Robert Shiller Pulls His Punches

Beyond Buy-and-Hold # 41

All of the work that I have done in the investing field is rooted in the insights revealed by Yale Economics Professor Robert Shiller’s research, popularized in his book Irrational Exuberance. The idea that a Buy-and-Hold strategy could work was rooted in the research of University of Chicago Professor Eugene Fama’s research, which was discredited by Shiller in 1981. My aim is to integrate the legitimate Fama insights (which were numerous) and the Shiller corrections into a package of investing ideas that can actually work in the real world. I call this package “Valuation-Informed Indexing.”

The strange thing about it is that I go places where Shiller has never gone.

I say that stocks are not nearly as risky now that we know that we need to take valuations into consideration when setting our stock allocations. Shiller doesn’t say that.

I say that the heavy promotion of Buy-and-Hold strategies for 30 years after they were discredited by the academic research was the primary cause of the economic crisis. Shiller doesn’t say that.

I say that the Old School safe withdrawal rate studies got the numbers that millions of middle-class workers used to plan their retirements wildly wrong and that we will be seeing political turmoil for years to come as a result of this horrible mistake. Shiller doesn’t say that.

Why doesn’t Shiller say these things? For that matter, why doesn’t Shiller endorse my saying of them? I wrote him an e-mail once with the hope of establishing ongoing communication about how to open the internet up to honest and informed exploration of his investing ideas. He did not respond. Huh?

I of course do not know why Shiller has been so reticent to help people learn about the far-reaching implications of his research. However, I can offer a few clues, based on statements that Shiller himself has made and on behavior I have seen from others who believe that valuations matter and who have evidenced a great reluctance to offer public comments about what this means in practical terms for investors.

Shiller once said in an interview that he has never shared all that he knows about stock investing because he would be viewed as “unprofessional” if he did. That’s such a strange statement. Isn’t it the goal of investing professionals to learn and teach the realities to the greatest extent possible? How did Shiller ever come to believe that people would think less of him if he helped us all out?

Call on me, teacher! I know! I know!

My contribution to the stock investing universe

My claim to fame on the internet is that I am the person who discovered the analytical errors in the Old School safe withdrawal rate studies. I helped lots of people out with that one. But it wasn’t the word “thanks” that I heard most often in response.

I had people threaten to kill me. I had people say my parents are alcoholics. I had people say my children don’t respect me. I had people say that my wife has left me. I had people tells lies about my financial circumstances. In short, I had people trying to plant an impression in other people’s minds that I am something less than “professional.” I’ve been Shillered!

The Buy-and-Holders have a problem. They really do believe in Buy-and-Hold. They think they are helping people when they advise them to follow this strategy. But they cannot entirely dismiss claims rooted in the academic research because Buy-and-Hold itself claims to be rooted in the academic research. And there is now 30 years of academic research showing that Buy-and-Hold can never work for the long-term investor.

The Buy-and-Holders are in a pickle!

They are hurting.

Buy-and-Hold Investors are investors in pain. Being human, they lash out.

Seeing that causes people like Shiller to keep it zipped. People don’t like to be hated and Buy-and-Holders often feel drawn to hate those who point out the practical investing implications of our finding in 1981 that valuations affect long-term returns.

Shiller has never told us all that he knows about stock investing. Lots of people haven’t. That’s too bad. We all are a poorer people (in more than one sense of the word) as a result.

We need to turn this around. Each and every one of us needs to pitch in and do what he or she can to help the Buy-and-Holders to understand that their legitimate contributions were very significant, to get over their defensiveness and to begin learning about all the exciting stuff that has come out in the last 30 years of academic research.

We’re all in this together. There’s not one person alive who does not on some level of consciousness want to learn how to invest effectively. We’re not enemies, we’re friends. We are all capable of making mistakes and we all have made them.

I look forward to the day when Robert Shiller gets over his reluctance to tell us everything he knows about how stock investing works. I look forward to the day when I get over that same reluctance. Yes, I feel it too. I think we all do. We all will be speaking about stock investing a lot more clearly and intelligently and honestly in the future than we ever have in the past.

Rob Bennett is co-developer of a stock cycles calculator called “The Returns-Sequence Reality Checker.” His bio is here.

Rob Bennett is co-developer of a stock cycles calculator called “The Returns-Sequence Reality Checker”. Rob’s bio is here.

( Photo from Flickr by Helico )

70 Responses to Robert Shiller Pulls His Punches

  1. Heywood and “Reality” – we’ve got 125 comments here – more than half by the two of you – participating in a negative personal exchange with Rob. Please take your greivances elsewhere. Your comments will be deleted, as will any subsequent comments. I suggest you go to direct email exchanges with Rob. I can’t allow these comments to remain published on this site. This is a difference of opinion that obviously has become very personal.

  2. Mr. Bennett,

    Can you please show the math and the corrections for what you say is the error in the old school withdrawal rate. Secondly, can you show us any fund that has utilized your “value informed investing strategy so that we can compare its real world performance versus other strategies. Lastly, your comments on “buy and hold” are downright false. We have seen many examples of buy and hold strategies that have worked, with actually demonstrated return rates. Would you like examples?

  3. All you have to do to see that the Old School SWR studies are in error is to take note of how much the number changes with changes in valuation levels. It doesn’t change! That obviously cannot be right.

