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

OMG.

You REALLY believe aaaallll those people paid for an education, studied hard, and went out and got jobs…because they just want to be liked??? You don’t have to be anything more than a two-bit pot dealer to be liked.

I’m betting ‘money’ ranks far, far above ‘will you be my friend?’ on their list of drivers.

And speaking of being honest and honest posting…whatever happened to all my Honest Posts you banned/deleted?

I don’t say that those people went to school to be liked. I certainly agree that part of it was to make a living. Another big part of it was to be able to do good in the world. The Buy-and-Holders are like everybody else. They act from a mix of motivations, some selfish, some altruistic, some in the middle.

But, yes, they do like to be liked. That’s one of the motivations that drives all of us.

If Shiller had published his “revolutionary” (his word) research in 1961 instead of 1981, there wouldn’t be one Buy-and-Holder alive on the planet today. Why would there be? We all want to reduce the risk of stock investing by 70 percent. We all want to be able to retire five to ten years sooner. So we naturally would all follow what the peer-reviewed research in this field says.

The problem is that Fama published his research before Shiller published his research and many good and smart people believed that Fama’s research was valid and they developed an investing model based on it. Then, when they learned that Fama got an important part of the story wrong, they resisted making the correction that needed to be made in part because they want to be liked and in part because the want to make money and in part (paradoxically enough) because they want to help people (the Buy-and-Holders don’t wake up in the morning seeking ways to crater the economy, they believe in Buy-and-Hold themselves, they have rationalized away the 33 years of peer-reviewed academic research showing that it can never work for even a single long-term investor).

Nothing that I say is even a tiny bit controversial in any objective sense. It is pure common sense. And it is backed by 33 years of peer-reviewed research, rooted in 140 years of historical return data. The guy who started Valuation-Informed Indexing won a Nobel Prize for his work. There is no intellectual dispute here. There is a mountain of evidence on one side and zero on the other.

THAT’S THE PROBLEM!

You would think that would help me. You would think that having every sliver of evidence available to us supporting my position would be a plus for me. But, no, that’s actually not the way it works.

The stronger my case is, the worse the Buy-and-Holders feel about the mistake they made. The more lives there are that will be ruined if the Buy-and-Holders don’t come clean today, the less likely they are to do so — because they cannot bear to acknowledge how many lives they have already destroyed with their reckless and relentless and ruthless promotion of their smelly Get Rich Quick garbage.

If this were some small mistake we were talking about, we would all agree that it should be promptly fixed and get about the business of fixing it. It’s no small mistake. The mistake that the Buy-and-Holders made is the biggest mistake ever made in the history of personal finance, a mistake that has caused so much human misery through the years that the Buy-and-Holders cannot permit people to talk about it on the internet. This mistake has caused four economic crises! This mistake has caused millions of failed retirements! This mistake has caused hundreds of thousands of business to fail! This mistake has caused millions of people to lose their jobs! This mistake has caused numerous discussion boards to be burned to the ground! This mistake is in the process of causing a good number of people who have put up posts in “defense” of Mel Linduaer and John Greaney to be sent off to serve prison terms for committing the most massive act of financial fraud in U.S. history.

The problem here is not that the Buy-and-Holders don’t get it that they have caused great human misery with their Buy-and-Hold lies. The problem is that they get it only too well and they cannot bear to acknowledge even to themselves what they have done. They lie to others, yes. But first they lie to themselves. It’s called “rationalization.” It’s called “cognitive dissonance.” It’s called “living in a fog.” The one thing that it should never, ever, ever be called is “science.” True scientists don’t threaten to kill the wives and children of people who question their findings. It just isn’t done.

The problem we have here is a human problem, Honest. The Buy-and-Holders are in great emotional pain. They have their lives riding on an idea for which there is not a sliver of support in the academic research and they see no way out of the trap in which they have placed themselves. There is a way out. The way out is through coming clean by the close of business today. But you try telling them that. That way lies their hope of getting their prison sentences reduced a bit. But they cannot bear the thought of serving any prison sentences at all! So whachagonnado?

My job is to help them (you!) work up their courage, swallow their medicine, and start to rebuild their lives (and the economic system of the United States!). I am doing all that I can think of to do. If you come up with an bright ideas, please pass them along. My take on this is that I have tried just about everything and the only thing that is really going to make a difference is the next price crash. After the crash, I don’t think I am even going to need to speak. My good friend Jack Bogle’s heart is going to melt when he sees that his marketing mumbo jumbo put us in the Second Great Depression and then he is going to give his “I Was Wrong” speech and then we are all off to the races bringing on the greatest period of economic growth in U.S. history.

