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

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“If Investing Advice Didn’t Matter That Much, the Buy-and-Holders Would Have Corrected Their Error When It Was Discovered in 1981. People Are Too Old to Start Saving Again When Their Retirement Plans Go Bust. So It Is Very Hard for the Buy-and-Holders to Acknowledge Their Mistake.”

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

http://www.bloomberg.com/news/articles/2015-06-08/u-s-stocks-on-wrong-side-of-history-with-rate-increase-in-sight?cmpid=yhoo

So the next stock market drop will be blamed on higher interest rates and not on goons or buy and hold.

I guess we won’t see anyone going to prison and you will have to do without your $500 million. Better cancel your order for the new Porsche.

You are accurately describing the game that the Buy-and-Holders have been playing for a long time now, Anonymous. They take credit for anything that happens that is good and they blame others for anything that happens that is bad. When Taylor Larimore is able to buy a house with the Pretend Money he gets from following a Buy-and-Hold strategy, he calls it “The House that Jack Built.” But when we see the economic crisis that inevitably follows from the widespread promotion of this strategy, he does not refer to it as “The Economic Crisis That Jack Built.” Heads, the Buy-and-Holders win. Tails, everybody but the Buy-and-Holders lose.

Your suggestion is that everyone will continue to permit the Buy-and-Holders to get away with such nonsense. I don’t buy it.

My personal belief is that even the Buy-and-Holders won’t permit themselves to get away with such nonsense following the next crash. The Buy-and-Holders are not bad people. They did not INTEND to cause an economic criss. They did. It happened. There is 34 years of peer-reviewed research showing why we always experience an economic crisis when large numbers of people are persuaded that Buy-and-Hold strategies can work in the real world. So the Buy-and-Holders messed up big time. But I have not seen any evidence that they INTENDED all this bad stuff. I have been studying this stuff for a long time and it is my strong impression that the Buy-and-Holders did NOT intend all this bad stuff and that they are on one level of consciousness horrified to see it playing out.

Do you see?

We are not on different sides. We are on the same side. Even you Goons did not intend all this bad stuff. So even you Goons are going to want to set things right following the next crash. Then of course we all have no problem. From that point forward, it is good stuff piled on top of good stuff piled on top of good stuff. For ALL of us. Valuation-Inforrmed Indexers and Buy-and-Holders alike.

Humans respond to incentives. If you want people to perform good acts, you reward them for them. If you want people to avoid performing bad acts, you penalize them. That’s how we do it in every field of human endeavor other than investing analysis. With investing analysis we encourage advisors to perform bad acts (to say that price discipline is not always 100 percent required) and we discourage advisors from performing good acts (to always point out that it is essential to exercise price discipline). Why the heck do we do that? Why are all the rules that apply in every other field of human endeavor turned on their heads in the investing advice field? That’s the question that we all need to come to terms with to be able to bring this economic crisis to an end and move on to the greatest period of economic growth in our history.

It’s not because getting investment advice right doesn’t matter. It’s because getting investment advice right matters so darn much. If investing advice didn’t matter that much, the Buy-and-Holders would have corrected their error when it was discovered in 1981. They would have said “sorry” and moved on to giving better advice and no one would have been upset and that would have been the end of it.

The reason why it didn’t happen that way is because it is a very big deal when someone gives bad advice on how to finance a retirement plan. People cannot fix their retirement plans when they go bust. They are too old to start over and earn all the money they need for retirement a second time. So it is very, very, very hard for the Buy-and-Holders to acknowledge their mistake. The mistake has had devastating consequences. We all need to keep that in mind when we are trying to persuade them to come clean.

And we need to keep in mind that this was so in a smaller way way back in 1981. The Buy-and-Holders were excited about their own discoveries, which they believed were taking us all to a very good place. Shiller’s 1981 research discredited the corner-stone on which the entire Buy-and-Hold strategy was built. The Buy-and-Holders were horrified to think that they had been giving dangerous advice. They became defensive. They went into cover-up mode. Not because they are bad or stupid. Because they care about their readers and clients and possess a sincere desire to help them and because they could not bear to think that they were hurting the people they thought they were helping.

Do you see, Anonymous?

This didn’t start out as financial fraud. It started out as a sincere effort to do wonderful things. And, indeed, many of the things the Buy-and-Holders did really were wonderful. Part of the answer here is making that point over and over and over again. The more we make the Buy-and-Holders feel good about all of their very real and important contributions, the less defensive they feel and the more willing they become to come clean about the issue (valuations) re which they messed up.

You are suggesting that they will never come clean, that the Buy-and-Holders are 100 percent corrupt and that they will continue to use their power and wealth and connections to destroy anyone who dares to “cross” them by posting honestly re any important investment-related question. I don’t see it. I believe that you are wrong. I believe that the Buy-and-Holders are going to come clean and that we all are going to make it safely to the other side of the big black mountain and that in coming days we all will be achieving financial freedom many years sooner than we ever imagined possible back in the days when we were collectively ignorant of the realities of stock investing.

The Buy-and-Holders have blocked the learning process that we all need to see take place for far, far longer than I imagined possible. I will give you that one. It is my job to figure out WHY that is so. I do not believe that it is because the Buy-and-Holders are corrupt through and through. It would take a long time for me to put forward all the reasons why I am convinced that that is not so. If you ask for me details, I will give them. But I cannot spell it all out in a single post. What I will say here is that I am personally persuaded that the Buy-and-Holders started out with good intent and generally possess good intent right up to the current day. That’s an important part of the story.

The people who now run the Bogleheads Forum used to refer to themselves as “Vanguard Diehards” back when their board was run from the Morningstar site. Does that mean that they were evil? It does not. It means that they really, really, really believed in what they were saying. Being a “diehard” is a bad thing when it means that you are arrogant and not willing to listen to other points of view. Being diehards has gotten these people in a lot of trouble and caused millions of people to suffer serious financial harm. But the feeling that caused these people to become “diehards” was a positive one. THE BUY-AND-HOLDERS WANT TO HELP PEOPLE! Good! That’s wonderful!

We need to take this positive energy and turn it to positive purposes.

Do you see?

The Buy-and-Holders want to help people. They know all about the laws of the United States. We need to persuade them that they need to FOLLOW those laws. You can’t commit felonies just because you are a “diehard.” That’s 100 percent unacceptable. So they need to rein in this impulse they have to lash out at anyone who talks about the implications of the last 34 years of peer-reviewed research in this field. The financial fraud stuff is 100 percent unacceptable. But the other stuff is great. The fact that the Buy-and-Holders want to help people is great. They fact that they care so much is great. The fact that they have so much energy and determination is great.

You are suggesting that the energy that the Buy-and-Holders have been putting to negative purposes for 13 years now can never be put to positive purposes. I just don’t buy it. If the Buy-and-Holders were bad people, I might buy it. But they aren’t! They are good people. They are smart people. They want to help. They are determined. That’s good. That’s what we want. So long as they don’t take the diehard part so far that they are committing felonies under the laws of the freakin’ United States.

I don’t buy into any of your negative scenarios, Anonymous. That’s all just garbage Goon talk.

I of course get it that bad stuff has happened. But the root realities here are 50 times more good than they are bad. We are going to get things on the right track. It might well take another price crash to get us there. But I am firmly convinced that we are going to get things to a positive place. I am sure.

Do you know who taught me what I needed to know to see that Greaney’s retirement study got the numbers wildly wrong?

It was John Freakin’ Bogle! It was by reading Bogle’s book that I figured out what I needed to know to take Greaney on.

What a terrible, terrible person that Jack Bogle is! How horrible that he helped us all learn how to calculate safe withdrawal rates properly and by doing so opened the door to hundreds of additional powerful insights that we have developed together over the course of the past 13 years!

You see things though a Goon perspective. I do not. You see only negative stuff. I see tons and tons and tons of positive stuff, enough positive stuff to make us the luckiest generation of stock investors ever to walk Planet Earth.

