Set forth below is the text of a comment that I recently put to a discussion thread at this blog:
Just a few more questions
How many boards have banned you?
How many emails have you sent to Wade?
How many emails have you made about Wade?
How many posts have you made about Wade?
How many people do you think should go to jail?
On what basis do you believe people will be charged with a crime that would lead to jail time?
There have been roughly 15 bannings.
Wade and I exchanged scores of e-mails.
The count for the e-mails that I have sent was at 9,500 this morning. I sent 100 more today. So it’s 9,600 at this moment in time.
I have an article that provides links to all the blog entries about Wade. My recollection is that there were 140. That was before I began the e-mail campaign.
I’m not able to answer the jail question. My personal preference would be to find some way that no one would go to jail. For years I did all in my power to make that a reality. I don’t think that’s possible today. Too many people have been hurt in very serious ways. I believe that there will be a good number of people going to prison. The question of who and for how long will be one that we will decide as a society. I will be arguing for prison sentences somewhat reduced from those that are supported by the consensus of opinion. I would like to see us focus on the positive side of all this rather than on retribution and all this ugly stuff. I believe that we need to work hard to keep our eyes on the prize.
No one will go to prison for believing in Buy-and-Hold. There are obviously millions of good and smart people who believe in Buy-and-Hold, The prison sentences will be for those who have engaged in financial fraud over a prolonged period of time. If you have failed to correct a retirement study after learning of an error you made in it, that’s obviously financial fraud. If you threaten to kill people to cover up errors you made in a retirement study, that’s obviously financial fraud. If you ban honest posting at your web site, that’s obviously financial fraud.
It’s not possible for any one person to say what is right re the prison question or what will happen re the prison question. We have never faced circumstances like this before. People are going to be very angry. And there’s no way to pay them their money back — the money was all pretend in the first place! So there are going to be calls for prison sentences for those who threatened academic researchers and all this sort of thing. I see it as my job to try to rein in emotions and to keep people focused on the positive. That’s why I am working hard today to bring the cover-up to an end. I see bringing the economic crisis to an end as our best option for keeping the prison sentences as limited as possible.
The charge will be financial fraud. You need to be careful here. The academic research showing that there is zero chance that a Buy-and-Hold strategy can work in the long term was published in 1981. So in an objective sense anyone who has recommended Buy-and-Hold strategies over the past 30 years has engaged in financial fraud.
The full reality, though, is that the vast majority (perhaps all?) of those who have recommended Buy-and-Hold are suffering from cognitive dissonance. They know in one part of their minds that Buy-and-Hold cannot work. That’s why Buy-and-Holders become so defensive when their strategies are questioned. But they also “believe” in the strategy in another part of their minds. They follow it. I have not seen any evidence that the people endorsing Buy-and-Hold strategies are not following them themselves.
So you don’t have bad intent. Bad intent is an element of the crime of financial fraud. So an endorsement of Buy-and-Hold in itself is not fraud despite the 30 years of research showing that it cannot work.
But what about when you have death threats or board bannings or defamation or threats to academic researchers?
Those acts show bad intent. Those acts turn a misunderstanding of what works in stock investing into financial fraud, a crime under the laws of the United States.
That’s my sincere take re this matter, Sparky. It obviously would be a good thing if others chimed in. If some want to argue that there is no financial fraud here, we need to hear from them, If others are as concerned about the prison sentences as I am, those people should be speaking up. It is only by speaking up that we can help our Buy-and-Hold friends either avoid prison sentences altogether (in cases in which they have not yet evidenced bad intent) or have their prison sentences reduced (by helping to bring the economic crisis to an end and thereby diminishing the public anger that otherwise might result in very long prison sentences).
I hope that helps a bit, Sparky. Don’t let the bad guys get you down, man.