A Rich Life

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

Ken Evoy, Owner of SiteSell, Inc.: “Rob, Awesome Post. I Suggest All Read It, Some Sharp, Creative Thinking. Trying to “Be There” Before the Gold Rush to a New Niche Is an Interesting Bet! You’ll Be THE Name If It Happens. Heck, You Might Even Help MAKE It Happen!”

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ISet forth below is the text of a post that I put to the SiteSell (a web hosting company) forum, followed by the response of SiteSell Owner Ken Evoy:

I believe that the path forward is to move away from the idea that there is one right way to build a successful site and to position SBI as a company that helps one-person shops build successful sites in a variety of ways.My site never fit the SBI model. I write about personal finance. That’s a huge topic with a huge amount of competition, certainly not the sort of niche that SBI advises its customer’s to pursue. There is a sense in which I am filling a niche — I employ behavioral finance insights that have to a large extent been ignored by the “experts” in the saving and investing fields. So my site is 100 percent unique and I really am a little guy going up against the big guys. But I don’t try to beat them by covering a smaller universe of subject matters. My hope is that behavioral finance insights will gain in popularity and that will pull enough people to my site for it to gain traction and then word of mouth will do the rest because the material is so good. If it happens (it hasn’t yet but I believe there is cause for optimism in the hugely enthusiastic support I have won among a small number of big names in the field), I will have won something bigger than just authority in a niche. It’s a riskier strategy than the usual SiteSell strategy, to be sure. But the payoff will be correspondingly big if the bet pays off.I knew that SBI was about developing niche material when I joined. So why did I sign up? I know that there are too many things to know about getting a business going on the internet for anyone to do it without help. I wanted to form relationships with others pursuing similar (but not the same) goals and learn from them (while also teaching them when I had something to offer in return). For example, I might want to create a PDF report to sell at my site and know nothing about how to do it. Someone with a niche site could share that knowledge with me. An area that I am strong in is getting expert endorsements. Perhaps I could share information on how to do that in return.I have nothing against the conventional SiteSell strategy. It obviously worked very well for a good number of people for a good amount of time. But I never felt that it was the only way to go and I always felt frustrated that it was hard to gain traction here with discussions of alternative strategies. I set up lots of pages that have no good keywords attached to them. That was the right thing for me to do because those pages explore strategies that I need to describe but that no one else in the personal finance field has written about. That’s a good thing for me! The fact that my work is unique is what gives it potential power even if Google changes its ranking rules (my unique saving and investing strategies can gain favor at FaceBook or Twitter or wherever). So I was right to write those pages. I often felt like a fool, though, because those pages did not fit the system and have not yet brought in visitors. If I become popular enough, they might bring in visitors in a later day. I created those pages as part of a long-term strategy.

My strategy is not one that many others are likely to pursue. But there are lots of possible variations both of the SiteSell way and of my way and of lots of other ways. David at the Cornhole site often talks about going for a small number of high-interest visitors rather than a large number of medium-interest visitors. I think that can be a good strategy for some niches. There are lots of other possibilities.

I understand why the conventional SiteSell approach had such appeal once upon a time. Google really ranked sites that followed the system well. The trouble (in my view!) is that not so long a time ago there was no Google. Google itself lacks a long history in which it determined for sure how rankings should be done. So ranking rules remain highly fluid rules. There is no one system that can be sure to work for a long time. It’s possible that three years from now Google will switch back to its old way of doing things. It’s possible that it will follow some entirely new path. It’s possible that some entirely new entity will replace Google. We don’t know.

Given that we don’t know, it is my belief that there are numerous possible paths for smart people to follow. That’s scary. If there is no one way sure to work, then there is a lot of risk attached to this site-building business. I think that there’s a lot of risk and that we all need to accept that going in. It would be fair to say that some strategies are less risky than others. And it would make sense to indicate to people what those strategies are. But given the riskiness of the entire endeavor, I think it is a mistake to believe that there is one strategy that is superior for all one-person-shop site builders.

Rob
http://www.PassionSaving.com

Ken Evoy’s Response:
Rob, awesome post…I suggest all read it, some sharp creative thinking.Trying to “be there” before the gold rush to a new niche is an interesting bet! You’ll be THE name if it happens. Heck, you might even help MAKE it happen!Re this…

[quote]I set up lots of pages that have no good keywords attached to them.[/b]

Yes, that’s the way folks should evolve. Much like golf, you should stop thinking of the mechanics of the swing at some point and just swing.

