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

Rob aren’t you afraid of the buy and hold mafia ruining your career too? Oh wait thats right you are just an internet troll nevermind carry on….

One of my primary goals is to save the careers of as many of my Buy-and-Hold friends as possible, Anonymous. Just about all of them want to come clean. People forget that I learned about the errors in the Old School retirement studies from reading Jack Bogle’s book. And he is obviously not the only one who understands that Buy-and-Hold is a big pile of smelly garbage. Bernstein has shown that he sees that. So has Swedroe. So has Burns. So has Richards. So has Schultheis. So has Kitces. So has Pfau. So has Ferri. So has Tresidder. So has Piper. And on and on and on.

They all feel trapped. The money that comes with pushing a pure Get Rich Quick strategy was just too good to pass up. But what do you do when the market collapse you brought on actually takes place and you have caused millions of people to lose most of their retirement money? Saying “oopsie, I guess I should have stayed more up to date re the peer-reviewed research” doesn’t cut it in the eyes of the millions of people who have seen their hopes for a decent retirement crushed by you, does it?

Given that we all have to come clean sooner or later, it seems to me that it makes all the sense in the world to do it sooner. That way the prison sentences are shorter and the financial liabilities are smaller. It’s a win/win/win/win/win.

This site gives people the ammunition they need to fight back when the Buy-and-Hold Mafia goes after them. There are billions to be made giving accurate and honest and research-backed investment advice. There are thousands and thousands of people in this field who would like to get in on that gravy train. Now they have a site that they can use to protect themselves from the tactics of the Buy-and-Holders. I think that it would be fair to say that the Wall Street Con Men don’t want the materials at this site getting any publicity.

I acknowledge that I possess no particular expertise in this field. My take is that that ended up being my biggest edge. Those who have been in on the corruption for years have had to rationalize their failure to speak out and have come to believe those rationalizations on at least one layer of consciousness. I never had to rationalize anything because I never have made a penny doing work in this field. You Goons can threaten me from morning until night. But you can’t get me fired from my job in the way that you threatened to get Wade Pfau fired from his, right? That’s my edge. That’s been my edge going back to the first day.

In the end, all of us who aren’t in prison will be working together. The Buy-and-Holders have to win every day just to stay alive to push their smelly Get Rich Quick garbage one more day. Those of us advocating the first true research-based strategy only need to win once to win forever. There have been lots of people who have made the switch from Buy-and-Hold to Valuation-Informed Indexing. There has never been one person who has switched from Valuation-Informed Indexing to Buy-and-Hold. I think it would be fair to say that there never will be one any more than there ever has been anyone seeking to sign up with the Madoff fund once that con was exposed.

The good news here is 50 times more good than the bad news is bad. The history books are not going to write about you Goons except perhaps in footnotes. What matters is the hundreds of research-backed insights that we have developed over the course of the first 13 years of Our Debate About Having a Debate. Once we enter the debate proper, look out world! We live in a great country. The Buy-and-Holders were right in the days when they were saying that it is a good idea to be willing to look at the peer-reviewed research. This stuff gets better and better and better with each passing day. I sure don’t see any reason to think that that will ever change.

Hang in there, my long-time Goon friend. It gets better. A LOT better.

Rob

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

Your constant references to ‘pain’, ‘love’, ‘wrath’, ‘prison’ ,’force’, etc. speak very much about your own psyche and inner landscape.

But, not so much about anything to do with financial planning.

Especially given that you are an self-admitted and publicly-evident innumerate.

Rob, I honestly (and I do mean honestly) believe that you are actually trying to fight out some inner unresolved conflict involving your Father, religion, and your own place in the world. If it were being effective, I would hold my tongue and let you do your required self-analytical work, disguised as oddly off-kilter topical retirement banter. Sadly, I think you are moving further and further away from reality the more you focus on this enormous strawman you keep trying to construct out of other people’s collective and/or personal choices and judgement. Your whole “love” “hate” “fear” pain” schtick, with you as the arbiter of all, is more in line with Reverend Harry Powell than anyone in their right mind. Seriously. Very very seriously.

This is the future of investing advice, Anonymous.

The only thing we disagree about is that I incorporate Shiller’s findings into my model and you do not. I very, very strongly believe that Shiller’s findings need to be incorporated and you very, very strongly believe that they must not be incorporated. What’s that all about? Why are feelings so strong?

P/E10 is a number.

But it is not just any old number.

It is a very, very, very special number.

It has more power to help us all invest effectively than all the other numbers used in investing analysis all put together.

P/E10 is the number that tells us how emotional we are being in our investing choices.

That’s huge. That’s 80 percent of the game. The peer-reviewed research that I co-authored with Wade Pfau shows that stock investing is a virtually risk-free endeavor for those investors who are willing to keep their risk profiles constant by taking the emotionalism of the market into account when setting their stock allocations.

P/E10 is the number that lets them do that.

When we add P/E10 to our discussions of investing, we are adding the effect of emotions to our discussions of stock investing. That’s where all the risk is.

