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

You get right to the heart of things with these questions, Anonymous. All of these questions are reasonable ones. And what you are suggesting is exactly how things are ordinarily done. Shiller published research showing that there is precisely zero chance that the safe withdrawal rate is the same number. And yet when research (the Trinity study) came out claiming that it is always the same number, Shiller did not object. The Trinity study passed peer-review! It’s an amazing reality.

But it is our reality all the same. There’s no cause to get angry with me. I didn’t create this crazy reality. I have pointed it out. That’s all. That’s my job. That’s what journalists do. We point out important realities to people. People planning retirements need to know that the Buy-and-Hold retirement studies get the numbers wildly wrong. So I tell them that. You don’t want people learning that. So you demand that I be banned. And the beat goes on.

I will certainly send a copy of my book to Shiller. I want to work with him. And I will send copies to lots of people whom I respect on the Buy-and-Hold side of the table. I want to work with them too. I do not believe that I am going to get the response that I need to get until after the next price crash. At that point, Shiller’s amazing research findings will no longer be just a theoretical matter. At that point, we will all be able to look into the faces of millions of people whose lives have been destroyed by the mistake that the Buy-and-Holders made (thinking that market timing isn’t always required). So we will all pull together and get the problem fixed.

I will naturally do anything in my power to help things to go as easy as possible for everyone involved, including you Goons. I will not say that I believe that the Greaney study contains a valuation adjustment. Telling more lies would obviously send things backwards rather than forwards.

Had we all been thinking clearly back in 1981, we would have at that time launched a national debate on the far-reaching implications of Shiller’s research and we all would be living better livest today. There wouldn’t be any thought that there are different sides re the question of learning for the first time how stock investing works in the real world. We obviously were not all thinking clearly back in 1981, The problem was that Shiller’s research was just too big an advance. People’s minds couldn’t let it in. They suffered cognitive dissonance.

Now that there has been a 39-year cover-up, it’s harder than ever for the Buy-and-Holders to acknowledge their mistake. So we created a world controlled by the Goon Brain to make sure that we never learn what the last 39 years of peer-reviewed research is trying to teach us. Um — lucky us! Um — right?

What would you have me do? What do you want from me? Should I say that I believe that Greaney’s study contained a valuation adjustment after all although I obviously do not believe that? Is that the answer? Somehow, I do not think that that is the answer.

I think that the answer is that I get the book written and that I continue to wrote weekly columns and that I do my best to respond to questions or comments put forward by you Goons (those that rein in the impulse to engage in criminally abusive behavior at least enough so that people who read the exchanges might be able to learn something from them) and that I wait for people like Shiller to come to the realization that the current state of play is just not sustainable in the long term. Obviously I would like to be working with Shiller and obviously he should be happy to work with me. I have this funny thought that the reason why he is holding back is that he does not like the idea of seeing people on the internet threaten to murder his loved ones. What a wacky idea!

We’ll see how it goes. Shiller merited his Nobel prize. The last 39 years of peer-reviewed research is the most important 39 years of peer-reviewed research in the history of the investment advice field. I believe that we will as a society figure out a way to get the ball over the finish line in the days following the next price crash. We are not there today. We are all afraid to take that next step. Shiller’s Nobel-prize-winning research findings are a huge advance, the biggest advance in the history of personal finance. Valuation-Informed Indexing is the personal finance equivalent of the cure for cancer. Reducing the risk of stock investing by 70 percent is a very, very, very big deal.

That’s why you Goons cannot bear the thought of permitting honest posting. You didn’t come up with that advance. You fell for claims made for the discredited approach. All that you see when you hear about the cure for cancer is reduced profits at your chemotherapy centers. You are going to stop millions of people from finding out about the cure for cancer if you have to spend the rest of your lives in prison cells because of the criminal acts that you had to commit to stop the history train from moving forward. That’s the path that you have chosen and you are sticking to it.

I have chosen a different path. I think that learning about the cure for cancer is a good thing even if it means that we all have to acknowledge that there was an earlier time in our history when we didn’t know everything there was to know about how the world works. I vote for progress. I vote for opening every site on the internet to honest posting re the last 39 years of peer-reviewed research. I vote for Valuation-Informed Indexing over Buy-and-Hold.

