It Can Take 20 Years for Sound Long-Term Investing Strategies to Pay Off

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Valuation-Informed Indexing #302

Play Quizzes 4

by Rob Bennett

Just about everyone agrees that it’s smart for stock investors to take a long-term focus. What most do not yet realize is how much Shiller’s “revolutionary” (his word) finding that valuations affect long-term returns changes our understanding of what constitutes “long term.”

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Many investors have a hard time not being influenced by the day-to-day news. Buy-and-Holders properly dismiss weekly, monthly and even yearly developments as so much “noise.” But Shiller’s research shows that even looking two or three or five years out is not enough. Stock risk diminishes dramatically when returns become highly predictable and that doesn’t happen until the investor looks 10 years out. So at the minimum the effective investor needs to be thinking about how his investment will perform in 10 years. Even better is to focus on what is likely to happen 20 years out or 30 years out.

The Investor’s Scenario Surfer helps you do this. The investor identifies the conditions that he wants to examine (such as the valuation level that applies) and the calculator reveals one year of returns at a time (permitting the investor to change his stock allocation at the end of each year.) Returns are of course to a large degree random. So numerous return sequences are possible. But Shiller showed that in the long term returns are far from entirely random. So while the calculator will generate different return scenarios on different tests applied to the same conditions, the mix of scenarios generated changes depending on the starting-point valuation level selected. Long-term returns are of course in a general sense better for purchases made at low or normal valuation levels than for purchases made at times of high valuations.

The calculator is not of much value for those who make use of it only a single time. There is a good chance that a single use is going to generate an outlier scenario, one likely not to apply for a real-life stock purchase made at the same valuation level. However, the investor returning to the calculator multiple times is rewarded with powerful insights. I have performed many hundreds of runs on the Surfer. I have developed over time a confidence about what to expect in real-life return scenarios that I do not believe I could have achieved by reading many accounts of how the market has performed through history. There is something about seeing a 30-year returns sequence play out year by year that helps one develop a sense of how the market always come to reward investors who exercise price discipline.

I can identify several important lessons that I have learned from my many runs of the Scenario Surfer.

High stock allocations almost without exception beat both low stock allocations and moderate stock allocations. The calculator compares results for a fixed stock allocation of 80 percent, for a fixed stock allocation of 50 percent, for a fixed stock of 20 percent and for the changing allocation chosen by the person using the calculator on a year-by-year basis. It is rare for the 80-percent fixed allocation not to beat the 50-percent fixed allocation and it is rare for the fixed 50-percent fixed allocation not to beat the 20-percent fixed allocation. I of course knew before creating the calculator that returns on stocks generally beat those offered by other asset classes. So these results should not have been surprising. Still, the point gets brought home in a compelling manner when you see a return sequence play out before your eyes in which for ten years or more the 20-percent fixed allocation goes a good bit ahead (this of course does happen from time to time in real life) but ultimately is beaten soundly because the odds of a non-stock portfolio prevailing over 30 years are just so small.

The one big exception to this general rule is that the Valuation-Informed Indexing portfolio nearly always beats the 80-percent fixed allocation (as well as the fixed 50-percent portfolio and the fixed 20-percent portfolio). Again, this probably should not have surprised me as much as it did when I first started using the calculator. Shiller showed that valuations matter and referred to this as a “revolutionary” finding. If fixed-allocation portfolios did not generally fall behind portfolios in which the investor adjusts her stock allocation in response to valuation shifts, Shiller’s discovery would be of no practical value and could hardly be termed “revolutionary.” The calculator (which is driven by the historical return data going back to 1870) shows that valuations matter a great deal indeed.

Valuations matter enough that the variable-allocation portfolio has beaten the three fixed-allocation portfolios in roughly 90 percent of the runs that I have performed over the years. My view is that even that claim understates the case. In the few cases in which the 80-percent fixed portfolio wins, the difference between the ending-point portfolio values is usually small. In the many cases in which the Valuation-Informed Indexing portfolio wins, the difference between the ending-point portfolio values is often quite large.