People have thought for many years that stocks were a risky asset class. That belief has been proven to be a false one. The risk of stock investing is a self-inflicted risk. It is an optional risk. It is a risk that applies only for those who are not willing to look at the emotional part of the equation.

We have essentially eliminated risk from the stock investing story. There never has been an advance this big. There never will be another advance this big. This is very, very, very, very big news.

For you, it is scary news.

You like playing with your non-emotion numbers. You like trying to persuade yourself that investor emotion is like the boogyman, it goes away if you just close your eyes and pretend that you cannot see it.

That approach has failed. That approach put us in an economic crisis. Four times now. Millions of middle-class investors want to move on. And they are going to get what they want.

Pain. Love. Wrath. Prison. Force. Father. Religion. Place in the world.

Yes, I talk about those sorts of things.

And, no, that is not the usual way of addressing the formation of investing strategies.

The title of my book is Investing for Humans. The perfect title, no?

I am involved in a turf war with the Wall Street Con Men. They like to portray themselves as Big Shots. But “they leave out half of the story,” as the Wall Street Journal put it.

No more.

I will not permit it.

We are going to tell people the entire story.

Because to tell people half the story (the non-emotional half) is to tell people a lie. And to tell lies about how to invest is to engage in financial fraud. A crime. A felony. Prison time. Like that.

Not this boy, Anonymous. I am happy to have the Wall Street Con Men tell their half of their story. I am not innumerate, self-admitted or otherwise. But I don’t possess a strong enough skill set re the non-emotional side of things to feel that I have something significant to offer. But I know with absolute certainty that an investing strategy that can only be “defended” with death threats and demands for unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs is an investing strategy not fit for the humans. I like the humans. So I am going to tell the other half of the story. I am going to tell millions of middle-class people the truth about what the peer-reviewed research says about what works and what doesn’t.

If the Big Shots were as knowledgeable as they pretend to be, they would be talking about the emotion you evidence in your every post here at every investing board and blog on the internet. Your emotionalism is the story. It is your emotionalism that makes stock investing risky. For you.

And not for those of us who use the magic P/E10 number to make ourselves aware of the emotionalism/risk all around us and of how to overcome it to achieve our retirement goals.

I am not asking you for your permission to tell the millions of middle-class investors what they need to know, Anonymous. I am telling you how it is going to be. I hope that I am being clear here. It would be cruel of me to evidence any vagueness over such an important question, a question that will be affecting how long your prison sentence will be in days to come.

I am not the arbiter of it all. We ALL have a say.

That includes the millions who want to know the truth about what the peer-reviewed research says. Not just the Wall Street Con Men seeking to protect their turf. And not just their Internet Goon Squads, so filled with rage over the idea of people hearing what the last 33 years of peer-reviewed research says that they engage in behavior that will be landing them in prison cells in days to come.

I love you, man.

But I won’t agree to commit felonies for you.

It’s not a close call.

I will continue to post honestly re safe withdrawal rates and scores of other critically important investment-related topics.

We will see how it all works out.

I naturally wish you all the best that this life has to offer a person regardless of what investing strategies you elect to pursue.

Love is the answer.

Oops! I did it again!

Rob

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

In your mind, the people going to prison are those that had you banned from the various financial boards, correct?

The crime we are talking about is financial fraud, Anonymous. In a hyper-technical sense, anyone who has recommended a Buy-and-Hold strategy from 1981 forward is guilty of the crime. Yale Economics Professor Robert Shiller published peer-reviewed research in 1981 showing that valuations affect long-term returns. If valuations affect long-term returns, then there is zero chance that a Buy-and-Hold strategy (a strategy rooted in the idea that there is no need to change one’s stock allocation in response to big shifts in valuations) could ever work for even a single long-term investor.

I say that promoting Buy-and-Hold is financial fraud only in a hyper-technical sense because millions of good and smart people really do believe in it. I believed in Buy-and-Hold until the evening of August 27, 2002. John Walter Russell believed in Buy-and-Hold when he started working with me. Wade Pfau believed in Buy-and-Hold when he started working with me. You Goons follow Buy-and-Hold strategies yourselves. In ordinary circumstances, that would be pretty darn strong evidence that you believe in the strategies.

Shiller’s 1981 findings truly were “revolutionary” as he indicates in the sub-title of his book. People are not capable of integrating the implications of such findings into their thought processes in a day or a week or a month. We have as a society been struggling with this for three decades now. We understand intellectually that Shiller is right. But we “know” emotionally that Fama and Bogle are right. We recognize the importance of Shiller’s work. So we celebrate his book and award him a Nobel prize.

But his findings are painful to us because accepting them requires that we acknowledge that our most fundamental beliefs about how stock investing works are in error. So we suppress knowledge of what Shiller taught us. We ignore him while celebrating him. We bow our heads when his name comes up but we go right on following and endorsing the Buy-and-Hold strategies that we followed and endorsed in 1980, before Shiller had published the most important research ever published in this field. We act as if Shiller did not exist.

