Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:
What you stated at the last election with Obama and Romney is that the crash would occur within a year. You keep repeating the claims of a crash, yet your predictions are wrong time after time.
In the last week, we have seen yet another 2 articles that have come out explaining how you have been wrong. It was pointed out on your site and you decided to throw out the prison threat yet again, which shows your sign of desperation. This desperation is not surprising as you stopped working with only $400k, hoping your hocomania routine might result in a few bucks, but that failed as well.
Now all you are left with now is the same delusional rants.
My record re short-term predictions is poor, Sammy. This is entirely consistent with Shiller’s research. He says quite clearly that short-term timing doesn’t work. I of course noted at the time when I made those predictions that there is no reason to believe that anyone has the ability to make good short-term predictions and that I was only putting them forward for fun. It can indeed by fun and at times even educational to discuss possibilities but the same historical return data that shows that long-term timing always works also shows that short-term timing never works.
You Goons brought those two articles to my attention at my blog and I thanked you because they do indeed make important points. They of course do not say what you suggest here they say. Surprise! Surprise! I wrote briefly about those two articles in the comments section of my blog. I also have written columns that will appear here in future weeks exploring those two articles in considerable depth. They raise important points but of course in no way shape or form do they show that I am “Wrrong.’ I have a funny feeling that the authors of the articles would agree with me and not with you Goons if they were asked to provide their take re this matter.
I believe that a good number of you Goons will be going to prison following the next crash, Sammy. I have been saying that for years now, ever since you threatened to destroy Wade Pfau’s career if he continued to tell people about the peer-reviwed research paper that he and I wrote together. That paper shows that investors who follow a Valuation-Informed Indexing strategy can thereby reduce their investing risk by close to 70 percent. That’s huge. I think it would be fair to say that that paper is the most important research paper published in this field in the past 35 years. Every investor alive needs to know about it. People are going to be angry at you Goons following the next price crash and I believe that, when the New York Times report all that has gone on over the past 15 years, you will be going to prison.
We will have to wait to find out for sure, you know? I obviously have no power to send you to prison. And i obviously am not seeking such power. I intend to argue for a somewhat shorter prison sentence than most are arguing for at that time on grounds that you are suffering from cognitive dissonance and that that should be a mitigating factor. But it is your jury that will decide the length of your prison sentence, not me. That one is not my call.
I do think it is my responsibility to let people know my view re the matter when asked. The fact that we are even talking about prison sentences for Goons shows how far out of hand this matter has gone. When both Fama and Shiller were awarded Nobel prizes on the same day, the New York Times noted how odd it was that two economists saying entirely opposite things about how stock investing works were both awarded the highest honor in the field on the same day. Everyone who works in this field should be engaged in the debate to determine whether it is Fama or Shiller who is right. The continued viability of our economic system lies in the balance.
We don’t see that. The problem is that lots of wealthy and powerful people have built their careers around promotion of the Buy-and-Hold strategy. So they tolerate abusive posting practices that are banned by the published posting rules (and indeed by the laws of the United States!) of every site that I have ever visited. It’s a shame. The reality is that there are two academic models for understanding how stock investing works, not one. Had Bogle come out with a clear statement to that effect when he first learned about Shiller’s “revolutionary” (his word) research in 1981, you wouldn’t be headed to a prison cell today and I wouldn’t have to worry about you Goons following me from site to site with your abusiveness.
Things are what they are. I don’t like the abusiveness. I DO like you Goons as people. So I will continue to do what I can to get the story of what you have done exposed and thereby to bring the ugly side of this to a full and complete stop. Until we all see that wonderful dream come true, we will just have to try to step around the nasty stuff to the best of our ability and keep our eyes on the prize — the wonderful learning experience that thousands of my fellow community members (including some of the biggest names in the field) have told me they have enjoyed as a result of my 15-year effort to examine the practical how-to implications of Shiller’s revolutionary research findings in great depth.
I naturally wish you all the best that this life has to offer a person, my good friend.
Rob
Hey Rob, did you see this on the Bogleheads conference:
Hello Everyone:
We are pleased to announce that our 2017 Bogleheads® Conference will be held in Philadelphia, Pennsylvania, with check-in starting at 2PM on Wednesday, October 18, 2017. The meeting will end around 1:30PM on Friday, October 20, 2017.
