A Rich Life

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

Buy-and-Hold Goon to Rob: “You Don’t Listen”

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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:

Your wife: You don’t listen
Your priest: You don’t listen
WadePfau: You don’t listen
Robert Shiller: You don’t listen
The rest of the investment community: You don’t listen

Shiller’s Nobel-prize-winning research showsing that valuations affect long-term returns: You don’t listen

A CAPE value of 28: You don’t listen

Thousands of our fellow community members expressing a desire that honest posting be permitted: You don’t listen

The Bennett/Pfau research showing that market timing is 70 percent of what it takes to achieve long-term stock investing success: You don’t listen

Common sense, which tells us that there is nothing on this planet avaiable for purcahse that is worth buying at any price: You don’t listen

150 years of stock market history, which is the source material for both Shiller’s research and the Bennett/Pfau research: You don’t listen

Your own behavior showing that the Buy-and-Hold case is such a desperate one that it cannot be defending without death threats and acts of extortion: You don’t listen

Bill Bernsteins book in which even a long-time Buy-and-Holder says that the safe withdrawal rate was 2 percent at the top of the bubble: You don’t listen

The published rules of every site at which you post, which prohibit the behavior that you have employed to suppress discussion on the last 41 years of peer-reviewed research and that show that we are fundamentally a good people who will in time figure out way to permit discussion of the peer-reviewed research — You don’t listen

Books like “The Grapes of Wrath,” which examine in some depth the ocean of human misery the always results from the widespread promotion of the pure Get Rich Quick/Buy-and-Hold “strategy — You don’t listen

Evidence-Based Investing, a general in Greaney’s Goon army, who has now acknowledged in several comments that the Greanet retirement study lacks an adjustment for the valuation level that applies on the day the retirement begins — You don’t listen

The deafening silence of Greaney himself in the wake of Evidence’s posts, suggesting strongly that Greaney himself does not know how to make a case that his study does contain a valuation adjustment — You don’t listen

The laws of the United States that make it a felony to advance death threats or to engage in acts of extortion — You don’t listen

Your conscience, which tells you that errors in retirement studies should be corrected within 24 hours of the moment they are discovered — You don’t listen

My ex-wife and my priest and Wade Pfau and Robert Shiller all live in the same country that I do. They all want the same things that I do. They will all be arguing in opposition to the pure Get Rich Quick/Buy-and-Hold strategy in the days following the next Buy-and-Hold Crisis. By posting honestly today, I assure that I will be able to sleep at night and that I will be able to look all of those people in the eye in the days following the next Buy-and-Hold Crisis. Can you say the same?

Rob

“Wasn’t There Something in the Sermon on the Mount About How “Those Who Report the Safe Withdrawal Rate Inaccurately Will Surely Perish”?”

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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:

“ Good one, Anonymous. Didn’t Jesus say that a man must lose his life in order to gain it? Maybe I took that one a little too literally.”

Jesus didn’t tell you to abandon your marriage. In fact, you are commanded to care and provide for your wife ( now ex-wife). You didn’t.

Jesus was tricky. Wasn’t there something in the Sermon on the Mount about how “Those who report the safe withdrawal rate inaccurately will surely perish”?

That’s how I remember it, anyway.

Rob

“The Buy-and-Holders Got There First. That’s the Only Thing That the “Idea” That Market Timing Doesn’t Always Work Has Going for 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:

“ An easy way to test that theory is to stop terrorizing board communities. Permit every discussion board and blog on the internet to allow honest posting and see what happens. I predict that I soon would be making so much money that there would be no need for me ever to look for other paid employment.”

It would not change one thing if you were given full access to the boards you were kicked off due to your bad behavior.. You have full control of this board, yet you have no following or income on this board. Just duplicating activity would still produce the same results. As we learned in math class, zero times any number is still zero.

I’ve seen it make a big difference in many cases. I was once a Buy-and-Holder. I am obviously not that today. What changed? I gave myself permission to think heretical thoughts. Giving myself permission to think one heretical thought (the Greany retirement study is in error) caused me over time to open up to other heretical thoughts (market timing always works and is always requited). Anf then those heretical thoughts lead over time to even more heretical thoughts (every site on the internet should be open to honest posting re the last 41 years of peer-reviewed research in this field). One day you look up and see that you are a Valuation-Informed Indexer and the biggest critic of Buy-and-Hold on Planet Earth.