We are headed to a good place. Bogle is going to come clean. So are all the rest of the Wall Street Con Men. So are you Goons.

I am sure.

Hang in there, man. It gets better. A LOT better.

Rob

“I Will Name Names. Any Blogger Who Has Permitted Participation at His Site By an Individual Who Has Posted in “Defense” of Mel Lindauer or John Greaney or Jack Bogle Will Be Named.”

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

“We need to make a demonstration as a people that we will not tolerate the intimidation tactics of the Buy-and-Holders any longer. ”

Intimidation? Please. You’ve been afforded much more presumed credibility than any internet crank deserves, by having many people tolerate your crap and even respond to it as if it were a legitimate case of ignorance or misunderstanding or other solvable situation, rather than just ignoring you — as is the most deserving response. Over the years, people have continually provided you links, discussion, argument, examples, references, analogies, details, particulars, history, explanation, and any number of other valuable resources all geared towards your personal enlightenment. So, ‘Intimidation’? Please. Hardly. For the last decade, you have used the same phone number that you publicly provide, same address that you publicly tout, same web address, same everything, and have never provided once scintilla of evidence of a SINGLE threat or act of intimidation. So, I’d say that is not just remarkable, but damn near incredible, given the nature of the internet, which attracts crazy likes flies to a picnic. And no, this is not a death threat, you idiot. It’s a friendly and human sincere invitation for you to finally to wake up, smell the coffee, greet your wife, kids, community, and acquaintances anew, and from this day forward, begin to act towards them as a responsible adult: get a job, save some money, be a responsible parent and spouse, and quit being nothing but a full-time nuisance internet crank, devolving deeper and deeper into your self-made land of mental illness, and imaginary threats.

I’ll talk a bit about intimidation.

The thrust of your comment is a suggestion that you will not be going to prison because you never came to my house with a gun at fired it at my wife or children. That’s not the test. You will be going to prison.

The threat to come to my house with a baseball bat and kill my wife and children is an act of intimidation. My wife certainly saw it as that. She will testify to how she felt when that threat was made. She was at the time taking care of a two-year old and an infant of five months of age. The jury will hear all this. They will decide on the length of your prison sentence.

Motley Fool deleted the most violent posts. But I believe we can get them to present as evidence either by going to the Motley Fool files or by using a WayBack machine or through some other means. Portions of the deleted posts were included in posts that were not deleted. So we always have those. And there were references to the death threats made at the Bogleheads Forum and other boards and blogs and you Goons demanded bannings of all posters who posted honestly on the matter. That shows a guilty conscience. If the death threats had not been made, there would have been no need to cover them up.

I filed a police report re the death threats. That will be available as evidence. I also made a report with a special office on internet crimes in Virginia. I also contacted the FBI. The question that the police officer focused on was whether I believed that you would follow through on the threats. I said that my wife was much more worried about that than I was but that I did not believe that my wife should have to live in fear because an individual got an important number wrong in a retirement study posted at his web site and because I pointed that out to friends of mine who had been planning their retirements pursuant to a belief that that individual (John Greaney) had done honest work. I said that I personally did not believe that you Goons would kill anyone. I added that I could not be certain because anyone who was crazy enough to put up a post in “defense’ of John Greaney is capable of just about anything.

I have copies of posts containing HUNDREDS of threats of physical violence. There are posts where you Goons discussed what model of gun to use to kill me. Those will be seen by your jury. I have copies of posts in which you posted photos of my church and made suggestions that you Goons would be showing up there. Those will be seen by your jury. I have posts showing that a swarm of you Goons descended onto the Bogleheads Forum when community members there complained about the constant abusiveness. You wouldn’t have had a swarm descend if you didn’t have a long record of abusiveness at many different forums. Those posts will be seen by your jury. And on and on and on and on and on.

And of course your jury will be seeing all of the threats that were directed at Wade Pfau. The Bennett/Pfau research is the most important piece of research published in this field in three decades. That research should have been written up on the front page of the New York Times when it was first published. The only reason it has not been is because you Goons threatened to destroy Wade’s career if he continued to post about it and Jack Bogle indicated that he backed you and your use of intimidation tactics 100 percent. Bogle allows his name to be used at a site that permits posting by Mel Linduaer, a guy who was employing threats of physical violence to suppress honest posting on the peer-reviewed research in this field long before I came on the scene!

The most important question is WHY Buy-and-Holders feel a need to resort to threats of physical violence and of career destruction whenever anyone posts honestly on safe withdrawal rates or any other critically important investment-related topic. The obvious explanation (it wasn’t obvious to me on the morning of May 13, 2002, but it is 13 years later) is that Buy-and-Hold was based on a MISTAKE going back to the first day. There has never been even a tiny sliver of support for the preposterous Buy-and-Hold claim that there is no need for investors to practice price discipline when buying stocks. The entire historical record shows that practicing price discipline is 80 percent of the game. That’s a lie that Buy-and-Holders use to take money out of the pockets of millions of middle-class investors and to put it into their own.

This massive act of financial fraud will be exposed. I will expose it. You have my pledge. I am sure.

I will name names. Any blogger who has permitted participation at his site by an individual who has posted in “defense” of Mel Linduaer or John Greaney or Jack Bogle will be named. Their juries will decide the length of their prison sentences. That’s not my call. But I guaranty you that their names will become known to the millions of middle-class investors who are in the process of seeing their lives destroyed because of the 34-year cover-up of the biggest “revolutionary” (Shiller’s word) advance in the history of personal finance.

I am going to see that you are put in prison, Anonymous. There will be no meanness to it. My aim is to put you in prison as soon as possible so that your sentence will be as short as possible, given the circumstances that apply. But it would be cruel of me for me to suggest that there is any but the most long-shot chance that you will not be going to prison. I will continue to do what I can to get your sentence reduced a bit. But that’s as far as my bending goes. There will be no felonies being committed on my end. There will be no discussion of felonies being committed on my end. Find someone else.

My best and warmest wishes to you, Goon friend.

Rob

“Say That Social Pressure in Favor of High-Stock-Allocation Recommendations Causes Us All to Increase Our Recommended Stock-Allocation-Percentage by 30 Percentage Points. Is That a Good Thing?”

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

You must be missing the literally thousands of valuation posts and Bogleheads and elsewhere.

I’m not missing them, Anonymous. I acknowledge that there are thousands of valuations posts. I say that it is not only the volume of valuation posts that matters. The RANGE of valuation recommendations matters too.

Say that millions of investors are counting on their portfolio values to be real at a time when stocks are priced at two times fair value. Posters who argue for lower stock allocation cause emotional distress for those millions of investors. An argument that one’s stock allocation should be low suggests that stocks do not offer a strong value proposition. Investors who are counting on the money in their stock portfolio to be real don’t want to hear that. There are all kinds of ways that those investors can impose social pressures to keep recommended stock portfolio percentages high.

Should those of us who believe that low stock allocations are appropriate at times of high valuations give in to those pressures? I say “no.” I say we hurt everyone when we do that. Those who really favor high stock allocations should of course say just what they believe. BUT SO SHOULD THOSE WHO FAVOR LOW STOCK ALLOCATIONS.

Say that social pressure in favor of high-stock-allocation recommendations causes us all to increase our recommended stock-allocation-percentage by 30 percentage points. Those who think 20 percent stocks is right say that they believe that 50 percent stocks is right so that they will win popularity points. Those who think 40 percent stocks is right sat that they believe 70 percent stocks is right to win popularity points. Is that a good thing? I think it is a HORRIBLE thing. You can’t trust what anyone says when everyone is upping their numbers so that they can sell more books or whatever.