Our special guest for the Conference is our friend and mentor, Jack Bogle (health permitting). Jack plans to attend specifically to meet with his Bogleheads®, so this is a unique and rare opportunity. Other investing authorities expected to attend and participate as panel members in the Q&A with the Experts are authors Christine Benz, Dr. Bill Bernstein, Jonathan Clements, Mel Lindauer, Dr. Wade Pfau, Mike Piper, and Allan Roth. And we’re excited to announce that Gus Sauter, the former Chief Investment Officer at Vanguard, will be joining us again this year.
It looks like they go all the liars together. Maybe you should crash the party and confront all of them.
I’m not going to crash the party. I wish hem well with it. I wish I could be there.
I know that many of those attending wish that we all could talk things over honestly. I encourage those who feel that way to hold out hope for a turning point in the days following the next crash. Those will be scary times but also very exciting times. We are going to need to see everyone working together and everyone doing all that he or she can do to get things back on a good track.
I hope that works for you, Anonymous.
Rob
Who are the people attending that don’t think they can speak honestly?
You should be asking the question from the other direction, Anonymous. Who are the people attending who think they CAN speak honestly?
The P/E10 level today is in the high 20s, right? The P/E10 level is an honesty indicator, right? To say that stocks are “overpriced” is to say that stocks are “priced dishonestly,” is that not so? If I had a car that was worth $20,000 and I was asking $40,000 for it, that would be dishonest, no? So, when the entire stock market is priced at two times fair value, just about every last one of us is feeling pressure to speak dishonestly. Is there some reason why you would expect the people attending this event to be different than all the rest of us.
The difference between us is that you always look at the dark side and I always look at the bright side. Yes, the people attending this event have engaged in a good bit of dishonesty. You Goons would have torn them to bits had they not done so. So the very fact that they are attending tells the tale. But the people you name have ALSO engaged in a good bit of HONESTY over the years. It was by reading Bogle’s book that I learned about the errors in the Buy-and-Hold retirement studies. Wade is the named author on the most important piece of peer-reviewed research published in the past three decades.
It’s sad as sad can be that these people will not be using their considerable talents to tell people attending that conference things that they need to know to help us all bring this economic crisis to an end. I wish they were doing that. But you know what the cool thing is? They wish that TOO. Wade wants to flip, he wants to feel clean again. Bogle wants to flip, he wants to feel clean again. All the others want to flip, all the others want to feel clean again. The people speaking at this conference are humans. They possess a longing to help their fellow humans. They want to be able to survive in their careers, they don’t want to be torn bit to bit as their punishment for being fully honest. But they would take it in the other direction in two seconds if they could get away with it.
I would bet money that Wade is going to be dropping little hints about the things that he really believes about how stock investing works just to see what he can get away with it and not see his career destroyed. Maybe he will say something that will give someone else there an idea. Maybe we will see good things come of this. Maybe we won’t even know about the positive conversations that are held until after the next crash, when they will come forward and tell the story. But perhaps groundwork will be laid by our human friends who feel today that they dare not be fully honest in their statements but who carry within them the intelligence and compassion and drive needed to help us all out in a big way.
The good news here is 50 times more good than the bad news here is bad. We are close. This is a paradigm change. We are working our way through a process by which we will together as nation achieve the biggest advance in our knowledge of how stock investing works ever achieved in our history. We are looking at truly “revolutionary” (Shiller’s word) stuff. And some of the people positioned to help both themselves and all the rest of us out are meeting and will be dancing a little dance in which they will struggle to take the next step needed to get us all over The Big Black Mountain.
You are a Goon. You like to focus on the negative. So be it. I am a Normal. I don’t go for the Goon stuff. I prefer to spend my time appealing to the good in people instead of exploiting their Get Rich Quick urge to an extent that never before in history has it been exploited. We will see which “strategy” works best following the next price crash, you know? The circumstances are going to be different then. The stakes are going to be higher. I have a funny feeling that my good friend Wade Pfau and my good friend Jack Bogle and lots of my other good friends are going to play if very different then from how they are playing it now. But I could be wrong. I don’t know it all. We will have to wait and see to find out for sure.