Many SBIers, once they are trained and the site is starting to flesh out, relax and are ready to just add great subject matter regardless of keyword.

You don’t need to be in your “ahead of the market” situation to do that, Rob.

But I don’t think we ever actually suggest that, Rob, so it’s a good point to add a point that, as you get used to the process, just relax and go with the flow of delivering a great user experience.

It’s possible to slavishly follow the AG “too much.” I can see that many would also NOT think to just “relax and swing.” You can’t break your site by delivering unique content. I think of it this way…

Demand is what people THINK of searching for (i.e., you follow their lead). NOT to build pages about Anguilla villas, Anguilla hotels, etc., would be foolish for a fairly tight niche like Anguilla. But adding articles about folks who have weekend in-house open kitchens (something she’s working on) is the type of unique and original information that pop people’s eyes once they are on your site.

Naturally, you’ll include the page in your zine, feed and FB post, reinforcing your reputation as a provider of information to follow.

We’ll build this concept up and add it to the Action Guide….

If you think your readers would enjoy it even if it’s not in the MKL, do it. It’s not so much about longtail search (although you’ll get a bit of that) as it is about the bigger concepts mentioned above.

We’ll add that. Thanks very much for bringing it up!

“People Won’t Tell You to Your Face That You Are an Ass. You Admit That You Have Been Doing This for 11 Years. Do You Notice That Your Message Is Not Going Anywhere? Wake Up, Rob!

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

Rob,

Even us unicorns know that people won’t tell you to your face that you are an ass. People, on the whole, will be polite in face to face discussions. There is no evidence of a vast conspiracy. You have been banned from so many sites because of your actions and demeanor. It is clear you are wrong and you made that more evident when you called Wade a liar. Additionally, my personal experience also shows you to lack credibility when you lied about me. There is clear evidence that you lie about others on here on a regular basis as we can look at their posts and watch you respond.

You admit that you have been doing this for 11 years. Do you notice that your message is not going anywhere, yet you have some delusion that it will go “viral”.

Wake up, Rob!

People who think you are an ass don’t say to you “your site is the best site I have seen in this area, I just love your investing ideas and have read every article you have written in an effort to learn more about them.” Give me a friggin’ break, Pink.

Now, the person that sent that message to me (I paraphrased but that was indeed the message) ALSO banned me from his site. So there are bits and pieces of what you say that are so. But the explanation of the EXCEEDINGLY strange situation is not that people think I am an ass. The explanation is that even the smartest people in this field are afraid today to go public with their doubts about Buy-and-Hold.

Whether there is a “conspiracy” or not depends on how you use the word. There are not people meeting in smoke-filled rooms plotting all this. But there are lots of people behaving in a similar manner when faced with similar sorts of circumstances. That’s been demonstrated THOUSANDS of times at this point.

You say I have been banned because of my “actions and demeanor.” Yes and no. It is an ACTION to report the safe withdrawal rate accurately. It is part of my DEMEANOR that I offer no apology for having done so when Buy-and-Holders react with anger. If that is what you mean by saying that my action and demeanor caused my bans, then sure, you are right.

How the heck do you think we are ever going to make the transition from Buy-and-Hold to Valuation-Informed Indexing without someone advancing that sort of action and demeanor, Pink? We need to get from Point A to Point B. It doesn’t happen if I say “oh, here’s my personal withdrawal rate” and then leave the discussion. I need to say “calculations of the safe withdrawal rate that do not contain an adjustment for the valuation level that applies on the start-date of the retirement are in error.” It is that statement that the Buy-and-Holders consider an action and a demeanor that cannot be tolerated. I am trying to REPLACE Buy-and-Hold with Valuation-Informed Indexing. The Buy-and-Holders are trying to defend Buy-and-Hold. We are working at cross purposes.

I have every right in the world to tell millions of middle-class people what they need to know to lose confidence in Buy-and-Hold. The move from Buy-and-Hold to Valuation-Informed Indexing is the biggest advance we have achieved as a people in the history of investing analysis. So please don’t suffer any illusions that I am going to back off that project. That is the project that I have been pursuing since the morning of May 13, 2002. With great pride. With great tenacity. With great diligence. With great hope. With great love.

