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

Wasting 15 years locked on one tiny investing metric would be mind-bogglingly stupid. But toiling for 15 years in the basic struggle of good versus evil is a noble sacrifice. Which is why you frame everything in terms of morality.

For me, this is very simple, X.

I was a popular poster at the Motley Fool Retire Early board. I made lots of friends there. My aim was to help my friends. So naturally I posted honestly.

John Greaney was a Buy-and-Holder. He believed what the Wall Street Con Men told him. He was embarrassed when I pointed out the errors in his retirement study (which he made because he believed what the Wall Street Con Men told him). All the rest follows from that.

I don’t see this strictly as a matter of morality. There are moral issues, to be sure. It certainly would be immoral for me to say that I believe that Greaney included a valuations adjustment in his study. You are right that I don’t want to behave in an immoral way by doing that. But there is more here than just that.

If there were zero moral concerns at stake here, I still wouldn’t want to give bad investing advice. Leave aside all the moral stuff. I wouldn’t want to do it for INTELLECTUAL reasons. I like to get things right. It’s offensive to me intellectually as well as morally to give bad investing advice. And of course I think it is a bad idea legally to do that, that’s another concern. Probably the biggest factor of all for me is that it is just not kind to lie to people about the numbers that they are using to plan their retirements. That’s the biggest one for me.

I want to be a good friend to people I get to know and like on the internet. I want to be moral too. But in my personal hierarchy of concerns being a good friend is probably of greater importance than being moral. It may be that my priorities should be otherwise. But that’s the way it is for me. I cannot BEAR the thought of misleading my friends and seeing them suffer failed retirements as a result. It’s beyond even my comprehension that I could ever walk that dark path. I guess I would like to say that it is beyond my comprehension that I would ever behave immorally too. But I can’t say that that one is the one that comes first to mind when I think about this stuff. The one that comes first to mind for me is being a bad friend. For good or for ill, that’s me.

I of course don’t agree with you that P/E10 is “one tiny investing metric.” The peer-reviewed research that I co-authored with Wade Pfau shows that we can reduce the risk of stock investing by 70 percent by making use of that “one tiny investing metric.” Reducing investing risk by 70 percent is HUGE. It’s the biggest advance in the history of personal finance. There is nothing else even in a close second place. There is nothing else even in a somewhat distant second place. Whatever is in second place is VERY distant.

P/E10 is the price tag of stocks.

For someone to suggest that it might be okay to buy stocks without first looking at P/E10 would be like someone telling you that it might be okay to buy a car without first asking the salesman how much money he is going to take out of your account when you do so. You MUST know the price of a car before you buy it. And you MUST know the price of stocks before you decide on a stock allocation. Knowing the price is critical. Knowing the price is 80 percent of the game. Knowing the price is the difference between having virtually no chance of being successful in the long run and being virtually certain of long-term success.

Looking at P/E10 is the key to successful long-term stock investing, according to the last 34 years of peer-reviewed research in this field. It’s no “tiny investing metric” or anything even remotely close to it.

Is what I am doing a “noble sacrifice”? Yes and no.

I expect to get paid a $500 million settlement payment following the next crash, X. I don’t think that there are too many who are going to look on what I did as an act of self-denial after I cash that check. I do not think of myself as a pure altruist and I certainly did not start walking down this path as an act of self-denial.

But there obviously has been self-denial involved. You Goons point out all the time that I have not been able to make a living for 13 years and that few people come to this site because of the Campaign of Terror that you have led against me. I stood firm in the face of that fire. That involved making some sacrifices. So, yes, there has been sacrifice here even though I expect to be paid $500 million for my trouble. The payment of the $500 million has been long delayed and of course it is not a 100 percent certainty that I will be paid that amount. So there has been sacrifice.

This is a business for me. I do the work I do primarily for business reasons. I had no idea how corrupt this field was on the morning of May 13, 2002. I didn’t INTEND to spend the next 13 years exposing corruption when I put forward that post. But, faced with the choice of becoming corrupt myself or exposing the corruption so that we ALL can post honestly, I choice to expose the corruption. That was an act of self-denial, at least for a time.

So long as you put things in that context, I am happy to have this referred to as a huge sacrifice. It has become that. I just want to be clear that that was not the intent when I started out and that I do not think of myself as some supreme altruist. I think that a lot of people would have done what I have done if they had been placed in similar circumstances. For example, I think that my good friend Jack Bogle would have done what I have done had he been placed in similar circumstances. It’s possible that Mel Linduaer and John Greaney would have done so too. I don’t know for sure. But I think it’s within the realm of the possible and I would obviously prefer to think the best of them.

A lot of people have not engaged in this act of self-denial because they don’t understand the issues clearly enough to see why it is so important that someone do so. Either because I am a very lucky individual or because I am a very unlucky individual, I see these issues with a great clarity. My take is that my great clarity has been unlucky for me for 13 years now (at least in a financial sense) but will become very, very lucky for me in days to come. We’ll see, you know?

The bottom line is that I would not be able to live with myself if I played it differently. There’s zero chance. That one has been 100 percent clear to me going back to the first day.

I of course want to be friends with all the people who attack me. I have always tried to bend over backwards to show them that I want to be friends. But there is only so far I can bend. I cannot say that Greaney included a valuations adjustment in his retirement study, I cannot say that there is not 34 years of peer-reviewed research showing that a valuations adjustment is required and I cannot say that he corrected the study within 24 hours of learning of the error he made in it.

