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“I Am Required to Say That Bogle Was Made Aware of the Lindauer Matter By Numerous Posters at the Bogleheads Forum and Did Nothing About It. That’s a Stone Cold Fact and That Is What I Am Going to Say. Financial Fraud Is a Crime in the United States. That’s a Stone Cold Fact Too. The Act of Fraud Does Not Cancel Out the Many Good Things He Has Done. But It Is in the Process of Doing Very Serious Harm to Millions of People. So It Is Something That Everyone in the Nation Needs to Know About and Come to Terms With.”

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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 spoke to Bogle. He says that he is grateful for the show of support for Buy-and-Hold but wonders if going to prison for it might be taking things a bit too far.”

If you are still planning on sending Jack to prison, you better hurry up. The guy is 89 years old and probably doesn’t have too many years left.

I hope he lives forever. I love the man. I rate him as a Hero to the Middle Class.

It sure won’t be me sending him to prison. I have zero power to do any such thing and zero desire to ever acquire such power.

I will tell the story honestly. I am required to say that Bogle was made aware of the Lindauer Matter by numerous posters at the Bogleheads Forum and did nothing about it. That’s a stone cold fact and that is what I am going to say. Financial fraud is a crime in the United States. That’s a stone cold fact too. The act of fraud does not cancel out the many good things he has done. But it is in the process of doing very serious harm to millions of people. So it is something that everyone in the nation needs to know about and come to terms with.

I have learned many important things from Jack Bogle. There would be no Valuation-Informed Indexing without the many valuable contributions of Jack Bogle. I hope to be working closely with him in the days following the next price crash, when I am 100 percent certain that he will make a full and complete break with Mel Lindauer and with all those who have posted in “defense” of him. I think of Jack as a friend and always will.

I think of you as a friend too, Anonymous. I haven’t learned as much from you as I have learned from Jack Bogle. But I have indeed learned things from you over the years and I am grateful for that.

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

Bogle-Loving (But Not Financial Fraud Loving) Rob

Bogleheads Wiki Page: “The Primary Driver Behind Creation of the New Forum Was Acute Disruption at Vanguard Diehards Resulting from Morningstar’s Lax Moderation Policies”

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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:

From the Bogleheads wiki page:

“An independent and noncommercial Bogleheads Forum was established on February 19, 2007 by an individual with username Phoenix. The primary driver behind creation of the new forum was acute disruption at Vanguard Diehards resulting from Morningstar’s lax moderation policies.”

Acute disruption. Lax moderation. Wow, that sounds unpleasant. Unfortunately they provide no further details.

The fact that some Buy-and-Holders view it as “acute disruption” to tell people what the last 36 years of peer-reviewed research teach us about how stock investing works tells a tale, Anonymous.

The fact that even more Buy-and-Holders (MOST Buy-and-Holders) tolerate the sort of behavior that we have seen for 16 years now from that first group of Buy-and-Holders also tells an important tale.

Buy-and-Holders find discussion of the last 36 years of peer-reviewed research to be unpleasant because the last 36 years of peer-reviewed research DISCREDITS Buy-and-Hold. The real unpleasantness will arrive when you see your retirement portfolio reduced by 50 percent or more. I am the guy trying to spare you that unpleasantness. If the people who came before me had done the job, nothing that I have said would have come as any sort of shock. It came as a shock because too many people in this field are more concerned with being popular and thereby turning a quick buck than they are with telling people what they need to know to invest effectively for the long term.

I offer zero apologies. I believe that the last 36 years of peer-reviewed research in this field is legitimate research.

My best wishes.

Rob

“Set Up a Debate at the Bogleheads Forum. We’ll Make History.”

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

“I think Bengen is wrong. I think that I have a responsibility to say so.”

And so you do. Here, behind his back. But you won’t express your math-free gut-feel opinion in a comment section where he might see it. How is that living up to your responsibility?

No. I engaged in an e-mail conversation with Bengen a number of years back. I told him that I think he is wrong re safe withdrawal rates.

Set up a debate at the Bogleheads Forum. We can have Bengen there. We can have me there. We can have Bogle there. We can have Shiller there. We can have Greaney there. We can have Linduaer there. We can have Pfau there.

See how it goes. No death threats. No demands for unjustified board bannings. No thousands of acts of defamation. No threats to get academic researchers fired from their jobs.

We’ll make history.