I hope that part is crystal clear at this point. Please don’t ever suggest again that there might be some future date at which I would agree to say things in some gibberish way that would cause the Buy-and-Holders to let me post on the internet but that would not permit me to get the message out to millions of middle-class investors that the millions of middle-class investors very much need to hear. Those are my people, Pink. Those are my friends. I am going to get this message out to those people or I am going to die trying. There is zero chance of any deals being worked out re that point. Please give up that stupid, pointless dream!

Wade will be tried to a court of law. He will present his evidence and the state will present its evidence. That’s the way the system works. I will do everything in my power to spin things in Wade’s favor. I will not commit perjury. Fair enough?

I will handle things in precisely the same manner in your trial. Obviously the things I say will be different because the realities are different. But the spirit in which I will approach my obligation to testify will be the same in both cases. The rule I follow is to be as honest as it is possible to be without crossing an important line and becoming uncharitable while also being as charitable as it is possible to be without crossing another important line and becoming dishonest. That’s the story re that one.

Your take on the 11-year history couldn’t possibly be more different than my own, Pink. I have accomplished things over these 11 years that I never would have dared dream possible. I had a conversation just yesterday with a woman who is doing some technical work on my site. She marveled over the endorsements I have obtained. I was humbled. If you had told me back when I was a boy growing up in Northeast Philadelphia that scores of the biggest names in the personal finance field would be saying the sorts of things that scores of the biggest names in the personal finance field have said about Rob Bennett’s investing work over the past 11 years, I would have said that you were 100 percent loco nutso mixed-up crazytown. And yet here we are.

I am 100 percent convinced that the message will go viral, Pink. I have zero doubt.

I worry that it will take a Second Great Depression to make it happen. That prospect scares me to death. So I don’t mean to suggest that I am comfortable about where things stand today. I am not even a tiny bit comfortable. I am very concerned about where things stand today.

But I do not CONTROL that question. I have to accept that things are how things are. It is not my call. There are other people who have to get involved to make good things happen and, as of this morning, those other people have not elected to get involved. That’s the story there.

If Shiller is right (there is now a mountain of evidence that he is), the next price crash is going to put us in the Second Great Depression. That can be proven with numbers, Pink. If you don’t think that news that we are in Second Great Depression and that the Wall Street Con Men’s decisions to continue pumping out this Buy-and-Hold garbage for 32 years after the peer-reviewed academic research showed that there is precisely zero chance that it could ever work for a single long-term investor is going to go viral, then you are a dang fool. No personal offense intended. I know of no softer words to convey the essential point.

I’m awake, Pink. I was awake on the morning of May 13, 2002. Getting the numbers that people use to plan their retirements right matters. I am not guessing. I am SURE.

I naturally wish you all the best things that this life has to offer, my old friend.

Rob

“It Doesn’t Matter, Even If You Are Right. Not One Bit. Because Everyone Thinks You Are a Complete Ass and You Will Be Long Forgotten When Someone Actually Does Anything Semi-Productive With the Vague Notions You Have Been Spewing for 10+ Years”

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

It doesn’t matter, even if you are right. Not one bit. Because everyone thinks you are a complete ass and you will be long forgotten when someone actually does anything semi-productive with the vague notions you have been spewing for 10+ years.

You’re wrong, What.

You pretend to think I am an ass. You are in a tiny minority. When I go to the Financial Bloggers Conferences, I meet lots of people. Not one of them has ever indicated in any way to suggest that he or she thinks I am an ass.

People are EMBARRASSED. That much is so.

People are SCARED. That much is so.

People are CONFUSED. That much is so.

That’s not at all the same thing as thinking I am an ass.

I have seen a parallel case showing how this will turn out. My site host (SiteSell) is owned by a fellow named “Ken Evoy.” He is a smart guy and he came up with some ideas for how to get traffic on the internet that were ahead of their time. His ideas worked for a good number of years. People LOVED him. I never followed his system because it didn’t make sense for what I am trying to do with my site. But I certainly noticed how much people loved the guy. It was over the top.

The Evoy system no longer works since Google came out with its Panda and Penguin changes. People don’t say “Oh, Evoy had good ideas but Google has changed.” Hardly anyone does that. There is one group, smaller than before, that continues to love him to this day. That group says that Panda and Penguin don’t affect the system despite a mountain of evidence to the contrary. Another group now hates the guy with a burning passion. Their businesses have failed. They blame him.

Evoy is John Bogle.