I hope that that is okay by you, my dear Goon friend.

But the bottom line is that that is the path that I will choose regardless of whether it is okay by you or not. I love my country. That runs deep.

My best and warmest wishes.

Cancer-Curing (Or at Least Giving it a Good Try!) Rob

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

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

I am sure that Robert Shiller, like almost everyone else, has Googled his name to see what people say about him. There is no doubt that he has seen that you have mentioned his name thousands of times. What is interesting is that he has never come to respond to you or comment about you. That demonstrates that he does not agree one bit about what you have to say about his work. It is the only logical conclusion.

I don’t agree.

I agree with the first part. I am certain that Shiller knows about me (because I know that he reads his e-mails and I have written to him on two occasions). My guess is that he is only slightly aware of me. Perhaps he has only seen those two e-mails or perhaps it’s a little more than that — perhaps he has seen one or two discussion threads in which I participated, something like that.

So I agree that there is at least a small bit of awareness. And I 100 percent agree that it is remarkable that he has never offered any kind of endorsement. Shiller should be an advocate of his ideas. It was his life’s work to produce those ideas. I have devoted 18 years of my life to exploring and promoting his ideas. In ordinary circumstances, you would 100 percent expect him to take an interest in what I have done. If nothing else, he should be flattered. You would expect him to be generally supportive. It would not be surprising if he did not agree with everything that I said about his ideas. In those cases, you would expect him to share his own take with me, to tell me what he thought I got right and what he thought I got wrong. The fact that Shiller has not said a word about my work — and he has not — is an exceedingly strange reality. You and I are 100 percent in accord re that one, Anonymous.

I disagree that the only logical conclusion is that he does not agree one bit with what I say.

The reason that I disagree is that this strange reality that Shiller has not demonstrated an interest in my work has evidenced itself in a world in which similarly strange realities have also evidenced themselves. I say that Shiller’s research shows that there is precisely zero chance that the 4 percent rule is a valid rule. What does Shiller say about that? He doesn’t say ANYTHING about it. That’s really, really, really strange. His finding that valuations affect long-term returns obviously has a bearing on the question of what retirement withdrawal is safe. It’s theoretically possible that Shiller believes that the effect is not so great. If that were the case, the natural thing for him to do would be to discuss the question in his book, to explain why he does not think that the effect is that great. I am not able to come up with any logical explanation of why he did not do that.

It’s a mystery why Shiller has not commented on my work. I give you that one. But you are ignoring the other big mystery here. Why did Shiller not address the question at all in his book or in articles or in interviews? And Shiller’s behavior here is 100 percent in concert with the behavior of many others. Bernstein said in his book that the 4 percent rule was two points off the mark at the top of the bubble. That’s what i say. But Bernstein too has not commented on my work. When the discussions were raging at the Bogleheads Forum as to whether the safe withdrawal rate studies are in error, Bernstein never stepped forward and said that he believed that there was indeed an error even though he at times participated in discussions at that board. That’s as crazy a reality as the one with Shiller.

It is a general phenomenon. When Wade Pfau was working with me, he was amazed to find that his research showed that everything that I said about stock investing checked out. One time I said something to him that he found a little hard to believe. But then he noted that, every time he questioned something that I said, he learned that I was right when he went to the trouble to research the question. Wade thought that our work was of huge value. He discussed the possibility that he might be awarded a Nobel prize for the work he did with me. So he was clearly a big believer. But today he is with Shiller and Bernstein — be no longer works with me or even comments on my work. Exceedingly strange. I have seen this same general phenomenon play out over and over and over again.

My explanation is that Shiller’s finding that the market is not efficient is so “revolutionary” (his word) that as a society we have just not been able to absorb it for 39 years now. The ordinary thing would be that there would today be discussions at every investing site on the internet as to whether it is Fama or Shiller who is right. But we don’t see discussions of that nature being held at a single site. That’s a puzzle. If we want to know what is going on here, we have to explain that one.