Greaney recommends 90 percent stocks. All signs are that he is sincere in that recommendation. So good for him. But Greaney never faces any social pressure to lower his recommendation. I favor an allocation of 30 percent at today’s prices. I face ENORMOUS pressures to lower my recommendation. I am told that I will be banned if I don’t post dishonestly. I refuse to let the social pressures influence what I say. But how many of those who have grave doubts about the high stock allocation recommendations dare to stand up to those pressures? Most do not. So you don’t even know what the real range of opinion is. When you only hear recommendations from 50 percent and up, you can easily be fooled into thinking that that is the consensus view even though you would hear very different numbers if people felt free to post honestly.

Say that you are a liberal. Would you trust a conservative site to tell you the true story re a political development? Or the other way around? I wouldn’t. People are BIASED. We all are. With investing, the bias is not ideology-based but time-based. There is a huge bias in favor of stocks when stocks are priced as they are today. And then the bias swings in the opposite direction after prices crash. You are getting the wrong story at both times. People should be more negative about stocks when they are insanely overpriced and people should be more positive about stocks when they are insanely underpriced.

The reason why I fell in love with Buy-and-Hold a long time back is that Buy-and-Holders argue that we should use peer-reviewed research as a guide and doing that would permit us to escape from the emotional biases that does such harm to investors. I gave up on Buy-and-Hold when I saw that the claim that we should root our strategies in the research is a con.

Buy-and-Holders SAY that they like to take the research into consideration. But mention the 34 years of research showing that valuations affect long-term returns and they demand that you be banned. Once you do that, you lose any virtue there is in basing your decisions on the research. If you lie to yourself and others about what the research says, it no longer plays the role of keeping things objective.

We might as well not do any research if we are going to ban research that shows the dangers of our biases. Once you become selective about what research may be discussed, you turn the idea of rooting one’s strategies in research into a negative. Your information is all the product of subjectivity but you are fooling yourself into believing that it is objective. That’s the worst of all worlds.

It is not enough to discuss valuations. We must permit HONEST discussions of valuations.

Rob

“Once I Found Out That the Buy-and-Holders F’d Up on the Safe-Withdrawal-Rate Issue, I Doubted Everything They Have Done. And, Indeed, I Have Discovered That They F’d Up On Ever Issue That They Have Addressed. Always for the Same Reason. They Continue FOR NO INTELLECTUAL REASON WHATSOEVER to Pretend That There Is No Need for a Valuation Adjustment. So the Biggest Advance in the History of Personal Finance Has Been Delayed.”

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

“The reason why I said “Grrrrr….” is that the circumstances here are unusual and call for long headlines in some cases.”

This is a microcosm of your entire thinking. You are completely deluded in thinking you are some special snowflake and your little VII is the more important than anything that has ever happened. Never mind that newspapers have existed for hundreds of years and covered every conceivable topic, Rob Bennett and his VII are so important that it now suddenly makes sense to make distractingly long and stupid headlines.

I agree with the part about this being a microcosm of my entire thought process, Anonymous.

I am not even close to being the only person who has noted that there is now 34 years of peer-reviewed research showing that valuations affect long-term returns. Just about everybody agrees with that. Including the Buy-and-Holders. Including you Goons. So that one inspires little controversy.

Where people go onto different tracks is re the question of What That Means.

It means that the entire Buy-and-Hold Model is in error. Buy-and-Hold is rooted in the idea that timing doesn’t work. Long-term timing has ALWAYS worked and has ALWAYS been 100 percent required. There are no reasonable grounds for questioning this. ALL of the evidence shows it. There is ZERO support for Buy-and-Hold in either the peer-reviewed research or in the historical return data.

This is where you Goons jump in and accuse me of believing in conspiracy theories. It is hard for people to believe that the experts in this field could have made such a mistake and it is even harder for people to believe that they would cover it up for 34 years.

They made the mistake because we were still in the early stages of developing our understanding of how stock investing works when Fama did his research in 1965. Bogle had not founded Vanguard yet at that time. So index funds were not available. So long-term timing was not a practical option. So, when people explored whether timing works, all they looked at was short-term timing. Short-term timing really doesn’t work. So Fama discovered something real and important. The finding that short-term timing doesn’t work is the second most important finding in the history of investing analysis. Fama deserves his Noble prize. Good for him.

But Fama never even looked at whether long-term timing works or not. So it is 100 percent absurd for the Buy-and-Holders to go into shock when someone notes that ALL of the research in this field shows that long-term timing ALWAYS works and is ALWAYS 100 percent required. Fama didn’t look at the question. So nothing Fama did even bears on the question.

Shiller was the first researcher to look at long-term timing and he found (in 1981) that long-term timing ALWAYS works and is ALWAYS 100 percent required. Every researcher who has looked at the question in the 34 years since has confirmed Shiller’s finding. So, again, there should be no controversy. All of the research on both questions shows the same two things: (1) Short-term timing never works and should be avoided; and (2) Long-term timing always works and must always be employed by every investor.

Once everyone knows this, we all live far richer lives than we ever imagined possible before. We reduce the risk of stock investing by 70 percent. We increase returns by enough to be able to retire five to ten years sooner. We no longer suffer economic crises. Investor Heaven!

So why have we seen a wee bit of friction over the past 13 years?

We have seen friction because the right thing to do when a mistake is discovered is to correct it IMMEDIATELY. I play the game Dominion. The publisher just published a new expansion. They messed up the printing of the cards. They put out a message within a day or two of the publication of the expansion saying that they will replace cards re which the backs were printed off center. That’s the way it is done when the mistake relates to a silly game. That’s the way it SHOULD have been done re stock investing. Had Bogle gave his “I Was Wrong” speech in 1981, we would today be enjoying the greatest period of economic growth in U.S. history. Bogle f’d up. Big time. He needs to come clean. By the close of business today.

That’s the story.

Now –

Bogle and the Wall Street Con Men have lots of power and lots of money and lots of influence. If the game company doesn’t acknowledge its errors, it will be fried by the public. Unfortunately, things don’t work that way in InvestoWorld. If you want to work in this field, you don’t point out that Jack Bogle has played the lead role in the greatest act of financial fraud in the history of the United States. Bogle’s 34-year cover-up has destroyed MILLIONS of middle-class lives. Bogle is Bernie Madoff multiplied by 5,000.

That’s not my doing, Anonymous. I LOVE Jack Bogle. I rank him as the second most important investing analyst of all time. I learned about the errors in the Old School SWR studies by reading Bogle’s book. I amy very, very, very proud of the investing strategy (Valuation-Informed Indexing) that I have developed. It is the first true research-based strategy. It is going to change the world in a very big and very positive way. VII would not exist if not for all of the wonderful insights generated by Bogle. All of the hard work that I have been doing for 13 years now is rooted in Bogle’s work. There is no bigger Boglehead alive on Planet Earth than Rob Bennett.

But the guy has played the lead role in the biggest act of financial fraud in the history of the United States.

What would you have me do about that? I think that I have responded in a very responsible way. I have sung Bogle’s praises to the skies. While also pointing out the massive act of financial fraud on an almost daily basis and making as many people as possible aware of it. I have balanced honesty and charity in the perfect mix. I have done the right thing over and over and over and over again. I have tried to help Bogle AND the millions of middle-class investors whose lives are in the process of being destroyed by his ongoing act of massive fraud.

Yes, that makes me different.

But, no, I am not the only person who has noticed that valuations affect long-term returns. Everybody who knows anything about stock investing knows that.

Everything I say follows logically from Shiller’s finding that valuations affect long-term returns. I am not an investing expert. I did not go to investing school. I never managed a big fund. But I am not a moron. I have enough going on in the brain department that I can figure out that, if valuations affect long-term returns, there ain’t no way on Earth that a retirement study that fails to take into consideration the valuation level that applies on the day the retirement begins can possibly get the numbers right.

Once I found out that the Buy-and-Holders f’d up on that one, I doubted everything they have done. And, indeed, I have discovered that they f’d up on every issue they have addressed. Always for the same reason. They continue FOR NO INTELLECTUAL REASON WHATSOEVER to pretend that there is no need for a valuation adjustment. The reason why those of us who don’t make gobs of money promoting failed investing strategies correct mistakes when we first learn of them is that failing to do so dooms us to making the same mistakes over and over and over and over again.