    The “fund” that shows that Valuation-Informed Indexing has beat Buy-and-Hold for 140 years (that’s as far back as we have records) is fund they call “The U.S. Stock Market.” There has never once in history been a time when VII did not produce far higher returns at greatly reduced risk. There is 32 years of peer-reviwed academic research showing this. The only thing on the other side is a massive marketing campaign led by the Wall Street Con Men, who obviously have become very wealthy through their promotion of the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind.

    There’s never been a case of a Buy-and-Hold strategy working in the long term, Questions. It simply has never happened. If there were a case of thing happening, the Wall Street Con Men would not be shy about telling us about it. Ignoring price ALWAYS increases risk dramatically while also decreasing return dramatically. It is impossible for the rational human mind to imagine how it could ever go any other way. Price matters with anything you buy, including stocks.

    Rob

  4. Mr Bennett,

    You have not answered the questions. Show us the math and you “fix” to what you call the Old School Method. All you say is that it is wrong. I dug further and see that Wade Pfau pointed out that you don’t know the numbers and so I want to see if you have come to any solution post his comment.Secondly, you have not pointed put a fund. What you are suggesting is market timing. Show us an example of a portfolio that has successfully traded with this strategy and has provided superior results. We can all be Monday morning quarter backs and name the winning teams after the event. Once again, point to any find that has used your strategy successfully. Also, tell us how you have traded in the market by using this strategy? Did you buy into the market during the 2009 buying opportunity and profited by one of the largest bull markets we have seen?

    Lastly, you are wrong on the buy and hold successes. Your good friend Yip gave you a long list of those. Shall I remind you of the list?

  5. I say that you are too emotionally addicted to the purest and most dangerous Get Rich Quick strategy ever concocted by the human mind to HEAR the answers, Questions.

    If Buy-and-Hold were a legitimate strategy, there never would have been a single death threat.

    If Buy-and-Hold were a legitimate strategy, there never would have been a single board banning.

    If Buy-and-Hold were a legitimate strategy, there never would have been a single act of defamation.

    If Buy-and-Hold were a legitimate strategy, there never would have been a single threat to get a single academic researcher fired from his job.

    I mean, come on.

    Rob

  6. Mr Bennett,

    Can you please try to answer the questions. We can address each of those points once you answer the questions that I have regarding the subject matter being discussed (let’s stay on topic, please).

  7. The topic is whether we should permit honest posting on stock investing topics on every board and blog on the internet, Questions.

    I say that we should.

    We permit honest posting on hundreds of other topics. The practice of permitting honest posting seems to work well in all those areas.

    We PROMISE to permit honest posting re investing in the published rules at every board and blog.

    Are you able to point to any possible downside (other than the fact that you will be going to prison once millions of middle-class people learn about the role you have played in supporting the biggest act of financial fraud in U.S. history — that’s not a good reason because the reality is that your prison sentence will be a lot shorter if you come clean today than it will be if you do not come clean until after the next price crash)?

    My feeble human brain is certainly not able to come up with anything.

    Is there anything that occurs to your far superior Goon brain?

    Rob

  8. Mr. Bennett,

    You wrote the above article. I am asking you direct questions as to what you wrote. Can you please refrain from name calling and stop trying to change the subject. The idea do the discussion section is to discuss the points raised. Can you please attempt to do so.

  9. How is it name-calling to ask that you refrain from the use of death threats and board bannings and defamation and threats to get academic researcher fired from their jobs, Questions?

    It’s not.

    Those are the basics of human civilization. All learning comes about because we agree to act in a civilized manner.

    Once you accept the need to act in a civilized manner, you will obviously have answers to your every question. We will see Valuation-Informed Indexing written up in every newspaper. We will see every investing site carrying calculators that report the numbers honestly and accurately. We will see the people who in earlier years have advocated Buy-and-Hold strategies offering their apologies to the millions of middle-class people they have harmed and moving forward together with the rest of us.

    Agreeing to follow the rules of civilized human behavior is the very first step, Questions. All of the rest follows easily from that.

    But that first step cannot be ignored. It is when that first step if ignored that we end up seeing people like yourself being sent off for long prison sentences. I think of you as a friend and I am not going to go along with something like that.

    I certainly wish you the best of luck regardless of what investing strategies you elect to pursue, in any event.

    Hang in there, my old friend.

    Rob

  10. You are wasting your time with Rob. He won’t answer your questions because he can’t back them up with facts.

    He will just change the subject making up more comments that also cannot support with facts, leading you down another rabbit hole. Ask him to support his comments on death threats or job threats and he will just give you a link to his own comments, but can never back them up with proof.

    His examples here show the real reason he was banned from 15 boards. Rob cannot manage to have a normal interaction with anyone that asks him questions about his posts or asks him to provide proof of his conversations.

    As you can see here, Rob will then resort to name calling, using the word “Goon” and then lies in saying that he never called you a name.

    Eventually, he will tell you that you are going to prison and that he will be receiving $500 million in damages.

  11. You are one of those Unemotional Investors, Mr. Rational. I can tell.

    Yes, I will continue posting honestly on safe withdrawal rates and on many other critically important investment-related topics.

    I’ll let you in on a little secret.

    My good friend Jack Bogle would very much like to feel free to join me.

    It’s the same with my good friend Wade Pfau.