The Buy-and-Holders are like all the rest of us. They have good in them, they have bad in them. They have smart in them, they have dumb in them. They have courage in them, they have fear in them. They feel trapped. All of us who care about them should be doing all we can to help them out of the trap in which they find themselves. I put my entire heart, mind and soul into that project on a daily basis. And I wish for the best. And that’s pretty much it. I can do no more and I can do no less.

I hope that helps a bit.

Please take good care.

Rob

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

There is PLENTY of good information out there. This site, however, doesn’t really offer anything other than someone that wants comic relief since all you talk about is how you hate buy and hold and you call people goons all day.

We disagree, Anonymous.

I believe that 90 percent of the information about stock investing available on the internet today is compromised by the desire of the person putting forward that information to be liked by the people reading the information.

The promotion of Buy-and-Hold strategies created $12 trillion in Pretend Gains. Millions of middle-class people are counting on using their share of the Pretend Gains to finance their retirements. So it causes them great pain to hear what the last 33 years of peer-reviewed research tells us about how the market really works. Since the people giving the information want to be liked, they hold back on telling people stuff that they very, very much need to hear.

It’s a vicious cycle. Experts don’t tell the truth because their careers will be destroyed if they do. And the only way that could change would be if the people listening to the advice came to see how much less risky and more profitable stock investing would be if they knew the realities. But how can they ever come to understand these realities so long as the experts don’t dare to talk about them?

There’s good stuff mixed in with all the Get Rich Quick garbage. That much is certainly so. There are lots of smart people in this field. And there are lots of hard-working people in this field. And it is my strong impression that most of the people working in this field very much want to help people. But they can’t! If they tell the truth in a clear and uncompromised way, they will be destroyed. So they keep it zipped.

And each time one expert decides to keep it zipped, the pressure increases on all the others to keep it zipped as well. Because if one were to tell the truth, it would make all those keeping it zipped look bad. So there’s a Buy-and-Hold Mafia that goes around and makes sure that researchers who try to publish honest research suffer very serious penalties for daring to step out of line. And to see that bloggers who put up honest posts suffer very serious penalties. And to see that community members at discussion boards who post honestly suffer very serious penalties.

It’s not only the Buy-and-Holders who hold back. The Valuation-Informed Indexers hold back. Robert Shiller himself holds back! This guy won a Nobel Prize for his “revolutionary” (his word) research. And even Shiller fears telling the whole truth about the wonderful and far-reaching peer-reviewed research of the past 33 years. Shiller limited the discussion of the how-to aspects of stock investing to two paragraphs of his book. I wonder why, I wonder why.

If Shiller had published his book in 1961, before Fama published the research that led to development of the Buy-and-Hold strategy, we would all be in a very different place today. We would be enjoying the greatest period of economic growth in U.S. history rather than enduring the worst of the four economic crises that have been brought on by the reckless and relentless and ruthless promotion of Buy-and-Hold strategies by our Wall Street Con Men friends.

What a mess!

Anyway, I do indeed hate Buy-and-Hold. And I do indeed make reference to the Goon phenomenon in just about everything I write.

Not because I don’t view the Buy-and-Hold Pioneers as heroes to the middle-class. I very much see them as that. I think it would be fair to say that I see them as that to a greater degree than they see themselves as that.

And not because I enjoy focusing on the Goon problem. I focus on the Goon problem because I want to bring the Goon problem to an end. It doesn’t seem likely to me that we are going to bring the Goon problem to an end by ignoring the Goon problem. When everyone else in this field is as focused on the Goon problem as I am, we will be well on our way to bringing the Goon problem to an end, in my assessment.

All that I can do is all that I can do, Anonymous.

I think we are in a bad place today. A place that none of us wanted to find ourselves in. I believe that we all share a desire to work together to get us all to a far better place. I much look forward to the day when I will be able to join hands with all of my many Buy-and-Hold friends and work together with them to lead us to that place.

Until then –

It’s back to hating Buy-and-Hold and calling people Goons!

Grrrrrr……

Please take good care, man.

Rob

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

People (the middle-class) aren’t joining in because they have no money.

They also don’t really — and I mean REALLY — care.
They spend far more time watching teevee et al than paying attention to finance and economics.
Why would they? They have no wealth, thus it doesn’t concern them.
Remember, spenders, not investors/savers.

True, the financial crisis did effect everyone.
It made the rich even more rich, and everyone else less rich.

We disagree, Honest.

I’ve spoken to many middle-class people over the past 12 years. They care about what is happening to their money. They care a lot.

