A Rich Life

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

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“There Are Millions of People Who Today Believe the Buy-and-Hold Lies. I Know Because I Have Talked to a Good Number of Them. I Have Had People Tell Me That Everything I Say About Investing Sounds 100 Percent Right On. But That One Thing Concerns Them. Big Shots Like Jack Bogle Are Saying the OPPOSITE of What I Am Saying, the OPPOSITE of What Makes Sense, the OPPOSITE of What the Peer-Reviewed Research in This Field Reveals. Research-Based Strategies WORK But Get Rich Quick Strategies SELL.”

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

No one is stopping you from selling your lucky VII scheme. Go short the market. Go start up a fund using your strategy. Do whatever you want. You can do whatever you want. Meanwhile, the rest of us will do what we want.

We are all big boys. We can make our own decisions and don’t need you telling us what to do. Advice can be be taken or rejected. What you want to do is shut down other people and then have you cecome the vaulted leader. How is that working out for you? Not very good, is it. It is not the so called “goons”. It is not some wall street conspiracy. You can find the source of the problem by looking in the mirror.

And you can market Buy-and-Hold, Anonymous. No one is trying to stop you from doing that.

But you cannot engage in acts of financial fraud to stop people from learning what the last 33 years of peer-reviewed research says. Advances in knowledge belong to EVERYBODY. If I want to post honestly at a discussion board about safe withdrawal rates, I have every right in the world to do so. So does Michael Kitces. So does Wade Pfau. So does Bill Bernstein. So does Larry Swdroe. So does everyone.

You have to make a distinction between marketing and research. Marketing is something you do to make a buck. If you want to make some marketing claim to make a buck, that’s your business. But your marketing claims cannot contain false statements about the peer-reviewed research in this field or you will be going to prison following the next crash. That’s financial fraud. That’s a felony.

There obviously is not a sliver of research showing that it is okay to ignore the valuation level that applies on the day a retirement begins when calculating the safe withdrawal rate. There is 33 years of peer-reviewed research showing that that is the most important element of the calculation. I understand that it helps your marketing efforts if you lie about that point. You need to understand that that’s a crime and that you can expect to be prosecuted for it.

There are millions of people who today believe the Buy-and-Hold lies. I know because I have talked to a good number of them. I have had people tell me that everything I say about investing sounds 100 percent right on. But that one thing concerns them. Big Shots like Jack Bogle are saying the OPPOSITE of what I am saying, the OPPOSITE of what makes sense, the OPPOSITE of what the peer-reviewed research in this field reveals. They want to know why.

The reason why is that Get Rich Quick sells. Research-based strategies WORK but Get Rich Quick strategies SELL. The Buy-and-Holders introduced the idea of rooting one’s strategies in the peer-reviewed research. That was a wonderful advance. But then when research was published showing that there is precisely zero chance that a Buy-and-Hold strategy could ever work for even a single long-term investor, they flipped. At that point, they continued SAYING that people should root their strategies in research but they began engaging in insanely abusive behavior aimed at intimidating people who reported honestly on the research (which has since 1981 shown that Buy-and-Hold NEVER works) into not doing so. That doesn’t fly.

This is not just an investing matter. Whether the millions of investors who need to know what the research says have some means to find out or not is a matter of grave ECONOMIC importance. When people cannot find out the truth about what the research says, they see their retirement portfolios wiped out. When people see their retirement portfolios wiped out, they stop buying goods and services. When they stop buying goods and services, hundreds of thousands of businesses go under. When hundreds of thousands of businesses go under, millions of workers lose their jobs. We are in an economic crisis today because the Buy-and-Holders are not willing to acknowledge that the “idea” that it is okay not to consider price when setting one’s stock allocation is a MARKETING claim with ZERO support in the peer-reviewed research in this field. That needs to change.

And this isn’t just an economic matter either. It is a POLITICAL matter. There are millions of people who are in the process of seeing their retirements fail because of the 12-year cover-up of the errors in the Old School safe-withdrawal-rate studies. Those people did nothing wrong. They listened to the “experts” (who were telling lies about SWRs for marketing reasons). We have no choice as a society but to bail those people out. That is going to cost us trillions of dollars in taxpayer money. The Federal budget deficit is going to EXPLODE. That’s all on the Buy-and-Holders and their unwillingness to permit honest posting on any of these questions because honest reporting of what the last 33 years of peer-reviewed research shows puts a crimp in their nasty MARKETING efforts.

There is a limit to how far you can take marketing, Anonymous. The Buy-and-Holders have destroyed millions of middle-class lives through this massive act of financial fraud. People are going to be sent to prison over this. We are going to see hundreds of thousands of civil lawsuits filed. Many reputations will be destroyed as word gets out about what the Buy-and-Holders have done to our country. Giving investing advice is not just about turning a quick buck. There are responsibilities involved. Jack Bogle and the other Buy-and-Hold advocates have failed in their responsibilities to their profession and to their clients and to their readers and to their country in a very, very big way.

No one is stopping you from selling your Buy-and-Hold garbage. But I AM in the process of stopping you from making claims that there is some mystical, magical “research” somewhere that supports it. Wade Pfau has a Ph.D. in Economics from Princeton. If there were ever a sliver of peer-reviewed research supporting Buy-and-Hold, he would have been able to find it. He searched for a long time. He found nothing. He couldn’t believe what he had learned. So he went to the Bogleheads Forum to see if anyone there had ever come across a single peer-reviewed research paper supporting Buy-and-Hold. Jack Bogle had never heard of a single study supporting the smelly Buy-and-Hold garbage. Bill Berntsein had never heard of a single study supporting the smelly Buy-and-Hold garbage. Larry Swedroe had never heard of a single study supporting the smelly Buy-and-Hold garbage. I wonder why.

