On October  24, I sent my article “Buy-and-Hold Is Dangerous” to the Quillette.com site for possible publication there. The article is an 11,300-word summary of my experiences of the past 16 years trying to get the word out about the errors in the Buy-and-Hold retirement studies and about the dangers of the Buy-and-Hold Model in general, focusing on the public policy aspects of the question (rather than on the investment advice side of the story).

Set forth below is the text of my e-mail to the editors at Quillette.com:

Quillette Editors:

The primary purpose of this article (“Buy-and-Hold Is Dangerous”) is not to make the case against Buy-and-Hold as an investment strategy. It is to point out the harm that the relentless promotion of this long discredited model for understanding how stock investing works is doing from a public policy standpoint. For example, Robert Shiller explains in his book “Irrational Exuberance” that it was the bull market of the late 1990s, which was brought on by the widespread price indifference encouraged by Buy-and-Hold, that served as the primary cause of the economic crisis of 2008. And prices are high enough today to justify concerns that we will be seeing a repeat of that crisis in not too long a time.

Set forth below is the text of an e-mail that I sent to Tracie, author of the Penny Pinchin’ Mom blog, on May 16, 2017:

Set forth below is the text of an e-mail that I sent to Barton Swaim, author of an article published in the Weekly Standard titled The Expertocracy: What If They Don’t Know As Much As They Think They Do?, on May 15, 2017, followed by his response:

Rob,

Set forth below is the text of an e-mail (the heading is “Shiller’s ‘Revolutionary’ Research Findings”) that I sent to James Altucher on May 6, 2017:

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Set forth below is the text of an e-mail that I sent on January 16, 2014, to Emily Bazelon, the author of an article in the New York Times Magazine on internet bullying. The heading for the e-mail was: “A Case of Internet Bullying That Affects Us All in Big Ways.”

Emily:

My name is Rob Bennett. My bio is here.

I saw your article on internet bullying in the New York Times Magazine and noted that you have done a lot of other work on internet bullying as well. I have a story to tell about a case of internet bullying that has had far-reaching economic and political implications.

The easiest way to tell you enough about the story for you to see if you have an interest in learning more is to point you to an article at my web site titled Academic Researcher Silenced by Threats to Get Him Fired From His Job After Reporting on Dangers of Buy-and-Hold Investing Strategies.

My best and warmest wishes to you!

Rob

Set forth below is the text of an e-mail that I sent to Jaime Hardy, owner of the EventualMillionaire.com site, on October 24, 2013, followed by her response:

Jaime:

This is Rob Bennett, at “A Rich Life.” We spoke at FinCon13 re the possibility of me hiring you as a coach. I hope the rest of the conference was successful for you. I much enjoyed giving the talk I gave at the Ignite sessions. That was a trip. And I think I did a good job of getting the essence of my story down to five minutes!

My recollection is that there were three questions you wanted to ask of me before deciding whether it made sense to proceed. Please send the three questions when you get a chance. I don’t know whether this idea makes sense or not. But I would like to explore the possibility a bit more in an effort to find out.

My warmest wishes to you.

Rob

Hi Rob!

So great to connect online.

Here are some questions to answer and then I’ll give you some actions to try. Then we can chat in later November when I have a spot for coaching open up. Make sense?

What is the number one objection from the average person – not one of the haters?

Have you been able to convince others to see your side? When?

What do you think your positioning/branding is currently on your current site?

Thanks Rob! Can’t wait to hear your answers.

My email inbox is a bit too full right now – so I’ll do my best for a speedy reply. Answering this email from the doctors office about to get my cast off!

Have an amazing day!
Warmest,
Jaime

Set forth below is the text of an e-mail that I sent to Danielle Citron at the University of Maryland Law School on September 24, 2013:

Danielle:

My name is Rob Bennett. My bio is here.

I saw your name in the New York Times article on revenge porn. Thank you for doing the important work you are doing!

The article suggested that the book you are working on may address internet harassment in general and not just revenge porn in particular. If that is the case, I can tell a story about internet harassment that is truly jaw-dropping in scope and that affects everyone living in the United States today.