They haven’t put together the pieces of the puzzle. They suspect that there is a lot of corruption on Wall Street. Many even went so far as to point the finger at Wall Street when the economic crisis arrived in late 2008. But they were vague in their accusations along these lines. They did not specify WHO on Wall Street caused the problem and WHAT they did to cause it. We need to get the information out to them so that they can identify the Wall Street Con Men pushing Buy-and-Hold strategies 33 years after the peer-reviewed research showed that there is precisely zero chance that such strategies could ever work well for even a single long-term investor.

A big part of the problem is that we have never seen a case of financial fraud as big and as far-reaching as this one. I certainly didn’t know about it on the morning of May 13, 2002, and I consider myself a reasonably smart person who follows these sorts of issues to at least a moderate extent. When I find myself feeling frustration that the millions of middle-class people who are the primary victims of this massive act of financial fraud are not speaking up, I try to call to mind my own ignorance of the realities in those long-ago days and that helps me understand why many people are having a hard time taking this in today.

I don’t believe that the Wall Street Con Men (or even you Goons!) possess a full understanding of what you have done. I believe that you really follow Buy-and-Hold strategies. So you are being hurt as much as everyone else. You just don’t see it. You are in emotional pain. You believed that Buy-and-Hold was the answer and it hurts to acknowledge that you got that one wrong. You are suffering from cognitive dissonance. You obviously know that it is wrong to advance 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. But you can’t figure out how to get yourself out of the trap you find yourself in. If you come clean today, you go to prison. If you continue with your Campaign of Terror against our board and blog communities, you go to prison for an even longer time following the next price crash. It’s not an enviable choice.

I love my country. I respect and admire and feel gratitude toward the Wall Street Con Men because of all of the many insights I have picked up from them and have used to build the Valuation-Informed Indexing model. Most of you Goons are friends of mine from the days before I worked up the courage to put up my famous post of the morning of May 13, 2002. I believe that we are the luckiest generation of investors ever to walk Planet Earth and that we will all come to see that not too long after the initiation of the next price crash, when we will all pull together to bury the smelly Buy-and-Hold garbage 30 feet in the ground, where it can do no further harm to humans and other living things.

Does that help?

The millions of middle-class investors whose lives are in the process of being destroyed care. And I care about them. And even the Wall Street Con Men and their Internet Goon Squads care on one level of consciousness. So, once you see the futility of further abusive posting, we will all pull together and focus on the positive side of this story (our ability to reduce the risk of stock investing by 70 percent just by opening every discussion board and blog on the internet to honest posting on safe withdrawal rates and scores of other critically important investment-related topics) rather than the negative (the prison sentences and the hundreds of billions in financial liabilities and so on).

The hand of kindness remains extended to you and to all the other Goons and to my Wall Street Con Men friends.

My willingness to post dishonestly re the numbers that my friends use to plan their retirements (and thereby to participate in the massive act of financial fraud and to thereby earn MYSELF a prison sentence) remains precisely zero.

I naturally wish you the best of luck in all your future endeavors regardless of what investing strategies you elect to follow.

Take care, man.

Rob

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

Rob,

What could a non-goon possibly discuss on this site? Unless they agreed with you 100% and just regurgitated your nonsense you would label them a goon. This site certainly doesn’t need anymore long winded ramblings from “non-goons” you fill that niche more than enough.

Here are some possible topics:

1) Why does Jack Bogle say that there is never a need for an investor to lower his stock allocation by more than 15 percent, even when valuations reach insanely dangerous levels?;

2) Why hasn’t Jack Bogle done something about the terrorist tactics that were used to silence Wade Pfau, the co-author of the research that I did that showed that investors can lower the risk of stock investing by 70 percent by abandoning Buy-and-Hold strategies?

3) Why didn’t the commission that was appointed to identify the cause of the economic crisis assign most of the blame to the continued promotion of Buy-and-Hold strategies for 33 years after the peer-reviewed research showed that the relentless promotion of such strategies ALWAYS caused an economic crisis?;

4) Why didn’t the Wall Street Journal article reporting that the Wall Street Con Men who push Buy-and-Hold strategies “leave out half the story” go viral on the internet?;

5) Why didn’t Wade Pfau learn at Princeton that there is zero support in the peer-reviewed research for the key Buy-and-Hold claim that there is no need to practice price discipline when buying stocks?;

6) Why does Shiller often fail to make the critical distinction between long-term timing (which always works and which is 100 percent required for every investor hoping to have anything more than a zero hope of long-term investing success, according to Shiller’s research) and short-term timing (which the peer-reviewed research in this field indicates can never work)?