    And with my good friend Bill Benrstein.

    And with my good friend Scott Burns.

    And with my good friend Larry Swedroe.

    And with lots and lots and lots of other.

    I have a funny feeling that, following the next price crash, we will all be working together to pull our economy out of the Second Great Depression and to take us all to the greatest period of economic growth in our nation’s history.

    Just another one of those crazy hunches that I have been known to experience from time to time.

    My best and warmest wishes to you in any event, Mr. Rational.

    Hang in there, old friend.

    Rob

  12. Mr. Bennett,

    Can you please focus for just one minute and comment ONLY on the questions that I raised above that are specific to your post. Otherwise, you are just wasting everyones’s time making comments that have no factual proof to support them.

  13. Are you able to focus for one minute and leave the nasty emotional stuff behind and engage in a learning experience, Questions?

    We are the luckiest generation of investors who ever lived. We know today all that we need to know to reduce the risk of stock investing by 70 percent.

    Why not enjoy the benefits of that instead of arguing over whether honest posting on safe withdrawal rates should be permitted?

    Of course honest posting should be permitted! We all benefit from permitting honest posting!

    Not just here.

    Honest posting should be permitted at Morningstar. And at Bogleshead Forum. And at Motley Fool. And at Early Retirement Forum. And at every investing blog.

    Are you able to imagine any possible downside?

    Rob

  14. When pressed for evidence Mr Bennett posted these rambling comments, without remotely addressing the questions. Mr. Bennett is a charlatan.

  15. The Campaign of Terror IS the question, Sensible.

    There’s 32 years of peer-reviewed research showing that there is zero chance that a pure Get Rich Quick approach can ever work for even a single long-term investor. There have been thousands of community members who have expressed a desire that honest posting be permitted. The peer-reviewed research that I co-authored with Wade Pfau shows that we can reduce the risk of stock investing by 70 percent for millions of middle-class people just by opening the internet to honest posting on SWRS and other critically important investment-related topics.

    There was a time when Buy-and-Holders FAVORED learning about what the peer-reviewed academic research in this field says.

    Somehow I don’t think that I am the “charlatan” here.

    My best and warmest wishes to you and yours.

    Rob

  16. Personal integrity matters, Mr. Rational.

    Not only in all areas other than stock investing. In stock investing too.

    That’s my sincere belief re this terribly important question, in any event.

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

    Rob

  17. Agree Rob. That is why you are asked to back up your comments with links to facts. You can’t do that on anything asked of you here today. You can’t even back up your other comments about death threats, job threats, prison threats, etc. You just mentioned the paper with Wade knowing that someone would comment on the fact that you are not listed as an author hoping to divert attention once again. Spare us your explanation about how you think you were the “teacher” and he was your student. The FACT is that you are listed in the acknowledgement section, just as others were.

    By the ways, most people don’t refer to others as “friends” when you don’t actually talk to them and also post about how they are going to prison.

    Yes, Rib, integrity matters. It is earned by being able to back up your comments with facts and not just links to your own posts.

  18. I agree that a “get rich quick” approach won’t work for most long-term investors. Fortunately for the average long-term investor, buy and hold works and is here to stay.

  19. Spare us your explanation about how you think you were the “teacher” and he was your student. The FACT is that you are listed in the acknowledgement section, just as others were.

    Why should I “spare” you this, Mr. Rational. This one fact tells the story in a very concise and wonderful and human way. I don’t want to “spare” anyone knowledge of this. I want to shout it from the rooftops. I want to spread the word to every investor alive today.

    Wade has a Ph.D. in Economics from Princeton. He knows his stuff. He was like a kid in a candy shop when I was teaching him about Valuation-Informed Indexing. He was learning things that he never knew before, things that they never taught me at the Princeton Ph.D. program. And he realized how important these things were. He told me that he couldn’t sleep at night because he was so excited about Valuation-Informed Indexing. He couldn’t believe that it could be so superior to Buy-and-Hold. But he checked the data over and over again and the research always turned out the same. This was the biggest breakthrough i the history of personal finance. Wade was looking forward to winning a Nobel prize for his efforts in this area.

    That’s good stuff, right?

    It was until you Buy-and-Hold Goons responded by threatening to get Wade fired from his job if he ever again dared to “cross” you by publishing honest research. And until Jack Bogle indicated that that was okay by him by failing to respond to the acts of intimidation when he learned about them.

    Wade had financial responsibility for two small children. So he agreed to keep quiet about what he knows in return for being able to keep his job.

    But what do you think is going to happen following the next price crash, when the continued promotion of Buy-and-Hold “strategies” puts us in the Second Great Depression. If Wade sees an opportunity to get away with posting honestly, he is going to grab it. Then where will you Goons be?>

    In prison, right?

    Because you can’t acknowledge getting a number wrong in a retirement study published at the web site of one of your fellow Goons?

    You are not Mr. Rational, Mr. Rational. You are Mr. Emotional.

    That’s my take, in any event.

    I naturally wish you all good things.

    Rob

  20. buy and hold works and is here to stay.

    Then you should be able to provide the URL for at least one peer-reviewed study showing that long-term timing is not required. Wade spent months searching the literature for such a study and was never able to find one. He couldn’t believe what he had discovered. So he went to the Bogleheads Forum to see is anyone there had ever found a single study supporting the key Buy-and-Hold claim — that price discipline does not matter when buying stocks.

