A Rich Life

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

“If Someone Says That One of the Things That I Say Is Right, They Know That They Will Be Led By Logic to Saying That All of the Things That I Say Are Right.”

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

If even a few things you say were true, why have you failed to get just one single person to come on here and say that you are right?

Because, if someone says that one of the things that I say is right, they know that they will be led by logic to saying that all of the things that I say are right. That puts them in the position of saying that the thousands of powerful and wealthy and well-connected people who have been promoting the Buy-and-Hold concept for many years got it wrong and caused great financial pain for millions of people. If Shiller’s Nobel-prize-winning research is legitimate research, it was the promotion of Buy-and-Hold that served as the primary cause of the 2008 economic crisis. How do you think it makes the Buy-and-Holders feel to hear someone say that? What do you think the career prospects are of someone who angers that many powerful and wealth and well-connected people?

The national debate re whether or not market timing is required should have been launched in 1981, when Shiller published his peer-reviewed research showing that there is precisely zero chance that an investment strategy that does not require market timing could ever work for a single long-term investor. Had it been done that way, the ideas that I talk about at this site would have gradually spread throughout the world and gotten slowly more popular over time and would probably be the dominant ideas today. The problem is that Shiller’s core finding was so at odds with the conventional thinking of the time (if the market were efficient, market timing would be a bad idea) that people’s minds just couldn’t take it in. People in this field suffered cognitive dissonance.

Which meant that they continued to promote the Buy-and-Hold idea that market timing is not required. The longer that continued, the harder it became to come clean. Now that the cover-up has continued for 40 years, it would look very, very very bad for the Buy-and-Holders for someone just t give voice to the obvious research-proven realities. So we are stuck.

We wont get unstuck by continuing to live in fear of you Goons. Those of us who believe that Shiller’s Nobel-prize-winning research is legitimate research need to work up the courage to speak honestly. On safe withdrawal rates and on scores of other critically important investment-related topics. There is no other way to get to the place where we all want to be deep in our hearts, a place where we all can take advantage of all the research available to us, both the pre-1981 research and the post-1980 research, and live richer and fuller lives from that point forward.

It shouldn’t take 19 years to determine whether or not the retirement study posted at John Greaney’s web site contains an adjustment for the valuation level that applies on the day the retirement begins, Anonymous. I mean, come on.

Rob

“Irrational Exuberance Exists. It Is the Primary Job of Investment Experts to Help Us All to Do Everything in Our Power to Combat This Horribly Destructive Force.”

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

“I don’t ignore everything else Shiller says. ”

To clarify, you take some of what he says and spin it to say what you want it to say (not what he actually says) and then you ignore the rest. This is just a factual observation.

The title of Shiller’s book is “Irrational Exuberance,” Anonymous. Is it spin to take note of the title he gave to his book?

If irrational exuberance exists, it is a logical impossibility that the safe withdrawal rate is the same at all valuation levels. There is obviously more risk when irrational exuberance is high. So the safe withdrawal rate is lower at those times.

We need to tell people that. There were thousands of people at the Motley Fool’s Retire Early board who were planning retirements based on Greaney’s claim that the safe withdrawal rate is always 4 percent.

I pointed out the error in Greany’s study on the morning of May 13, 2002, It has not been corrected to this day. Does that not concern you? It sure concerns me.

If the Buy-and-Holders got the numbers that people use to plan their retirements so wildly wrong, what else did they get wrong? I think we should be exploring that question at every discussion board and blog on the internet. Every day. That’s how we all learn over time.

The Buy-and-Holders did a great thing advancing the idea that investment advice should be rooted in peer-reviewed research. I love them for that. But science does not stand still. We learn new things all the time. We learned an important new thing in 1981. We learned that the market is not efficient and that irrational exuberance is a real thing. We learned that stock investing risk is not constant but variable. We learned that market timing always works and is always 100 percent required for all investors. We learned that, when large numbers of investors come to believe that market timing is not required, the market becomes dysfunctional and down the road we see a price crash and an economic crisis. The good news is — we learned how to bring an end to price crashes and economic crises — by permitting open discussion of what the peer-reviewed research shows at every internet site.

Irrational exuberance exists, Anonymous. It is the primary job of investment experts to help us all to do everything in our power to combat this horribly destructive force. How do we do that? Through market timing. It is the only means available to us to get the job done. We should all be thanking our lucky stars that Shiller’s Nobel-prize-winning research showed us what we had gotten wrong and pointed us in the direction of getting it right in the future.

My sincere take.

Rob

“I Say That We All — Experts and Ordinary Investors Alike — Have a Lack of UNDERSTANDING.”

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

The experts do not have a lack of knowledge or information. Either all these experts are lying or it is just you lying, I think we all know how to answer that one.