In short, we suffer from cognitive dissonance. When people cannot accept a truth, they suppress knowledge of it. We have as a people been suppressing knowledge of what Shiller showed to be so in 1981 for 33 years now.

Cognitive dissonance is not a crime. Financial fraud IS a crime. But cognitive dissonance to a large extent negates it. One element of the crime of financial fraud is bad intent. If someone advocates Buy-and-Hold with good intent, he is not guilty of the crime even though he has hurt people in very serious ways and even though there is 33 years of peer-reviewed research showing him why it was wrong for him to make the claims he made. An element of the crime is missing in such cases.

That’s not so in the cases of people who have advanced death threats or demands for unjustified board bannings or tens of thousands of acts of defamation or threats to get academic researchers fired from their jobs. Those people are suffering from cognitive dissonance too. But they have evidenced bad intent in a way that cannot be excused by cognitive dissonance.

These people have not only gotten the investing question wrong. They have made it impossible for us as a society to ever get it right. In all other fields of human endeavor we correct mistakes by talking through new findings and different opinions. Gradually, we work our way to the truth. We cannot do this when the penalty for the “crime” of posting about the implications of  the last 33 years of peer-reviewed research is career death.

Hundreds of academic researchers want to tell the truth about stock investing but do not feel safe doing so. Hundreds of investment advisors want to tell the truth but do not feel safe doing so. Hundreds of journalists want to tell the truth but do not feel safe doing so. Hundreds of economists would like to tell the truth about the cause of the financial crisis but do not feel safe doing so.

The members of the Buy-and-Hold Mafia have gone beyond just giving bad investment advice. They have engaged in acts of intimidation and deception that have stopped thousands of people who know the truth about these matters from speaking up. Those acts of intimidation cannot be excused in the name of cognitive dissonance. Those acts of intimidation need to be prosecuted as acts of financial fraud.

I am not a prosecutor and I will not be serving on any juries. I am a journalist. It is my job to tell this story in as fair and complete a way as I possibly can tell it. It is for others to decide precisely who will go to prison and for what length of time. If I were to ignore the fact that crimes have been committed, I would not be doing my job as a journalist. If I were to ignore the fact that crimes have been committed, I would be participating in the cover-up myself. I would be putting myself at risk of going to prison. Um — No thanks.

I love my country. Part of my job is to move the focus of the discussion to the substantive matters as quickly as possible. That means getting the criminal questions addressed as soon as possible so that we can put the ugly procedural side of this behind us. Ducking the reality that serious crimes have been committed helps no one. The longer that side of things is ignored, the more financial misery is caused and the angrier people will be when they lose most of their retirement money in the next price crash. The sooner the prison sentences are announced, the fewer people there will be who will go to prison and the shorter their prison sentences will be. To fail to address the crimes that have been committed during the 12-year cover-up is not an act of charity but an act of cowardice.

That’s my sincere take re these terribly important matters, in any event, Anonymous. I hope that the words above help a little bit.

Rob

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

if the Goons and hatred and conspiracies are the real story, why not talk about that during your 5 minutes of fame at FinCon?

People don’t want to hear it, Anonymous.

It makes people feel very uncomfortable to discuss that stuff.

The people who promote Buy-and-Hold are not bad people. They made a perfectly understandable mistake. Then they covered it up, thinking it probably wouldn’t be a big deal to do so. Then valuations went so high that it became a very big deal indeed. By that time they felt that it would make them look awful to come clean. The trap that they have fallen into just keeps pulling tighter and tighter and tighter as time passes.

People don’t like to think that Jack Bogle is a criminal or that Mel Linduaer is a criminal or that John Greaney is a criminal. I don’t like to think it myself. You didn’t see me calling these people criminals until they had engaged in so many criminal acts that it was impossible for me to look the other way anymore.

Why were all those Catholic priests not turned in when they engaged in sexual crimes? People didn’t want to accuse them. People didn’t want to cross powerful people. People were embarrassed. These things happen.

I would prefer it if someone else would expose this matter. I would prefer that about 10,000 times over. Do you see anyone else stepping forward?

Every academic researcher wants to be freed to do honest work. Every blogger wants to be freed to post honest blog entries. Every investment advisor wants to be freed to give honest investment advice. Every economist wants to be freed to tell people the true cause of our economic crisis.

Why don’t all those people speak out?

The same reason why those people don’t speak out is the reason why I don’t focus on the ugly side of this in my presentations at FinCon. People do not want to hear it. People are not ready to hear it.

We will have another chance following the next price crash. At that point people are going to be very afraid. We may be in the Second Great Depression. At that point, I think we may get Old Saint Jack himself speaking out. If not, we will get other people who will say things that will put Jack in a spot where he will eventually need to speak out. Once Jack comes clean, everyone will feel safe to speak honestly. People want to feel safe.

Do you have any great ideas on how to solve this problem? If you do, I am all ears.

