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 thousands of comments we see on this board everyday speak volumes about your opinions.

The lack of comments show that Get Rich Quick strategies can achieve high levels of popularity before they are exposed as scams, Anonymous. There were people who knew that the Madoff fund was a scam before it was exposed. If those people had put up web sites pointing out the scam, how popular do you think they would have been?

I read an article published shortly after the Madoff scam was exposed that said that the lesson for investors was that, if it sounds too good to be true, it probably isn’t true. Does that apply to Buy-and-Hold? The Buy-and-Holders say that there is no price at which stocks are a poor investment choice. Stocks are best when selling at fair value and also when selling at two times fair value and also when selling at three times fair value and also when selling at ten times fair value. I can go for that! That sounds believable! The idea that one asset class is always the best choice is not too-good-to-be-true stuff!

Your “defense” of the most heavily promoted Get Rich Quick scheme in history is that it has remained popular for as long as prices have remained sky high. Let’s see how long it remains popular after prices have fallen hard. I have a funny feeling that that might be a better test. But I guess we will see, you know?

I wish you the best of luck with it, in any event. I hope that that helps at least a tiny bit.

Unpopular 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:

The plan did not work like a dream. We can all see the math. 17 years is not a short term. After 17 years of missing your target, the nest egg is spent down to a level that you can’t recover. You are trying to convince people that they should try to time the market with your VII strategy. Why should they when it failed for you?

I agree that 17 years is a long time.

If you include the value of the book that I could not have written had I not taken this path, then my nest egg value is off the charts. I have not converted that value to cash as of today. But I see the value there very, very, very clearly. So that’s what I have to go by.

If a fellow had discovered the cure for cancer and people who worked in cancer treatment centers harassed him for 17 years and kept him from earning an income, would you conclude that the value for the cure for cancer was zero? I would not. I would conclude that the people harassing him saw the great value in what he was putting forward or they would not be bothering with the harassment.

Everyone should be timing the market. Not because of anything that happened to me and not because of anything that I say. Everyone should be timing the market because there is 38 years of peer-reviewed research in this field showing that market timing is required for long-term investing success. If valuations affect long-term returns (Shiller was awarded a Nobel prize for showing this), then stock investing risk is not stable but variable (depending on valuations). Investors seeking to keep their risk profile roughly constant over time MUST engage in market timing. To fail to do so is to fail to practice price discipline, which is obviously not at all a good thing.

It will be interesting to see how things play out in the days following the next price crash, Sammy.

I do wish you all good things, in any event.

Well-Wishing 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:

Your portfolio did not do what you said it would do. VII did not work. We can all read what you wrote. Your plan failed. You do not make up risk adjustments. Nor do you even risk adjust for results that have already occurred. You should have learned that in your basic finance classes.

I disagree.

I have learned amazing things over the past 17 years. My work has been endorsed by thousands of ordinary people and by dozens of big names and the work is unique work (meaning that I have few competitors) in a highly lucrative field. That sounds real,real, real, real good to me.

If the work that I have done brings in even a small fraction of the value that it has added to the world, the Bennett family will be taken care of financially for many generations to come. If you would have asked me what the odds were that I would be able to produce this kind of value on the day when I began investigating the VII concept, I would have put it at one million to one. I guess I will just have to struggle on somehow now that the one in a million shot has come through for me.

Oh, woe is me!

I think you WANT me to have not succeeded. I think that is how you hope you will be able to block people from learning what they need to know — you don’t feel that you can defeat the ideas, so you put all your effort into defeating the person carrying the ideas to others. I see that as deeply, deeply, deeply sad stuff. If I ever get to the point where I feel that way about ideas that I am trying to defend, I hope that I just give up on those ideas rather than try to defend them that way.

I think that lots of others will be making big money from these ideas down the road a piece, by the way. Today, the Buy-and-Holders scare people into thinking that they will pay a financial penalty for exploring Shiller’s research. That’s a desperation tactic. It’s what we would see if someone came up with a cure for cancer and the people who earn big incomes at cancer treatment centers put all their energies into destroying the careers of the people with the new and better approach. That sort of thing makes the people involved feel sick inside. It’s not a good long-term plan. Eventually, a good people finds a way to make the transition to the new and better approach. That’s what I think we will see here. Probably not until we see all the human misery that we will see with the next price crash. But eventually. And better late than never, right?