To understand my case, you need to understand a bit of background re the history of our growing knowledge of how stock investing works. There are two major schools of thought: (1) The Buy-and-Hold Model, which is rooted in the research of University of Chicago Economics Professor Eugene Fama; and
(2) The Valuation-Informed Indexing Model, which is rooted in the research of Yale Economics Professor Robert Shiller. The Fama model is dominant today. I advocate the Shiller model. My web site has more material explaining the  implications of the Shiller model than any other site on the internet.

An individual who was embarrassed when I let people know that he got a number wrong in a retirement study has waged a 11-year smear campaign against me with the aim of making it impossible for me to earn a living from my work on the internet. Thousands of community members at various discussion boards and blogs have expressed a desire that honest posting on both points of view be permitted on the internet. But his Goon Squad disrupts conversations wherever they are held on this topic. Numerous site owners have reacted in fear of what will be done to them if they allow the issues to be discussed and have banned posting on the implications of the Shiller model at their sites.

I spent 16 months working on research with an academic researcher with a Ph.D. in Economics from Princeton. The researcher (Wade Pfau) was thrilled with what we accomplished. He told me that our research product was worthy of publication in the Journal of Finance, the top journal in the field. These
internet Goons threatened to send defamatory e-mails to Wade’s employer with the aim of getting him fired from his job if he did not stop pursuing this research. Wade had seen what had happened to me and agreed to stop publishing similar research (one study had already been published in a peer-reviewed
journal at the time this happened).

If you have an interest in learning more about the story, I have extensive  documentation of the entire 11-year history of the matter. Please just send me an e-mail letting me know and we can set up a time to talk by telephone.

Here is an article giving background on the investing issues:

http://arichlife.passionsaving.com/about/

Here is an article giving an in-depth report on the Wade Pfau matter
(please note that there are links to reactions from numerous academics at the end of the article):

http://arichlife.passionsaving.com/the-buy-and-hold-crisis/academic-researcher-silenced-by-threats-to-get-him-fired-from-his-job-after-reporting-on-dangers-of-buy-and-hold-investing-strategies-teaser-version/

Here is an article in which I set forth 101 comments of my fellow community members expressing
a desire that honest posting on these important investment topics be permitted:

http://www.passionsaving.com/investing-discussion-boards.html

I wish you the best of luck with all your future endeavors!

Rob

Set forth below is the text of correspondence that I engaged in with Jeff, owner of the Sustainable Life Blog, on October 6, 2013:

Hi Rob,

I just wanted to drop you a quick line and say how nice it was meeting you at fincon in St Louis this year. I don’t know about you, but I had such a great time hearing from all the speakers and meeting online friends (some for the first time).

It was great meeting you at Ignite Fincon and chatting with you about Value Index Investing. I thought it was really interesting, and I’d really like to know how you got started with Value Index Investing and what you enjoy most about it. I had such a great time meeting and talking to so many different people, I didn’t get much time to focus on the most interesting parts – like why they do what they do!

I remember that we chatted a bit about being the most hated guy on investing forums and branding it as well. That was really great to hear about, and I think it’s so funny that people get so angry at you for those comments you left. Glad that you were basically proven right by the downturn though.

Please, don’t hesitate to email me if you’ve got any questions or need help with anything. I’ve been blogging for almost 5 years, and love to help out anyone that asks!

Once again, it was great meeting you..

Jeff

Jeff:

That’s super kind! Seeing your e-mail brought a nice measure of good cheer to my Saturday afternoon.

I got started with Valuation-Informed Indexing when I was putting together an early retirement plan in the late 1990s (I left corporate employment in August 2000 and our family of four has been living off our investments for the 13 years since). When you are handing in a resignation from a big-paycheck job (I was a Director at the Ernst & Young accounting firm), you need to be SURE that you have enough to make it on your own.  So I investigated a concept called “Safe Withdrawal Rates.”