Bogle is very smart. Bogle did things no one before him was able to do. Bogle deserves to be lauded as a hero. I laud him as a hero and always will. But I do that with an appreciation of the one thing he got wrong. Those who today laud him without an appreciation of the thing he got wrong are going to turn on him after the next price crash. I OPPOSE that. I think that’s a mistake. But I cannot control the world. I am virtually sure that that is what is going to happen.

I am not certain to succeed. But the risk for me is not the risk you point to. If people reach a point where they are willing to hear the realities of stock investing, I have the only site on the internet with 11 years of material exploring those realities. My site will go viral if a good percentage of the population opens up to the message. I am not worried about what happens to me in that event. In that event, I won’t have to file any legal papers to enjoy a $500 million payday. I will have multiple parties pushing the money on me, asking me to take it fast to help them with their guilt feelings.

My risk is that people are going to become excessively disillusioned with Buy-and-Hold. Valuation-Informed Indexing is Buy-and-Hold with one change. If people come to hate Buy-and-Hold with a burning passion, their emotionalism may cause them to tune out Valuation-Informed Indexing as well on the grounds that they just cannot bear to hear about anything that even reminds them of Buy-and-Hold.

If you were smart, you would join me in doing what you can to insure that that doesn’t happen. People don’t hate Buy-and-Hold today. So, if the Buy-and-Holders joined forces with me, we could stop the next crash from happening and all would be well on about 20 different fronts. But I obviously don’t control what people do. I am not expecting the Buy-and-Holders to help out. I hope they will. I urge them to. But I understand that that part of this is out of my hands.

I think you are wrong in your take as to how things will play out. I think you are being emotional once again. You are so ashamed of what you have done over the 11 years that you would rather see the entire planet go to hell over seeing Rob Bennett get any acknowledgment for the amazing work he has done over these past 11 years.

That’s on you, What. Your hate doesn’t just hurt me. It hurts you too. In very, very serious ways. It so blinds you that you cannot even see how much it is hurting you. All I can do is type out those words and hope that they cause some melting of your heart. I have said many times that I am happy to help you in any possible way and I of course stand by those words today. If you are too filled with false pride to accept my help, then that’s just the way it is. It makes me very sad. But there’s not one darn thing I can do to change the situation if that is indeed what the situations is (all signs indicate that it is).

I wish you well, man. I will keep on saying that with a hope that one of the times I say it the message will get through to a part of you that remains capable of hearing it.

Rob

Economics Professor Valeriy Zakamulin: “We Cannot Assume the Existence of Predictability Just Because There Are No Studies That Fully Reject It”

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I’ve been sending e-mails to numerous people letting them know about my article reporting on The Silencing of Academic Researcher Wade Pfau by the Buy-and-Hold Mafia.

Yesterday’s blog entry reported on a response that I received from Valeriy Zakamulin, a professor in the Department of Economics and Business Administration at the University of Agder, and my reply to that response.

Valeriy then wrote:
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Dear Rob,

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There are currently a few working papers that explore how to use the Shiller’s PE ratio for long-term investing, see for example

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http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2129474

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http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2031406&http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2031406

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In financial industry there have been developed market indexes to facilitate the implementation of the Shiller’ idea, see for example

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http://www.indexuniverse.com/sections/news/14498-barclays-shiller-hatch-pe-linked-indexes.html

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When it comes to your question “Do you know of any that show the opposite — that long-term market timing does NOT work”, you see, science is not the law where there is “presumption of innocence”. That is, we cannot assume the existence of predictability just because there are no studies that fully reject it. Besides, there are many different forms of predictability, many signals/variables/models that can be used. In science one first introduces a hypothesis and then test it. Thank god we have the Efficient Market Hypothesis! This provides us with a very simple benchmark to test different deviations from the EMH. Usually in science one first publishes a paper that shows evidence of predictability (using for example a specific signal/variable/model), then, if researchers finds some flaws in the paper, they publish papers that demonstrate these flaws and what happens if one takes into account these flaws.

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How science works, see for example

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http://en.wikipedia.org/wiki/Karl_Popper

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It seems to me that you believe in some sort of “conspiracy”, that the majority of academic researchers deliberately support the faulty idea of superiority of Buy-and-Hold strategy. May be a few of them do, mainly because there have studied it, and we lecturers tell about it, sometimes without due critique. But it seems to me that the buy-and-hold strategy is mainly supported by industry practitioners who earn money by investing other’s money in stocks. Their salary depends on how many people invest in the stocks, no matter the long-run outlook, whereas a salary of an academic researcher is not.