You know darn well why I don’t address the nasty side of this at FinCon. The Buy-and-Hold Mafia is a brutally corrupt entity. People are afraid their careers will be destroyed. People are afraid they will be sued. People are afraid that these powerful and corrupt people will not link to them. People are afraid that even people who are not Buy-and-Holders will not link to them because those people will be afraid of the Buy-and-Hold Mafia turning on them if they have a relationship with people who have posted honestly. People are afraid that their readers will not like them if they pop their Get Rich Quick fantasies.

You know the answer to your question.

And somewhere in your consciousness you know why we need to solve this problem. We have as a society put the responsibility on workers to finance their own retirements. We must provide some means for them to access accurate and honest reports re the last 33 years of peer-reviewed research in this field. This is imperative. The future viability of our economic and political systems depend on it.

I write about the nasty side here. So there will be plenty of materials when people are open to looking at them.

I wrote about the nasty side in my 30,000 e-mails to academic researchers.

I recorded several RobCasts on the nasty side of things.

I have contacted numerous journalists and bloggers re this side of things. Not just on the personal finance side. I have contacted people on the political side. I will obviously contact lots more people in days to come, especially following the next price crash.

Is there anyone you can name who has done more than me? I obviously would like to do more. But I think it would be fair to say that I have done more than anyone else. No?

Do you think we should ignore this? Do you think that Bogle and all the others are going to stop committing financial fraud if we all act like it doesn’t matter? How do you think that will work exactly? If doing nothing is the right answer, why is it that people are still promoting Buy-and-Hold 33 years after the peer-reviewed research showed that there is precisely zero chance that it could ever work for a single long-term investor?

Do you think that I did a good thing pointing out the errors in Greaney’s study or a bad thing? I obviously think I did a very, very good thing. What do you think?

Would Greaney be in the position he is in today if someone had posted honestly about those studies years before I did so? I obviously don’t think he would be. What do you think?

Do you think that Jack Bogle wishes that he had come clean years ago instead of letting this massive act of financial fraud get so out of control? I sure do. What do you think?

What do you want from me, Anonymous?

I have offered to do anything in my power to help you short of committing a felony myself.

Is there something else?

What can I do to make you happy that would not require me committing a felony under the laws of the United States?

Is there anything?

Rob

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

“I think it would be fair to say that there is less personal integrity in the investing advice field today than there is in any other line of endeavor that could be named. ”

Fortune telling? Bank robbery? Child porn? Slave trading? Murder for hire? Embezzlement?

Fortune telling is not nearly as bad. Most people know to be skeptical of fortune tellers. Fortune telling is an innocent game compared to the investing advice field in the Buy-and-Hold Era.

Far fewer dollars are lost to bank robbery than to the continued promotion of long-discredited investing strategies. The direct losses resulting from Buy-and-Hold are $12 trillion. The total losses (both direct and indirect) exceed $20 trillion. The losses from bank robbery are not even remotely in the same neighborhood.

Child porn and slave trading and murder for hire are far, far, far worse for the people touched by them. But these horrors are not widespread enough to cause a loss of confidence in our political system. Following the 2008 crash, we saw political frictions on both the left (The Occupy Wall Street Movement) and the right (The Tea Party Movement). The next crash will greatly exacerbate this problem. Employers no longer provide for the retirements of their employees. We have moved the responsibility for the financing of workers’ retirements to the workers themselves. When we did that, we took on a responsibility to open up some means for the millions of middle-class workers affected to access honest and accurate reports re what the peer-reviewed research in this field reveals. Our system of government cannot retain the respect of the people unless we find some way to open the internet to honest discussion of safe withdrawal rates and scores of other critically important investment-related topics.

Embezzlement is akin to bank robbery. Obvious bad stuff. But not as bad as financial fraud precisely BECAUSE it is so obvious. Everyone opposes embezzlement. We are united in the view that we must work to stop it when we discover it. We cannot say the same about the continued promotion of Buy-and-Hold strategies for 33 years after they have been 100 percent discredited by the peer-reviewed research. We have highly revered people like my good friend Jack Bogle promoting Buy-and-Hold TO THIS DAY. That’s corrosive to our economic and political systems in a way that embezzlement could never be. Many people will find it hard to retain confidence in capitalism and in our democratic republic when they discover their life savings gone because of the lies about the peer-reviewed research that the Buy-and-Holders continued telling after the peer-reviewed research showed that there is precisely zero chance that this “strategy” could ever work for a single long-term investor.

I stand by my statement, Anonymous. This isn’t a case of one or two bad apples being discovered. The 12-year cover-up (it’s 33 years if you go back to when Shiller published his “revolutionary” [his word] research) couldn’t happen without support or tolerance of it from the journalism field. It couldn’t happen without support or tolerance from personal finance and political bloggers. It couldn’t happen without support or tolerance from academic researchers. It couldn’t happen without support or tolerance from economists. It couldn’t happen without support or tolerance from policymakers.

It’s bad.

The good news here is 50 times more good than the bad news here is bad. We now know how to reduce the risk of stock investing by nearly 70 percent while increasing long-term returns by enough to help investors retire five to ten years sooner. It’s important that we not lose sight of the fact that the economic and political system that failed us in permitting the continued and fraudulent promotion of Buy-and-Hold for 33 years after it was 100 percent discredited by the peer-reviewed research ALSO pointed the way to the biggest advance in the history of personal finance. This is overall a HUGELY positive story.