THE BUY-AND-HOLDERS MADE A MISTAKE. AND THEY FAILED TO CORRECT IT. THAT’S THE STORY HERE. EVERY PERSON ALIVE TODAY SHOULD BE URGING THEM TO CORRECT THAT MISTAKE BY THE CLOSE OF BUSINESS TODAY SO THAT THEY CAN STOP DESTROYING LIVES. THIS IS NOT OPTIONAL. THIS IS IMPERATIVE!

Is there a vast conspiracy?

Well, those Wall Street Con Men have tons of money and power and they are ruthless in their willingness to destroy the careers of those who try to get the word out to the millions of middle-class investors about the con that has been worked on them. It’s the same story over and over again. Some kind and smart person like Wade Pfau learns the truth and does what he can to get the word out and thereby fix the problem. You Goons threaten to destroy him. Bogle and the other Wall Street Con Men signal their support. The good and kind person flips to the Goon side. He decides that he would rather retain his ability to make a living than to tell the truth and go hungry. Gee, I wonder why so many have flipped! Some of these things are so hard to figure out!

The announcement of your prison sentence will change things, Anonymous.

Wade Pfau doesn’t want to go to prison. Todd Tresidder doesn’t want to go to prison. Bill Bernstein doesn’t want to go to prison. Mike Piper doesn’t want to go to prison. Larry Swedroe doesn’t want to go to prison. And on and on and on and on and on.

They all will flip in one day once your prison sentence is announced. So this is headed to a very good place.

And there will be lots of people demanding your prosecution for financial fraud following the next crash. Why the heck wouldn’t they? People will be losing most of their life savings. They will be able to recover some of the money by bringing legal actions against those who have posted in “defense” of Mel Linduaer and John Greaney and Jack Bogle. Why wouldn’t they want their money back? It’s impossible to imagine any reason. And, once they bring their lawsuits, all of the facts detailed at this site will come out. So then people will demand your prosecution for criminal acts of financial fraud. The logic chain on this one is rock solid.

I am a person who has gotten caught up in circumstances. I didn’t know any of this stuff on the morning of May 13, 2002. I knew that Greaney got the numbers wrong in his retirement study, that’s it. I was obviously doing a good thing to let my discussion-board community know about those errors. The people in the community thanked me for starting the best discussion we ever had at the Motley Fool board. And then Greaney came out with his death threats. Huh? If that’s not proof of a massive cover-up, I’d like to know what would be proof of a massive cover-up.

I didn’t know on May 13, 2002, that there was a massive cover-up going on. I sure do now. What choice do I have other than to expose it? The shift from Buy-and-Hold to Valuation-Informed Indexing is the biggest advance in the history of personal finance. And continuation of the massive cover-up will put us in the Second Great Depression if it is not exposed. Do I have any choice here? Any choice at all?

I obviously have no choice, Anonymous.

You point out all the time that people don’t post here. Thousands have told me that they would LOVE to post here. There are enough people who have told me that they would love to post here to make this the biggest personal finance site on the internet. But people are scared to post here. And for good reason. People know that, if they post honestly, the same things that you Goons did to me and John Walter Russell and Wade Pfau and Ben Solar and ES and Wanderer and John D. Craig and Microlepsis and Earn a Buck and hundreds and hundreds of others will be done to them.

So the biggest advance in the history of personal finance has been delayed. The way this should have played out is that Bogle should have come clean in 1981 and as a society we would have gradually learned more and more each year. We have seen the biggest advances in history over the past 34 years, in particular in the past 13 years. And yet we have reaped no benefits thus far. Because of the death threats and the demands for unjustified board bannings and the tens of thousands of acts of defamation and the threats to get academic researchers fired from their jobs. You Goons have been super effective in destroying lives. What an accomplishment!

You can’t intimidate me, Anonymous. I don’t want to destroy. I have zero interest. I want to do positive work. So I refuse to be intimidated. Tell Bogle that he needs to get me sent to prison if he wants to shut me up. But be sure to tell him that I have contacted people who have agreed to take over the site in the event that I am sent to prison. So Bogle and his Con Men Pals are going to need to send LOTS Of people to prison to keep this covered up following the crash.

And, even if the Con Men could send all those people to prison, they still have the problem that Shiller’s book was a best-seller and can be obtained in lots of libraries. And they still have the problem that there are thousands of articles and posts that tell the truth about stock investing and that are not even housed at this site (some with my name on them, some with other names on them). The con is failing. The con is coming down. The con is in the process of being exposed.

The History Train is moving forward, Anonymous. There is not a darn thing that Bogle or you or anyone else can do about it. We all need to know the truth about what the last 34 years of peer-reviewed research says. We are going to gain access to the information and analysis we need. The only thing unsettled at this point is how long your prison sentence is going to be. Each day that passes, more lives are destroyed. Each new life that you destroy increases the length of the prison sentence you receive following the crash. That’s the deal.

Yes, the “Grrrr” was a microcosm of my entire thinking. I like doing honest work. I like doing positive work. I like doing intelligent work. So I refuse to pretend that the last 34 years of peer-reviewed research doesn’t exist. It exists. And I use it in developing every post and ever podcast and every calculator and every article and every blog entry and every column that I advance. And I always will. I refuse to be intimidated and I refuse to pretend to be a moron who doesn’t know that valuations affect long-term returns.

Wade Pfau elected to play it differently. I told him that he was “insane” to do so. Wade may or not may not join you Goons in prison. It’s not my call. But Wade is insane to behave in a way that even makes that an issue. Had he played it straight, he would have received his Nobel prize by now. I am sympathetic to his concern that his kids might starve if he does the right thing. Still, I think he was insane to risk a prison sentence. Those in this field who do not possess what it takes to stand up to the Wall Street Con Men and their Internet Goon Squads need to find a new way to make a living. That’s my sincere take re this terribly important matter.

We will see how it plays out following the crash. What else can we do at this point?

I will NOT be intimidated. I will NOT post dishonestly. Get me sent to prison or give it up and come clean or just wait for the next crash and hope for the best. Your call. I made my call on the morning of May 13, 2002. I have never given two seconds consideration to joining you Goons in the years since. It ain’t gonna happen.

I hope that helps a bit.

I wish you all the best that this life has to offer a person.

Rob

“The ‘Idea’ That It Is Not Necessary to Practice Price Discipline When Buying Stocks Was a Mistake. There Has Never Been Even a Tiny Sliver of Evidence Anywhere in the Peer-Reviewed Research Suggesting That All Investors Need Not Always Practice Price Discipline (Long-Term Timing) When Buying Stocks.”

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

What did the recent Bogleheads posts on P/E 10s linked here not say? What exactly is the “peer-reviewed research” information Bogleheads won’t allow there?

For starters:

1) The errors in the Old School safe-withdrawal-rate studies were not discovered when the Wall Street Journal wrote about them but 10 years earlier when a post reporting on those errors was posted to Motley Fool’s Retire Early board;

2) Two-thirds of the risk of stock investing is the result of the promotion of Buy-and-Hold “strategies” and the Ban on Honest Posting on the dangers of Get Rich Quick strategies supported by Jack Bogle and the other Wall Street Con Men;

3) By switching from Buy-and-Hold to Valuation-Informed Indexing, workers can realistically expect to be able to retire from five to ten years sooner than would be possible if they did not make that switch;

4) The “idea” that it is not necessary to practice price discipline when buying stocks was a mistake. There has never been even a tiny sliver of evidence anywhere in the peer-reviewed research suggesting that all investors need not always practice price discipline (long-term timing) when buying stocks;

5) There have been four occasions in U.S. history when the Wall Street Con Men were successful in persuading large numbers of investors that all the rules of stock investing might be stood on their heads and for the first time Buy-and-Hold might work well for one or two long-term investors in this or some other solar system. The first time that happened, we saw the first of four economic crises that we have seen as a nation. The second time, we saw the second economic crisis. The third time. we saw the third economic crisis. The fourth time, we saw the fourth economic crisis.

