Set forth below is the text of a comment that the owner of the Joe Taxpayer blog put to a recent blog entry at that site:

Rob is not using my site for anything. I mentioned that we met, and I respect him and his analysis. No more, no less. In person, he’s bright, energetic, and passionate. He talks about his son with the same love as I speak about my daughter. The rest of this back and forth [Joe is referring here to the intimidation posts put forward by the Lindaueheads and the Greaney Goons] is really nonsense.

There are those who swear by gold. I think it’s an ancient relic (only for the fact that Milton Freedman used those words, else, I’d just think it a pretty metal.) There are day traders. I think that’s a losing proposition. It goes on. Some debate these issues like religion. I enjoy a thought provoking conversation with people I respect.

Set forth below is the text of a comment made by the owner of the Joe Taxpayer blog at his site, followed by the text of my response to his comment:

Joe Taxpayer:

My view on Rob and his research are in my article above. The fact that Shiller is a proponent of the approach takes it from a fringe view to mainstream, in my opinion. I know, emotions run high in this type of discussion.

I only wish this passion were present in the discussions on the fees that funds charge.

Finally, Bob. You can see I welcome debate. I get a lot of comments hitting my spam filter, I’m glad yours was not caught in there. If anyone who commented doesn’t see their post, please resubmit. I just cleared 2K+ comments from that folder.

Rob Bennett: 

The fact that Shiller is a proponent of the approach takes it from a fringe view to mainstream,

Thanks so much for saying that, Joe. Your comment cuts right to the heart of things, in my assessment.

These ideas should be discussed at every site on the internet. People should be 100 percent free to reject them. But all bloggers should be sure that their readers are aware of the ideas and feel free to say whatever they please about them. Each of our readers has the right to make his or her own decision as to whether it is Fama or Shiller who ultimately will be proven right. The success of their retirement plans depends on the answer to that question. No blogger or site owner should be taking on the financial responsibility for the success of all of his or her readers’ retirement plans.

Rob

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

Anyone can read the article and see that you are not the co-author. You are acknowledged for motivating the topic and there is a long list of others that are also acknowledged…. Anyone that visits your site will see countless posts where you tell all of us that we are going to prison.

Anyone can also read the many e-mails Wade wrote describing me as the teacher and him as the student and understand that not only was I the co-author, I was the PRIMARY co-author, Bob.

I talk about the prison terms because the prison terms are an important issue, Bob.

Ideas have a life cycle. There is a time when they are rising and gaining new adherents by the day. There is a time when they are dominant. There is a time when they decline in influence. And there is a time when they die.

Buy-and-Hold was a wonderful idea in its early days. We wouldn’t have Valuation-Informed Indexing today if Buy-and-Hold hadn’t come along first.

But Buy-and-Hold died intellectually in 1981, when Shiller published his research showing that valuations affect long-term returns. For Buy-and-Hold to work, returns must be random. If returns are higher when valuations are lower (and they have been for 140 years now), then risk is higher when valuations are higher. If you fail to adjust your stock allocation when risk increases, you end up with a risk profile to which you are entirely unsuited.

That’s a disaster. We are spending an enormous amount of resources teaching millions of investors to do something (ignore price when setting their stock allocation) that dooms their efforts. We need to stop doing that.

Now –

There are millions of good and smart people who believe in Buy-and-Hold today. Nothing could be more clear. Those people obviously have every right to talk about what they believe on discussion boards and blogs.

BUT SO DO THE VALUATION-INFORMED INDEXERS!

When you Goons deny us that right, you place yourselves on the wrong side of an important line. You have employed death threats to silence Valuation-Informed Indexing. You have employed unjustified board bannings. You have employed tens of thousands of acts of defamation. You have employed threats to get academic researchers fired from their jobs.

That cannot stand, Bob. That is not what the Personal Finance Blogosphere is about. That is not what the United States of America is about. It is not all about you.

Shiller published the research founding the Valuation-Informed Indexing model in 1981. It’s been 32 years. In ordinary circumstances, everyone would know about every idea I have put forward, given that they have had 32 years to explore them. It’s not an accident that the vast majority of people don’t know about these ideas today.

The Buy-and-Holders have engaged in nasty tactics to block million of people from learning about what the research in this field really says. This sort of thing was obviously going on long before I came on the scene. But I have documented the last 11 years of nasty stuff. And a lot of what we have seen has been very, very nasty indeed.