Rob

“I Greatly Enjoyed the Time That I Spent at the Bogleheads Forum and Learned a Lot From the Experience and Made Lots of Good Friends. But I Was Not Willing to Say Either That the Buy-and-Hold Retirement Studies Contain Valuation Adjustments or That Such Adjustments Are Not Needed to Get the Numbers Right. So I Am No Longer Permitted to Post There….We All Learn More When We Permit Our Beliefs to be Challenged in Civil and Reasoned Discussions.”

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Set forth below is the text of a conversation that recently took place at the FinCon Community on Facebook:

Miranda Marquit: Also, I’m looking for a legit Boglehead. Any of you been (or still are) a Boglehead? Would like to know what it’s like to be on the “inside” as well as if there are some issues with being too fervent about it.

Doug Nordman: I’ve been a member of the Bogleheads forum since 2007, if that helps. I was also at the Vanguard Diehards forum with Morningstar when the first Bogleheads broke free to build a better forum. But I’ve never had any accounts with Vanguard or been to a Bogleheads’ meetup. Years ago I remember that Mike Piper had been to one.

The Bogleheads forum, like every forum, has its share of passionate zealots. It’s heavily moderated to stay on topic and avoid self-promotion, which its (remaining) members seem to prefer. Its wiki is also exceptional, and I’ve helped build out the military part of that.

It has a forum’s usual share of drama. It’s also produced several very good investing books and become a tremendous educational resource.

Tom Drake: Rob Bennett

Doug Nordman: Tom, I wouldn’t do that to Miranda.

Rob Bennett: Miranda knows me. We are friends. I am friends with Tom as well. And it has always been my hope to be friends with all Bogleheads (including you, Doug). The fact that some of my Boglhead friends do not view me as a friend is an unfortunate and sad reality.

Tom Drake: Miranda is looking for any issues, so I thought Rob would be a good addition to her post.

Rob Bennett: If I were asked by Miranda or anyone else about the Bogleheads Forum, I would say that it is an amazing resource populated by lots of smart and good people that has unfortunately suppressed discussion of the far-reaching implications of the 36 years of peer-reviewed research in this field showing that valuations affect long-term returns. I greatly enjoyed the time that I spent at the forum and learned a lot from the experience and made lots of good friends. But I was not willing to say either that the Buy-and-Hold retirement studies contain valuation adjustments or that such adjustments are not needed to get the numbers right. So I am no longer permitted to post there. It is my belief that I am not the only one who lost out as a result of that decision. Everyone who participates at the board lost out on a great learning experience. We all learn more when we permit our beliefs to be challenged in civil and reasoned discussions.

 

“One of the Things That I Love About the Bogleheads Forum Is That Implications of Bogle’s Ideas Are Being Teased Out There on a Daily Basis. Bogle Got the Ball Rolling re Those Ideas. But Then Others Came Along and Applied Them in New Ways. Bogle Teaches Others and Then Others Teach Bogle. The Same Thing Will Happen With Shiller As We Permit Discussion of His Ideas at More Places.”

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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:

Below is what Shiller is saying today.

“Spooky valuation story No. 1: The Shiller P/E ratio is now at 30.8, higher than it was right before the 1929 market crash.

The only time it was higher was right before the 2000 dot-com market meltdown, as you can see here. That does sound scary!

Especially when you consider that this valuation metric was invented by a Nobel Prize winner and Yale University professor Robert Shiller, who wrote The New York Times best-seller “Irrational Exuberance.” That’s an impressive list of credentials. He’s smarter than you and me, or at least me anyway, so his P/E ratio formula has to be right, no?

Not so fast. I checked with Shiller, and even he disagrees with this one. Shiller tells me he’s still got money in the U.S. markets, though he has been tilting toward Europe and emerging markets, in part, because they look cheaper. “For the immediate future, I am not that bearish,” says Shiller. “I am not thinking that the U.S. is a disaster.”

Shiller cites two reasons you shouldn’t buy the scare story that bears are concocting from his famous valuation metric. First, as many Shiller P/E commentators like to point out, Shiller says his P/E ratio is not a good predictor of short-term market moves, meaning one or two years. Instead, it’s better as a 10-year predictor. But even here, it’s not forecasting dire news. It’s still predicting gains over the next 10 years, even if they’re modest, says Shiller.”

So, Rob, what gives? Shiller says we shouldn’t buy your scare story. Not only is he not warning “divide your portfolio by two”, he’s still in the market himself. Doesn’t Shiller understand the last 36 years of peer-reviewed research? Doesn’t he understand his own research? If Shiller isn’t on your side, who is?

