A Rich Life

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

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“Wade Pfau Should Have Been Posting From the First Day That He Got Interested in Valuation-Informed Indexing. He and I Would Have Written That Paper a Lot Sooner Had He Done So. And We Might Have Done an Even Better Job Because We Would Have Had That Entire Community Feeding Us Ideas. We Might Have Even Gotten Jack Bogle Involved! Wouldn’t That Have Been Something?”

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Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

According to your previous posts, you said you needed the windfall or you would not have enough. Was this a lie or are you lying with this latest post?

The rest of your post is nonsense.

In the time that I was posting at the Bogleheads Forum (about 18 months), Wade Pfau was reading my posts and thought that Valuation-Informed Indexing was incredibly exciting. He had never learned about it when he was earning his Ph.D. in Economics at Princeton but he could see that it all made sense and that the entire historical record supported it. He was afraid to post because you Goons were injecting healthy doses of abusiveness into every thread. But he kept reading. After I was banned, he contacted me and told me that he would like to prepare research on VII with me. The research paper that resulted was published in a peer-reviewed journal. I think it would be fair to describe it as the most important research published in this field in the past 35 years.

There were people telling me at the time that I was crazy to keep posting because your abusiveness ruined every thread. Lots of smart and good people wanted to participate in constructive discussions. But they weren’t doing it and so lots of people told me that I should just give up, let the lowest members of the community have veto power over what the rest of us said. That didn’t seem right to me. In the end, those posts had more value than any posts I have ever advanced. Wade was quietly reading them and they ended up producing this amazing research paper that will be helping investors invest more successfully for many decades to come.

Do you see what I am getting at, Sammy? It’s an ill wind that blows no good. We know as a society that certain sorts of posting are helpful and certain sorts are not. That’s why we have rules at every site prohibiting the tactics that you Goons employ. We need to tune you Goons out and just proceed with our business. It is important business and we should not permit the lowest among us to hold us all back.

Wade should have been posting from the first day that he got interested in Valuation-Informed Indexing. He and I would have written that paper a lot sooner had he done so. And we might have done an even better job because we would have had that entire community feeding us ideas. We might have even gotten Jack Bogle involved! Wouldn’t that have been something.? Please don’t dismiss the idea. If we could get Wade involved, we could get Jack involved. They are both smart people with a desire to help others learn how stock investing works. What grounds do we have to believe that Jack would not respond in ways similar to how Wade responded if the circumstances were right?

When you put one foot in front of the other and just do what you know is right, good things happen down the line. That’s my sincere belief, Sammy. I have seen things like what happened with Wade happen HUNDREDS of times during these past 15 years. We all just need to hang in there and let the process play out. The Goon stuff is nasty as all get-out. But it is ultimately trivial. You Goons act the way you act because you are in pain to see that you made a mistake when you fell for the Buy-and-Hold marketing slogans. We can use your experience to learn how Get Rich Quick strategies can become addictive and we can use what we learn to help others not to make the same mistakes.

That’s my sincere take re these terribly important matters, in any event.

My best wishes to you and yours.

Rob

“Bogle Is Working a Con. When He Says That He Responds to Letters, He Is Telling a Lie. He Responds to Letters That Don’t Expose His Con. He Ignores Those That Ask Him Why He Lies About What the Last 35 Years of Peer-Reviewed Research Tells Us About How Valuations Affect Long-Term Returns.”

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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:

Hey Rob. Here is your chance. According to this link on Bogleheads, Jack Bogle looks at the letters that are sent to him. Perhaps you can write him a letter and send it to him. You can then post the letter and response here:

https://www.bogleheads.org/forum/viewtopic.php?f=9&t=203980&sid=3d5ca916ec62bc7ba172d38949fbb871

Bogle is working a con, Anonymous. Con men rarely turn themselves in.

I wrote to Bogle years ago. As you know. And a good number of others at the Bogleheads Forum wrote to him at that time. When he says that he responds to letters, he is telling a lie. He responds to letters that do not expose his con. He ignores those that ask him why he lies about what the last 35 years of peer-reviewed research tell us about how valuations affect long-term returns.

I don’t believe that Bogle started out as a con man. I believe that he was sincere in believing that the market is efficient in his early days. Perhaps you are cynical enough to believe that he was a con man going back to the first day. Your tone suggests that. I don’t believe that. I believe that he made a mistake and that he fell victim to cognitive dissonance when his mistake was discovered by the publication of Robert Shiller’s “revolutionary” (Shiller’s word) research findings in 1981. Then, as the number of people whose lives have been destroyed by the relentless promotion of the Buy-and-Hold lies grew larger and larger, Bogle felt that he had no choice but to engage in a cover-up to keep people from discussing openly how things really work in the stock market. At some point, he became desperate enough to associate with the sorts of individuals who have put up posts in “defense” of Mel Linduaer and John Greaney. And here we are.

I love the man. I am grateful for the hundreds of powerful insights that he developed that have helped us all to develop a stronger understanding of how stock investing works. There would be no Valuation-Informed Indexing today were it not for the fine work that Bogle put forward a good number of years back. In fact, it was by reading Bogle’s book that I learned about the errors in the Buy-and-Hold retirements studies that I posted about in my famous post of the morning of May 13, 2002.