Still, the bad stuff is bad enough to make a lot of us uncomfortable confronting it. That’s the answer to the question you frequently ask as to whether there is some sort of “conspiracy” responsible for the 12-year (or 33-year) cover-up. The “conspiracy” is our human nature. We like to think well of others. We don’t like to call people out on their acts of financial fraud, especially well-respected and widely loved figures like Old Saint Jack. So we have let things slip and slip and slip and thereby pulled the trap tighter and tighter and tighter on Old Saint Jack and on all of our other Buy-and-Hold friends.

It’s a story that is incredibly bad and amazingly good at the same time.

That’s my sincere take, in any event.

Rob

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

“…desperate characters… a lot of money… a lot of power… a lot of connections… people who don’t play nice… brutally abusive and ruthlessly vicious people. That’s the story.”

And yet you somehow think these tantalizing and ‘sexy’ factors would PREVENT a legitimate reporter* from wanting to grab this as perhaps an exclusive?

Sorry, Rob. That kind of grist for the mill rarely appears even given a whole lifetime of specifically looking for it, for an investigative reporter. If there were one scintilla of evidence of what you claim, then more than one investigative team would have been all over such a story.

It’s a huge story, Anonymous. It’s a Pulitzer-prize winning story. And there are obviously lots of reporters who would like to win Pulitzers. But this is scary stuff too.

There are at least four big negatives.

One, only a small number of reporters know the background well enough to understand what is going on. The case for Valuation-Informed Indexing is rock-solid. But VII represents a complete breaking of the old paradigm. Consider what the Bennett/Pfau research shows. It shows that we can reduce the risk of stock investing by 70 percent. I told you the story about how I was once talking to my wife about this stuff and she said “you sound like one of those infomercial guys.” It’s all true, it all checks out. But it is also too much to be believable. Reporters don’t want to get something wrong. Getting something this big wrong is a career-killer. And the initial reaction of most reporters is similar to the initial reaction of my wife. They think “this CANNOT be so” and “If this were so, someone else would have reported it.” The guy or gal who breaks the story is going to be someone well-versed in behavioral economics and there are only a limited number of that type out there in positions of influence.

Two, the investment advice industry has great power. Editors worry about losing advertising and the investing advice industry supplies most of the advertising that appears in the investing sections of newspapers. The potential upside here is huge. But there is a big potential downside here too. There is great risk in taking on this story.

Three, the majority of readers of the investing sections of newspapers are Buy-and-Holders and are thus strongly biased against this story. After the crash, I don’t think that will be so. But as of today most investors are over-invested in stocks (we couldn’t have the P/E10 we have today if that were not so). A newspaper that runs this story is performing a huge public service but is also alienating a large percentage of its readership. Not every paper is jumping at the chance to do that.

Four, even if you find a reporter who is 100 percent knowledgeable and 100 percent independent and 100 percent brave, he wants to understand all the elements of the story before he puts his name on it. The usual rule you follow when you make a pitch is to keep it simple. You want to say “Person X accepted a bribe of Y amount on Date Z and here are the pieces of paper proving this.” Then it clicks. We are talking here about an entire model of how stock investing works being brought down. There are about 10 different huge insights that ALL have to be true for the entire story here to be true. You can’t boil this down to 10 words. That just means that the story is bigger than it would be if you could do that. But it makes it harder for the pitch to succeed. The reporter is not going to take the time to check everything out until he is at least reasonably sure that there is a big story here. And he cannot be made reasonably sure that there is a big story here until he has checked everything out. It is much, much harder to get the word out on huge stories than it is to get the word out on small stories.

This is not the first time that something like this has happened.

Watergate was possibly the biggest story of all time. That story MADE the Washington Post. The Post was a relatively small paper before it broke the Watergate story. It then became the second most influential paper in the nation. You would think that every paper in the country would have been competing with the Post to break that huge story. But that’s not the way it was. The Post was the ONLY paper pursuing that story for a long time. It was a huge opportunity but it was a risky thing and no other papers were willing to employ the resources it took to break the story and get it right.

The Lance Armstrong story was huge and just about every reporter who covered bicycle racing knew that he was using illegal drugs for a long time before that story broke. Armstrong had connections and power and money. There are people who told the truth about his fraud and then were sued or rendered unemployable because they did so. Lots of reporters HINTED at what they knew (and many today hint that Buy-and-Hold has been discredited). But it took a long time before the story broke in an official way. People committing fraud employ intimidation tactics because intimidation tactics work. At least in the short term.

The Joe Paterno case, where child sexual molestation was being covered up at Penn State, could have been reported MUCH earlier if reporters had not been afraid that their careers would have been destroyed by the powerful people trying to keep the cover-up going. There was a woman at another department of Penn State who lost her job in that matter because she told the truth about things that came to her attention.

Cover-ups are the order of the day in cases where there are people with huge amounts of money and power who want to keep a story suppressed. That’s just a reality of our world.

