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 either don’t understand the point made or you are intentionally ignoring it. The red flag should indicate to you that you are not really thinking about things correctly. What are the odds that only Rob Bennett is right. Answer: Slim to none and slim just walked out the door.

It is not honest posting when you are ignoring what people are telling you. Calling people goons means that you see these people as a threat to uncovering the real truth.

You lack total self awareness as well as situational awareness. There is no way for anyone to have a reasonable conversation with you.

The odds that only Rob Bennett is right are zero. But I am not the only person saying that valuations affect long-term returns. Shiller wrote an entire book on the subject and was awarded a Nobel prize for his research showing that it is so. Wade Pfau devoted 16 months of his life to investigating my claims and concluded that they all check out and that “Yes, Virginia, Valuation-Informed Indexing works!” John Walter Russell researched my stuff for eight years, receiving zero compensation, because he thought that the issues that I brought to the table were so important. Bill Bernstein said that the safe withdrawal rate was only 2 percent at the top of the bubble. The Wall Street Journal and the Economist both published articles saying that the Buy-and-Hold studies are out of date and in error. Thousands of my fellow community members have said that they would like to see honest posting permitted so that they could see my work and the work of other Valuation-Informed Indexers. Rob Arnott looked at my site and calculators and said that everything I have said sounds good to him. Several professors have told me that they have begun teaching Valuation-Informed Indexing in their classes after having being exposed to my work on the internet. And on and on and on and on.

It’s not just me, Anonymous. It is 10 percent of the population that today believes that Shiller’s Nobel-prize-winning research is legitimate research.

I want to make it 90 percent. That won’t happen until we open every site on the internet to honest posting. So I want to see that happen. The problem has never been that people do not see the merit of the case. The problem is that Buy-and-Holders see how positively people react to the message and feel that they need to shut the discussions down, even if it takes criminal acts to get the job done.

Not this boy, you know?

Mu best wishes.

Rob

I’ve posted Entry #534 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Was Buy-and-Hold Just a Money-Making Scheme Going Back to the First Day?

Juicy Excerpt: Another factor is that there are so many experts who endorse Buy-and-Hiold. As noted above, common sense says that market timing must work and all of the evidence available to us confirms that what common sense says must be so really is so. Still, experts rarely make that point. Actually, I cannot recall anyone other than me ever saying things quite that way. Buy-and-Hold appears to be supported by experts. That reality gives the strategy credibility in the minds of millions even though the case does not hang tougher at all well.

I’ve posted Entry #521 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called New Article on Safe Withdrawal Rates Shows How Far We Have Come in 18 Years.

Juicy Excerpt: Bengen states: “Examining the chart, one is immediately struck by the countervailing behavior of the two data series. High initial withdrawal rates are consistently associated with ‘cheap” stock markets and low initial withdrawal rates are associated with ‘expensive’ stock markets. The correlation between the two data series is negative 0.75, which is quite strong. Obviously, it paid to retire when stocks were cheap!”

That’s Valuation-Informed Indexing, not Buy-and-Hold. That’s market timing. Bengen wouldn’t have dared to write something like that in 2002 and Financial Advisors wouldn’t have dared to publish it at that time. We’ve come a long way in 18 years!

I’ve posted Entry #495 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called We Should Want Stock Prices to Move to Fair-Value Levels Gradually.

Juicy Excerpt: My biggest concern from an investing standpoint is that the price drop will not stop when the CAPE level hits “16.” Shiller’s research teaches us that it is investor emotion, not economic developments, that play the biggest role in setting stock prices. Irrational exuberance produces the crazy high numbers that have been in evidence for many years now. But irrational exuberance never gives way to a period of reasonable prices. Emotional highs lead to emotional lows. Irrational exuberance becomes irrational depression. CAPE values of 26 do not give way to CAPE values of 16 but to CAPE values of 8. We can’t take a CAPE value of 8.

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

“Is there anything else that I can do for you?”

I am not asking you for anything. You are the one asking. You want Shiller, Wade and a host of other people to say things. You want people to let you have an unfettered soap box on their forums to say and do whatever you want. You seem to be hoping that we will all just go along with your unverified claims of death threats, job threats, etc. You want the The New York Times to write articles about you. You want people to pay you $500 million. Read your board. You are the one making all the demands.

I expect the laws of the United States to be followed when I post on boards where people meet to learn about retirement planning and I point out to them that a study that many of them are using to plan their retirement lacks an adjustment for the valuation level that applies on the day that the retirement begins. That much would be fair to say.

It hasn’t happened. But those laws remain in place. Those laws are every bit as much a reflection of our national will as is the popularity of Buy-and-Hold. We are as a nation acting in a conflicted way for the time being. Will we resolve the conflict in the days following the next price crash, when we see with our own eyes how much following Buy-and-Hold strategies has hurt us, just as the last 38 years of peer-reviewed research in this field told us it would?