I will continue posting honestly re safe withdrawal rates and scores of other critically important investment-related topics. If there comes a day when you want help from a friend re the mess you have created for yourself and many, many others, let me know, I will be your guy. So long as the price of admission to your “discussions” is engaging in a felony under the laws of the United States, I am afraid that you will need to find someone else. Not this boy. I can’t go for that. No can do. It’s not my particular cup of tea.

My best wishes to you and yours, Anonymous.

Rob

“The People Who Demanded That Larry Swedroe Post Dishonestly Should Cover the Losses of All Those Who Lose Money As a Result of the Ban, No? Those People Did Nothing Wrong. How Could They Ever Suspect that Honest Posting Was Banned at an Investing Forum? We All Should Be Speaking Up Against This Sort of Thing EVERY TIME WE SEE IT.”

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

I could if I were willing to take the time to look it up, Evidence.

This happened before I posted there. Several community members made reference to Swedroe’s banning. It’s not hard to figure out what caused it. Swedroe talks about the importance of valuations all the time. During the time I was posting there, he never once posted in support of those of us who were saying that honest posting should be permitted on safe withdrawal rates. But I’ve seen that he has in recent days written an article that points out the errors in the Old School SWR studies. When he is not on the Bogleheads Forum, he is willing to post honestly on SWRs. Perhaps it was that.

But it could have been any of a hundred things. Valuations affect every aspect of the stock investing project. So it could have been just about anything. What I know from reading posts that others put up is that Larry was banned for a time and then he agreed not to post honestly and he was let back on.

People said that he did this because he wanted to use the forum to promote his books. I suppose that that is speculation. No one can know the precise motive. But it certainly is a reasonable guess. Say that it’s not that. Say that Larry just wanted to be able to talk things over with other people. It’s still wrong to demand that he post dishonestly as the price of admission to the forum, no? It’s degrading. And it’s dishonest. And its fraudulent.

The people who demanded that he post dishonestly should cover the loses of all those who lose money as a result of the ban, no? It certainly does not make sense to have those who followed advice offered at a forum where the one thing that is banned is honest posting on what the last 33 years of peer-reviewed research says pay the price for those acts of fraud. Those people did nothing wrong. How could they ever suspect that honest posting was banned at an investing forum? The published rules of the site suggest that honest posting is PERMITTED. So how would they know?

We all should be speaking up against this sort of thing EVERY TIME WE SEE IT. Bogle should be speaking out against it in the strongest possible terms. Wade Pfau too. Scott Burns too. Bill Bernstein too. Mike Piper too. EVERYONE. That’s how we bring Buy-and-Hold down and put the first true research-based strategy (Valuation-Informed Indexing — which is Buy-and-Hold with the dishonest Get Rich Quick part removed) in its place.

I have a file where I keep copies of hundreds of threads from the Bogleheads Forum (which was called the Vanguard Diehards forum in an earlier day). When the time comes to testify, I can go to that file and pull up the posts at which Swedroe’s banning was discussed. I am not going to go to the trouble today because anyone who spends a little but of time at this site gets it that Buy-and-Hold is today a 100 percent discredited strategy promoted through corrupt means. Those who pretend otherwise aren’t going to start posting honestly because I provide the links to the threads where Swedroe’s banning was discussed. But, if a jury needs to see them for some reason, I have them.

We are not talking about a simple cover-up today, Evidence. We are talking about a cover-up of a cover-up of a cover-up of a cover-up. As times passes, it gets worse and worse and worse. It can never get better until my good friend Jack Bogle walks to the front of a room and says those magic words “I” and “Was” and “Wrong.” It is by Jack’s speaking of those magic words that we all come clean and gain the ability to bring this economic crisis to an end, show millions of middle-class Americans how to reduce the risk of stock investing by 70 percent, and bring on the greatest period of economic growth in our history.

My best wishes to you, Evidence.

Rob

“It’s Hard for the Wall Street Con Men to Employ Their Huge Financial Resources to Destroy Sites Giving Honest Investing Advice When the Materials Collected At This Site Are Available for Use In Any Trial. The Wall Street Con Men Obviously Don’t Want the Wade Pfau Matter Getting Public Attention.”

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

There really is no value in this site. All you do is sit around telling us about your hate for buy and hold and for those that don’t agree with you (that you describe as goons).

It’s not possible that I sit around talking about my hate for Buy-and-Hold or for my many Buy-and-Hold friends, Anonymous. It’s not possible because I do not FEEL hate for Buy-and-Hold or for my Buy-and-Hold friends.

I am the world’s most severe critic of Buy-and-Hold as it is promoted today. I say that it is a big pile of smelly garbage. I say that the relentless promotion of Buy-and-Hold strategies caused the economic crisis. I say that millions of middle-class people are going to suffer failed retirements because my good friend Jack Bogle has not yet worked up the courage to walk to the front of a room and say the words “I” and “Was” and”Wrong.” All of that is so, and, yes, because all of that is so there is one sense in which I suppose it would be fair to say that I hate Buy-and-Hold.

But hold on.

Is all that ugly stuff what Buy-and-Hold really is?

I say no. I say that Buy-and-Hold is something very different from what you Goons (and, yes, even my good friend Jack Bogle) today claim it to be.

Buy-and-Hold is two things. It is the thing that was put forward in the days before Nobel-Prize-Winning-Economist Robert Shiller put forward his “revolutionary” research showing that valuations affect long-term returns. In those days Buy-and-Hold was all about using the peer-reviewed academic research to guide one’s investing strategies. But today there is a new version of Buy-and-Hold that is something very different. The phrase “Buy-and-Hold” today signifies an investing “strategy” that calls for the investor to possess a burning hatred for discussions of the last 33 years of peer-reviewed research and to employ all forms of trickery and deception and intimidation to keep all investors (including one’s self) from learning how stock investing really works in the real world.