I cannot say any of those three things. It is beyond my imagining that things could ever change so that I could say any of those three things. All of the rest just follows from that, in my assessment Call it morality, call it caring about friends, call it intellectual integrity, call it fear of going to prison, call it whatever you want. For me, there’s just no give re those three claims. I don’t like being dishonest to my friends as a general rule. And I really, really, really, really don’t like being dishonest to my friends re important money matters.

That’s where I am coming from, in any event.

I wish you all the best that this life has to offer a person.

Rob

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

You are wrong. They are both data driven fields. If investment advice is 100 corrupt, than you must distrust all advice, including your own comments.

Show me one instance in the medical field in which someone of Bogle’s stature permitted his name to be used on a discussion board at which the sorts of individuals who have posted in “defense” of Mel Linduaer or John Greaney are permitted to participate. It has never happened. Give me a freakin’ break.

If the barber here in Purcellville found that the sorts of individuals who have posted in “defense” of Mel Linduaer and John Greaney were using his name, he would be on the phone in five minutes contacting the authorities and demanding that action be taken. Does Jack Bogle not have a telephone in his house, Anonymous? Why does he associate on a daily basis with people who have a long record of committing numerous acts of financial fraud if this field is not today 100 percent corrupt?

I don’t distrust all advice. There are lots of wonderful people who work in this field. Bogle is one of them. He is an absolute giant. I call him a Hero to the Middle Class. I don’t say that lightly. So, no, you are 100 percent wrong when you say that I distrust all advice in this 100 percent corrupt field.

The problem here is that price discipline is BY FAR the most important factor bearing on the long-term success of stock investors. It is 80 percent of the story. So Bogle can offer top-notch advice on 15 other topics (and he does) and still get it all horribly wrong by remaining unwilling to take a look at the 34 years of peer-reviewed research showing that long-term timing always works and is always 100 percent required.

I am NOT saying that the people who work in this field are bad people. And I am NOT saying that the people who work in this field are dumb people. I have never met a dumb Buy-and-Holder. And, while I certainly say that a good number of Buy-and-Holders are in an objective sense guilty of financial fraud, I also say that most of them are good and hard-working and entirely likable people. That might seem like a bit of a paradox on first hearing. But that is the reality here.

I go back to my civl right comparison. The way in which blacks were treated prior to the civil rights revolution was HORRIBLE. It was sinful. It was shameful. It was criminal. It’s almost impossible to imagine that not too long ago we lived in a country where people who had black skin were not permitted to drink from the same water fountains as people with white skin. Huh? That’s INSANE. How could even one person believe that that was the right way to go? That was 100 percent insane. There is not one reasonable person who today says different.

So our nation was 100 percent corrupt in the area of race relations in the early 1950s. Is that not fair to say?

Would you then say that everything we did was bad? I sure wouldn’t say that. If everything we did was bad, we never would have had a civil rights revolution. There must have been some good there for us ever to have taken that step. It was a very, very, very, very bad situation. But there was still a lot of good present in our country all the same. That’s the full reality.

That’s how it is in the investing advice field today. The field is 100 percent corrupt. Good and smart people like Wade Pfau publish amazing research that should be helping millions of middle-class people and Goons like you threaten to get him fired from his job for going to the trouble. And people like Jack Bogle SUPPORT you Goons and thereby empower you. So Wade has to be willing to let his two small children starve if he is to follow his dream by promoting the important research he has published and thereby winning the Nobel prize to which he is entitled.

I say “no.”

The field is 100 percent corrupt today. But it is only re one issue that we are 100 percent corrupt. We are 100 percent corrupt because of our unwillingness to acknowledge that there is precisely zero chance that any investor failing to exercise price discipline can ever achieve good long-term results. On the day that Bogle gives his “I Was Wrong” speech, we will achieve 34 years of advances in one day and we will instantly start to realize the benefits of being the luckiest generation of investors that ever lived, the first that is able by virtue of making use of the peer-revirewerd research (which the Buy-and-Holders once thought was a good way to go!) to reduce the risk of stock investing by 70 percent while obtaining FAR higher long-term returns.

Both things are so, Anonymous. We are 100 percent corrupt today. And we are also on the verge of the greatest advance in our knowledge of how stock investing works ever achieved in our history.

And it is not an accident that both things are so at the same time. It is BECAUSE we are on the verge of the greatest advance in knowledge ever achieved in the history of personal finance that the Buy-and-Holders are so insanely defensive about what the last 34 years of peer-reviewed research says. If the peer-reviwed research that I co-authored with Wade Pfau showed us all how to reduce the risk of stock investing by 5 percent, I would be the toast of the town. My web site would be the #1 site on the internet. I would have earned millions as a result of my discovery of the insights advanced in that paper. I would be on tour with Bogle at this moment. People would be writing books about me.

But I committed the terrible, terrible crime of co-authoring a peer-reviewed paper that shows us all how to reduce the risk of stock investing not by 5 percent but by 70 percent. That makes the Buy-and-Holders look bad. All the death threats and demands for unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researcher fired from their jobs follow from that.

I didn’t put up the famous post from the morning of May 13, 2002, with the idea of making the Buy-and-Holders look bad, Anonymous. I was the leader at a board that the most abusive poster in the history of the internet had decided he was going to burn to the ground. I had a responsibility to step in and help out my many friends who had built that board into the #1 board at the Motley Fool site. So I did what I had to do.