    Jack Bogle did not know of a single such study. Neither did Bill Bernstein. Neither did Larry Swedroe. Neither did Rick Ferri. Neither did Mel Linduaer. Neither did Taylor Larimire.

    I wonder why.

    Rob

  21. And there is Rob, right on cue. Making statements he can’t support with facts and he throws in the prison threat for good measure.

    Need I say more?

  22. Financial fraud is a felony, Mr. Rational.

    That means prison time.

    I didn’t make financial fraud a felony. The people of the United States did.

    Your beef is with them, not with me.

    I wish you well.

    Rob

  23. No need for peer review. You simply have to look at some charts. Buy and hold is special in that way, you can easily just pick a day and then review results from that day til now. Or another day.

    Irrational market timing, the sort that leads investors to buy high and then sell low in a panic, is not as easy to quantify. There will be some winners but mostly losers.

  24. Rob,

    You and everyone else knows that no one has been charged with the felonies you allege. Spare us your fantasies of revenge.

    Look at all your silly posts made in an attempt to avoid simple questions.

  25. “Buy and hold is special in that way, you can easily just pick a day and then review results from that day til now.”

    That’s what Wade and I did with our research. We found that for 140 years now, following a Buy-and-Hold strategy has ALWAYS dramatically increased risk while also dramatically decreasing return.

    Just what a middle-class investor wants in an investing “strategy”!

    Rob

  26. “Spare us your fantasies of revenge.”

    I have been posting in OPPOSITION to the abusive stuff going back to the morning of May 13, 2002, Mr. Rational.

    You wouldn’t have to worry about a prison sentence today if I could have found enough other community members to shut down the Campaign of Terror 11 years ago.

    Financial fraud is a loser. For everyone involved in it.

    I am sure.

    My best wishes.

    Rob

  27. Rob, the richest and most successful investors in the world are buy and holders. They are not market timers.

    You did not have a significant role in Wade P’s research.

  28. “the richest and most successful investors in the world are buy and holders. They are not market timers.”

    For a time, yes. But never in the long run.The 140 years of historical data is available at Shiller’s site. You could check this for yourself if you were so inclined.

    “You did not have a significant role in Wade P’s research.”

    That’s not what Wade said. I have 20 or 30 different e-mails in which he goes on and on saying that Valuation-Informed Indexing is the biggest advance he had ever seen and how he learned everything he knew about it from me and how grateful he was that I was willing to teach him all the stuff that he never learned at Princeton and how he expected to spend the rest of his life researching VII and how he gave me full credit for being the person who developed the concept in the face of such relentless and brutal opposition and how he thought that the people who posted in defense of Mel Linduaer and John Greaney were corrupt and on and on and on.

    I will naturally be presenting those e-mails at your trial, Sensible.

    I wish you all good things.

    Rob

  29. Ben Graham and Warren Buffett together are enough of a “long term” example, Rob.

    There will be no trial. You’re either trolling, delusional, or both. BTW I’m happy to see you’ve resisted the urge to post single-character nonsense replies so far. Keep it up!

  30. “Ben Graham and Warren Buffett together are enough of a “long term” example, Rob.”

    Both stressed the need of making a good purchase. If you make a good purchase, you will always do well in the long run. The Buy-and-Holders say that it is possible to obtain good results WITHOUT changing your allocation in response to big valuation shifts.

    “There will be no trial.”

    I believe there will be and I am going to do what I can to keep the number who will be sent to prison as limited as possible and to keep the prison sentences handed out to those who do receive prison sentences as limited as possible. Sue me.

    “You’re either trolling, delusional, or both”

    The SWR thing was just a lucky guess, Makes sense, Sensible!

    Rob

  31. Coke was overvalued in the late 90s/early 2000s yet Warren Buffett didn’t sell.

    Most small investors simply can’t bring themselves to make rational decisions. That’s what makes buy and hold so special! For a real-life example just look at your own decision to not buy stocks in 2009 when stocks were on sale! You were just too nervous, weren’t you?

    I’m not going to prison, Rob!

  32. “Coke was overvalued in the late 90s/early 2000s yet Warren Buffett didn’t sell.”

    Shiller’s research doesn’t tell us how to identify the long-term returns of individual companies. VII only works for indexers. But you of course knew this and just pretending to not know it.

    “Most small investors simply can’t bring themselves to make rational decisions.”

    The answer is to lie to them about what the last 32 years of peer-reviewed academic research says.

    “That’s what makes buy and hold so special!”

    Because the Buy-and-Holders all stick together and tell the same lies, figuring they won’t get caught if they can engage in intimidation tactics brutal enough to keep those who have looked at the research from speaking up. Makes sense.

    “I’m not going to prison, Rob!”

    And Nixon is not a crook. We know because he told us so!

    Rob

  33. Rob,

    I noticed you comment above about personal integrity. Glad you brought it up. You were asked earlier about any fund that trades with your value informed investing strategy (which you tried to avoid). You were also asked if you followed your own advice and traded using this strategy. Here is what I found:

    http://www.s152957355.onlinehome.us/cgi-bin/yabb2/YaBB.pl?num=1372203091

    Just a couple observations. You say you got out of the market and bought IBonds and TIPS. That means you don’t follow your own advice on market timing, missing out on one of the largest runs in the market as it has doubled since 2009. With that said, it was pointed out that you couldn’t have bought TIPS and IBonds as you have claimed. When this was brought to your attention, you can see the evidence that you deleted the posts that pointed this out to you.