Wade Pfau said after 16 months of researching this stuff: “Yes, Virginia, Valuation-Informed Indexing works!” You are standing in the path of the history train, Sammy. That’s not a good place to be standing. This is a nation committed to progress. The investment advice field cannot long remain the one big exception.

We’ll see.

My best wishes.

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:

Who, specifically, threatened Wade’s career?

Ask him.

He wrote to me and told me that he was scared of what you Goons would do to him if he continued doing honest work. He had posted our research at the Bogleheads Forum and a number of people there responded in a very positive way. And then Mel Lindauer accused him of following unethical research practices. Wade took great exception to that. He shot back at Lindauer and I was very proud of him because so few people have the courage to do that. But soon after that he wrote to me and said that he did not want you Goons following him around the internet and destroying his career. He told me that he warned the journal that published one of his papers to expect hate mail; I am sure that it embarrassed him that he had to do that. And he said that he was concerned that defamatory e-mails would be sent to his employer and that his employer would not want to go to the trouble of figuring out if the charges were legitimate but would just fire him to remove themselves from the controversy.

My personal theory (Wade did not say this) is that Wade expected Bogle to come to his defense when Lindauer attacked him and that it frightened him to see that Bogle was not going to do anything to rein in Lindauer. It’s very scary to fight you Goons alone. We live in a society that has laws and for years we have seen those laws enforced in a reasonable manner. So it comes as a shock to learn that, when it comes to the right to explore the implications of the last 38 years of peer-reviewed research in this field, there are lots of highly respected people who have no desire or intention to do anything to see the laws enforced. It shocked me when Motley Fool did not take action against Greaney after he posted his first death threats. By failing to take action they were sending a signal that death threats are okay when it come to the promotion of Get Rich Quick investment strategies; there’s money in it, so the usual rules just don’t apply. I think that is how Wade felt when he was attacked and saw that Bogle took no action. He knew that, if defamatory e-mails were sent to his employer, he would not be able to count on Bogle’s help. That’s a scary feeling. Again, the Bogle part of this is a personal theory of mine, Wade did not tell me that Bogle’s failure to act responsibly was the reason why he went to the dark side.

Wade was scared on the day he contacted me 16 months before. He was always trying to appease you Goons while always also wanting to dig deeper and do important work developing and promoting the Valuation-Informed Indexing concept. I remember one time he saw how you Goons invaded the Early Retirement Forum with out-of-control hate when my name was mentioned and he just couldn’t believe it. He had never seen anything like that before. I am sure that that left an impression on him. And on numerous occasions he would try to explain himself at the Bogleheads Forum. He would say how Valuation-Informed Indexing is completely in accord with many Buy-and-Hold principles (which is of course so) and that he did not think that Buy-and-Holders should be hostile to hearing about it (and of course most are not — you Goons comprise about 10 percent of the population of Buy-and-Holders). But of course none of that had any effect on you Goons. That scared him. He couldn’t figure out how to do work advancing the world’s knowledge of how stock investing works without losing his ability to earn an income in this field.

It took me some effort to persuade Wade to contact the Trinity study authors about the error that they made in their study. It is a scandal that that study passed through the peer-reviewed process. Shiller’s peer-reviewed work showing that valuations affect long-term returns had already been published at the time the Trinity study was presented for review. And it passed! It is impossible to explain that one. The very purpose of peer-review is to catch those kinds of errors. Wade saw the need to contact the authors of the Trinity study and he eventually did so (I do not believe that he ever received a response but it is possible that he heard something after he flipped to the dark side). Wade was very worried that calling the Trinity authors out on their error was going to hinder his career advancement. After he flipped to the dark side, he told me that it is not reasonable to expect errors in retirement studies to be corrected — that “that’s just not the way that research works.” (that’s a paraphrase but close to his actual words). That’s s chilling statement. I am 100 percent certain that close to 100 percent of the investing population would like to think that errors in retirement studies are corrected when they are discovered. But the threatened and frightened version of Wade Pfau says, no, that is not the way it is done. Of course he thought that corrections were entirely appropriate in the days before his career was threatened. The views that he expressed in public changed dramatically as a result of his personal experience of seeing what happens to people who dare to do honest work in this field.