It turned out that I had no idea how important that post was going to be. The reason why Greaney had gotten the numbers so wildly wrong in his study is that this field had become 100 percent corrupt long before Greaney or I ever came on the scene. Greaney saw that supposedly legitimate researchers were using that methodology and so he thought it would be okay to use it himself. Then he was embarrassed when I showed that the methodology was analytically invalid and when hundreds of our fellow community members agreed with me that his study was lacking a valuation adjustment.

Greaney is responsible for his own behavior. He has led the biggest act of financial fraud in the history of the United States and that calls for a long prison sentence under our statutes. I cannot take us back in a time machine and change that. If he wants me to help him out by pointing out that the entire industry is 100 percent corrupt today, I am 100 percent happy to do that. He doesn’t need to give me anything for me to do that. I will do it just because I think it is the right thing to do.

And the same goes for Bogle. And for Phau. And for Bernstein. And for Kitces. And for Tresidder. And for Piper. And for Swedroe. And on and on and on and on.

But I cannot commit financial fraud myself. Going to prison is not on my bucket list. I ain’t freakin’ interested.

I will work with anyone willing to agree to follow the most minimal standards of personal integrity that apply in every field other than stock investing. I have zero willingness even to CONSIDER working with anyone who says that he or she knows about some mystical, magical alternate universe where it might be a good idea for one or two long-term investors to fail to exercise long-term timing.

Find someone else, you know?

I naturally wish you the best of luck in all your future endeavors regardless of what investing strategies you elect to pursue, Anonymous.

Rob

 

 

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

“If you do the math, you will see that you are wrong. There have been six different people who have done the numbers on my personal situation. I have been following VII strategies for 18 years and I have been ahead of where I would have been had I followed BH strategies for a long, long time.”

That comment was posted July 2014. Took me just seconds to find an S&P 500 historical return calculator. The real return between July 1996 and July 2014, counting dividends, is 5.9%. You claim to have everything in 3.5% real TIPS. Please explain how 3.5% is greater than 5.9%, and show your work.

You are right, Doing the Math.

I am going to add some complications below. But I checked what you say here and you are right in what you say in this post. The point you are making is important. So I am grateful to you for putting this post forward.

I do not retract my earlier comment. My personal situation has been analyzed on various boards MANY times (probably more than six times, but at least that many times) over the 13 years of discussions. I HAVE been ahead according to those earlier calculations. The unvarying response of you Goons when it was determined that I was ahead was to respond with acts of deception and intimidation. That has led to a LOT of confusion on both “sides.” In this care you are making a legitimate and important point. I wish that we could work together in future days to come to a better mutual understanding of the REALITIES rather than seeing the nastiness that has poisoned so many earlier discussions. The point you are making here is a POWERFUL one in support of the Buy-and-Hold position. I wish that we could all focus on that and learn what there is to be learned from it.

I do NOT look at these sorts of numbers very often at all. I don’t care about them. I care about long-term results, and, as you know, I am firmly convinced of the long-term merit of Valuation-Informed Indexing strategies. So these sorts of numbers don’t matter much to me.

That said, these numbers DO tell us something important. Buy-and-Hold has done well from 1996 forward even though prices were insanely high in 1996. That’s a LONG time-period. The fact that Buy-and-Hold has done that well for that long a time-period is compelling evidence in support of the Buy-and-Hold strategy, in my assessment. An argument could be made that I should look at these numbers more often than I have in the past. I certainly think that most other investors would want to know about these numbers. I am surprised by the numbers you have presented. I am going to write a column at the Value Walk site pointing out these numbers and noting that they make a strong case for the Buy-and-Hold strategy and that they undermine the case for Valuation-Informed Indexing a bit.

I hope you won’t see me as being defensive if I make a point that applies in my personal case that makes the numbers for my personal portfolio significantly different from the numbers you have presented. I am not presenting this information to undercut your point, which I think is a good one. I am presenting them in the interests of having readers of these words exposed to the complete picture.

I had a very small portfolio in the Summer of 1996, when I moved the money that I had in stocks first to CDs paying roughly 4 percent real and then to TIPS and IBonds paying 3.5 percent real when those became available. Until February 1996, I was directing all of my savings to paying off my mortgage. I owned only a small amount of stocks (perhaps $30,000 worth) when I made the transfer to CDs in the Summer of 1996. I was saving large amounts of money in those days in preparation for my early retirement in August 2000. For example, in the last 12-month period before I handed in my resignation, I saved $88,000. The numbers are VERY different for that segment of my portfolio (and to a lesser extent different for ALL of the post-1996 saving amounts).

The calculator that I used to confirm your numbers shows the annualized return for stocks (with dividends reinvested) from January 2000 forward until today as 2 percent real. My 3.5 percent real return soundly beats that number. And the $88,000 amount we are talking about here is much larger than the roughly $30,000 amount for which the Buy-and-Hold strategy soundly beat the VII strategy. My sense given these numbers is that I am STILL ahead of Buy-and-Hold today, given the size of the disparity.

My recollection, however, is that the earlier analyses showing that I was ahead did not incorporate that factor. So what you are showing DOES appear to me to show a change. That is significant. It also shows that Buy-and-Hold has done very well since 1996 despite the sky-high prices that applied in 1996. In fairness, it also shows that Buy-and-Hold has performed poorly since January 2000, especially in comparison with the results shown for TIPS and IBonds over those years.

