As you all know I am away in the Dominican Republic this week. Rob Bennet offered to write some guest posts for a bunch of PF bloggers in order to get his message out (which is a very logical, well-thought out message at that!). Rob Bennett writes the A Rich Life blog. He has recorded over 75 podcasts on things he has learned about stock investing during his seven years of participation in The Great Safe Withdrawal Rate Debate (a series of discussions of stock investing held in the Retire Early and Indexing discussion-board communities). Enjoy!
I learned how to invest in an unusual way. I didn’t do it by reading books. I didn’t do it by listening to experts. I didn’t do it by hiring a financial planner. I did it by learning how to save.
It works! I’m far ahead of all the indexes dating back to 1996, the year when my learning process began.
I’ve learned some amazing things.
One thing I’ve learned is that most people are intimidated by investing. They think its complicated. They think they could never figure it out. They think that the best thing to do is to hire a planner or, if they cannot afford to do that, to follow the instructions of the experts as closely as possible.
Nothing could be further from the truth.
The Secret to Buying Stocks
The secret to buying stocks is understanding that they are much like just about any other asset you can buy. You know how to buy cars, don’t you? You know how to buy comic books. You know how to buy bananas.
That means that you know (without knowing it) how to buy stocks.
What do you have to look at before buying cars or comic books or bananas? Two things:
(1) the long-term value proposition offered by the possible purchase; and
(2) the price being charged.
Stocks offer a great long-term value proposition.
The average return in the U.S. has long been about 6.5 percent real (that means 6.5 percent plus inflation). That’s a great deal. The experts have been telling us for a long time that stocks offer a great deal. They got that one right.
It’s the price one that they get wrong. Have you ever heard the claim that stocks are always best for the long run? That suggests that price doesn’t matter, that stocks offer a good deal at any price. Or have you heard that timing doesn’t work? Again, the claim is that stocks offer a good deal at any price — that price doesn’t matter.
It’s not so. Price matters. A lot.
I’ve studied this question in depth. It turns out that there are some price levels (such as the price level that applied in 1982, at the beginning of the huge bull market) when stocks are likely to provide a long-term return far in excess of the average 6.5 percent number (how does a long-term return of 15 percent real per year sound to you?). And there are other price levels (such as the price level that applied in early 2000, at the top of the bubble) at which the likely long-term return is negative. Yowsa!
So it makes no sense to go with the same stock allocation at times of insanely high prices (as applied from 1995 through the first part of 2008) as at times of moderate or low prices. Those seeking long-term investing success need to lower their stock allocations when prices are too high.
The experts don’t know this. Or if they do, they don’t tell. My sense is that it’s a little bit of both. In any event, investors who learn how to invest by listening to the experts don’t understand the realities. And they have paid a big price for their lack of understanding of the realities. The experts have failed us.
I was lucky. I learned how to invest by learning how to save.
When I was trying to become an effective saver, I learned that the secret is paying attention to value propositions. You might enjoy going out to eat. But you have to understand that there’s a cost attached to developing a habit of visiting expensive restaurants. When you pay to eat out, you are giving up something else you could have done with the money. The question is: Is the dining-out experience worth it?
It works that way with investing too. Stocks are great. Still, there are prices at which the risk of losing most of your life savings in a huge price crash are just too great to make it worth it to go with a high stock allocation. Huge price crashes only take place at times of insanely high prices. It makes no sense for the middle-class investor to be investing as heavily in stocks at times of insanely high prices as he or she does at times of moderate prices.
None of this should be surprising. Price matters in the purchase of all other assets that can be bought or sold for money. Why would anyone think it would be any different with stocks?
The reality is — millions do. Millions believe that they should stick to the same stock allocation at all price levels. This idea is referred to as “Passive Investing.” It is the idea pushed by most of the big-name experts of today.
You don’t need to study investing for years to understand the flaws in the idea. If you have ever tried to save effectively, you know that price matters. Big time.
It’s common knowledge that that’s so with everything other than stocks. By learning how to save, and by then not forgetting the lesson just because the experts were telling me that different rules apply with stocks, I learned how to invest.
I'm MLR. After graduating from college debt free, I decided to write a blog encouraging people to adapt responsible and sensible personal finance rules.
March 18th, 2009 at 11:46 am |
I suppose I have learned how to invest the same way. While saving up our emergency fund, we started to really look at the different between wants and needs which helped us to make better decisions.
March 21st, 2009 at 12:18 am |
Looking at wants vs needs can be quite challenging. Especially when it comes to some aspects of our lives that we consider somewhat necessary, but also somewhat a luxury. A newspaper subscription? Cable TV? Pick your poison!
Thanks for stopping by Jason, hope to see you around.
March 24th, 2009 at 11:39 am |
Rob says he has beat the indexes, but was not specific in this article as to his techniques and the alternate investments he selected. So I decided to both visit his blog and also do an internet search to find other writings from him.
Oh, my.
I am frankly surprised you selected this individual to provide content for the blog. He seems to be universally dismissed as pretty much a kook, and rather than take any one else’s opinion on something like that, I looked into his site and past articles and have now made my own mind up. I suggest others do the same. His use of the words ‘insane’ to describe methods other than his own, and his preoccupation with the supposed faults of all ‘experts,’ smacks of an individual who is frustrated with his own station, rather than someone with unique and valuable insight to help me with my own decision process.