    So, I do agree that integrity matters. You don’t seem to have any.

    You can’t show any fund that follows your strategy and you don’t even follow it yourself.

  34. Rob, you neglected to comment about the time when you missed your golden opportunity to buy stocks. You know, back in 2009 after the market had tanked and everything was on sale. It’s no wonder you won’t talk about it. Your own personal experience of not taking advantage of the buying opportunity of a lifetime supports buy and hold!

  35. “That means you don’t follow your own advice on market timing, missing out on one of the largest runs in the market as it has doubled since 2009.”

    Gamblers worrying about “missing out on big runs,.”

    Effective investors follow research-based strategies.

    My take.

    Rob

  36. “you neglected to comment about the time when you missed your golden opportunity to buy stocks. ”

    Salesman are always talking about “golden opportunities,”

    There is now 32 years of peer-reviewed academic research showing that it is the salesman and their “golden opportunities” that destroy middle-class portfolios.

    I believe in following research-based strategies. Call me madcap.

    Rob

  37. Rob,

    Your valuation informed strategy is market timing. Yet now you are saying it would be gambling. You are just changing the story to fit your outcome.

    You are preaching about a system that you don’t even follow. I would say that makes you a fraud.

  38. “What you’re basically telling us, Rob, is that the time to buy stocks is “never”.”

    I’m the biggest advocate of stocks in the world, Sensible.

    I am saying that stocks are no more risky than CDs in today’s world. That is not an anti-stock message. That is a pro-stock message. I love stocks more than you do.

    I say that you should not buy stocks when the long-term value proposition is poor. You hear that as “don’t buy stocks ever” because the long-term value proposition has been poor for so long now. But that is a one-time thing. It’s just something we had to live through as we make the transition from Buy-and-Hold to Valuation-Informed Indexing.

    Stocks became a bad deal in 1996. That’s 17 years. Yes, that’s a long time to be out of stocks. Yes, I can even see how some would describe that as “forever.”

    But 17 years is NOT forever in terms of your investing lifespan. Most of us are investors for about 60 years (age 25 through age 85). 17 years is a significant amount of time. But it is not “forever” in the context of a world in which you will be investing for 60 years.

    The gains you get for being willing to go with a low stock allocation for those 17 years are HUGE. You have to do the math to see it. It’s counter-intuitive. But the effect is positively HUGE. It means being able to retire 10 years sooner. There is no other change you can make in the financial realm that provides that sort of bang for the buck.

    And it will never be 17 year again. Once we open the internet up to honest posting, stock prices become self-correcting. So you will never again need to be out of stocks AT ALL! If investors act in their self interests, the problem goes away. We will never again have another bull market. Which mean that we will never again have another bear market. Which mean that we will never again have another economic crisis.

    And it won’t be just Rob Bennett getting the credit for this huge advance. Jack Bogle is going to get a lot of the credit. Bill Bernstein is going to get a lot of the credit. Larry Swedroe is going to get a lot of the credit. And on and on. I am going to see to it. So this is not a thing where any of the Buy-and-Holders are going to be left behind.

    But there will be many Buy-and-Holders going to prison! Not because I want that. Because I am in circumstances here in which I absolutely must be truthful when explaining to the millions of middle-class investors why their financial futures were destroyed. We can never bring this to a successful resolution without being honest with people. So I must tell the story as it really happened. And in some cases that is going to mean prison sentences, whether I like the idea or not.

    There is such a thing as an ADVANCE, Sensible. What we have here is the biggest advance in the history of personal finance. It helps every human being alive. You, me, Bogle, Shiller, Pfau, everyone. You can delay the benefits. But you hurt yourself by doing so.

    I want you (and millions of others, to be sure) to enjoy the benefits. That’s all. The prison sentences are on you. I OPPOSED the behavior that led to the prison sentences going back to the first day I OPPOSE the behavior that is lengthening your prison sentence to this day. I can OPPOSE that stuff from now until Doomsday and it doesn’t much matter if I don’t get your cooperation in bringing the behavior to a full and complete stop by the close of business today. It’s when that behavior comes to a full and complete stop that everything starts getting better and better with each passing day rather than worse and worse. And I mean for every single person involved.

    There’s nothing even the tiniest bit negative about stocks here. As a society we have turned it into a negative by refusing to open the wonderful gift that has been bestowed on us. We are the luckiest generation of investors who ever lived. It is those who engage in abusive behavior that are making stock investing look bad. What the last 32 years of peer-reviewed research shows us is that stocks are the most wonderful asset class imaginable, a far, far better asset class than any of us realized in the days in which many of us believed that Buy-and-Hold strategies could work.

    Rob

  39. “Your valuation informed strategy is market timing.”

    That’s so.

    And that’s a wonderful, wonderful thing.

    The mistake that the Buy-and-Holders made was in coming to believe that market timing is not required for long-term investing success. Market timing is everything. Market timing reduces the risk of stock investing by 70 percent. Market timing increases returns enough to let you retire 5 to 10 years sooner. Market timing is the answer to just about every investing question.