In short, the Buy-and-Hold investor has a small chance of being ahead by a small amount at the end of 30 years while also having a large chance of being behind by a large amount at the end of 30 years. I think it is fair to say that on a risk-adjusted basis, practicing price discipline when buying stocks is always the superior choice.

The Scenerio Surfer teaches patience. It is important that investors following a Valuation-Informed Indexing strategy possess a firm understanding that the strategy can leave them behind for a long stretch of time. Stock prices do not fall in the pattern of a random walk. Momentum plays a big role. But it’s tricky. When prices get very high or very low, the odds of a reversal in the momentum grows large. So outlier prices increase the odds for both large price increases AND for big price drops. The investor using the calculator can see this phenomenon play out to cause his strategic choices fail to pay off for many years and then race ahead by the end of the 30-year time-period being examined.

Rob Bennett’s bio is here.

Updated on

Rob Bennett’s A Rich Life blog aims to put the “personal” back into “personal finance” - he focuses on the role played by emotion in saving and investing decisions. Rob developed the Passion Saving approach to money management; Passion Savers save not to finance their old-age retirements but to enjoy more freedom and opportunity in their 20s, 30s, 40s, and 50s - because they pursue saving goals over which they feel a more intense personal concern, they are more motivated to save effectively. He also developed the Valuation-Informed Indexing investing strategy, a strategy that combines the most powerful insights of Vanguard Founder John Bogle and Yale Professsor Robert Shiller in a simple approach offering higher returns at greatly diminished risk. Tom Gardner, co-founder of the Motley Fool web site, said of Rob’s work: “The elegant simplicty of his ideas warms the heart and startles the brain.”
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28 COMMENTS

  1. It computes perfectly, Sammy.

    The Buy-and-Hold Pioneers were heroes. They didn’t intend to hurt anyone. They intended to help millions in a very big way. And they did just that. Is there some reason why we should not all want to help these people out of a jam in which they now find themselves?

    You don’t help people out of a jam by covering up a mistake they made re the numbers that millions of people have used to plan their retirements. You get about the business of getting those darn numbers corrected! You explain to people what happened so that they see that the intent was good and that things just got off track because of an unfortunate cover-up.

    The last thing you do is to take any steps that extend the cover-up. It is the cover-up that is killing us all, Sammy. The cover-up is killing the Buy-and-Holders as well as everyone else! It is not an act of charity to fail to speak up about the cover-up. It is an act of cowardice. I know. I was there. I failed to speak up about the errors in the Old School retirement studies for three years. I was a coward too. I too am one of those darn humans!

    I am your friend, Sammy. I am the best friend you have in this world. You don’t see it. But that’s the way it really is. A true friend wants for you what is in your true best interest. That’s what I want for you. I want to bring the cover-up to a full and complete stop so that we can all spend the rest of our lives working together to learn all we possibly can about how stock investing works in the real world.

    I hope that makes good sense to you and to all of my other Buy-and-Hold friends.

    Rob

  2. You love your buy and hold friends?

    How does that compute with this line that you posted on you blog to someone you call a buy and hold goon:

    “I am doing everything in my power to get the prison sentences announced by the close of business today. ”

    All because you think some mysterious “goons” that favor buy and hold are trying to keep things quiet about VII.

    Just sad, Rob. You should be ashamed for making comments like that as well as the comments you have made about people like Jack Bogle and Wade Pfau.

  3. Yes Dan, it is complete crap. Use Rob’s outcome as an example. He is the God Father of VII, yet his plan has been an utter failure. He pulled all of his money out of the market almost 20 years ago, according to his claims. If you read his website, his current plan relies on getting a $500 million windfall from some unknown source, facilitated by Jack Bogle.

    Not surprising, Rob admits he has no formal financial training and is not a numbers guy.

  4. “The record shows that for 145 years running VII has provided FAR higher returns at GREATLY reduced risk.” That is total crap. It’s impossible to calculate VII returns without a precise explanation of how to implement VII. Clearly for you, this is a matter of faith over reason, so debate is pointless. Best wishes Rob, with whatever it is you are trying to do.

  5. I am not the one saying that Valuation-Informed Indexing is superior to Buy-and-Hold. It is the entire historical record that says that. The record shows that for 145 years running VII has provided FAR higher returns at GREATLY reduced risk. I just tell people what the data shows, nothing more and nothing less.