I discovered (ironically enough, I discovered this by reading John Bogle’s book — this is ironic because Bogle is the lead advocate of Buy-ad-Hold, the strategy that VII replaces) that the conventional SWR studies get the numbers wrong (they fail to consider the effect of valuations). I was posting daily at a Retire Early board at Motley Fool and a retired government engineer there named John Walter Russell became interested enough in what I was saying to spend the next eight years of his life researching questions related to VII. John did HUNDREDS of studies backing all this up and published them at his own site. John died a few years ago and the right to publish all his research passed to me.

At some point, I started posting at the Vanguard Diehards board at Morningstar.com. An academic researcher (Wade Pfau — he has a Ph.D. in Economics from Princeton) discovered my posts and wrote me to ask if I would be interested in doing some research with him. Our paper has been published in a peer-reviewed journal. I believe that it is the most important research published in this field in the past 30 years. It shows investors that simply by taking valuations into consideration when setting their stock allocations they can reduce the risk of stock investing by 70 percent. Once we reach a point where we can publicize these findings,  stocks will become essentially a risk-free investment class. This is a huge deal.

The thing that I like most about VII is not the investing benefits. I have made my living as a journalist pretty much my entire life (I was hired at Ernst & Young as a tax lobbyist because they learned about my work reporting on tax legislation on Capitol Hill — I also hold a law degree and a Masters in Tax Law). So I have a strong interest in public policy issues. VII is rooted in the research of Yale Economics Professor Robert Shiller (who won the Nobel prize a week or two ago). Shiller’s findings don’t just make stock investing a risk-free endeavor. They also have huge implications re stabilization of our economic system.

Shiller predicted the 2008 economic crisis in a book published in March 2000. Do you know how he did it?

Shiller’s research shows that EVERY economic crisis in U.S. history was caused by excessive stock valuations. There has never been a single exception. Take away excessive stock valuations and you take away economic crises and all the huge increase in unemployment that always follows from them. Shiller’s work has the greatest potential for easing human suffering of any research being done today. What he has found (and what I have been writing about for 11 years) is the financial sector equivalent of the cure for cancer.

How do we stop stocks from becoming overpriced? It is amazingly easy.

I have a calculator at my site called “The Stock-Return Predictor.” It applies a regression analysis to the 140 years of historical return data to reveal the most likely annualized 10-year return for stock purchases made at any possible price level. It shows that the claim you always hear from Wall Street that “you can’t time the market!” is 100 percent false marketing mumbo jumbo. It has ALWAYS been possible and easy and necessary to time the market. There is a hyper-technical way in which what they say is so. It is NOT possible to engage in short-term market timing (guessing where stock prices will be in a year or so) effectively. However, it is VERY easy to engage in LONG-TERM market timing. You can know today (with a high but not perfect level of accuracy) where stock prices will be 10 years from today. Using the calculator, you can know when stocks are worth buying and when they are not. This permits you to retire as much as 10 years sooner than you ever before imagined possible.

The Stock-Return Predictor reveals the price tag of stocks. Middle-class people who don’t practice long-term timing are essentially making the most important purchase of their lives (we spend more in the course of a lifetime on stocks than we do on clothes or food or housing or cars) without knowing the price! It’s insane. Why do they do it? Every industry that exists would love to have its customers believe that its product is a good buy at any possible price. The Stock-Selling Industry is the only industry that has ever been able to persuade its customers that this is actually so. They get away with it because most investors are intimidated by the subject of investing. They defer to experts. And the experts in this field get paid depending on how effective they are in persuading people to buy stocks. The conflict overwhelms most people’s sense of right and wrong and they rationalize saying all sorts of things that have long been shown to be nonsense by the peer-reviewed academic research.

Once people understand that stocks are not worth buying at high prices, guess what happens? That makes it impossible for high prices ever to be seen again. As prices go up, people sell shares. The sales of the shares pull price down again. If they go too low, people start buying more and that pushes prices up again. Stock prices are self-regulating. So long as people are told about the research!