I say that we all — experts and ordinary investors alike — have a lack of UNDERSTANDING. We need as a nation of people to give ourselves permission to discuss Shiller’s Nobel-prize-winning research at every discussion board and blog on the internet. The more we talk about it and explore it from all possible angles, the surer and firmer will be our appreciation of all the far-reaching implications of his many amazing breakthrough insights.

My sincere take.

Rob

Buy-ans-Hold Goon to Rob: “There Is No Possibility That All of These People Are Liars and Only Rob Bennett Is the Truthful One.”

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

There is no possibility that all of these people are liars and only Rob Bennett is the truthful one.

Was everyone who believed in the days before Galileo that the earth was the center of the universe a liar?

Most of those people truly believed that the earth was the center. What Galileo said upset them. So they had him silenced.

The vast majority of people who support Buy-and-Hold possess a sincere belief that it works. They are not liars. But there are 10 percent who believe that Shiler’s Nobel-prize-winning research is legitimate research. And, if we permitted honest posting, that 10 percent would grow to 20 percent and then to 40 percent and then to 80 percent.

Shiller was awarded a Nobel prize because he showed us something that we did not know before he came along. The fact that we didn’t always know everything there is to know about stock investing doesn’t mean that we were all liars. We did not know. And most of us still do not know. But we COULD know. The peer-reviewed research is available to us today. We could give ourselves permission to talk about it and all live better lives from that point forward. I vote for doing that.

Rob

“The Problem Is the Criminal Stuff”

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

No one has ever said they agree with your conclusions about Greaney. Your spin is not convincing anyone. No one has agreed with you that there were any death threats. You are just making it up.

I said that the Greaney study lacks a valuation adjustment and should be promptly corrected before it does more damage to more human lives. Wade Pfau looked at it and concluded that the Greaney study is “dangerous.” That’s agreeing with me.

No one has ever said they disagree with me. Greaney himself has not pointed to a section of his study that contains a valuation adjustment. Evidence-Based Investing is the gooniest of goons and he acknowledged a few weeks ago that the Greaney study lacks a valuation adjustment. When you’ve lost Evidence….

The problem is the criminal stuff. That is hurting us all in a very serious way. We know how stock investing works today. We have known for 40 years. But we need to be able to talk about what we know for it to do us any good. We all have a Get Rich Quick/Buy-and-Hold urge residing within us. It takes work to overcome that urge. Anytime someone posts honestly re the peer-reviewed research, that helps us. Anytime someone is intimidated into silenced by your criminal acts, it sends us all backwards.

I believe that we will get the Greaney study corrected in time. But it looks like we are going to see millions of people hurt in very serious ways before we work up the courage to make it happen. It’s a sad situation. But the good news here is 50 times more good and the bad news here is bad. We are poised to experience a huge economic surge. I am looking forward to seeing it (although I obviously am am not looking forward to the ocean of misery that we will be seeing with the next price crash even a little bit).

Rob

” We Need to Insist on Reasonable Enforcement of Those Laws If We Want to Advance in Our Understanding of How Stock Investing Works.”

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

No expert has ever agreed with you about Greaney. No expert is currently willing to even speak with you.

A good number have agreed with me. Bill Bernstein said in his book that the safe withdrawal rate is not always 4 percent, that the Buy-and-Hold studies were off by a full two percentage points at the top of the bubble. Wade Pfau said that the Greaney study is “dangerous.” John Bogle did not comment specifically on the safe withdrawal rate issue but he said that he could see how Valuation-Informed Indexing might well work out; if you support Valuation-Informed Indexing, you implicitly support the idea of taking valuations into consideration when calculating the safe withdrawal rate. The Economist magazine had an article saying that many people have lost confidence in the idea that the safe withdrawal rate is always 4 percent. Todd Tressider stated very strongly that the old studies are in error and gave me full credit for discovering the error and making the case for correction of the studies on the internet. And there have been numerous others.

You are right though that the vast majority of experts get real quiet once they see the death threats and the acts of extortion and the acts of defamation. That sort of thing scares people into silence. That’s why as a nation of people we adopted laws against the use of those sorts of tactics. We need to insist on reasonable enforcement of those laws if we want to advance in our understanding of how stock investing works. I believe that lots of people will be coming forward to do just that in the days following the next price crash. It will be interesting to see how it all plays out.

Rob

“No One With Any Credentials Has Said That They Believe That the Greaney Study Contains a Valuation Adjustment. Full Truth Be Told, Greaney Himself Has Not Said That. Greaney Ought to Know What Is Contained in His Own Study.”

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

Experts with credentials say YOU are wrong about your interpretation of Greaneys work, so you are starting with a false premise.

No one with any credentials has said that they believe that the Greaney study contains a valuation adjustment. Full truth be told, Greaney himself has not said that. Greaney ought to know what is contained in his own study.

Few have been willing to say flat-out that the Greaney study should be corrected. That’s the problem. That’s why I say that we need to open every discussion board and blog on the internet to honest posting. To get people to say that, we are going to have to do something about the death threats and the unjustified board bannings and the acts of extortion and the acts of defamation.

