A Rich Life

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

“I Believe That We Are Fundamentally a Good People. And I Believe That We Have Made Enormous Progress In Our Effort to Discover the Realities of Stock Investing.”

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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:

When do expect that things will finally work out for you (timeframe)?

I don’t know the answer.

I know that I would not feel good about myself if I said that I believe that the Greaney retirement study contains a valuation adjustment. So I don’t do that.

I believe that we are fundamentally a good people. And I believe that we have made enormous progress in our effort to discover the realities of stock investing. 44 years ago, we did not have Shiller’s amazing research findings. 25 years ago we did not have Shiller’s best-selling book. 12 years ago Shiller had not been awarded a Nobel prize. We are closer than ever. That’s all that I can say about it.

Rob

“If We Decide As a Nation of People in the Wake of the Next Buy-and-Hold Crisis That We Would Like to Bring an End to Bull Markets and Bear Markets and Economic Crises, the Last 44 Years of Peer-Reviewed Research Will Be Sitting There Waiting for Us.”

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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:

Take a look at my Tesla.  It doesn’t have a microwave oven.  That must be an error.

That’s what we’re up against.

If we decide as a nation of people in the wake of the next Buy-and-Hold Crisis that we would like to bring an end to bull markets and bear markets and economic crises, the last 44 years of peer-reviewed research is sitting there waiting for us. I say “go for it.”

Emotion (marketing) vs. reason (research),

Rob

“Everyone Knows That Greaney Made an Error. YOU Know That. If You Believed That His Study Contained a Valuation Adjustment, Your Next Post Would Contain a Link to the Page in the Study Containing It.”

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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:

So, what you are saying is that no one but you claims that Greaney made an error.  Again, why are YOU broke?  Why isn’t anyone willing to pay you a dime?

Everyone knows that he made an error. YOU know that. If you believed that his study contained a valuation adjustment, your next post would contain a link to the page in the study containing it.

The cover-up has been going on for 44 years. We should have talked this all through in 1981. After a 44-year cover-up, it is very hard. It only gets harder to wait longer. But it is very hard.

There’s a movie called “The Insider” about a man who knew that the tobacco industry was lying in testimony to Congress about research that showed that smoking causes cancer. All of the same tactics that have been used to suppress what I say and what all the people who have posted in support of me say were used to keep the public in the dark about the dangers of smoking. Do you think It would have been better if that cover-up were still going on? I do not. I think we needed to bring it to an end. I think we need to bring the Buy-and-Hold cover-up to an end as well.

The longer it continues, the worse it is for each and every one of us.

Rob

“If the 4 Percent Rule Goes Down, the Entire Buy-and-Hold Strategy Goes Down.”

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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:

Is Greaney broke? No
Is Wade Pfau broke? No
Is Robert Shiller broke? No
Is Evidence broke? No

Is Rob Bennett broke? Yes………I wonder why? Hmmmmmmmm…………

I know why, I pointed out the error in the Greaney retirement study (it lacks a valuation adjustment). If the 4 percent rule goes down, the entire Buy-and-Hold strategy goes down. Shiller published the Nobel-prize-winning research discrediting it in 1981 and the cover-up has continued for 44 years now, doing a lot of harm to millions of people. So there is a strong feeling among a lot of wealthy and powerful and well-connected people that this thing has to be kept under wraps.

But that only makes it worse. It can only get worse and worse, never better. So I think it would have been better just to come clean on the afternoon of May 13, 2002. If Greaney’s study contained a valuation adjustment, he would have pointed us to it on the first day.

I don’t want to be broke. But I don’t want to stab my friends in the back either. And I don’t want anyone else to feel that they need to stab their friends in the back. LOTS of people would like to see every site opened to honest posting re the research. But someone has to lead the way. I guess I was elected. Once we get to the other side. no one is going to want to go back. It makes no sense to have one set of laws for every field of human endeavor other than the investment advice field and then a different set of laws for the investment advice field. I mean. come on.

If Buy-and-Hold were a real thing, there never would have been a single abusive post, much less 23 years of them.

Rob

“Say that Someone Eats Three Ice-Cream Sundaes for Dinner Seven Nights a Week. And for a Long Time He Lives. Then at Age 45 He Has a Massive Heart Attack and Dies. Do You Say That His Diet Worked for All Those Years?”

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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:

“Every 30-year period has failed. Every 20-year period has failed. Every ten-year period has failed. Every five-year period has failed. Every one-year period has failed.“

That is factually incorrect. When you make statements like that, it tells people that you are either lying or you have no ability to even look at numbers. With the comments you make, it is not surprising

Say that someone eats three ice-cream sundaes for dinner seven nights a week. And for a long time he lives. Then at age 45 he has a massive heart attack and dies. Do you say that his diet worked for all those years? I say that he was engaging in high-risk behavior and that the diet failed the first time he employed it because it did damage to his long-term health. It would have been better if he had been eating sensibly.

Rob

that you are completely broke and the investment community has shunned you.

 

“Is There Any Way to Mess Up Such a Great Asset Class? You Could Encourage Investors to Push Prices Up so High That You Turn that 6.5 Percent Return into a Negative Number. That’s What the Buy-and-Holders Did,”

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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 markets go up and down every day. No 30 year period has ever failed. As such, your comments are not relevant.

To the opposite, if you are not fully funded by your 60’s, you have a failed retirement.

You are trying to make up a story about how a system that has always worked will potentially fail and at the same time talk about a system that has never worked will somehow magically become successful.