The trick today is getting the word out about what the research really says. Most of the people who work in this field have built careers around promotion of Buy-and-Hold. There are lots of powerful and wealthy people who very, very much do not want middle-class people to learn about Shiller’s research and its implications. So we face heavy resistance.

But things have changed in a big way since the crash. I couldn’t get a guest blog published anywhere on the internet in the old days. Today there are lots of blogs that welcome me. Shiller’s research shows that there will be another crash in a year or two. I believe that the gates will swing wide open then.

You probably know that many blogs have been hit hard by Google. I believe that VII is going to prove to be the salvation of the Personal Finance Blogosphere. Bloggers are not as beholden to the industry big shots as are most others in this field. We are at least capable of independence. If we can get a small group of independent bloggers writing about these ideas, they will spread and spread and eventually gain recognition everywhere. I have spoken with LOTS of people over these 11 years. Lots of the big names in this field want to feel free to tell their readers and clients what really works in the long run. But they are afraid. They need cover. The more people who speak the truth openly, the less afraid all the others who want to do so feel. So this thing will gain momentum fast once we get the fire started.

Please come back to me and ask questions about this at any time. My site is today the only site on the internet that explores the implications of Shiller’s research in an in-depth way. There is room for hundreds of blogs doing this kind of work. And we would be helping millions of middle-class people by doing it. VII is safe, smart, simple investing. I have had THOUSANDS of people encourage me to pursue this quest. People need this. They need it badly. And the demand is going to go through the roof following the next crash, which is likely coming in not too long a time.

I hope that helps a bit.

Thanks again for your exceedingly king and encouraging note.

Rob

Yesterday’s blog entry reported on correspondence I had in 2013 with Kevin, owner of the Out of Your Rut blog. Set forth below is follow-up correspondence:

Hi Rob,

I think apathy more than anything is keeping other bloggers from seeing the light. There’s also go along to get along factor; inertia is very powerful, as I’m sure you understand. If I’m a blogger and making money selling ad space or affiliate links to investment companies, I hear no evil, see no evil, speak no evil. The bull runs forever.

What’s keeping buy and hold afloat are the actions by the Fed and the US govt to maintain a perpetual bull market in stocks, no matter what the economic backdrop is. The economy is on wobbly legs, and a rising stock market is the only game in town. When that goes down, it will be the last leg holding the house of cards up.

I wouldn’t be surprised to find that these “goons” are more significant than you think. Fraud is keeping systems afloat, and some pretty powerful people have a vested interest in keeping it going.

You may want to back down until the worm turns. It will. And then people will listen. I’m of the opinion that getting into debates with these types is worse than counter-productive. Their aim isn’t to debate, it’s to discredit. And right now “the facts”, contrived and manipulated as they are, are supporting their case. Right now, nothing can kill the bull, the Fed won’t allow it. That’s ultimately what QE and zero interest rates are all about.

Kevin

Set forth below is the text of an e-mail sent to me by Kevin, the owner of the Out of Your Rut site, on October 2, 2013, and the text of my response to him. For several years, I wrote a weekly column titled Beyond Buy-and-Hold at Kevin’s site.

Hi Rob,

I skimmed through the 125 comments that were on this post, and they’re pure mud-slinging by Heywood and “Reality”. I deleted all the comments including yours, and put up my own reply. Hope you don’t take offense to that as I meant none toward you.

Those two are just looking for trouble, and they won’t get any help on OOYR. Constructive, adult disagreements are fine, but attack style is out of the question.

Do these guys bother you elsewhere???

Thanks,

Kevin

Kevin:

It’s good to hear your voice again.

Yes, the Goons bother me elsewhere.

They have my name in a Google notification service. So if I post at any blog on the internet, they know and they posts an endless number of abuse posts until the site owner agrees with their demands. There are blog owners who have put up Guest Blogs by me and the Goons sent an e-mail to the owner of the blog telling him that they would destroy his site if he did so again.

