A Rich Life

The Old Ideas on Saving & Investing Don't Work -- Here's What Does

“The Wall Street Journal Ran a Column Saying That Buy-and-Hold Is A Big Pile of Smelly Garbage, That the People Pushing It “Leave Out Half the Story.” That Article Should Have Gone Viral. Every Blogger Who Has Ever Mentioned Buy-and-Hold Should Have Been Writing About It. They Are AFRAID.”

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Set forth below is the text of a comment that I recently posted to the Goon Central board:

claiming it has ANYTHING to do with some goofball in Purcellville is grounds for instant disqualification, since 99.999999999% of investors, bankers, retirees, professors, etc have never heard of your crazy ass.

Rob Arnott doesn’t hail from Purcellville, Drip Guy.

He told me in his e-mail to me that he has seen all the same intimidation tactics that I have seen. There were two young researchers who wanted to do research on Arnott’s ideas. They were taken aside by friends and told that the Buy-and-Hold Mafia would destroy their careers if they went forward. So they dropped the idea.

Who benefits when something like that happens?

Not you. Not me.

The Wall Street Con Men benefit. The Buy-and-Hold advocates benefit.

There was an economics professor from Columbia University who said he loved my stuff. He said that it all made sense although he couldn’t do research showing this to be so. WHAT THE HECK IS STOPPING HIM? He is AFRAID to do research because he knows what the Buy-and-Hold MAfia will do to him if he does HONEST research.

Why did Wade flip? Partly he was afraid of you Goons. But there are internet Goons all over the internet and there is no other subject area re which people of Wade’s stature take into consideration what Goons like you think. Wade rolls over and begs when you tell him to roll over and beg because Bogle backs you up, Drip Guy. If Bogle condemned you, you would be gone. If Bogle had gone to Vanguard the first time Mel Linduaer threatened violence on a poster who dared to “cross” him by posting honestly on the academic research in this field, there never would have been a second time. Give me a friggin’ break.

The Wall Street Journal ran a column saying that Buy-and-Hold is a big pile of smelly garbage, that the people pushing it “leave out half the story.” That article should have gone viral. Every blogger who has ever mentioned Buy-and-Hold should have been writing about it, letting his or her readers know of the dangers of a strategy that has been pushed relentlessly for decades now. Not one blogger other than myself mentioned the article. They are AFRAID.

Bernsteinzzz said in response to Ataloss’ e-mail that anyone who uses one of the Old School studies to plan a retirement needs his head examined. Yet he said in the same e-mail that the studies are not analytically invalid. Huh? He is AFRAID to tell the truth re this matter.

Scott Burnszzz told me in his first e-mail response to me that I was “right” about safe withdrawal rates. Then he thought better and put up an article saying that “some people” say that the studies got the numbers wrong but not letting his readers know that he, Scott Burnszzz, personally AGREES with those “some people” (whom he left unnamed). Scott is AFRAID to do his job.

People aren’t going to become less afraid by permitting The Great Buy-and-Hold Con to continue.

It is by bringing it to a total and complete stop that we overcome this economic crisis and gain the ability to start feeling good about ourselves again.

I’m afraid of the Buy-and-Hold MAfia too, Drip Guy. The difference with me is that I am MORE afraid of playing a role in causing the Second Great Depression.

I have a right to post honestly. And I worry what the consequences will be to me and to others if I fail to demand recognition of that right.

It ain’t just Rob Bennett who has pointed out that Buy-and-HOld is a big pile of smelly garbage, Drip Guy. Far from it. I think it would be fair to say, that, once your prison sentence is announced, there are going to be hundreds if not thousands of people saying it.

We need to stop punishing people for telling the truth and rewarding people for pushing Get Rich Quick garbage.

That’s how change will be achieved.

My sincere take.

Rob

“They All Know Me. They All Know the Basic Story. They Are All AFRAID to Mention It on Their Blogs. Tell the Truth about Buy-and-Hold on Your Blog and You Are Going to Get the Treatment That Was Dished Out to Rob Bennett and John Walter Russell and Wade Pfau.”

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

You keep getting these questions because your history at these conventions is to be a wallflower. If you tell any of those bloggers that he or she is going to prison, they undoubtedly will mention it on their blog.

At the first financial bloggers convention that I attended (FinCon11), there must have been 15 different bloggers who came up to me and said some version of: “Oh, so YOU’RE Rob Bennett! YOU’RE that guy!”