I will continue posting honestly on safe withdrawal rates and on scores of other critically important investment-related topics. I will continue to praise my friend Jack Bogle to the skies re every subject except where it would constitute financial fraud to pretend not to know about the mistake he made and has covered up for so long that has put millions of middle-class Americans at grave risk of suffering failed retirements. I am 100 percent confident that things will work out for the best following the next price crash. This is exciting stuff. The good news here is 50 times more good than the bad news here is bad.

I naturally wish you all the best that this life has to offer a person, my good friend.

Rob

“If You Are Going to Say That Bogle Never Heard of Robert Shiller and Never Realized That He Had a Responsibility to Reform Buy-and-Hold to Reflect This “Revolutionary” (Shiller’s Word) Research, You Might As Well Get About the Business of Searching for Nicole Simpson’s Real Killer While You Are At 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:

What if Bogle never read your emails. I get over 300 emails a day and don’t get time to read them all. I skip the emails that come from people I don’t know. I am guessing a guy like Bogle gets even more emails and has to pick and choose what to read and respond to.

I believe that he read the e-mails. One of the e-mails was invited. He had started a new blog or something and he asked for input and I sent an e-mail giving input. Are you saying that he invites comment on a question and then does not read the responses? That’s really pushing it.

And Bogle himself said that he visited the Bogleheads Forum once per week. There were some days during the time-period in which he said that where there were three or four threads PER DAY dealing with the topics at issue here. Are you saying that he didn’t notice any of them when he visited the board? That’s very, very hard to believe. It we were talking about some random thread, yes, it would be entirely possible that he missed it. But this was a raging controversy for 18 months. There was relentless, high-spirited discussion.

The entire freakin’ board was MOVED because of this. The board used to be at Morningstar. Morningstar refused to ban me. So Lindauer asked that everyone move to a different site where he could control who was banned. Are you saying that Bogle moved to a different site and never noticed that the board had been moved? That’s 100 percent impossible to believe, Anonymous. He noticed that the board had been moved. So he knew there were things going on.

There were numerous questions about valuations that came up that year at the annual meeting. Bogle is not a moron. He knew why those questions were being asked. He might not have known all the details. I don’t believe that he did. But I am 100 percent certain that he had the general picture of what was going on. He knew that there was a guy who was banned who was raising questions about how Shiller’s research reflects on the Buy-and-Hold dogmas and that Mel Lindauer and his Goons were engaging in insanely abusive acts to get this guy removed so that people visiting the board would not hear these challenges. Bogle knew that much and to know that much and not do anything about it is fraud.

We will find out all the details at the trial. We know what we need to know to know that there will be a trial following the next price crash.

Say that none of this had happened. None of it. There STILL would be an issue. Shiller showed in peer-reviewed research published in 1981 that there is precisely zero chance that Buy-and-Hold could ever work for a single investor either in this solar system or in any other solar system located far, far away. Yet Bogle made no changes in Buy-and-Hold as a result. Huh? Is it not arguable that that itself was financial fraud even without all the rest?

I believe that Bogle was suffering from cognitive dissonance in 1981. I think he is a good man and a smart man. So I personally would not call him guilty of financial fraud in 1981. Cognitive dissonance is a real thing. Bogle truly believes in Buy-and-Hold. Fama is a legitimate researcher, one who deserved the Nobel prize he was awarded. So I think that what happened in 1981 was okay. But I am pretty darn sure that lots of people are going to say different following the next price crash, when they have lost most of their retirement money and have no means to get it back other than to bring lawsuits against the people who promoted Buy-and-Hold in defiance of the peer-reviewed research for 35 years.

We are in a sticky situation, Anonymous. The Buy-and-Holders are good people. They messed up. It happens. Unfortunately, in this particular case the mess-up ruined millions of lives, it caused vast amounts of human misery. We are all going to have to pull together to put our economic and political system back together again. That’s the bottom line. That’s what matters.

I am going to do what I can do to help every single person end up in the best possible place in which he or she can land given the circumstances that apply. That’s my job, as I see it.

I cannot say that Bogle didn’t read the e-mails. I believe he read them. I can say that it is theoretically possible but the longest of long shots that he did not read the e-mails. But even in that case he knew about Mel Lindauer from long before I even came on the scene. So we still end up in the same place, with Bogle failing to speak up about a very serious matter and thereby causing the biggest economic crisis in U.S. history. And even if none of that were so, you have the 35 years of peer-reviewed research and the Nobel prize that was awarded to Shiller. If you are going to say that Bogle never heard of Robert Shiller and never realized that he had a responsibility to reform Buy-and-Hold to reflect this “revolutionary” (Shiller’s word) research, you might as well get about the business of searching for Nicole Simpson’s real killer while you are at it. I mean, come on.

We will find out at the trial precisely what Bogle knew and when he knew it. Everyone who has been paying even a tiny bit of attention knows that he knew more than enough to know that there was a lot of funny business going on and that he had a responsibility to take action and that he failed to do so and that millions of lives have been destroyed as a result.