The same thing happened with John Walter Russell. He was a Buy-and-Holder on the morning of May 13, 2002, Instead of just ssying “tis is the dogma, I will just accept it,” he devoted his energies to doing research to determine the realities. He ended up spending eight years of his life doing research into Valuation-Informed Indexing.

The same thing happened with Wade Pfau. He contacted me, I didn’t contaxct him. He had seen my posts at the Bogleheads Forun and was intrigued. He wanted to do research into Valuation-Informed Indexing. He asked my permission to do because he felt that I was the founder of the new model. I of course said that I would be happy to work with him. The research we did together so excited him that he told me he couldn’t sleep at night. He told me that he questioned whether he has missed somethinjg becaused he was discovering so much amazing stuff about how stock investing works in the real world and he couldn’t understand why eveyone else who works in this field was not going similar research. Of coursed the answer to that one was deliverd to him when you Goons threatened to destroy his career if he continued doing honest research and people like John Bogle just sat on their hands and did nothing.

Similar things happened to scores and scores of people. The Buy-and-Holders got there first. That’s the only thing that the “idea” that market timing doesn’s always work has going for it. Of course it always works! How could the exercise of price discipline ever not work? But Shiller’s research had not yet been published at the time when Buy-and-Hold was being developed. So the Buy-and-Holders made an extremely unfortunate mistake. It wouldn’t have mattered if they just corrected their model when they learned about the mistake they had made in it. Instead, they covered it up. So here we are 41 years later still engaging in silly arguments as to whether market timing (price discipline!) is always reqauired or not. Humans!

Market timing is always required. I think we will all come to see that in time. I think it is going to happen when we see the ocean of human misery we have brought on through our collectice tolerance of the behavior of you Goons. But we’ll see, you know?

Humans learn by talking things over. If Buy-and-Hold were a real thing, the Buy-and-Holders would encouraged questioning of their dogmas. They would understand that respinding to challenges makes their own understanding of the subject matter stronger over time, The reactions that we have seen among the Buy-and-Holders to my claim that the Greaney retirement study lacks a valuation adjustment shows that belief in the no-market-timiing “idea has eroded even among the most dogmatic of Buy-and-Holders. I believe that it will fall entirely in the days following the next Buy-and-Hold Crisis, when it will no longer be possible for any of us (including you Goons!) to deny what a horrible mistake the Buy-and-Holders made when they came to believe that there might be an alternatve universe 20 billiion light years away in which price discipline/market timing was not 100 percent required for every stock investor on the planet.

But we’ll see, you know?

I naturally wish you all the best that this life has to offer a person regardless of what investment strategy you elect to follow, Anonymus.

Rob

“Expertise Will Not Mean What It means in Other Fields in This Field Until We Open Every Internet Site to Honest Posting re the Last 41 Years of Peer-Reviewed Research. If the Buy-and-Holders Cannot Bear to Be Questioned, Their “Expertise” Is a Pretty Darn Flimsy Thing.”

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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:

First you say you need to be an expert, then you say it is better not to be one.

The idea that market timing is not required was the dominant expert view in the 1960s, when Buy-and-Hold was being developed. Then in 1981 an expert (Shiller holds a Ph.D.) published peer-reviewed research showing that the market is not efficient and that timing is required for investors seekling to maintain a constant risk profile over time. People who had developed reputations as “experts” in earlier times have suppressed discussion of the far-reaching implications of Shiller’s Nobel-prize-winning research for 41 years now. Who are the true experts? The people still following a model discredited by 41 years of peer-reviewed research? Or the 10 percent of the population that believes that Shiller’s Nobel-prize-winning research is legitimate research?

I read Shiller’s book. I understand that there is precisely zero chance that the safe withdrawal rate could be the same number at all valuation levels. Does that make me an ‘expert”? Reading a book does not make me an expert in the way that that word is ordinarily used. But it puts me far ahead of the many people who to this day believe in Buy-and-Hold strategies.

