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 13, 2009.
I am grateful that you care and that you are willing to share your sincere thoughts re this with me. That’s obviously a kindness. I of course agree that God placed people like my wife and my brother (and you!) in my life to guide me to good things. I do try to hear what they have to say and to the extent possible I try to acknowledge that it is possible that I am not hearing all that I need to hear. It’s hard for all of us to do that. All that we can do is to try as hard as we can to remain open to other takes.
I entirely agree when you say that I should not try to force my message on anyone. But then I don’t do that! I think people should invest according to their own beliefs. I’ve certainly never said different. The way that it should work is that I should share what I think and others should share what they think and those listening in should decide for themselves. That’s the ordinary operating procedure in all areas other than investing, is it not? I think that’s what would work best in the investing area too.
If you are ever interested in reading background materials re this aspect of things, I provide a number of articles at the “Banned at Motley Fool!” section of the site. It’s there to help people come to a better understanding. If you or anyone else ever expressed interest in writing something giving a side to the story that I have not put forward, I would be happy to post something like that as an article at that section of the site. My guess is that you are not interested in doing that and that is of course fine. I am just saying that in the event that you or anyone else were interested, I think it would be a good thing. I am not saying that my views on this aspect of things should be the only views heard.
You say that I cannot “control” whether the internet is opened to honest posting on investment topics. I obviously cannot control that by myself. But I control it IN PART. We all do. Each of us through our posting decisions make the internet a little more open to honest posting or a little more closed to it. I want my posts to be posts that encourage more openness. That much I control. I understand that I do not control more than that, but I don’t view doing more than that to be my responsibility.
I am all for having more allies. That is solid, practical, constructive advice. I would like to have thousands of allies. You are of course right that that is a critical piece of business. Tell me where to sign up for more allies!
I don’t understand what you are suggesting when you say that I “focus” on detractors. I don’t feel that I focus on detractors any more than I focus on supporters. I talk and write about both all the time. I don’t IGNORE the detractors, that much would be fair to say. I strongly believe that the detractors and the tactics they have employed to block the supporters from having the discussions they want to have are a big part of the story.
I don’t view this as an intellectual story. Everything I have pointed out has been “known” (in the sense that it has been publicly available information) for 28 years now. I think a big question here is — Why is information that has been publicly available for so long not widely known? It’s because people are afraid to bring it up or to talk about it or to ask questions about it. In my eyes, that’s the entire deal. Once we get over our fear of violating the social taboo that forbids honest discussion of investing, the whole national nightmare comes to an end.
There’s nothing to “understand” here, Larry. It’s all simple common sense. You have to look at how much you are paying for stocks before you buy them. That’s a revelation? I don’t think so. It comes across as a shocking news development only because for so long now we have as a people been unwilling to talk about the common-sense realities. I don’t see how we are going to change things until we change that reality.
Say that you get 100 pension people to agree with you. What are they going to do about it? To do any good, they are going to need to talk about the realities, are they not? If they do that, sooner or later those who believe in Buy-and-Hold are going to find out and become upset. It leads to the same place sooner or later, does it not?
The problem here is not that I say that we should be permitted to talk honestly about investing on the internet. In ordinary circumstances, that one would be considered so obviously true that it would be silly for me to bring it up. The problem here is that investors who believe in Buy-and-Hold become upset when the realities are mentioned.
That’s a real problem. I don’t make light of it. I say that we cannot solve that problem unless we first start TALKING about it. It’s a very real, very serious, very troubling problem. It is the problem that causes all the other problems. We should get it out on the table and discuss it and try to solve it. That’s my belief, in any event.
I DO post where I can and then let it go. What choice do I have in any event? You say “move on to people who will listen.” There are LOTS of people at all the Retire Early and Indexing boards who have expressed a desire to listen (and to share their own thoughts, to be sure). Again, there’s an article at the “Banned at Motley Fool!” section of the site where I quote 101 of them. That’s only a small sample.
There has never been any problem getting people interested in hearing about the ideas. There’s been huge interest since the first day. The problem has always been that the group that doesn’t want people to be able to listen is 50 times more intense than the group that wants to be able to listen. The group that doesn’t want people to be able to listen knows what is at stake if the discussions are permitted. My sense is that the group that wants to be able to listen does not appreciate how big this is.
But there are many, many people on all the boards and blogs who very much want to be able to listen. This has been clear as clear can be going back to the first day. I think that, if you asked “how many support the idea of honest posting?” you would have 80 percent saying “yes.” The trouble has been that most find the abusive posting a huge turn-off.
I think that if we dealt with the abusive posting, all the other problems would just go away. (I certainly do not mean to suggest here that everyone would agree that Valuation-Informed Indexing is the way to go. That’s a very, very different question. I am just saying that most are open to the idea of having both sides state their sincere views so long as abusive posting does not enter the picture.)
Jesus did not hold back from saying what He felt needed to be said out of fear that some would become angry on hearing it, did He? He put forward some Hard Sayings. And He certainly did not limit Himself to speaking only to those who were in 100 percent agreement with him from the start. He spoke to sinners. Well, the Buy-and-Hold Investors are the sinners of InvestoWorld. We need to talk to them. Talking is caring. I view it as the easy way out to say “Oh, well, I will only talk to those who praise me from the first time they hear me.”
