meaningfully based on the input.

Set forth below is the text of a comment that I recently put to the Joe Taxpayer blog:

he will use your name. He perceives your comments as validation of everything he says. The comments by Wade referred to early is just a small taste of what is in your future. You will soon come to understand.

Here are some comments that Wade Pfau made about his good friend Rob Bennett in the days before Bob and his fellow Goons threatened to send defamatory e-mails to his employer in an effort to get him fired from his job (and Jack Bogle and lots of other big name Buy-and-Hold advocates signaled that that was just fine by them):

1) “If you read Rob Bennett’s stuff carefully, I think he did provide an important contribution in terms of describing a way for PE10 to guide asset allocation for long-term conservative investors. I also think he was right on the issue of safe withdrawal rates.”

2) “I am also extremely grateful to Rob Bennett for motivating this topic and contributing his experience and encouragement.”

3) “You deserve much of the credit as the whole idea of Valuation-Informed Indexing belongs to you.”

4) “I definitely need to cite some of your work as the founder of Valuation-Informed Indexing, as I have not found anyone else who can lay claim to that. Shiller pointed out the predictive power of PE10 but never discussed how to incorporate it into asset allocation, as far as I know.”

5) ”Any data mining that I am doing is in favor of buy-and-hold, not in favor of market timing.”

6) “The findings for “market timing” are so robust anyway, that it hardly matters how we do it.”

7) “What you see in the top part of the graph for each year is the amount of wealth accumulated after 30 years for someone following Buy-and-Hold against someone following Valuation-Informed Indexing….Valuation-Informed Indexing provides more wealth for 102 of the 110 rolling 30-year periods, while Buy-and-Hold did better in 8 of the periods.”

8) “I will take steps in my final paper to test a wide variety of assumptions about asset allocation, valuation-based decision rules, whether the period is 10, 20, 30, or 40 years, lump-sum vs. dollar-cost averaging, and so on, and to show that the results are quite robust to changes in any of these assumptions.”

9) “On a risk-adjusted basis, market-timing strategies provide comparable returns as a 100 percent stocks Buy-and-Hold strategy but with substantially less risk. Meanwhile, market timing provides comparable risks and the same average asset allocation as a 50/50 fixed allocation strategy, but with much higher returns.”

10) ”If everyone increased exposure after a market fall and vice versa, then this would dampen out the big swings in the market aggregates, and we might get shallower boom/bust cycles.”

11) “Yes, Virginia, Valuation-Informed Indexing Works!”

12) “I wrote up the programs to test your Valuation-Informed Indexing strategies against Buy-and-Hold, and I must say that the results look very promising…. I am quite excited about the findings so far. As you say in the podcast, Valuation-Informed Indexing should beat Buy-and-Hold about 90 percent of the time, and I am getting results that support this for various strategies.”

13) ”It makes complete sense to have an equity allocation that is in some way flexible. Having a completely inelastic demand for equities is a bit bonkers; no-one acts that way with life’s other important commodities.”

14) “I have been toying with the idea of sending the paper to the Journal of Finance, which is the most prestigious journal in academic finance.”

15) “Now that I am accounting for risk, I am even more amazed by how well Valuation-Informed Indexing works.”

16) “My idea is to show many different tables with results over the whole period for returns and risks. Valuation-Informed Indexing always provides more returns for often less risk.”

17) “No matter what I try, Valuation-Informed Indexing will still perform better in 85-95% of cases for 30 years.”

18) “The traditional approach to retirement planning (as described on pages 10 and 11 of The Bogleheads’ Guide to Retirement Planning, for example) is counterproductive and possibly damaging.”

19) “Retirees now frequently base their retirement decisions on the portfolio success rates found in research such as the Trinity study…. This is not the information that current and prospective retirees need for making their withdrawal rate decisions.”

20) ”Though I was only trying to do an Old School safe-withdrawal-rate study, all that I ended up doing was showing in a different way what you had been saying all along: the safe withdrawal rate changes with valuations.”

21) “Valuations are the driving factor. ”

22) “Naturally, I am finding that Valuation-Informed Indexing can allow you to reach a wealth target with a lower savings rate, use a higher withdrawal rate, and also have a lower “safe” savings rate, than a fixed allocation.”

23) ”I think I should stay publicly quiet for a while, as I really don’t want anyone sending messages about any topics to officials at my university.”

24) “I don’t want them [the Goons] working behind the scenes to derail me.”

25) “I did warn the editor of the Journal of Financial Planning that they may receive some ‘hate mail‘ after I mentioned your name in the safe savings rate paper.”

What a difference a threat to get the father of two small children fired from his job has on an investing discussion, eh?

Whatever could I have been thinking when I said that lots of my Goon friends will someday be serving long prison sentences as a result of the 11-year cover-up?

Long live Buy-and-Hold! It’s science! With a Marketing Twist!

Rob

Set forth below is the text of a comment that I recently put to the Joe Taxpayer blog:

Some debate these issues like religion.

99 percent of the world probably thinks that was so of me. I truly do not think it was. I knew about the errors in Greaney’s SWR study when I put my first post to the Motley Fool board in May 1999. I didn’t put forward my famous post pointing out the errors in the study until the morning of May 13, 2002. So getting those studies corrected obviously was not a religion to me in those days!