    There is no onus on me. Price discipline is the key to success in every market that has ever existed. It is the Buy-and-Holders who are making the extraordinary (and frankly, preposterous) claim that the stock market is the one exception to the otherwise universal rule. The burden of proof is on those making the extraordinary and preposterous claim, not on those suggesting that what common sense says must be so and what the entire historical record confirms is so just might in fact really be so.

    When I refuse to provide a “system” by which to exercise price discipline, I am merely doing what the peer-reviewed research must be done for price discipline to work in the real world. Jack Bogle is the lead advocate of Buy-and-Hold. He has never set forth a “system” that applies with perfect precision to every investor. Bogle says that investors should take their risk tolerance into consideration when setting their stock allocations. He is right to say that. That’s what common sense says must be done. I do the same.

    There is no one stock allocation that will work for every investor in a Buy-and-Hold world and there is one stock allocation that will work for every investor in a Valuation-Informed Indexing world. Those who demand precise “systems” that apply in exactly the same way in every possible circumstance are revealing their disdain for the peer-reviewed research when they do so. I like the idea of using the peer-reviewed research for guidance (I am grateful to my friend Jack Bogle for persuading me of the merit of this idea). I reject the idea that investors should adopt “systems” that the research shows cannot possibly work solely because a group of abusive internet goons demand this of them. Call me madcap.

    Wade Pfau and I co-authored peer-reviewed research showing that VII has been far superior to BH for 145 years running now. The response of you Goons was to threaten to send defamatory e-mails to Wade’s employer in an effort to get him fired from his job unless he agreed to stop spreading the word about this research. That tells the tale about the level of confidence you hold for the Buy-and-Hold “strategy.”

    The VII strategy has never been proven wrong by any fair-minded person. You Goons have pretended to have proven it wrong by applying the ideas in absurd ways that everyone who has ever endorsed the idea have rejected since the first time they endorsed it. Any idea can be “proven” wrong by a mind determined to prove it wrong. Every test that has been done by a reasonably fair-minded person (including many who were once ardent Buy-and-Holders, like myself) has shown VII to be far superior. That’s good enough for me.

    I wish you the best of luck in all your future life endeavors, Dan.

    Rob

  6. Rob, you are the one claiming to have a superior system. The onus is on you to prove that, not on me to disprove it. “Take price into consideration” using “common sense” is not an actionable strategy. It’s “buy low sell high” by gut feel. I see now that VII’s vagueness is its key feature, not a bug. If it can’t be defined, it can’t be proven wrong.

  7. Rob,

    Spare us the rambling posts. You might find my previous comment insulting, but it is true. Your response just verified it.

    It is no wonder your retirement plan failed ( yes, this can be verified by googling Rob Bennett retirement failure).

  8. We don’t agree about this, Sammy.

    What you are buying when you buy stocks is the income stream generated. The income stream is 6.5 percent real per year. Which is great. But of course if you overpay you don’t get that much. To the extent you overpay you lessen the value proposition of buying stocks. The most likely long-term return on stocks when they are priced as they were in 2000 is a negative number. That’s terrible!

    Your insulting comment about retaking basic economics classes shows your state of mind. You are angry. You have a need to believe that you have it all figured out. You don’t. None of us do. You are fooling yourself. You are living in a fantasy world. You are hurting yourself.

    Shiller won a Nobel prize for his “revolutionary” (his word) research findings. Those of us who explore the implications of his findings are in the process of REWRITING the economics textbooks. That’s wonderful. We know more now than we did before, We all benefit from expanding knowledge. You hurt not only yourself but all of us when you throw obstacles in our path.

    If you knew it all, you would not feel a need to make insulting comments. The insulting comments reveal an insecurity about whether Buy-and-Hold can really work in the long term or not. There’s nothing worse than having a blind faith in something that is dangerous and wrong.