They all know me, X. They all know the basic story. Rob Bennett has pointed out that there is now 32 years of peer-reviewed academic research showing that Buy-and-Hold is a big pile of smelly garbage and not one of the big shot experts has been able to respond with an effective argument. They all know that everyone working in this field should be writing about this story, the most important economic and political story of any of our lifetimes.

None of them mention it on their blogs. They are all AFRAID to mention it on their blogs.

Tell the truth about Buy-and-Hold on your blog, and you are going to get the treatment that Rob Bennett got when he told the truth about Buy-and-Hold. Tell the truth about Buy-and-Hold and you are going to get the treatment that John Walter Russell got when he told the truth about Buy-and-Hold. Tell the truth about Buy-and-Hold and you are going to get the treatment that Wade Pfau got when he told the truth about Buy-and-Hold.

Everybody gets it, X.

The other side of the story is that, when 10 of us who want to tell the truth about Buy-and-Hold all agree to stick together and not let the Buy-and-Hold Mafia pick us off one by one, it is all over. Buy-and-Hold was a mistake. There has never been a single peer-reviewed study showing that an investor who refuses to consider price when setting his stock allocation can obtain good long-term results. Not one person in this field has ever supplied the URL of such a study because no such study exists. The entire thing was in its early days an innocent mistake and then over time was transformed into a marketing gimmick, The Marketing Gimmick that Destroyed the U.S. Economy.

After the next crash, people will be mad enough to demand honesty. And the Wall of Intimidation will come crashing down.

That’s when those who have posted in “defense” of Mel Linduaer and John Greaney will be sent off to serve long prison terms.

My job today is to do what I can to see that the number sent off to serve prison terms is as small as possible given the circumstances that apply and that the prison sentences assigned are as short as possible given the circumstances that apply.

I naturally wish you all the best things that this life has to offer someone on the road to being assigned a long prison sentence.

Rob

“Following the Next Crash, We Will See All Kinds of Things Come Out That We Can Barely Imagine Today. I Believe That We Are Going to Hear Shiller Say That He Has Been Intimidated FOR YEARS. Until We Hear Testimony Taken Under Oath, We Won’t Be Able to Say How Many Will Be Going to Prison.”

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

Rob,

How many people are going to prison. Who will be paying you the 500 million?

I’ll offer you my impressions, Anonymous. That’s the best that I can do given the unique circumstances that apply. We have never as a nation been in a situation like this before. These are entirely uncharted waters.

There are millions of good and smart and hard-working people who believe that Buy-and-Hold works and who naturally share that belief with friends and neighbors and co-workers and fellow community members. These people have obviously never done anything wrong and have zero chance of going to prison. I was one of these people myself until the night of August 27, 2002, the night that John Greaney threatened to kill my wife and children if I continued to post honestly on safe withdrawal rates. It was when I saw 200 people endorse his post that I saw how emotional a strategy Buy-and-Hold was and knew that it was not for me.

The next layer down is people who participated at discussion boards at which the Buy-and-Hold Goons employed intimidation tactics to drive away those with an inclination to post honestly about the last 32 years of peer-reviewed academic research and who failed to speak up about it. That’s dishonorable behavior. Those people helped the 11-year cover-up of the errors in the Old School safe withdrawal rate studies in an indirect way. A case could be made that those people were in some small way engaged in an act of financial fraud. But I would be very surprised if any of those people were prosecuted. Prosecutors need to allocate limited resources in an intelligent manner. Limited resources are not going to be directed to people whose only “crime” is that they kept quiet. Those people will not be going to prison.

The next layer down is people who actively participated in the cover-up by putting up intimidation or deception posts but only on a small number of occasions. I believe that no one will be prosecuted for doing this sort of thing on a small numbers of occasions. Again, there are bigger and more important fish to fry.

Going down another layer, we have people who participated in long-running smear campaigns aimed at keeping middle-class investors from learning about the errors in the Old School SWR studies and about the dangers of Buy-and-Hold investing strategies in general. These are the people most likely to be prosecuted, in my assessment. People have sympathy for those who make one or two mistakes. Sympathy wanes when people make a career out of the destruction of human lives. It is to protect ourselves from these sorts of individuals (The Lindauerheads and the Greaney Goons) that as a society we adopted the laws against financial fraud in the first place. I am highly confident that the Lindauerheads and the Greaney Goons will be spending many years in prison cells.