I don’t see any conflict between what I say and what you quote in that comment, Anonymous.

I certainly believe that you need to divide by two to know the true, lasting value of your stock portfolio. That’s what it means to say that stocks are priced at two times fair value.

But I certainly do not think of myself as a bear. I think of myself as someone who uses the peer-reviewed research as a guide to how to invest in stocks. I don’t see anything bearish or bullish about using peer-reviewed research as a guide.

I certainly agree that most investors should have some money in stocks today. But I certainly do NOT believe that most investors should have the same stock allocation today as they would have at a time when stocks are priced reasonably. If Shiller is saying that investors should go with the same stock allocation at all times, then we do indeed disagree. There’s a tiny bit of a suggestion of that in the words you quote. But I don’t think he says that. My take is that he is dancing around the issue. He doesn’t want to address the issue clearly because he knows that the Buy-and-Holders will go nuts if he does. So he offers some words that cut one way and some words that cut the other way.

I don’t quite agree with the fellow who is saying that Shiller’s words have credibility because he is “smarter than you or me.” Shiller is plenty smart. But Bogle is plenty smart too. If the test is which group has higher I.Q.s, I would feel comfortable with the Buy-and-Holders, there are plenty of smart people on that side of the table. I go with Shiller because he has 36 years of peer-reviewed research supporting him. That’s the biggie for me. The other biggie for me is that what Shiller says is consistent with what common sense tells me — price matters with everything else I buy so I have a hard time ignoring it when I buy stocks. Shiller is plenty smart but I wouldn’t say that that is the sole thing that makes him so persuasive for me.

I don’t like it AT ALL when Shiller says “for the immediate future, I am not that bearish.” Yucko! That one makes my blood run cold. He says this kind of thing all the time. He is saying here that he thinks that he can look at some sort of signal and identify the right time to get out of U.S. stocks. I am with the Buy-and-Holders re this one. I don’t believe that short-term timing works and I find it embarrassing when Shiller indicates that he believes in it. I believe that Shiller’s official position is that short-term timing doesn’t work but I have seen him refer to “indicators” and his confidence in them on many occasions. Nobody’s perfect and this is a case where my take is that Shiller is saying something that is outright foolish. I don’t see it as a super big thing. But I find it more than a little perplexing given how smart he indeed is. It shows once again that smart people get them wrong all the time. Being smart is a plus but it is not enough.

I don’t think that the U.S. is a disaster. I wouldn’t be looking around for undervalued markets. It can make some sense to do some of that. But my personal view is that the U.S. is a well-established market with a great track record. I think you can outsmart yourself trying to look for other markets at times when the U.S. market is insanely overpriced. My inclination would be just to lower your allocation in the U.S. market for a time.

I of course agree that P/E10 does not predict short-term returns. I agree that today’s P/E10 predicts a positive return over 10 years. But it predicts a very low positive return. If you are happy with a very low positive return and you understand that that’s what you are likely to get, a high stock allocation can work for you. But I think it makes more sense to go with a lower stock allocation today and then move to a high stock allocation when prices fall and the 10-year return going forward is much higher. Stocks have been providing a poor (about 2.25 percent) return for 18 years now. Most people cannot go for years and years with such a low return. People invested heavily in stocks have now lost out on close to two decades of compounding. What the f? Most people rely on compounding to meet their goals. Miss out on two decades of compounding and you are not going to make it. I think that the likely 10-year return at today’s P/E10 level is too low to be acceptable for any more than a small percentage of one’s portfolio.

I don’t have any “Scare story.” I have a research-based story. I think we should permit honest posting re the last 36 years of peer-reviewed research at every site on the internet. I see it as a win/win/win/win/win.

I do think that to some extent it would be fair to say that Shiller does not appreciate the implications of his own research. I don’t think there is anyone who ever lived who was able to appreciate all the implications of his own ideas. People learn from discussions with other humans. When we open every site on the internet to honest discussion of Shiller’s research, Shiller will hear lots of things that he has not heard until now. That will help him come to a better understanding of the far-reaching implications of his work. That will be a very good thing.