March 24th, 2009 at 11:52 am |
For instance, the site “Stockpicker” shows Rob selected GM, Ford, and Dell for his model portfolio in Jan 2007, as part of a dialog he was having with M* Diehards. Each of those individual stocks (and therefore, his portfolio picks collectively) performed significantly worse than the S&P500.
Only if one makes overt, specific decisions in writing, in real-time, should claims about the performance of their specific investing advice be given any credence. Human memories are amazingly faulty things!
http://www.stockpickr.com/user/Rob-Bennett/
http://www.stockpickr.com/showforums/2/73/#selViewThread
March 24th, 2009 at 11:55 am |
One final point for thought:
Here, Rob shows that he is unclear on the basic premise behind ’schools’ of investing thought:
hocus
06-04-2006, 1:29 PM | Post #2185995
I find both Austrian economics and indexing partially satisfying as both take logic chains more seriously than do most alternative thought-systems in the field in which they make a contribution. I find neither totally satisfying because neither takes the human factor into sufficient account, in my view.
Rob
mattduke
06-04-2006, 4:19 PM | Post #2186063
It is interesting that you say you Austrian Economics doesn’t take the “human factor” into account, when human action and subjective valuation is its fundamental concept.
http://socialize.morningstar.com/NewSocialize/forums/176768/PrintThread.aspx
March 24th, 2009 at 12:13 pm |
Analytical framework
Austrian economists reject empirical, statistical methods and artificially constructed experiments as tools applicable to economics, saying that while it is appropriate in the natural sciences where factors can be isolated in laboratory conditions, the actions of human beings are too complex for this treatment.
Austrian School economists advocate strict adherence to methodological individualism – analyzing human action from the perspective of individual agents…
http://en.wikipedia.org/wiki/Austrian_School#Analytical_framework
March 24th, 2009 at 2:04 pm |
I looked into his site and past articles and have now made my own mind up. I suggest others do the same.
Thank you for making that suggestion, Henri. Nothing could be more fair.
Rob
March 24th, 2009 at 2:19 pm |
His use of the words ‘insane’ to describe methods other than his own
I have used the word “insane” to describe only the Passive Investing concept, the “idea” that there is no need to change one’s stock allocation when prices go to insanely dangerous levels. I do not say that the people who endorse or follow the Passive model are insane. There are lots of smart and good people who do one or the other or both.
I do believe that the idea is insane. Prices matter when buying any asset — houses, cars, comic books, and bananas. It’s not possible for the rational human mind to imagine a scenario in which this universal rule would not also apply to stocks.
and his preoccupation with the supposed faults of all ‘experts,’
It’s not me who is preoccupied with the mistakes of the 90 percent of the “experts” who have endorsed the Passive model. I had many middle-class investors tell me before the crash that they thought that all that I was saying about investing (which is backed by a large number of experts too, but rarely reported on in the media) made sense but that they felt bound to go with what the big-name experts were saying. I think it would be fair to say that most of those people wish today that they had not put such trust in what the “experts” said.
The problem with listening to big-name “experts” on the subject of stock investing is that the things that “experts” say change with changes in stock prices. When stock prices are insanely dangerous, most people are heavily invested in stocks (that’s why the prices are so high) and want to hear that valuations don’t matter. So the “experts” who become most popular at such times are the ones giving the worst advice. it’s just the opposite when prices are low.
Dallas Morning News Columnist has written three columns on the New School of Safe Withdrawal Rate research (I have the first New School calculator at my web site, The Retirement Risk Evaluator). He explained in one column that the reason why the media has not widely reported on the errors that I discovered in the studies we all use to plan our retirements is that “it is information most people don’t want to hear.” What does that tell you?
Most experts see it as their job to tell us what we want to hear about stocks, not what we need to hear about stocks. That makes us feel a little less nervous until prices crash. But it also delays our retirements by many years.
I favor an opposite model, a model in which we all do what we can to make others aware of the realities of stock investing. When millions of others know the realities as well, that makes it that much easier for me to invest effectively (all humans are affected by what their friends and neighbors and co-workers say about a subject).
This is what caused today’s economic crisis. Most of the “experts” were doing what made sense from a short-term business perspective. There was a whole big bunch more money to be made in the short-term telling people what they wanted to hear rather than reporting what the historical data really says about the effect of valuations on long-term returns. But what happens in the long term if the promotion of Passive Investing causes the collapse of the U.S. economy?
We all lose when our economic system is brought to its knees, Passives and Rationals alike.
Rob
March 24th, 2009 at 2:25 pm |
the site “Stockpicker” shows Rob selected GM, Ford, and Dell for his model portfolio in Jan 2007,
You can’t believe everything you read on the internet, Henri.
I am the person who discovered the analytical errors in the Old School Safe Withdrawal Rate Studies (my findings have been confirmed in recent years by a good number of big-name experts). John Greaney (owner of the site at http://www.RetireEarlyHomePage.com) is the author of one of the Old School studies. Since I reported on the errors in these studies, he has made it his life’s work to follow me around the internet and to smear me and all posters who post in support of me or of the New School SWR studies. It was John or someone on his Goon Squad (he has a discussion board where he organizes the smear campaigns) that put up the fake stuff at that site about the fake model portfolio.
I do not own any of those stocks. I never have.
Rob
March 24th, 2009 at 2:32 pm |
Austrian School economists advocate strict adherence to methodological individualism – analyzing human action from the perspective of individual agents…
But do they get it all right, Henri?