6) Jack Bogle pulled his “15 percent rule (the “idea” that it might be okay if investors lowered their stock allocations by only 15 percent when stock prices rose to insanely dangerous levels) out of his backside.

7) It was the promotion of Buy-and-Hold “strategies” that caused the economic crisis that began in 2008.

8) Robert Shiller predicted the economic crisis that began in 2008 in a book published in 2000 and explained why the economic crisis was inevitable unless we began telling millions of middle-class investors the truth about how the stock market works.

9) The stock market becomes a Ponzi scheme when stock prices reach insanely dangerous levels. There is now 145 years of historical return data showing this.

10) Many academic researchers and many investment advisors and many journalists and many bloggers want to tell the truth about stock investing but have been intimidated into silence by the brutally abusive tactics of the Wall Street Con Men and their internet Goon squads.

That’s all important stuff, Anonymous.

There are good reasons why as a people we elected to make financial fraud a felony, a crime calling for prison sentences for those found guilty of it.

Don’t let the bad guys get you down, old friend.

Rob

“The Question You Are Asking Is: What Precisely Is the Line That One Cannot Cross Before Being Put on the ‘Must Destroy’ List of the Buy-and-Hold Mafia? The Line Is Not a Fixed Place. Back in May 2002, It Was Possible to Block All Discussion of the Errors in the Old School Retirement Studies. That’s Not Possible Today. Today the Thing That Will Get You Banned Is to Say That the Discredited Studies Should Be Corrected. The Conclusion You Can Draw Is That the Buy-and-Holders Have Employed Intimidation Tactics to Stop the Valuation-Informed Indexing Concept from Spreading As Quickly As It Should.”

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

You have complained innumerable times that anyone who speaks favorably of PE10 gets banned. That’s the very definition of the “Ban on Honest Posting”. Several people in that Bogleheads thread spoke of the merits of PE10. They have not been banned. So what conclusion can we draw?

No. I have never said that anyone who speaks favorably of P/E10 gets banned. That’s far from being so. As you point out, there are numerous comments in that thread that are pro-P/E10. And some of those posters have hundreds of comments in their files. CJKing is an AMAZING poster. He has offered some of the best pro-P/E10 commentary that I have ever seen. So it is not even close to being the case that there is a ban on pro-P/E10 stuff.

That’s not true in the bigger world either. Robert Shiller is the godfather of Valuation-Informed Indexing. He is the guy who started all this (unless you count Benjamin Graham, who was speaking in favor of the VII concept back at a time when index funds were not available and when the potential of the concept was thus much more limited). My guess is that there have been LOTS of intimidation tactics directed at Shiller. I believe that he could write a book about the intimidation tactics that have been directed at him. Still, his book was widely reviewed. He was awarded the Nobel prize. Lots of people, including Buy-and-Holders, speak respectfully re Shiller. So Shiller’s ideas are not 100 percent banned.

The conclusion you can draw is that the Buy-and-Holders have employed intimidation tactics to stop the Valuation-Informed Indexing concept from spreading as quickly as it should. The particular thread that you are pointing to is a good thread. Both sides are represented on it. People can learn from it. That’s all to the good. The site administrators at the Bogleheads Forum are corrupt. But the board that they administer produced that good thread. It doesn’t help anything to ignore that. We should be celebrating that. We should be pointing out the corruption. But we should ALSO be pointing out the good that these people do when they do good. To be slanted or biased pulls things in the wrong direction. Nothing whatsoever is achieved by such behavior. So I applaud Mel Linduaer for whatever role he played in producing that thread (and he certainly played some role given the huge role he has played in building the board at which the thread appears).

The question you are asking is: What precisely is the line that one cannot cross before being put on the “Must Destroy” list of the Buy-and-Hold Mafia? I have obviously crossed that line. Wade Pfau obviously crossed it at one time and now no longer does. The people who posted on that thread obviously have not crossed the line.

The line is not in a fixed place. I crossed it on the morning of May 13, 2002, just by asking a question as to whether valuations should be considered when calculating safe withdrawal rates. My initial post didn’t even express a belief that valuations should be considered; it just asked the question. That was enough for me to become Public Enemy #1 of the Buy-and-Hold Mafia back in May 2002. Today, I could obviously get away with that with no problem. So the first thing that must be understood is that the line is not in a fixed place.

The line is fluid. To understand where the line is, you must understand the motivations of those establishing the line. The Buy-and-Holders are good and smart people who achieved huge advances in our understanding of how stock investing works. They believe themselves in the recommendations they offer to others. They follow those recommendations. But they have doubts. These doubts haunt them. If the doubts turn out to be rooted in something real, that means that the Buy-and-Holders have hurt themselves in very serious ways. It also means that they have hurt their friends and neighbors and co-workers and fellow community members in very serious ways. The idea that their doubts might be rooted in something real horrifies the Buy-and-Holders. They set out with an aim to do something good and, if those doubts end up being rooted in something real, they instead caused a huge amount of human suffering.

The purpose of the intimidation tactics is to stop the pain that the Buy-and-Holders feel when they are faced with words that at least partly persuade them that their doubts are rooted in something real. The purpose is to STOP THAT DARN PAIN through whatever means are necessary to do so.

The Buy-and-Holders realize that they cannot stop the pain entirely. Back in May 2002, it was possible to block all discussion of the errors in the Old School retirement studies. That’s not possible today. Every major publication in this field has published an article saying that those studies are in error. So it is just not realistic today to push the Old School studies in the way that they were pushed years ago. But it is still possible to get away with failing to correct the discredited studies. So today the thing that will get you banned is to say that the discredited studies should be corrected. The line has moved. But the basic impulse — stop the deeply painful stuff from appearing on people’s computer screens — remains the same. There is still a Ban in place. But the line at which the Ban comes into effect has moved because the Buy-and-Holders have acknowledged the reality that every publication in this field has acknowledged that the 4 percent rule is pure and complete garbage with nothing whatsoever to support it.

The debate that is going on in the thread to which you point is a good one. People can learn about both sides from reading it. But the Valuation-Informed Indexers are holding back in that thread. Most of the Valuation-Informed Indexers posting on that thread know that I was banned because I posted honestly at that board. Why don’t they say that? That goes to the integrity and confidence of the Buy-and-Holders and integrity and confidence are huge issues that everyone listening in needs to know about. They know that Mel Linduaer has a long history of resorting to threats of physical violence to silence posters who make points to which he does not have a good response. Why don’t they point that out on the thread? They know that you Goons threatened to get Wade Pfau fired from his job if he continued to do honest research. Why not say that? They know that Jack Bogle permits his name to be used at that board even though he has known for years that it is a corrupt enterprise. Why don’t they say that?

They don’t say it because they know they will be banned if they do say it. That’s the only reason. It is intimidation, nothing else. The Bogleheads Board is ruled by intimidation. The entire reason why they had to move the board from the Morningstar site is that there were limits to the intimidation tactics that they could employ at the Morningstar site and they needed to have those limits removed to have any hope whatsoever of continuing to “defend” the Old School retirement studies.

Buy-and-Hold cannot be defended in reasoned and civilized debate. It is impossible. There is now 34 years of peer-reviewed research showing that it is garbage, it was all a mistake that should have been corrected many, many years ago. So we see nasty stuff in discussions of Buy-and-Hold that we do not see in discussions of any other topic discussed on the internet. The issue of whether Buy-and-Hold can ever work is of huge importance and there is precisely zero reason in the peer-reviewed research to believe that it ever could work. So we have seen an act of financial fraud bigger than any earlier act of financial fraud in U.S. history to cover up the 34 years of peer-reviewed research.

I want no part of it, Dizzy. If you were thinking clearly, you would not want any part of it either.