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On the other hand, let us assume that everybody uses a market timing strategy that works. Then imagine what happens with the stock market and economy when everyone sells stocks and switches to money markets. There will be a total financial disaster and long-term economic collapse! Will people be better off? I doubt. Have you ever thought about this?

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Valeriy

Economics Professor Valeriy Zakamulin: “I Would Not Agree That All Academic Professors Deny the Existence of Predictability. If A Paper That Supports Predictability Is Not Accepted, This Usually Does Not Mean That an Editor or a Reviewer Disbelieves In It. Most Often There Are Some Serious Flaws in Research Design.”

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I’ve been sending e-mails to numerous people, letting them know about my article reporting on The Silencing of Academic Researcher Wade Pfau by the Buy-and-Hold Mafia.

Valeriy Zakamulin, a professor in the Department of Economics and Business Administration at the University of Agder, wrote:

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“I agree that the topic of stock return predictability is indeed controversial. Yet I would not agree that all academic professors deny the existence of predictability. If a paper that supports return predictability is not accepted, this usually does not mean that an editor or a reviewer disbelieves in it. Most often there are some serious flaws in research design. Typical flaws are data-mining bias, look-ahead bias, econometric pitfalls, etc. There have been published many papers in top academic journals that find in-sample predictability.”

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Personally I believe in stock return predictability, see my paper

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http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1857794

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I replied:
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Valeriy:

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Thanks a million for that extremely helpful response.

One, I appreciate the context you provided re why some research in this area may have been rejected. There are some who adopt views re this matter that I view as excessively cynical. It cheers me to hear someone who is more knowledgeable than me about the technical aspects of the question who is able to offer a more charitable and encouraging and positive take.

Two, I did not know about your research and I am so happy that now I do! I have downloaded the paper and will give it a careful read over the next week or so (I am at the moment trying to complete a few projects I need to put behind me before taking a few days off for the holidays).

I am not an investing expert. I do not have the technical background you possess. I am a journalist. I do think I possess a strong grasp of the political aspects of the question (as noted above, I tend to be inclined to a more optimistic take than some of the others who share my concern that we need to move forward more quickly than we have been re challenges to the conventional thinking). I also have done a lot of work exploring the how-to-invest implications of Shiller’s findings and the research that followed from it. Please feel free to shoot me an e-mail if you ever have an interest in talking over any questions re which you believe that I might be able to offer any help.

I’ll ask you one question that I think is key to making sense of all this. Please don’t feel that I am demanding or even expecting an answer for you. I am just throwing this question out there in the event that it might be helpful to do so.

You say that there are many papers in top journals showing in-sample predictability. Do you know of any that show the opposite — that long-term market timing does NOT work? My sense is that the source of all the confusion is that those who believe in the Efficient Market Theory ASSUMED that long-term timing does not work without ever showing this to be so and that the problem ever since has been that people don’t want to reject this assumption because so many books and articles and calculators were built on this foundational belief.

The idea that timing doesn’t work became the default position, so the burden was placed on those who believe in predictability to prove their case while it really should be the other way around — we should be assuming that long-term timing always works (since long-term timing is paying attention to price and price discipline is what makes markets work) and challenging those who do not believe that long-term timing is required to present evidence in support of their case.

IS there any evidence that supports the claim that long-term timing is not required? Wade Pfau spent a good bit of time trying to find something re this point and came up empty-handed. He even went to the Bogleheads Forum and asked if anyone there knew of any studies showing that long-term timing does not work or is not required for long-term success. No one there knew of any work that had been done on this particular point.

Thanks so much for doing the work you do, which I believe (I am biased — but still…) is the most important research work (in any field!) being done today. I wish you the best of luck in all your future endeavors.

Rob

25-Year CPA Lyn Graham: “One Direction for a Person Working With Such Perceived Threats Is to Work Under the Visible Level. The Other Is to Be Very Visible and Make It Difficult for the Threats to Be Carried Out Without Notice.”

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I’ve been sending e-mails to numerous people, letting them know about my article reporting on The Silencing of Academic Researcher Wade Pfau by the Buy-and-Hold Mafia.