I have read great stuff from the Austrian School. I am grateful for the many powerful insights I have learned by reading their stuff.
But no, I am not convinced that they got it all 100 percent right. I don’t personally believe that any of us humans are capable of getting it all 100 percent right. My take is that we all come to these questions from different sets of life circumstances and that we all make a mistake when we tune out other viewpoints because we become too convinced that we have found the One True and Right Way.
This is my big beef with the Passives, their dogmatism. I don’t feel nearly so strongly about the Austrians. As noted above, I’ve learned a lot from them and I love a lot of their stuff (that’s true of the Passives too, to be sure). But I’m not willing to say that the Austrians and the Austrians alone have it all down. I think it would be fair to say that there is something in my personality that is offended by dogmatism.
I’m pretty darn dogmatic about that one too!
Rob
March 24th, 2009 at 2:44 pm |
Rob,
I think you were trying to quote from Scott Burns, from when he was a columnist with the Dallas News. Here is a quote where he uses the phrase “isn’t what people want to hear” in relation to withdrawal rates.
However, given the information you provide on other sites, your own withdrawal rate appears to be consistently over 10%, so I’m just not sure what your point is.
[i]
Tuesday, April 4, 2000
The Fixed Bear, Rising Bulls Spending Rule
By Scott Burns
Think of it as the Sword in the Stone question, financial planner version. How do you get as much income as possible from a nest egg and not risk running out of money?
Answer that question and the kingdom is yours, your future is assured.
Unfortunately, it doesn’t have an easy answer. One financial planner can show that no one should withdraw more than 4 percent a year from a retirement portfolio, lest there be a chance of running out of money.
Needless to say, that isn’t a very popular finding.
Other research, cited in this column and posted on my website, indicates that a withdrawal rate of 5 percent a year is pretty safe. Start exceeding 5 percent a year and your chances of going broke start to increase, rising dramatically when you go over 7 percent.
Worse, “pretty safe” isn’t what most people want to hear.
…
If my mailbag is any indication, most readers think the solution isn’t to be found in sophisticated portfolio allocation or adroit market timing. The repeated question from readers is “What if you spend more in good years and less in bad years? What if you cut back your spending when the market goes down?”
The answer, according to Mr. Boyer, is that something like that is a pretty good move. [/i]
So, Rob, rather than Mr. Burns advocating market timing (of which you are now an unabashed proponent, after years of claiming otherwise), or advocating changing allocations to attempt to maximize the amount withdrawn, he is advocating flexible withdrawals based on careful adjustment of SPENDING based on economic conditions. I think most people would agree that technique is quite sound and reasonable. Unfortunately, it has nothing to do with methods YOU advocate, so it appears you may be taking Mr. Burns words out of context.
http://www.dallasnews.com/s/dws/bus/scottburns/columns/archives/2000/000404TU.htm
March 24th, 2009 at 2:55 pm |
given the information you provide on other sites, your own withdrawal rate appears to be consistently over 10%,
Again, you picked this information up by listening to the Greaney Goons, Henri.
I have seen thousands of posts put forward by the Greaney Goons that use false numbers re my personal financial circumstances. I have never seen one that used accurate information.
It’s theoretically possible that one of them once put forward an accurate report and that I missed it because I was on vacation or something. I cannot say with 100 percent certainty that there has never been one that contained accurate information. I very much doubt it, however. I think it would be fair to say that, if there ever happened to be an accurate one, it would be purely by mistake and not by intention of the poster.
You’re being misled on all sorts of things, Henri.
Any who think I might be overstating things re the Goon Phenomenon should take a look at this site:
http://www.s152957355.onlinehome.us/cgi-bin/yabb2/YaBB.pl
This is the place where they organize the Smear Campaigns.
The guy who owns this site has a study that hundreds of thousands of people have used to plan their retirements. It has been linked to all over the internet.
John is a friend of mine from my Motley Fool days. But I would sure not want to be taking retirement advice from someone whose name is associated with that site.
Would you? Would you want anyone you cared about to be planning their retirement based on what the individual who owns that site says in a study he published on the internet? I mean, come on.
Rob
March 24th, 2009 at 3:01 pm |
Rob,
Discussion with you is hopeless. It is not “Austrians”! It is the “Austrian School“, a philosophical position, not a specific country of birth unique to the proponent!
It is difficult to tell if you are perhaps mentally impaired, or just being slippery when you say of a model portfolio: “I’ve never owned those stocks.” Of course not. That is precisely what makes it a model. Are you saying that you did not create the information that appears there? It seems to be a link to your bio and your site, so for some “enemy” to supposedly have created it in an attempt to hurt your credibility or as a joke means it wasn’t very effective at either. Pretty weak sauce! Are the things you say on your site your own words, or is that also a carefully contrived attempt at smearing you? I have posted on the internet for twenty years, and have never ran across as peculiar an individual as you — it seems you adore being an object of frustration and confusion everywhere you go. It is a strange occupation. Especially for one who, if they HAD a superior system that beat prevailing wisdom, all he need do is lay it out on his very own website. I see that you have been asked to do just that repeatedly, and yet somehow never have found the time to do so, yet appear intent on being seen at as many other blogs as possible.
Rob, if you had the “goods” the world would beat a path to your door. You clearly do not, and I perceive it is not your intent to ever create such a method nor to even understand basic financial principals well enough to hope to ever do so.