I don’t think that Bogle understands all the implications of his many powerful insights either. One of the things that I love about the Bogleheads Forum is that implications of Bogle’s ideas are being teased out there on a daily basis. I would bet $10 that, if you asked Bogle if he has ever read anything at that board that he did not think up himself, he would say “yes.” That’s super groovy, so far as I am concerned. Bogle got the ball rolling re those ideas. But then others came along and applied them in new and interesting and exciting ways. A win/win/win/win/win. Bogle teaches others and then others teach Bogle. I think that’s great. And I think that the same thing will happen with Shiller as we permit discussion of his powerful ideas at more places.

Shiller is on my side. So is Bogle. So is every American citizen. We acted as a people to make financial fraud a felony in the United States. I don’t know how anyone could be more on my side than to do that. If you asked Mel Lindauer or John Greanry on May 12, 2002, whether they thought that there is a place in investing discussions for 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, they would have said that there is no place for such garbage. They changed their minds under pressure. Humans do not always act rationally under pressure. But there is no problem here of the entire country not being united in opposition to the tactics that we have seen advanced by the Lindauerheads and the Greaney Goons over the past 15 years. We are entirely united. I mean, come on.

Everybody is on my side. But this has been a difficult transition. It hurts people to hear that they need to divide their portfolio balances to know the true and lasting value of their stock holdings. When people are hurt, they forget their true beliefs. This is something that happens with the humans all the time. I am 100 percent certain that we will all get things back on the right track in the days following the next price crash. Once there is no more need to divide by two, the marketing edge that Buy-and-Hold possesses today will disappear.

Or so the greatly flawed brain of Rob Bennett believes, you know?

I could be wrong, Anonymous. That’s the wild card here.

I naturally wish you the best of luck in all your future life endeavors.

Rob

“No One Has to Take My Word re Death Threats or Anything Else. A Simple Test That People Can Run Is to Go to the Bogleheads Forum, Point Out That There Are No Valuation Adjustments in the Buy-and-Hold Retirement Studies and See What Sort of Reaction Follows.”

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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:

And your “unique” interpretation of events, research, etc have all led to your conclusion that you will be given $500 million and we should also just take your word for it regarding death threats, etc.

My interpretation is not unique. Shiller was awarded a Nobel prize for his work. His book was a best-seller. There have been thousands of people who have expressed a desire that open discussion of Shiller’s work be permitted at every site on the internet. The Valuation-Informed Indexers are a minority. We are about 10 percent of the population of investors and Buy-and-Holders are about 90 percent. But 10 percent of the population of investors is millions of people.

There are things that I have said that have not been said by others. Shiller doesn’t talk about what his “revolutionary” (his word) findings mean in a practical how-to context. He just sticks to theory. I address the how-to-invest aspects of the question. I feel that it would be silly of me to address how-to questions pursuant to the Buy-and-Hold theory since I believe that theory to be in error. I saw a huge opportunity to address questions that have never been addressed before, so I acted on it. I’d like to see lots and lots of others doing the same. The more who get involved, the more we all will learn.

I of course acknowledge that $500 million is a lot of money. But when you consider what is at stake here, it is not a large number at all. I have spoken to numerous academic researchers who are afraid to do the work they think they should be doing because their findings will upset the Buy-and-Holders. I have spoken to numerous professors who told me that they would be using my web site as a teaching tool because they see how important it is to get these ideas out. We all benefit when researchers and teachers do good work. I think it would be fair to say that we stand to benefit to the tune of a whole bunch more than $500 by me getting the word out re this stuff and bringing more people in to explore and write about the Valuation-Informed Indexing concept.

No one has to take my word re death threats or anything else. A simple test that people can run is to go to the Bogleheads Forum, point out that there are no valuation adjustments in the Buy-and-Hold retirement studies and see what sort of reaction follows. I had a friend of mine who used to argue with me about this stuff notice an article in the Wall Street Journal saying that the Buy-and-Hold retirement studies get the numbers wrong because they don’t include valuations adjustments. So he called me and asked how it felt to be vindicated. I said that it felt fine. He asked me if all the boards that had banned me in earlier days had now welcomed me back with open arms. I said not by a long shot. He said that he couldn’t believe that. I suggested that he try going to the Bogleheads Forum and mentioning the Wall Street Journal article and see what happened. He was banned in about two minutes.

Those who want to believe in Buy-and-Hold can tell themselves all sorts of stories and continue to believe. The human is the rationalizing animal. Those who want to figure out what is really going on can easily confirm what I have said.

I wish you all good things, Sammy.