Everyone alive hates one of the two forms of Buy-and-Hold, Anonymous. Those of us who feel a passionate love for what the Buy-and-Hold project was in its early days (a quest to help millions of middle-class investors invest more effectively) naturally hate to see the Buy-and-Holders of today drag the concept through the mud with their deception and intimidation tactics. We want Buy-and-Hold to work. So we naturally want to update the concept to reflect the last 33 years of peer-reviewed academic research. Those who are emotionally addicted to the Get-Rich-Quick version of Buy-and-Hold naturally hate those of us who argue that exploration of the peer-reviewed research should be permitted. There’s no support in the academic research for Get Rich Quick. It makes the Buy-and-Holders who are in the Get Rich Quick camp “look bad” for millions of middle-class people to find out what the research really says.

Which Buy-and-Hold is the real Buy-and-Hold?

That’s the question here. If the ugly form of Buy-and-Hold is the real form of Buy-and-Hold, Jack Bogle is the Frank Underwood of Personal Finance. Jack has caused more human misery than anyone who has ever worked in this field. That’s objective fact. Millions of people have already lost their jobs in the Buy-and-Hold Crisis. Millions more will lose their jobs following the next price crash. When you suggest that the ugly form of Buy-and-Hold is the only legitimate version of Buy-and-Hold, you suggest that Jack Bogle caused this economic crisis by intent You suggest something very, very, very horrible. When you suggest such horrible things, you speak in hate.

I speak in love. I suggest something very different.

I argue that Jack Bogle is a good man who allowed his pride to get too caught up in a highly promising but ultimately flawed idea and who today suffers from a horrible case of cognitive dissonance as a result. I say that, when Old Saint Jack wrote in one of his books that, were he ever to be found to have made a mistake that hurt millions of investors, he would want his friends to point it out to him, he was speaking from the heart. I am Jack’s truest friend. So I have done what my friend asked of me. I will continue to do it until my friend’s heart melts and he works up the courage to do the right thing. I believe that after the next price crash he will do it. We will see. In any event, my actions are rooted in a deep love of the man that I call “friend.”

Your actions are rooted in hate, Anonymous. Every day that the Ban on Honest Posting continues, more lives are ruined. Every day that the Ban on Honest Posting continues, more people cross the lines that lead to prison sentences down the road. Every day that the Ban on Honest Posting continues, the prison sentences that will be imposed on those who crossed those lines years ago grow more lengthy. Bad stuff piled on top of bad stuff piled on top of bad stuff. Hate piled on top of hate piled on top of hate.

That’s the real Buy-and-Hold?

I say otherwise.

I hate the hate. That much is fair to say. But the reason why I hate the hate is because I love the true Buy-and-Hold Project, I love what Buy-and-Hold stood for in earlier days and I love what Buy-and-Hold will stand for again after my good friend Jack works up the courage to walk to the front of a big room and say The Three Magic Words. I love the true Buy-and-Hold, not the b.s. version pushed by the sorts of individuals who have put up posts in “defense” of Mel Lindauer and John Greaney.

This site is of immense value.

There has not been any intellectual support for the phony version of Buy-and-Hold for 33 years now. We are on the one-yard line. The one thing that the millions of good people who today reside in the United States need to bring this economic crisis to an end and to bring on the greatest period of economic growth in our history is the courage to stand up to you Goons and to insist on the recognition of the right we all possess to post anywhere we please on the internet in accord with what the last 33 years of peer-reviewed research tells us about how stock investing works in the real world. We know that there are millions of people who possess a great desire to hear the realities. We need one venture capitalist or one large site owner or one big-name journalist or one economist or one policymaker to work up the courage to take on you Goons and the entire Buy-and-Hold house of cards comes crashing to the ground.

This site gives those people what they need to steel themselves against your Campaign of Terror.

People worry that the Wall Street Con Men will employ their huge financial resources to destroy them through phony lawsuits. It’s pretty hard for the Wall Street Con Men to do that when the materials collected at this site are available for use in any trial. The Wall Street Con Men obviously don’t want the Wade Pfau matter getting public attention. The threat of lawsuits that have held many honest people from speaking up against the Get Rich Quick garbage for 33 years now has been neutralized by the materials collected at this site.

People worry that you Goons will attack their sites and that other site owners will not step in to help them because they feel that the number who want to hear the realities of stock investing is so small. But that number is NOT small. We know that by what the materials at this site tell us. Those people are AFRAID to speak up. But they are not small in number. I wouldn’t have over 200 expressions of intense support at the “People Are Talking” section of the site if the number favoring honest posting was small. Again, the intimidation tactics engaged in by those seeking to “defend” the b.s. version of Buy-and-Hold have been neutralized by the materials collected at this site.

I win, Anonymous.

You Goons lose.

I knew it all the time!

Rob

“Not One of the 30,000 Academic Researchers to Whom I Sent a Link Identified Any Problem With the Research Paper That I Co-Authored With Wade Pfau Showing Investors How to Reduce the Risk of Stock Investing By 70 Percent.”

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

Hi Rob,

Does anyone other than you believe that you have “develop[ed] a new model for understanding how investing works that will reduce risk by 70 percent”?

Surely you must have shared this with others whose opinions you respect. What did they think?

The committee that approved publication of the research paper in a peer-reviewed journal obviously thought well of it, Curious.My co-author Wade Pfau was very excited about it. He said that he was giving thought to submitting the paper to the Journal of Finance, the top journal in the field. Over and over he expressed amazement that no one had thought to examine the question we researched together (how much it reduces risk to exercise price discipline when buying stocks) before.

The scores of academic researchers who responded to my e-mail campaign thought well of it. Rob Arnott, the former editor of the Financial Analysts Journal, told me that my work in this field is “sound.” Carol Osler said that we are seeing a change in the paradigm for understanding how stock investing works and that I must be patient to see all the experts in the field come around (she expressed the thought that this would likely happen following the next price crash). Robert Savickas said that he will be teaching Valuation-Informed Indexing to his class at George Washington University. Barry Ritholtz linked from his hugely popular blog to my article on “Why Buy-and-Hold Investing Can Never Work.” Scores of others offered exceedingly kind comments. Not one of the 30,000 academic researchers to whom I sent a link identified any problems with the research paper.