I love my country, Anonymous. I am physically incapable of telling lies about the numbers that my friends use to plan their retirements. So I have never had any options as to how to play this. There has never been more than one way that I could go and I have always “chosen” to go that way. I’ll make the best of it whatever happens, you know?
I have learned important stuff from Wade. I have learned important stuff from Bogle. I have learned important stuff from Bogle. I would rather focus on that. Do I believe that this will end well, that the humans will figure out a way to work around you Goons and re-connect with their lost integrity? I do. I believe that that is going to happen. So I do what I can to further the process that I believe will continue to take place whether I act to further it or not. I want to have a positive effect on the world. I cannot bear to be one more person saying that the safe withdrawal rate is always 4 percent. I have seen too much human misery follow from that false claim to feel comfortable putting my name to it. Su me, you know?
I wish all the people attending the event the best of luck with it. I am 100 percent certain that every last one of them would prefer to be doing 100 percent honest work. But all of us humans feel pressure from time to time to be less than 100 percent honest. It’s never harder to be honest in the investing field than at times when the P/E10 level is in the high 20s. But the other side of the story is that there is never a time when the long-term payoff for being honest is greater than when the P/E10 level is in the high 20s. You see a gloom and doom. I see an amazing and exciting opportunity. That’s the difference between holding a Goon perspective and holding a human perspective.
I believe that it will all work out amazingly well for every last one of us. I am sure of it.
I hope that works for you, long-time Goon friend.
Rob
“You are a Goon…I am a Normal.”
I could attend the Bogleheads Conference. You are probably the only person in the world who is explicitly not welcome. In what twisted way does that make you “normal”?
That’s a good question, Anonymous.
You make a good point when you say that I am “probably the only person in the world who is explicitly not welcome” at this event. And I agree with you that in ordinary circumstances that would not be an indicator that I am “normal.” It would be quite the contrary. It would be an indicator that I am an outlier, that there is something weird or different or odd or unacceptable about me that puts me in this unique position of being not welcome at the event.
We agree on all that. And this is the driver of the entire 15 years of friction. I was a part of a community of aspiring early retirees that used a retirement study to plan their futures. The Greaney study was discussed at the Motley Fool’s Retire Early board on a daily basis. Everyone accepted it as a valid study. One day I stepped forward and asked “Should we be taking valuations into consideration when we calculate the safe withdrawal rate.” That was the day when I become not normal. That was the day when we saw the first outpouring of hate directed at me. That was the day when it became important to a number of my Buy-and-Hold friends that I be isolated, that I not be welcome at events like this Bogleheads conference that is coming up. The efforts to isolate me have obviously been successful.
In a surface sense, I suppose that it would be fair to say that the people attending the conference are the Normal ones and that I am the not Normal one. In ordinary circumstances, you would be making a good point. I can see how someone would see it that way if they did not look too deeply into the matter.
I see it differently because I am aware how out of line with our social norms the investing advice field is today. Not one person in 15 years has been able to find a valuation adjustment in the Greaney study or in any other Buy-and-Hold retirement study. So I have been proven right about that beyond any reasonable doubt. And Shiller did something very important in 1981 when he showed that valuations must always be taken into consideration in such calculations. If Shiller’s findings had not been as “revolutionary” as he claims they were, he would not have been awarded a Nobel prize. The normal thing in our society is to applaud huge advances like this, to dig deeper and deeper and deeper in an effort to incorporate them into our understanding of how stock investing works. Combine the fact that a valuations adjustment is 100 percent required to get the numbers right with the fact that the Buy-and-Hold studies do not contain a valuations adjustment and it becomes clear that I did something very important and very good when I put forward the question (“Should we be considering valuations when you calculate the safe withdrawal rate?”) that I put forward on the morning of May 13, 2002.
I am not the one who is out of step with our social norms, Anonymous. It is the Buy-and-Holders who are out of step. I am the Normal. It is the people who demand that I be banned from discussions and the people who agree to those demands and the people who tolerate the continued voicing of those demands that are acting out of the norm. That’s my sincere take re this matter.
I love these people. I admire their energy and their good will and their intelligence and I of course want to be even closer friends with them. But I do not want to go to the dark side to win their friendship. In the society that I grew up in, it was 100 percent accepted and even encouraged to speak honestly. It never occurred to me prior to May 13, 2002 that there might be an exception that applied in the investing advice field or that such an exception might be a good thing. I 100 percent believe that the same standards of ethics that apply in every other field should apply in the investing advice field. I am the Normal. My job is to Normalize this field. It is those advancing or tolerating death threats and demands for unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs who are living outside of our social norms.