Then we have people like Mike Piper, at the Oblivious Investor blog, and Carl Richards, at the Behavior Gap blog. Both Mike and Carl have done a great deal of top-notch work. They are both friends of mine and they have both been highly complimentary of my work. They’re both smart. They’re both good guys. It pains me to think that there is anything more than a zero chance that either Mike or Carl (or any of the many others in similar circumstances) will be going to prison. Yet it is a stone cold fact that both Mike and Carl (and the many others) provided HUGE help to the 11-year cover-up of the errors in the studies that are in the process of causing millions of middle-class people to suffer failed retirements. They committed the act of financial fraud as that crime is defined in the statute books.

Will Mike and Carl (and the others) go to prison? I don’t feel that I can answer that question. I am too close to all this. I have personal friendships with these people and I naturally hate the thought of seeing my friends carted off to prison cells. On the other hand, I also care about the millions of middle-class people whose lives are in the process of being destroyed. I think it is fair to say that after the next price crash those people are going to be very, very, very angry to learn that the errors in the Old School studies have been public knowledge since the morning of May 13, 2002, and that these people engaged in multiple acts of financial fraud to keep people from learning this. I can with my heart hope that Mike and Carl (and the others) will not go to prison while acknowledging with my head that my heart may not rule the day re this one.

Then we have all the people who have known about the dangers of Buy-and-Hold for many years and kept it zipped because they didn’t want to see their careers destroyed by the Buy-and-Hold Mafia. Rob Arnott reported that, when he asked a convention of academic researchers whether they thought Buy-and-Hold could work, only a tiny number of hands went up. Yet when he asked the same researchers whether they rooted their research in a belief in Buy-and-Hold, nearly every hand in the room shot up in the air. That’s obviously not the way in which academic researchers are supposed to behave. That’s obviously not ethical behavior. I believe that these people will be held to a far higher standard than non-experts. These people are paid to know this stuff. They can’t say “Oh, I haven’t been able to find time over the past 32 years to keep up with any new developments in the field.”

There are thousands of cases of this kind. Shiller published his “revolutionary” (his word) research in 1981. I didn’t come on the scene until the morning of May 13, 2002. I saw intense hostility evidence itself following my first post. So the cover-up had obviously been going on for a long time before I came on the scene. I believe that, following the next crash, we will see all kinds of things come out that we can barely imagine today. I believe that we are going to hear Shiller say that he has been intimidated FOR YEARS. Lots of others will be saying similar things. Until we hear testimony taken under oath on all that has been going on, I don’t think that any of us will be able to make fully informed statements about how many will be going to prison or for how many years.

Finally, there are cases like the cases of my good friends Wade Pfau and Jack Bogle. I love these guys. There would be no Valuation-Informed Indexing if not for the huge contributions of Jack Bogle and there would be no peer-reviewed academic research with my name on it showing millions of middle-class investors how to reduce the risk of stock investing by 70 percent if not for the huge contributions of Wade Pfau. So I am biased.

The other side of the story, of course, is that both Jack and Wade are in circumstances in which they could bring the economic crisis to an end with very little effort on their part. Wade just needs to get that study written up on the front page of the New York Times and Jack just needs to address the Lindauer matter so that the hundreds of posters who have expressed a desire that honest posting be permitted at the Bogleheads Forum can see that desire given recognition in the real world.

I believe that whether Wade and Jack go to prison or not will likely depend on the answers they give to questions put to them under oath. People are going to want to know how deep their fears were. Were family members threatened? How did they rationalize their behavior to themselves? How deep was their cognitive dissonance? All this kind of thing.

As for the $500 million, that’s just a number that I put forward as part of an effort to provide an incentive for the Wall Street Con Men to seek a settlement prior to the next crash. Any person who has participated in the cover-up is liable to me for the financial damages I have suffered as a result of the damage done to my business. The amount of the damages is obviously a number far bigger than the number I put forward as a possible settlement amount. I did that because I don’t want us to go into the Second Great Depression. I am happy to settle for $500 million if it brings the economic crisis to an end and helps us on our way to the greatest period of economic growth in our history. I am far better off getting $500 million to spend in a thriving economy than I would be to receive a far larger amount in a society that is in a state of collapse. No one wins if we fail to bring this matter to a successful conclusion prior to the next price crash, in my assessment.