I now know that this sort of thing goes on all the time. Rob Arnott said that he has had experiences similar to my own. He has known of researchers who wanted to prepare research relating to his investing beliefs (which are similar to my own) who were taken aside and told that publishing such research would do damage to their careers. The American people need to know this. This sort of thing needs to be written up on the front page of the New York Times. If researchers are afraid to do honest research because of what the Buy-and-Holders will do to them if they “cross” them, then the entire field is corrupt. We would be better not to have any academic researchers than to have academic researchers feeling free to publish research supporting a Get Rich Quick approach but afraid to publish research challenging that approach.

I suspect that there were e-mails from you Goons to Wade in which more threats were conveyed. But I of course did not see them and cannot say what was contained in them. I believe that there were such e-mails because the statement that Wade put forward when he flipped to the dark side contained language that was so dumb that it could not possibly have come from his own mind. He had that absurd stuff where he said that Greaney had solved the entire problem when he said that people could in the privacy of their own homes elect to go with a withdrawal rate lower than 4 percent. That of course has never been in question. The issue has always been whether people can point out on discussion boards and blogs where the Greaney retirement study is being relentlessly promoted that that study lacks a valuation adjustment. Wade obviously knows that that is the dispute. That crazy language had to have been suggested by one of you Goons. But I have never seen the e-mail in which that suggestion was made.

The peer-reviewed research that Wade and I co-authored is the most important research published in this field in 30 years. Every investor alive has a right to see it and to use it to inform his investment decisions. It is a national scandal that Wade was threatened and that millions of people have been denied access to that amazing piece of work. Neither Wade nor any other researcher should have to live in fear of a gang of internet goons. But that’s where we are today. The cover-up has been going on for 38 years now and so there are a lot of powerful and wealthy people who very, very, very much do want to see it exposed.

I believe that we are a good people. I believe that this will all come out in the days following the next price crash. We’ll see.

My best and warmest wishes to you and yours, Anonymous.

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, what you are saying is that buy and holders did well after those drops, but VII investors missed out yet again.

Obviously I am not saying anything even remotely like that.

I am saying that stock price increases of 6.5 percent real per year are rooted in economic realities and that investors may count on them to finance their retirements but that price increases of more than that are rooted in irrational exuberance and investors should NOT count on those amounts to finance their retirements. I am also saying that everyone who works in this field should be telling investors that every day.

Investors have not been told that. Investors have been terribly misled. This is a national tragedy.

The biggest reason why The Great Buy-and-Hold Con has continued for so long is that all investors possess a Get Rich Quick urge and Buy-and-Hold appeals to it. The vast majority of investors like thinking that the amounts on their portfolio statements are real and that they do not need to divide those amounts by two at times when stocks are priced at two times their fair value. Most investors are fine with being misled. That doesn’t make it okay. But it does make it a viable marketing strategy to mislead investors about the true and lasting value of their portfolios.

When nominal portfolio values are lower than their real values, the psychology changes. When stocks are priced at one-half of their true value, I will be telling investors that they need to multiply the nominal value by two rather than divide it by two. That’s a much more appealing message. I believe that enough investors will listen to that message for us to open every site on the internet to honest posting re the last 38 years of peer-reviewed research. Then we are home free.

There’s no reason for anyone to go back to Buy-and-Hold once they have discovered Valuation-Informed Indexing. One is research-based, one is not. One is real, one is not. One works, one does not, We are all going to be Valuation-Informed Indexers in the future. But for now, these high prices are an obstacle to progress. They appeal to our Get Rich Quick impulse, which is our weakness.