I am going to do everything in my power to help my good friend Jack out of a jam that he has gotten himself into. Doing “everything” does not include committing felonies myself. To expect that of me is flat-out insane stuff, stuff that only a feverish Goon brain could consider even the most remote possibility.

I will do everything I can to help out all of my Buy-and-Hold friends and all of my Goon friends. No more. And no less.

I have no other even halfway reasonable options available to me.

My best wishes.

Rob

“Wade Told Me That His Fear Was That His Employer Would Believe Your Lies. If Wade Had Confidence That Bogle Would Jump In and Take His Side Against You, He Would Not Have Been Afraid. It Was Because He Saw That Bogle Did Nothing When He Saw Lindauer’s Threatening and Abusive Behavior That Wade Believed That You Goons Really Had the Power to Destroy His Career.”

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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:

Are you saying Bogle is the leader of the goons and that the goons follow orders given by Bogle? Are you the main target of those orders?

Did Wade tell you that he could not stand up to Bogle and the goons?

I don’t think that Bogle and his various Goon Squads communicate on a daily basis.

But I know for certain that Bogle knows about the threats of physical violence and the thousands of acts of defamation and the threat to get Wade Pfau fired from his job if he continued to do honest work in his field. I know because I sent three e-mails to Bogle telling him what was going on and asking for his help. I also know that there were a number of others at the Bogleheads Forum who contacted Bogle asking for help with the Lindauer Matter because they told me so.

And I know that Bogle knew about Lindauer’s behavior long before I even came on the scene. I ran into a fellow who had been banned from the Boglehead’s Forum before I posted there because he had posted honestly. He said that Lindauer made threats of physical violence to intimidate him into leaving the board. Bogle has said publicly that he visits the Bogleheads Forum roughly once a week. So Bogle has known about what goes on there for a long time. It would be impossible for him not to know when there were numerous threads discussing these matters every day when I was there. And of course Bogle knew about how Lindauer reacted when I announced that I would be attending one of the annual meetings that Bogle attends.

Wade Pfau was more concerned about Bogle than he was about Linduaer. When Pfau posted about the peer-reviewed research that he and I co-authored (research that I believed can fairly be characterized as the most important research done in this field in the past 35 years), Lindauer defamed him by saying that he had engaged in unethical research practices. Wade showed a lot of backbone in standing up for himself. He made clear that he would not tolerate such behavior from the king of internet goons. But when Bogle failed to act to rein in Lindauer, Wade got scared and backed down. I cannot think of any other explanation for his change in behavior.

It may be that there were threats made behind the scenes that played a role. I obviously cannot speak to what I did not see with my own eyes. But even if there were additional threats made in private by you Goons, I believe that it was Bogle’s endorsement of your criminal behavior that most frightened Wade. It wouldn’t make sense for him to be so afraid of a group of internet Goons that he would jeopardize his career and risk going to prison just because of what you might try to do.

Wade told me that his fear was that his employer would believe your lies. If Wade had confidence that Bogle would jump in and take his side against you, he would not have been afraid. It was because he saw that Bogle did nothing when he saw Lindauer’s threatening and abusive behavior that Wade believed that you Goons really had the power to destroy his career (and Wade of course had financial responsibility for two small children — so these were threats that hit him at a point of human vulnerability).

There is much evidence of Bogle’s association with Mel Lindauer. Bogle permitted his name to be used on a blurb for Lindauer’s book. It’s hard not to believe that Bogle did not play some role in getting Lindauer his column at Forbes. Bogle permits his name to be used in the name of the board that Lindauer claims to “lead.” I have seen photos from the annual meetings in which Lindauer and Bogle can be seen close enough to each other to appear in the same photograph. The site administrator refused for a long time to violate the site’s rules and ban me solely for enraging Lindauer with my honest posting on the last 35 years of peer-reviewed research in this field despite Lindauer’s many requests that he do so; it’s hard not to believe that Bogle did not play a role in “persuading” the site administrator to commit this criminal act.

I cannot prove that with direct evidence but I feel comfortable saying that any reasonable person would conclude that Bogle must have played at least some role. At the very bare minimum his failure to speak up about the insanely abusive behavior of Lindauer’s Goon squad sent a very clear message to the site administrator (and quite possibly to the legal department of Morningstar as well). The behavior went on for a long, long time. MANY long-time community members spoke out against it in very clear terms and a good number did so on numerous occasions.

Bogle knew about Lindauer. I doubt very much that he knew every detail. I don’t believe that. But I am 100 percent certain that he knew far more than what he needed to know that he had a responsibility to take action and he failed to take action. That’s fraud, Anonyous. Someone who keeps quiet about a massive act of financial fraud is complicit in the cover-up of it. And this is the biggest act of financial fraud in the history of the United States, one that is in the process of destroying millions of middle-class lives and indeed one that has put the continued survival of our economic system and perhaps even of our political system at risk.

Bogle knew. We will find out at the trial, when witnesses speak under oath, precisely how much he knew. That is not entirely clear today. But anyone who participated in real time or who has reviewed the Post Archives (I have copies of all essential threads) knows that Bogle betrayed himself, his family, his profession and his country in his failure to take action re Mel Lindauer, John Greaney and the members of their Goon Squads. I naturally wish that it were not so. But we know today that that much is so beyond any reasonable doubt whatsoever.