Rob

“Our System Works Only If We All Say What We Honestly Believe. Once Intimidation Enters the Picture, Things Get Corrupted.”

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

Just amazing how so many people who are much more intelligent, more successful and far more wealthy are wrong and Rob is the only one right………because, of course, Rob can’t possibly be wrong.

I CAN be wrong, Anonymous.

Say that I am wrong. Would that make it acceptable for me to post dishonestly? It would not.

All of us can make mistakes. None of us can be required always to be right.

But none of us may post dishonestly. We must say what we truly believe.

We are all better off being wrong and honest than being right and dishonest.

Why is that?

Because no human can ever be sure that he is right. We are all flawed creatures.

The only way we will discover our errors is if someone coming from a different set of life circumstances is honest enough to point out our errors to us. That person is worth gold.

I don’t say that I am certain that I am right. I say that I must post honestly and that there can never be any negotiation re that point.

What if Bogle is wrong? He can be wrong too, no?

Would he want Rob Bennett insisting on his right to post honestly and pointing out his (Bogle’s) errors?

I am 100 percent sure that Bogle would want me to point out his errors.

So I am going to continue to do it.

If you care about Bogle, you should DEMAND that I continue to do it.

There shouldn’t be even a tiny question in anyone’s mind re this one.

Our system works only if we all say what we honestly believe.

Once intimidation enters the picture, things get corrupted.

That hurts each and every one of us.

Please think it over, my old friend.

Rob, the Fellow Who May Have It All Wrong But Who Properly Insists On His Right to Post Honestly All the Same

“If the Purpose of a Ban Is to Cover Up an Error Made in a Retirement Study, the Ban Is an Act of Financial Fraud. That’s a Felony. That’s Prison Time.”

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Set forth below is the text of a comment that I recently posted to the Goon Central board:

Rob doesn’t seem to realize that almost all websites are private property and he can post at them only if the owner allows.  An owner can ban him from a site for any reason, and he has no recourse. 
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That’s not what the laws concerning financial fraud say, GW.  If the purpose of the ban is to cover-up an error made in a retirement study, the ban is an act of financial fraud. That’s a felony. That’s prison time.If the ban is the result of an act of intimidation advanced by someone engaged in a cover-up of an error in a retirement study, that act of intimidation is an act of financial fraud, a felony.

There is no law that makes it a crime to write random numbers on pieces of paper. But Bernie Madoff is in prison today because he wrote random numbers on pieces of paper and then told people that these numbers reflected transactions that he made with their money. That part turned what he did into financial fraud, a felony. Bernie Madoff is in prison today.

That’s where you are headed, GW. For a long time. We are not talking about one or two felonies here. We are not talking about mistakes made in a heated moment but cold and calculated acts extending over an 11-year time period. We are not talking about an act of financial fraud that caused a few thousand people to experience failed retirements but one that caused millions to do so.

My warmest wishes to you and yours.

Rob, a Fellow Who Is Very Happy Today That for Years He Refused Greaney’s Entreaties to Commit Acts of Financial Fraud Himself

“The First Question That I Get From Just About Everyone Who I Tell That It Is Now Possible to Reduce the Risk of Stock Investing by 70 Percent Is — Why Don’t We Hear About This From Every Expert in the Field, Rob?”

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

Are you going to talk about Wade, goons, death threats, prison sentences and lawsuits at FinCon? It would be dishonest and corrupt to avoid those topics when mingling with your fellow bloggers, since that is ALL you talk about here.

That is not all I talk about here, X.

I have five calculators here that exist nowhere else on the internet.

I have over 200 RobCasts and just about all of them are over one-hour long.

I have 200 articles focusing on different aspects of what the peer-reviewed academic research of the past 32 years says about what works in stock investing.

And I of course have links to the peer-reviewed research that I co-authored with Wade Pfau, the research that shows millions of middle-class investors how to reduce the risk of stock investing by 70 percent.

I will obviously be talking about as much of that stuff as I possibly can.

But, yes, I will also talk about you Goons and your death threats and your board bannings and your tens of thousands of acts of defamation and your threats to get academic researchers fired from their jobs.

Why?