There’s one thing that really is like a religion to me. Free Speech. I’m a journalist. It’s all I ever wanted to be. It’s in my blood. So, yes, the idea that people use intimidation tactics to block a very important discussion that thousands of people have expressed a desire to have for 11 years rubs my fur the wrong way. Guilty as charged re that one!

The other one that might come close to being a religion with me is the idea that you don’t betray your fellow community members, no matter what. There were hundreds of us who worked together to build the Retire Early board at Motley Fool into the most successful board in the history of the site. Those people shared private stuff about their finances. I shared in their joy when they achieved important milestones. Those people became friends to me. You don’t betray your friends because some internet Goon makes clear what his Goon Squad will do to you if you refuse. You’re not the same person as you once were once you go along with something like that.

Hey! Motley Fool promised me in its posting rules that it would protect me from the sorts of individuals who have put up posts in “defense” of Mel Lindauer and John Greaney. If I had known that you had to show up with a Goon Squad to be able to say what you truly believe, I would have formed one of my own!

Actually, I probably wouldn’t have. I don’t think Goon squads are ever really going to be my thing. If I HAD a Goon Squad, I would probably post in opposition to my OWN Goon Squad. That’s how deep this Free Speech thing goes with me.

Here’s an interesting historical fact that few newcomers to this stuff know — I dropped out of the discussions on Friday, May 17, 2002. The Goons had become just too brutal and I had had enough and I announced that I was leaving the board and I had every intention of sticking to it.

God had other plans for me. The following afternoon, a retired government engineer (John Walter Russell) who had never posted to the board before put up a post doing a sensitivity analysis of the Greaney study to see whether I was truly off my rocker or not. John found that the sensitivity numbers for the retirement study were so bad that an aspiring retiree would have to be 100 percent loco to give two seconds consideration to the idea of using that study to plan a retirement. He wrote a post titled “Hocus Is Really Onto Something (and I Am Having a Ball!). About 50 of my fellow community members endorsed the post. Dozens of posters came forward to say that this was the most exciting discussion we had ever seen at that board.

I was back! What else are you gonna do in those sorts of circumstances? You can’t let all of your buds down and still look at the man in the mirror the next day.

John Walter Russell? He spent the next seven-plus years of his life (John died in October, 2009) researching my investing ideas. He became the most loved poster in the history of both the Retire Early and Indexing discussion-board communities. He ended up having so much wonderful research that he created a site of his own to share it with all the people asking about it (the site passed to me on John’s death).

Things sometimes work out for the best when you work up the courage to do the right thing.

Or so I am informed by one of those crazy hunches that I have been known to experience from time to time!

Rob

Set forth below is the text of a comment that I recently put to the Joe Taxpayer blog:

Funny, how certain things get people moving. I simply reference our meeting, and the concept Rob promotes and suddenly, a torrent of comments. I guess the other folk I met, and mentioned, weren’t as controversial.

The cover-up of the last 32 years of peer-reviewed academic research in this field, which had already been going on for 21 years when I put up my famous May 13, 2002, post, cannot continue in a world in which the millions of people who use the internet to learn about the world are free to use this powerful tool to protect themselves from such cover-ups.

I don’t approve of what the Goons do. But I understand that they have only two options: (1) continue with the intimidation tactics; or (2) permit millions of people to learn investing realities that they very much want to learn about. And, if they choose Option (2), they are not Goons anymore, are they?

It’s a strange story. I certainly don’t say different.

But, as with anything else, it is possible to make sense of it if you study it long enough and in sufficient enough depth.

The Goons don’t themselves have confidence in Buy-and-Hold. They follow it themselves. They are not recommending anything they don’t personally make use of. But there is a voice in their heads that tells them “this cannot work!” and that scares them to death. I hold up a mirror to them and say “why not pay attention to that voice?” I bring on pain not because I want to hurt them. I bring on pain because the pain they feel coming to terms with the dangers of Buy-and-Hold strategies will end up being a lot less than the pain they will feel if they continue to ignore those dangers.

We have as a society been working up our courage to deal with these matters for 11 years now (it’s 32 years if you count back to the publication of Shiller’s research in 1981). We’re not there today. I wish we were. But we are today a whole big bunch closer to where we all deep in our hearts want to be than we were on the morning of May 13, 2002. I believe that there is a good chance that we can get to where we all deep in our hearts want to be prior to the onset of the Second Great Depression. If we don’t, I believe we will make it there soon after that extremely unfortunate milestone.

Yes, this one gets people moving. Few are willing to talk about it intelligently and reasonably and civilly. We talk about it in all sorts of strange ways. But we don’t engage in the strange behavior because we don’t care. We care deeply.

So long as we care so much, and so long as the Forbidden Research is so promising, we all should take comfort in these signs that we will in time make it to where we all deep in our hearts want to be. There’s a lot of surface ugliness. But the core realities here are the most amazingly positive realities we have ever experienced in the history of personal finance.

Think of the ugly stuff as the final cry of a “strategy” that died intellectually over three decades ago. If only we had gotten about the business of burying the body when it first began stinking up the joint!

Rob