Yesterday’s blog entry reported on my correspondence with 25-Year CPA Lyn Graham. Set forth below is Lyn’s response:

The forthcoming market crash is foretold and purposeful, and no investment strategy I have heard or can think of is the solution. It is a sad state of affairs. Reagan warned we are only a generation away from losing our freedoms. I never took that as a prophesy but ….
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Economic success breeds freedom, and economic success is being destroyed, purposefully.
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One direction for a person working with such perceived threats is to work under the visible level. The other is to be very visible and make it difficult for the threats to be carried out without notice.
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I am not sure I have much to add. Good luck.
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I replied:
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Lyn:

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I’ve definitely chosen the “Be Very Visible” path!
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I want to end the conversation on an optimistic note. Shiller’s ideas represent a very big advance. I truly think I speak as an expert on this question because no one else has spent as much time exploring the implications of his ideas. Think where we would be had we failed to achieve any advances in electronics and computer and software technology for the past 32 years. We’ve given up a lot by closing off advances in our understanding of how stock investing works. The good news is that, when those paths open to us, we are going to see huge increases in our economy’s ability to generate wealth for us all in a very short amount of time.
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I am not saying that everything is roses. But I think that sometimes it is darkest before the dawn and I don’t think that is pure coincidence. I think it may sometimes take a spell of darkness to help the humans appreciate why it is important always to be moving ahead. I can see things getting much worse than they are today and then suddenly turning very positive indeed.
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Even if I am wrong, it’s probably better to be optimistic than not to be as it is difficult to work up the energy to work hard for good solutions once one becomes overly pessimistic. If it were just me, perhaps I would become discouraged. I have two young boys. So I feel that I have no choice but to maintain hope for the future even when my eyes see things that otherwise might push me in the other direction.
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Rob

“Jack Bogle Owes Every Investor Who Has Followed a Buy-and-Hold Strategy an Explanation of Why He Did Not Correct the Errors He Made Promptly Following Shiller’s Publication of Research Showing Them to Be Errors”

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Set forth below are the texts of six comments that I recently put to a discussion thread at this blog:

There is no conspiracy.

Former Financial Analysts Journal Editor Rob Arnott copied Jack Bogle on his e-mail to me saying that my investing ideas are “sound” and sharing with me his own experiences with intimidation being employed to stop academic researchers from doing the research that we all need to see to learn how stock investing really works. Jack did not respond.

I don’t think “conspiracy” is precisely the correct word to describe what is going on here. But there is certainly some sort of funny business going on when Jack Bogle does not offer a public response to an e-mail of that nature. No?

Please explain Bogle’s failure to respond to Rob Arnott’s e-mail from your perspective that there is no “conspiracy” going on re these matters.

Rob

 

You are delusional.

You were one of the ones saying that on the morning of May 13, 2002, when I put up my famous post pointing out the errors in the Old School safe withdrawal rate studies.

In the past year or two, every major publication in this field has acknowledged that I was right.

Is it Rob Bennett who is delusional? Or is it the “experts” who continue to try to “defend” Buy-and-Hold in the face of 32 years of peer-reviewed academic research showing that there is precisely zero chance that this strategy can ever work for a single long-term investor?

Rob

 

You have been banned from a large number of boards.

And I have seen a good percentage of the site administrators who banned me write me notes APOLOGIZING for the bans and telling me that they see great value in my work.

Odd?

Rob

 

As to not getting responses, no one owes you anything.

Jack Bogle owes every investor who has followed a Buy-and-Hold strategy (and they number in the millions) an explanation of why he did not correct the errors he made in development of the strategy promptly following Shiller’s publication of the research showing them to be errors, Sparky.

With great influence comes great responsibility.

Rob

 

Name any crackpot idea and you usually find that 2 or 3% of the population will support that position. That is really not a great percentage.

No one employs death threats and board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs to “defend” their ideas from the challenges raised by crackpots, Sparky. Your own behavior tells the tale here.

Rob

 

you seem to be viewed as a nuisance.

I am viewed as a nuisance and a lot worse by people who are still turning a buck through the promotion of Buy-and-Hold strategies 32 years after the peer-reviewed academic research showed that there is precisely zero chance that such a strategy could ever work for even a single long-term investor. That much is certainly fair to say, Sparky.

Rob

“People Do Not Post Comments Here. And People Do Not Link to Me. They Are Afraid to Do So. I Had Tons of Support Before Greaney Threatened to Kill Family Members of Any Poster Who Expressed Support for Me.”