Because the first question I get from just about everyone who I tell that it is now possible to reduce the risk of stock investing by 70 percent is — Why don’t we hear about this from every expert in the field, Rob?

The obvious answer to that question is that the Buy-and-Holders are not willing to admit the mistake they made and have been engaging in brutally abusive tactics to keep millions of middle-class investors from learning what the research says.

We know all we need to know on the substance side to bring the economic crisis to an end and to enter the greatest period of economic growth in our history, X. We are on the 99-yard line. The last yard is getting you Goons sent to prison. When your prison sentences are announced, the news will go viral and Buy-and-Hold will be a dirty phrase at every web site on the internet.

I talk about bringing an end to the ugly stuff because it is by bringing an end to the ugly stuff that millions of us get to experience the benefits of being lucky enough to be born at the greatest time to be investors in the history of Planet Earth.

Does all that make good sense to you, my good friend?

Rob, the Fellow Excited About Being Given the Job of Carrying the Football One More Yard and Making the 99-Yard Drive So Far Achieved Pay Off Big-Time for Every Single Person Involved

“Wade Is Embarrassed About the Reports on His E-Mails for Only One Reason — Because He Joined the Cover-Up and Committed Felonies in Support of It Himself. He Doesn’t Gain Some Magical Right to Have His Felonies Remain Secret Just Because Much of the Evidence of His Involvement Is Contained in E-Mails to Me.”

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Tell me Rob, what’s ethical about disclosing the contents of private emails sent to you against the wishes of the sender? Wade is not ashamed of anything he said in any of those e-mails, Yip. He is very, very PROUD of the work he did. Nothing could be more clear. He communicates this clearly over and over and over again.

He is AFRAID. He has financial responsibility for two small children. He knows how ruthless the Wall Street Mafia is. He doesn’t feel that he can afford to lose his job. That’s all.

And Wade is not the only one. Bogle has made clear in a number of his comments that he would like to feel free to post honestly. Swedroe would like to post honestly. Burnszzz would like to post honestly. Bernsteinzz would like to post honestly. Morningstar wants to permit honestzzz posting at its discussion boards. So does Motley Fool. So does the Early Retirement Forum. There are hundreds of bloggers who would like to be doing honest work. There are hundreds of personal finance journalists who would like to be doing honest work. There are tens of thousands of investment advisors who would like to be doing honest work.

How do you suggest that we make this happen?

So long as everyone is afraid, nothing good can happen. The Buy-and-Hold Mafia can cut us all off one by one.

Once a group of us stands together and INSISTS on our right to post honestly, we are all safe. There is not a thing that the Buy-and-Hold Mafia can do to us once we work up the courage to stand together.

We gain that courage by knowing that there are lots of others out there who want to see minimal ethical standards apply in this field, just as they do in every other field.

I did not intend to write reports on Wade’s e-mails when we were working on the research. There was no news value in them. The news value was in the research we produced together. That research changes the history of investing analysis. We showed millions of middle-class investors how to reduce the risk of stock investing by 70 percent. That’s Nobel-prize-quality stuff.

You committed felonies to keep that research from getting out to the millions of middle-class people who desperately need to know about it. Jack Bogle indicated that he is fine with that. That’s financial fraud. And not an ordinary case of it either. That’s the greatest act of financial fraud ever committed in the history of the United States.

Your felonies make Wade’s e-mails news. Your 11-year cover-up of the errors in the Old School SWR studies is the biggest economic and political story of any of our lifetimes. In that context, Wade’s e-mails become news.

All that said, I was careful about how I reported on what Wade said in the e-mails. I did not post the entire texts of the e-mails. I used quotes from Wade only when they were needed to tell the story effectively. I gave Wade the ability to control to a large extent how the story would be told. I posted every word he wrote to me in response to the posts on the e-mails and I collected all his responses in a single article so that people could easily gain access to any responses from him. I told him that I would be happy to run responses from him on every single e-mail if that is what he wanted. I told him that I would run the full texts of the e-mails if that is what he wanted (he asked that I do that in only one case and I followed his instructions).

I did not violate Wade’s privacy. He does not have a right to demand that I not provide the authorities evidence of multiple felonies when they are committed. And these are not ordinary felonies. These are felonies that caused the biggest economic crisis in U.S. history. These are felonies that have caused tens of thousands of businesses to fail and that have put millions of people out of work. These felonies have caused great political friction both from the left (the Occupy Wall Street movement) and from the right (the Tea Party movement). These felonies are likely to put us in the Second Great Depression in not too much more time. This is serious stuff, Yip.