This is an interesting development. My expectation is that you are going to respond with nasty Goonishness and undermine the learning experience that we both could profit from as a result of your helpful post. I hope that my unfortunate expectations will prove to be unfounded. My take is that these numbers offer support for BOTH the BH and VII positions. The 1996 numbers really support BH and the 2000 numbers really support VII. Intelligent investors should be thinking about what that combination of realities means re what is likely to work best on a going forward basis.

Anyway, I AM grateful for you willingness to correct the record on this point. I want to state things properly and I was not aware that the numbers were so supportive of the BH position from 1996 forward. I’ve learned something important this morning and I would not have learned that thing if you had not taken time out of your day to help us all out.

Take care, man.

Rob

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

“It is important because friendship is the prerequisite to learning.”

No. It’s not.

People learn all the time from sources that are not their ‘friends’, or even friendly! Your entire premise is ridiculous.

I don’t think it is ridiculous, Anonymous.

I am a conservative. At earlier times in my life, I was very much a liberal. I still have sympathies for a good number of liberal ideas.

Bill Maher often says things that rub my fur the wrong way. I don’t follow him. But there have been several times when I have heard him quoted saying things that make me feel that he is not worth following. That’s the REASON why I don’t follow him.

Yesterday he made some strong statements against these people who killed the satirists in Paris. The pitch he made is that “my position is the true liberal position.” I don’t agree 100 percent with everything Maher said. But I agree 90 percent. I certainly felt that he was speaking for me when he said what he said.

Am I “friends” with Maher? Not really. I don’t follow the guy. I would give a thumbs down to Maher in a general sense rather than a thumbs up.

But I felt drawn to him when he was saying the words he said yesterday. I don’t think it would be unfair to say that I felt “friendly” (in a small and limited way) toward him while I watched the video clip of him saying his words.

Marketers are in the business of persuading people. They study what is required. Any marketer will tell you that people don’t buy from people that they don’t like. The first step in making a sale is getting the customer to like you. The won’t sign on the dotted line until they study all the specifications and determine that the deal makes sense for them. It’s not all about being friends. The intellect kicks in at some point before most efforts at persuasion are complete. But it is emotion that leads the way. People won’t even look at the specifications until they decide they like you.

As a general rule, people only buy from people they like. People want to feel safe before they buy. They don’t feel safe around people they don’t like. This is true not just in sales of products and services. It is true in politics. There were Democrats who voted for Reagan. They liked him. There were Republicans who voted for Clinton. They liked him. Convincing someone that you care about them is the first and most important step in any effort at persuasion.

Shiller published his revolutionary research 33 years ago. The Buy-and-Holders have failed to incorporate that research into their strategy for over three decades. Why?

It’s not that the Buy-and-Holders are not intellectually capable of understanding the implications of Shiller’s research. I have never met a dumb Buy-and-Holder. They are 100 percent capable. The problem is that they do not hear people they like making the case for the Shiller model (Valuation-Informed Indexing).

Todd Tresidder is the smartest blogger in the personal finance field that I have met. Todd agrees with me about the importance of valuations. The Buy-and-Hold Mafia has not targeted Todd for career destruction as it has me. Why?

Todd keeps to his own kind. He offers powerful insights re how to invest effectively that are rooted in the peer-reviewed research of the past 33 years. But Todd does not present those insights at the Bogleheads Forum or at any other discussion board or blog dominated by Buy-and-Holders. People like him and so he is successful. But he poses only a small threat to those promoting Buy-and-Hold strategies because he doesn’t post at boards and blogs that they control and so the Buy-and-Holders are not concerned that Todd is going to become well-liked and thus effective at “their” boards and blogs.

I don’t limit myself in the way that Todd does. I want every investor on Planet Earth to learn about Valuation-Informed Indexing. I am 100 percent happy to post at boards and blogs dominated by Buy-and-Holders. So I pose a MAJOR threat to those promoting Buy-and-Hold strategies.

I don’t just post about the last 33 years of peer-reviewed research. I am likable. I know this is so because THOUSANDS of my fellow community members have told me so. Those trying to promote Buy-and-Hold strategies obviously see me as a threat. They know that, if they abide by the published rules of the sites at which I post, I will become more and more well-liked over time and the community members of those sites will listen to my message in a fair-minded way and a lot of them will be won over by it.

You Goons have been attacking me for 12 years now. Never has there been a single attack rooted in peer-reviewed research. Every attack that you have put forward has been aimed at getting people not to like me. You say that I stalk women. You say that I use drugs. You say that I am stupid. You say that I manage my money poorly. You say that my wife has left me. You say that my parents were alcoholics. You say that I am a bad father. You say that I am a liar. You say that I am jealous of Lindauer and Greeney and Bogle. And on and on and on.

If you didn’t see the importance of people liking someone who is trying to convince them of something, you wouldn’t focus all of your efforts on personal destruction. You would address issues. You know that people will only listen to someone whom they like. So you focus all of your efforts on destroying me as a person rather than addressing the very important substantive issues that have been put on the table.

Buy-and-Hold failed 33 years ago. The only thing keeping it alive today is these personal attacks. Many people still like the Buy-and-Hold advocates because they have not yet suffered all the losses that the peer-reviewed research in this field shows that they will suffer as a result of their decision to follow this “strategy.” I win every debate on the merits. But you Goons win on the likability matter because there are more of you and because you all act in a united way and because you employ tactics that those of us who follow research-based strategies are not willing to employ.