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

I have 140 wildly supportive comments posted (with links!) at the “People Are Talking” section of the site, Sparky. There is no other blogger on the face of Planet Internet who has even a fraction of the number of wildly enthusiastic endorsements that I have won for myself.

Tell me one other blogger who has his name in the Acknowledgments section of peer-reviewed academic research (saying that he was the person whose views on investing inspired the research). And we’re not talking about any old research paper here. We are talking about research that a Ph.D. graduate from Princeton says belongs in the Journal of Finance, the top journal in the field.

Are you joking?

You are right that people do not post comments here. And people do not link to me. And people do not write articles about me.

They are afraid to do so.

I had tons of support before Greaney threatened to kill family members of any poster who expressed support for me. Do you think that might have something to do with the lack of comments here?

And it’s not just the death threats. The death threats were advanced by social misfits who in ordinary circumstances no one would pay attention to for two seconds. The bigger problem is the failure of people like Jack Bogle and Bill Bernstein and Larry Swedroe and Scott Burns to speak up and demand that something be done about those death threats and all the other intimidation tactics that you Goons have employed.

When Bogle speaks up, it is over, Sparky.

From that day forward, I will have not just hundreds of comments at this blog every day, I will have thousands.

That’s why I built the Retire Early board at Motley Fool into the most successful board in that site’s history in the first place. I want thousands of comments every day. And I want a thriving community of people helping those thousands of people to save and invest more effectively.

When your prison term is announced, that news is going to go viral. And then it will be over. The ugly part, I mean. The wonderful, life-enhancing exploration of the realities of saving and investing will continue for years and years and years.

Do I like it that my success depends on you being sent to prison?

I do not like it one tiny bit.

That’s why I have spoken out against the intimidation tactics going back to the first day.

I don’t control everything that happens in this crazy, mixed-up world of ours, do I, Sparky?

If it were up to me, there would be thousands of comments here every day and you would not be on your way to prison. It’s not up to just me. So I have been forced to watch it play out this other way instead.

I wish you all the best, my long-time abusive posting friend.

Rob

“I Have Engaged in Hard Self-Evaluation Every Day for 10 Years Running Now. I Have Come to the Conclusion That It Is Possible That I Am Wrong.”

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Set forth below is the text of a comment that I recent put to a discussion thread at this blog: 

I agree in full with the first two points you make here and in part with the third, Sparky.

I am 100 percent confident that many of the recipients of my e-mails find the e-mail campaign an odd way of spreading the word. How can I be so sure? I find it an odd way of proceeding MYSELF. If the person sending the e-mails finds it an odd way of proceeding, how could at least a significant percentage of those receiving them not feel the same?

And I certainly agree that the vast majority of people do not share my views on investing. If they did, stocks couldn’t possibly be priced as they are today. So that one also is settled.

Your third point is that I should do some hard self-evaluation and consider the possibility that I am wrong.

I agree 100 percent with those words as stated. I have engaged in hard self-evaluation every day for 10 years running now. So I obviously agree with you that this is needed. And I have come to the conclusion that it is possible that I am wrong. I’ve been wrong before. I thought I was right on those occasions. If it happened those times, why would it not be possible that it is happening again?

The part re which I disagree is unspoken but implicit in your words.

Your implicit suggestion is that I should stop sending the e-mails.

No.

That would be a terrible, terrible, terrible choice for me to make.

This is where YOU need to consider the possibility that it is YOU who are wrong.

If you are wrong, we have available to us today a means of reducing the risk of stock investing by 70 percent and we are not making use of it.

If you are wrong, we have caused an economic crisis because some Big Shots in this field were not able to work up the courage to acknowledge that what the academic research appeared to show 30 years ago no longer applies (something that all “experts” in this field should know as a result of their obligation to keep up with the new research as it appears).

If you are wrong, we have destroyed many fine discussion boards and blogs for no good reason whatsoever.

If you are wrong, many of our friends will be serving long prison terms following the next price crash. Huh? That makes sense? It’s not a close call, Sparky. That makes zero sense.

I could be wrong. You could be wrong. So it goes in this crazy, mixed-up world of ours.

Fortunately for us, we have as a society figured out a way to deal with this dilemma. We permit both sides to have their say. Then all the people interested in the subject listen in and decide for themselves. That way, as the case for an idea weakens, it is replaced by another, ultimately stronger idea.