Wade is embarrassed about the reports on the e-mails for only one reason — because he joined the cover-up and committed felonies in support of it himself. He doesn’t gain some magical right to have his felonies remain secret just because much of the evidence for his involvement is contained in e-mails to me.

It is my JOB to report on this story. I of course need to be fair to Wade in my reports. I have been fair to Wade in my reports.

And, to the extent that it was possible to avoid using Wade’s words in my reports, I think it made sense as a matter of charity to honor his wishes that I do that. I did indeed honor his wishes.

I would be committing a felony myself if I were to fail to report on the story. A journalist who knows about a story of this magnitude and who fails to report on it because some of those who committed the felonies are friends of his is himself participating in a cover-up.

No thanks. Find someone else.

I have reported the story. I will continue to report the story. I will always make every effort possible to be kind to those involved. But it is not only those who have committed felonies who matter here. There are millions of middle-class people whose hopes for retirement have been destroyed by this 11-year cover-up. Those people matter too. I need to balance their rights to learn what the last 32 years of peer-reviewed research tells us about what works in stock investing with Wade Pfau’s rights to keep personal things personal.

It’s not a personal matter anymore once you take acts that put the future of the country you live in in great jeopardy. My understanding is that Wade is currently a citizen of the United States. There are responsibilities that go with being a citizen of this country. One of Wade’s responsibilities was to report to the authorities the threats that were made to shut him up and to demand that those making the threats and those supporting those who made the threats be put in prison for their crimes. There are REASONS why the behavior you have engaged in is criminal behavior under the laws of the United States. The people of this nation adopted those laws as PROTECTION against people like you.

Wade has nothing to be ashamed of EXCEPT for his dealings with you Goons and his dealings with the Wall Street Con Men, Yip. That’s the bottom line here. If he wants to start feeling good about himself again, he needs to return to behaving ethically in the execution of his responsibilities as an academic researcher. If he feels that that is impossible given the realities that apply today, he needs to find another way of making a living. No one has the right to lend support to the sorts of individuals who have posted in “defense” of Mel Linduaer and John Greaney and their 11-year cover-up of the errors made in the Old School safe withdrawal rate studies.

I naturally hope that my good friend Wade enjoys all the best that this life has to offer a person.

I naturally wish the same for you, Yip.

Rob the Patriot and the Good Friend of Wade Pfau (a Fellow Who Has a Desire to Do the Right Thing for His Country Himself But Who Is at the Moment Too Afraid of What the Buy-and-Hold Mafia Would Do to Him)
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“Cigarette Companies Once Advertised the Health Benefits of Smoking. Why Do You Think They Did That? It Helped Sell Cigarettes. And There Was No Downside. To Change That Situation, We Imposed a Downside.”

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

For each to do the same thing, yes, it would require a mass conspiracy. What are the odds that each would act in similiar fashion on their own accord. The odds of that happening are astronomical.

There obviously is no mass conspiracy. That is obviously a 100 percent silly idea.

But you are wrong when you say that the odds are against large numbers of people acting in a similar manner. When there are huge incentives for people to act in a certain manner, it should not be even a tiny bit surprising to find that most elect to take advantage of those incentives.

To understand what is going on, you must understand how stock prices are set. There is no governing body that has to approve a price increase. It is 100 percent up to investors to determine whether prices go up.

Now –

How many of the humans benefit from an increase in stock prices? We ALL seem to benefit! Every last one of us. The Stock-Selling Industry is happy with a price increase because they sell more stocks. Investors are happy because they appear to be closer to financing their retirements. The newspapers are happy because more people want to read the business pages. More books are sold. Politicians are happy because people are more satisfied with their lives and more likely to vote for incumbents. Clothing stores are happy because people have more money to spend on clothes. And on and on and on.

Is that a conspiracy?

Not in the usual way in which that word is used. It is a case where everyone has an incentive to do the same thing — push stock prices up. It’s a case of all incentives pointing in the same direction.

The answer is to provide equally strong incentives pushing people to act to keep from stock prices getting out of hand. The way to do that is to permit honest posting on the peer-reviewed academic research of the past 32 years. People can retire many years sooner if they follow a research-based strategy. But they have to know about it first! So we must open the internet to honest posting.