The Bogleheads Forum found that the paper was of huge importance. Fred Flintstone said that it challenged core principles of Buy-and-Hold. Many others expressed a desire that the Ban on Honest Posting be lifted so that they could engage in reasoned discussion of the findings of the paper. You Goons were obviously impressed by it or you would not have threatened to send defamatory e-mails to Wade Pfau’s employer in an effort to get him fired from his job. My good friend Jack Bogle was obviously not able to come up with any grounds for challenging the findings of the research in civil and reasoned debate or he would have done something about you Goons when he learned about the threats you made to silence Wade.

The short version is that tens of thousands have seen the paper and most who expressed an opinion have either praised it to the skies or have been so threatened by what they saw (because they have staked their lives on a belief in Buy-and-Hold strategies) that they either engaged in or tolerated acts of financial fraud to keep more people from learning about it.

I think it would be fair to say that there are few research papers that have ever been published that have had that sort of impact in the short amount of time that the Bennett/Pfau research paper has been available for people to review. Wade once told me that there is a saying among academic researchers that no paper ever wins a Nobel Prize without being hated by some (because the most important papers are seen as a threat to those who built their careers around the ideas that are being discredited by the advance in knowledge). I think it would be fair to say that the Bennett/Pfau paper showing how investors can reduce risk by 70 percent just by abandoning Buy-and-Hold strategies fits that pattern!

My best wishes to you.

Rob

“Shiller Does Not Know It All. Shiller Is One of the Humans and We Humans Learn by Talking Things Over. We Learn Through Give and Take. We Unearth Puzzles and Then We Offer Our Thoughts As to the Resolution of the Puzzles and Then We Get Some Feedback That Helps Us Figure Out If We Are on the Right Track or Not and So On. That’s How It Is Done. That Process Is Not Taking Place Today. EVEN FOR SHILLER.”

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

Question for you Rob. If Shiller’s actions indicate that his interpretation of his revolutionary research differ from your interpretation, is more likely that difference is attributable to Shiller being disingenuous for fear of being spoken ill of on finance blogs, or that you’ve mis-interpreted the implications of his work?

Thanks for asking an intelligent question, Curious.

You are referring to Shiller’s recent statement that he is today 50 percent in stocks. I am personally at zero stocks and I have said that the typical middle-class investor should today be going with a stock allocation between 20 percent and 30 percent, based on Shiller’s findings and the 33 years of peer-reviewed academic research that have followed.

It’s certainly possible that I have misinterpreted the implications of Shiller’s work. I did not go to investing school. I have never managed a big fund. I am one of the flawed humans. So people certainly need to understand that one possible explanation here is that I have messed up. I don’t think that’s the case. But then I wouldn’t, would I?

I will make the argument for the case that I have NOT messed up. I am not the person to talk to for hearing the case that I HAVE messed up. Those who believe that I have messed up should make that case.

Shiller has a long record of giving odd responses when asked about the practical implications of his “revolutionary” (his word) findings. In early 2009, he said that investors should stay out of stocks until the P/E10 value dropped below 10. We have not dropped below 10 since then. So Shiller is not following his own advice in going with a 50 percent stock allocation. Do you not find that odd? I sure do.

There’s another contradiction revealed by Shiller’s statement that he is at 50 percent stocks today. A few months ago, Shiller predicted that there will be a crash in 2014. That means sometime in the next nine months. He foresees a price crash and he is at 50 percent stocks? Does that make even a tiny bit of sense? It does not.

Shiller clearly does not know everything, Curious. I obviously love the guy. “Irrational Exuberance” is my Bible. But the guy obviously has not put all the pieces together.

You suggest that the only alternative to me being wrong is that Shiller is being “disingenious.” I don’t agree with that. I don’t think he knows all the answers and is just not revealing them to us. I do indeed think there may be some of that going on. There is a high price to be paid for speaking frankly about these matters. I believe that the Social Taboo holds Shiller back, that he does not say everything he believes because he fears the smears that would be directed at him if he did. He’s like all the rest of us in that regard.

But I also believe that Shiller does not know it all. Shiller is one of the humans and we humans learn by talking things over. We learn through give and take. We unearth puzzles and then we offer our thoughts as to the resolution of the puzzles and then we get some feedback that helps us figure out if we are on the right track or not and so on. That’s how it is done. That process is not taking place today. EVEN FOR SHILLER.

He no doubt has theories on certain questions. But until there is widespread and open and frank discussion of all these matters, he is not going to be able to do his best work. We have as a society crippled him. And that hurts us in a big way. We have also crippled Bogle, to be sure. And of course it is true that I am crippled as well. I would do better work if Shiller were being challenged on his contradictions on a daily basis and if Bogle were being challenged on his contradictions on a daily basis. I would learn from the discussions that would follow and I would be better able to do good work myself as a result. So would Bogle. So would Shiller. So would everyone else.

You challenge me daily to explain everything that goes on in the world of stock investing that seems a bit odd but you never challenge anyone else. Why don’t you start a thread at the Bogleheads Forum about Shiller’s contradictions and see if anyone there can figure things out better than I can? Then please start a similar thread re Bogle’s contradictions. Stop trying to put all the weight on me. I am just some fellow who figured out how to get his words posted to the internet. I don’t claim to be an expert. Bogle does, Shiller does. Those guys should be held to a higher standard than me and you are not today holding them to any standard whatsoever.

Yes, Shiller is afraid to speak out in perfect frankness. If he were not afraid, why would he have published a book that contains only two paragraphs on the how-to questions? Those are the questions of greatest interest to most book buyers. He refrained from addressing those questions because he fears the reaction he would get if he addressed them. It may be that he is not even personally aware of this. It may be that he tells himself some other story. But, yes, I believe that that is a big part of the explanation of the odd behavior.