We have a wonderful system of government and I believe that this cover-up will end with lots of people going to prison and with lots of people paying huge amounts of civil damages. But your idea that it doesn’t take a lot of courage to go up against people like Jack Bogle and the other Wall Street Con Men is a sick joke. This is hard work. It is very, very, very important work. But it is also very, very, very hard work.

I will have earned every penny of that $500 million when this story breaks in the national press, Anonymous. There are thousands of academic researchers who will be freed to do honest work again when this story breaks. There are millions of middle-class workers who will be able to plan their retirements effectively for the first time in their lives when this story breaks. We will as a nation be able to avoid future economic crises after this story breaks. I am humbled to be playing the lead role in getting this matter out before the public.

But I’ve got scars all over my body from the hits that I have taken over the past 12 years from the Wall Street Con Men and from their Internet Goon Squads. That’s part of the story. Lots of academic researchers want the story to be told. And lots of investing experts (including most of my Buy-and-Hold friends) want the story to be told. And the vast majority of middle-class investors obviously want the story to be told. But there are reasons why so many of us have been afraid to take the steps needed to get this out before the public.

I was scared too. I know how my fellow reporters feel.

And I am scared today, to tell the full truth.

It’s just that I am more scared of what happens to our country if this does not get out than I am scared of what happens to me if I continue my efforts to get it out.

I say clearly that everyone who loves his or her country should be helping in the effort to get this story out and to change the world for the better in about 500 different ways. But I also say clearly that I have sympathy for those who have for 12 years been too afraid of the Wall Street Con Men and their Internet Goon Squads to do what they know to be right.

People who know that they are on their way to prison are like cornered rats, Anonymous. As you well know. We will beat you in the end and we will never look back. But I will always be willing to take the time it takes to tell the story of why it was so hard to get a nation of good people to take action re this matter. Even good and smart humans are intimidated by threats of physical violence to their loved ones and to threats of career destruction supported by some of the wealthiest and most powerful people in our society.

Wade Pfau loved being able to work with me on the peer-reviewed research that he knew would win him a Nobel prize when it got written up on the front page of the New York Times. But he has two small children to think about. Wade did a very, very, very wrong thing when he agreed to commit financial fraud to get you Goons to stop your attacks. But the threats that were made against him were real and his jury needs to know that and appreciate that when determining the length of his prison sentence.

Or so Rob Bennett sincerely believes, in any event.

My best wishes and warmest wishes to you and yours, Anonymous. Dom’t let the bad guys get you down, my old abusive-posting friend.

Rob

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

Do you think you might want to maybe ask…. oh, I don’t know, maybe THE NEW YORK TIMES about that?

I’ve contacted reporters for the New York Times as well as reporters for many other fine publications, Anonymous. A few years back, I was posting the contents of my e-mails to reporters as blog entries here. I bet that, if you did some searching, you could find at least one that went to a New York Times reporter.

There was one fellow whom I wrote to who showed a lot of interest in writing a big article. He was not with the New York Times. But he has a significant following on the internet. We had two very long telephone calls (two hours or so each). We communicated by e-mail probably four times. He asked me for books to read so that he could better understand the background and I pointed him to Irrational Exuberance and A Random Walk Down Wall Street. He asked lots of questions, including a good number of hard questions. That’s a very good sign. Reporters don’t run articles until they have challenged their sources with hard questions. So this guy was close to biting.

He did not end up publishing an article and he was not willing to tell me why. But I can guess.

That journalist (and all journalists who work for the New York Times and all other publications) was in the same spot that Wade Pfau was in when he did his research with me showing that making the switch to Valuation-Informed Indexing reduces the risk of stock investing by 70 percent. Wade very much looked forward to winning a Nobel prize and I am sure that the reporter that I worked with very much looked forward to winning a Pulitzer prize. But at what price?

When you Goons threatened to destroy Wade’s career if he continued to publish honest research and Jack Bogle signaled that he would employ his power and wealth and contacts to support your efforts, Wade thought about his responsibility to provide for his two small children and thought better of the idea of helping millions of middle-class people by doing the job that he was being trained for all of his life to be able to do. I am virtually certain that the same thing happened to the reporter that I worked with. And of course there are numerous bloggers in this field who have told me or showed me that similar concerns drive their decisions about what to write at their blogs.

The 12-year cover up of the errors in the Old School retirement studies is the biggest act of financial fraud in U.S. history, as you well know. Lots of people will be going to prison when this gets out. It will get out eventually. It has to get out eventually or our entire economic system will go down. But how do you think you would feel if you were the reporter who was preparing the article that would tell the world about the most massive act of financial fraud in U.S. history?

And how do you think you would feel if you were that reporter’s editor or publisher?

There’s a scene in the movie All the Presidents Men in which the Ben Bradlee character is telling the Bob Woodward character that he had better not f this up or it might bring down the Washington Post. There’s where we are with the 12-year cover up of the errors in the Old School retirement studies. Lots of people will be going to prison when this story comes out. How far do you think the people who will be going to prison will be willing to go to keep from the American people news of what the last 33 years of peer-reviewed research in this field says about how stock investing works? We are taking about very desperate characters here, Anonymous.

