The Delete Button

The fellow’s name is “JLP.” He writes the All Financial Matters blog.

It’s a good one. This is a smart fellow and a kind fellow. He helps people. To take a look at the blog makes you feel hopeful about things.

The day on which he learned about Passive Investing was like the day the devil held the apple out to Eve. “What could be wrong in the idea of an efficient market? There’s a voice in my head that tells me that this is a tree that will bear bad fruit. But that’s nonsense! I’m good. I want the apple. The apple must be good. The market is made up of lots of people like me. We’re all good. We all want apples. All apples are good. All else is myth.”

It tasted good. So he was right!

Those people who got sick, it wasn’t the apples that did that. That was the economy. The economy can be bad, but not apples. He picked the apple. He’s good. How could the apple possibly have been bad?

The thread was called “Problems with the Conventional Investing Advice.” I posted the thread-starter. The forum is called “”. Bloggers go there to learn how to set things up, or to hear what readers are getting excited about nowadays, or to share tips on bringing in some money, that sort of thing. It’s not a place to talk about snakes bearing apples! Only Rob Bennett would think it proper to mention the snakes!

The thread-starter generated lots of discussion. I said that I would be happy to write some guest blog posts telling the truth about stock investing (as if we all didn’t all already know somewhere within that the apple incident has not been entirely forgotten by, well, you know — Him!). Eight bloggers said they would be happy to look at some words from me. There were lots of good questions. Respectful and warm. An encouraging sign to eyes that have seen so many of the other kind over the past seven years.

The sense you got was that we are past most of the denial and anger and are now in the bargaining stage, with some at least entertaining thoughts of giving in to depression. Which suggests that the good stuff that comes with acceptance might not be all so terribly far off anymore. But that comes from a fellow who has been seeing the glass as half full for a long time now. You need to subtract credibility points for that.

The most instructional line was one posted by “Four Pillars”. He asked what exactly it was about the Old School safe-withdrawal-rate studies that bugged me so much. I told about the hundreds of my friends from the Motley Fool board suffering busted retirements because they believed the lies (intentional or not) posted there by their other friends. “Is this a problem or is this not a problem?” I wondered. “It’s hard to say,” Four Pillars responded.

He’s right, you know. It’s easy to know that it’s a problem, to be sure. But it is indeed darn hard to say it. Saying it hurts. Because when you say it, people hear it. And hearing it certainly hurts. Most of us don’t get kicks out of hurting our friends. There’s an important sense in which it makes all the sense in the world to ban honest posting on safe withdrawal rates and other valuation-related investing topics.

This brings us back to the apple business. To say out loud the truth about stock investing is to let people know that eating the apple wasn’t so hot an idea. The “experts” did this to us. We did this to us. Our friends did this to us (and we did this to our friends). The good people! We’re pointing out flaws in the good people now! We’re hurting each other!

Can we talk about the Sharpe ratio? There’s something about the Sharpe ratio that I have never entirely understood. I believe that the key to getting out of this economic crisis is coming to a better and more complete understanding of the Sharpe ratio. I’m sure of it!

A report was filed Saturday night at Goon Central. A post soon went up suggesting that the Personal Finance Bloggers of the World should turn their attention back to The Sharpe Ratio and quick-like. It was a forceful suggestion. You’ve seen this sort of thing before. You know.

Sunday morning comes and there’s no thread. It went “poof!” Oh my!

I remembered that Graham Parker once wrote a song about things that happen on Saturday night and I googled the lyrics for clues. “It must have been murder, this wasn’t no accident.” I pondered these words in my heart.

I wrote an e-mail to JLP.

He responded with four words. This apple business is potentially a big story. You measure your words.

“I deleted the thread.”

That kinda sorta explains things. But this is a murder inquiry. We need to know more.

“Because it had turned into a mudslinging thread.”

We’re in the journalism biz. We still need to know more. “Why didn’t you delete the two mudslinging posts and leave the dozens of wonderful ones up for people to learn from?”

A quick conversation with the lawyers (this is a joke — I hope!). And then this: “”It was easier to delete the whole thread (one-click) than to weed through the posts that I thought were pointless.”

Bloggers! They’re humans too! I’ve long suspected as much.

I tried this: “Do you have any objection if I start a thread at the forum asking other bloggers in the community what they think of your policy of deleting an entire thread because one poster (both trash posts were put forward by the same individual, an individual who had never posted to the forum before and an individual who does not own a blog and an individual who has been posting abusively in numerous forums for years) posted abusively on it?” 

No response to that one.

An apple. All this fuss over an apple. It’s so unfair!

The forum is still there. The blogs are all still there. The Old School studies are all still there. The busted retirements are all still there. The books recommending Passive Investing are all still there.

It’s almost as if nothing ever happened.

Wouldn’t it be cool if there were a button on your computer that you could push and it would make it so that nothing that we ever said or did during The Passive Investing Era had ever happened?


  1. says

    I do not understand the fixation with the Sharpe Ratio myself outside of an Efficient Market Hypothesis context.

    It claims to be a measure of gain versus risk. It is actually a measure of gain versus volatility. Unless investment gains increase as you increase risk, it is meaningless. Guess what? Quite often, you can increase investment returns while decreasing risk. Think of the top of the bubble and the alternative of investing in TIPS.

    Hidden in the background during discussions of the Sharpe Ratio is the time frame. It is usually quite short. It excludes effects that take a while to surface such as mean reversion.

    Have fun.

    John Walter Russell

  2. Rob says

    Lauren is correct. Thanks for the correction, Lauren.

    That one is particularly embarrassing because I sent a link to the blog entry to JLP and we had a little discussion of it between ourselves. I doubt that it made a big difference but, if I had it to take back, I sure would have preferred to have gotten the fellow’s name right.

    I’ll make the fix now.


  3. Rob says

    I do not understand the fixation with the Sharpe Ratio

    Why do people stuck in dead-end jobs spend the time that could be spent pursuing something better watching escapist entertainment instead?

    It’s not my intent to be harsh with that comment. It’s my intent to be real.

    I’ve used escapist entertainment as a distraction from my real problems on many an occasion. I certainly don’t say that I am above this sort of behavior.


  4. says

    I find myself disagreeing with Professor Shiller. I believe that Minski had the right take: in capitalism, stability leads to instability (and later returns back to stability).

    I believe that it was the SUCCESS of Alan Greenspan that led to bigger bubbles (stocks, then real estate) than we would have had otherwise.

    Professor Shiller points toward better ways of smoothing out the business cycle. I don’t believe that this is possible (in a positive sense).

    Today’s Governmental solutions seemed geared towards making everything much, much worse than they have to be.

    Have fun.

    John Walter Russell

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