I believe that we will see it happen in the days following the next price crash. I sure hope so!

Rob

“I Publicly Pointed Out the Error in the Buy-and-Hold Retirement Studies on the Morning of May 13, 2002. Shiller Has Not Done That as of Today. So I am 18 Years Ahead of Him re That One.”

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

“ But I doubt Shiller would say anything that would persuade me.”

What makes you think that you know more than Shiller? What credentials do you have that says you are qualified to even question the opinions of Shiller?

I publicly pointed out the error in the Buy-and-Hold retirement studies on the morning of May 13, 2002. Shiller has not done that as of today. So I am 18 years ahead of him re that one.

I couldn’t have done what I have done without the work that Shiller did before I came on the scene. But Shiller has held back from exploring the how-to implications of his work (it is discussion of the how-to implications that most upsets the Buy-and-Holders). I have not let the Buy-and-Holders keep me back. I learned new things every week. And there are a lot of weeks in 18 years.

It doesn’t take a lot in the way of credentials to take note that a retirement study lacks an adjustment for the valuation level that applies on the day the retirement begins. Anyone with a little bit of common sense could have done what I have done. What it takes is the courage to stand up to you Goons. That not too many have. People do not like to see their loved ones threatened. People do not like to see their careers destroyed.

I of course do not like those things either. But I could not stand to see the lives of my friends at the Motley Fool board destroyed by Greaney’s deceptions. And I cannot bear the thought of seeing millions of other lives destroyed in the next price crash. So I stand up to you. The only way forward for all of us is for someone to stand up to you. So I do that. My credential is my love for the millions of middle-class people who need access to information about what the last 40 years of peer-reviewed research teaches us all about how stock investing works in the real world.

And what makes you think that you are qualified to threaten people who believe that Shiller’s Nobel-prize-winning research is legitimate research?

Rob

“I Think It Would Be Fair To Say That I Am the World’s Foremost Authority on Two Subjects: (1) The Valuation-Informed Indexing Strategy, Which I Have Been Developing Full-Time for Over 18 Years Now; and (2) The Efforts By Buy-and-Holders To Block Millions of Middle-Class Investors Who Very Much Want To and Need To Hear About These Ideas From Learning About Them.”

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

If Shiller told you that you should not use CAPE to time the market, would you finally admit that you are wrong about Shiller’s work? Do you think you know more about investing than Shiller?

That’s a super question.

If Shiller said that, I would tell everyone that he said it. Shiller played such a key role in the development of the Valuation-Informed Indexing strategy that anyone considering the strategy would need to know that he said that if in fact he did.

I would not necessarily say that I was wrong. If Shiller gave a reason for not using CAPE to time the market that I found persuasive, then I would change my mind and I would tell people that I now thought I was wrong about what I believed in the days before Shiller persuaded me. But I doubt Shiller would say anything that would persuade me. In that case, I would continue saying what I believe. I would let people know that Shiller has a different opinion in in fact he said that he did. But I would not say that I thought I was wrong about my own opinion.

I think it would be fair to say that I am the world’s foremost authority on two subjects: (1) The Valuation-Informed Indexing strategy, which I have been developing full-time for over 18 years now; and (2) The efforts by Buy-and-Holders to block millions of middle-class investors who very much want to and need to hear about these ideas from learning about them. Lots of people know lots more than me about all sorts of investing topics. But no one has put in the time and effort on those two that I have. There’s no one in a close second place.

I put the time in because I think those two issues are of immense important. People invest their retirement money in stocks. So we have to find some means of getting information about accurate and honest research-based strategies out to people no matter how bad it makes the Buy-and-Holders feel for us to do that. The process issue is more important than the substance issues. Because, once we solve the process problem, we will have thousands of people making great contributions on the substance side. I won’t be the foremost authority anymore in those days. And that will be a good thing. I SHOULDN’T be the world’s foremost authority on research-based investment strategies. It’s only because of the insanely abusive posting of you Goons that it became possible for me to attain that status.

I very much look forward to seeing Shiller’s book on the how-to aspects of his model for understanding how stock investing works. My guess is that we will be seeing that someday after we all suffer the horrible effects of the next price crash.

Rob

Buy-and-Hold Goon’s Response to Rob’s Assertion that “Today’s CAPE Needs to Be Taken Into Consideration to Know What Those Portfolios Will Show Tomorrow”: “No, It Doesn’t.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site, followed by the response posted by one of my Goon friends:

Today they do.

And the entire history of the market shows that today’s CAPE value needs to be taken into consideration to know what those portfolios will show tomorrow.

Irrational exuberance is real. Acting together as a society we can rein it in. Not one of us has the power to do that acting alone. This is a group project. This is why we need to feel free to talk about what the research shows, Learning the realities of stock investing is empowering.

Rob

No, it doesn’t.