    I know what they teach people in basic economics classes. I also know that the stuff taught in basic classes needs to be revised from time to time. When Shiller published his revolutionary Nobel-Prize-Winning insights about how stock investing works, we should have all gotten down to the business of rewriting those economic textbooks that got the basics wrong. It’s a shame that we have put off that important work for 35 years because we are afraid it would hurt the feelings of our Buy-and-Hold friends for us to do so.

    Deep in their hearts our Buy-and-Hold friends want to get it right. I have gotten a lot of help over these 14 years from people who believe in Buy-and-Hold, including from my good friend Jack Bogle himself. We don’t help our Buy-and-Hold friends when we encourage them to continue the cover-up; we hurt them when we do that. Friends want to do what is best for their friends even when their friends don’t themselves appreciate at the moment what is best. You wouldn’t encourage your friend to smoke four packs of cigarettes each day. I don’t think you should encourage your friend to follow a Buy-and-Hold investing strategy either given what the last 35 years of peer-reviewed research tells us about how stock investing works in the real world.

    My take.

    I love my Buy-and-Hold friends. I don’t at all like what their first-draft effort at developing a research-based strategy has done to them and to all of us. I believe that we need to incorporate Shiller’s revolutionary, Nobel-Prize-Winning findings into our understanding of how stock investing works. When you incorporate Shiller’s findings, it’s not called Buy-and-Hold anymore. Incorporate the last 35 years of peer-reviewed research into your thinking and you become a Valuation-Informed Indexer.

    Don’t let the bad guys get you down, man.

    Rob

  9. Rob,

    A car is a commodity as well as a depreciating asset. As such, it is consumed. Ford can keep making more cars. Stocks are not a commodity. There are a limited number of shares. They are not consumed. They can also produce growth along with income.

    Your comparison makes no sense and indicated you need to retake basic economics classes

  10. Do you follow a formula when you take price into consideration when buying a car? You don’t. You ALWAYS take price into consideration. But you NEVER develop a formula. It’s not necessary to develop a formula and it’s probably not even a good idea. But it is 100 percent INSANE not the consider price. No one does that when buying cars. But when it comes to buying stocks, we are told that there is some mystical, magical research showing us that we don’t need to consider price.

    Show me the research, Dan. Until you do that, I am going to continue to believe what my common sense tells me MUST be so. And what the last 35 years of peer-reviewed research in this field confirms indeed IS so.

    Again — my take.

    And again — I naturally wish you all good things.

    Rob

  11. “I would need to see peer-reviewed research supporting the idea that there is no need for investors to practice price discipline when buying stocks. That is, research showing that staying at the same stock allocation at all times can work in the long term.”

    In that paragraph you don’t even define what “work” means, let alone any specific formula for implementing VII. Without a formula VII is nothing more than a vague concept. It’s undefined, therefore untestable, therefore there certainly will be no “peer-reviewed” research. So that was just a long way of saying that nothing will ever convince you that you are wrong.

  12. I would need to see peer-reviewed research supporting the idea that there is no need for investors to practice price discipline when buying stocks. That is, research showing that staying at the same stock allocation at all times can work in the long term.

    It never has. Not once in 145 years. I find it impossible to believe that that’s a coincidence. In a theoretical sense, anything is possible. It might be that the moon really is made of green cheese. But that seems so remote a possibility that I cannot imagine putting my name to a statement saying that that is so. I would need to see some sort of scientific evidence to believe that the moon is truly made of green cheese. There’s a lot of intellectual resistance to overcome there. That’s how I feel about Buy-and-Hold. I find the idea that price discipline is not required to be preposterous, insanely far-fetched. But if I saw scientific evidence, that could bring me around.

    When I say that I could be wrong, it’s not false humility, it’s a position that I have come to as the result of life experience. There was a thing that happened a number of months back with my boy Timothy. We were playing a card game (Dominion) and a question re the application of an obscure rule came up. Neither of us wanted to stop in the middle of the game to check the rulebook but we both were sure of our positions. He agreed to go with what I believed and then we checked the rulebook after the game. It turned out that his understanding of the rule was the proper one. I was amazed. I had been sure that I was right. But I wasn’t. That left an impression on me.