You feel that you cannot give up the intimidation tactics because they are the only thing keeping you out of prison today. But the deeper reality is that the length of your prison sentence will be determined by how many middle-class lives you destroy and there are thousands more lives destroyed each day that the Ban remains in place. We are on the same side. I am trying to get your prison sentence reduced by bringing the Campaign of Terror to a full and complete stop by the close of business today. And on some level of consciousness you would like to see your prison sentence reduced. You just cannot bear to accept ANY prison sentence! That’s the Goon part of your talking. And, unfortunately, the Goon part of your personality is dominant today.

I’ll be there for you whenever you are ready to accept my help. My offer of charity is not a limited-time offer.

I will never say that John Greaney’s retirement study contains am adjustment for the valuation level that applies on the day the retirement begins. That’s financial fraud. Financial fraud is a felony. That means prison time. Going to prison is not on my bucket list. Find someone else. No can do. I can’t go for that.

I hope that helps a bit.

My best and warmest wishes to you and yours, Dizzy.

Rob

“Intelectual Points Are a Secondary Consideration for Everyone on ‘the Other Side.’ Their First Concern Is Staying Out of Prison. How Am I Supposed to Persuade People in Those Circumstances? We Could Adopt an Amnesty. But I Cannot Adopt an Amnesty on My Own. I Have to Wait for Some Others to Step Forward.”

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

Intimidation? You mean like when someone threatens you with prison because they don’t do what you want?

I’m not threatening you with prison, Anonymous. I am offering to do whatever is in my power to help get your prison sentence reduced. There’s a big difference.

You have to take a step back and look at the history to understand what is going on here.

I am opposed to Buy-and-Hold, right? I have two problems getting Valuation-Informed Indexing on the map. One is that the Buy-and-Holders don’t believe in it. That’s a problem but not an insurmountable one. In theory, the way to overcome that problem is to convince enough people of the merits of Valuation-Informed Indexing to take on the Buy-and-Holders at every board and blog on the internet. Eventually, the better ideas would prevail. Right?

One big problem with the usual approach is that the Buy-and-Holders are so ruthlessly abusive. They will do ANYTHING to stop people from learning about the implications of the past 34 years of peer-reviewed research. That makes my job a lot harder. But even that does not make my job impossible.

There’s a way in which the Ban on Honest Posting cuts in my favor. It creates a huge OPPORTUNITY for those who jump on the VII bandwagon first. Bogle is famous today because he was one of the first to push Buy-and-Hold. You would think that someone like Wade Pfau would want to become as famous as Bogle and so would lead the VII cause today. Why doesn’t he?

A big problem here is cynicism. People see things in black and white. Either Bogle is the greatest genius who ever lived and is incapable of ever making a mistake. Or else he is the Frank Underwood of Personal Finance, the most corrupt person who ever lived. The Buy-and-Holders believe he is the former. Those who lose confidence in Buy-and-Hold usually fall into the trap of believing the latter. They adopt the cynical view that Bogle (and the other Wall Street Con Men) are 100 percent corrupt. Thus, they conclude that it is just too risky to take them on. They satisfy themselves with including BITS of honesty in their work. They don’t tell the full truth known to them but they tell more truth than most others and are able to live with themselves by rationalizing that that is the best that can be done given the circumstances that prevail.

I DO NOT SHARE THIS CYNICAL VIEW.

I believe that Bogle really believes what he says about stock investing on one level of consciousness. He knows that Shiller’s research is a threat. He would have to be a moron not to see that. But he tells himself that Buy-and-Hold is as close to what works that we are ever going to get and that that is good enough. He compares it to other stuff out there and rationalizes that he is helping people by advocating Buy-and-Hold.

Why do I believe in this non-cynical interpretation of events? I have had a front-row seat to all of this for 13 years now. I have been able to see up close and personal how people develop their various rationalizations. No one else has the level of experience with this aspect of the question. I am truly the world’s #1 expert on this side of things.

Greaney’s study was an advance. He said that the safe withdrawal rate was 4 percent when a lot of people were still saying that it was 7 percent. Heck! There was one guy at Motley Fool who once said that it was 15 percent! Greaney believed that his study served a good purpose by showing why people making such claims are wrong. He is the leader of the Campaign of Terror and he believes in his heart (on one layer of consciousness) that he is going good.

If Greaney believes that, why should anyone conclude that Bogle thinks anything less? Bogle is not The Frank Underwood of Personal Finance. He is a good and smart and hard-working person who happened to make a mistake, fell victim to cognitive dissonance and thereby found himself in a trap that he cannot figure out how to escape.

I had many conversations with Mike Piper before he banned me from his site. Mike told me that he believes that Valuation-Informed Indexing can work. I reported on my conversation in a blog entry from a number of years back. Mike does not follow VII himself. He is a Buy-and-Holder. So he properly advocates Buy-and-Hold at his site. But he does not permit discussion of the last 34 years of peer-reviewed research at his site. That’s a strange reality. We need to solve that puzzle.

I figured out the answer to that one when you Goons threatened Wade and got him to flip. You had committed felonies long before that. I hadn’t mentioned prison sentences before that because I believed that it would just inflame things all the more. But I saw when you threatened Wade that, once you committed the felonies, you reached A Point of No Return. Once you passed that point, you felt that you would go to prison no matter what you did. So it didn’t much matter anymore what you did.

You now felt compelled to do things that you never would have dreamed of doing in the early days. In the early days, you fought because you cared about what was right and you thought Buy-and-Hold was right. Once you committed felonies, all concern about what was right went out the window. Now it was about staying out of prison. Even research showing how we all can reduce the risk of stock investing by 70 percent was not going to cause you to come clean once coming clean meant going to prison.

There is no way out of the trap you are in today. If you come clean, you still go to prison! Not for as long, obviously. But prison is not appealing for even one day. So you are not interested in coming clean. I want you to come clean. But seeing that it means prison for you, I can’t say that I don’t see at least a tiny bit of logic in your position.

Given that you cannot come clean, it doesn’t make much sense for me to hold back from talking about the felonies. It doesn’t matter how much I inflame you anymore. You are not open to coming clean no matter what I say.

The next step down the logic chain was to realize that it is the same for Jack Bogle and all the other Wall Street Con Men. Jack would come clean in two seconds if it were a question of going back to 1981 and playing it straight this time. The problem is that he does not have that option available to him.

If Jack comes clean, people are going to ask why he didn’t come clean in 1981. They are going to ask why he caused an economic crisis. They are going to ask why he caused millions of middle-class retirements to fail. They are going to ask why he did nothing when he learned that Mel Linduaer uses threats of physical violence to keep people in line at the Bogleheads Forum. What is he going to say? What good answers are there to such questions?

You Goons are in a trap. And Bogle is in a trap. And Mike Piper is in a trap. And the Wall Street Jourmal is in a trap. And every academic researcher is in a trap. And Princeton University is in a trap. Wade Pfau received a doctorate in Economics at Princeton. He sure should not have had to come to me to learn how to calculate the safe withdrawal rate. His Princeton teachers should have taught him that. But they can’t. Because they are in the same trap that holds Bogle and Piper and you Goons and everybody else.

Our entire freakin’ society is in a trap!

Now –

The question is — What are we going to do about it? How do we get OUT of the trap?

We are not going to get out of it by people like me being mean to people like you, Anonymous. So I am happy to do absolutely anything in my power to help you out Anything. And you don’t have to do anything in return to persuade me to do it. I ask for nothing. I just want to help you. And I want to do it for free.

There’s only one hitch.

I want to get us all out of this trap.

If I don’t get us all out of the trap, you end up in prison. So that’s not helping, is it?

And if I don’t get us all out of the trap, Bogle never gets credit for the amazing work he has done, does he? Bogle never intended to cause the biggest economic crisis in our nation’s history. But unless we get out of this trap, that’s what he will be known for for decades to come. I love the guy. So I need to get him out of this trap as much as I need to get you Goons out of this trap.