There is a phenomenon called “cognitive dissonance.” The human brains blocks out information that comes in that it does not for some reason or other want to process. When Shiller published his Nobel-prize-winning research, every person who works in this field understood on some level of consciousness that it changed everything that we once thought we knew about how stock investing works. Every textbook had to be rewritten, every calculator had to be rejiggered, every person who had come to be regarded as an expert in his understanding of the old model now needed to rebuild his reputation by showing a mastery of the new model rooted in the new research. People saw Shiller’s work as a threat. So they went into cognitive dissonance mode, They shut it out of their brains, they ignored Shiller’s research.

Now 39 years have passed. It is no longer just Shiller’s research findings that people want to ignore. They also want to ignore the 39-year cover-up of Shiller’s research findings. The desire to not talk about this stuff is greater today than it has ever been before. Talk about it today and you are going to have to talk about how the promotion of Buy-and-Hold strategies caused the economic crisis of 2008. We were all in on that. We all let that happen. Who wants to talk about this terrible mistake that we made?

That’s why Shiller keeps quiet about the far-reaching implications of his amazing research. That’s why Bernstein keeps quiet. That’s why Pfau keeps quiet. That’s why everyone keeps quiet.

I don’t see the embarrassment that we all feel over the 39-year cover-up as a good reason to keep quiet. If we keep quiet for another year, it is going to become a 40-year cover-up. Is that better? It’s not. Keeping quiet makes things worse, not better. So I speak up. And I urge all others to speak up.

If stocks continue to perform in the future anything at all as they always have in the past. we will be seeing another price crash in the not-too-distant future. I believe that some people will work up the courage to speak up then. Once a few do, the floodgates will open and people will be talking about the last 39 years of peer-reviewed research on every investing site on the internet. I am 100 percent confident that Shiller will be commenting on my work at that time.

I could be wrong. I don’t think that that’s the case. But you never know, right? We will just have to wait a bit to see how it all plays out.

My best and warmest wishes.

Shiller (And Bernstein! And Pfau! And Bogle!) Fan Rob

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

The fact that Robert Shiller has NEVER blamed buy and hold, it makes your whole campaign worthless and lacking any support or substance.

He’s talked about irrational exuberance. It is the title of his book.

If there is irrational exuberance, it is something that hurts us all. It is something that we should all be working to diminish. It would be wonderful if Shiller and thousands of others did that on a dally basis. I certainly don’t think that it would help if I did less of that. We need more people making the effort, not fewer.

I have a chapter in my book titled “Robert Shiller Is a Failure.” I of course love and respect Shiller. All of my work is based on his research. So why would I call him a failure? I call him that because the CAPE value in recent decades has been higher that at any earlier time in history. Shiller’s research shows the horrors of irrational exuberance and yet it has gotten more out of control since his research was published. Huh?

That’s because of the factor that you point to. Shiller are many, many others are afraid to call the Buy-and-Holders out on their b.s. They try to be “nice” and not mention that the Buy-and-Holders made a terrible mistake in thinking that market timing is not required. We have to stop thinking like that. There’s nothing nice about it. The Buy-and-Holders were trying to help people and by making that horrible mistake they have instead ruined millions of lives. If they were thinking clearly, they would want us to point out their mistake and to do everything in our power to get it corrected.

Drop all the criminal stuff, Anonymous. Drop all the criminal stuff and tell Shiller that you have done so and ask him to come to the Bogleheads Forum and tell people there whether he believes that the safe withdrawal rate is always the same number. I am personally 100 percent certain what he will say if you do that. But there is only one way to find out, right?

We all are in the same boat. We all want to know how to invest effectively. Find out what Shiller really thinks re these matters and you are helping every single investor on the planet, including yourself.

I don’t think you will do it. But I wish you would. And I believe that Shiller is going to address the matter sooner or later, whether you do or not. Sooner is better for everyone, But this sort of thing just cannot be covered up indefinitely in a free society in any event. Not in Rob Bennett’s sincere assessment of the matter.

My best wishes.

Rob the Campaigner

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

And yet you wonder why you have no supporters.