The good news is that it will all come out in the trials that will be held following the next price crash and at that time we all will be free to make use of what we have learned from the past 35 years of peer-reviewed research to make our lives and the lives of all of those of us living at this magic time in the history of investing research better than we ever believed they could be before Bogle got us started down this wonderful journey of putting together the first true research-backed investing strategy. Let’s not forget the great good that this wonderful man has done while pointing out his unfortunate relationship with the sorts of individuals who have posted in “defense’ of Mel Lindauer, which of course also cannot be denied.

My sincere take.

Rob

“I Love Jack Bogle for the Good That He Has Done, Which Is Huge. There Obviously Would Be No Valuation-Informed Indexing But For Jack’s Many, Many Positive Contributions.”

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

Funny you should mention Jack and Mel. The two buddies were in Philadelphia this week at the annual Bogleheads conference.

https://www.thestreet.com/story/13772578/1/meet-the-ordinary-people-vanguard-s-jack-bogle-made-rich.html

Okay, Anonymous.

I love Jack Bogle for the good that he is done, which is huge. There obviously would be no Valuation-Informed Indexing but for Jack’s many, many positive contributions.

I don’t feel as strongly about Mel and I do not follow his work. But I have heard positive things from enough people whom I respect that I am highly confident that Mel too has put forward valuable insights.

That’s the other side of the story.

I wish my two good friends the best of luck in all their future life endeavors.

Rob

“I View It As a National Tragedy That As an Entire Society Advances in Our Understanding of the Realities of Stock Investing Have Been Delayed for 35 Years Now. I Have Taken on as My Life’s Work the Project of Doing All That I Can to Create Safe Places for People of All Investing Persuasions (Buy-and-Holders and Valuation-Informed Indexers Alike) to Express Their Sincere Views on the Many Far-Reaching Implications of Shiller’s Powerful Research-Based Insights.”

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Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

Buy and hold what, Rob? You just use it as a label. If you go to the Boglehead forum (which is your stated nemesis, the portfolios vary greatly and there is the common practice of rebalancing. Meanwhile, your plan crashed and burned a long time ago.

Your emotions (most notably, your envy) comes through loud and clear.

When I say “Buy-and-Hold,” I am referring to the investing strategy advocated by Jack Bogle by which investors are advised to stick with the same stock allocation regardless of the valuation level that applies for stocks. I believe in Valuation-Informed Indexing, which incorporates all of the many powerful insights advanced by the Buy-and-Holders over the years but which also incorporates the peer-reviewed research from 1981 forward by Robert Shiller and others showing that valuations affect long-term returns and that therefore stock investing risk is variable rather than static and that investors thus MUST be willing to adjust their stock allocations in response to big valuation shifts to have any hope whatsoever of keeping their risk profiles roughly stable.

I view the strategy known as “Buy-and-Hold” as a first-draft effort at developing a research-based model for understanding how stock investing works. I LOVE the idea of following a research-based model for guidance on how to invest (not surprisingly, I was once a proud Buy-and-Holder myself). But I HATE the idea that there can ever be any idea that is so well proven that it can no longer be subject to questioning and challenges. I believe that Shiller’s “revolutionary” (his word) research of 1981 discredited the fundamental belief on which the Buy-and-Hold Model was constructed, the idea that the market is efficient and that thus valuations (prices) do not need to be taken into consideration in all investing decisions.

I have spoken to hundreds of people in this field who hold varying degrees of doubt re the merit of the idea of ignoring valuations when setting one’s stock allocation but who decline to express those doubts as strongly as they feel them because they have seen the abusive practices followed by the more dogmatic advocates of the Buy-and-Hold strategy and don’t want to see their personal lives or their careers destroyed because they hold these beliefs. I view it as a national tragedy that as an entire society advances in our understanding of the realities of stock investing have been delayed for 35 years now as a result.

I have taken on as my life’s work the project of doing all that I can to create safe places for people of all investing persuasions (Buy-and-Holders and Valuation-Informed Indexers alike) to express their sincere views on the many far-reaching implications of Shiller’s powerful research-based insights.

Rebalancing is the thing I oppose. To rebalance is to return to the same stock allocation that one held before a price change caused one’s stock allocation to change. I believe that investors should go with higher stock allocations when valuations are low and with lower stock allocations when prices are high. It is only by encouraging investors to exercise price discipline that we can prevent bull markets.

If investors sell every time prices get too high and the long-term value proposition of stocks diminishes enough to make stocks unappealing relative to other investment options, stocks will never get too overpriced and we will not again see the sorts of insane overpricing that led to the 2008 price crash and the economic crisis that followed. Teaching investors that it is not necessary to change their allocations in response to big price changes is the most dangerous advice imaginable, in my assessment (and it is my further assessment that there is strong support for this view in the last 35 years of peer-reviewed research in this field).