    The historic reality here is that we did not know that market timing was the answer to every investing question back in the 1960s, when Fama did his research. Fama showed that short-term market timing never works and there were some who jumped to the false conclusion that no form of market timing was required.

    It turns out that nothing could be farther from the truth. Long-term market timing is the thing that makes the market work. Long-term market timing is the exercise of price discipline. Every time that a large number of investors have come to believe that long-term market timing might not be required we have experienced an economic crisis. An economic crisis is the market’s way of bringing prices back to where they belong when it realizes that the investors who should be doing that job are refusing to practice market timing because they have come to believe that they have entered some magical universe where Buy-and-Hold might work.

    We are on our way, Mr. Rational. We are on the 99-yard line. All of the many years of work of the Buy-and-Holders and of all those who came before them begins to pay off on the day when we bring the Ban on Honest Posting to a full and complete stop and begin sharing with each other the information we all need to know about to become effective long-term investors for the first time.

    It’s all there for you if that sounds good to your ears.

    Or you can continue to engage in acts of financial fraud and make your prison sentence even longer than it is today.

    You know which way I want you to proceed.

    But it is not my call.

    I do wish you all good things.

    Rob

  40. Rob,

    All you are doing is talking in circles. There is no fund with a track record that trades under your “strategy” and YOU yourself don’t even follow your own advice.

    Thanks for a waste of bandwidth.

  41. There’s the U.S. Total Stock Market Index, Mr. Rational.

    There’s 140 years of historical data showing that those who purchase the U.S. Total Stock Market Index using research-based strategies obtain FAR higher long-term return at GREATLY reduced risk than do those following pure Get Rich Quick strategies.

    If I could provide you with 150 year of historical data supporting the research-based approach, I would offer it to you. The reality is that we I only have 140 years of data available to us and we will not have 150 years of data supporting Valuation-Informed Indexing until ten years from now.

    My best and warmest wishes to you and yours.

    Rob

  42. Rob,

    Your strategy is NOT the US Total Stock Market. That would be buy and hold. Instead, your strategy is to market time the trade of the US stock market. There is no fund existing with this strategy and you don’t trade with this strategy. There is no return you can point to with any fund or with your own personal accounts.

    As said time and again, we can all look at historical data and say if I just happened to trade on these specific days with these particular holdings, I would have outperformed everyone else. It comes down to actually implementing the strategy and demonstrating the results.

    Stop insulting our intelligence.

  43. I also notice you continue to avoid talking about your own financial implementation. You apparently don’t follow your own advice and your comments about investing in TIPS and IBonds were pointed out to be lies.

  44. “Stop insulting our intelligence.”

    The thing that I am insulting is your pride, Mr. Rational.

    The historical reality is that you fell for the purest and most dangerous Get Rich Quick strategy ever concocted by the human mind. It hurts your pride for you to accept that you delayed your retirement by so many years for such a foolish reason.

    I didn’t do that to you. The Wall Street Con Men did that to you.

    I pointed it out. That much is fair to say. That’s what a friend does. That’;s all I ever did.

    The emotional pain you feel is something that you need to work out on your own time and on your own dime. I can make suggestions. But that’s as far as it ever can go.

    I believe strongly that all of your friends should be doing what they can to help you out. Unfortunately, some of the people who you think of as “friends” have their hand in your pocket and have zero intention of raising a finger to help you out.

    I cannot change that reality by myself. I am doing what I can. But I am not Superman. So it may be that you will need to suffer a bit longer.

    I do believe that there will come a day when you will be able to think clearly about these matters. I worry that you will be in a prison cell on that day. But, either way, I believe that that day will come and I very much look forward to it.

    I do wish you well, my old friend.

    Rob

  45. Mr. Bennett,

    I have read through all your responses and have researched all the points. There is no fund that invests in a way that follows your strategy. It appears that you do not follow the strategy. Your comments on “buy and hold” are clearly false. You have not supported your claims on SWRs as you have failed to show the errors and corrections (supported by Wade Pfau’s comments to you stating that you are not correct on this matter). Despite many attempts to ask questions directly related to your post, you have been evasive at best.

    When looking at your site, your entire philosophy revolves around these two key areas. Since you can’t support either, it appears all of this is merely a waste of time. In fact, it can be well argued that you are damaging potential investors by telling them to avoid buy and hold. We can look at many examples of buy and hold that have long term track records of success. You have been given many links to this, but have chosen to delete them from your site. A repository of these can be found on the site you call “goon central” and can also be found on the bogleheads forum.

    In looking at this thread, I am sure you will attempt to divert once again by spinning yet another story, but I am not interested in reading your lies, distortions, etc.

    Your “investing” advice has been a waste of time for some and potentially damaging for others.

  46. I”n fact, it can be well argued that you are damaging potential investors by telling them to avoid buy and hold. ”

    I sure am speaking out in OPPOSITION to Buy-and-Hold, Question. I describe it as the purest and most dangerous Get Rich Quick scheme in history. I say that it was the promotion of Buy-and-Hold that was the primary cause of the economic crisis, which put millions out of work and which causes tens of thousands of businesses to fail. I say that those who participated in numerous act of financial fraud in “defense” of Buy-and-Hold will be going to prison for a long time following the next price crash. I say that it no legitimate investing strategy would need to be “defended” through the use of death threats and board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs. I say that, if there were a single peer-reviewed research paper supporting the key claim of the Buy-and-Holders, all Buy-and-Holders would be embarrassed by the behavior of the Lindauerheads and the Greaney Goons and would demand that they be removed from all of our communities.