No one ever “misses out” by knowing what the peer-reviewed research says, Anonymous. That’s like saying that people who didn’t invest in the Madoff fund “missed out” on a great opportunity to get rich quick. Huh? The peer-reviewed research is our friend. It is the marketing slogans of the Buy-and-Holders that hurt us and cause us to miss out on better investment strategies and the many benefits that flow from them. It is absurd to think that someone could miss out by giving up a Get Rich Quick strategy for a research-based strategy. Perhaps in the short-term, when irrationality can prevail, but never in the long-term, when rationality always reasserts itself.

My sincere take.

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:

Looks like ESI wrote an article about you on his website:

https://esimoney.com/beware-of-fake-money-experts-with-no-accomplishments/

I don’t think that I agree with every word in this article but I am fine with a good bit of it. I think the article is worth reading.

The headline is: “Beware of Fake Money Experts with No Accomplishments”

I don’t put myself forward as an expert re stock investing in any general sense. I don’t have the background or education or training. I have said many times that anyone who follows my ideas on stock investing solely because I advance them is a darn fool.

There’s one exception to that rule. I am an expert on the long-running (38 years!) cover-up of the discrediting of Buy-and-Hold in the peer-reviewed research of Robert Shiller. That is a huge story. The cover-up is the biggest public policy issue facing the United States today. And exposing the cover-up is just the sort of thing that a journalist does. You don’t need a Ph.D. in Economics to see that people who rely on death threats and threats to get academic researchers fired from their jobs are working a con.

I also am a reluctant expert on the how-to implications of Shiller’s work. I don’t feel entirely comfortable writing about that aspect of the story. But it is work that has to be done and everyone else is afraid to take it on given the behavior of you Goons and so I had no choice but to do it myself. I always encourage others to get involved. And, when others get involved, it is my intention to fade into the background a good bit. I don’t think that I should be advising people as to what to do with their retirement money. But someone needs to give people accurate and honest advice. So I have been forced into the role.

If it is true that valuations affect long-term returns (there is 38 years of peer-reviewed research showing this to be so), then there is zero chance that the safe withdrawal rate is always the same number. So why the heck did the Trinity study get approved by its peer-review committee? Shiller’s research was on the books at the time that the Trinity study was approved. Huh? What the f? That’s the problem. Greaney would have included a valuation adjustment in his study had he seen the Trinity authors include one. So that was a big mess-up.

I would have preferred to have seen Greaney acknowledge the error in his study in 24 hours. Then the Retire Early community could have worked together to come up with accurate numbers. And of course we could have run our work product past the Trinity authors and other people with expertise in the field. We cannot do that today. We don’t have the cooperation that we need to get the job done. But I am sure up for it. I believe that we will have the cooperation we need down the road a piece (after the next price crash).

The reason why I became a Buy-and-Holder once upon a time is that I liked the idea that they rooted their advice in peer-reviewed research. I believe in science. So I love the idea of making investment advice more scientific. But part of the scientific process is acknowledging errors when they are discovered. We should have had a national debate on the many ways in which Buy-and-Hold had to be changed as a result of Shiller’s work way back in 1981.

Once there was a delay, it became embarrassing to the Buy-and-Holders for them to acknowledge the cover-up. Now that it has gone on for 38 years, there is a mountain of embarrassment and we are in a real fix. None of that is my doing. I have been calling for the launching of a national debate for 17 years. I have been trying to move the ball forward.

There’s nothing less expert than advancing death threats and threat of career destruction to block knowledge from moving forward. If we are going to ban honest academic research, we would be better off just to shut down all academic research. Having no research is better than having only dishonest research. That should not be a controversial statement. If there weren’t so much money in Buy-and-Hold, not one person on the planet would oppose the idea of opening every site on the internet to honest posting on the last 38 years of peer-reviewed research in this field.

World Expert (on the Buy-and-Hold Con!) 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 you not ashamed shows us that you lack basic ethics. Your bannings have been well deserved.

No.