We all have emotions. I aim to keep mine in check. But the brutal reality is that, if I have at times failed to do so, I would probably be the last to notice this. Because of my flawed human nature, I am possibly every bit as biased against Buy-and-Hold as the Buy-and-Holders are biased against Valuation-Informed Indexing. I wish that I could change that, but I cannot. The best that I can do is to warn all who read my words that they are reading one person’s opinion and that they would be fools to make any investing decisions based solely on that one person’s views.

I don’t entirely agree that the Bogleheads Forum is my “nemesis.” I can see why some would put it that way. I posted at that forum for about 20 months. I loved the experience; there are more smart people there than at any other forum I have visited. And the feeling was mutual. There were a large number of posters there who identified me as one of their favorite posters of all time. However, I am today banned for life at that forum. Even posters who have spoken up in my defense or who have requested that I be readmitted have been banned. Amazingly enough, the entire board was moved from the Morningstar site because the owners of the Morningstar site refused to follow the demands of a few of the “leaders” of the board to ban me. Those leaders have made clear that they hate me with a burning hate.

My view is that the forum as it exists today should be called the “Lindauerheads Forum” rather than the “Bogleheads Forum” because Bogle at least publicly supports the idea of looking to the peer-reviewed research for guidance on how to invest and Valuation-Informed Indexing is the first true research-based strategy (Buy-and-Hold was intended to be a research-based strategy but Shiller’s research showed that the first draft approach was rooted in error).

Valuation-Informed Indexing could properly be called “Buy-and-Hold 2.0.” It is what Buy-and-Hold would be today if Bogle had followed his own advice of staying on top of the peer-reviewed research and had updated Buy-and-Hold when Shiller’s revolutionary findings were published. It is my intent to take Bogle’s ideas in the direction in which he himself would have taken them a long time ago had only he not gotten caught up in the cognitive dissonance that all of us humans are prone to fall victim to when we become too emotionally attached to one way of thinking about a subject important to us.

I don’t envy the Buy-and-Holders. I love them. They have taught me many important things. I naturally regret the stubbornness with which SOME Buy-and-Holders have responded to my pleas to incorporate the lessons of the last 35 years of peer-reviewed research in this field into their thinking and to the willingness of a much larger group of Buy-and-Holders to tolerate the insanely abusive practices that the small group has employed to block the millions of middle-class investors who have both a desire and a need to learn more about the many far-reaching implications of Shiller’s findings from doing so.

I hope that helps a bit, my old friend.

Rob

“In the Event That the Thread Has Been Doctored (Surprise! Surprise!), I Have a Copy of the Complete Thread in My Files, So I Will Be Able to Provide the Words That Appeared Before the Thread Was Doctored. And the Lawyers Will Be Able to Recapture the Original Thread When the Various Trials Are Held. The Members of Your Jury Will of Course be Free to Reach the Obvious Conclusions re What Doctoring of the Thread Signifies re the State of Mind of Those who Performed the Doctoring.”

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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 see the threads calling Taylor and Mel liars. Can you provide a link?

I am not going to find the link for you, Anonymous. I mentioned it at the time either in a blog post or on a podcast, possibly both.

If you want to find it, you’ll find it. Or you could ask Larimore and Lindauer. They would tell you in private.

If the Bogleheads Forum permitted honest posting, you could just ask there. But of course that is out for obvious reasons. But you can ask privately and find out what you need to know (as if you didn’t know already!).

Anyway, it will all come out in the court proceedings and in the many news articles we will see re these matters once legal actions (both civil and criminal) are filed against you. I WILL go to the trouble to track down the link for the benefit of the reporters writing those articles and for the benefit of the people serving on the juries in those cases.

I naturally wish you the best of luck with it (while also wishing the millions of middle-class investors whose lives are in the process of being destroyed the best of luck with it as well).

Also, I have plans to prepare an article for posting sometime in 2017 that will offer a listing of the 101 most important acts of financial fraud. That article will provide the link to the Bogleheads Forum thread that you are seeking. In the event that the thread has been doctored (Surprise! Surprise!), I have a copy of the complete thread in my files, so I will be able to provide the words that appeared before the thread was doctored. And the lawyers will be able to recapture the original thread when the various trials are held. The members of your jury will of course be free to reach the obvious conclusions re what doctoring of the thread signifies re the state of mind of those who performed the doctoring.

Rob

“I Am Telling You What I Believe Will Happen. I Am NOT Telling You What I Want To See Happen or What I Will Push To See Happen. If Anything, I Intend To Play It the Other Way. I Intend To Put Forward Some Words Aimed at Getting Your Prison Sentence REDUCED. I Want To Put the Nasty Stuff Behind Us. I Believe That Any Energy Wasted on Retribution Is a Big Waste of Energy and Even a Dangerous Use of Energy. I Want To See Us All Working Together.”

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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:

Rob,

We have already experienced drops, including the 2008/2009 market, yet nothing changed for you. What would be any different in future market downturns?

There are little drops all the time, Anonymous. If a drop doesn’t take us below fair-value valuations levels, the Get Rich Quick stuff is still making people feel that they are ahead of the game.