    I’d be grateful for anything that you or any of your Goon friends could do to help spread the word that I am the most severe critic of Buy-and-Hold alive on Planet Earth today. Every little bit helps.

    And I naturally wish you the very best of luck in all your future life endeavor.

    Rob

  47. Buy and hold, such as advocated by the bogleheads have return rates superior to you, Rob. Buy and hold is the opposite of the market timing get rich quick schemes. your labels merely perpetuate your lies and distortions.

    As pointed out above, you have deleted those posts that show you the portfolios that have provided superior returns.

    The mere fact that you don’t follow your own advice speaks volumes.

  48. Rob, you’ve been out of the market since 1996. Care to look at your portfolio and compare it to people who didn’t get out of the market in 1996? An HONEST look would clearly show that, even with some big downturns, the guy who stayed in the market did way better than you.

    But take a really close look at 2009. That was your opportunity to show everyone how smart you were to stay out of the market since 1996. It was the biggest downturn in 80 years. 80 years is, by your own admission, longer than a typical “investing lifetime”. You could have bought an index fund in early 2009 and made a bundle. You could have bought one of the many Blue Chip stocks that were on sale and made a killing. Yet you sat on your hands and bought NOTHING.

    Rob, you don’t even follow your own advice. Instead, you serve to be a real life example of how foolish market timers really are.

  49. “An HONEST look would clearly show that, even with some big downturns, the guy who stayed in the market did way better than you.”

    That’s false, Sensible.

    This has been checked dozens of times by dozens of different people.

    EVERY calculation has shown me to be ahead.

    And that’s not even counting the fact that my risk was MUCH reduced. On a risk-adjusted basis, I am FAR, AR ahead. The numbers are not even in the same ballpark.

    And all that doesn’t even count what will happen after the next price crash.

    Then I will be FAR, FAR, FAR, ahead.

    And even all that doesn’t count what I will gain from decades of compounding returns on the differential.

    Then I will be FAR, FAR, FAr, FAR, FAR ahead.

    Get Rich Quick is not the answer. Get Rich Quick is the PROBLEM.

    Rob

  50. “It was the biggest downturn in 80 years. 80 years is, by your own admission, longer than a typical “investing lifetime”.”

    Yes, it was the biggest downturn in 80 years. And, yes, you would think that would present a great buying opportunity.

    That’ not what we had in this case. The trouble is that this huge downturn started from a time when prices were at levels we had never seen before. So all we had was a couple of months when stocks were selling at fair-value prices.

    Stocks are a good deal at fair-value prices. So it made sense to buy in those days.

    But it was no big whoop. Anyone who bought at those prices need to hold through the next price crash, which is likely going to put us in the Second Great Depression.

    I elected not to do that.

    I considered going the other way. Had prices remained at fair value levels for another month, I would have bought.

    But, again, it is no big whoop.

    I still get to invest in stocks when they are selling at one-half fair value. That’s a whole big bunch better than buying them at fair-value prices. And this way I don’t have to worry about holding through further crashes.

    It’s a low-emotion, high-return choice.

    What’s the downside?

    Rob

  51. “you serve to be a real life example of how foolish market timers really are.”

    The ones putting forward death threats and demanding board bannings and advancing tens of thousands of acts of defamation and threatening to get academic researches fired from their jobs are the ones who have it together.

    I believe you, Sensible.

    Get Rich Quick rules! Sign me up for whatever the Wall Street Con Men are pushing the hardest! They know what’s good for me! They’re my friends!

    Rob

  52. “And then lose it all in the next crash.”

    Obviously if you had bought in 2009, you would have sold this year due to high valuations. Thereby locking in huge gains, making buy-and-holders look foolish, and earning a lucrative reputation as a market guru.

    That’s what WOULD have happened, if you followed your own strategy. But you don’t. Your personal strategy is more accurately described as reducing the risk of stock investing by never owning stock.

  53. “Obviously if you had bought in 2009, you would have sold this year due to high valuations.”

    That’s so.

    What you are missing is that WE DID NOT KNOW IN ADVANCE THAT THAT WAS THE SCENARIO THAT WAS GOING TO PLAY OUT.

    Long-Term Timing ALWAYS works out. There has never been a single exception in the 140 years for which we have records.

    But Short-Term Timing NEVER works out. So we do not know in advance which one of numerous possible scenarios is going to pop up.

    If I knew with a high level of confidence that the scenario that ultimately played out was going to play out, you would be right. But I did not know that at the time the decision was being made.

    Given what I knew, a decision to go with 30 percent stocks made perfect sense. But so did a decision to continue with zero stocks. It was a close call, given what the last 32 years of peer-reviewed research tells us.

    I went with one way of playing it that appears likely to provide a very good result while passing up on another way of playing it that appeared likely to provide a very good result. I don’t fault anyone who increased his or her stock allocation in 2009. But I sure don’t regret even a little bit not doing so mysef.

    You are too focused on the short term, RA. That’s what you look at and obsess over again and again and again.

    You need to look at the long term.

    That’s my sincere take re this one, in any event.