A nation of investors needs to learn who its true friends are. That’s what this all comes down to. I believe that people will begin to see following the next price crash that the Buy-and-Holders are true experts in only one area — Marketing. Get Rich Quick/Buy-and-Hold sells. But Get Rich Quick/Buy-and-Hold never works in the long run. Research-based strategies work in the long run. Once large numbers of people start to question their friendship with the Wall Street Con Men (a friendship that has been built and maintained with a mountain of deceptions and intimidations), we will be able to have a national debate on the MERITS. We will be able to talk about the last 33 years of peer-reviewed research says and that will change everything.

Humans need to feel some feelings of friendship with those with whom they are engaged in conversations to have any hope of learning from those people. I feel friendship toward you Goons. So I learn from you all the time. But you feel a burning hate toward me. So my words just bounce off you. Things will change in a positive direction when the next price crash breaks your excessive pridefulness and we are all able to begin LEARNING from the other fellow.

That’s what our boards should be about. That’s why we have rules at every board and blog prohibiting your Goons tactics. That’s why we have laws making financial fraud a felony with a penalty of prison time for those who will not accept the constraints that these laws impose on their behavior.

My sincere take.

Rob

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

Everyone else is lying and only you are telling the truth?

I am the only one telling the truth re the financial fraud aspect of this, Anonymous. You yourself have acknowledged this on many occasions.

Fama had good faith when he published his wonderful research in 1965.

Fama didn’t distinguish between short-term timing and long-term timing because long-term timing was at the time not a practical option. Bogle had not yet founded Vanguard. Long-term timing works only with index funds.

Shiller was the first to publish peer-reviewed research showing that long-term timing always works and is always 100 percent required. That was in 1981.

Bogle had a responsibility to walk to the front of a large room and to say the words “I Was Wrong” as soon as he learned of Shiller’s 1981 findings.

Bogle can be excused for not acting immediately. Shiller’s findings were truly “revolutionary” (his word). They turned everything we once thought we knew about how stock investing works on its head. It is a common phenomenon for humans to experience cognitive dissonance in such circumstances. This is almost certainly what happened to Bogle and the other Wall Street Con Men. They told themselves that people would figure all this stuff out over time. They noted that stock prices were at rock-bottom levels. It was hard to imagine at that time that prices would ever again be at fair-value levels much less at three times fair-value levels. The Wall Street Con Men rationalized that to hold off on declaring Buy-and-Hold 100 percent discredited for a few years would not do much harm.

The years passed and prices reached a point where telling the truth about what Shiller’s research showed would cause a recession. At that point, the Wall Street Con Men felt trapped. They worried that many would not understand why they held off on telling the truth for so long. They anticipated lawsuits and even prison sentences if the truth were to get out. They engaged in brutally abusive tactics aimed at scaring anyone who told the truth into holding back from doing so.

I came on the scene in May 2002. I pointed out that the Old School safe-withdrawal-rate studies got the numbers wildly wrong and needed to be corrected immediately. You Goons understood that permitting honest posting on the retirement planning question would cause the entire Buy-and-Hold Model to collapse. So you went into Campaign of Terror mode.

Bogle backed you up. Motley Fool backed you up. Morningstar backed you up. Index Universe backed you up. Everyone who had hopes of making a dime in this 100 percent corrupt field backed you up. Because everyone who has been paying attention knows that this field is today 100 percent corrupt and that those who talk about the implications of Shiller’s 1981 findings in places where con men are seeking to push their smelly Buy-and-Hold garbage see their careers destroyed.

Is everyone lying?

Obviously.

Nothing could be more clear.

Am I continuing to refuse to lie?

Absolutely.

Were all the members of Nixon’s White House lying when he obstructed justice, Anonymous?

Were all the people who made a buck from Lance Armstrong’s mountain of deceptions lying when they helped him continue his massive cover-up of his use of performance enhancing drugs?

Were all the people in the Penn State football program lying when they covered up the child molestation going on that Joe Paterno did not want people to know about?

People lie when the cost of doing so becomes so great that their careers and the lives of their loved one are at risk if they dare to “cross” the powerful people demanding that they lie. This is not the first time that something like this has happened. It is the worst. There has never been a lie that caused as much human misery as the lie that there is some mystical, magical research somewhere showing that there might be an alternate universe in which Buy-and-Hold might work for one or two long-term investors.

I’m not lying today. But I am a weak human like all the others. I lied once upon a time. I wrote words of praise for Greaney’s study in my “Secrets of Retiring Early” report. The words were in a hyper-technical sense correct (as are the words of Shiller that you quote here) because I really do believe that his study represented a major advance. But I knew at the time I wrote those words that his study did not contain a valuations adjustment and I knew that that was required. So I lied. I committed financial fraud. Because I was scared of what would happen to me if I told the truth. Shiller and all the others are lying for the same reason today.

Following the next price crash, the lies will stop. The human misery will be too great for people to continue to rationalize their lies. So people will start telling the truth. Buy-and-Hold will collapse, as it should have 33 years ago. And we will figure out as a society what sort of prison sentences should be handed out to all the liars.

I will be arguing for mercy. You can count on me for that.

But I will be telling the story honestly, as it happened. The millions of middle-class investors whose lives have been destroyed by the 12 years (it’s 33 years if you go back to when Shiller published his study) of lies will decide on the length of your prison sentence. That’s how our system works.

I naturally wish you the best of luck in all your future life endeavors regardless of what investing strategies you elect to pursue.