March 24th, 2009 at 3:05 pm |
Rob asked:
“I would sure not want to be taking retirement advice from someone whose name is associated with that site.
Would you?”
No, Rob, I most certainly would not. And since you appear to be the principal and most frequent contributor to that site, I now bid you a none too fond “Adieu.”
March 24th, 2009 at 3:11 pm |
it appears you may be taking Mr. Burns words out of context.
No, that’s not right, Henri.
I’ve had extensive e-mail correspondence with Scott. He has told me that he thinks that I am right about safe withdrawal rates. He has written about the New School research (I am the founder of the New School of SWR analysis) three times in his column.
It is true that Scott has not been willing to publicly endorse The Retirement Risk Evaluator. He explained in his column that this is because it provides “information that most people don’t want to hear” (it was before the huge price crash that he said this — I think it would be fair to say that many more middle-class investors are strongly motivated to learn the realities of stock investing today).
On another occasion, Scott said that he believed that I have added a new layer to our understanding of the SWR topic but that he felt that my longstanding effort to get the errors in the Old School studies corrected before they caused millions of busted retirements was “catastrophically unproductive.” I think it would be fair to say that it would not have been catastrophically unproductive for the millions who are suffering the busted retirements to learn the accurate numbers. The group for whom getting this information out to people might possibly have been viewed as “catastrophically unproductive” is the many “experts” who have endorsed Passive Investing over the years (Scott himself is in this group).
Here’s a link to one of the columns in which Scott discusses the New School research:
http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/columns/2005/stories/060205dnbusburns.2d233d3c9.html
Scott Burns: Let’s review the latest thinking on safe withdrawal rates. While most of the research says any retiree can safely start with a withdrawal rate of 4 percent to 5 percent a year, a newer school of thought believes the safe withdrawal rate depends on how stocks are priced at the time you start making withdrawals.
I launched the New School of SWR analysis in a post that I put to a Motley Fool discussion board on May 13, 2002. That post has generated hundreds of thousands of posts at scores of discussion boards and blogs in the seven years since. We refer to these discussions collectively as “The Great Safe Withdrawal Rate Debate.” I think it would be fair to say that there has never been another money-related debate that has generated as much discussion on the internet. All of the investing articles and podcasts and calculators at my site were developed as a result of the findings of the thousands of community members who participated in a constructive way in the discussions.
You’re focused on the Campaign of Terror (the ugly, divisive, abusive, stupid stuff), Henri. You need to spend more energies on looking into The Great Safe Withdrawal Rate Debate (the exciting, mind-blowing, positive, life-enriching stuff). It’s the good stuff that lifts you up instead of taking you down.
Rob
March 24th, 2009 at 3:23 pm |
No, Rob, I most certainly would not.
We are in strong agreement re this one, Henri.
And since you appear to be the principal and most frequent contributor to that site, I now bid you a none too fond “Adieu.”
It’s true that I post almost daily at thee Goon Central board.
I have never posted abusively there. I have on numerous occasions spoken out in opposition to the abusive posting there. I have done all that I can do to take the board in a positive direction.
I don’t want people to think that just because the posters there engage in heavy amounts of abusive posting that there is nothing that we can learn from them. The posters there are very angry with me because I reported accurately what the historical data says re SWRs. That’s crazy, of course. But it’s so all the same. They are not faking all that anger.
This is an investing issue. If we are to come to understand what causes massive price crashes, we need to come to understand the anger that the Passive Investing dogmatics feels upon being exposed to the investing realities. We all have a bit of the Goon poster within us. We all are prone to fall victim to Get Rich Quick schemes like the “idea” that it is not necessary to change one’s stock allocation in response to big price swings. We need to know where all this negative emotional energy comes from.
I have learned more from people who do not agree with me that I have from people who agree with every word I say. I have learned important things as a result of my many conversations with the Goons. I don’t approve of the abusive posting. I think that the Goons degrade themselves when they engage in this sort of behavior. But they are smart people and a good number of them are friends of mine from earlier days and I do want to help them and I do want to help others by coming to a better understanding of what makes them tick and what makes all of us tick when we are giving in to the negative emotional impulses that destroy our retirement dreams.
I don’t apologize for posting to the Goon Central board. I don’t enjoy posting there. The abusiveness makes it a stone cold drag to go there. But I see it as my job to learn as much as I can about what caused this economic crisis so that none of us ever have to live through something like this again.
The Goons are people too, you know. We’ve all got that ugliness lurking somewhere within, We all need to stop ignoring it and to come to terms with it. For so long as we ignore it, it will continue to destroy us.
That’s my take, in any event.
Rob
March 24th, 2009 at 3:25 pm |
It is difficult to tell if you are perhaps mentally impaired
You’d be surprised how often this one comes up in my travels on the internet.
My standard response to this one is:
Sometimes I feel like a nut —
And sometimes I don’t!
Rob
March 24th, 2009 at 3:34 pm |
Rob, if you had the “goods” the world would beat a path to your door.
The world of middle-class investors already has beat a path to my door, Henri. Or at least it has repeatedly tried to. There have been thousands of community members at the Retire Early and Indexing discussion boards who have expressed a desire that honest posting on SWRs and on other valuation-related topics be permitted.
