A blogger friend of mine sent me a note a few weeks ago saying: “You’re not alone in the Bogleheads ban. Larry Ludwig at Investor Junkie got the boot this week.” He then sent a folow-up e-mail in which he said “never mind” because he had read the thread at Investor Junkie, saw that I had commented and realized that I already knew about this. Set forth below are the words of my response e-mail (slightly modified to avoid disclosing the identity of the blogger friend):
Thanks for thinking of me in any event. Had Larry not let me know, your e-mail would have informed me and this is certainly something I need to know about.
I want to ask you to consider something about this that very few people get but that has been a big deal to me from the first day.
The people who banned Larry and me and lots of others are NOT bad people. And they are not dumb people. They want to learn how to invest effectively. And they want to help others learn. I have zero doubt re this. There is a mountain of evidence showing it to be so.
So why do they behave like this? What is the motive?
They are hurting. Their motive is to ease their emotional hurt. They got very excited about an idea, evidence came in that that idea is not perfect, and they experienced emotional pain in seeing that. So they reacted defensively. They SILENCED the words that hurt. People are tempted to do this sort of thing from time to time.
This is the difference between Buy-and-Hold and Valuation-Informed Indexing. Buy-and-Hold does not consider valuations because all mispricing is emotional in nature and the type of people who came up with Buy-and-Hold are not comfortable talking about emotion.
We all agree that emotionalism is a bad thing in investing. We have different approaches for dealing with it. Their approach is to ignore the thing that makes them uncomfortable. Mine is to face the problem (emotionalism, which is evidenced through valuation levels) head on. If we face it, we can beat it. If we ignore it, it beats us. This is the missing piece in our understanding of how stock investing works. This is huge. This changes everything.
Say that the Financial Blogging Community took this on. We would change the world in a very positive way. We would bring the economic crisis to an end. I am not kidding. I have studied this in great depth and we could do that if we all worked together. LOTS of people want to do this work. I can give you names. I have talked with LOTS of people.
The problem in every case is that they are afraid. There is a Social Taboo that says “you don’t talk about this, it hurts people too much.” We are in the sort of situation we were in when blacks could not drink from the same water fountains as whites. Every single person knows that it is wrong and no one speaks up because everyone is afraid to violate the Social Taboo.
I am going to change this. The Social Taboo is going to fall. I am not going to attack the Buy-and-Holders. I am going to show them the respect and affection and gratitude that they have merited by virtue of their many breakthrough findings. But I am going to insist that they permit honest posting at every board and blog on the internet. That’s going to change everything in a very positive way. No one is ever going to look back and say “I wish Rob and his friends hadn’t done that.” Everyone will benefit and everyone will say so once we get to the other side.
I obviously need help. If you are at all interested in helping, please let me know of any questions or concerns you have. If you know of others who you think might be willing to help, please share their names with me. We can do this. We MUST do this. The alternative is going into the Second Great Depression sometime over the next few years.
That’s my pitch. It’s not my intent to push in an offensive manner. I am grateful that you went so far as to send the e-mail. I am telling you all this because I think there are huge opportunities for bloggers here and I want my friends to be part of it and you have shown a bit of an interest in walking a bit down this path. If you are not interested now but come to be a bit interested later, that is of course fine. If you never become interested, that is of course fine.
Anyway, thanks for letting me know of the development. I see lots of signs that things are slowly moving in the right direction.
Please take good care. You do super work at your blog. I am grateful for the help you provide to your readers.