Rob

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

1. Soon After the Next Crash, A Number of People Will Say That Their Consciences Will Just Not Permit Them to Keep Quiet Any Longer.
2. Then There Will Be a Deluge of Truth-Telling.
3. Lots of People Will Be Hoping That By Coming Forward Early, They Will Be Able to Avoid Prison.
4. We Will See a Media Frenzy.
5. That Will Lead to Congressional Hearings.

5 sentences.
Each one containing a prediction about the future.
Your track record with predictions is terrible.
You will most likely go 0 for 5 with this lot.

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.

Ten years later, the Wall Street Journal published an article saying that the numbers in the Old School safe-withdrawal-rate studies were wildly wrong.

I think that my record on “predictions” is pretty darn good.

The reason why my record is so good is that the only things that I “predict” are things that have already happened. There was no prediction needed to see that Greaney’s retirement study did not contain an adjustment for the valuation level that applied on the day the retirement began.

The only reason why millions of others did not notice the lack of a valuation adjustment in the Old School retirement studies is that millions of others want to believe those numbers on the bottom of their retirement statements so badly that they lie to themselves about what the peer-reviewed research in this field tells us. That’s the entire story here, Evidence.

Us humans are prone to self-deception. Self-deception is what makes stock investing risky. We learned that intellectually in 1981. But we have permitted our emotions to dominate our intellects for 33 years now. Not because we are bad or stupid. Because we are humans. Humans have been known to do that sort of thing from time to time.

My job is to free the humans to enjoy their good fortune in happening to be the luckiest generation of investors who ever walked Planet Earth.

If my prediction track-record were so poor, you wouldn’t be here today, If you hadn’t noticed how many people were impressed with my work, you would have been long gone by no.

I had a big-shot financial advisor call me on the telephone yesterday and talk to me for over an hour about this stuff. I had the same thing happen with a different big-shot financial advisor last week. Both are changing their business models because of what they learned from this site and because of what they learned in their conversations with me. That sort of thing does not happen to people who have a track-record of always getting their predictions wrong.

You’re a liar, Evidence. You have the power and the wealth of the Wall Street Con Men backing you up. So you have been able to get away with your lies for a longer time than I would have thought possible. But I do not believe that you will get away with those lies indefinitely. I think that when the human misery that you are causing grows so great that people will feel that they have no choice but to work up the courage to stand up to the Wall Street Con Men, you will find yourself in a prison cell. At that time I will be able to turn to these words and reassure myself that I did everything in my power to help my friend.

Do what you want, you know?

You are scared or you wouldn’t be here. I know that. You know that. But you are a Goon and you are incapable of taking a constructive and positive and life-affirming step. You and I both know that too.

So it is what it is.

I don’t like it. But I accept it.

If you ever come to accept it, you will stop posting here. You will just wait to see how it plays out.

You are welcome to continue posting here. I will continue to delete a good number of your posts. But I don’t believe in this business of banning people. I believe that even the worst of you Goons can come up with good stuff on occasion and what I have seen here for 12 years now confirms that belief. So you are free to continue.

But I am not going to lie to you and say that I am persuaded that you are not afraid of going to prison. Not this boy.

You have my best and warmest wishes, in any event.

Rob

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

Rob,

The crisis has come. The Wall Street Con Men ™ have of course, rumaged their lapels, and pooled together to provide 1 BILLION untraceable, untaxable U.S. dollars to you, to ensure a quick settlement. It is already in your bank account. The sun rises over 160 N Hatcher. You roll over, wipe the sleep from your eyes, and the day begins. Rob, please describe for us the typical day of a Valuation Informed Billionaire. I’m dying to hear what it is that you intend to do with yourself!

I’m going to use the $500 million number, not the $1 billion number.

I intend to use 5 percent ($25 million) to finance a number of blogs that will further develop the Valuation-Informed Indexing concept. My guess is that it might work to give $100,000 to each of 250 bloggers.

I intend to use another 5 percent to promote this blog all over the internet. That will solve that nasty problem that you refer to from time to time of there not being enough comments at the blog entries at this site.

I intend to take over control of the Bogleheads Forum and set it up here as a sub-domain. That will also help with the comments.

I would like to work out an arrangement with Motley Fool where I would write a newsletter on Valuation-Informed Indexing that they would publish and promote. I would like to have a weekly column there that would appear on the front page of the site and bring more traffic here.

I of course will publish the book — Investing for Humans: How to Get What Works on Paper to Work in Real Life.

After publishing the investing book, I will look for a big-name publisher for my saving book, Passion Saving: The Path to Plentiful Free Time and Soul-Satisfying Work.

I view those two books as part of a trilogy. When I am caught up with work on the saving and investing side, I will get to work on a book on career growth, The Self-Directed Life. I haven’t finalized a sub-title for that one yet.

I intend to do a lot of speeches. I love interacting with people. I intend to do a weekly podcast. I could see becoming active in FinCon. I believe that the internet changes the world of personal finance in a big and positive way. I want to be part of efforts to develop blogs that make a difference.

I expect to work for the passage of legislation that will protect internet posters from Goons and that will hold accountable site owners who know about Goon activity at their sites and fail to take action to deal with it.