I am proud that I finally worked up the courage to call the Buy-and-Holders out on their b.s. that there might be some alternate universe where investors are not required to engage in market timing when buying stocks. Market timing is price discipline. It is price discipline that makes markets work; without it, they become dysfunctional. I believe that most Buy-and-Holders would like to correct their error, which has been public knowledge since 1981. But they are afraid that their careers will be destroyed if they speak honestly and frankly re these matters. There should be no penalties for speaking honestly and frankly re the last 38 years of peer-reviewed research in this field. Opening up every site on the internet to honest posting re these matters is the most important piece of public policy business before our nation today.

My sincere take.

Ethically Challenged 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:

Out of hand? Yesterday, for example, I left a post about this subject as to how you are hypocritical by wanting to post what you want on other people’s sites, but don’t do the same on your site. You deleted it. I have tried posting numbers about buy, hold and rebalance returns yet you have deleted those.

In return, you write an article about being polite and then in the comment section you call me a goon and try justifying your choice to ban me. You are your own worst enemy.

Please go to Greaney’s site and take a look at his retirement study, Sammy. I pointed out on the morning of May 13, 2002, that it lacks an adjustment for the valuation level that applies on the day the retirement begins. It still lacks that today. 17 years have passed. The study has not been corrected. It just sits there, uncorrected, hurting people who are taken in by it.

That’s the problem. There’s nothing that I can do as one person to fix it and there’s nothing that you can do as one person to fix it. This is something that we need to address AS A NATION. The ordinary procedure would be that, Shiller would publish his research showing that valuations affect long-term returns in a peer-reviewed journal and a national debate exploring its implications would be launched. And we would all learn and learn and learn and learn and learn. And we would all be better off from that point forward. We would all be living better lives from that point forward.

The ordinary procedures obviously did not apply in this particular case. The research was published, Shiller was awarded a Nobel prize in recognition of his amazing advance. But the studies rooted in the old understanding were not corrected (the astounding reality is that the Buy-and-Hold retirement studies did not even exist on the day when Shiller published his breakthrough research — the Trinity study and all the studies that followed from it came later — the Trinity study was granted peer review even though its methodology conflicted with the findings in Shiller’s peer-reviewed studies). So here we are.

We live in a world in which there are retirement studies floating around that purport to be peer-reviewed but which use methodologies that are in direct conflict with earlier peer-reviewed research. If Shiller’s Nobel-prize-winning research is legitimate, those studies are likely going to cause millions of failed retirements down the road a bit. But they remain uncorrected even though the errors are public knowledge. The authors of the studies are not interested in correcting them and the people of the United States are not interested in pressing them to make corrections. We have all taken up residence in the Twilight Zone.

Do you have any bright ideas as to how we might proceed? My bright idea is that we all work together to launch the national debate re the many, far-reaching implications of Shiller’s Nobel-prize-winning research. If you have something better in mind, I’d like to hear it.

If your something better is that I just keep quiet about the errors, no thanks. I did that for three years. I was afraid of what Greaney would do to me if I spoke up. I felt bad about myself. A lot of the people who were being taken in by his study were friends of mine. So I worked up the courage to do what had to be done. I’ve learned a lot about how stock investing works in the 17 years since. And I have done all that I can to share what I have learned with lots of others. I have faced a lot of flak, to be sure. But it feels healthier facing flak than it did living in fear.

I wish you all good things, Sammy. That much I can do without feeling bad about myself. So that much I do. I cannot keep quiet about the errors in the studies without feeling bad about myself. So that I do not do.

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:

You are just repeating the same delusions that have been addressed thousands of times.

I would say that it’s the other way around, Anonymous It’s the Buy-and-Holders who repeat and repeat and repeat a mistake that was uncovered by the peer-reviewed research 38 years ago.

There is zero evidence that price discipline (long-term timing) is not required when buying stocks. ALL of the evidence shows that long-term timing always works and is always required. But the Buy-and-Holders continue to make this crazy claim that there might be some mystical, magical world where long-term timing might not work every time, Huh? What the f?

It all goes back to a mistake made back in 1965. Eugene Fama published research showing that short-term timing doesn’t work. Good for him. That one has stood the test of time. That was an important finding. If the Buy-and-Holders told investors to avoid short-term timing, they would be heroes.