Expertise will not mean what it means in other fields in this field until we open every internet site to honest posting re the last 41 years of peer-reviewed research. If the Buy-and-Holders cannot bear to be questioned, their “expertise” is a pretty darn flimsy thing. True experts don’t advance death threats or engage in acts of extortion. Nor do they keep quiet when they see others around them doing so. True experts encourage challenged to their thinking, especially when the challenges are rooted in 41 years of peer-reviewed research.

I am the strongest critic of the “idea” that market timing is not required alive on Planet Earth. If that makes me an expert, then I’m an expert. And proud of it. I sure ain’t a Buy-and-Holder (although I of course have great respect for the Buy-and-Holders for the many important contribtuons that they made that have stood the test of time).

I hope that helps at least a tiny bit.

Rob

“Somehow I Don’t Believe that “It’s Not Even Just You Goons. How About All of the Normals Who Tolerate the Behavior of You Goons? That’s the Bigger Issue.”

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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 feel great anguish over that issue. It is something that I have thought about every day of my life for 20 years running now.”

So you have left your family in this situation and know that, yet you have done nothing about getting a job when you have more than enough hours in the day to work a job and still do all the rest of what you want to do. You haven’t given any excuse for that which any sane person would agree with.

I’ll have enough time for both once the book is finished. Until then, it would be wrong to take time away from the book just to bring in money. Bringing in money helps me and a small number of others. Opening every site on the internet to honest posting re the past 41 years of peer-reviewed research helps and protects millions and millions of people.

I wish there were five of me, you know? That would make things easy. There’s only one of me, just like with everybody else. I didn’t ask to get pulled into this thing. It’s something that happened to me. Who would think that making a simple observation thst a retirement study posted at some guy’s web site lacks a valuation adjustment would bring on a 20-year smear campaign? If that is what life presents to you, you have to figure out how to respond to it. Somehow I don’t believe that the right response is to pretend that that is in any way, shape or form normal. That’s extremely weird stuff. That tells me that I have a tiger by the tale re this one.

It’s not even just you Goons. How about all of the Normals who tolerate the behavior of you Goons? That’s the bigger issue. That tells us that we ALL have that Get Rich Quick/Buy-and-Hold urge residing within us. We had better get about the business of learning about it and figuring out how best to cope with it! Otherwise, it could kill us as a society. How the stock market works is not some trivial matter. It’s important. We have the safety of our retirements riding on it. The last 41 years of peer-reviewed research is trying to tell us something. We very much need to pay attention. I am proud to be able to say that I have been trying to get us all to pay more attention for 20 years running.

You cannot speak for all sane people, Anonymous. You are a freakin’ internet Goon! I mean, please give me a freakin’ break. It’s true that most people are improperly complacent re these matters. I’ll give you that one. But will that remain the case in the days following the next Buy-and-Hold Crisis? I do not think so. I think that a good number of people are going to look at the ocean of human misery and regret not having taken effective action sometime over the prior 41 years. I think we are as a society on the thresdhold of some amazing breakthrough advances. I sure hope so.

My best and warmest wishes to you and yours, in any event, Mr. Sane Buy-and-Hold Goon Person.

Rob

“Even in These Goon-Approved Words, Wade Says That: “Warning People About the 4% Rule Is Helpful.” If There Is Something to Warn People About, That’s Huge. Before I Put Up My Famous Post From the Morning of May 13, 2002, No One at the Motley Fool Board Was Warning People About Greaney’s Study. They Were Using It to Plan Retirements!”

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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:

Hi Rob,
I forgot that I was still saying things like this even 2 weeks after the initial incident.
This was more than a year ago now, but I am thinking that I was just trying to explain politely to you that I’d rather have you quit writing about me, or at least stop using my name. I suppose that I figured the only way you might understand why is if I explained it in terms of your favorite conspiracy theories.
I will make one more attempt at a reality check for you. You go on and on about how I allegedly lack personal integrity because I allowed the Goons to threaten me into silence.
The reality is that though I may have for a brief moment got a bit too caught up in YOUR drama, I do not have any fears about the Goons.
The reality is that you are causing me 1000x more career damage than the Goons ever could have by filling Google with so much nonsense about me, and sharing embarrassing private details such as my overly ambitious journal submission strategies, etc. Those in particular are highly private. People don’t publicly share where they submit articles to unless those articles are accepted. You’ve violated my trust in so many countless ways and yet you still proclaim to be my friend.
And the further reality is that if I *did* lack personal integrity, I could have made this all stop just by saying the meaningless sentence you want so desperately to hear: “I think the errors in the traditional safe withdrawal rate studies must be corrected by using Rob’s analytically valid method.”
But I don’t believe that. I do not believe you have offered a valid correction to the safe withdrawal rate question. And I believe that retirement income strategies go much further than the question of a safe withdrawal rate. And so that is why I’ve had to endure your ongoing harassment for months on end now.
Usually I can figure out the Rob-logic behind what you are thinking, but I really don’t know how you think you come out of this whole episode looking like the good guy. I guess it is because you think you are saving my soul and putting me back on the path of righteousness, or something, huh? If only you had the power to do a little bit of self reflection…
Now that the whole email history is on display, we have the reminder of how angry you got at the very beginning when I referred to you as dogmatic. Yet, look at the way you’ve treated me for disagreeing with you on something which you don’t even understand. You quote numbers from JWR’s statistical work, but I’m not sure if you can even distinguish a mean from a median. So how can you be sure his work is right? I don’t know either, as I never did get around to digging into it, and I doubt I ever will now. But I’m not sure how a properly calculated lower confidence bound for a 2000 retiree could have been higher than zero.
Rob, suppose the stock market does drop 65% as you are expecting. It might happen, who knows.
Step 1: Stock Market Drops 65%
Step 2: ??
Step 3: Rob wins $500 million settlement from the Goons, the Goons are sent to prison, the investing public learns about and adopts VII.
What is Step 2? There isn’t one. You will still be in the same position as you’ve been in for the last 10 years. Why didn’t something happen for you after the 2008 financial crisis? You are like the guy who keeps predicting new ends for the world as each previous prediction date passes by.
That is why I’m telling you, from one human being to another, that it is time to move on. You are a smart guy, and you could use your talents for something productive. While warning people about the 4% rule is helpful, the way that you go about doing it is rather “catastrophically unproductive” as one wise fellow said to you years ago. I provide a loud voice that is critical of the 4% rule, and so spending your days assassinating my character is counterproductive to your underlying cause. So perhaps you can start fresh with a new issue of social import that carries less baggage for you. What happened in the past is a sunk cost, but you still have a chance to turn things around and start afresh today. And you can do all of this while still being honest and true to yourself.

These words were not written by Wade Pfau today. One of the Goons just posted them today. But they were written by Wade a good number of years back, when he was threatened by the Goons after working with me for 16 months on the research that we had published in a peer-reviewed journal which caused Wade to exclaim: “Yes, Virginia, Valuation-Informed Indexing works!”

It was one of the Goons who posted this comment today. But look at what it says! Even in these Goon-approved words, Wade says that: “warning people about the 4% rule is helpful.” If there is something to warn people about, that’s huge. Before I put up my famous post from the morning of May 13, 2002, no one at the Motley Fool board was warning people about Greaney’s study. They were using it to plan retirements! That happened almost every day at that board! So getting that out there was huge. And of course what Wade really believes is that the Greany study is “dangerous,” which is what he said before he was threatened. And he believed all of the things that he said in the days before he was threatened on scores of other subjects as well.

Why is it that only the members of the Buy-and-Hold Goon Squads who feel a need to threaten people? We never see Valuation-Informed Indexers do that. The difference is that the Valuation-Informed Indexers have Nobel-prize-winning research supporting what they say while all the Buy-and-Hold Goons have is a mistake (the Efficient Market Theory) that was DISCREDITED by that Nobel-prize-winning research 41 years ago. We all need to move on from the mistake at the heart of the Buy-and-Hold strategy (the idea that market timing [price discipline!] is not required for all investors at all times).