I also expect to set up a system whereby internet communities concerned with personal finance issues help the public to identify the good guys, a Good Housekeeping Seal of Approval sort of thing. I believe that lots of people in this field want to do good work but feel pressured to engage in unethical activities because others are doing it and it gives them a marketing edge. People should be able to promote themselves as honest and as holistic in their approach. They need a respected authority site to identify them as such for their claims to be meaningful to everyday people.

My expectation is that I will continue doing this work until I die. I would like my two boys to get involved in the business as I get older.

I want to explore the Goon issue in more depth with both my Valuation-Informed Indexing friends and my Buy-and-Hold friends. The Goon issue really is the key to everything. People don’t like to talk about it because they view it as yucky. It IS yucky in its way. But it is also the key to long-term investing success. We ALL have a Get Rich Quick urge within us. It is that GRQ urge that makes stock investing risky. We are on the verge of discovering that reality. Once we do, 80 percent of the investing project will be helping people to develop tools to overcome the GRQ urge within, to avoid goonishness at all costs. Behavioral Finance is the future in this field, both on the investing side and on the saving side. I am pretty darn sure of that one.

People like Bogle and Bernstein and Burns and so on should be looking at my interactions with you Goons and writing about what they tell us about the pitfalls of stock investing. They are afraid to do so. They created a monster with their promotion of Buy-and-Hold. But this is where the action is. People don’t need to study annual reports in the days of indexing. People need to worry about becoming so emotional that they overlook the need to adjust their stock allocation and thereby keep their risk profile roughly constant. With the internet, we now can identify the rationalizations that people use to fool themselves Everyone in this field should be writing and talking about that aspect of the story on a daily basis.

I think that pretty much covers it. My sense is that the agenda outlined above will keep me more than busy for the remaining days of my time here on Planet Earth.

My best wishes to you and yours, my long-time Goon friend.

Rob

 

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

And yet you became, as you proudly proclaim, “the most hated man on the internet”. One doesn’t gain such a title without generous amounts of antisocial behavior, no?

My stuff causes great pain to large numbers of people, Anonymous. That is a stone cold fact.

I am a journalist. The job as a journalist is to tell the truth, not to be popular.

Woodward and Bernstein are recognized as two of the most important journalists of my lifetime. Do you think that their stuff always made people feel good? It did not. Nixon won reelection in a landslide in 1972. There were millions of people who wanted to believe in him and who didn’t want to believe that members of his Administration had committed crimes. There was a time when Woodward and Bernstein were two of only three journalists working the Watergate story (the other was a guy at the New York Times). Lots of people saw no profit in bringing people down with all this obstruction of justice stuff. Still, they soldiered on. They did their job.

Valuation-Informed Indexing is a huge advance. It turns stock investing into a virtually risk-free endeavor. If people were capable of being objective about this, there wouldn’t be one person opposed to the advance. The only problem we have is that Buy-and-Hold came first. Because that’s so, lots of people experience hurt feelings when they hear what the last 33 years of peer-reviewed research says. They scream out “Make that stop! I cannot bear to hear that!”

But is that really how they feel deep down inside?

I don’t think so. I believe that Bogle was sincere when he said that using the peer-reviewed research as a guide is a good idea. I am just following his lead, taking his ideas where they go if you do not refuse to follow them once following them puts you in circumstances where you are required to acknowledge a mistake.

It is true that I became for a time the most hated blogger on the internet. I don’t think that I am quite that today. Views have softened since the 2008 crash. But there are still people who dislike me. There are people who love me to death. That’s been so going back to Day One. But there are also still people who feel a strong dislike for me. I don’t think that Mike Piper was lying when he told me that he had readers telling him that they would abandon his blog if he did not ban me there. I think that really happened. I think that that’s an important fact that people need to know.

Is it anti-social behavior to report accurately and honestly what the last 33 years of peer-reviewed research says re what works in stock investing in the long term? I sure don’t think so. I think it is the most pro-social thing that a person could possibly do. We are the luckiest generation of investors who ever walked Planet Earth. If we gave ourselves permission to post honestly, we could overnight reduce stock investing risk by nearly 70 percent while increasing our returns enough for us all to retire five to ten years sooner than we ever before imagined possible. That’s anti-social? Huh?

It depends on how you use the word.

My behavior is “anti-social” if you define the word as “upsetting large numbers of people in a serious way.” That’s not a crazy definition of “anti-social.” And I am guilty of that. Large numbers of people really are upset by my stuff in a deep and serious way. I can acknowledge that much.

But they wouldn’t be upset AT ALL if they could appreciate the full story. If they could see how much richer their lives would be (in every sense of the word) if we they came to understand the implications of the past 33 years of peer-reviewed research, I would be the most popular poster on the internet. I want to bring things around to that place. I want people to see me as a teacher and a friend and a helper, not some nasty guy who is making them feel bad by telling them that their retirement plans are going to fail.

How do we get to that place?

We don’t get there by me shutting up or by me agreeing to write one-sentence responses to the questions that people direct to me or by me agreeing to only post once per week or once per day or once per thread even when my fellow community members ask me ten questions about VII in the posts that I put to some threads.

We need to find some way to get the word about Valuation-Informed Indexing out to the millions of middle-class investors who very, very, very much need to know about it.

If doing that means that for a time I become the most hated blogger on Planet Internet, then so be it, you know? I don’t like it. But these are the circumstances in which we find ourselves. I didn’t create these circumstances. I need to deal with them to the best of my ability. It’s been 33 years now that we have been covering up the greatest advance in the history of investing analysis. I cannot believe that it is a good idea for me to permit that to become 34 years because I am not willing to accept whatever abuse gets laid on me because I am the first to speak plainly and boldly and honestly about what the last 33 years of peer-reviewed research tells us.