7) Why haven’t all of the Old School SWR studies been corrected in the 12 years since the errors in them became public knowledge?;

8) Why haven’t sites like Motley Fool and Morningstar and Index Universe and Early Retirement Forum and Bogleheads Form and Oblivious Investor and Monevator honored their promises to protect us from you Goons?;

9 How long should the prison sentences assigned to those who have put up posts in “defense” of Mel Lindauer and John Greaney and my good friend Jack Bogle be, given the circumstances that apply?; and

10) Why don’t all the people who would like to be making money on the internet take advantage of the huge opportunity that has been presented to them to become pioneers in teaching millions of middle-class people about the first true research-based strategy?

I hope that helps a bit, Anonymous.

Rob

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

Super post, Canuck. I relate to everything you say here.

Shiller published his research showing that valuations affect long-term returns in 1981. If valuations affect long-term returns, the risk of stock investing increases each time valuations increase. Buy-and-Holders recommend staying at the same stock allocation at all times. That means that your risk profile is usually wrong. You are in most circumstances taking on either more risk or less risk than is appropriate for an investor in your circumstances. Getting your risk profile wrong is ALWAYS going to hurt you. It can NEVER be a plus.

Say that a 60 percent stock allocation is right for you when valuations are at moderate levels. If you stay at 60 percent stocks when valuations are high, you are hurting yourself — your stock allocation is wildly off the mark. Your stock allocation is also wildly off the mark when valuations are low — again you are hurting yourself.

The stock allocation you choose is the most important factor determining whether you will be successful in the long term. If you are willing to adjust your stock allocation as conditions change, it’s pretty easy to insure good long-term results. But if you refuse to change your stock allocation (that is, if you practice Buy-and-Hold), you insure that your stock allocation will be wrong two-thirds of the time.

If you choose a stock allocation that is right for you when prices are moderate, you have the wrong allocation two thirds of the time (when prices are low or high). If you choose a stock allocation that is right for you when prices are high, you have the wrong allocation when prices are low or moderate. If you choose a stock allocation that is right for you when prices are low, you have the wrong allocation when prices are moderate or high.

It is IMPOSSIBLE to get your allocation right if you follow a Buy-and-Hold strategy. Because the last 33 years of peer-reviewed research shows that risk is VARIABLE. If risk is variable, you MUST change your allocation in response to big changes in valuations.

Here is the research paper that I prepared with Wade Pfau:

http://arichlife.passionsaving.com/wp-content/uploads/MPRA_paper_35006.pdf

Please look at Table 1 on Page 18.

Look at the Maximum Drawdown section. The Maximum Drawdown is a good measure of risk. It is the greatest loss you ever could suffer following the strategy you employ. The Maximum Drawdown for Buy-and-Holders is 61 percent. For Valuation-Informed Indexers, it is 21 percent. That’s a reduction of about two-thirds. That’s huge! I am not saying this to brag and there are of course hundreds of good and smart people who played a role in helping me and Wade to produce this study, but that is the most important finding in the history of personal finance.

We now know how to reduce investing risk by close to 70 percent. That’s like learning how to cure cancer.

I had several long-time Buy-and-Holders tell me when that study came out that they were so impressed with that finding that they were considering changing strategies for the first time in their lives.

The response of the Buy-and-Hold Mafia was to threaten to send defamatory e-mails to Wade’s employer in an effort to get him fired from his job. Wade is financially responsible for two small children. He agreed to stop doing honest research if the Goons would let him keep his job.

Jack Bogle knows about this. He is okay with what the Goons did. Bill Bernstein knows. He is okay with what the Goons did. Larry Swedroe knows. He is okay with what the Goons did. Rick Ferri knows. He is okay with what the Goons did. The Buy-and-Hold Mafia cannot afford to see this research written up on the front page of the New York Times. The day that it is will be the day Buy-and-Hold dies in a practical sense (Buy-and-Hold died intellectually in 1981, when Shiller publisher his research showing that valuations affect long-term returns).

I wrote to the 30,000 names at the Social Science Research Network site to let them know about this. A good number wrote me back saying that they agree that this is corruption but that they do not feel that they can do anything about it given the brutally abusive practices of the Wall Street Con Men and their Internet Goon Squads. None of us can effectively stand up to the Buy-and-Hold Mafia on our own; we need to unite and insist on enforcement of the U.S. laws against financial fraud to have any chance at bringing these powerful and wealthy and corrupt individuals to justice. If this isn’t the greatest act of financial fraud in the history of the United States, I’d hate to know what is. I think it would be fair to say that this is 500 times worse than anything that Bernie Madoff ever did and Bernie Madoff lives in a prison cell today. I think it would be fair to say that Bernie Madoff is Mother Teresa compared to some of the “individuals” we have seen put up posts in “defense” of Mel Linduaer and John Greaney (and my good friend Jack Bogle).