But I am virtually sure that another big part of the explanation is that he has not put all the pieces of the puzzle together yet. That’s because he has not had enough discussions about his tentative beliefs to check them out and to revise them and to gain confidence in them. He’s like the vast majority of experts in this field in that respect. And it is killing us that that is so!

We should want Shiller devoting all his mental energy to these questions. And we should want that from Bogle. And we should want that from thousands of others. We start getting all the good stuff when we give ourselves permission to have open and free and frank and honest discussions on the implications of the last 33 years of peer-reviewed academic research.

I have tried for 12 years to get the ball rolling. That is my great “crime.”

Rob

Jack Bogle and Larry Swedroe and Bill Bernstein and Rick Ferri Certainly All Have Goodness in Them and All Four of These Individuals Certainly Have Shown on Numerous Occasions That They Would Like to Come Clean. We’re All on the Same Side.”

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

I would also say that Jack, Larry, Bill and Rick would speak out as well.

Jack Bogle and Larry Swedroe and Bill Bernstein and Rick Ferri certainly all have goodness in them and all four of these individuals certainly have shown on numerous occasions that they would like to come clean.

Jack Bogle said in his book that Reversion to the Mean is an “Iron Law” of stock investing. That’s how I knew that there was zero chance that the Old School retirement studies got the numbers right. Jack sprinkles honest observations about how stock investing works in with the smelly Buy-and-Hold garbage ALL THE TIME. If there were no good in him and no desire in him to come clean, why would he do this?

Bill Bernstein was honest when Ataloss asked him whether the Old School retirement studies were analytically invalid, as I have claimed since the morning of May 13, 2002. He said that any aspiring retiree who gave a second’s thought to using on of this studies to plan a retirement had to be out of his or her mind. That’s pretty darn honest! He also included a dishonest statement in his response, saying that even though there was zero chance that the studies could get the numbers right, they were analytically valid all the same. So he covered his tracks with the Get Rich Quickers and they permitted him to continue making a living in this field. It remains the case that he included some honest stuff in that e-mail and that that took courage on Bill’s part.

Larry Swedroe was so honest at one time that he got himself banned from the Bogleheads Forum! Again, that shows that there is some goodness in him and that he would like to come clean about what the last 33 years of peer-reviewed academic research says. Does that overcome the harm he did with his dishonest support for the 12-year cover-up of the errors in the Old School retirement studies? Hardly. But it does show a desire on Larry’s part to do good work, a desire that we will see him acting on on a daily basis once your prison sentence is announced and this all comes out, Anonymous.

We are all on the same side, Anonymous.

Rob

“I Am Not the One Who Is Alone. If I Were Alone, I Would Pose No Threat to You Goons. It Is Precisely Because There Are So Many Millions Seeking to Understand for the First Time How Stock Investing Really Works That You Hate Me With Such a Burning and All-Consuming Hate.”

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

Rob, you seem to be alone in this VII crusade. Haven’t you ever considered that you might be wrong about this?I have considered whether I might be wrong and looked for evidence to support that view every day of the past 12 years of my life, Sensible.I am not alone.

My work is rooted in the research of Yale Economics Professor Robert Shiller. Shiller was awarded the Nobel prize in Economics last year. Having the support of a winner of the Nobel prize in Economics ain’t being alone.

I am the co-author of the most important piece of peer-reviewed research published in this field in the past 30 years. Having your name on a piece of research that shows millions of middle-class investors how to reduce the risk of stock investing by 70 percent ain’t being alone.

I have over 200 quotes posted at the “People Are Talking” section of the site. Many of the quotes are by top-name experts in the field. Having that many supportive quotes by top-name experts ain’t being alone.

Jack Bogle, whom I rank as the second most important figure in this field, thinks enough of my work that he went along with having the entire Bogleheads Forum moved to another location rather than take the risk of appearing at an event with me in which he would be expected to respond in an effective way to my questioning. Impressing the second most important figure in the field to that extent ain’t being alone.

Former Financial Analysts Journal Editor Rob Arnott wrote me to tell me that my investing ideas are “sound.” That ain’t being alone.

Thousands of my fellow community members have expressed a desire that honest posting be permitted on our boards and blogs so that they can hear what I have to say about how investing works. That ain’t being alone.

Millions of people lost their jobs in this economic crisis, an economic crisis that my work shows was caused by the reckless promotion of Buy-and-Hold strategies. Those millions all want what I have to offer to become known to every person on this planet. That ain’t being alone.

Thousands of entrepreneurs saw their businesses fail in the Buy-and-Hold Crisis. Those thousands want what I have to offer to become known to every person on this planet. That ain’t being alone.

Millions of people from both the left (The Occupy Wall Street Movement) and the right (The Tea Party Movement) have begun to lose confidence in the ability of our political system to be responsive to the concerns of millions of its citizens because of the foolishness we saw in the wake of the onset of the economic crisis with people ignoring the obvious cause of the crisis (Buy-and-Hold caused $12 trillion in Pretend Money to be created and the loss of that $12 trillion in buying power caused the economy to collapse) want what I have to offer to become discussed at every board and blog on the internet so that we can begin to see some healing. That ain’t being alone.

Millions of middle-class people are in the process of seeing their retirements fail as a result of the 12-year cover-up of the errors in the Old School safe-withdrawal-rate studies. Those people are looking for the explanations of what happened to them that are contained in the thousands of pages of this web site. That ain’t being alone.

I’ve written e-mails to 30,000 academic researchers letting them know about the threats you made to intimidate Wade Pfau into silence on the realities of stock investing when he “crossed” you by publishing honest research and a good number of them sent back to me exceedingly kind and intelligent and helpful responses. That ain’t being alone.

I gave a presentation to the last Financial Bloggers Conference reporting on why Buy-and-Hold is the past and Valuation-Informed Indexing is the future and heard the applause of hundreds of my fellow community members learning about the truth in this area for the first time and enjoyed the hours of discussion of these issues that followed from a small group that came up to share a beer with me after the event. That ain’t being alone.