In my definition of “anti-social,” there would have to be some INTENT to upset people. I have zero such intent. My intent is to HELP people live richer lives. 100 percent. So, no, I don’t think that it takes anti-social behavior for one to become the most hated blogger on the internet. In most cases, it would. But in the odd circumstances that apply in the investing realm today, posting honestly about the biggest advance in the history of personal finance will make you the most hated blogger on the internet even if your sole intent is to help millions of people live richer lives.

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

I wish you the best of luck in all your future endeavors regardless of what investing strategies you elect to pursue.

Rob

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

I’m not convinced that your wife meant her comment as a compliment

My wife is not a Goon. She loves me. So her negative comment counts for more than the negative comments that I hear from you Goons. People need to know that even my own wife holds some skepticism re my claims. That’s an important part of the story.

This reality doesn’t justify your goonishness. But it does add context to it. It explains it to some degree.

If the peer-reviewed research paper that I co-authored with Wade Pfau showed investors how to reduce the risk of stock investing by 10 percent, it would have been written up on the front page of the New York Times within three weeks of its publication. Everyone would be singing my praises if that were the case.

But 70 percent? That’s a threat. That means that we need to change everything that we tell people about how stock investing works. That means that all the textbooks need to be rewritten. That makes all the people who have promoted Buy-and-Hold strategies (and those people constitute the most powerful people in this field) look bad.

I don’t want to make those people look bad. I want those people on my side. I want those people helping me out. I want those people commenting on my work and linking to me and inviting me to speak and all that sort of thing.

But I cannot lie about what the historical data says, can I?

The historical data says that exercising price discipline reduces the risk of stock investing by 70 percent. So that’s what I need to say, whether it makes me a target of the powerful Buy-and-Hold Mafia or not.

Our unfortunate (!) reality is that we achieved the greatest advance in the history of personal finance in 1981. We didn’t know everything there was to know about even the basics of stock investing prior to the publication of Shiller’s “revolutionary” research. He supplied the critical missing puzzle piece. Now we know. We are the luckiest generation of investors ever to walk Planet Earth.

But what do we do about the Buy-and-Holders? They are powerful. They are determined to stop the millions of middle-class investors from learning what they very, very, very much need to know.

We could praise them to the skies. That would be honest. They have put forward many huge, powerful, positive, life-affirming insights. We could make them heroes in the eyes of the millions of middle-class investors.

They have made it clear that that’s not good enough for them. They cannot bear to say those terrible words “I’ and “Was” and “Wrong.” So what do we do?

We have to keep trying. We have laws in place against financial fraud. We made it a felony. Prison time. We have to push for enforcement of those laws. Once prison terms are announced, all the ugly side of this matter comes to an end. From that point forward, it’s good stuff piled on top of good stuff piled on top of good stuff. The Goons get shorter prison sentences. The rest of us get to enjoy the benefits of learning about the first true research-based investing strategy.

If you ever come up with any better ideas, I hope you will share them with me.

My aim is to make life better for every single person affected by this matter. The millions of middle-class investors. My fellow bloggers. The Wall Street Con Men. Their internet Goon squads. The Buy-and-Holders. The Valuation-Informed Indexers. Everyone.

The best idea that I have been able to come up with given the behavior of you Goons is enforcement of the laws against financial fraud. Announcement of your prison sentence will get all sorts of good things happening at all sorts of places, Interested. That’s the thing that will turn the key. There need to be consequences when people make use of death threats and demands for unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs as their way of blocking millions of people from learning things they very much need to know because of embarrassment they feel over having made mistakes themselves.

I cannot change the realities that apply here. My job is to play the cards that I am dealt to the best of my ability. That means prison for you, my good friend. But I still hold out hopes that it will not mean a prison sentence as lengthy as the one you will be getting if you do not come clean until after the next price crash!

I hope that helps a bit.

My wife is like everyone else. She finds it hard to believe that as a society we are able to make such a huge advance at this time. We have the Buy-and-Hold Pioneers to thank for that. Shiller would never have published his “revolutionary” (his word) research had the Buy-and-Hold Pioneers not first advocated the idea of us all rooting our investing strategies in what the peer-reviewed research in this field reveals to us.

Thanks John Bogle!

And off to prison with you, John Bogle!

Humans!

Whachagoonado?

Take good care, man.

Rob

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

Rob, when do you think the last time a non-goon read anything you wrote?

I don’t know the answer, Anonymous.

I occasionally have people who sign up as subscribers to the site. They must read some of the stuff and like it. There aren’t a lot of them. But they exist. So the number is greater than zero.

Sam Parler is an old friend (he was co-developer of one of the calculators). He posts at a site that charges a fee for membership (so I don’t go there). He sent me an e-mail recently saying that he links to me there from time to time and that recently there was a post that he put up that linked to me that received a strong and positive reaction.

It causes me pain that more people don’t post here, especially non-Goons. If that’s what you are getting at, please know that it certainly causes me pain. You “win” re that one.

The other side of the story is that it would cause me a far worse pain if I were to agree to post dishonestly re safe withdrawal rates or any other critically important investment-related topic. So I have never once in 12 years given that idea even the tiniest bit of consideration. I think it would be fair to say that I have been the big “winner” re that one.

I hope that helps a bit, my old friend.

Rob