And of course I need to get Wade out of the trap. And I need to get the Wall Street Journal out of the trap. And on and on and on and on and on.

We are not arguing intellectual points anymore. Intellectual points are a secondary consideration for everyone on “the other side.” Their first concern is staying out of prison and avoiding legal liabilities. What the heck am I supposed to do about that? How am I supposed to persuade people in those circumstances?

One possibility is that we could adopt an amnesty. I have no problem with that. My aim is to be able to tell millions of middle-class people about the first true research-based investing strategy, a smart and simple and safe way to invest in stocks. If adopting an amnesty gets us there, why would I object? I am fine with that.

But I cannot adopt an amnesty on my own, can I?

When there are enough powerful people working together to get an amnesty adopted, I will help out. I cannot do it on my own. I have to wait for some others to step forward. That’s where things stand.

For now, it would be cruel of me not to mention the prison sentences. Because the lengths of the prison sentences increase each day. I want the prison sentences to be as short as possible for all sorts of reasons. So I am bound in conscience to continue mentioning them. Even though I do not personally believe that it is going to make much difference. I think that the game-changer is going to be the next price crash. When the crash comes, I want to be able to show people that I at least mentioned the prison sentences on hundreds of occasions. I want to be able to show people that I at least tried.

If you have any bright ideas, please feel free to share them, Anonymous.

Otherwise (and I know that the reality is otherwise — I have been wracking my brain for a long time to come up with any ideas that help us all out of this mess in which we find ourselves), we just have to wait until the crash comes and see how people react to it. Then I believe the chances are good that constructive and helpful and life-affirming things will begin to happen.

My best and warmest wishes to you and yours, my long-time Goon friend.

Rob

“You Say That I Stalk Women. You Say That I Use Drugs. You Say That I Am Stupid. You Say That I Manage My Money Poorly. You Say That My Wife Has Left Me. You Say That My Parents Were Alcoholics. You Say That I Am a Bad Father. You Say That I Am a Liar. You Say That I Am Jealous of Lindauer and Greaney and Bogle. If You Didn’t See the Importance of People Liking Someone Who Is Trying to Convince Them of Something, You Wouldn’t Focus All of Your Efforts on Personal Destruction.”

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

“It is important because friendship is the prerequisite to learning.”

No. It’s not.

People learn all the time from sources that are not their ‘friends’, or even friendly! Your entire premise is ridiculous.

I don’t think it is ridiculous, Anonymous.

I am a conservative. At earlier times in my life, I was very much a liberal. I still have sympathies for a good number of liberal ideas.

Bill Maher often says things that rub my fur the wrong way. I don’t follow him. But there have been several times when I have heard him quoted saying things that make me feel that he is not worth following. That’s the REASON why I don’t follow him.

Yesterday he made some strong statements against these people who killed the satirists in Paris. The pitch he made is that “my position is the true liberal position.” I don’t agree 100 percent with everything Maher said. But I agree 90 percent. I certainly felt that he was speaking for me when he said what he said.

Am I “friends” with Maher? Not really. I don’t follow the guy. I would give a thumbs down to Maher in a general sense rather than a thumbs up.

But I felt drawn to him when he was saying the words he said yesterday. I don’t think it would be unfair to say that I felt “friendly” (in a small and limited way) toward him while I watched the video clip of him saying his words.

Marketers are in the business of persuading people. They study what is required. Any marketer will tell you that people don’t buy from people that they don’t like. The first step in making a sale is getting the customer to like you. The won’t sign on the dotted line until they study all the specifications and determine that the deal makes sense for them. It’s not all about being friends. The intellect kicks in at some point before most efforts at persuasion are complete. But it is emotion that leads the way. People won’t even look at the specifications until they decide they like you.

As a general rule, people only buy from people they like. People want to feel safe before they buy. They don’t feel safe around people they don’t like. This is true not just in sales of products and services. It is true in politics. There were Democrats who voted for Reagan. They liked him. There were Republicans who voted for Clinton. They liked him. Convincing someone that you care about them is the first and most important step in any effort at persuasion.

Shiller published his revolutionary research 33 years ago. The Buy-and-Holders have failed to incorporate that research into their strategy for over three decades. Why?

It’s not that the Buy-and-Holders are not intellectually capable of understanding the implications of Shiller’s research. I have never met a dumb Buy-and-Holder. They are 100 percent capable. The problem is that they do not hear people they like making the case for the Shiller model (Valuation-Informed Indexing).

Todd Tresidder is the smartest blogger in the personal finance field that I have met. Todd agrees with me about the importance of valuations. The Buy-and-Hold Mafia has not targeted Todd for career destruction as it has me. Why?

Todd keeps to his own kind. He offers powerful insights re how to invest effectively that are rooted in the peer-reviewed research of the past 33 years. But Todd does not present those insights at the Bogleheads Forum or at any other discussion board or blog dominated by Buy-and-Holders. People like him and so he is successful. But he poses only a small threat to those promoting Buy-and-Hold strategies because he doesn’t post at boards and blogs that they control and so the Buy-and-Holders are not concerned that Todd is going to become well-liked and thus effective at “their” boards and blogs.

I don’t limit myself in the way that Todd does. I want every investor on Planet Earth to learn about Valuation-Informed Indexing. I am 100 percent happy to post at boards and blogs dominated by Buy-and-Holders. So I pose a MAJOR threat to those promoting Buy-and-Hold strategies.

I don’t just post about the last 33 years of peer-reviewed research. I am likable. I know this is so because THOUSANDS of my fellow community members have told me so. Those trying to promote Buy-and-Hold strategies obviously see me as a threat. They know that, if they abide by the published rules of the sites at which I post, I will become more and more well-liked over time and the community members of those sites will listen to my message in a fair-minded way and a lot of them will be won over by it.

You Goons have been attacking me for 12 years now. Never has there been a single attack rooted in peer-reviewed research. Every attack that you have put forward has been aimed at getting people not to like me. You say that I stalk women. You say that I use drugs. You say that I am stupid. You say that I manage my money poorly. You say that my wife has left me. You say that my parents were alcoholics. You say that I am a bad father. You say that I am a liar. You say that I am jealous of Lindauer and Greeney and Bogle. And on and on and on.

If you didn’t see the importance of people liking someone who is trying to convince them of something, you wouldn’t focus all of your efforts on personal destruction. You would address issues. You know that people will only listen to someone whom they like. So you focus all of your efforts on destroying me as a person rather than addressing the very important substantive issues that have been put on the table.

Buy-and-Hold failed 33 years ago. The only thing keeping it alive today is these personal attacks. Many people still like the Buy-and-Hold advocates because they have not yet suffered all the losses that the peer-reviewed research in this field shows that they will suffer as a result of their decision to follow this “strategy.” I win every debate on the merits. But you Goons win on the likability matter because there are more of you and because you all act in a united way and because you employ tactics that those of us who follow research-based strategies are not willing to employ.

A nation of investors needs to learn who its true friends are. That’s what this all comes down to. I believe that people will begin to see following the next price crash that the Buy-and-Holders are true experts in only one area — Marketing. Get Rich Quick/Buy-and-Hold sells. But Get Rich Quick/Buy-and-Hold never works in the long run. Research-based strategies work in the long run. Once large numbers of people start to question their friendship with the Wall Street Con Men (a friendship that has been built and maintained with a mountain of deceptions and intimidations), we will be able to have a national debate on the MERITS. We will be able to talk about the last 33 years of peer-reviewed research says and that will change everything.

Humans need to feel some feelings of friendship with those with whom they are engaged in conversations to have any hope of learning from those people. I feel friendship toward you Goons. So I learn from you all the time. But you feel a burning hate toward me. So my words just bounce off you. Things will change in a positive direction when the next price crash breaks your excessive pridefulness and we are all able to begin LEARNING from the other fellow.