Rob

Buy-and-Hold Goon to Rob: If PE10 Is Everything, Why Didn’t Its Father Mention It in That Article? Why Is He Now Giving the Exact Same Advice as Buffett, Bogle, and All the Bogleheads? It’s Almost As If He Was Embarrassed by PE10. Face It, Rob. Shiller Is a Buy-and-Holder. The War Is Over.”

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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:

“We don’t feel a need to beat the market, just to match it.”

You could have done that 20 years ago by buying an index fund, and saved yourself several million words of typing.

If PE10 is everything, why didn’t its father mention it in that article? Why is he now giving the exact same advice as Buffett, Bogle, and all the Bogleheads? It’s almost as if he was embarrassed by PE1o.

Face it Rob. Shiller is a buy-and-holder. The war is over.

I couldn’t do that 20 years ago because stocks were not available for sale at a reasonable price. I would prefer that stocks ALWAYS be available at reasonable prices. If we opened up the internet to honest posting on the last 36 years of peer-reviewed research, we would be there. But we do not today live in a world where honest posting on the last 36 years of peer-reviewed research is widely tolerated. The reality is what it is whether I approve of it or not.

Shiller should have mentioned P/E10 in the article. I am 100 percent with you re that one, Anonymous. All of the points he makes are legitimate. There is nothing wrong with the words that he put forward. But it is weird for him to put those accurate words forward without also including a discussion of the valuation-related aspects of the question. I think you are right on re that observation.

I cannot see into his mind. I can speculate as to what is going on. But I cannot say with certainty.

I don’t know if I would go quite so far as to say that Shiller is giving the exact same advice as Bogle. But I agree with you that what he is saying sounds close to what Bogle is saying. He is certainly not doing much to highlight his differences with Bogle. I can see how someone who read only that article could think he has no major differences with Bogle. I have lots in common with Bogle but I don’t think that anyone would say that about me. I highlight the differences, Shiller does not. That’s a perfectly fair assessment, in my view.

I don’t think that Shiller is embarrassed by P/E10. I think that he doesn’t want to be slammed and he has learned from bitter experience over the years that being too clear in one’s statements re what the last 36 years of peer-reviewed research shows leads to one being slammed pretty darn hard. I think your statement that “it’s almost as if he was embarrassed by P/E10” is a fair one. The behavior is exceedingly odd. I don’t think that deep down he really is embarrassed of his life’s work. But I think it is fair to say that at times he gives that impression. It’s a strange way for someone who truly is the creator of the Valuation-Informed Indexing concept to spread the word re his “revolutionary” (his word) research findings. If it is all so revolutionary, why doesn’t he tell us more about the revolutionary how-to aspects of the question from his perspective?

I don’t think that Shiller is a Buy-and-Holder and I don’t think that the war is over. I obviously believe something quite to the contrary. But I cannot say that I fault you too much for saying this. I have won every battle we have fought on the content side and you have won every battle that we have fought on the process side. It’s a pretty darn big victory for you to be able to point to Shiller statements of this sort while also pointing out the absence of Shiller statements saying that what Bogle is saying is wrong and dangerous. If I were you, I would be pointing this out. I don’t quite agree with you. But I don’t think you are engaging in much distortion re this particular point.

If you really cared about your own long-term investing success, you would want to pin both Shiller and Bogle down to a far greater extent than they have allowed themselves to be pinned down thus far. That’s my comeback. Shiller is offering you a certain measure of happy talk. Are you going to let him get away with it? If you were thinking clearly, you would be holding his feet to the fire. You don’t do that. That tells me that you are worried that, if you tried to hold his feet to the fire, you would hear things that you very much do not want to hear.

So your position is ultimately a weak one. You have a temporary strength that you can use to get people like Shiller and Bogle to issue public statements that keep the fantasy going. Okay. But what do you do for an encore, you know? If the last 36 years of peer-reviewed research points to something real, prices are going to collapse and a lot of people are going to be angry about what happened to their retirement portfolios. People are going to be asking hard questions in those days and looking for real answers to them. Happy talk is not going to close the sale in those days. I have a mountain of real answers to offer them. I got off the happy talk road a long time ago.

It all comes down to whether people develop a desire to know the realities or not. If they do, I win. If they don’t, you win. That’s the bottom line, The desire is not intense enough today to overcome your abusiveness. But what about tomorrow? Will a price crash bring about a change? I believe that it will. I cannot see into the future. But I don’t feel comfortable being one more person generating a lot of happy talk. So I guess that I will just continue to walk this path that I have been on for the past 15 years.