I spent 16 months working with Wade Pfau, an academic researcher with a Ph.D. in Economics on a piece of research that I believe can fairly be called the most important research published in this field in the past 32 years. It shows investors that, by looking at valuations when setting their stock allocations, they reduce the risk of stock investing by 70 percent. I have had long-time Buy-and-Holders tell me after they looked at that research they were rethinking their beliefs about how investing works.

The response of the Goons was to send an e-mail to Wade telling him that they would send defamatory e-mails to his employer with the aim of getting him fired. Wade sent me several e-mails telling me that he was afraid of what they could do to him. When they continued, he worked out a deal with them in which he took down every comment I had written at his site (which he thanked me for profusely when I wrote them) and put up comments praising the leader of the Goons. Wade dropped plans to do follow-up
research on Valuation-Informed Indexing (he told me when we did the first research paper that “You ain’t seen nothing yet!” and that he expected eventually to get research on Valuation-Informed Indexing published in the Journal of Finance, the most respected journal in the field).

The 11-year cover-up of the errors in the Old School safe withdrawal rate studies is the greatest act of financial fraud in the history of the  United States. We are going to see many people going to prison for this massive act of financial fraud following the next price crash.

It is my strongly held view that every blogger on the internet should be speaking out about this.

It is not entirely true that the Goons are “just looking for trouble.” They are looking to INTIMIDATE. For 11 years, that has worked. They are now not just covering up the errors in the retirement studies. They are now covering up the cover-up. Things get worse and worse and worse as they commit more felonies as as bloggers in this field and experts like Bogle and Swedroe and Ferri and Burns and Bernstein fail to speak up.

Rob Arnott (the former editor of the Financial Analysts Journal) wrote me an e-mail in which he told me that “your ideas are sound.” He described acts of intimidation by Buy-and-Holders that he has experienced himself. Two young researchers wanted to do research in this area. They were taken aside by an older Buy-and-Holder who told them that they would be hurting their careers if they were to do so. Rahiv Sethie, an Economics Professor at Columbia, told me that all of my ideas follow from Shiller’s findings and that he could see why Valuation-Informed Indexing would work. But he hasn’t published research showing this. Given these other events, I don’t think it is too hard to figure out why he holds back.

Arnott copied Bogle on his e-mail to me. So Bogle knows all about this.

This is not an economics story. It is primarily a POLITICAL story. The question on the table is whether citizens of the United States should be permitted to know what the last 32 years of peer-reviewed academic research in this field tells us about how stock investing works. Wall Street wants us to believe that Buy-and-Hold can work. There is now 32 years of peer-reviewed research showing otherwise. Investors MUST take price into consideration to have any chance of achieving long-term success.

I believe that things will change following the next crash (the research shows that we have another
crash of 65 percent coming up ahead). The problem with waiting for the crash is that another crash
of that magnitude will put us in the Second Great Depression. I am not sure that our political system
can sustain a Second Great Depression, one that will according to the research be far deeper and far longer-lasting than the depression we experienced in the 1930s.

This is not just about giving me a hard time. It is about keeping information from millions of middle-class people who very much need to hear it.

It’s important to understand that the Goons do not benefit from a Second Great Depression any more
than any of the rest of us. They are in emotional pain. The Buy-and-Hold advocates created a monster when they encouraged so many people to believe in this stuff. And of course the advocates too would
like to get out of the corner into which they have painted themselves.

The positive news here is 50 times more positive than the negative news is negative. The answer
is just to get a discussion started and then we see good things piled on top of good things piled on top of good things.

Do you know from your conversations with other bloggers what they are afraid of? It seems to be that
if there were 10 of us who stuck together, the Goons would be powerless to do harm to any of us. All of their power to destroy us comes from the fact that they can take us on one by one. I’ve spoken to financial advisors and academic who have been intimidated too. It seems to me that the logical step is for 10 people (a combination of financial bloggers, political bloggers, academics and financial advisors) to agree to meet at a discussion board set up at one site and to keep a record of the intimidation tactics. Then anyone being hassled could point to that site. I would think that would end the nasty stuff in no time.

Do you see merit in that idea? Please let me know if you have thoughts in reaction to all this.

And please take good care.

Rob