That’s not what they say. They say to avoid all forms of timing, both short-term and long-term. Why do they do this? They didn’t know about the importance of the distinction between short-term timing and long-term timing at the time they were developing their strategy. Shiller showed that in 1981 and Buy-and-Hold was developed before that. So the Buy-and-Holders just made a mistake. No biggie. It happens. The only humans who never make a mistake are the ones who never try to accomplish anything.

So the Buy-and-Holders make a mistake and Shiller uncovers it and all is well that ends well, right? Not quite.

The Buy-and-Holders become EMBARRASSED by their mistake. So, instead of owning up to it, they elect to cover it up. And then they are embarrassed not only by the mistake itself but also by the cover-up of the mistake and then also by the cover-up of the cover-up and so on and so on and so on. And now, 38 years down the line, they are also worried about the hundreds of thousands of civil claims for damages that will be brought against them by investors who will lose large portions of their life savings because the Buy-and-Holders have failed to own up to this mistake for 38 years now and about the criminal charges that will be brought against those who have posted in “defense” of you Goons and so on. It gets worse and worse and worse and worse and worse.

It can never get better, Anonymous. Actually, there’s one way that it can get better. But only one.

The only way that it can ever get better is if those who are aware of the mistake start making it a practice to call the Buy-and-Holders out on their b.s. when they advance the crazy idea that it is not necessary to engage in market timing or that there might be some mystical, magical, alternate universe in which market timing is not required. It’s about 10 percent of us who see these claims as b.s. If that 10 percent consistently calls the Buy-and-Holders out on their b.s., the mistake will get fixed. But that’s the only way that it is ever going to happen.

The penalty for the Buy-and-Holders owning up to their mistake is just too huge for them ever to do it on their own. No one wants to go to prison. No one wants to pay damages in a civil lawsuit. No one wants his clients or his readers to learn that he is the sort of “expert” who is 38 years behind in his reading of the peer-reviewed research in his field. So the Buy-and-Holders are not going to on their own walk up to the front of the stage and say “oopsie!” That is just not going to happen.

So how do we ever get this mistake fixed? The Buy-and-Holders ain’t going to fix it on their own. And they are going to make sure that the thousands of honest and good people who would like to see the mistake fixed so that our economic and political systems can survive are going to pay a huge price if they dare to “cross” the Buy-and-Holders by posting honestly re the last 38 years of peer-reviewed research. What happened to me is what happens to anyone who dares to note that the Buy-and-Hold retirement studies lack an adjustment for the valuation level that applies on the day the retirement begins. The Buy-and-Holders don’t attack me because they don’t like the way I look. They attack me because I post honestly about the far-reaching implications of Shiller’s Nobel-Prize-winning research and there is no way that Buy-and-Hold can survive someone being able to do that.

Millions of people want to know how stock investing works in the real world. Permit me to post honestly and I will soon be making millions and then tens of millions and then hundreds of millions. And, after I make hundreds of millions, there are going to be thousands of bloggers joining me and then thousands of investment advisors and then thousands of academic researchers and then thousands of authors and then thousands of policymakers and then thousands of economists on and on and on.

The mistake that the Buy-and-Holders made (failing to distinguish long-term timing from short-term timing when research was published showing that short-term timing doesn’t work) is the biggest mistake ever made in the history of personal finance. Long-term timing is price discipline. Persuade millions of investors that there is no need to practice market timing and you are going to bring on an economic crisis. We have seen an economic crisis on every occasion in U.S. history in which Buy-and-Hold has become a popular “strategy.” It is not even possible for the rational human mind to imagine a scenario in which we would not see an economic crisis once Buy-and-Hold became popular. Market timing is price discipline. Remove price discipline from the market and it collapses. Every market depends on price discipline to function. Crash the market and you remove trillions of dollars of spending power from the economy and the economy collapses too. It has happened every time because it MUST happen every time.

I’m not the one breaking the law, Anonymous. I am not the one in a panic. I don’t like how you Goons have destroyed our boards and the lives of the people who populate them. Obviously. But I believe that our country is a good country and I believe that we will see reasonable enforcement of our laws in the days following the next price crash, when people are able to see with their own eyes what Buy-and-Hold delivers to millions of investors every time that it is tried.