    That sort of thing of course happens all the time with all of us. Humans are vulnerable creatures. We are inclined to have too much confidence in our beliefs because it is scary to not be sure about things that are more important to us than the rules for card games. How many people get divorced? They build their entire lives around their love for this one particular person. They bring children into the world with that person. They move to a different part of the country to make that person happy. They take on financial obligations that they would never dream of taking on but for their love of that person. And then they wake up one day to conclude that the person was not the person they thought he or she was. How could they be proven wrong about a matter so important to them, about a matter re which they were so sure?

    It happens. Humans get things wrong all the time. Our political system and our economic system were built with an understanding of this reality in mind. Our systems are built so that mistakes can in time be discovered and corrected. This is why our systems are so dynamic, it is why our way of life is in many ways superior to the ways of life delivered by less open and less flexible systems. I love my country. I love the dynamism of our political and economic systems.

    It’s important that we get our understanding of how stock investing works right. A lot is riding on it. Paradoxically, it is because these matters are so important that the Buy-and-Holders are so reluctant to acknowledge the mistake that the peer-reviewed research in this field revealed 35 years ago. The Buy-and-Holders cannot bear to acknowledge that the mistake that they made 50 years ago has destroyed millions of lives. They intended to help people and instead they destroyed millions of lives. They just cannot accept this reality.

    I feel that as a friend of the Buy-and-Holders it is my job to help them accept that they made a mistake, or at the very bare minimum to at least accept the POSSIBILITY that they made a mistake. Once they accept the possibility, we are back to normal business and over time things will become clearer and Buy-and-Hold will either be affirmed or rejected. That’s the way things are supposed to work in our country.

    Because these matters are of such great importance, we have as a society not permitted the process by which mistakes are corrected over time to proceed in this particular case. People don’t point out the contradictions in the Buy-and-Hold concept because they know that their careers will be destroyed if they do so in an effective manner. So this awful cover-up that is killing us all continues.

    Deep in their hearts that not what the Buy-and-Holders want. Deep in their hearts the Buy-and-Holders want what we all want. We all just need to work up the courage and love that we need to evidence to get past this obstacle standing in our path to the future and thereby put everything on a better track. We need to persuade Jack Bogle to give a speech in which he says “I Was Wrong” (or at the very bare minimum “I’m Not Sure”) and then everything changes. No one would feel intimidated into silence from that day forward. Everyone will be saying what he or she truly believes from that day forward and working together in pursuit of a common purpose we will be able to take things to a better place.

    I believe that I could be wrong, Sammy. I don’t believe that I am wrong. But I believe that I could be. Experience has taught me that lesson. There have been occasions when I was as sure as sure can be about something and later it turned out that I was wrong. I need to keep that in mind when I put forward statements re what I BELIEVE about how stock investing works.

    So does Jack Bogle.

    When Jack realizes that he is human just like all the rest of us and capable of making mistakes just like all the rest of us, we all start moving forward at an amazing pace. That’s when things start changing for the better in a very big way.

    I look forward to the day when we are all working together to make that happen. We have achieved huge advances over the past 35 years. We should be celebrating them, not trying to intimidate the thousands of good people who want to share what they have learned about an important subject into silence.

    My take.

    Rob

  13. Then under what circumstance would finally lead you to conclude that you, in fact, are wrong? If (as I suspect) you can’t answer that, then saying “it’s possible that I am wrong” is nothing but false humility.

  14. My personal take is that it is not given to us humans to ever possess absolute certainty that we have access to “the real truth,” Sammy.

    I believe in Valuation-Informed Indexing as strongly as I have ever believed in anything. But I hope that there will always be a voice in my head suggesting that I pull back just a wee bit whenever I feel myself becoming convinced that I possess “the real truth.”

    I believe what I believe. But I also believe (somewhat paradoxically, I acknowledge) that it’s possible that I am wrong.

    Anyway, I do wish you all the best. Thanks for the many times in which you have helped me to come to a better understanding of some aspect of this story.

    Rob

  15. There are lots of people who have proclaimed their innocence and who were convicted in the court of public opinion for a time because of prejudice and then later were vindicated in the eyes of all.