Here’s a list of comments that Wade made about me and about Valuation-Informed Indexing during the 16 months that we were working together:

http://arichlife.passionsaving.com/2014/02/20/what-a-difference-a-threat-to-get-the-father-of-two-small-children-fired-from-his-job-has-on-an-investing-discussion-eh-long-live-buy-and-hold-its-science-with-a-marketing-twist/

There is zero chance that Buy-and-Hold can ever work for a single investor because it is built on a false premise. Prior to 1981, people believed that stock investing risk was STABLE. If stock investing risk was stable, Buy-and-Hold would be the ideal strategy.

What happened is that many powerful people built careers pushing the Buy-and-Hold concept BEFORE we learned from the research that it can never work. Then, when we learned this in 1981, they were embarrassed. They didn’t want to acknowledge the error. They felt that it would hurt their careers. So they ignored Shiller’s findings. And they put pressure on lots of others to not say anything about Shiler’s findings either.

Now we are 33 years down the road and the penalty of ignoring Shiller’s findings has become clear — millions of failed retirements and an economic crisis that may well eventually become the Second Great Depression. The people who didn’t want people to learn these realities back in 1981 really, really, really don’t want them to learn these realities today.

Most of them would like to come clean. There is tons of evidence that they have consciences and would love to find some way to get the word out. But how the heck do you get the word out without lots of people being sent to prison for the greatest act of financial fraud in U.S. history? The Goons don’t like it when I talk about the prison sentences. But my aim is to REDUCE the prison sentences. We can only reduce them by getting the word out and by bringing the economic crisis to an end. Each day that the cover-up continues, we cause more financial ruin and thereby INCREASE the length of the prison sentences of those who have participated in this massive act of financial fraud.

It’s a mess!

But the core reality here is very, very, very positive. We now know how to reduce the risk of stock investing by 70 percent. This is the biggest advance in the history of personal finance. My aim is to get all the nasty stuff behind us and then just concentrate on all the wonderful insights that we have mined over the past 33 years and have not been able to benefit from because we have had to keep it zipped to keep from hurting the feelings of the Buy-and-Holders.

Thank for asking. That was a super question.

Rob

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

Hi Rob,

A quick one as I’m tight on time today.

To further detail why I think the way I do, kind of comes down to two…abstract ideals, for lack of better terminology.

1) After the 2008 Crisis got me thinking that there has to be a better way to invest, I started doing a lot of financial research (on the internet, of course!). Didn’t matter the source, I read it; if it seemed reasonable I filed it, unreasonable, filed in the circular bin. I’ve found an exceptionally small (dismally small?) amount of really solid and intelligent personal finance agendas out there. The rest are mere regurgitation, especially in the face of cart-upsetting facts.

The thing which disturbed me the most is that most of them were all saying the same thing, and the ones pandering to new and young investors were saying it the loudest. What got me was that these newbies weren’t even being honest or even all the information out there so they could at least formulate conclusions of their own. I guess you could say I want to stand up for the non-educated so they get a fair shot at utilizing their money in a fair manner.

2) Which leads to the second “driver”. It isn’t only my money I have invested. I’ve inherited money from two grandparents and a parent. When I did so I accepted the transfer of wealth with utmost sincerity and seriousness (there’s reasons why generation wealth in N.America does not last). This was wealth created by the lives of three people, I surely wasn’t going to disrespect that immense amount of labour capital simply by throwing it all into stocks without question. The people on the “sell” side don’t care about the human(e) part of the equation, but they sure care about the dollars.

People work so very hard for their money, usually for 40-50 years and usually at jobs they don’t particularly enjoy. They need to have the respect of the financial industry to be given, at the very least, access to all information as it pertains to investing.

One of my most endearing opponents (as I am his) is a mutual fund salesman who operates his own financial planning company. His concrete mantra is for his clients to stay 100% invested 100% in mutual funds at all times. That is, spend all your money on his mutual funds and nothing else — and keep it there — forever (how else is he supposed to collect his management fee?). I have a few other issues with him and his business “theories”, but this a major one.

I think I’ve pulled a ‘Rob’ here and thrown open the flood gates! lol Reigning it in….

