Set forth below is the text of an e-mail that I sent on January 18, 2010, to New York Times Columnist Paul Krugman:
I was struck by a reader comment to one of your recent articles re The Efficient Market Hypothesis that this theory “seems harder to kill than the undead.” I believe that there is more going on here than the typical reluctance of academics to acknowledge that better theories have come along to replace earlier ones.
I would be grateful if you would give a look to a Google Knol that I have written entitled “Why Buy-and-Hold Investing Can Never Work.” If the market is NOT efficient in the short term but IS efficient in the long term, it seems to me that Buy and-Hold is the WORST possible strategy. If the market is always in the process of moving in the direction of fair price, ignoring price when setting one’s stock allocation is a horrible mistake. Stocks were overvalued by about $12 trillion at the top of the bubble. This means that middle-class investors are in the process of losing that much of their life savings and that the reason why they are losing it is that The Stock Selling Industry has been pushing the Buy-and-Hold mantra so aggressively and for so long.
I believe that political pressure is going to be required to force the “experts” in The Stock-Selling Industry to acknowledge their error or this discredited theory is going to cause a mass loss of confidence in our economic and political systems.
I would love to hear any thoughts you have in reaction to the Google Knol (either positive or negative, of course).