Those people are not isolated today. They get invited to conferences. They are not banned from discussion boards or blogs. They FEEL normal. They APPEAR TO BE normal. But they do not BEHAVE in a normal manner, according to our social norms. Death threats are not normal. None of these other intimidation tactics are normal. These are outlier behaviors. We are living in a strange Twilight Zone world in which the person who is behaving consistently with the social norms is being treated as an outlier and the people violating the social normals are being treated as Normals.
This has been going on for 15 years. Maybe the norms really are different in this field. Maybe I need to accept that. Maybe things will never change. Maybe I am the one who needs to change.
I cannot do that.
I believe in the social norms that apply in every other field. I think honesty matters in the investing advice field just as it matters in every other field. I would not be able to sleep at night if I flipped and began saying that Greaney’s retirement study contained a valuations adjustment all along. I don’t believe it and it would hurt people for me to tell them that and so I just cannot go there.
There obviously are historical reasons why we find ourselves living in this bizarro Twilight Zone world. I would need to write a book (I am doing so!) to explain all the factors that came into play in putting us as a society in this strange place. I won’t go into all that in this post. But the bottom line is that things happened and here we are. If we are going to remain in this strange place for all remaining time, I am a fool to do the work I do trying to get us out of this crazy place and into a far better place for each and every one of us. I do not think I am a fool. I believe that the inversion of the social norms that govern who can attend the Bogleheads Conference this year are a TEMPORARY PHENOMENON.
I believe that it is all going to change following the next price crash, Anonymous. I could be wrong. I thought that the Campaign of Terror against our board communities would expire after about two or three days. I didn’t think that most community members would tolerate it for longer than that. It would be fair to say that the joke was on me re that one. So I acknowledge here and now that I could be wrong re all this. I don’t think that I am. But it is at least a theoretical possibility.
The reason why I don’t think that I am wrong is that I believe that the social norms that apply in every other field of human endeavor exist for very good reasons and that they cannot be ignored in any one field indefinitely. If it really is so that valuations affect long-term returns (I believe that it is so), then Buy-and-Hold over time will cause the collapse of our economic system. Prior to 1981, we did not have the peer-reviewed research showing how dangerous Buy-and-Hold is. So we have a test of what it can do. The historical record shows that indeed every time Buy-and-Hold has become popular we have seen an economic collapse. There is not one exception in the historical record. Buy-and-Hold became popular four times and we have seen four economic collapses. That concerns me, both because it is history and because the history we have seen play out makes perfect sense once Shiller’s revolutionary findings of 1981 are incorporated into one’s thinking about how stock investing works. What Shiller has shown us MUST happen indeed always HAS happened for as long as there have been markets offering stocks for sale to human investors.
I think that in days to come the investing advice field is going to be governed by the norms that apply in every other field of human endeavor. I believe this with 100 percent certainty. I acknowledge that I could be wrong because I am one of those darned flawed humans. But I personally possess a strong conviction re this matter because of my 15 years of viewing up close and personal how the Buy-and-Holders react when their views about how stock investing works are questioned or challenged.
I love my Buy-and-Hold friends. And I love the millions of middle-class investors whose lives are in the process of being destroyed by my Buy-and-Hold friends. So I feel compelled to do what I can to relieve the pain of the people in both groups. I am asking that our social norms be applied in this field just as they are in every other field of human endeavor. I believe that deep in their hearts that’s what my Buy-and-Hold friends want as well, they just don’t feel comfortable saying so out loud because they are not willing to pay the penalties that they have seen exacted on others who have dared to “cross” the Buy-and-Holders by posting honestly re the last 36 years of peer-reviewed research.
We will have to see how it all plays out, Anonymous. I believe that the norms in this field are going to change to reflect the norms that apply in every other field when we see the next price crash and the 36 years of peer-reviewed research discrediting the Buy-and-Hold concept is seen to offer not just theoretical knowledge but to report on very important flesh-and-blood realities. Millions of people are investing in stocks today to finance their old age retirements. These people need access to honest and accurate reports of what the last 36 years of peer-reviewed research says. This is not optional. It is 100 percent imperative. My feeble human brain is not able to come up with anyway around that critically important reality.
