Set forth below is the text of an e-mail that I sent on November 13, 2009, to Carl Richards, Owner of Clearwater Asset Management and author of the Behavior Gap blog. I will post a summary description of Carl’s response and my reply in a forthcoming blog entry.
I saw your note at Behavior Gap this morning announcing that you have banned honest posting at your blog. My guess is that you will react by feeling that that is too harsh a way of putting it. I say it that way because every bit of evidence that I have seen tells me that that is the right way to say it. When you ban me from posting honestly about the realities of stock investing at your blog, you are banning anyone from posting honestly re the realities of stock investing at your blog. It is obviously not me personally that you object to. It is the fact that I am reporting the realities accurately. If someone else were to post the same words, you would ban him or her. I believe strongly
that you would be wrong to do so. You should celebrate honest posting, especially on aspects of the investing question that you do not today understand well. That’s how you learn and learning is wonderful (this is not something that I would need to say if we were discussing any subject other than stock investing).
The other poster asked why I post the same comment each time I comment. obviously do not post the same precise comment. What I do is let people know of different ways in which the idea that it is not necessary to take price into account when buying stocks destroys us. There is not one way in which this is so. There are hundreds of ways. I cannot report on the full horror of Buy-and-Hold Investing in a single post. I report on one aspect at a time as the different topics are put on the table by your blog entries. That is the entirely appropriate way of going about it. That is how people learn, by taking in one aspect of a problem at a time and over time coming to appreciate the full realities.
You say that my comments “dominate.” How is it that they do that? It is not because of the strength of my personality or the strength of my intellect. My comments dominate because they are so important and because they are not generally heard. It comes as a shock to people to learn that the entire financial crisis was 100 percent avoidable if only we had permitted honest posting on investment topics on the internet. The failed businesses did not need to fail The failed retirements did not need to fail. The failed marriages did not need to fail. We caused these problems with our promotion of and tolerance for the long-discredited idea that there is no need to take prices into account when buying stocks. The shock comes not from the reporting of the reality alone. Reporting the realities of a subject matter is the most natural thing in the world. The shock comes from the context in which the realities are being reported, a context in which the realities were covered up for 28 years after the academic research showed that valuations affect long-term returns and that there is therefore precisely zero chance that buy-and-hold could ever work in the real world for the long-term investor.
You have complained that your criticisms of conventional thinking have been ignored by those pushing other agendas. Rightly so. You are now yourself guilty of the same crime of which you have accused others. You have closed your blog to the input that it needs to remain a fully honest vehicle for the exploration of new ideas. My view is that you have three legitimate choices when you see ideas that you do not agree with appear on your blog: (1) you can refute them; (2) you can ignore them; or (3) you can explore them. You have chosen a fourth approach that I do not view as legitimate. You have
elected to silence them (at least at your blog, which is all that you control). That reveals a lack of confidence on your part in your own views. I don’t say that to make a personal dig. I say it because it is my sincere assessment of what your action shows about your level of confidence in your own investing ideas.
If you have questions about the ideas, I will of course do anything I can to help you come to a better understanding of them. Learning is a positive. But to learn you are going to need first to be open to learning. Again, that’s not intended as a dig but as a fair assessment of an important reality. Are you open to learning? If you are, let’s get about the business of learning together. If you are not, my personal belief is that you should not be writing a blog on investing. I of course acknowledge the many talents that you regularly evidence in your writings. It’s not enough to be a good writer. It’s not enough to have some good ideas. It’s not enough to be open to SOME new ideas. The trick is to get it right. If you are not open to the most important ideas, you cannot get it right. That means that your work, however well-intentioned (and I do not doubt your good intent), ends up doing harm.
There have been many “experts” who have done great harm in recent decades because they continued to promote the Buy-and-Hold concept long after it had been intellectually discredited. My job is to persuade those people of their horrible mistake and to do what can be done to help our society recover from the great damage done. I hate to think of you as now being in that group, but I think it is fair to say that that is where you have placed yourself with your recent action. Please know that I will always remain open to talking over any aspect of these matters with you in a constructive spirit.
I believe that you would like to be capable of doing better than you are capable of doing today. I believe that I can make you capable of better things b sharing with you what I have learned through interactions with my fellow community members at the Retire Early and Indexing discussion-board communities over the past seven years.
My strong belief is that you could learn a lot from me. My equally strong belief is that I could learn a lot from you. I love your work. I have seen you bring forth some powerful insights that will do many people much good. In the event that you do elect to enter a constructive back-and-forth discussion, I will be excited to begin that learning process.