Here is a link to an article at my site which contains snippets of a small sample of the posts expressing that desire:
http://www.passionsaving.com/investing-discussion-boards.html
The problem has never been that there are not millions of middle-class investors dying to learn the realities of stock investing. The problem has always been that reporting accurately what the historical data says means the end of the Passive Investing model and the Old School SWR studies. And a lot of the “experts” in this field feel strongly that it would be “catastrophically unproductive” if word about the 30 years of academic research showing that valuations affect long-term returns were to become widely disseminated.
I feel exactly the opposite. I feel that it is imperative that this information get out and that people discuss it and learn from it. I believe that the only way that we are going to be able to restore public confidence in the markets and in our economic and political leaders is to begin talking straighter with them than has become standard practice during The Passive Investing Era.
Rob
March 24th, 2009 at 5:19 pm |
http://www.passionsaving.com/The-Great-Safe-Withdrawal-Rate-Debate.html
March 27th, 2009 at 4:42 pm |
“You can’t believe everything you read on the internet, Henri.”
Especially, if it’s written by someone who likes to use the name “hocus” (look it up if you’re unclear). Rob “hocus” Bennett has been playing this game for many years.
March 27th, 2009 at 5:02 pm |
Rob “hocus” Bennett has been playing this game for many years.
It’s been nearly seven years now.
I was the person who discovered the analytical errors in the Old School Safe Withdrawal Rate (SWR) studies. These are the studies that financial planners use to help us craft our retirement plans. I reported on the errors in these studies in a post that I put to a Motley Fool discussion board on May 13, 2002.
The problems with those studies have since been confirmed by several big-name experts in the years since. For example, William Bernstein has said that any retiree who is giving thought to using one of the OId School SWR studies to plan a retirement would be well-advised to “FuhGedDaBouDit!” Larry Swedroe has described the Old School studies as “Garbage-In, Garbage-Out” research.
Not one of the studies has been corrected as of today. Millions of middle-class investors will suffer busted retirement as a result, in the even that stocks continue to perform in the future anything at all as they have always performed in the past.
Here is the URL for The Retirement Risk Evaluator. This is the only analytically valid SWR calculator available on the internet today.
http://www.passionsaving.com/retirement-calculator.html
The smear campaigns are organized by John Greaney, the author of one of the Old school SWR studies. John meets with the other Goons to decide how and when to attack the various discussion-board and blog communities from this site:
http://www.s152957355.onlinehome.us/cgi-bin/yabb2/YaBB.pl
Yucko!
Rob
March 27th, 2009 at 5:54 pm |
See what I mean?
March 28th, 2009 at 7:48 am |
Jeez, give it a rest, Rob.
A lot of silly arguments on the Internet end up with someone claiming the other party is ‘crazy’ or needs a psychiatrist, but you really DO seem to need mental help.
March 28th, 2009 at 8:26 am |
Jeez, give it a rest, Rob.
I don’t respond to the truly nasty and nutso stuff, Henri. That stuff speaks for itself and the best thing for the rest of us to do is just to ignore it. So I am with you to that extent.
However, I don’t think ignoring it makes sense in cases where there might be some nasty stuff mixed in with some points that appear on the surface to possess some legitimacy. We are suffering from an economic crisis. The Passive Investing stuff has hurt millions of people. Those people are confused. They have lots of questions as to how this all came to be. I see it as my job to put forward the best effort that I can to be responsive to as many legitimate (or even partly legitimate) questions and comments as possible.
The phrase I use to describe my take on this is — I can do no more and I can do no less.
A lot of silly arguments on the Internet end up with someone claiming the other party is ‘crazy’ or needs a psychiatrist
I’ve noticed that too, Henri.
I wonder why.
but you really DO seem to need mental help.
Yeah, yeah.
The bottom line is that the Old School retirement studies really did get all the numbers wrong. And not by a little bit — the numbers in those studies are wildly off the mark. And these mistakes are going to cause millions of busted retirements.
What does that tell us about the Passive Investing model, Henri? What sort of model would produce retirement advice that causes millions of busted retirements? My answer is — a really, really, really bad model.
If the model we have used to generate 90 percent of the investment advice that people have been hearing for 30 years now is flawed right to the core, I see that as a big deal. That’s something that we should be exploring in more depth, in my assessment.
All that said, it remains true that sometimes I really do feel like a nut. That’s the other side of the story re this matter!
Rob
March 28th, 2009 at 7:13 pm |
Rob,
I read in your blog:
“There was a time in my life when I was visiting a shrink on a weekly basis. I recall telling him about a dream in which a toilet was overflowing and I was trying to take care of it but the water level just kept rising and eventually there was water and feces flowing all over the floor and there was nothing I could do. He told me that this was the result of my efforts to examine the questions that I was talking over with him. I was making an effort to look at the dark stuff that people ordinarily don’t like to think about but that we all know is there and must be dealt with all the same.
We all know that the stuff being put forward by the Greaney Goons is sewage. We all hate it. In ordinary circumstances, we wouldn’t remain long at a party that Greaney Goons were permitted to crash. We would ask the host to take care of the problem, and, if he failed to do so, we would walk. Most of us view our self-respect as being of greater value than whatever enjoyment we get from attending even the swingingest party.
Most of us view our self-respect as being of greater value than whatever enjoyment we get from participating at even the swingingest discussion-board too. So why the heck do we tolerate the Goons? Why have we permitted them to continue their Campaign of Terror against us for over four years now? Why is it that we fail to take action when it is brought to our attention that the community toilet is overflowing?”