That’s it, my long-time Goon friend. You are treated as a Normal today. But I don’t view death threats as normal. I say that it is you Goons who are the true outliers and that this will become known and accepted everywhere in the days following the next price crash. But we are just going to have to wait to see how things play out to know for sure.
I wish you the best of luck with it. I ALSO wish my millions of normal middle-class investors the best of luck with it. I see it as my job to do the best that I possibly can do for my Goon friends without crossing the line and failing to honor the needs and wishes of my millions of normal middle-class investor friends as well. Re anything that I can do to help you Goons out, I am in without question UNLESS GOING IN REQUIRES CROSSING THE FELONY LINE, in which case I am out without question. No felonies. No financial fraud. No statements that Greaney’s study contains a valuations adjustment. No denials that there is now 36 years of peer-reviewed research showing that any study failing to include a valuations adjustments gets the numbers wildly wrong.
I love you, man. But I also love myself. And I also love my country. And I also love those social norms that we have been talking about here. I think that those social norms will prevail in the end. I think that it is you Goons who will be excluded from Bogleheads Conferences in the days following the next price crash. I believe that following the next price crash we are going to see a great demand throughout this nation to rebuild our economic and political systems from the damage that has been done to them in recent decades and I am excited about the opportunity that I have been given to play a big role in that revival.
I am going to be speaking at plenty of Bogleheads Conferences in future days. It is going to be a blast. I am not worried about it. I am disappointed that I am not going to be able to speak this year. But that’s the way the cookie crumbles, you know? I don’t control that. I am 100 percent confident that, if I do the right things, things will go well for me and for our entire country in the long run. I believe that we live in days of great opportunity. I believe that people of the future will look back at these 15 years and wonder what we were thinking in waiting so long to apply the social norms that we all know deep in our hearts are the ones that get the job done.
Humans!
You know?
I wish you all good things, old friend.
Rob
Panel of so-called “investing authorities” Bogle, Lindauer, Piper, Pfau, Pfffft. They all belong in prison. You are Bogle’s equal. You were Wade’s teacher. I know this is true, because I read it all here. You shouldn’t just be on the panel, you should BE the panel, answering THEIR questions. But you can’t even attend.
At what point does the injustice of it all become overwhelming?
There have been grave injustices. I don’t say different.
There have also been amazing advances.
Shiller published the most important peer-reviewed research in the history of investing analysis in 1981. Shiller’s book was widely reviewed and became a best seller. Shiller was awarded a Nobel prize. We have had thousands of community members express a desire that honest posting be permitted at every discussion board and blog on the internet. The research paper that I co-authored with Wade Pfau was accepted for publication in a peer-reviewed journal.
You can look at the glass as half-full or as half-empty. I prefer to look at it as half full. I believe that it is your Goon nature that causes you always to focus on the ugly side of things and to turn away from all the wonderful, exciting stuff that the humans (including people like my good friend Jack Bogle!) are doing all about us on a daily basis.
I have a funny feeling that the next few decades are going to go a lot better for all of us than the last few have gone.
But we’ll see, you know? That’s the drama of the thing. No one knows for absolutely certain how it will all play out until we see it with our own eyes.
My sincere take.
Rob
Rob,
If you were to plan and design your own conference like the Bogleheads conference…………let’s call in Bennettheads, what would the agenda look like and who would be on the panel?
I don’t want ever to be associated with any conference called “The Bennettheads.” I find the idea distasteful. So I certainly would not go with that name.
I wouldn’t have a problem with calling the conference “The Bogleheads.” I think of myself as a Boglehead. As I have noted on many occasions, it was by reading one of Bogle’s books that I learned about the errors in the Buy-and-Hold retirement studies. The only reason why I don’t usually refer to myself as a “Boglehead” today is that a community called the “Bogleheads” banned me from their discussions. I think it would be fair to say that a good number of Bogleheads hate my message. So my thought is that it is not a good idea for me to go around using that name. So I moved away from it. With some sadness in my heart, to be sure.