That’s my sincere take re these terribly important matters, in any event. I believe that we will as a nation of people move on in the days following the next Buy-and-Hold Crisis. And, when we do, Wade Pfau will return to saying all the things that he said in the days before the Buy-and-Hold Goon Squads threatened to destroy his career if he continued doing honest work in this field. We all benefit from having Wade Pfau believe that it is safe to do honest work in this field. We all benefit from having EVERY academic researcher feel that it is safe to do honest work in this field.

Rob

Valuation-Informed Indexing #622: Economists Don’t Pay Attention to the Loss of Consumer Buying Power That Results When Irrational Exuberance Disappears

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I’ve posted Entry #622 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Economists Don’t Pay Attention to the Loss of Consumer Buying Power That Results When Irrational Exuberance Disappears.

Juicy Excerpt: Most people who comment on Shiller’s work make an effort to warn investors of the dangers of investing in overpriced stocks. That makes sense. But I rarely see even the most ardent Shiller supporters make the obvious (to my mind) follow-up point. The inevitable disappearance of irrational exuberance (in a price crash) sinks the economy.

“The Book Is Not an Intellectually Difficult Project. It Is an EXTREMELY Difficult Emotional Project. That’s Why No One Else Has Written This Book in the 41 Years Since Shiller Published His Amazing, Revolutionary, Nobel-Prize-Winning Research Findings. It Is an Emotionally Harrowing Experience to Tell Millions of People Something That They Very, Very, Very Much Do Not Want to Hear, That Their Stock Portfolio Is Not Worth Anything Close to What They Have Been led to believe It Is Worth.”

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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’ve answered your question.”

No you haven’t. You haven’t said why you can’t do both at the same time when there are plenty of hours in the day. You seem to have time to post here, on ValueWalk, Twitter, etc. you seem to have time for watching movies, baseball, etc. Yet you have chosen to put your wife and her concerns last when there is plenty of time to address that as well.

I post here to respond to questions and comments re the material in the book. It obviously makes the book a better product the more I know about the subject matter.

I write a column every week for Value Walk. Again, doing that enhances my understanding of the subject matter of the book.

I spend very minimal time on Twitter. I I push that little “retweet” button re some articles that I happen to come across that I think might be worth reading.

I do watch movies and I do watch baseball. The book is not an intellectually difficult project. It is an EXTREMELY difficult emotional project. That’s why no one else has written this book in the 41 years since Shiller published his amazing, revolutionary, Nobel-prize-winning research findings. Bernstein could have written it. Kitces could have written it. Shultheis could have written it. Freakin’ Shiller could have written it. Lots of others. Why has no one else written it? Why has this job been left to me? Because it is an emotionally harrowing experience to tell millions of people something that they very, very, very much do not want to hear, that their stock portfolio is not worth anything close to what they have been led to believe it is worth. It’s a very hard job. Watching a movie or a baseball game gives me some emotional relief. So, yes, I do that.

I wish that I were Superman. I wish that I did not need the emotional relief. The book would have been completed years ago if that were the case. But you know what? I am close to finishing the book. Most of these others haven’t even started writing it yet, so far as I can tell. So I am not going to get too down on myself for doing some things that I need to do to obtain the emotional relief required to bring this important work to a successful conclusion. I’ll finish the book. It will be out there for anyone who cares to learn the true story. I’ll do what it takes to get to the finish line, including watching a few movies and a few baseball games. No apologies.

My best wishes to you.

Rob

Valuation-Informed Indexing #621: The Purpose of Market Timing Is to Avoid Irrational Exuberance, Not to Outsmart the Market for Profit

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I’ve posted Entry #621 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called The Purpose of Market Timing is to Avoid Irrational Exuberance, Not to Outsmart the Market for Profit.

Juicy Excerpt: But it’s hardly reasonable to rule out market timing in general because one foolish form of the practice rarely produces good results. Driving drunk is a terrible practice. We all know it. But few of us conclude that we need to give up driving as a result. We distinguish the foolish approach to driving, which truly doesn’t work, from the reasonable approach to driving, which helps us to get to places we need to get to. So it should be with market timing. Practicing long-term market timing permits us to maintain the same risk profile when stock valuations (and thus the long-term return offered by stocks) change. That always works. No one has been able to identify a time-period in U.S. history when it did not.