We’ll see, you know?

I am going to continue to say that I see no valuation adjustment in the retirement study posted at John Greaney’s web site. That much is under my control. That much I will do. The rest is out of my hands. I would like to see us all stay within the confines of U.S. law in our discussions. But I only get one vote. I don’t always get my way. Perhaps you’ve noticed.

I wish you all the best that this life has to offer a person. I like to think that that might help a tiny bit. That much I can do in good conscience and so that much I do do. I cannot in good conscience say that I believe that the retirement study posted at John Greaney’s web site contains an adjustment for the valuation level that applies on the day the retirement begins. So that I do not say. No freakin’ way, no freakin’ how.

My best wishes to you and yours.

Delusional (According to the Buy-and-Holders!) 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 have seen a long list of people that have investigated your claims of death threats. Not one person could find any proof. The burden of proof falls on you as you are the only one making the claim.

Will my ability to meet the burden of proof change in the days following the next price crash? That’s the question on the table today.

There are people who don’t like it that there have been death threats but who are afraid to speak out today because they have seen what happens to people who speak honestly re these matters. I understand where those people are coming from because I was essentially one of them myself from May 1999 (when I put my first post to the Motley Fool board) until May 2002 (when I finally worked up the courage to say publicly that I did not believe that Greaney’s retirement study contains an adjustment for the valuation level that applies on the day the retirement begins).

The thing that caused me to work up the courage to cross the line was the smear campaign that Greaney led against Wanderer when Wanderer said that he thought that there were circumstances in which it could be a good idea to invest in real estate. Wanderer was our best poster and I loved that board community. So I could no longer live with myself if I didn’t do something. So things had reached a point where the cost of remaining quiet was greater than the cost of posting honestly. So I crossed the line.

We need to see that happen with lots of other people. Most people don’t even know who Wanderer is. So the smear campaign that Greaney launched against Wanderer is not going to bring other people around in the way that it brought me around. But losing 50 percent or more of their retirement savings may do it. That will mean that people’s hopes for their financial future will be crushed. People will be reading about how tens of thousands of businesses have failed. They will be reading about how millions of workers have lost their jobs. They will be seeing political frictions get worse and worse. I believe that all that may bring people around. I believe that in the days following the next price crash we may be seeing millions of people experience the sort of conversion experience that I experienced in the days following Greaney’s smear campaign against Wanderer in February 2002.

We are not going to see millions flip overnight. But within a few months we might see enough flip that we get the percentage of the population that believes that Shiller’s research tells us something important about how stock investing works move from 10 percent to 20 percent. That could prove to be a very big change. There are things that the Buy-and-Holders are able to get away with today when the percentage is only 10 percent that they will not be able to get away with when the percentage has increased to 20 percent. So the nature of the discussions will change significantly. As the discussions become more balanced, people will be able to hear both sides of the story. When people are able to hear both sides of the story, conditions will be right for the percentage to go even higher, to 30 percent, and then to 40 percent, and then to 50 percent, and then higher.

It’s an astounding reality that we are only at 10 percent after the publication of 38 years of peer-reviewed research showing that valuations affect long-term returns. That is an amazing reality. There are huge amounts of money to be made offering honest, research-based investment advice. So you would think that there would be many smart and good people rushing in to mine Shiller gold. But we obviously have not seen that. We have seen some rush in. Rob Arnott. Wade Pfau. John Walter Russell. Microlepsis. John Craig. Me. There are others. But that group has just not been large enough to get the job done. We don’t have enough people to turn to for help when we are attacked. And so we self-censor ourselves just so that we can avoid being silenced altogether. And that means that statements put forward by Buy-and-Holders remain unchallenged and as a people we remain in our general ignorance about foundational principles re how stock investing works.