I have written scores and scores of Guest Blog Entries which have inspired wonderful, thought-provoking discussions and which earned me the effusive praise of my peers. That ain’t being alone.

I have done work that fulfills the boyhood dream of my good friend and hero Jack Bogle, making the change in his model for understanding how stock investing works that makes his approach workable in the real world for the first time. Thousands of my Buy-and-Hold friends have been looking for years for the resolutions to the contradictions in the Buy-and-Hold concept that were needed to make that long-deferred dream a reality and those people will be celebrating my work for many decades to come. That ain’t being alone.

I am alone in only one sense.

People are afraid to speak out about the intimidation tactics of you Goons. People hate seeing death threats. People hate seeing demands for unjustified board bannings. People hate seeing tens of thousands of acts of defamation. People hate seeing threats to get academic researchers fired from their jobs. I am not entirely alone even on that score. I share the feelings of repulsion that virtually every person living on this planet feels toward that sort of behavior. The only sense in which I am alone even in this respect is that I believe that the way to overcome you Goons is to expose your behavior to the sunlight. Most others are still too afraid to speak up. That will change following the next price crash, when they see how serious the threat is that you pose to our way of life. Then I will not be alone even on that score.

You are the one who is alone, Sensible. You are the one going to prison. To be sent to prison is to have your peers reject you completely, to have the society you live in declare that your behavior is so sub-human that you can no longer be permitted to walk freely among others. That is an isolation that I don’t wish on my worst enemies (and indeed I have worked hard to get your prison sentence reduced to the extent possible).

I have a battle to fight. There is evil in the world. There have always been people who see the accomplishments of others and feel drawn not to learn from them and achieve great things on their own but to equalize things by tearing down the good work that in their minds makes them look small and insignificant. But I am not the one who is alone. If I were alone, I would pose no threat to you Goons. It is precisely because there are so many millions seeking to understand for the first time how stock investing really works that you hate me with such a burning and all-consuming hate.

Bernie Madoff is alone, Sensible.

And you are Bernie Madoff times 5,000.

I want no part of it.

I offer the hand of kindness. Always. But not once in 12 years have I given a second’s thought to betraying my country. I won’t do that in the next 12 billion years either.

Why? Because when I violate the laws of the United States, when I betray my country, then I truly become alone in a way that I never want to be alone.

The people of the United States are traveling down some rocky road today. That much is so. We will overcome. We will prevail. It is those who doubt that our economic and political systems work any longer who will find themselves in days to come the lonely ones.

We humans made a mistake. It happens. We will figure things out and we will turn things around. You are too far down the dark path to turn around. To be lost in that terrible dark place must be a lonely feeling indeed.

I ask myself every day whether I have gotten something wrong, Sensible. Every day. Because I never want to find myself in the lonely place that you find yourself in today.

When I discover that I have gotten something wrong (it has happened on a few occasions over the past 12 years), I quickly ask to be able to come to the front of the room and say the magic words “I” and “Was” and “Wrong.” Because those words end the loneliness. Once I have said those words, I no longer have anything to hide. Once I say those words, I am again playing a role in the community of people living under an economic and political system that works.

I pray that I never face a temptation to play it the other way. I am a flawed human and so I cannot dismiss entirely the possibility that it could someday happen. So I pray. Not as often as I should but now and again at least. I will have to hope that that gives me enough strength to make it safely to the other side.

And I pray for you, my lonesome friend. I pray that there is a spark of kindness within you for your friends and co-workers and neighbors and fellow community members that will one day save you. It happens. People tell me to give up on you Goons. I don’t feel comfortable giving up on anyone. That’s not the answer. Love is the answer. Love is the thing that keeps me from feeling alone through those times when a good number of my friends are afraid to speak up.

Love prevails in the end, Sensible. You cannot fathom how, but it does. You keep forgetting that I read the last page of the story before I dared to venture forward with that crazy-brave post of the morning of May 13, 2002. I would have had to have been off my meds to have dared try that one without reading the last page first! I mean, come on!

Rob

“Jack Bogle Is Afraid of Rob Bennett. He Doesn’t Believe That He Can Offer Good Answers to My Questions. That’s Sad.”

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

Don’t worry. Jack, Larry, Wade and Bill aren’t afraid. They are just fine.

Their behavior tells a different tale, Anonymous.

The entire Vanguard Diehards community was moved over to the Bogleheads Forum when I announced that I would be attending the annual meeting and asking Jack some questions about the effect of valuations on long-term returns.

That happened because Jack was afraid to be in the same room with me and to try to answer the questions that he knew I would put to him.

Nothing could be more obvious.

When one of the leading figures in investing analysis is afraid to face questioning from some fellow whose only claim to expertise in this field is that he figured out how to get his words posted to the internet, there is a good bit of funny business going on.

Jack Bogle is afraid of Rob Bennett. He doesn’t believe that he can offer good answers to my questions. That’s sad. All of us who are Jack’s friends should be trying to do something about that.

My sincere take.

Rob

“My Famous May 13, 2002, Post Ended Not With a Period But With a Question Mark. That Was Fear. My Apology on the Night of Day Three Was Rooted in Fear. I Held Back for a Long Time From Saying That I Know More About How Stock Investing Works Than Jack Bogle. That Was Fear. I Held Back for a Long Time From Saying That You Goons Are Headed to Prison. That Was Fear. There Is No Intellectual Debate Here. It’s All About Fear.”

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

The lack of any supporting comments on this board speaks volumes, Rob. No, people are not afraid to post here as they would be anonymous.

The lack of supporting comments certainly tells us something important, Anonymous. You and I do not agree re what it tells us. But we are 100 percent in agreement that it is a telling reality.

You are of course correct that people are free to post anonymously here. So it is not that they are afraid that the Goons are going to come after them and kill their family members or whatever. That is not the sort of fear we are dealing with in this case.

