Set forth below is the text of my response to a comment advanced by “Arty” to the discussion thread or a recent blog post here:
But just so we are on the same page, what are the precise quotes from, say, Bogle, that are “get rich mumbo jumbo”?
Please understand that Bogle is one of my heroes. I view him as a giant in the field. There would be no Valuation-Informed Indexing without John Bogle. I learned as much from Bogle as I learned from any other expert, including Shiller and Russell.
That said, the sort of thing that Bogle says that causes huge trouble for millions of middle-class investors is his injunction to “Stay the Course!” What does that mean?
If it means “try to keep your risk profile roughly stable,” Bogle is the leading advocate of Valuation-Informed Indexing alive on Planet Earth today. It’s not possible to keep your risk profile stable without changing your stock allocation in response to big valuation shifts. So, if that’s what the phrase means, Bogle and I are soul brothers.
But that’s not how the Lindauerheads interpret “Stay the Course.” The Lindaurheads say that it means to stay at the same stock allocation. That’s the opposite of maintaining the same risk profile.
Bogle won’t tell us what he means. I offered to make a presentation to the annual Bogleheads conference and to ask him that question and find out what he thinks and the owners of the forum elected to start a new forum to escape me and my annoying questions rather than to permit me to ask those questions in a public meeting. So I think it would be fair to say that there is some funny business going on re these matters, Arty.
I know that the Lindaurheads interpret what Bogle says in very dangerous ways. I don’t know precisely what Bogle thinks because he won’t answer questions about these matters. I have sent him three e-mails trying to learn more about what he really believes. But he has not responded to those e-mails.
I have never seen Bogle correct the Lindauerheads. That suggests that he does not have a big problem with what they tell people.
That’s pretty much all I can say about this topic, Arty. I wish that some others would get involved and try to find out in more detail precisely what Bogle believes. We need Bogle promoting Valuation-Informed Indexing. That would be huge. And he has indeed said many things supportive of VII. But I don’t think that I can quite say today that The Big Guy has endorsed VII. I wish I could.
If anybody has any ideas as to what I might do to persuade him to make a flat-out endorsement, I would be grateful to hear them. Once we get that endorsement from The Big Guy, I believe that we are on our way to bringing this economic crisis to an end.