I’d love to contribute to your new discussion board when it’s up and running. A couple of concerns, i) I’m not exactly sure how much in terms of quality etc. I can contribute above and beyond personal anecdotes and limited research. Being nothing but a repetitive ‘Chatty Cathy” can kill a board; ii) I’m not anywhere near up to speed on the whole VII theory et al so my contributions may be exceptionally limited in scope, which brings me to the final concern; iii) how can a discussion board expound on what VII is past what it is? Every investment theory has a set degree of parameters past which you are into other things. What can you see discussion board contributors posting that you haven’t already done so in your extensive articles?

Finally, whew!, can you provide me a link(s) to the “peer-reviewed research in this field showed that there is precisely zero chance that Buy-and-Hold can ever work for a single investor” ?

Gotta run for now but I’ll be back! Have a great week and thanks!

 

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

Rob,

Not considering a variable in a study is not fraud and doesn’t require an immediate or any update.

If I publish a study showing a link between smoking and cancer but fail to account for family history it may be a less than perfect study but I am in no way required to amend that study.

You are welcome to post your own finding and highlight how the current study is insufficient. It seems like you have already done this Rob and now people are free to review everything available. That is how it works old studies aren’t updated new research is done on top of previous research and if it hold enough merit it just usurps the old as the gold standard. Maybe people aren’t willing to accept they need to consider Rob Bennett’s way of valuing stock and only Rob’s valuation when deciding on a safe withdrawal rate. Not including this very esoteric valuation metric from an internet troll into your study is not fraud.

If Greaney didn’t think it was fraud to lie about the numbers that people use to plan their retirements, he never would have threatened to kill my wife and children if I didn’t agree to stop reporting the accurate numbers. Give me a friggin’ break.

And if Bogle didn’t think it was fraud to continue telling people that the peer-reviewed research supports Buy-and-Hold 33 years after the research that once was thought to do that was discredited, he never would have gotten involved in the threats to get Academic Researcher Wade Pfau fired from his job unless he agreed to stop publishing honest research. Again, give me a friggin’ break.

I’m telling, Anonymous.

That’s the bottom line.

I’m telling the millions of people who will see a large portion of their retirement money disappear following the next price crash who did it to them. And I am going to help them organize and file lawsuits and get prosecutors to file criminal cases and all the rest.

That’s how our system works. There are always going to be some low-lifes who are going to be tempted to exploit human weaknesses for their personal profit. Fortunately, we were smart enough as a society to enact laws making financial fraud a felony. The announcement of your prison sentence will go viral. From that day forward, the rest of us will be learning about the first true research-based strategy, the strategy that lets us all reduce the risk of stock investing by 70 percent.

If you don’t think it is fraud to lie about the numbers that people use to plan their retirements, tell it to the jury, my old friend. It’s your jury that holds your fate in their hands. It’s your jury that you need to convince.

I want nothing to do with felonies and juries and prison sentences. It is my intent to continue to post honestly re safe withdrawal rates and scores of other critically important investment-related topics.

We’ll meet on the other side of the river following the next price crash and compare notes as to who has fell and as to who has been left behind. Fair enough, 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:

who exactly is in the buy and hold mafia and how did they get so much power? do you have any real names of people who wield this type of influence over the universe?

Jack Bogle.

Bill Bernstein.

Larry Swedroe.

Scott Burns.

The owners of the Motley Fool site.

The owners of the Index Universe site.

The owners of the Morningstar.com site.

The owners of the Bogleheads.com site.

And on and on and on and on.

They got their power legitimately. There really was peer-reviewed research published in 1965 that appeared to many good and smart people to support the Buy-and-Hold concept. That wasn’t fraud. That was good stuff. I can go a step farther than that. I can say that that was heroic stuff. The Buy-and-Hold Pioneers took us out of the dark ages re our understanding of how stock investing works. Their huge insight — that short-term timing never works — is the second most powerful insight ever developed in the history of investing analysis. We all owe a great debt of gratitude to the Buy-and-Hold Pioneers.

It became fraud sometime between 1981, when Yale Economics Professor Robert Shiller published his “revolutionary” (his word) research showing that, while it is indeed so that short-term timing never works, long-term timing (price discipline) ALWAYS works and is ALWAYS 100 percent required for investors hoping to have any realistic hope of long-term success, and the morning of May 13, 2002. On the morning of my famous post pointing out the errors in the Old School SWR studies, the Buy-and-Holders responded with an insane level of defensiveness. So they obviously were aware on at least one level of consciousness that the research showed that Buy-and-Hold could never work. I have seen no evidence that they were aware of that in 1981. It appears to me that their confidence that Buy-and-Hold could be defended in civil and reasonable debate gradually declined over those 21 years until things got to the point where they stood on the morning of May 13, 2002. I can obviously only give personal testimony as to events that took place after that date.