But the places you talk about all banned you – right? So they did take action. It just wasn’t the action you wanted. Given that the same events have happened over and over on so many websites where the only common denominator was you, you might consider that there is a much more obvious explanation than a “campaign of terror” run by “Greaney Goons”.
March 29th, 2009 at 5:23 am |
You’re raising an important question, Geoff.
But the places you talk about all banned you – right? So they did take action. It just wasn’t the action you wanted.
All that is correct, Geoff. They did not act responsibly. They did not act reasonably. They did not act effectively. They did not act in the interests of the community as a whole.
Given that the same events have happened over and over on so many websites where the only common denominator was you, you might consider that there is a much more obvious explanation than a “campaign of terror” run by “Greaney Goons”.
Now you are oversimplifying, Geoff.
This hasn’t happened only to me. There are scores of posters who have been silenced at the Retire Early and Indexing boards. The common denominator is that in every case the person silenced was one of the most effective and one of the most popular posters at the board to which he posted. That’s strange, strange as strange can be. Why would all these board communities silence their most effective posters?
It’s because there is a second common factor, one you are failing to address. In every case, there was some sort of Big Shot involved who had published a study or produced a calculator or written a book that made claims in accord with the Passive Investing model of understanding how stock investing works. If the Passive Investing model was shown to be flawed, the Big Shot would lose influence. In each case it was as obvious as obvious could be that the Big Shot and his Goon supporters were holding the boards hostage, insisting that a ban on honest posting be imposed or else they would generate so much abusive posting as to cause every poster of intelligence and integrity to leave the community. Yucko!
You are right to point out that this has happened in more than one place. It is not just one abusive individual that is causing this or one small group of individuals. And it is not just one irresponsible site owner causing this. There is something far bigger than that going on. On this point, we are in absolute agreement.
Where we disagree is that I believe that the fact that there is such an intense desire among so many to block discussion of these issues tells us that discussion of these issues is of critical importance. The intensity of the reaction among the Passive Investing dogmatists shows that they understand that they are holding a weak hand on the merits. If the Passive Investing model is as flawed as its strongest advocates appear to understand it is flawed, just about everything we have been told about how stock investing works over the past 30 years is wrong.
We don’t protect free speech in this country because we believe that the majority is always right. If we believed that the majority was always right, there would be no need for free speech protections. Majorities don’t need protections because they have the power to protect themselves. The majority never tries to silence its own speech. It is always minority viewpoints that are silenced. Our belief that the right to free speech should be protected is a belief that minority viewpoints must be heard, that all (even those who don’t persuade us at the moment) must have a seat at the table.
The stock crash shows why we are right to value free speech. When free speech is denied, the only ones left speaking are the ones telling us what we want to hear. That hurts us all.
Not everyone would have listened had we permitted free speech on investing issues from the first day. But many would have listened; there have been thousands of community members who have expressed a desire that honest posting be permitted. Stock prices could never have climbed as high as they did if investors had access to all points of view re what those high valuations meant re their future stock returns. Had prices not climbed to such insane levels, we would not be suffering this economic crisis today. This economic crisis is the consequence of our failure in the investing realm to honor our usual commitment to free speech.
The vast majority of community members has always favored the Passive Investing advocates on the substantive questions. That’s hardly surprising. Stocks could never have reached the valuation levels that applies prior to the crash had the vast majority not come to believe that valuations don’t matter much. But the vast majority of community members has also always supported the idea that those who do not believe in Passive Investing should be permitted to speak. This has been so at every board that has participated in these discussions.
None of the site owners has ever said that they will not permit honest posting in any circumstance. In each case, the ban was imposed solely because of the Campaign of Terror being led by the Passive Investing dogmatics against the board community as a whole. What the majority at every community wants is civil and reasoned discussion of all viewpoints. The Goons (a group of posters who post in “defense’” of a small group of Big Shots whose studies or calculators or books are being questioned, perhaps 10 percent of the board communities) have exploited the majority’s lack of understanding of some of the issues to hold entire board communities hostage until the site owners were willing to give in to their demands that honest posting be banned. This is an ugly business, totally at odds with the fundamental belief in free speech that is a bedrock belief in our society and on the internet in particular.
Set forth below is the URL for an article at my site entitled “Investing Discussion Boards Ban Honest Posting on Valuations!.” The article contains over 100 snippets of posts in which community members express a desire (backed by a great diversity of persuasive arguments) that honest posting be permitted. These snippets reflect where most of our fellow community members stand on these questions far better than do the feckless decisions of the site owners to let the Big Shots turn human beings into puppets who can praise them to the skies but who can never question whether their claims stand up to reasoned scrutiny.
http://www.passionsaving.com/investing-discussion-boards.html
I post honestly or I post not, Geoff. I believe that I have a responsibility to my fellow community members (many of whom are my friends) to always honor that rule. I’ll help rebuild any board that has been destroyed. I will not ever post dishonestly re the numbers that my fellow community members use to plan their retirements. Non-negotiable.
Rob
March 29th, 2009 at 10:07 am |
Rob,
I’ve done some reading around already. You’ve said all this before and it’s all been debunked before. Many times. Over and over again. For example I already found an article that shows that those “100 snippets” you listed above are taken way out of context. You’re sadly consistent. Using more dishonesty to claim that letting you back on a board that banned you would promote “honest posting” is ridiculous.
