“An Entire Industry Is Going to Have to Be Rebuilt. The Freakin’ Textbooks Are Going to Need to Be Rewritten. That’s What’s Holding Us Back.”

Set forth below is the text of a comment that I recently put to the Goon Central board:

What absolute BS.  After he makes his “famous” (but actually insipid) statement on 2 May 2002, less than two weeks later he says: That shows the power of social pressure, GW.

Which is the entire story here.

I am not smarter than Jack Bogle. And I am not smarter than Bill Bernsteinzzz. And I am not smarter than Scott Burnssss.

All those people — and most of the others who have advocated Buy-and-Hold since 1981 — know about Shiller’s research.

So why was I the first to point out the errors in the Old School SWR studies?

It’s because they face greater social pressure than I do. When Bogle gives his “I Was Wrong” speech (and he will), an entire industry is going to have to be rebuilt. The freakin’ textbooks are going to need to be rewritten. All the tests that these people take to become “qualified” to give investing advice are going to need to be redone. That’s pressure. That’s what’s holding us back, not a lack of intelligence. Almost without exception, the Buy-and-Holders are smart as smart can be.

I was sure on the morning of May 13, 2002. I checked it every which way it can be checked before I pushed the “Send” button.

But I was not so sure that I could not still be persuaded by relentless and ruthless social pressure exerted by hundreds of my internet friends.

I did write the apology post. I did believe it was appropriate that Thursday night.

But it turned out that I was wrong about being wrong, didn’t it?

Two days later, Russell advanced his sensitivity study of Greaney’s study. That pretty much sealed the deal, didn’t it?

I was sure. Then I faced relentless social pressure that made me unsure. So I did the right thing and took the words back. Then I saw the numbers-based proof that proved beyond any reasonable doubt that I was right to be sure. And then of course we have had 10 years of confirming evidence since then without ever seeing a tiny sliver of data pointing in the other direction.

This story is a story of the power of social pressure to cause people to believe things that do not make sense.

That’s not just the story of safe withdrawal rates. That’s the story of stock investing.

It is the social pressure we all feel to pretend that we believe that bull prices are real that is the source of just about all stock investing risk.

You take that social pressure away and we never again have another bull market. You take that social pressure away and stocks are no longer any more risky than Certificates of Deposit.

Social pressure is the story here. All you are doing in showing that social pressure influences Rob Bennett just like it influences everyone else is showing how powerful a force social pressure is in stock investing. Yes, it affects me too. That’s because I am human.

If social pressure can influence that stubborn SOB Rob Bennett on the very topic on which he is a stubborn SOB, why should anyone believe that it has zero influence on JAck Bogle or Bill Bernsteinxxx or Scott Burnsxxx?

Social pressure matters, GW. It’s social pressure that got us into this mess in the first place.

And yes, I was have been wrong about things. I was wrong about being wrong about SWRs. There are now 10 years of Post Archives showing this to be so.

And you have been wrong about things. And, when people like Bogle and Bernsteinzz and Burns come to see that it is their job to help you to RESIST the social pressure to believe in bull markets, you will become empowered to earn far higher returns at greatly diminished risk and to retire many years sooner.

Empowering you (and millions of others) has been the entire point of this going back to the first day.



  1. Rob says

    That’s the kind of spirit I like to see, David — practical, optimistic and goal-oriented!

    Please take good care.


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