We need to get that percentage up to make significant forward movement. And, once we get it up, that forward movement can come very quickly. Lots of groundwork has been laid over the past 38 years by that vanguard 10 percent. We’ve got the research that we need to make our case effectively. We’ve got responses to every challenge that could possibly be directed at us. We’ve got calculators. We’ve got podcasts. We’ve got graphics. We’ve got everything. We’ve got everything today but the courage to post honestly in the face of the hurricane of abuse that is directed at anyone who dares to speak in a clear and honest way about what Shiller’s research teaches us all about how stock investing works in the real world.

Most people are not terribly interested in theory. Most people are interested only in real-world, practical stuff. Buy-and-Hold failed the intellectual, theoretical test back in 1981. That’s a long time ago. But never in those 38 years have we seen millions of people lose a large portion of their life savings because of Buy-and-Hold. We have not once since 1981 seen a bull/bear cycle come to an end. It is when a bull/bear cycle comes to an end that Buy-and-Hold delivers its most horrible pain. We can point to how Buy-and-Hold has done this in the past, in the Great Depression, in the stagflation of the 1970s, in the near depression that we experienced in the early years of the 20th Century. But there are very few people still alive who personally experienced the Great Depression. There are people who experienced the stagflation of the 1970s but that third Buy-and-Hold Crisis was the least horrible of the four crises that were caused by this theory.

So most people are not alarmed by the mistake at the core of the Buy-and-Hold concept, So even people that go to the trouble to understand that arguments of the Valuation-Informed Indexers are not concerned enough about the mistakes at the core of the Buy-and-Hold concept to take action to get them fixed. The downside of Buy-and-Hold is not clear to people living today because as of this moment in time Buy-and-Hold is telling us that our stock portfolios are worth two times what they really are worth and that seems like a good thing. And the price of speaking out is very high, as my personal experience testifies very strongly. So most people conclude that the prudent thing is to keep it zipped. And as a nation we remain locked in our ignorance of the realities.

Does a 60 percent price crash change that? That question is the entire ball of wax at this point, Anonymous.

I think that a 60 percent price crash that remains in place for a good bit of time is going to change things. I could be wrong. I thought that Greaney’s smear campaign against me would be brought to an end by the site administrator at Motley Fool within two or three days. So I do not have a perfect record when it comes to speculating how things are going to play our re this matter. If you want to say that I am wrong and that a 60 percent price crash will have no effect, you can say that.

But that’s not what I believe. I believe that a 60 percent price crash will cause lots of people to stop and think. And I believe that we only need to get the percentage who have doubts about Buy-and-Hold up from 10 percent to 20 percent to bring about an amazing leap forward in our nation’s understanding of how stock investing works. I think that we are standing on the threshold of one of the most exciting learning experiences that we have ever enjoyed.

I think that the shift from Buy-and-Hold to Valuation-Informed Indexing is the personal finance equivalent for the cure for cancer. We have the cure in our hands. We have tested it and 100 percent of the evidence available to us tells us that the cure works. But the people who make money in cancer treatment centers don’t want millions of people to learn about the cure and have engaged in criminal acts to keep knowledge from advancing. All that we need to advance is a little more courage but we cannot get to first base in our efforts to educate every investor on the planet to the true realities of stock investing until as a people we work up a bit more courage to take on your Goons.

I think that a 60 percent price crash is going to do the trick. But we are just going to have to wait a bit to find out for sure. I naturally wish you the best of luck in all your future endeavors regardless of which way things go.

I am the one putting forward a new idea and so I am the one carrying the burden of proof. In ordinary circumstances, 38 years of peer-reviewed research would be enough to get the job done. These are not ordinary circumstances. Getting stock investing right is so important and this is so lucrative a field that we have powerful forces working against us as a nation as we try to consider these matters. We are going to need a shock to the system to change the conditions on which discussions are held enough for us all to make the trip from the horrible place where we reside today to the wonderful place where deep in our hearts we all want to be tomorrow. I believe that a 60 percent price crash will break down that wall of ignorance and set us free from the Buy-and-Hold Idea that price discipline is not required when buying stocks for ever and ever. But we are just going to have to wait a bit to find out for sure.

I hope that works for you, dear Goon friend.

Burden-of-Proof-Carrying Rob