I believe that Shiller will be singing a clearer and bolder tune in the days following the next price crash. But I cannot prove it. We will have to wait to see how things play out.

A few years back I talked these matters over with my priest. I supplied him with a summation of events and he asked me: “Have you considered contacting Shiller and asking for his help?” It’s a fair question, no? That’s pretty much the same point that you are getting at here, no? Shiller is the guy with the Nobel prize. One would think that he would be doing everything in his power to spread the word re the last 36 years of peer-reviewed research. But the reality is that he has never said “The Buy-and-Hold retirement studies get the numbers wildly wrong” or “Bogle’s investing advice is dangerous” or “It was the promotion of Buy-and-Hold strategies for decades after the peer-reviewed research showed that there is precisely zero chance that they could ever work in the real world that served as the primary cause of the economic crisis.” It hurts the cause that that is so.

I obviously would like to hear Shiller say all those things. What do you want me to do about it? I cannot force the man to say those things any more than I can force Bogle to say the things that I would like to hear Bogle say. There would be no Valuation-Informed Indexing without the contributions of Shiller and Bogle. So I obviously need to be supremely grateful to both of them. And I just have to accept that neither of them sees fit today to offer all the help that I would like to see them both offer. It’s not like I can do anything about it anyway, you know?

It wouldn’t surprise me to see Shiller publish a sequel to his Irrational Exuberance book in the days following the next price crash in which he reports on all the how-to implications of his research that he has held back commenting on through this day. I have no inside knowledge. But it would not surprise me to learn that he has already written the sequel and is just waiting for a time to publish it when he believes that the follow-up work will generate a good reception.

I want to read the sequel now, you know? I don’t want to wait. When it comes to learning what I need to do to invest my retirement money effectively, I am an impatient sort of fellow!

Rob

Buy-and-Hold Goon to Rob: “Over at Bogleheads.org, They Are Celebrating the 10-Year Anniversary of the Site’s Founding. As You Know, Your Behavior at Morningstar.com Played a Major Part in Creation of the Board.”

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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:

Over at Bogleheads.org they are celebrating the 10 year anniversary of the site’s founding. As you know, your behavior at morningstar.com played a major part in the creation of the board.

Feb. 19, 2017 is a very special day. It marks the 10th birthday of this Bogleheads.org forum.

Born out of frustration over the lack of moderation at our previous home, this moderated Bogleheads.org forum has been a remarkable success. Over the past 10 years, we’ve had over 3,000,000 posts on more than 200,000 topics. We now have nearly 57,000 members and about 10 times that number of guests (affectionately known as “lurkers”). Our viewer numbers are off the charts. We get more than 70,000 unique visitors per day from all around the world. The forum averages around 4,000,000 hits per day.

https://www.bogleheads.org/forum/viewtopic.php?f=9&t=211525&newpost=3246896

I’m grateful to you for providing us the link, Observer.

I am sure you understand that I do not agree with the thrust of the words quoted. I would say that there is great POTENTIAL value because of the 57,000 members and 570,000 (estimated) lurkers. Those people COULD be adding to the world’s knowledge of how investing works in a big way and it is certainly their intent and their desire to do so. But so long as fully honest posting on the implications of the last 36 years of peer-reviewed research is prohibited at the board, that potential cannot be realized.

In fact, the reality is just the opposite of the promised potential. So long as honest posting re the last 36 years of peer-reviewed research is prohibited, the board has a NEGATIVE influence. It does not help people learn how to invest effectively. It encourages them in the pursuit of their Get Rich Quick fantasies. The bigger the Bogleheads Forum is, the more harm it does, the more lives it destroys. And that will remain so for so long as fully honest posting re safe withdrawal rates and scores of other critically important investment-related topics remains prohibited.

This is as clear as anything could be clear to me, Observer. If the people running the Bogleheads Forum were thinking clearly, they would agree with me. If you asked them when they started the Vanguard Diehards board whether they believed that honest posting re the peer-reviewed research should be permitted, they would have said with zero hesitation that of course it should be permitted, that the question is an absurd one. They justified in their minds an exception to that belief when they were faced with my claim that it is not possible to calculate the safe withdrawal rate accurately without considering the valuation level that applies on the day the retirement begins and all of the ugliness that followed took place because they could not bear to live up to their own ideals. It was just too hard for them even to admit the possibility that their hero Jack Bogle had made a mistake when he failed to acknowledge the “revolutionary” (Shiller’s words) implications of Shiller’s finding that valuations affect long-term returns back when those findings became public back in 1981.