We’ve talked about Joe Taxpayer recently. I have said that I would like to see more from him. He had been supportive. He opposes the Ban on Honest Posting. But I would like to see him go another step. I would like him to write a blog entry saying that he thinks the Ban on Honest Posting is a shameful thing and that all bloggers should oppose it. I would like him to try to organize all his blogger friends to speak up against this stuff.

Is Joe afraid? Yes, he is afraid. If he wasn’t afraid, he would do what I describe above.

He is not as afraid as some others. He worked up the courage to say that he believes the Ban on Honest Posting is wrong. He worked up the courage to call you Goons out on your nonsense. So he is less afraid than most. But he takes some steps and then he fails to take others. He is a hero. But he is not a perfect being. None of us are, of course.

I was afraid. I didn’t post about the errors in the Old School studies from May 1999 to May 2002. What do you think was up with that? It’s hard to believe today that I kept it zipped all that time, isn’t it? But I did. Why? What was I afraid of? I never dreamed that any of the Goon stuff that we have seen over the past 12 years was even remotely possible back in those days. But I never spoke up. Why? What held me back?

Humans are social creatures.

If you don’t get that, you cannot get any of the rest of it. That part is fundamental.

Bull markets are social phenomena.

You could never have a bull market if people were not afraid to speak up. We obviously had a huge bull market. So there obviously were a lot of fearful people. That’s by definition. You know that just by looking at the P/E10 level. When you have a P/E10 level of 44, you have millions of fearful people. You couldn’t have it any other way.

It’s not cartoonish things that people are afraid of. People are not afraid that you are going to come to your house and shoot them. People are afraid that they will be out of step with the majority. People are afraid that lots of people will think they are dumb. People are afraid that people will yell at them. People are afraid that, if they talk openly about another crash, that will somehow cause one to come. People are afraid that we are going to see a deepening of the economic collapse and don’t want to talk about it or hear about it because it scares them. People are afraid that there are groups starting to lose confidence in our political system. People are afraid that they will not have enough money to retire and that they will lose access to the comfort offered by the Buy-and-Holders if they think things through carefully and come to realize why those comforts are illusory.

People are afraid of all sorts of things, Anonymous.

Wade talked about it in the comments he posted here after his flip. He wrote one on which he said: “I don’t see how you are going to end up being seen as the good guy.” He said almost the same thing at the Bogleheads Forum. He said: “Some of you see anyone pushing market timing as a snake-oil salesman and you are disdainful of it. I don’t want you to think of me that way.”

He does’t want you to dislike him, Anonymous. That’s his fear.

I know how it goes. I don’t want you to dislike me either. The difference with me is that I have an even bigger fear of selling out my fellow community members. I feel that I am worthless to you and to everyone else if I do not post honestly. So I stick to that one no matter what. I don’t give an inch on that one.

My famous May 13, 2002, post ended not with a period but with a question mark. That was fear.

My apology on the night of Day Three was rooted in fear.

I held back for a long time from saying the words “analytically invalid.” That was fear.

I held back for a long time from saying that I know more about how stock investing works than Jack Bogle. That was fear.

I held back for a long time from saying that you Goons are headed to prison. That was fear.

It’s all about fear. There is no intellectual debate here. If you Goons believed that Buy-and-Hold could survive a civil and reasoned debate, you would invite a civil and reasoned debate. You don’t believe that for two seconds. You believe that Buy-and-Hold can survive only for so long as effective challenges to it are prohibited. That’s why you behave as you do.

You follow Buy-and-Hold yourselves. Following a strategy is a sign that you believe in it. You pass that test. There is a sense in which you believe.

But you do not possess confidence in the strategy you follow. It causes you great emotional pain to hear it challenged effectively. Confidence is another marker of belief. You fail that test. There is a sense in which you do not believe at all.

You are in the worst of all worlds. You believe enough that you cannot bear to listen to challenges. So you will stick with Buy-and-Hold until prices are at rock bottom. But you lack the confidence to continue holding when prices hit rock bottom and when every media organ is saying that no middle-class person should ever even consider putting money into stocks. The same social pressures that caused you to tune out the last 33 years of peer-reviewed academic research will cause you to sell your stocks when prices hit rock bottom.

That’s called capitulation. It’s when the last Buy-and-Hold Goon sells his shares that the market (that’s us!) is able to turn up again for an extended period of time.

You happened to be born at a time that led to you investing heavily in stocks at the worst time in history for doing that. You know it on one level of consciousness (while fiercely denying it on another). You are scared out of your freakin’ wits. So scared that you can’t even let it in that you are scared at all. And you will be even more scared after the next crash.

I didn’t do any of that to you.

I don’t say that the people who did it to you meant to hurt you. I don’t believe that. Those people are scared too.

I say that I am not playing my role if I don’t post honestly. I am saying that it cannot possibly be the right answer for me to agree to say things I don’t believe for two seconds.

And I wish you well in all your future endeavors, my old friend.

Rob

“If the Buy-and-Hold Mafia Could Have Blocked Publication of Shiller’s Book, They Would Have Done It. They Don’t Possess Quite That Much Power. So Long as Shiller Pulled a Lot of His Punches, He Possessed the Power to Get the Book Published. But I Am Just Some Fellow Who Posts Stuff on the Internet. So the Buy-and-Hold Mafia Did Possess the Power to Block Me. So I Tell the Full Truth. Suck It, Goons!”

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

Rob,

Wade Pfau told a different story than you do and same with Mike Piper. Are they both liars and you are the only one telling the truth?

Wade told the same story as me before he was threatened and a different story than me after he was threatened. Mike tells the same story as me in private and tells a different story in public.