I think it is pathetically obvious to everyone else why most people don’t want you constantly trying to make yourself and your conspiracy theory the center of attention at their boards. I’m going to stop feeding the troll now, as so many have before me.
March 29th, 2009 at 1:47 pm |
You’ve said all this before and it’s all been debunked before.
I’m not persuaded, Geoff.
Rob
March 31st, 2009 at 2:12 pm |
“This hasn’t happened only to me. There are scores of posters who have been silenced at the Retire Early and Indexing boards. The common denominator is that in every case the person silenced was one of the most effective and one of the most popular posters at the board to which he posted.”
Rob, you are apparently trying to become a big name, get a book published, and also you claim to have been some sort of reporter in the past, although what I find of you on the web surely is not like any reporting I’ve ever seen, and I am in the racket!
Before we put our trust in a person, as you ask us to do, they should provide evidence of trustworthiness. So my request is simple and direct: Provide evidence that anyone except you was banned at more than one board. You are aware of what a “Score” is in number terms, right, Rob? It is twenty. So ’scores’ or banned folks means there are forty or more. I’m only asking you to provide half a dozen names, and whatever actual evidence there is that they got banned as you say.
THEN I might be ready to listen further, but until then, you appear to be just another stay at home unemployed guy with too much free time on his hands.
March 31st, 2009 at 2:45 pm |
[i]I’m only asking you to provide half a dozen names[/i]
These are screen-names: (1) Microlepsis; (2) JohnDCraig; (3) JWR1945; (4) RetiredAt48; (5) InsuranceGuy; and (6) Wanderer.
That is of course only a small sample.
There’s a link earlier in this thread to the “Investing Boards Ban Honest Posting on Valuations!” article at my site, Brent. There’s an “answer” post to that article at the Goon Central board (this is the board at which the leader of the Campaign of Terror organizes the smear campaigns used to silence those posting honestly on the safe withdrawal rate topic — you’ll find it by going to the site at http://www.RetireEarlyHomePage.com site). In the answer post, you’ll find quotes from a good number of the people who expressed a desire to be able to post honestly in the comments cited at my article instead expressing support for the Campaign of Terror and for the ban on honest posting.
Why do you think these people switched sides, Brent?
People don’t get paid to post at discussion boards. They help us all learn when they post their sincere views. But there are limits to what people are willing to be put through for the privilege of going to the trouble of helping us all out. Abusive posting on investment boards is a big problem. The site owners should be required to honor the promises they make to us when they promise to protect us from this stuff.
Here’s the URL for an article at my site that sets forth the words of an e-mail that I wrote to my congressman (Rep. Frank Wolf) providing background and urging the adoption of legislation re this problem:
http://www.passionsaving.com/internet-harassment.html
The boards are wonderful. The vast majority obviously opposes these tactics (otherwise, why would all the site owners promise to protect us from this stuff when they are trying to entice us to expend time and energy building up the boards?). But without the reasonable enforcement of posting rules all of the good work done by the vast majority can be undermined or even ruined by a small number of thugs. Not good.
Rob
March 31st, 2009 at 2:58 pm |
Before we put our trust in a person, as you ask us to do, they should provide evidence of trustworthiness.
I didn’t ask you to put your trust in me, Brent.
I offered to write a Guest Blog Entry and the owner of this site accepted the offer. The title of the blog entry is: “I Learned How to Invest by Learning How to Save.”
You may have noticed that a good number of the questions directed at me (including your own) have little to do with the topic explored in the blog entry. My take is that reasonable people should be asking why that is.
There’s no way to know for sure. It could be that some of these questions are legitimate. That’s why I provide serious and honest answers to them. In the event that someone is asking a sincere question, he deserves a sincere response.
It’s also possible that most of these questions are more gamesmanship. If that’s the case, that just shows again why it is important that we all take steps to rein this sort of thing in. When people with internet sites gets numbers wrong in retirement studies, the proper thing to do is to let them know and the proper thing for them to do is to correct the studies. If they fail to do so, they put themselves in circumstances in which they need to spend the rest of their lives smearing all those who post the accurate numbers. The longer the cover-up goes on, the more desperate become the tactics used to continue it for a bit longer.
You’re free to trust who you please, Brent. If you have further questions about the Campaign of Terror against the Retire Early and Indexing discussion-board communities that appear to me to be at least possibly serious questions, I will do what I can to answer them for the sake of those who have been hurt by the abusive posting and who would like to know what needs to be done to bring it to an end. But please don’t think that you are under some sort of obligation to trust anyone who you do not believe that you should trust.
You have every right in the world to read the blog entry or to skip it, as you please. I haven’t asked you to trust me and I see now reason why I should ask you to trust me. I don’t even know you! For all I know your real name may not even be Brent! I mean, come on! I responded to the questions asked above because they appeared to me to be legitimate questions. That’s it. Please don’t feel that I have asked you to place your trust in me. I have not asked this. You should trust those who you believe you should trust and not trust those who you believe you should not trust.
Rob
March 31st, 2009 at 3:09 pm |
you appear to be just another stay at home unemployed guy with too much free time on his hands.