Following the next price crash, are you going to be able to make whole the millions who have suffered huge financial losses because of your insanely abusive behavior? You cannot do it. There’s not enough money in the world to do it.

So those people are going to be angry.

And my site documents your many felonies.

So I believe you are going to end up in prison.

Not because of anything I say or do. I have zero ability to send you to prison and zero desire to gain any such abilities. So any threats you are hearing from me are empty threats.

What I am seeking to do is to get your prison sentence REDUCED. You were a friend to me in the days before I put up my famous post pointing out the errors in John Greaney’s SWR study and so I care about you. Aside from that, you are a human and the thought of any human going to prison because he didn’t like what someone else said on a discussion board or blog makes me want to be sick. So I want to see you come clean. If you come clean prior to the next crash, your prison sentence is obviously going to be a lot less than what it will be if you do not come clean until after the next crash. So that is something I advocate at my site.

I believe that every blogger on the internet should be pushing for an end to the Ban on Honest Posting. I have had thousands of people tell me that they want to see it come to an end. I have had academic researchers tell me that they dream of the day when they will be able to do honest research once again. I have had investment advisors tell me that they dream of the day when they will be able to give honest investing advice again. These people matter. These people have a RIGHT to do honest work. And they would be helping us all by doing it.

Once the ban is lifted we are going to see thousands of blogs writing about Valuation-Informed Indexing. Joe says up above that the problem with VII is that it takes a long time for prices to return to fair-value levels. That will never again be an issue following the lifting of the ban. There will be thousands of blogs offering people tools to help them understand when stocks are not worth buying. So there will never again be a sustained bull market. We will never again have to worry about overvaluation once we all feel free at last to speak honestly about what the last 32 years of peer-reviewed academic research in this field says.

If you truly don’t believe that you will be going to prison, please forget I said anything, Bob. I am no one to you. Ignore me with my blessing.

But I have a conscience. So I am going to continue to point out to people that that is where things are headed. I want to be able to say on the day that your prison sentence is announced that I did something to keep that prison sentence limited.

It is my job to pull people together. I want the Buy-and-Holders and the Valuation-Informed Indexers working together and learning together and laughing together and having a good time together. So I don’t turn away when I see one of my Buy-and-Hold friends in trouble. You are in trouble, my old friend. You have crossed lines. Not once, THOUSANDS of times. And there is a record of internet posts showing this. You need to take care of the problem.

Ignore me if you like. THAT’S on the right side of the line. But I am the one who has to live with himself as events play out. I knew on the morning of May 13, 2002, that I could no longer live with myself if I didn’t work up the courage to tell the truth about Greaney’s study. So I did it and I accepted the consequences that followed from that brave decision to “cross” my old friend. I know today that I will not be able to live with myself in future days if I do not do what I can to help my old friend Bob from landing himself in prison for a long, long time. So I am going to continue doing what I can to see that your prison sentence is shortened a bit.

The rest is out of my hands, old buddy.

My warmest wishes to you and yours.

Rob

Set forth below is the text of a section of a blog entry that appeared at the Joe Taxpayer blog:

There were so many bloggers who gave a talk that I really run the risk of leaving off someone who deserves a mention, but here are the ones that stand out in my mind –

Rob Bennett – I’ve met Rob at prior FinCons and he strikes me as one of the most passionate people out there. Rob gave a talk at Ignite, an evening function in which each speaker has 5 minutes to share an idea via a set of 20 slides timed to change at 15 second intervals. Rob has a message to share, but somehow his message isn’t welcome in many financial forums. What’s Rob’s message? It seems to be twofold, first, stocks actually do get overpriced. Any of my readers old enough to remember the crash of ’87? No? No problem, we had another crash from 2000 through Mid-02. I know, that was still over a decade ago. The latest crash occurred from Mid-07 till Jan ’09. It would seem that Rob’s observation is correct. Another Rob, Schiller to be specific, had a similar idea. He doesn’t get kicked out out finance forums, that I know, instead he gets a Nobel prize. Which is pretty cool. The second part of Rob Bennett’s message is that by using data that we know, the PE10, which happens to be popularized by Robert Schiller, we have a tool to judge market valuation. If there’s a problem with the process Rob discusses, it’s that it takes time and patience. Check his site out, and see what you think.