That’s how we have to play it. I am not wrong re that one. That one is backed by all our cultural norms and indeed by our entire legal system and by thousands of years of human civilization. It’s not even remotely possible that I am wrong re that one.

Say that I really am wrong and that Buy-and-Hold is the ideal investing strategy. If that is so, Buy-and-Hold will survive any challenges that I or anyone else can present. The Buy-and-Hold idea will be stronger after it is vindicated than it is today. If Buy-and-Hold is the ideal strategy, that’s what you and I both want to see happen, no?

So let’s get to work, Sparky!

Let’s get that Ban on Honest Posting lifted at every discussion board and blog on the internet and let’s see Buy-and-Hold (or Valuation-Informed Indexing!) vindicated in the national debate that follows.

I look forward to working together with you and all of my other Buy-and-Hold friends to put all the ugliness behind us and to transform these discussions into helpful and fruitful and warm and friendly ones from this point forward.

Please let me know at what time today I should begin posting again to the Bogleheads Forum. I believe that it would be helpful if you would ask Mel to put up a “Welcome Back, Rob!” thread. That would set the right tone for where we all want to take this in coming days.

Thanks for hanging in there, my old friend!

Rob

“An Entire Industry Is Going to Have to Be Rebuilt. The Freakin’ Textbooks Are Going to Need to Be Rewritten. That’s What’s Holding Us Back.”

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Set forth below is the text of a comment that I recently put to the Goon Central board:

What absolute BS.  After he makes his “famous” (but actually insipid) statement on 2 May 2002, less than two weeks later he says: That shows the power of social pressure, GW.

Which is the entire story here.

I am not smarter than Jack Bogle. And I am not smarter than Bill Bernsteinzzz. And I am not smarter than Scott Burnssss.

All those people — and most of the others who have advocated Buy-and-Hold since 1981 — know about Shiller’s research.

So why was I the first to point out the errors in the Old School SWR studies?

It’s because they face greater social pressure than I do. When Bogle gives his “I Was Wrong” speech (and he will), an entire industry is going to have to be rebuilt. The freakin’ textbooks are going to need to be rewritten. All the tests that these people take to become “qualified” to give investing advice are going to need to be redone. That’s pressure. That’s what’s holding us back, not a lack of intelligence. Almost without exception, the Buy-and-Holders are smart as smart can be.

I was sure on the morning of May 13, 2002. I checked it every which way it can be checked before I pushed the “Send” button.

But I was not so sure that I could not still be persuaded by relentless and ruthless social pressure exerted by hundreds of my internet friends.

I did write the apology post. I did believe it was appropriate that Thursday night.

But it turned out that I was wrong about being wrong, didn’t it?

Two days later, Russell advanced his sensitivity study of Greaney’s study. That pretty much sealed the deal, didn’t it?

I was sure. Then I faced relentless social pressure that made me unsure. So I did the right thing and took the words back. Then I saw the numbers-based proof that proved beyond any reasonable doubt that I was right to be sure. And then of course we have had 10 years of confirming evidence since then without ever seeing a tiny sliver of data pointing in the other direction.

This story is a story of the power of social pressure to cause people to believe things that do not make sense.

That’s not just the story of safe withdrawal rates. That’s the story of stock investing.

It is the social pressure we all feel to pretend that we believe that bull prices are real that is the source of just about all stock investing risk.

You take that social pressure away and we never again have another bull market. You take that social pressure away and stocks are no longer any more risky than Certificates of Deposit.

Social pressure is the story here. All you are doing in showing that social pressure influences Rob Bennett just like it influences everyone else is showing how powerful a force social pressure is in stock investing. Yes, it affects me too. That’s because I am human.

If social pressure can influence that stubborn SOB Rob Bennett on the very topic on which he is a stubborn SOB, why should anyone believe that it has zero influence on JAck Bogle or Bill Bernsteinxxx or Scott Burnsxxx?

Social pressure matters, GW. It’s social pressure that got us into this mess in the first place.

And yes, I was have been wrong about things. I was wrong about being wrong about SWRs. There are now 10 years of Post Archives showing this to be so.

And you have been wrong about things. And, when people like Bogle and Bernsteinzz and Burns come to see that it is their job to help you to RESIST the social pressure to believe in bull markets, you will become empowered to earn far higher returns at greatly diminished risk and to retire many years sooner.

Empowering you (and millions of others) has been the entire point of this going back to the first day.

Rob