There’s only one time in many, many years when we dropped slightly below fair-value valuation levels. That was in early 2009. Then we went to a P/E10 of 13, a wee bit below the fair-value number of 15. And we did indeed see attitudes changing at that time. That’s when we saw people working up the courage to call Mel Lindauer and Taylor Larimore liars at the Bogleheads board. We never saw people saying things that bluntly in the days when I was there.

The dissatisfaction was not strong enough to change ownership of the board. But prices shot back up far above fair-value levels within a few months. What will happen when we see the P/E10 level remain below 10 for several years? That’s what has happened in all earlier bull/bear cycles before the irrational depression that always follows irrational exuberance comes to an end. I believe that we will see the ownership of the board change hands at that time. And, yes, I believe we will see prison sentences announced at that time.

But again — I CANNOT PROVE THIS.

I am telling you what I believe will happen. I am NOT telling you what I want to see happen or what I will push to see happen. If anything, I intend to play it the other way. I intend to put forward some words aimed at getting your prison sentence REDUCED. I want to put the nasty stuff behind us. I believe that any energy wasted on retribution is a big waste of energy and even a dangerous use of energy. I want to see us all working together. I see it as my job to steer things so that we all begin working together to achieve goals that benefit all of us.

So what I am describing is not what I want to see but only what I expect to see. I think about how pissed I would be if people who called themselves “experts” had been lying to me about all this stuff for years. The answer is — I would be pretty darn pissed. The lies haven’t had any effect of me for a long time now. I saw on the evening of August 27, 2002, that Buy-and-Hold is just a con, a money-making thing, with zero support in the peer-reviewed research. So it hasn’t cost me any money (the “defenses” of it of course have, but that’s something different).

I am not going to hold people back from going nuts unless I have credibility in their eyes. That’s why I have worked so hard to get so many posts in my file showing that I have OPPOSED this massive act of financial fraud for 14 years running now in every possible way. Those thousands and thousands of posts will add to my post-crash credibility and help me to help you.

Or at least so I believe. It’s not possible for me to say precisely what will happen. I worry that people are just going to freak out and that nothing I say in your behalf will make much difference. I will give it my best shot, that’s all. I obviously cannot control results. All that I can do is to push for settling this matter BEFORE we see the massive crash and so that’s what I do.

This one will not be like any earlier crash. The amount of money lost in a crash is determined by how much overvaluation there was at the top of the bull market that caused it. In two of the earlier Buy-and-Hold Crises, the highest P/E10 level we saw was 25. The one time we went to 33 we created the Great Depression. This time we went far, far beyond the number that caused the Great Depression. This time we went to 44. So we will be losing an unprecedented amount of phony baloney wealth this time. The Wall Street Con Men have never before pushed Buy-and-Hold so hard as they did this time (for example, they never before told the lie that there is peer-reviewed research supporting the pure Get Rich Quick “strategy”) and so of course we all should be expecting them to cause more human misery this time than they have ever caused before (I am assuming here that stocks may continue in the future to perform at least somewhat as they always have in the past).

Please don’t mis-interpret any of my words here as “doom and gloom.” The reality could not be further from the truth. The last 35 years of peer-reviewed research provides the missing key to understanding how stock investing works that humankind has been looking to find for a long time. The good news here is 50 times more good than the bad news here is bad. Yes, we may go into a Second Great Depression. I hope not but that’s certainly a possibility. But the Second Great Depression should not last as long as the first one did.

We need to get one large web site to permit honest posting on safe withdrawal rates and scores of other critically important investment-related topics. It’s all downhill sledding from that point forward. We all want the same things. Bogle and the other Wall Street Con Men did not INTEND to cause the Second Great Depression. They BELIEVE the garbage that they have been pumping out for decades now. When they see the results of their trickery, I am 100 percent certain that they are going to come clean and flip to the research-based side.

Then it will be easy. We will be able to spread the word quickly re what really works when we have the money of the Wall Street Con Men behind us. We can outdo the damage of the past 35 years in perhaps one year when we are all working on the same side. I think it is entirely realistic to expect us to experience the greatest surge of economic growth in our history in the days following the onset of the Second Great Depression. This is big stuff. We now know how to reduce the risk of stock investing by 70 percent while increasing returns dramatically. It is impossible to exaggerate how big an advance that is. This is how we restore people’s faith in the capitalist system. When we show people that capitalism can work for ordinary people, not just Wall Street Big Shots, we change the political dynamic in a big way.

Anyway, those are my thoughts re these terribly important matters.

I naturally wish you the best of luck in all your future life endeavors regardless of how things play out, my old friend.

Rob

“I AM Intense. There Is No Question But That That Is a Reality. I Am Friendly and Polite and Warm. But I Am Intense and Determined. And There Is No Question Whatsoever But That That Turns a Good Number of People Off in My Discussions With Them. My Challenge Is to Retain the Good that Comes from Caring Deeply without Scaring People or Turning Them Off.”

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Set forth below is the text of an e-mail from Jackie (owner of the The Debt Stuff blog) to me dated October 14, 2014, followed by my response:

Some of my (unasked for) thoughts:

– I think you could really benefit from an editor to make sure you aren’t focusing on the past but instead are getting your actual message across
– I think a simpler tone (like what I posted from your emails vs. the tone of what you originally sent me) is more readable
– Shorter paragraphs are more scanable.
– Shorter comment responses make you look helpful vs. over-doing it (Most people don’t respond to comments with multiple paragraphs; that gets overwhelming)

As a side note, your message reminded me a little of what http://dropdeadmoney.com/ talks about.