There is a lot of money behind Buy-and-Hold. There is a lot of power behind Buy-and-Hold. There are a lot of connections behind Buy-and-Hold. We are dealing here with people who don’t play nice. We are dealing here with brutally abusive and ruthlessly vicious people. That’s the story. That’s why the New York Times has not run this story as of today.

What’s going to happen following the next price crash? That’s the big question.

I say that the Wall Street Con Men are brutal and vicious and wealthy and powerful and well-connected. But I do not say that that is ALL that is true of them. Jack Bogle tells bits of the truth about stock investing in just about every speech he gives and in just about every article he publishes. Why the f does he do that if he is trying so hard to cover up the truth? It doesn’t make any friggin’ sense, does it?

It doesn’t make sense on a surface level. Bogle is suffering cognitive dissonance, like you Goons. He does not want people to feel free to discuss the peer-reviewed research of the past 33 years. He hates with a burning hate the idea of millions of middle-class investors learning the truth about stock investing. But he is a good man. He is a smart man and a good man. He has devoted his life to helping middle-class investors. He has been responsible for scores of powerful and important insights. He loves his country. He does not want to see this economic crisis take us into the Second Great Depression.

So what do you think he is going to do following the next price crash?

I think he is going to flip. I think he is going to walk to the front of a large room and say the words “I” and “Was” and “Wrong.” That’s when the New York Times will publish its article. It would be better if it did it today. But the editors of the New York Times want Bogle’s okay before going ahead. EVERYONE will be telling the truth about stock investing once Old Saint Jack gives the signal that it is safe to do so. We are all today waiting for Old Saint Jack to make the first move.

I have written to the man. Three times. My good friend Rob Arnott has written to the man. Others have written to him. John Craig wrote to him. Lots of people want Jack to come clean. It would be a wonderful, wonderful thing if he came clean by the close of business today. That would take us off of this very dark path and put us on to a very, very bright path.

I can’t force the issue.

The posts that I write here will help us in the days following the day on which Jack gives his speech. Things will move quicker and smoother because of the articles that I posted in the days before he gave his speech.

This thing is headed to a very good place. I know that that’s so because the only alternative we have to taking this to a very good place is for us to take it to the worst place imaginable and I just don’t see anything in my good friend Jack Bogle’s life story to indicate that that is where he is going to take this. Jack is going to do the right thing. Because he loves his country. Because he doesn’t have any other choice. But, sad as it makes me feel to report this reality, it does not look like Jack is going to do the right thing by the close of business today. WhaChaGawnDo?

Jack and I will be working together at a wicked pace in the days following The Big Guy’s Big Speech. We will be best friends. That will be a blast. That is something that I am looking forward to very much.

I will continue contacting reporters in the days leading up to the next crash. But Jack and the other Wall Street Con Men are very powerful people and I think it would be fair to say that they have made it pretty darn clear what will happen to anyone who speaks out of turn before Jack gives his speech.

That’s where things stand today, Anonymous. I will help any reporter who wants help with this. I will answer any question. But I cannot make it happen by myself. I need Jack’s help to bring on all the wonderful stuff that follows from opening the internet to honest posting on safe withdrawal rates and scores of other critically important investment-related topics. We all would be a whole big bunch better off if Jack and the other Wall Street Con Men and the members of their Internet Goon Squads had never committed financial fraud in the first place.

But we do not have access to a time machine that can take us back to those innocent days, do we?

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

Rob

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

No one is telling you that you cannot express your views. However, it is wrong for you to expect that you can express them on other people’s forums.

No, it isn’t.

Any forum owner who bans someone solely for posting honestly on the topic of the forum is committing an act of financial fraud. That person thereby makes himself responsible for all losses suffered by people who read his forum thinking that it was a legitimate and non-corrupt enterprise.

If you don’t believe me, wait and see what your jury says following the next price crash.

We adopted the laws against financial fraud for a good reason.

I have every right in the world to post honestly at every board and blog on the internet. So do all of the thousands of people who over the course of the past 12 years have expressed a desire that honest posting be permitted.

You are wrong about this. As wrong as wrong can be. I am sure.

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

But, now, how is it that “Wall Street Con Men” can supposedly get wealthy over Grandma Betty buying and holding a market basket of stocks, cash-equivalents, and a dollop of bonds for thirty or forty years, with perhaps some annual rebalancing thrown in?

Taylor Larimore, co-author of The Bogleheads Guide to Investing, had a line that he often used during the time I posted with him at the Bogleheads Forum. He would point to his retirement home and refer to it as “the house that Jack built.” The idea was that it was by following the Buy-and-Hold strategies advocated by Jack Bogle that he earned the money to buy that house.

The Wall Street Con Men get rich by lying to people about the nature of the “gains” they “earn” in bull markets.