They keep their power through the use of brutal intimidation tactics. The most obvious case is where they threatened to get Academic Researcher Wade Pfau fired from his job if he continued to publish and promote honest research. There are thousands of researchers who would love to be doing honest research today. But, like Wade, many of them have families and, thus, do not dare to “cross” my good friend Jack Bogle and the other Wall Street Con Men trying to keep the Buy-and-Hold fantasy alive another week, another month, another year.

The con men want to come clean. It was an honest passage in Bogle’s book that taught me that the Old School SWR studies were in error. Bernstein gave a partly honest response when one of you Goons sent him an e-mail asking if the methodology used in the Old School studies is analytically invalid. Swedroe stood up to Linduaer once and got himself banned from the Bogleheads Forum. Pfau wrote to the authors of the Trinity study and asked them to correct the errors in their study. And on and on and on.

The problem is that the Wall Street Con Men know that, if they come clean, they go to prison. Bogle should have acknowledged his mistake when Shiller first published the research discrediting the Buy-and-Hold Model. He rationalized not doing so. I presume that he told himself that it would all somehow work out. And now that 33 years has passed, it is 1,000 times harder for Old Saint Jack to work up the courage to say the Three Magic Words.

Everybody who works in this field knows that his career will be destroyed if he tells the full truth re these matters. So everyone keeps it zipped.

But keeping it zipped re financial fraud only causes the financial fraud to spread. Financial fraud is a cancer. The longer it continues, the more lives are ruined. The more lives that are ruined, the longer are the prison sentences that are ultimately assigned to those participating in the massive act of fraud.

My job is to bring it to an end and get us back to the original Buy-and-Hold idea — rooting one’s strategies in the peer-reviewed research.

I hope that helps a bit, Laugh.

Rob

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

Hi Rob,

What would you do if you found someone operating a blog preaching an approach to investing with obvious flaws; who incorrectly confused correlation with causation; and who improperly believed that the past was bound to repeat itself?

Would you reach out to that person, try to engage them in a discusion of their beliefs in an attempt to illuminate them? Or would you just chalk it up to yet another kook with a website and move on?

What if, as a result of those conversations, that person said you were a goon who deserved jail time for their approach to investing?

What would you do — as a friend?

Ryan Howard plays first base for the Phillies. He was a great player at one time and was signed to a very big long-term contract. He is a horrible player today. But when people talk about trades the team may make, his name never comes up. People are embarrassed to talk about the subject because Howard is a nice guy who once was a great player and because there are no teams interested in taking him today.

Today the front office began to lower the boom. They brought up a possible replacement. And there there were several interviews in which the idea was put forward that they will be releasing before the beginning of next season. Now everything has changed. Now it is considered fair game to mention the realities concerning Ryan Howard.

That’s what is going to happen re Buy-and-Hold following the next price crash.

People are afraid to talk today because the Buy-and-Hold Mafia is powerful and there are still people holding out hope that we will not see another crash. But following the next crash someone big will say things out loud that lots of people have been thinking for many years now. And then everything will open up. People will be rushing for the exits.

Once the taboo is broken, things are never again the same.

When it turns, it turns fast.

Where will you be then?

I am the best friend you have in this world, Curious.

That’s the real deal.

I can help. But only if I get cooperation.

You do deserve jail time. Put yourself in the shoes of the millions of people in the process of suffering failed retirements. Or in the shoes of the millions of people who lost their jobs in the economic crisis.

I have the credibility on this issue to help you get your jail time reduced. And that’s obviously all that I have. I cannot put you in jail and I cannot keep you out of jail. I have no such powers. I can try to help, I can try to put things in the light most positive for you. That’s all I can do.

I haven’t confused correlation with causation. I have explained WHY valuations affect long-term returns. The new model is based on a new understanding of how the market sets prices. The new model is consistent with the data. The old model is not.

I don’t say that the past is bound to repeat. I say that it very well might and that every person working in this field has a responsibility to let millions of middle-class people know what will happen to their retirement money if that turns out to be the case. If you tell the truth while still promoting Buy-and-Hold, you are in good shape if we have a crash and in good shape if we do not have a crash. That’s where you should want to be. That’s sane. Because you don’t know for sure what is going to happen.

I don’t know with certainty what is going to happen either. I have my strong beliefs, just as you have your strong beliefs. The difference is that I have never blocked anyone from hearing the Buy-and-Hold story. Everyone knows the Buy-and-Hold story. You have blocked people from hearing the Valuation-Informed Indexing story. That puts you on the hook for losses if things don’t go as you expect.