    Most of the people who banned me apologized to me for doing so. That’s not the ordinary scenario. I have had site owners write me e-mails telling me that they are banning me because their readers are demanding it while also telling me that my site is their favorite site on the internet and that they have learned more about how stock investing works from me than from any other writer on the subject. That tells me that we are going to see a reversal in public opinion re this one and that there will come a day when I will be widely viewed as a hero for my refusal to buckle to your demands that I post dishonestly re safe withdrawal rates and scores of other critically important investment-related topics.

    We are just going to have to wait to see how it all plays out following the next price crash.

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

    Rob

  16. Everyone of those decisions was wrong, Sammy. There will come a day when one of those decisions will be reversed. Very soon after that, they all will be reversed. Every one of those decisions was made for the same wrong reason. When the first of the wrong decisions is reversed, the wrongness of all of the wrong decisions will be obvious to all and they all will be reversed.

    There was a time when women could not vote in any state in the United States. What were the chances that every state got that one wrong? We now know that the chances were 100 percent. Women were denied the vote in every state for the same wrong reason. Once the wrongness of that call was revealed, all of the wrong decisions were corrected at the same time.

    There has never been even the tiniest sliver of support for the idea that it is not necessary to practice price discipline (long-term timing) when buying stocks. If there were a tiny sliver, I would not be banned at a single place. It is because 100 percent of the evidence supports Valuation-Informed Indexing and 0 percent supports Buy-and-Hold that the Buy-and-Holders feel that they must ban me at so many sites. When I talk, people like what they hear. If enough people hear my message, Buy-and-Hold goes down. The Buy-and-Holders know this as well as I do. The only difference is that I want to see Buy-and-Hold go down and the Buy-and-Holders want to keep the cover-up going.

    I am the best friend that the Buy-and-Holders have. Because the best thing for the Buy-and-Holders is for the cover-up to come to an end. And I am the one fighting for that.

    There’s a lot of money to be made pushing Buy-and-Hold, Sammy. Money corrupts people. It’s a story that has been going on since the beginning of time. When you look at how much money we are talking about, it’s not hard to understand what is going on here. But, given that the cover-up has to come to an end sooner or later, it is better for each and every one of us that it come to an end quickly.

    If Buy-and-Hold were not a con, you could name the many changes that Bogle made in the strategy following the 1981 publication of Shiller’s “revolutionary” (his word) research findings. You can’t name any. That tells the tale.

    Rob

  17. 20 bannings. What are odds that each of these decisions is wrong and you all be, Rob, are correct?

    I think we all know the odds of that.

    Put it this way. If 20 people tell you that you stink………it is more likely you have an odor problem versus 20 people having defective noses.

  18. Well, I’ve been banned at many places, Sammy. That one is beyond dispute.

    And this reality signifies something. We are in complete agreement re that one too.

    We differ on what it means.

    You say that it signifies that I am doing something wrong.

    I say that it signifies that there’s something seriously wrong with Buy-and-Hold.

    Time will tell the tale.

    Rob

  19. I’ve been banned at about 20 boards or blogs. That’s a lot. I don’t know anyone who has been banned at more places. I once gave a talk at the financial bloggers conference (FINCON) titled “How to Become the Most Hated Blogger on the internet.” There was a time when I used to receive fresh death threats in my e-mail box every morning.

    What does that tell us?

    It tells me that Shiller is right, that stock investing is in fact NOT 100 percent rational, as the Buy-and-Holders say, but instead is HIGHLY emotional, as Shiller and the 145 years of historical data available to us today, say.

    Buy-and-Hold today remains the dominant model for understanding how stock investing works. Not because there is any evidence in the historical support for it or any research-based support for it or even any common-sense-based support for it. Because humans all have a Get Rich Quick impulse residing within them and because Buy-and-Hold is the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind. That’s my sincere take, Sammy.

    Could I be wrong? Absolutely. I’ve been wrong about lots of things. If it were happening again, I would in all likelihood be the last to know. I could be wrong re all that I say here any everywhere else.

    But I am not looking for a Plan B. If I ever become convinced that I am wrong, I will change what I say. That’s part of Plan A. But so long as I remain convinced that Buy-and-Hold is truly dangerous stuff, I am going to continue to say that Buy-and-Hold is truly dangerous stuff. It may be that saying that will get me banned at 20 more places or at 200 more places or at 2,000 more places. If that happens, I’ll have to live with it. Plan A places great importance on posting honestly and so I intend to continue doing that.