    Rob

  54. “Your personal strategy is more accurately described as reducing the risk of stock investing by never owning stock.”

    Yet I will over my lifetime end up owning far more in the way of stocks than you ever will by buying them at reasonable prices rather than by frittering away my limited resources buying stocks when they are selling at insanely inflated prices just because the Wall Street Con Men aren’t satisfied being multi-millionairies but feel that they must become multi-billionaires by pushing more Get Rich Quick garbage on me and millions of other middle-class investors.

    Makes sense!

    Rob

  55. You said”EVERY calculation has shown me to be ahead.

    And that’s not even counting the fact that my risk was MUCH reduced. On a risk-adjusted basis, I am FAR, AR ahead. The numbers are not even in the same ballpark.”

    That is incorrect Mr. Bennett. I looked back at your old posts where you indicated your move into TIPS and IBonds and your stated return rates. It was pointed out to you that the S&P outperformed you. When given that information, you deleted it from your board, but the posts were copied and placed on another board to point out your falsehoods.

    I cannot find one single link that shows others backing your assertions.

  56. “WE DID NOT KNOW IN ADVANCE THAT THAT WAS THE SCENARIO THAT WAS GOING TO PLAY OUT.”

    What good is your strategy then?

    “I sure don’t regret even a little bit not (buying in 2009).”

    You should. Anyone who wouldn’t regret that loss is demented.

    “Yet I will over my lifetime end up owning far more in the way of stocks than you ever will by buying them at reasonable prices rather than by frittering away my limited resources buying stocks when they are selling at insanely inflated prices just because the Wall Street Con Men aren’t satisfied being multi-millionairies but feel that they must become multi-billionaires by pushing more Get Rich Quick garbage on me and millions of other middle-class investors.”

    One long raving sputtering sentence-rant.

  57. Rob, the last time I checked CDs and TIPS didn’t beat out any of the index fund portfolios that your friends the Bogleheads usually recommend. Care to explain how you beat 7+% returns with a portfolio consisting of CDs and TIPS?

  58. “What good is your strategy then?”

    It reduces risk by 70 percent while increasing returns enough for you to be able to retire five to ten years earlier than would be possible with a Buy-and-Hold strategy.

    No more, no les.

    Rob

  59. “Care to explain how you beat 7+% returns with a portfolio consisting of CDs and TIPS?”

    Care to rein in your hate enough so that you can understand the answer when it is provided to you?

    Rob

  60. Rob, you didn’t answer the question. Any idiot could have beaten you with a simple lazy portfolio of index funds, riding out the downturns. Many did. You had a chance to redeem yourself in 2009 but you couldn’t bring yourself to jump in! Now should be the time when you, Rob Bennett, admit that you were wrong and that the buy and hold people have a much better approach to investing than you do.

  61. “Sensible Investor”, “Mr. Rational”, “RA”, and “Questions” – Any comments you make from this point forward will be deleted. You “guys” are the same jokers who have done this before, sparring with Rob over nonsensical issues on this site and otheres, leveling personal attacks, and you won’t even use your real names!

    Rob is entitled to his opinion, but the fact that you challenge every jot and tittle of what he says makes it clear you have an unholy agenda. Please take it elsewhere as your comments are not welcome here.

  62. Kevin,

    People will not use their real names because they see what Rob has done to others. Rob will readily admit that he sent out over 20,000 emails about Wade Pfau. Wade has told Rob to stop and has told him how much harm he has caused him (which is documented), yet Rob continues.

    If you go against Rob, you will soon find yourself in a bid situation. Take a look at bloggers like Mike Piper or JD Roth. You can go to Rob’s website and see for yourself.

    There is no unholy agenda. In fact, it is the opposite. An unholy agenda would be one linked to lies. The comments I just made can be backed up with proof. Just ask, and I will provide them.

    Read the comments above again. They are not nonsensical. Rob states that he has an investment strategy that he touts as superior to buy and hold. There is no fund that has ever tracked this and comes with documents return rates. Rob himself will not even trade this way, yet is the basis of his investment advice. He states that buy and hold is some kind of risky investment strategy with inferior returns, yet we have documented portfolios with returns that show otherwise (to which Rob deletes from his site).

    When 15 major financial sites have banned Rob, you should ask yourself if he is really credible. You can do the research for yourself. Read the history. See what he says.

    I am sure you are familiar with the freemoneyfinance website. It is run by a christian person who takes a very fair approach with those that post at his site. Take a look at some of the historical posts that involved Rob. The person running the site (who I personally know) had to shut down Rob’s thread after Rob got carried away.

    Once you decide that you do not agree with Rob, you will be added to list of those that he will threaten will prison and lawsuits. Tell me one other finance blogger that does this. Why would anyone tolerate this kind of abuse in any forum community.

    Is there an agenda against Rob? Well, if people like me stand up to Rob and his mistreatment of people like Wade, Mike, JD , Mel, John, Rick, Larry, Jack, etc., then you can call it an agenda.

    Kevin – You can delete if you want. It is your choice. Now that Rob has a link to your site on his, people will come to see where you stand. You may want to check out what I am saying and decide for yourself.

  63. Once again, no name is given. Wow. As to your littany of blogger names, I do know one of them – Larry, if it’s Larry at Investor Junkie. He shares my irritation at your group, and has similarly posted as much on a recent article.

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