The back story here is that people got very excited when we discovered the Buy-and-Hold Model. People thought we had found the answer. It turned out that that wasn’t quite true — the Buy-and-Holders got one part of the story wrong and their entire model fails because of that mistake. But by the time the error was discovered, thousands of people had already built careers based on the failed model. So people rationalized. They told what they viewed as white lies, thinking to themselves that it was okay because Buy-and-Hold at least comes close to working and anyway there is nothing better out there. Then evidence came in that in fact Buy-and-Hold doesn’t work at all in the long term and that there is something 10,000 times better out there. By that time, all the people who had said positive things about Buy-and-Hold (which is the vast majority of people in this field) were trapped. They were in a cage from which there is no escape except telling the truth and there was an entire industry intent on using all of its considerable resources to destroy the career of anyone who dared to “cross” it by doing that.

I often make the comparison to the Civil Rights revolution. A number of Southern states had laws that said people with black skin could not drink out of the same water fountains as people with white skin. Those laws were 100 percent insane. No reasonable person can justify such laws. The people who lived in those states knew on some level of consciousness that those laws were insane. But they didn’t think the laws could be changed. They grew up in societies that had those laws and had never experienced life in a place that did not have those laws. It was not possible for them to imagine life without those laws. So they supported them. Or at least they didn’t fight them. They were born into ignorance and sin and they couldn’t imagine any alternative and so they supported or at least tolerated the continuation of ignorance and sin.

Everyone in this field wants to make the transition from Buy-and-Hold to Valuation-Informed Indexing. There is not one person who wants to see a worsening of the economic crisis. There is not one person who wants to see millions of failed retirements. There is not one person who wants to see more death threats and more unjustified board bannings and more acts of defamation and more threats to get academic researchers fired from their jobs. But what are they going to do? Talk honestly about a simple matter like how to calculate the safe withdrawal rate accurately and the Buy-and-Hold Mafia destroys your career. People rationalize that they can do more good working on the inside for gradual change than they can with their careers destroyed.

So no one tells the full truth re these matters today but me.

Shiller doesn’t. He is of course a brave and wonderful man. But Shiller predicted the economic crisis in his book and he said that it was the idea that a Buy-and-Hold strategy can work that was causing it. When the crisis came, he didn’t say “here is what I predicted, do you see now why we need to make the transition to Valuation-Informed Indexing?” He kept it zipped. He heard all sorts of silly explanations for the economic crisis put forward and he kept it zipped.

Arnott doesn’t. Arnott is a stud. I learned how to be tough about this stuff myself by watching him in action. But he does not today possess the courage to tell the full truth. When he wrote me to tell me that my ideas on investing are sound, he said that Jack Bogle is his friend and that Jack Bogle has always been a gentleman in his presence. That is probably so. But Jack Bogle was not being a gentleman when he failed to speak up about what Mel Linduaer did to the Bogleheads Forum and Arnott knew about that. So Arnott does not today possess the courage to tell the full truth.

If Robert Shiller and Rob Arnott are not telling the full truth, there is no one telling the full truth.

Except me.

I tell the full truth because I have been left with no other options. If the Buy-and-Hold Mafia could have blocked publication of Shiller’s book, they would have done it. They don’t possess quite that much power. So long as Shiller pulled a lot of his punches, he possessed the power to get the book published. But I am just some fellow who posts stuff on the internet. So the Buy-and-Hold Mafia did possess the power to block me. And they did it. So I don’t have the option of pulling punches and yet still telling pretty much the truth. My choice is to submit and pretend that I believe that the Old School studies get the numbers right or to have you Goons disrupt the discussion at any site on the internet at which I post.

Given those choices, I go with Option Two, telling the full truth. Suck it, Goons!

I’m like everybody else. I didn’t always tell the truth. I obviously did not tell the truth prior to May 13, 2002. I wanted to be popular, I wanted to be able to make a buck. So I kept it zipped. I was afraid of what the Buy-and-Hold Mafia would do to me if I told my friends what I knew about the Old School studies. Greaney got so bad that I couldn’t live with the rationalization any more. So I worked up the courage to put forward the May 13, 2002, post. And the rest is history.

If we could go back to May 13, 2002, you Goons would play it another way. I get that. I don’t have a magic wand. I cannot take us back to May 13 2002. We are in a place today where, if we permit honest posting, you Goons end up in prison cells. That gives you a huge incentive not to permit honest posting. I get that. There’s nothing I can do about it. For a time, I kept quiet about it because I knew that the prison-cell thing was a disincentive for you to permit honest posting. After you threatened Wade, it became clear that it was all a big joke and that you knew perfectly well that you were headed to prison once the truth came out and that there was already zero chance that you were ever going to come around. So I stopped playing that stupid game.

That’s where things stand today.

Everyone in the field is afraid to tell the full truth about the last 33 years of peer-reviewed academic research. The Buy-and-Hold Mafia has the power and wealth and connections to destroy just about anyone and the ruthlessness to follow through on its threats. Everyone sees that. Everyone gets that. That is the biggest factor I have working against me.

The other side of the story is that everyone in the field LONGS to be able to come clean. People didn’t get into this field to destroy millions of middle-class lives. So they WANT to tell the truth. They want to have fun again. They want to give accurate retirement planning advice. They want to bring the economic crisis to an end. They want to tell people how to reduce the risk of stock investing by 70 percent. That is the biggest factor I have working for me.

The power of the Buy-and-Hold Mafia diminishes as more and more middle-class lives are destroyed. The truth is that we are on the one-yard line. Some political blogger could write up the truth and get away with it today. With all of the documentation available at my web site, they would get away with it. And there are enough people entertaining doubts today that there is a good chance that the report would go viral. That is what was going on with the Wall Street Journal article that reported that the “experts” are leaving out half the story. I believe that that was a trial balloon. The Wall Street Journal was testing the waters to see whether telling the truth about the last 33 years of research would fly. That particular article did not go viral. But the next one might. Certainly the article published following the next price crash will go viral.

I will be there when it happens. I will tell the entire story. I will tell about the bad stuff you Goons did and I will tell about the extenuating circumstances. And we will see where things end up.

I tell the full truth because I have been left no options but to tell the full truth. Those are the cards I was dealt and I will play them to the best of my ability.

I wish you all good things, Anonymous.

Rob