I have supporters. It’s not a majority of the population. But about 10 percent of the population thinks my stuff is amazing. I have had numerous people tell me that my writing on stock investing is the first stuff that they have ever read that makes complete sense of the subject. It’s those sorts of comments that give me the encouragement that I need to hear to continue fighting the good fight.

In ordinary circumstances, I could go to all kinds of sites and that 10 percent would in time grow to 20 percent and then to 40 percent and then to 80 percent and Valuation-Informed Indexing would replace Buy-and-Hold as the dominant model for understanding the subject. But about 10 percent of that 90 percent who are not immediate fans reacts to the idea that market timing is required for long-term success with a level of defensiveness that is just completely off the charts. The level of vitriol that you see from this group is 20 times greater than anything you have ever seen in a polarized political discussion. It is unreal. If you think abortion is a hot button issue, you have never been in the middle of a discussion as to whether it is possible to calculate the safe withdrawal rate accurately without taking into consideration the valuation level that applies on the day that the retirement begins. Holy moly!

I take that as strong evidence that Shiller is right. The only thing that Shiller is saying that is different from what the Buy-and-Holder say is that the Buy-and-Holders believe that stock investors make rational choices and Shiller’s research shows that investors are often highly emotional (the CAPE metric tells us how much investor emotions are affecting the stock price at any given point in time). So, if Shiller is right, we should be seeing insane levels of emotion in most investors at times when stocks are priced as they are today. I can testify that there is a lot of crazy stuff going on at investing discussion boards today, stuff that just ain’t normal and healthy.

Will all that change when prices drop? Will investors become less emotional about Buy-and-Hold when prices have fallen to fair-value levels or lower? I believe they will. I don’t believe that it is even possible to hold a civil and reasoned debate about these matters today. I have certainly run into Buy-and-Holders who are exceptions to that rule. But they are the in the minority and sooner or later they always get drowned out by the more emotional voices. So we cannot really even say whether Buy-and-Hold makes sense or not. Until prices drop, we are not as a people capable of engaging in the discussion it would take to develop a reasoned assessment.

Shiller changed the very language that we use to talk about stock investing. You could compare it to what Darwin did or to what Freud did or to what Galileo did. Galileo was put under house arrest by the Catholic church because he said that the earth was not the center of the universe and that conflicted with what people knew with 100 percent certainty was so from reading the Bible. I am a believer. So I am all for reading the Bible. But I think that Galileo did a good thing by taking a scientific approach to the questions he examined. I believe that God gave us our brains and that He wants us to use them to learn what we can about the world around us. I believe that Shiller advanced that cause by teaching us things about stock investing that we just did not know before and that the only reason why people become upset to read my stuff is that it is so different from what they have come to believe is so from reading stuff that doesn’t take Shiller’s Nobel-prize-winning research findings into consideration.

I have supporters, Sammy. Not as many as I would like, But I have some very intense supporters. And I believe that when the time arrives when more people feel safe talking about the far-reaching implications of Shiller’s work, I will have a lot more of them. I believe that Buy-and-Hold is the past of investment analysis and that Valuation-Informed Indexing is the future. I mean no insult to my Buy-and-Hold friends by saying that. I think that the Buy-and-Holders made many important contributions to our understanding of the subject. But I also believe that Shiller merited his Nobel prize and that we all need to begin working together to integrate his powerful insights into the understanding of how stock investing works that the Buy-and-Holders advanced before he came along.

That’s where I am coming from, in any event. I naturally wish you the best of luck with whatever investment strategy you personally find most appealing.

Rob

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

Stop blaming Shiller for your failed timing strategy. He warned you not to use CAPE to time the market. Stop twisting it around. You only have yourself to blame.

I love Shiller. Shiller and Bogle are my two favorite investment advisers of all time and I rank Shiller first. (Bogle, by the way, said in a post to the Bogleheads Forum, that he could see how market timing could work so long as the investors employing it only practiced it when prices got to extremes — I agree that there is no need to engage in market timing more than once every ten years on average but I say that it is absolutely critical to engage in it on those rare occasions when prices get totally out of control, like today). I have devoted 18 years of my life to exploring Shiller’s ideas. So I think it would be fair to say that I have made my respect for the man pretty darn evident.

