Set forth below is the text of a comment that I recently put to a blog entry at this site:
Isn’t that what you are trying to do here? How’s that working out for you?
It’s certainly what I am trying to do, Pink.
I have not succeeded in building the community I want to see in place as of this moment in time.
Thanks to you Goons! And your pals in The Buy-and-Hold Mafia!
The investing advice that “works” for those giving investing advice is the opposite of the investing advice that works for those hearing the investing advice. Those giving advice receive a short-term financial benefit from going with a pure Get Rich Quick approach. We all are drawn to GRQ approaches and the appeal is intensely emotional. All salesmen know that the way to make a sale is to form an emotional connection with the sucker — er, the customer!
The problem with Get Rich Quick is that, while it feels wonderful in the short term, it wipes you out in the long run. What works for the salesmen doesn’t work AT ALL for the customers. That’s why today’s investing advice is so poor. That’s why we are in an economic crisis today.
The answer is to get the case for the true research-based approach (Valuation-Informed Indexing) well-known enough that anyone who calls himself an “expert” would be ashamed to be seen promoting Buy-and-Hold “strategies.” The peer-reviewed academic research has shown for 32 years now that there is precisely zero chance that a Buy-and-Hold strategy could ever work for a single long-term investor. The trouble is — most people do not know this! And the Buy-and-Hold Mafia very, very much wants to keep it that way! The Buy-and-Hold Mafia is on the hook for trillions in legal liabilities once people learn what has been done to them.
My job is to get the word out.
Today, we have a Catch-22. People are afraid to tell the truth about stock investing because the Buy-and-Hold Mafia will destroy them if they do. But the thing that gives the Buy-and-Hold Mafia the power to destroy them is that very few know the realities. If people knew what the research said, those who engaged in the tactics engaged in by the Buy-and-Hold Mafia (death threats, board bannings, tens of thousands of acts of defamation, threats to get academic researchers fired from their jobs) would be put in prison for these acts of financial fraud. But not enough know today to make an effective stand. And those who do know are destroyed if they speak up because they don’t have enough others speaking up for them.
So, yes, we need a community where people openly speak the truth about what the academic research says without fear of what the Buy-and-Hold Mafia will do to them. Once we have a community, there’s not a thing the Mafia can do. They will have to flip themselves and start giving research-based advice. Which of course is exactly what deep in their hearts they very much want to do! So everyone wins once that community is in place. It’s a win/win/win/win/win.
The hard part is — How do we get the darn bell on the cat?
We need some people with influence speaking up. That’s it. Once we get an article on the front page of the New York Times, it’s over. We all win! Or once Bogle gives his “I Was Wrong” speech. Or whatever. It all comes to the same thing.
I am sending 50 e-mails each day letting people in various fields (economists, academics, policymakers, bloggers, investing professionals, journalists, etc) know about the threats that were made by the Lindauerheads and the Greaney Goons to get my buddy Wade Pfau fired from his job because he published honest research in this field. Once that story gets big play, it’s over. The economic crisis comes to an end. We enter the strongest period of economic growth in our history. We all are working together to develop the first true research-based model and to mine more and more powerful insights from it.
I want a big, honest community here. Just as I wanted a big, honest community at Motley Fool. JUst as I wanted a big, honest community at Early Retirement Forum. Just as I wanted a big honest community at Bogleheads. And on and on. That’s been the idea going back to the first day.
It needs to be a community that is not controlled by the Wall Street Con Men. So long as what we all say is controlled by the Wall Street Con Men, our communities are negative forces rather than positive ones. The Bogleheads Forum today is encouraging Buy-and-Hold rather than warning people of its dangers. We obviously don’t need any more of that.
So, yes, I am trying to build a community here, and yes, it has been a very, very, very, very hard thing to pull off.
You know what?
It’s worth it.
When the community is in place, we will all be able to live richer lives than we ever dreamed of being able to live before.
That includes you Goons.
And that includes all of my good friends in the Buy-and-Hold Mafia. People like Jack Bogle. And Bill Bernstein. And Scott Burns. And Larry Swedroe. And on and on and on.
All of those people got into this field because they wanted to help people. They wanted to do good and honest work. They cannot do it today. After I get this community off the ground (and after they serve whatever prison sentences we as a society determine are appropriate), they will be able to do it.
It’s good stuff piled on top of good stuff piled on top of good stuff. It’s not even possible for the rational human mind to imagine any possible downside.
So, yes, that is the goal.
Do I wish it were an easier goal to pull off?
I sure do. You got me re that one.
But what’s the alternative?
Engage in financial fraud myself? Huh?
I wish you all the good things that this life has to offer a person, Pink.
Rob the Community Builder