Set forth below is the text of a post that I recently put to the Goon Central board:
Change will come when the negative consequences (professional ridicule, financial and criminal liabilities) that follow from advocating Buy-and-Hold “strategies” are greater than the positive consequences (lots of bucks from the suckers!) that follow from advocating Buy-and-Hold strategies.
That’s my bottom-line assessment of the lesson learned from these first 11 years of our discussions.
The advice I am given even from from well-wishers is to be less strident.
How is that going to change anything?
Buy-and-Hold has the natural edge as a money-making thing. Most of us humans LOVE us some Get Rich Quick. We are all weak. We are all vulnerable to the trickery of the Wall Street Con Men.
The edge possessed by Valuation-Informed Indexing is that it is the first true research-based strategy. That is a more subtle thing. Millions of middle-class people are drawn to the idea of being able to obtain far higher long-term returns while virtually eliminating the risk of stock investing. But research-based strategies do not have the emotional appeal of the pure Get Rich Quick garbage pushed so relentlessly by the Buy-and-Holders. For research-based strategies to gain a foothold, we need to spell out in clear and firm and unmistakable terms the DANGERS of Buy-and-Hold. Otherwise the Wall Street Con Men will win every battle.
We need to be firmer. We need to be clearer. We need to be braver. We need to be plainer.
Get Rich Quick doesn’t work. Not ever. Not for anyone. Buy-and-Hold is long-discredited garbage.
If that is stridency, we should pray for the courage and love to engage in the ultimate forms of stridency! We are not serving the millions of middle-class people who need access to honest and accurate investing advice if we fail to do so.
Please note that the non-strident promotion of the non-Get Rich Quick approach has gotten us precisely nowhere in the 32 years since Shiller blew up the intellectual case for Buy-and-Hold.
I wonder why.
There is a LOT of money in this field.
Whiners and enablers and puppy-dog posters talk the research-based talk (in cautious whispers). Strident truth-tellers walk the research-based walk (taking bold strides forward on a daily basis).
If you believe that rooting one’s investing strategies in the peer-reviewed academic research is a good idea, you don’t ask for permission to point out the track record of Buy-and-Hold. You SAY it. And you say it CLEARLY so that people can understand. And you NEVER apologize.
Should we respect our Buy-and-Hold friends for the amazing contributions they made in an earlier time?
To be sure.
But never should we do that without also pointing out that it has been 32 years since Buy-and-Hold possessed even a sliver of intellectual merit among those of us in this field who are responsible enough to keep up with the literature and to spend at least a small amount of effort thinking through its implications.
This is myzzz sincere take re these important matters, in any event.
Rob the Strident