I believe that we will. I believe that our best days are ahead of us. I believe that Buy-and-Hold is the past and that Valuation-Informed Indexing is the future. So I am waiting for that big advance.

I want Shiller to do things, I want Wade Pfau to do things, I want everyone living in the United States to do things. Why wouldn’t I? I love my country. I love the people who reside in it. Naturally, I wish the best for them. Naturally I want to see them do the things that they need to do to advance into a very bright future in which the risk of stock investing has been reduced by nearly 70 percent (according to the peer-reviewed research that I co-authored with my good friend Wade Pfau).

I want lots of things. But I don’t think that it would be quite right to say that I am asking for those things today. I would of course like to have those things today. But I no longer believe that it is possible for me to have them today. I need help to make all these things happen. And I do not believe that I am going to get that help until we see another price crash and it causes people to open up to the idea of giving the last 38 years of peer-reviewed research in this field a serious look.

I want lots of things. But I am not asking for anything at this moment in time. I am just waiting. I am always trying to understand better what is going on. And I am writing a book that tells the story. And that’s pretty much it.

I respond to your questions because I want to help you cope with any pain that you are feeling and because I don’t want to pass up on any learning experiences that might be made available to me by people who are skeptical of my beliefs about how stock investing works and who have from time to time asked me questions that helped me think about aspects of the story that I had not considered enough before hearing those questions.

There is nothing that I am asking you for at this point in time, Anonymous. I have offered to help you and you have demonstrated a lack of interest in my offers. So be it, you know? You are obviously not required to accept my offers. You have other plans. I wish you the best of luck with those plans. Go in peace, grasshopper, you know?

Hang in there, dear friend.

Rob the Demanding One

I’ve posted Entry #454 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Risk Is Not Volatility, Risk Is Not Knowing What Causes Volatility.

Juicy Excerpt: Strangely, however, we cannot say that Shiller has in a practical sense done much to reduce stock investing risk. If stocks are more risky when stocks are priced high (which is what Shiller showed), there has never been a time in U.S. history when stocks have been more risky than than have become during the post-Shiller era (from 1981 forward). There have been two huge changes in the stock investing world in the past four decades. In an intellectual sense, most of the risk of the asset class has been eliminated. And in a real-world sense, stocks have become much more risky.

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

Rob,

If these “goons” never existed, how do you think your life would have been different, other than the loss of mild entertainment?

That’s like asking an oncologist how his life would have been different if cancer had never existed. In one sense, it would have been better. The oncologist devotes his human energies to defeating cancer, just as I devote my human energies to defeating the Get Rich Quick urge that animates the Buy-and-Hold strategy. So there is a sense in which the oncologist sees cancer as the enemy. But he doesn’t avoid cancer in the way that he might avoid some other enemies. He goes looking for people who have cancer to see if he can help them. He reads all that he can about new developments in the treatment of cancer. He wants to know everything about cancer so that he can do a better job eradicating it (because he loves people and cancer hurts people). So do I want to know everything about goonishness/Get Rich Quick/Buy-and-Hold thinking because I want to eradicate it (because goonishness/Get Rich Quick/Buy-and-Hold thinking hurts people and I love people).

Does that help at all? I like you Goons as people, Anonymous. For all sorts of reasons. Because I learn from you, for one. But I believe strongly that, if you were thinking clearly, you would work hard to rein in your Goon inclinations. Because those Goon inclinations hurt you in very, very serious ways. You need to know how stock investing works. We all do. But you have made a decision never to listen to the 10 percent of the population that believes that Shiller’s research is legitimate research because those people say things that make you feel uncomfortable. I don’t apologize for making you feel uncomfortable. I think that there are circumstances in which we must live through a measure of discomfort to get to a better place and to experience lots of exciting, wonderful stuff. The words that I direct at you are aimed at helping you to find your way to that place or at helping others find their way to that place in the event that you elect not to go there and others elect to visit this site in the hopes of learning what they need to learn to find their way to that better place.

Does that help at all? I don’t like goonishness. But I appreciate that goonishness often resides within good and smart people who would disdain their own goonishness if they were able to see it. I cannot force anyone to see their own goonishness. But I can point it out to them and to others. And if they or the others reach a point where they are interested in seeing how the goonishness is a negative, they can benefit from seeing how it all works.

Goonishness/Get Rich Quick/Buy-and-Hold is bad. That’s my sincere take. I was once a Buy-and-Holder myself. That was because Buy-and-Hold was promoted as a research-based strategy and that’s what I was looking for. I think that Get Rich Quick emotions can hurt investors and I like the idea of teaching people what the research shows so that they can rein in those emotions. On the evening of August 27, 2002, when Greaney advanced his first death threat and 200 of my fellow community members endorsed the post containing it, I lost confidence in Buy-and-Hold. I cannot endorse a strategy that prompts people to go down that dark path.