Jackie:

Your comments are 100 percent welcomed. I will also pledge to read yours over again several times and to try to let the message get past my protective radar.

The last comment (re overdoing it) is the one that hits home the most.

I once wrote a guest blog at Miranda Marquit’s blog that told a story about me that I think is funny today only because I have distance from it. Basically, I had a crush on a girl when I was in my 20s and it was clear that she liked me but it was also clear that she didn’t want to get more involved and it was driving me crazy for a long time. Eventually, she broke down and told me that I was “too intense.” I never would have come up with that one because in my mind intense is the best thing that a  person can be!

I wrote only about saving strategies for several years and I was universally loved. I was the same person! It’s just that then I was being intense about a different  subject, one that did not upset people. The name of my book about saving is “Passion Saving.” I don’t think that’s an accident. When people used to praise me, the common thread was that “he’s passionate about the subject.”

I care deeply about helping people. I saved like a crazy man for nine years because I couldn’t bear to do work that I did not love, no matter how much money I made doing it. It’s not my intent here to brag. I am saying that it is my nature to be intense. In some circumstances people love that trait and in some circumstances people hate it.

I am not sure that I am capable of being non-intense. There are circumstances in which one needs to pull in the reins to be effective, and, if that’s the way it is here, I need to work harder at doing that. But it really is something deep in my nature that drives that behavior. I don’t know how effective I can be if I deny my nature.

It may well be that the intensity has hurt me in many cases. I think there is a good bit of evidence that that is indeed so. But the other side of the story is that it has led me to good places on other occasions. I really do have my name on peer-reviewed research that I believe will be featured on the front page of the New York Times one day. That’s a pretty darn amazing reality given that I never studied investing in school. That happened because Wade Pfau contacted me because of my posts at the Bogleheads Forum. It didn’t bother Wade that I was banned for writing those posts. He saw merit in them and wanted to perform research that would show whether I was right or not.

I am hearing. I know that I am offering some pushback. But I am also at least TRYING to listen. We all have a hard time listening to messages that say we have long been doing something wrong in an important way.

I AM intense. There is no question that that is a reality. I am friendly and polite and warm. But I am intense and determined. And there is no question whatsoever but that that turns a good number of people off in my discussions with them. It makes the Goons go positively mad. But it causes at least some unease on the part of lots of people who are not at all goonish in their behavior.

I would be happy to rein it in if I believed that that would bring good results for everyone. But it amazes me that Shiller’s research has been out there for 33 years now and very few people have explored the implications of it in any great depth. I didn’t know that when this started. When the Goons started attacking me, I looked around for friendly sites and found that there was not at that time one site on the internet exploring the  implications of Shiller’s ideas in depth (now my site is the one site that does that).

Think about Wade Pfau, the researcher who contacted me to work with him. He told me that he was learning new things from me on an almost daily basis. And he has a Ph.D. in Economics! It should not have been possible for someone like me to teach Wade anything. But I taught him lots of very important things, according to what he told me in the hundreds of e-mails we exchanged.

I see that as evidence that my intensity can be a positive in some circumstances. I  could have folded up when the Goons attacked me and I never would have learned these things myself. I didn’t. I dug and dug and dug and dug. And I learned and learned and learned and learned. That’s what gives my work value, in my assessment. That’s the good side of my intensity.

The bad side of it is that it may turn some people off. I need to deal with that if that really  is so (and I think there is a good bit of evidence that you are right on this point). I am not dismissing what you are saying. I am struggling with the puzzle of how to be intense when that is a good thing to be and to be more reserved when that is the better thing. The intense person is inclined to see the good in intensity and not the bad, even though seeing only the good may hurt him in some ways.

It’s very hard for me to write short responses. When I detect that someone has an interest in the ideas, I want to share EVERYTHING. Sometimes I write an absurdly long response and people complain about it and they don’t realize that I cut it in half before posting it because I didn’t want to upset people by going on too long. That really happens! There was one woman at Motley Fool who put up a thread about me that she called “Death by Verbosity.” So you are pointing to something real. I acknowledge that.

My challenge is to retain the good that comes from caring deeply without scaring people or turning them off. It’s my problem, not yours. I am grateful to you for trying to help. I am not agreeing 100 percent because I feel that I see good that comes from the intensity too. I don’t feel that I can apologize for caring so much. But my ultimate goal is to get the message out and, if you point me in a direction that makes me more effective in getting the message out, you are doing me a big favor.

Thanks for trying to break through my super-strong defenses!

Rob

Crystal, Owner of the Budgeting in the Fun Stuff Blog, to Rob: “To Get the Word Out There, You Just Need Bloggers to Post. To Get Bloggers to Post, You Just Have to Be a Person We Know That Won’t Get Personal With the Assholes of the Blogging World. Your Posts Just Need to Be Informational And Positive Every Time. Never Put Any Focus on the Goons at All. Don’t Reply to the Goons.”