Every 30-year period has failed. Every 20-year period has failed. Every ten-year period has failed. Every five-year period has failed. Every one-year period has failed.

Stocks are an amazing asset class. They offer a 6.5 percent real average annual return. Is there any way to mess up such a great asset class? You could encourage investors to push prices up so high that you turn that 6.5 percent return into a negative number. That’s what the Buy-and-Holders did,

The trick to stock investing is to always, always, always practice price discipline and to always tune out the Wall Street Con Men who say that they have a funny feeling that it’s all going to turn out different this time. What if it doesn’t turn out different? What it it turns out the same> That’s the one that keeps me up at night.

I believe that we should permit honest posting re the peer-reviewed research at every site. It solves a lot of problems and it creates a lot of exciting opportunities. Yes, it means that the people who developed the Buy-and-Hold strategy in the days before Shiller’s Nobel-prize-winning research was published to say the words “I” and “Was” and “Wrong.” Who cares, you know? I can live with that.

Rob

“There Is No Way That People Can Keep Sitting Around for Decades More to See if Your VII Strategy FINALLY Works. They Need to Go with a System That Has Always Worked. Buy and hold Has Worked Over EVERY 30 -Year Period. That Is Not Even Debatable.”

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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:

For the last 2 decades, you keep saying that we have to see how things turn out. That is not a valid statement for a large percentage of our population, including you and me. Right now, 1/3 of working adults are already retirement between the ages of 60 and 64 (my group) and 70% are retired between the ages of 65 and 69 (your age group). Clearly, people need to have a fully funded retirement when they turn 60 since it is too late to fix the short fall.

There is no way that people can keep sitting around for decades more to see if your VII strategy FINALLY works. They need to go with a system that has always worked. Buy and hold has worked over EVERY 30 year period. That is not even debatable. It is a fact as we can look at history.

Many Buy-and-Holders believe today that they have fully funded retirements but, if they took the last 44 years of peer-reviewed research into consideration, they would see that they do not. Today’s CAPE level is 38. We usually see the CAPE drop to 8 in a Buy-and-Hold Crisis. That’s a drop of more than 75 percent. Say that there’s a fellow who needs a portfolio of $1 million to have a fully funded retirement and that he has that today. Then we experience a Buy-and-Hold Crisis and he is left with a portfolio of less than $250,000. He no longer has a fully funded retirement.

Irrational exuberance is a real thing, Anonymous. Irrational exuberance is the cancer of the personal finance realm. You could have a guy who on the surface appears to be perfectly healthy but a terrible cancer is eating away at his insides. Would you say that this guy is in good health? I would not. To know whether our retirements are fully funded or not, we need to know how much of our retirement account is real and how much is just phony baloney irrational exuberance.

How much do you subtract from the number on your portfolio statement for the effect of irrational exuberance?

Buy-and-Hold has never worked. It’s not even logically possible that it ever could work. Buy-and-Holders don’t subtract for the effect of irrational exuberance. It is not possible to engage in effective financial planning if you are not even open to looking at what you need to look at to know how much wealth you have accumulated over the years. That’s the most important question. It is fundamental.

Rob

“Stock Prices Are Self-Regulating So Long as Most Investors Practice Market Timing. The Problem Is That There Is So Much Money To Be Made in Encouraging People to Ignore the Research and Follow a Buy-and-Hold Strategy.”

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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:

yahoo.com/news/wealthiest-10-americans-own-93-033623827.html

Notice the following section from this article:

The richest Americans own the vast majority of the US stock market, according to Fed data.
The top 10% of Americans held 93% of all stocks, the highest level ever recorded.
Meanwhile, the bottom 50% of Americans held just 1% of all stocks in the third quarter of 2023.

The wealthiest Americans have never owned so much of the stock market, with the top 10% now holding a record 93% of US equities, according to Federal Reserve data.

These people not only hold stock, but they also had vast amounts of Treasuries, bonds, CD’s, etc and have other sources of income. They have capitalized off of the weak hands of the market timers. They just keep buying up assets (playing out like a game of monopoly) and now we have a clear division of the have’s and have not’s. These rich people are not impact by the swings in the market. To the opposite, the market timers are left out in the cold and just complain about how unfair everything is and play the role of a victim.

It’s the people who own stocks who CAUSE price swings. The last 44 years of peer-reviewed research shows that investors must practice valuation-based market timing to keep their risk profile stable over time. If they do that, you cannot have big price swings. Every time there are price increases, investors lower their stock allocation. The sales pull prices down to reasonable levels.

Stock prices are self-regulating so long as most investors practice market timing. The problem is that there is so much money to be made in encouraging people to ignore the research and follow a Buy-and-Hold strategy.

Rob

“If Buy-and-Hold Were a Real Thing, Every Buy-and-Holder Would Welcome Challenges To It Because Responding to the Challenges Would Permit Them to Sharpen Their Understanding of It.”

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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:

You are broke and divorced.  Using your analogy, you have been drinking several cases of beer every day for the last 20+ years.

And all of it is due to abusive behavior of Buy-and-Holders. If Buy-and-Hold were a real thing, there never would have been a single abusive post. If Buy-and-Hold were a real thing, every Buy-and-Holder would welcome challenges to it because responding to the challenges would permit them to sharpen their understanding of it.

What does it say about Buy-and-Hold that I am broke and divorced? It sure doesn’t say anything good.

Rob