Get Rich Quick investing is my cancer. I love the people who follow Buy-and-Hold strategies. I devote my human energies to showing them that that is a mistake. I love the people, I don’t love the cancer. My job is to remove the cancer, my job is to defeat the cancer.

If we lived in a world in which there was no Get Rich Quick/Buy-and-Hold urge, I would need to find something else to do with my time, just as an oncologist who was moved to a world in which there was no cancer would need to find something else to do with his time. I see no signs that Get Rich Quick investing strategies are going to disappear from our world anytime soon. So I intend to just keep doing what I can to help people overcome the Buy-and-Hold stuff. If I could wave a magic wand in the air and make the Get Rich Quick urge go away, I would do it. But I obviously don’t possess those sorts if powers. So I do what I do instead.

I hope that helps a small bit. I wish you all good things.

Cancer-Fighting 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:

So, the answer is to just read Rob’s stuff till you believe it.

Instead of having actual evidence.

The answer is to let the process play out, Laugh.

You have my blessing to never read another word I say. That would be 100 percent on the right side of the line. You travel to the wrong side of the line when you make that decision for others. All of the others get to decide for themselves whether they will read any of my words or not.

Every new idea in the history of the world started with one person believing it. Then it became two. And then four. And then in time four-hundred. And then in more time four-thousand. And like that. That’s the process by which an idea grows from insignificance to dominance. You have to let that process play out as it will without trying to kill the idea in the crib.

Most new ideas die of their own weakness before they grow into anything of significance. It is fine for you to believe that that is what will happen with Valuation-Informed Indexing. If the idea is not strong, it will die without you ever needing to life a finger to kill it. But it is not for you to force the death of the idea. Each member of the community plays a role in determining whether the idea withers or grows and you just have to stand back and let that process play out. You get a vote, like everyone else. You can say “I think this idea is pure stupid.” That’s fine. That’s helpful, actually. Doing that is playing your role. But, after you do that, you have to let it be. Others get to decide for others. You need to respect the line that distinguishes deciding for yourself and trying to force others to make the decision you prefer. You need to let others make up their own minds without interference from you.

That’s it. That’s the secret. I often say “I love my country.” That’s what I mean when I say it. Our country has a process by which these sorts of disputes are resolved. It works. Most new ideas die. Most new ideas should die. So it’s a good thing that our process results in the death of most new ideas. But some new ideas go on to help us all in hundreds of amazing ways. And so it is also a good thing that our process lets a small number of new ideas grow into something very big. You need to respect that process. You need to play your role to the best of your ability and then step back and let others do their thing without any force being applied by you.

What’s evidence to you is not necessarily evidence in the mind of someone else. And what’s not evidence to you might qualify in the mind of someone else. You have to respect that others have different perspectives from yours as to what constitutes evidence. All of the words that come out of your mouth should reflect your perspective. But all of the others get to determine their perspective and to decide on the words that will come out of their mouths. You control the posts that appear with your name on them. But you do not speak for the entire community. If there are 10 percent who are Valuation-Informed Indexers, that 10 percent gets to decide for itself what constitutes evidence from its perspective. The 10 percent has the same right to speak its mind as the 90 percent. No intimidation tactics.

Process-Focused Rob

I’ve posted Entry #388 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Value Proposition of Stocks Can Only Be Assessed Relative to What Is Being Offered By Other Asset Classes — Yes or No?

Juicy Excerpt: Is it possible that our failure to address the sky-high stock valuations that have applied for over 20 years now has put us in a spot where either the negatives associated with low interest rates or the negatives associated with high stock prices are locked in? I find the logic chain described by Shoehorn troubling. Yes, investors are being rational to choose even high-priced stocks in circumstances in which alternatives offering a decent return are not available. But why aren’t alternatives offering a decent return available? Can we identify the driver of the low interest rates?

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

So, you have seen what holdings I have in my Vanguard account to make such an assessment.

It’s not as if you are better off if you have an account that is not representative of the market as a whole. If you have a non-representative portfolio, it is possible that your numbers are slightly better. But it is EQUALLY possible that your numbers are slightly WORSE. In other words, having e non-representative portfolio increases risk. Not generally considered a good thing,.

The biggie is whether you are taking the last 36 years of peer-reviewed research into consideration by dividing by two or whether you have been taken in by the smelly Buy-and-Hold garbage and are fooling yourself into thinking that your portfolio numbers offer a reasonably good assessment of the true and lasting value of your portfolio. If you have fallen for the smelly Buy-and-Hold garbage, you cannot engage in effective financial planning. To engage in effective financial planning, you need to get the numbers at least roughly right.

These are my sincere thoughts re these terribly important matters, Anonymous. Buy-and-Hold/Get Rich Quick is not my particular cup of tea. I am a peer-reviewed research/common sense kind of guy. Sue me, you know?

But I course wish you all the best that this life has to offer a person all the same, my good friend. I am 100 percent sure re that one.

Please take good care, man.

Rob