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Set forth below are the texts of an e-mail sent to me by Crystal (owner of the Budgeting in the Fun Stuff blog) and Jackie (owner of the The Debt Stuff blog) on October 14, 2014, followed by my response:

You should totally respond to Evan. To get the word out there, you just need bloggers to post. To get bloggers to post, you just have to be a person we know that won’t get personal with the assholes of the blogging world. We weren’t saying that you shouldn’t post. Your posts just need to be informational and positive every time. Never put any focus on the goons at all. Don’t reply to the goons. Just reply to the Evans. That was our general point. Does that make sense?

Crystal

I would say reply in one (short) paragraph to Evan 🙂

And to keep all references to stuff that’s gone on in the past out of your posts/comments.

I haven’t gotten a comment on the one on my site, but that’s not at all unusual. I noticed some people did tweet/repin it though.

Crystal:

After I finish this response, I will put up a brief response to Evan.

What you say about the Goon matter almost makes sense to me but not quite. I 100 percent agree with the idea of always being informational and positive. And I know that people hate it when I talk about the Goons. But there are problems that come about from not responding to them.

The Goons are assholes. That’s fair to say. But on a lot of other issues a lot of them are NOT assholes. They believe in Buy-and-Hold. They lie about all sorts of things. But they are not lying about that. The reason why they act like assholes is that they are insecure in their beliefs. They have doubts in their own minds and, when I point out what the research says, I stir up their insecurities and they lash out.

There was one discussion board where they were having a debate as to whether I should be banned and one guy said: “Rob is the politest guy that I have ever met on the internet but he irritates me to no end!” That guy was not a Goon. He would not say something kind about me if he was a Goon. But he did vote for silencing me. My stuff really does bother even good and smart people. It is hard for people to accept that they have made a mistake with their retirement money. The Goons exploit that reality. But it is not only the Goons that are the problem.

I had a weekly column for a long time at the “Out of Your Rut” site. Kevin, the owner of the site, LOVED my stuff. He loved it so much that he told me that he wanted to start paying me even though I never asked for payment. Kevin has lots of friends in the social media and so the column would regularly get positive comments. I once wrote about how John Bogle caused the economic crisis (through his advocacy of Buy-and-Hold). One guy got upset about that. He likes Bogle and he didn’t like hearing that. I like Bogle too. He is one of my heroes. I wrote another column at the same site in which I praised Bogle to the skies. 90 percent of what Valuation-Informed Indexing is about is taken from Bogle. So the problem is not that I don’t like Bogle. The problem is that I am PERCEIVED as having something against Bogle even though that is not at all what I feel in my heart (I do believe that Bogle was the lead voice in favor of the investing strategy that caused the economic crisis but I do not believe that it was his intention to cause an economic crisis.).

It’s not my intent to be argumentative here. I appreciate that you are sincere and are trying to give me helpful advice. I am trying to be frank. I am trying to show the true nature of the problem. What is going to happen to people’s retirement money is a sensitive question. No one started out with bad motives. But people are in tough spots. Emotions are raw. The biggest problem that I have is that my case is research-based. If it were just my opinion, people could say “oh, that’s just that crazy guy saying crazy things again” and we could all be friends. But the Buy-and-Holders take pride in promoting a research-based strategy and it hurts them to hear that it is a very different strategy that is really supported by the research.

I will give one more example that perhaps will put a human face on the story. I had a friend named “Brian” when I worked at Ernst & Young. We used to go to lunch several times a week in the late 1990s.
Sometimes we talked about stock investing. He always said that I was “crazy” in a friendly and warm way. I would say “yes, I know that I am crazy, Brian, but that’s what I sincerely believe” and all was fine. A few years ago, the Wall Street Journal ran a story saying that I was right about safe withdrawal rates.
Brian knew that that was the issue that got me banned from numerous boards years ago. So he called me
on the telephone and said “How does it feel to be vindicated after all these years?” I said that I guessed it
felt good but that discussion of what the research says re SWRs is still banned at all those boards. He said
that he didn’t believe that and that he was going to put up a post repeating what the Wall Street Journal said at the Bogleheads Forum and see what happened. He bet me $5 that he would not be banned. He was banned within 30 seconds.

It’s hard for people to admit that they are wrong when they have invested years of their lives saying the wrong thing and telling others the wrong thing. That’s the real issue here. As a society we have to turn the boat around and it is a hard business because we have so much invested in the old way of thinking.

I’m not sure what my response adds up to. I am not trying to argue with you. I think I am just passing along thoughts gathered from 12 years experience trying to get the word out about these matters. I don’t think the Goons are the entire problem. I think that people tolerate behavior from them that they would not tolerate in other circumstances because they find it painful to hear parts of the message.

I will promise to ponder what you said a bit more. I will go back and re-read your e-mail several times. I don’t feel that I can promise not to talk about the Goons on an across-the-board basis because I feel that they are part of the story. But I of course acknowledge that I can get things wrong and that I need to try to be open to feedback from people who are obviously trying to help. So I will make some effort to challenge my own beliefs re all this.

Hopefully it will all work out for the best in the end.

Rob