You have probably noticed that I often refer to supporters of Mel Lindauer as “Lindaurheads.” I do this to point out the contrast between what Lindauer advocates and what Bogle advocates. Bogle advocates using the peer-reviewed research as a guide. I view this as Bogle’s core belief. It is also my core belief. This is why I feel such respect and admiration for the man. I believe that the primary risk of stock investing is engaging in emotionalism and that the best way to avoid emotionalism is to test ideas through the use of peer-reviewed research. When I was researching this stuff, I learned that Bogle believes in using the peer-reviewed research as a guide and so I became a Boglehead or a Buy-and-Holder or whatever you want to call people who believe that.
I think it would be fair to say that Lindauer feels a burning hate for the last 36 years of peer-reviewed research. I use the term “Lindauerheads” to refer to people who profess to follow Bogle but yet hate his core idea of using the peer-reviewed research as a guide. One could argue that Bogle himself is a Lindauerhead; he certainly has done things to indicate support for Mel’s work. Bogle has never explained the contradiction. He continues to support Lindauer but he ALSO continues to support the use of the peer-reviewed research which Lindauer hates with such a passion. I am not able to resolve that contradiction. I would love to have an opportunity to ask Bogle to try to do so. That certainly would be one of the first questions that I would ask him if I were permitted to attend this year’s conference.
The Bogleheads name is around and well-known. And the Buy-and-Hold name is around and well-known. Why not just use those? That’s my thought. We could distinguish the version of Buy-and-Hold that incorporates the last 36 years of peer-reviewed research into the analysis by referring to what I now refer to as “Valuation-Informed Indexing” as The New Buy-and-Hold or Buy-and-Hold 2.0 or whatever. It was never my personal intent to supplant Buy-and-Hold. I just wanted to incorporate the last 36 years of peer-reviewed research into the model. It’s all the controversy, which I very much did not expect to see when I put forward my post of the morning of May 13, 2002, that brought on the need for new nomenclature.
I imagine that I could design a good conference if I spent some time and effort on the project. I cannot do it off the top of my head. I just am not prepared to do so. But I doubt very much that I would have any major objections to the line-up that you referred to in your earlier post. I am 100 percent certain that the people who came up with that list did a good job. So, if you want me to give you an answer off the top of my head, I would say just go with that list and you would not be going too far wrong. There are several names on that list for which I feel great respect and admiration. So I am 100 percent confident that it is a good list and I suspect that it is close to what I would come up with if I spent lots of time trying to do the job picking names myself. Why not just make use of the good efforts already invested in this project by other good and smart people?
There would of course be one major difference between the conference that is going to be held and the one that I would design. I would permit every single participant to offer honest and informed comments on the far-reaching implications of the past 36 years of peer-reviewed research. Check that. I wouldn’t just permit honest posting, I would ENCOURAGE it. I would invite it.
I wouldn’t compel it. If there are people speaking to the conference who either don’t believe that valuations matter or who believe that they don’t matter all that much or who feel that we don’t yet fully understand how they matter and who therefore elect themselves not to address themselves to the subject, I think that’s fine. But I would encourage those who believe they have something useful to say on this subject to do so. I would like to know what Bogle believes re the valuations topic. I would like to know what Pfau believes (I already know what he believes to a considerable extent, but I would like to see him say it publicly at a Bogleheads conference and there is a good chance that his beliefs have evolved a bit since the time when I was in regular communication with him and so I would love to hear an update). And I would like to hear the thoughts held by all participants re this critically important (in my view!) topic in the event that they felt that they had something useful to contribute regarding it.
The only thing that distinguishes me from my many Buy-and-Hold friends is that I believe that the last 36 years of peer-reviewed research should be explored in great depth. All the rest I think is gold. But I view it as a terrible mistake to prohibit all discussions that incorporate an appreciation of the past 36 years of research. Science is a process by which humans learn new things over time. There is never a date in history at which you can say “we know it all now and we never again need to reconsider any question.” That attitude, which is a Goon attitude is anti-science. It is the OPPOSITE of what attracted me to Bogle and to Buy-and-Hold. My view is that Valuation-Informed Indexing is the product of the natural evolution of Buy-and-Hold over time. We started out believing one thing re valuations and then we learned something different and then we struggled to incorporate the new thing but now at last we are getting near to the end of the process by which that incorporation will be achieved.
I hope that helps a bit, Anonymous.
Rob