Here’s a link to The Retirement Risk Evaluator:
http://www.passionsaving.com/retirement-calculator.html
The Risk Evaluator is the only retirement calculator on the internet today that gets the numbers right (it is the only one that contains an adjustment for the valuation level that applies on the day the retirement begins — the historical stock-return data shows that this factor is the single most important factor that affects the safety of a retirement plan).
Hundreds of people helped me build that calculator through their constructive posting at the many boards that have hosted the first seven years of The Great Safe Withdrawal Rate Debate. Are each and every one of these hundreds of people unemployed guys with too much time on their hands?
I find the question preposterous. It answers itself.
There are millions of people who are going to suffer busted retirements because of the demonstrably false claims put forward in the Old School SWR studies. The work I do is aimed at helping people achieve financial freedom early in life, not at destroying lives (a busted retirement is one of the worst life setbacks imaginable).
I’ll continue to direct my energies to helping people who evidence a desire to learn how to save and invest effectively. I of course understand that there are a number of Big Shots who see it as the worst thing that could possibly ever happen in this world if they were to correct an error that they made in a study. I care for those people. I consider some of them my friends. But I am not willing to sell out the ones I write for to protect the overgrown egos of individuals who cannot bear to acknowledge that they too are human and capable of getting something wrong.
I don’t think trust is the issue here, Brent. I think the issue is caring. I have had lots of good times with the people who helped me build that calculator. I posted on boards with them for years. I got to know their life stories. I got to know about their troubles and their dreams. They matter to me.
That’s the bottom line. They’re people that matter to me and I will not sell them out. If that’s how you felt about them, I believe that you would post the accurate retirement numbers too.
Rob
March 31st, 2009 at 3:13 pm |
and whatever actual evidence there is that they got banned as you say.
The best evidence is the evidence that you see play out before your own eyes, Brent.
Go to the board at Bogleheads.org. Start a new thread and put up a link to The Retirement Risk Evaluator. Ask for the people who congregate there to share their thoughts on the calculator.
I think it is fair to say that you’ll know by the reaction you get what the story is. Why would the site owners remove the thread if they did not have a long history of banning honest posting on safe withdrawal rates at the board?
Rob
April 1st, 2009 at 8:19 pm |
Rob,
So you’ve spammed this blog and now you’ve asked us to spam one of the many places that banned you. Um, OK, but what’s in it for us? Spammers usually get paid. Why should we do your spam work for free?
April 2nd, 2009 at 1:45 pm |
(3) JWR1945
(4) RetiredAt48
(6) Wanderer
Rob,
One example alone is enough to prove you wrong, but for at least three of the six you provided as examples of fellow bannings, you are just plain wrong. A minimum of a 50% error rate is not too good for a guy claiming he is some sort of leader and author to be listened to. All three of those posters are free to post at M* and Bogleheads — if they have stopped posting, it is because they chose to and not because they were banned.
YOU, however, have been banned more than one dozen times, and you claiming those as kindred to you shows you will lie to try to get support for your otherwise unsupportable claims.
April 2nd, 2009 at 1:49 pm |
You have every right in the world to read the blog entry or to skip it, as you please. I haven’t asked you to trust me and I see now reason why I should ask you to trust me. I don’t even know you!
But the *Community*, Rob! The *Community*!!!!
They come first! They trump individual freedom if speech, individual property rights, etc.
And you being one of the Big Shot Eggheads who have been asked to guest post means you are in a position of trust in the *Community*, Rob!
And of course you know me — we have exchanged blog posts anonymously. That makes us friends, doesn’t it?
April 2nd, 2009 at 2:13 pm |
Someone who gets a number wrong in a study that people use to plan their retirements should correct the error when it is brought to his attention. End of sentence, end of paragraph, end of chapter, end of story.
If there are any reading this who have been wondering why the investing model that has become the conventional wisdom in recent years produced the biggest economic crisis since the great depression, the sewage posts should tell the story that needs to be told.
It’s not that there are crazies on the internet. We all get that. It’s that there have been numerous places at which these tactics have been either tolerated or flat-out encouraged. There are big-name experts who have participated at boards at which these sorts of tactics were employed to block embarrassing questions about the “strategies” that are today’s conventional wisdom.
The good news is that the pain we are all experiencing today will provide us the motivation to work up the courage we need to work our way to a better place in days to come. It gets better. A lot better!
Rob
April 2nd, 2009 at 5:29 pm |
And so it goes. People who don’t buy into Rob’s conspiracy theory are crazies and sewage. If only Rob ran the internet, then it would be safe and pleasant for all of him. If you want to see a blog sanitized of all comments that disagree with Rob, just visit his site. Don’t expect any of your comments to get posted though unless you are highly agreeable and obsequious. Rob uses open blogs to advertise, but he doesn’t run one.
April 12th, 2009 at 3:15 pm |
Hi there,
Everything dynamic and very positively! :)
Have a nice day
Charlie
May 9th, 2009 at 3:35 pm |
I should have spoken about this sooner.
You CAN trust Rob Bennett. He is the only person in the Great Safe Withdrawal Rate Debate who has spoken the truth. That debate is over and he won. No honest person can disagree with him.
That is why he has been banned at so many websites. There is a conspiracy to suppress the truth about investing and valuations.
Have fun.
May 9th, 2009 at 3:38 pm |
By the way, goons frequently post under my name or one similar (JohnR, John Russell, John). I am the true owner of this name. My website is http://www.early-retirement-planning-insights.com/.
My expertise is retirement investing.
Have fun.