That said, I can acknowledge that it would be a good thing if Shiller made his advocacy of market timing more explicit. He has recommended it on several occasions and his life’s work shows the need for it. But I would like to see Shiller write an entire book on all the ins and outs of market timing, when to do it and when not to do it, how to do it, why it is so important. That’s a book that we all need to see and learn from.

And of course it is not only Shiller who could write such a book. Shiller’s research is available for all to review. We need to get lots of people absorbing its powerful lessons and writing books on the many benefits of market timing. I am writing a book on the subject. So I am doing my part. But I am some guy whose only claim to expertise in this field is that I figured out how to get posts to appear on internet discussion boards. This niche should not be left to me. We should have hundreds and hundreds of smart and good people pitching in.

Shiller changed the world in a very positive way, Sammy. That is why he was awarded a Nobel prize. And the thing that he did, if you want to reduce it down to one sentence, is that he showed that market timing is absolutely essential for all investors hoping to achieve long-term success. That’s the thing that we did not know before Shiller came along that those who have spent some time thinking about his research findings now do know. If stock gains that are caused by overvaluation are nothing more than irrational exuberance and do not reflect any economic realities, then stock investing risk is not constant but variable. If risk is variable, then an investor who wants to maintain the same risk profile over time MUST practice market timing.

Three cheers for market timing! We once thought that it was not necessary but now we know better. So now we can all live richer lives on a going forward basis.

Rob

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

Reread your post. You just proved my point.

Okay.

I stand by the post.

I think that the question that I ask (how does Shiller’s Nobel-prize-winning research findings change our understanding of safe withdrawal rates and of scores of other investment-related topics?) in the post is the most important public policy question before the people of the United States today.

We all need to know how best to invest our retirement money. And, until we launch a national debate aimed at exploring the far-reaching implication of Shiller’s Nobel-prize-winning research, we will not know that. Even if it turns out that Buy-and-Hold really is best after all, we are better off concluding that after hearing out the challenge presented by the many good and smart people (about 10 percent of the population today) who believe that Shiller’s Nobel-prize-winning research is legitimate research.

My best and warmest wishes to you, Sammy.

Rob

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

What you do with Shiller, and with others, is say things that they didn’t say and then when pressed, you say that they really meant to say those things but were too scared. Basically, you make things up.

Are you willing to say what you believe Shiller thinks about safe withdrawal rates? Shiller’s research shows that valuations affect long-term returns. I say that, if that is so, there is precisely zero chance that the safe withdrawal rate is the same number at all valuation levels.

The safe withdrawal rate is a risk assessment tool. If valuations affect long-term returns, then stock investing risk is not stable but variable. Risk is greater when valuations are high and lower when valuations are low. So the safe withdrawal rate is lower when valuations are high and higher when valuations are low.

I have never seen Shiller comment directly on the safe withdrawal rate issue. I wish that he would do so. It would make my life go a lot easier. I think that we all would benefit from hearing him comment on the question. I wish that some of my Buy-and-Hold friends who feel so strongly that the safe withdrawal rate is always the same number (they say that it is always 4 percent) would ask Shiller what he believes and put this matter to rest. I am 100 percent confident that, if they asked in a polite way, he would respond. Shiller is an extremely affable guy. He is not going to respond if you are abusive in your tone. But if you show that you have a sincere desire to know the answer, he will accommodate you.

Are you willing to say what you think Shiller believes re this one, Sammy? I am not asking what YOU believe re safe withdrawal rates. I am asking what you believe SHILLER (who believes that valuations affect long-term returns) believes re safe withdrawal rates.

Rob Bennett believes that Shiller believes that the safe withdrawal rate is a number that changes in response to changes in valuation levels. He believes that because that logically follows from a showing that valuations affect long-term returns and it has been Shiller’s life work to show that valuations affect long-term returns.