I CARE about the sinners, Larry. Because I am a sinner. I believed in Buy-and-Hold Investing once upon a time. I have an inner Goon. I do dumb stuff. I fall for marketing slogans.
And I LEARN from the sinners. All the time. I have learned from talking with Schroeder. And from talking with Drip Guy. And from talking with Norbert Schenkler. These are three of the most abusive Goons in the history of our boards. And I have learned important things from talking things over with them. I need to filter out the hate stuff to be able to make any sense of what they say. But there is sometimes sense buried there that can be found if you look for it.
The Goons do not want to destroy their lives. They do not want to delay their retirements. On some level they do not want to be Goons. They want to be humans. In that sense they are like me. Or like you.
We all have Goonishness within us, Larry. That’s a big part of the story being revealed here. The Sharpe Ratio doesn’t measure the Goonishness in the air at any given point in time. That’s why the Sharpe Ratio causes us to get all the numbers wrong. Goonishness enters the picture once we bring humans into the story and let them be the ones buying the stocks.
Eugene Fama doesn’t feel comfortable talking about human emotions. That’s why he spends so much time walking through blind alleys. The part of investing that has been ignored for years now is the human part. It’s re that part of the story that I have something worthwhile to offer. When you bring humans into the story, you bring Goonishness into the story. That’s just the way it goes. God lets Goonishness continue. It was His call to make this part of the story, not mine (I am just a mild-mannered reporter who writes up what he sees appear before his eyes, nothing more and nothing less).
My view is that these things need to be said. My goal is to have a world where EVERYONE shares his or her honest views. The very fact that that this is today considered by some an impossible dream tells me that there is something very, very wrong with the current set-up. I view honesty as Job #1. Without honesty, I feel that all the words that follow are empty words. Humans can never achieve absolute honesty. But we should TRY. That’s all that I do. I TRY to post honestly.
One thing that I do that is different from some others is that, when I feel inclined to pull back and not post my honest beliefs because of intimidation tactics, I make an effort to work up the courage to post my honest beliefs DESPITE the intimidation. I think that’s the answer. I think that we all need to try to OVERCOME this social taboo that has stopped us from writing and thinking honestly re these questions for many years now. We often learn by saying things out loud.
When we don’t SAY what we believe, it becomes hard to think clearly. I have found over and over again that, when I work up the courage to say something that for a long time I had been afraid to say, it causes me to discover a powerful new insight. I have had that happen scores of time. I believe that all the great ideas are stored in our heads waiting to get out when we work up the courage to give voice to them. I see it as my job to work up the courage to do this as often as possible.
One of the things that is holding us back (I believe) is shame. We are ashamed of what we have done for 28 years now, of all the human misery we have caused by failing to speak out for so long. I think that’s the source of the pain and the anger and the hate. I take no pleasure in causing people to feel shame. My view is that feeling this emotion (which we earned with our behavior over the past 28 years) is the only way out of experiencing more and more and more of it over time. The shame is not going to go away because we ignore it. It’s going to get worse. If we cause the second great depression, there will be MORE shame than there is today. I want to do what I can to prevent that. That’s why I try to tell the story as straight as possible.
I feel that you (and many other smart and good people) want to compartmentalize things. I feel that you want to turn this into a math problem. I do not see this as a math problem. All of the intellectual puzzles were solved decades ago. What has been lacking for 28 years is the willingness to speak up about what we already know intellectually. It’s not enough to understand this stuff. We need to be willing to SHARE what we understand. We need to be willing to put what we understand into words. In today’s world (a world influenced by hundreds of millions of dollars that have been directed to the promotion of Buy-and-Hold Investing), sharing what we know about the realities is going to cause a good number of people a good bit of distress. That’s just the way it is.
We need to respond to that distress with love. The question is — Is the loving thing to pretend that the distress is not there or to take steps to alleviate the distress? I believe that we need to face and overcome the distress. I believe that when that job is done all the rest just follows as easy as eating a piece of apple pie. Knowing about this stuff is a win/win/win/win/win for everyone concerned. In a rational world, there is no possible grounds for opposition. Spreading knowledge of the realities of stock investing is a 100 percent good thing, with no possible downside for anyone concerned.
There was a time when it was not viewed as polite to talk about the evils of slavery. We ended up in war over that one. When people fail to speak up about obvious evils, those evils retain the power to do harm to people. The idea that it is not necessary to take price into consideration when buying stocks is an evil idea. It is rooted in a dark part of human nature, the Get Rich Quick impulse. If we speak up in opposition to this evil, it will lose its power over us; it will be destroyed. This is why I speak plainly. I care about the people being hurt by the evil idea and I want to bring the evil idea down. I see it as my job to employ all my powers of persuasion to achieve that goal.
Again, I am grateful for your concern and for your caring and for your willingness to help. I am happy to interact with you according to whatever terms you specify. If you don’t ask about this aspect of the story, I am happy not to bring it up. If you do ask, I feel an obligation to explain my take as well as I can. I certainly don’t make any demands that you agree. I cannot not believe what I believe so strongly. So I just have to hope that that will be good enough.