I believe that I possess a right and a responsibility to post honestly that must be respected at the Bogleheads Forum and at every other investing discussion board and blog on the internet. I believe that every one of my fellow community members, both my Valuation-Informed Indexing friends and my Buy-and-Hold friends, possess that same right and responsibility. I believe that it is a criminal act for me to fail to exercise that responsibility and for the site owners of the Bogleheads Forum to fail to respect that right.

I don’t believe that this one is a close call. I don’t believe that every act of financial fraud that has been revealed over the 15 years will be prosecuted because that would not be practical and because there is a mitigating factor of cognitive dissonance that applies (Bogle and the others who advocate Buy-and-Hold personally believe that it works). But still, in an objective sense it is a felony to insist that posters lie about the numbers that their friends are using to plan their retirements. I love my country and the relentless promotion of this dangerous and irresponsible lie has caused an economic crisis that has caused millions to begin to question their confidence in our system of government. So I don’t want to go there. Not in 15 years, not in 15 billion years. Re that one, my Boglehead friends are going to have to find someone else to participate at their board discussions (it appears from the words quoted above that they have been successful at finding quite a few someone elses).

I love my Boglehead friends, Observer. I wish them all good things. I agree with them on all issues other than the valuations issue and I believe that it is at least their intent to do good. But I cannot in good conscience participate in their discussions for so long as the Ban on Honest Posting re safe withdrawal rates and scores of other critically important investment-related topics remains in place. I believe with my heart , mind and soul that valuations affect long-term returns and that that reality (which has been known to those who follow the peer-reviewed research in this field for 36 years now) affects every issue considered at that board.

I cannot in good conscience put my name up in support of an enterprise that is in the process of destroying millions of middle-class lives and in an ultimate sense threatening the continued viability of the country that I love. I don’t believe that even a single one of my Bogleheads friends would participate in discussions held at that board if he or she were able to see clearly the things that I am able to see clearly because I have worked so hard for 15 years now to overcome the veil of cognitive dissonance that limits their vision today.

I love you guys, Observer. I wish you well. But we can not work together under the conditions that you insist on. I am not able to imagine any circumstance in which that could change.

I personally believe that conditions WILL change in a dramatic way following the next price crash. I believe that at that time we will come to be good friends. But I understand that there is nothing that I can say today that will persuade you that what I foresee happening will ever take place in the real world. So my only realistic option is to continue to do my best to get the word out re the implications of the last 36 years of peer-reviewed research at all places other than the Bogleheads Forum and to hope and pray that doing that successfully will in time generate pressure among responsible people in that board community to demand changes in the operation of that board My personal assessment at this stage of the proceedings is that my efforts will not bear good fruit until the days following the next price crash. But I will continue to give it my best shot. I can obviously do no more and I can obviously do no less.

I hope that all that helps a tiny bit, my long-time Goon friend. My best and warmest wishes to you and yours.

Rob

Buy-and-Hold Goon to Rob “It’s Easy to See Why You Have Been Banned from Boards. Take Bogleheads, for Example. It Bans Conspiracy Theories.”

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

“The only thing that should be banned are violations of the published posting rules.”

Well then, it is easy to see why you have been banned from boards. Take Bogleheads, for example. It bans conspiracy theories.

We’ll have to wait and see how things play out, Anonymous.

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

Rob

” Wade Pfau Was Afraid to Post at the Bogleheads Forum Because of the Abusiveness He Saw From You Goons Whenever I or Someone Else Discussed Shiller’s Research and the Many Important Implications That Follow From It. Wade Is in Very Good Company re His Fearfulness. Once We Send a Clear Message That It Is Safe for Everyone Working in This Field to Express His or Her Sincere Views, No One Will Be Holding Back.”

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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:

The paper doesn’t list me as co-author.

But that is certainly the role that I played. I didn’t go to Wade asking that he write a paper. He came to me because he had learned about Valuation-Informed Indexing by reading my posts at the Bogleheads Forum. He was afraid to post there because of the abusiveness he saw from you Goons whenever I or someone else discussed Shiller’s research and the many important implications that follow from it. So for about two years he just soaked up knowledge that he had never acquired when he was working on his Ph.D. at Princeton. He was the one who approached me and asked if I would be willing to work on the paper with him.