The jury wil hear testimony re whether I am just a kook with a web site. Wade Pfau will be testifying. And so will lots and lots of others. And the testimony will be given FOLLOWING the next crash. At that time it won’t be just me saying it might happen. It will be a present-day reality. It will be in all the papers.

I love my country and I will continue to fight to protect her from you, Curious. That’ the bottom line here. I have a funny feeling that love of one’s country is a virtue that is going to be coming into style following the next price crash and that turning a quick buck may be viewed as less of a sign of the ultimate “success” in those days. We will see.

I naturally wish you the best of luck in all your future endeavors regardless of what investing strategies you elect to pursue.

When lots of others are saying that Old Saint Jack cannot get around on a fast ball anymore, I will still be singing his praises. I will be recalling to people the day when he really was something special. The word “friendship” means something to me, old friend.

Rob

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

I doubt you have many friends who twist a difference in opinion about the future into the other side having been “mistaken”.

It’s not a difference of opinion, Anonymous.

If John Greaney was putting forward statements at the Motley Fool board that “It is my OPINION that a withdrawal rate of 4 percent will work for those beginning retirements today,” I never would have felt a need to put forward that famous post of May 13, 2002.

He didn’t say that.

He said “the historical data shows that a 4 percent withdrawal is 100 percent safe.”

That’s a lie. Backed by threats of physical violence and threats to get academic researchers fired from their jobs, it is a criminal act of financial fraud.

Greaney BELIEVES that 4 percent is going to work. Bogle BELIEVES that Buy-and-Hold is going to work. That is not in dispute. That is not the issue.

Greaney is telling lies about what the academic research says. Bogle is telling lies about what the academic research says.

That’s the act of financial fraud.

Most people don’t check this stuff out as carefully as I have. Most people at the Moltey Fool board heard what Greaney was saying and noticed that no one was calling him out on what he was saying and assumed (quite understandably) that he was telling the truth. It’s the same with Bogle.

But Greaney and Bogle ARE NOT TELLING THE TRUTH.

The truth is that Greaney and Bogle believe that Buy-and-Hold can work and probably will work. But the further truth is that Greaney and Bogle are engaging in abusive practices to block millions of people from finding out about the 33 years of peer-reviewed research showing that they are wrong to believe what they believe. Greaney and Bogle have a responsibility to tell people about that research and to warn people that they may be wrong in their claims and to permit and invite and encourage posts exploring the implications of the research showing that they are wrong.

This is not about opinions.

It stopped being about opinions when the Buy-and-Hold Pioneers adopted the wonderful practice of rooting their investing claims in the peer-reviewed research. Once you do that, you take on a responsibility to correct your claims when subsequent research finds them to be in error.

Now –

There’s a thing called cognitive dissonance. It is possible for humans to know one thing with their minds and to be unable to acknowledge that thing with their hearts. There are circumstances in which humans say things that in an objective sense are falsehoods but that in a subjective sense they believe to be truths. I believe that that is what is going on here. That part of the story needs to be told too and that part of the story cuts against a finding of financial fraud.

But there are limits.

Death threats are over the line. Demands for unjustified board bannings are over the line. Tens of thousands of acts of defamation are over the line. Threats to get academic researchers fired from their jobs are over the line.

If as a society we are going to elect to permit a finding of cognitive dissonance to excuse any crime, then we cannot justify keeping Bernie Madoff in prison. Madoff told a writer with New York magazine that he thought he was helping people. It may well be that that’s a lie he tells to himself and a lie that he believes about himself. The bottom line is that he created documents reporting on transactions that never took place. That’s a line you cannot cross. There’s no point in having laws against financial fraud if we are going to permit a claim of cognitive dissonance to cancel out their effect in all cases.

I will be claiming that cognitive dissonance applies in this case. I owe that to my Buy-and-Hold friends. I believe that to be the case.

I will NOT be claiming that prison sentences are inappropriate for those who crossed the line and for those who helped out those who crossed the line or who covered up for those who crossed the line.

That’s where things stand, Anonymous.

I have zero problem with you stating an opinion different from my own. I believe that you really do hold a different opinion. I believe that you have both a right and responsibility to express it.

But I also know that you have crossed the lines that make you guilty of financial fraud on thousands of occasions. And I am telling. My expectation is that papers will be filed following the next price crash. I will argue for a good measure of charity when the time comes. But I will also argue for at least a small measure of justice. Our society cannot survive to face another day without any justice whatsoever being achieved re this matter.

And I love my country.

The more you evidence your hate of it, the more I will rise up in protection of it.

I love my country. Deal with it.

My best wishes to you and yours.

Rob