That’s the story, Questions.

There is no conspiracy. There is an unhealthy lack of balance to the incentives being provided to investors and investing experts.

Cigarette companies once advertised the health benefits of smoking. Why do you think they did that? It helped sell cigarettes. And there was no downside. To change that situation, we imposed a downside. We adopted laws and regulations that made clear to the cigarette companies that their top executives would go to prison if their companies continued to make false claims about the health benefits of smoking.

The Stock-Selling Industry is today where the tobacco industry was in the days when cigarettes were promoted as a boon to good health. We need to send people to prison when they make false safe withdrawal rate claims and then respond to those pointing out the falsity of the claims by threatening to kill their family members. When these people go to prison, all the others making false claims will notice and will stop making false claims themselves.

That’s how it works.

All the incentives today are encouraging people to talk nonsense about stock investing. The result is that we are in the worst economic crisis in our history. To change that, we need to provide disincentives to promote Buy-and-Hold strategies and incentives to promote Valuation-Informed Indexing strategies.

My warmest wishes to you.

Rob

“It Is Always Hard to Move from One System of Thought to Another. It Is Harder Than Usual When Making the Transition Requires That Lots of Powerful People Give Up (Temporarily — But Still) Some of Their Power and Their Ability to Generate Huge Sums of Money for Themselves.”

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

You also fail to address the fact it would require mass conspiracy as well as the disregard by all with respect to their individual levels of respect and credibility.

I don’t think it requires mass conspiracy, Questions.

It involves a huge advance in our understanding of how stock investing works, an advance so big that people cannot come to terms with it without first being permitted to talk it through a bit. And it also involves a lot of money. It is always hard to move from one system of thought to another. It is harder than usual when making the transition requires that lots of powerful people give up (temporarily –but still) some of their power and their ability to generate huge sums of money for themselves.

I like the civil rights analogy. But there are lots of other analogies that could be used. When Galileo discovered that it is the earth that revolves around the sun rather than the other way around, there were lots of powerful people who tried to shut him down. The first reaction of established orders to challenges to their pre-eminance is to attack those bringing the challenges. That’s just the way it is with those darn humans.

I think YOU are the one suspending rational thought, Questions. You are the one going to prison, not me. The fact that you have placed yourself in circumstances where you will be going to prison because some fellow you don’t even know personally happened to post honestly about the numbers that millions of middle-class people use to plan their retirements should tell you something. The idea that stock investing is a 100 percent rational endeavor has certainly been disproven in your case. No?

I say that it is not just you. It’s fair to say that you are an extreme case. But I believe that all of us humans are subject to the same influences. During the Buy-and-Hold years, we haven’t been doing anything to address the effect of those influences on our long-term investing returns. The peer-reviewed academic research shows us that, if we start doing that, we will be able to reduce the risk of investing by 70 percent. I say we should go for it. That sounds like very good news indeed to my ears.

Please take good care, my old friend.

Rob

“I Believe That the Second Explanation — The Charitable Explanation That the ‘Experts’ in This Field Are Suffering from Cognitive Dissonance — Is the Right One”

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

Once again, we look at patterns and we see that these very smart people have given and continue to give considerable thought and study to each issue. Basically, we look at people’s track record in order to assign credibility. The same measure is applied to everyone, including you.

You have not presented a case that is credible.

I disagree, Questions.

I put forward my famous post pointing out the errors in the Old School safe withdrawal rate studies on the morning of May 13, 2002. Not one of those studies has been corrected to this day. That tells the story.

There are two conclusions that can be drawn:

1) The uncharitable conclusion that the “experts” in this field are 100 percent corrupt; and

2) The charitable conclusion that the “experts” in this field are suffering from cognitive dissonance.

I believe that the second explanation is the right one (and I have seen a good bit of evidence supporting my conclusion on this point).

There’s only one way to bring the cognitive dissonance to an end. That’s to open every board and blog on the internet to honest posting on safe withdrawal rates and scores of other critically important investment-related topics.

We all learn by talking things over. So long as the “experts” don’t permit anyone who has not been taken in by their errors near them, they are never going to learn the realities. The ONLY way to take things to a good place is to launch a national debate on these questions.

That’s my sincere take, Questions.

Hang in there, man.

Rob