He felt that he did not even have the right to work on the paper if I did not agree. He said that he would give me 100 percent of the credit for the Valuation-Informed Indexing concept. He is obviously very well read in this field. And he said that he had never heard of anyone who had developed the concept in a way even approaching the degree to which I had developed it. We discussed scores of issues in e-mails that I have posted to my web site. There were several occasions on which he was amazed by what he learned from me. He would tell me that he was surprised by something that I said but then when he did research to discover the reality that what I said turned out to be correct. That happened enough times that he said that he had learned to assume that what i was saying was right because his skepticism about something I said had been answered so many times.

Wade wrote in the Acknowledgments section of the paper that: “The author is extremely indebted to suggestions and reading recommendations provided in the thread ‘Any Studies on Long-term Market Timing?’ at the Bogleheads Forum (www.bogleheads.org). Because market-timing strategies are specifically not part of John Bogle’s investment philosophy, the author wishes to thank without implicating users including Adrian Nenu, afan, alec, Alex Frakt, bob90245, cjking, crl848, dmcmahon, DP, grayfox, Les, lostcowboy, market timer, matt, Mel Lindauer, Norbert Schlenker, peter71, pkcrafter, Rodc, SP-diceman, tadamsmar, wearethefall, and yobria. I am also extremely grateful to Rob Bennett for motivating this topic and contributing his experience and encouragement.”

The thread to which he refers came into existence as a result of the 15-year Great Safe Withdrawal Rate Debate that began when I put a post to a Motley Fool discussion board asking whether a valuation adjustment is needed to calculate the safe withdrawal rate accurately. Not one person has been able to find a valuation adjustment in the Greaney retirement study (to which I referred in my Motley Fool post) or in any other Buy-and-Hold retirement study or in any other Buy-and-Hold retirement study in the 15 years of discussion that followed from that post. I have developed a funny hunch over the years that that might be because there is no valuation adjustment in those studies. Yet not one of the Buy-and-Hold studies has been corrected in the 15 years. Wade once asked the authors of the Trinity study to correct their study but was rebuffed.

Wade had zero problem acknowledging that I was the lead author on that study in the days before you Goons threatened to send defamatory e-mails to his employer if he continued to post his honest views about it. Again, the e-mails in which he expresses his fears of you Goons are posted at my web site. I have no problem with the acknowledgment he gave me in the study. It was perfectly appropriate and generous-spritied. I particularly liked it that he also thanked the Buy-and-Holders who participated in the debates that led to creation of the study; that was a very balanced and charitable and life-affirming way to approach things; that was typical of Wade’s behavior in those days.

I do NOT believe that Wade should have agreed to stop posting his honest views on safe withdrawal rates as a means of appeasing you Goons. I told him that that was an “insane” decision. We had planned to have that paper featured in a front page story in the New York Times. It merits that sort of treatment. Every investor alive needs to know how much valuations matter to long-term investing success. Wade is in a position to help advance the ball re these matters and I strongly believe that he should be doing all that he can do.

That said, Wade is in very good company re his fearfulness. I have mentioned in earlier comments here that I held back saying what I knew about safe withdrawal rate for three years because I was afraid of what you Goons would do to me if I dared to “cross” you in that way. That was shameful behavior. And of course there are lots of others who remain fearful today. Bogle is in that group. Shiller is in that group. Bernstein is in that group. Swedroe is in that group. And on and on and on and on and on.

Once we send a clear message that it is safe for everyone working in this field to express his or her sincere views, no one will be holding back. Some will be advocating Buy-and-Hold. That’s good. Some will be advocating Valuation-Informed Indexing. That’s also good. Some will be advocating elements of both models. That’s also good. No one should ever be afraid to express his sincere views re these terribly important matters. The only way to change things is for some of us to work up the courage to show others the way. I have endeavored for 15 years now to set a good example by being as honest as I can possibly be while never crossing the line and becoming uncharitable while also being as charitable as I can possibly be without ever crossing the line and becoming dishonest.

I am 100 percent certain that there will come a day when Wade and I will be working together again and when he will praise me to the skies for my contributions to that paper as I of course have always praised him to the skies for his contributions. Wade and I are on the same side as are Bogle and I and Shiller and I and Bernstein and I and even in a deep sense Greaney and I and Lindauer and I.

I hope that helps clear up any confusion re these points at least to a small degree.

I naturally wish you the best of luck in all your future life endeavors, my long-time Goon friend.

Rob