    I think it would be fair to say that our Plan A as a country is to permit people to give voice to their honest beliefs. That’s how we handle it in every field of human endeavor other than the investing advice field. I don’t think we become different sorts of people when we give investing advice. I think there is a good reason why the rules of every discussion board and blog at which I have been banned PERMITS honest posting even though the site administrators of those boards don’t honor the published rules of their own sites in their administration of them. I don’t view that as a reality that can continue indefinitely, I view it as a temporary aberration that will likely be corrected following the next price crash.

    We are going to have to wait to see how it all plays out, Sammy. I cannot take you in a time machine to let you see how it all plays out before it happens. I know that I don’t want any posts with my name on them floating around the internet in which I said that the Buy-and-Hold retirement studies contain a valuation adjustment or that there is not 35 years of peer-reviewed research showing that a valuation adjustment is required to get the numbers even roughly right.

    I accept the reality that my honest statements of my views on these matters is not a terribly popular one today. But I pledge to do my best to resist any pressures imposed on me to begin posting dishonestly re these matters. I believe that I owe it to my readers to tell them what I sincerely believe. I don’t see that one as even being a close call. I believe that we all want to overcome this economic crisis and that we all know somewhere deep in our hearts that the first step is encouraging all of our friends and neighbors and co-workers and fellow community members (both our Buy-and-Hold friends and our Valuation-Informed Indexer friends) to post with 100 percent honesty and sincerity and charity.

    I love my country, Sammy. And I see Plan A is being consistent with the founding principles of my country in a way that anything less than Plan A could never be. My working motto is: “Be as honest as it is possible to be while never crossing the line and becoming uncharitable while also being as charitable as it is possible to be without ever crossing the line and becoming dishonest.” That’s Plan A. That’s what I love. That’s where Valuation-Informed Indexing comes from.

    I am grateful to you for all that I have learned from you over the years.

    And I naturally wish you the best of luck with all your future life endeavors.

    Rob

  20. 59 years old. Got it. So you hope that by the time you are between 79 and 89 years old, you might get that retirement plan of yours to work. Hmmmmm…….you might want to think again about plan B.

    As for spreading your message in other boards, I think you already tried that and you ended up getting banned. Sounds like another reason plan B is needed.

  21. I’m 59, Sammy.

    The peer-reviewed research shows that Valuation-Informed Indexing has been working for 145 years now. That’s as far back as we have records.

    The only thing that I am waiting for is the opportunity to be able to spread the word at every investing discussion board and blog on the internet. I believe that day is coming. If there were something that I could do to make it happen sooner, I would do it. But I believe that I have done everything open to me to do.

    I believe that it is the next crash that is going to bring on the change. I obviously wish that it didn’t have to be that way. But that is the conclusion that I have reached as a result of the opposition that I have seen over the past 14 years.

    The other side of the story is that the good news here is 50 times more good than the bad news here is bad. This is a pretty darn exciting time to be alive for those of us who have an interest in learning how stock investing works in the real world.

    Hang in there, man.

    Rob

  22. Rob,

    You’ve got to be getting close to 60 years old by now. Do you really have 20 to 30 more years to sit around to see if your strategy will work? You better come up with a Plan B before you have to figure out how you are going to afford that box of Depends.

  23. My best and warmest wishes to you and yours, Sammy.

    Thanks for taking time out of your day to share your thoughts with us.

    Please take good care, my old friend.

    Rob

  24. Rob,

    You missed your calling. You should be a comedian. Is this how you spin it order to now say why you have been out of the market for 20 years?

    By the way, the buy, hold and rebalance crowd has beat your returns by huge amounts; not the small numbers you try to pass off.

    Of course you then spin around with your story about “cotton candy” money and how everyone but you needs to deduct 65% off our net worth calculations for it to be a fair comparison (Rob Bennett math). The funny thing is that even if I reduce my numbers by 65% (which is silly), I still have way more than you have.

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