Recent blog entries have reported on correspondence between a community member named “Larry” and me. Set forth below is the text of an e-mail that I sent to Larry on November 12, 2009.
Thanks for the kind “beyond awesome” assessment. I fully get it that you are trying to bring the positive aspects to the next level. I am of course grateful.
I feel that I need to respond to the point about spending time and energy battling old foes. I hope that you will not take my feeling a need to respond as defensiveness.
The first thing that I need to say is that you are not the only person whom I respect who has said things along these lines. My wife has said things along these lines. John never said it in words but my strong sense is that he would have agreed with you. My brother has said things along these lines. There are others. So there is evidence that I may just have a blind spot here and cannot see something that is obvious to many others.
Still, I believe what I believe re this aspect of things and I think I should make an effort to put what I believe into words so that you are at least clear about where it is that I am coming from according to my perspective.
I feel that any old “foes” (I don’t personally think of the Goons as “foes” although it certainly is fair to say that they view me as constituting some sort of “foe”) have a right to invest however they please. This has never been even a tiny concern to me.
My “battle” is to open the internet to honest posting on investment questions. Not one of the ideas explored at my site was developed by me sitting in a room thinking grand thoughts. They were all developed through INTERACTION with my fellow community members. The process that works is much like the one that you and I are going through in these e-mails. Different thoughts come from different angles and over time people develop better-informed takes as a result.
Hundreds of the people on the boards are friends of mine. I think they have a right to have the discussions that they want to have. And many of these people have things to teach me. I think I have a right to bounce ideas off them and learn from them. The purpose of the “battle” is to make that possible.
I do not care what Greaney thinks about investing any more than I care what anyone else thinks. I had some good times with the guy. I think of him as a friend because of those good times. But I couldn’t possibly care less how he goes about investing his money. I see that as being his call. The one way in which he has become a concern to me is that he and his Goon Squad stand in the way of a number of boards and blogs permitting honest posting on these questions. I think he should be banned from the boards until he is willing to follow the rules he agreed to follow when he was permitted access. I have been saying so since November 2002. All of the boards that I have posted at prohibit the tactics that he employs to block honest posting.
There’s one more angle here that I believe that you need to consider to develop a full appreciation of why the Passive model is so dangerous. I noted above that all of the boards prohibit the tactics employed by Greaney and Lindauer. That’s evidence that there is a deep feeling among many people that those tactics are unacceptable. Yet only a small number have spoken out in strong terms in opposition to the tactics that have been employed. Does that not say something about how emotional an approach the Passive investing approach is?
I think it does. I think that all of us know on some level of consciousness that the idea that price doesn’t matter when buying stocks is nonsense. We try to ignore the voice inside telling us this but we can never fully pull it off. So it eats away at us. And it makes us emotional when someone comes along and points out what the historical data really says.
I don’t possess an I.Q. bigger than all these experts. So how did it come to be that I am the one writing and speaking about all these exciting findings? That’s a fair question that I think reasonable people should be asking.
I think that the explanation is just that I haven’t had money in stocks since 1996. So I am not caught up in the Passive Investing craziness. I am capable of a level of objectivity that few alive today are capable of. I think that’s part of the story here.
Several financial planners have told me that the reason why they do not talk straight about stock investing is that most investors are far too emotional to handle the truth. I think that the problem is that the conventional advice MAKES them emotional. So this is all circular. Passive Investing makes us incapable of reason and being incapable of reason makes us unable to appreciate strategies rooted in reason.
We need to break this chain. I don’t think we can break it any final sense by writing some super-duper article that lays out all the points (I of course do not mean to say that producing such articles is not a plus). The human mind possesses an incredible ability to rationalize away points that it does not want to take in. But I have seen people slowly come around when they are able to ask questions and step by step come to a better appreciation of the realities. So I am always looking for places where I can help people through that step-by-step process.
The Goons of course want to block that learning process as much as I want to advance it. So we are working at cross purposes. My view is that I am working for a positive purpose and they are working for a negative purpose. I get the sense that they would like me to feel that I should apologize for doing so. I offer no apologies. I am proud of the work that each of the hundreds of people who have made positive contributions has put forward.
I believe that even the Goons would feel a whole big bunch better about themselves if they would make positive and constructive contributions. I have often urged them to do so. I believe that I have done pretty much all that it is possible for me to do in this regard.
I view this as a positive story and I regret it that many characterize it as a negative story because of the ugliness that the Goons have injected into the proceedings. My view is that we should all work together to insure that things always remain positive. I do what I can in this regard. When I am not able to think of anything more of a positive nature that can be done, I let it go and turn my attention elsewhere. I personally do not see what is wrong with this approach. But, again, you are far from the first person I respect who has indicated to me that I am going about things in the wrong way.
If I have done something wrong, I hope that there will come a day when I can recognize that. Until I really do see it, I don’t think it would be right for me to say that I do. I have to just keep doing what seems right in my eyes while making an effort to remain open to the points made by people of good will seeking to steer me in another direction.