Shiller is saying something different that the Buy-and-Holders. Something very, very, very different. And I happen to think that he is right. I believe that Shiller’s Nobel-prize-winning research is legitimate research. And I offer no apologies for saying so or for saying that the Buy-and-Holders get some very important questions (like the calculation of the safe withdrawal rate) terribly wrong.

Rob

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

I still don’t get it. Everyone has heard of Shiller. He didn’t need or ask for any P.R. If there is any payment made, he should get it since it is his work, unless you have some king of license agreement with him.

Everyone in the investing field has heard of Shiller. But when I put up my famous post of the morning of May 13, 2002, pointing out the error in the Buy-and-Hold retirement studies, a lot of people reacted with great surprise. Huh? What was that about?

People have not integrated Shiller’s findings into their thinking. If a large portion of all of our portfolios is comprised of irrational exuberance and is not backed by anything of lasting economic significance, that changes our understanding of how stock investing works in a fundamental way. It changes absolutely everything that we once thought we knew about this subject. That’s why Shiller was awarded a Nobel prize. We have as a people only touched the surface of what Shiller’s research has to teach us.

John Bogle was an exceedingly smart man. I don’t think that there is any reasonable person who disagrees. But Bogle did not know what to make of Shiller’s insights. I was amazed when Bogle put forward his post semi-endorsing Valuation-Informed Indexing. He saw that there was too much merit to the concept to dismiss it. But he couldn’t square the fact that Valuation-Informed Indexing relies on market timing to deliver its amazing results with his longstanding disdain for market timing.

If Bogle could not figure something out, then I think it is fair to say that lots and lots of smart people could not figure that something out. So I am doing something important by putting these questions before people. It is by grappling with these questions that we all come to enjoy an amazing learning experience.

Shiller just got the ball rolling., We need to open every discussion board and blog on the internet to honest posting to tap into the full power of Shiller’s amazing research findings. That’s what I have been working on for 18 years now. No apologies, you know?

Shiller P.R. Guy Rob

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

It looks like Shiller did the work. Shouldn’t he be the one that gets the $500 million, instead of you?

It would make sense that we would both get $500 million. The shift from Buy-and-Hold is obviously worth a whole big bunch more than $1 billion to the people of the United States.

You are right in a sense that Shiller “did the work.” Shiller did the intellectual work. Prior to 1981, the academics believed that the market was efficient. If that were so, Buy-and-Hold would be the ideal strategy and the safe withdrawal rate would always be the same number. So Shiller did something of earth-shaking importance.

But I have have a chapter in my book titled “Robert Shiller Is a Failure.” I have devoted 18 years of my life to exploring the far-reaching implications of Shiller’s research. How could I say that he is a failure?

Shiller’s job is not just to provide intellectual insights. Ultimately, those insights serve no good purpose unless they improve the lives of people. Has Shiller improved the lives of people? He has not. The measure of whether he has improved the lives of people is the CAPE value. Shiller’s research shows that a high CAPE value destroys human lives. A high CAPE value is like a cancer on our economic system. Today’s CAPE value is one of the highest ever seen in U.S. history. We have had high CAPE values for 24 years running. This is the longest stretch of high CAPE values in U.S. history. Shiller’s powerful insights have not changed the way people invest. Not nearly enough.

What do we need to do with Shiller’s work to improve human lives? We need to promote it. We need to discuss it. We need to explore its implications. That’s a journalist’s function. That’s what I do. Or at least that’s what I try to do. I have not had as much success as I would have wished for because the criminal behavior of you Goons has been holding me back for 18 years now. But I have been giving it my best shot. And it is my intent to continue doing that until we break through the Big Black Wall of Ignorance and Complacency that is causing us all so much pain.

The part that I am doing — opening every discussion board and blog on the internet to honest discussion of the last 39 years of peer-reviewed research in this field — is every bit as important as the part that Shiller has done — publishing research showing that the key to long-term investing success is always, always, always practicing market timing (exercising price discipline!) when buying stocks.

We need both. We need the research and we need to have it widely discussed. Once the entire internet has been opened to honest posting, I have a funny feeling that we will no longer be looking at CAPE values of 30. Holy moly!

My best wishes to you, Anonymous.

Rob the Journalist