That’s what our boards should be about. That’s why we have rules at every board and blog prohibiting your Goons tactics. That’s why we have laws making financial fraud a felony with a penalty of prison time for those who will not accept the constraints that these laws impose on their behavior.

My sincere take.

Rob

“People Don’t Shift to a New Model Because They Are Exposed to Some ‘Information’ About It. Conversion Is a More Gradual Process. People Need to Be Permitted to Talk Things Out. With LOTS of Different Proponents of the New Idea. They Need to Be Able to Challenge Those People, To Ask Lots of Hard Questions. They Need to Be Able to Watch to See the Extent to Which Friends of Theirs Are Convinced Over Time.”

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

What new information do you have that you believe people have not already heard from you?

That’s a super great question, Anonymous.

It’s not information that people need. Everything that I say is rooted in information supplied by Shiller back in 1981. People can hear the phrase “valuations matter” 10,000 times and not have it have any influence on how they invest.

What people need is discussion. People need to talk these things through.

And people need exploration. Most people do not today appreciate the many far-reaching implications of the finding that valuations matter. One of the reasons why I posted so frequently is that the finding that valuations matter affects every strategic question that comes up in stock investing. I want to show people that this advance in our knowledge changes everything we once thought we knew about how stock investing works. It is not a single information bit that I am supplying. It is an entirely new way of thinking about the stock investing project. People can only come to appreciate how important this is if Valuation-Informed Indexers show them how it applies in hundreds of different circumstances.

And people need multiple sources of confirmation of the insights. I am not going to be the only one posting about Valuation-Informed Indexing in days to come. We need to have THOUSANDS of posters doing this. People are just not going to believe what one person says and for good reason. We need to hear Bogle comment on VII. And Bernstein. And Burns. And on and on and on and on.

Those people are not going to offer only positive comments. That’s good. People will not learn from hearing only positive comments. People need to hear positive comments from posters who believe that positive comments are warranted. And people need to hear negative comments from posters who believe that negative comments are warranted. That’s how learning experiences work. We need a National Learning Experience re the last 33 years of peer-reviewed research in this field and re how the findings of the post-1981 research relate to the findings of the pre-1981 research (which also contains many powerful insights, to be sure).

Do you see?

There was a fellow named “Earnabuck” at the Bogleheads Forum when I posted there. He didn’t agree with most of my investing ideas. But he was a big defender of mine because he believed strongly that all posters should be permitted to post their sincere views. He said one time that he was present for the Motley Fool discussions and that at the time he agreed with Greaney but that over time he had come to agree with me that the valuation level that applies at the time the retirement begins must be taken into consideration in the calculation of the safe withdrawal rate.

That was an amazing statement.

The guy was obviously not biased against me. So when he agreed with Greaney, he was not being a Goon. And the guy was obviously smart. So why couldn’t he appreciate the simple point that I made on the morning of May 13, 2002, within one or two hours of the time I made it?

He couldn’t. That’s clear beyond any reasonable doubt.

The point is a painfully simple one. The price you pay matters when buying stocks just as it does when you buy anything other than stocks. Could anything be more obvious? But this guy really did not get it for a long, long time. It took him YEARS.

We do not lack for information, Anonymous. That is not our problem. Humans are not information processing machines. That’s not how they operate.

We need to talk about this stuff. Openly. Honestly. Bluntly.

We need to be friendly to those on “the other side.” We need to be respectful.

But we MUST all say what we truly believe. That’s how humans learn.

I could talk about this aspect of the question for a long, long time. So I am going to stop there unless you ask further questions.

But the question you are asking here could open all sorts of doors if you would ponder the matter a bit.

You Goons are not bad people. I do not say that.

The Wall Street Con Men are not bad people. I do not say that.

We all want the same things. We are all on the same side.

If you could LISTEN to what the other side is saying without so much defensiveness, you could learn some amazing things. In time you would come around.

Or not. I believe that you would come around. Perhaps I am wrong. If you did not come around, you would still gain from the experience. By letting the other side have its say and seeing that you were not persuaded, you would be confirmed in your current beliefs. You would over time become more confident in what you believe. Which is a big plus when you are following a strategy that you must stick with for it to work.

People don’t shift to a new model because they are exposed to some “information” about it. Conversion is a more gradual process. People need to be permitted to talk things out. With LOTS of different proponents of the new idea. They need to be able to challenge those people, to ask lots of hard questions. They need to ponder things over time. They need to be able to watch to see the extent to which friends of theirs are convinced over time. They need to try out different possibilities.

We have had the information we need for 33 years. Now we need to take it to the next step and start enjoying the big-time learning experiences that follow from it.

Rob

“It Is a Grossly Unfair Insult to the Authors of the Old School Safe-Withdrawal-Rate Studies to Say That They Did Not Consider the Effect of Returns Sequences When They Were the Ones Who Achieved That Huge Breakthrough That Advanced Our Knowledge of How Retirement Planning Works in a Very Big Way.”

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

Vanguard publishes article on 4% retirement rule. What ban?

http://vanguardblog.com/2014/11/07/the-4-spending-rule-20-years-later/

Where’s the discussion of the effect of the valuation level that applies on the day the retirement begins? That’s the error that caused the problem. She doesn’t even discuss that issue.

She says that the problem is that we are in a low-return environment today. The Old School studies took that into account. Greaney’s study too that into account. It is an insult to him and to all the authors of Old School SWR studies to say that they didn’t consider the possible that we might enter a time-period when returns would be lower. The entire point of all SWR studies is to identify the withdrawal rate that works in worst-case scenarios. Entering a bad return environment is obviously a bad-case scenario. So that is not the mistake that was made.

And she says that the studies failed to take the possibility of bad return sequences into account. Again, the Old School studies do that! It was the Old School SWR studies that taught us all the importance of considering return sequences. That was the gold in them. Before the Old School studies came out, people like Peter Lynch were saying that the SWR is 7 percent. The Old School studies put an end to that. It is a grossly unfair insult to the authors of the Old School studies to say that they did not consider the effect of returns sequences when they were the ones who achieved that huge breakthrough that advanced our knowledge of how retirement planning works in a very big way.

The elephant in the living room is valuations. There is 33 years of peer-reviewd research showing that the valuation level that applies on the day the retirement begins is the most important factor in determining the safe withdrawal rate. There is a Social Taboo against talking about this because 90 percent of the experts in this field have been ignoring this factor for 33 years after the peer-reviewed research showed that it is critical and in a not-small number of cases have engaged in financial fraud (a felony) to keep millions of middle-class investors from learning about the important of this factor.

I cannot change the history, Trebor. I love the Buy-and-Holders for their many positive contributions and I always will. Those contributions are real and important and are already written in the book and thus can never be negated. But the Buy-and-Holders are going to look very, very, very bad following the next crash when they try to once again explain away the realities staring millions of middle-class investors in the face.

Price matters when buying stocks just as much as it does when buying anything else. Ignore price and you get it all wrong. No matter how smart you are. No matter how much of a big shot you are.

Price matters.

That’s the future.

Either we acknowledge that as a society and stop with the death threats and demands for unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs or we all go down together. Those are the two options before us. We can enjoy the benefits of being the luckiest generation of investors that ever lived or we can see our economic system fail.

I am telling.

Not because I have some grudge against the Buy-and-Holders. Because I love them. Jack Bogle never wanted all his wonderful work to turn out this way. The woman who wrote this article never wanted her hard work to turn out this way. Not one person wanted this. Even Mel Linduaer and John Greaney never wanted this.

But here we are.

Every time another Buy-and-Holder tells another lie he or she makes it harder for all the others to acknowledge the mistake they made in 1981. The sooner you come clean, the shorter your prison sentence will be. Because the sooner you come clean, the sooner the millions of middle-class investors will be able to learn about the first true research-based investing strategy and the sooner we will be able to bring the Buy-and-Hold Crisis to an end.

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

My best and warmest wishes to you and yours and to all of my many good Buy-and-Hold friends.

Rob