Taylor earned 6.5 percent real per year on his stock investments, just as everyone investing in the U.S. stock market has earned for 140 years now. To the extent that he overpaid for his shares, he obviously brought that return down. Bogle’s phony baloney investing advice obviously pulled down Taylor’s return dramatically. Get Rich Quick strategies always do. We now have 33 years of peer-reviewed research showing that not only are Get Rich Quick strategies not the answer, they are the problem.

There are millions of people like Taylor, people who have fooled themselves into believing that the Wall Street Con Men are doing them some sort of favor by lying to them about what the peer-reviewed research in this field says about how stock investing works in the real world. The Wall Street Con Men love to pretend that this might be the first time in history when a Buy-and-Hold strategy will work for one or two long-term investors because, when they can trick people like Taylor into believing that, the Con Men get credit for creating those false and phony and temporary and meaningless “gains.”

When Bernie Madoff was exposed, there was a thread in which people were referring to what he did as “fraud” and one guy came on the thread and said “oh, it wasn’t fraud.” Why wasn’t it? Because this fellow got out of the fund before it collapsed and was ahead by more than $1 million. This fellow had “a house that Bernie built” So to this fellow it was Saint Bernie who was operating the fund, not some con man who merited prison time for his trickery.

But of course the reality is that Bernie was a con man. And of course the reality is that Old Saint Jack is one too. If Buy-and-Hold weren’t a con, we never would have seen the Buy-and-Holders put forward a single death threat or a single demand for a single unjustified board banning or a single act of defamation or a single threat to get a single academic researchers fired from a single job. People who are promoting legitimate strategies do not behave in that manner. Not ever.

People who make use of such tactics have something to hide. People who make use of such tactics are operating a con. It may be that they conned themselves before they conned others. That happens. Saint Bernie told a reporter for New York magazine that he felt that he was doing good for others. My good friend Jack has said similar things.

The bottom line is that those are the marks of a con and Academic Researcher Wade Pfau checked the entire literature and never was able to find the tiniest sliver of research-based support for Buy-and-Hold anywhere in the academic literature. And of course the response of you Goons was to threaten to get him fired from his job. And Old Saint Jack had no problem with that. That tells the tale, Yogi.

There are always some people who make money from a Ponzi scheme. The difference between the Ponzi scheme built by Old Saint Bernie and the one built by Old Saint Jack is that the one built by Old Saint Jack destroyed 10,000 times more human lives. Old Saint Bernie let us all off easy. Old Saint Jack has us on the path to the Second Great Depression.

If you think that’s funny, then you think that’s funny.

I don’t get the joke.

And you know what else? I have a funny hunch that Grandma Betty is not going to find the joke too terribly funny when we all find ourselves on the other side of the next price crash.

But we’ll see, right?

I’ll be there and you’ll be there and Old Saint Jack will be there and Grandma Betty will be there. We’ll all talk it over at that point in the proceedings and decide together how long the prison sentences shall be.

Could anything be more fair?

Rob

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

Did you even bother to read the article? With your drastically reduced activity, it seems like you’d have plenty of time to keep up on your reading. Anyway, your old buddy Wade states quite emphatically that 4% is not safe. What more of a “correction” do you require?

Wade said that the Old School studies were in error YEARS AGO, X. He wrote to the authors of the Trinity study asking that they correct their study. That’s when you Goons threatened to get him fired from his job if he did not ditch the honest posting routine. AND BOGLE BACKED YOU UP.

That’s why you are going to prison. You get that, right?

I don’t WANT to go to prison. So I am posting honestly.

I said above what sort of correction I require. I require the sort of correction we see in every field of human endeavor other than in the investing advice field. We need to see the studies corrected. We need to see accurate studies promoted. We need to go back and study how we got this one so terribly wrong and determine what we need to do to make sure that nothing like this ever happens again. We need to see that damages are paid to the millions of people who were taken in by the garbage studies. We need to decide how long the prison sentences should be for those who have put up posts in “defense” of Mel Linduaer and John Greaney and Jack Bogle. We need to make settlement payments to those who tried to solve the problem by posting honestly and who were targeted by the Buy-and-Hold Mafia as a result. We need to send a message to all academic researchers in this field that the Buy-and-Hold Mafia is no longer running the show and that, starting here, starting now, we want to encourage all researchers in the investing advice field to do HONEST work.

Does that help?

Going to prison is not on my bucket list. I have zero desire to participate in this massive act of financial fraud. I told Wade when he signed up with you Goons that he was “insane” to do so. I think it would be fair to say that it would be equally insane for me to do so today.

Of course the studies are in error. Everyone who bothered to take five minutes to check the Greaney study to see whether it contained an adjustment for the valuation level that applied on the day the retirement began knew that back on the morning of May 13, 2002. Now we need to get the legal matters taken care of so that we can all begin enjoying the benefits of being the luckiest generation of investors ever to talk Planet Earth. We need to get your prison sentence announced so that the millions of us who very, very much need to know how stock investing works according to the last 33 years of peer-reviewed research can get about the business of talking about this subject in honest and accurate and research-based ways.

Does all of that make good sense to you, X?

Rob