Set forth below is the text of a comment that I recently put to another blog entry at this site:
Really, what do you think you’re accomplishing?
Buy-and-Hold was not always a horrible thing, Goon. It was once a truly wonderful thing. It got us halfway to where we need to be to change stock investing forever in a very, very, very positive way. Our economic future is bright indeed.
There is one problem. Had Robert Shiller published his “revolutionary” (his word) research in 1971 instead of 1981, we would be in the Garden of Paradise today. There never would have been any Buy-and-Hold. The name of the famous book would have been “A Valuation-Informed Walk Down Wall Street.” It didn’t happen that way. Buy-and-Hold, the mistaken and terribly dangerous approach, came first. The research-based approach that works in the real world — Valuation-Informed Indexing — came along a few years later.
The people who work in this field are EXTREMELY proud people. And they are wealthy and powerful and well-connected people. They don’t take to the idea of admitting mistakes. So, for 32 years now, we have been playing a stupid game where “experts” act as if they think Buy-and-Hold might end up working for one or two long-term investors when they know from reading the peer-reviewed academic research in this field that there is precisely zero chance of that happening. They know that Buy-and-Hold has caused an economic crisis every time the Wall Street Con Men have touted it and they know that the stock market affects more lives today than it ever did before (millions of middle-class people now depend on it to finance their retirements). So this economic crisis is going to be far worse than any earlier one. We are looking at a Second Great Depression that will be twice as long and twice as deep as the first one.
Just about everyone in the field knows this on at least some level of consciousness. And of course that means that they want to speak out and get us out of the economic crisis and bring us to the greatest period of economic growth in our history. But everyone in this field also knows something else. Telling the truth about what the last 32 years of peer-reviewed academic research says is a career-ender. Those who don’t want the word getting out will all act in concert to destroy anyone who gets it in his or her head to tell the truth to the millions of middle-class investors who need to hear it. There’s a lot of money to be made in this field. So most go along.
But most have consciences. So they drop lots of hints. Just about everybody drops hints, including those who push Buy-and-Hold the most strongly in their usual public comments. Jack Bogle drops hints that Buy-and-Hold is the biggest pile of smelly garbage he has ever come across. That’s why I was able to learn from Jack why the Old School safe withdrawal rate studies are so off the mark. Scott Burns drops hints. That’s why his first reaction when I told him that the Old School studies get the numbers wrong was to write me an e-mail saying “you’re right, Rob” and to ask me my telephone number so that he could write an article on what I told him. Wade Pfau drops hints. That’s why his reaction when he saw that 140 years of historical data supports Valuation-Informed Indexing and zero supports Buy-and-Hold was to imagine himself getting published in the Journal of Finance and winning the Nobel Prize in Economics. This was the breakthrough he had dreamed about discovering since he was a boy.
Still, all of these people are afraid. They have seen the brutality of the Buy-and-Hold Mafia. They know that it does not feel bound by the laws of the United States and is capable of just about anything. They know that a cornered animal is a dangerous animal and that Buy-and-Hold, with 32 years of peer-reviewed academic research showing that there is precisely zero chance that it could ever work for a single investor, is the most cornered animal there has ever been.
So they rationalize. They drop their little hints. That eases their consciences. But they are careful not to make the Buy-and-Hold Mafia angry. As you Goons would put it, they watch not what they say but how they say it. The Mafia doesn’t like it when people say that Buy-and-Hold doesn’t work. So they don’t say that. They say lot of things that lead inevitably to that conclusion. But they don’t say the words that would mean the end of Buy-and-Hold if they were spoken firmly and clearly and publicly and proudly and without compromise. I do that sort of thing all the time. That’s what makes me different.
What do I hope to accomplish? I hope to give encouragement to those on the verge of telling the truth and bringing on the collapse of this poisonous investing strategy.
I give people numbers. I give people data. I give people calculators. I give people podcasts. I give people research. I give people comments from others in the field. I give people quotes from you Goons. I give people everything they need to understand how the con works and why it is destroying us and how great our future will be together if a few of us work up the courage to use our Constitutionally protected right to speak out honestly on what the Wall Street Con Men have done to our country with their relentless and reckless and ruthless promotion of the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind.
Most of all, I give people an example.
I don’t ever speak in an unbalanced way about the Buy-and-Holders. I don’t deny their great accomplishments. I always note that they are good and smart and hard-working people. So I show people that you don’t need to become a Goon yourself to fight the Goons. A person can defend his country from this most brutal attack on it and maintain his or her dignity while doing so, despite the ugliness and smelliness of the tactics employed on a daily basis by you Goons.
And I show people that those who work up the courage to speak out will not be paying a price for doing so much longer.
I speak honestly all the time re stock investing, no? What price have I paid? I have not been sued by Jack Bogle and his rich, powerful friends. I am not in prison. What power do these people really possess anymore? After the next price crash, they will have no power whatsoever. “Buy-and-Hold” will be a dirty phrase. People will be running from it as fast as their little legs can carry them. They can come here and read the story of someone who began running on the night of August 27, 2002, the night that John Greaney threatened to kill my wife and children if I continued to “cross” him by posting honestly on the SWR matter.
We will rebuild our country, Goon. The Goons lose on the last page. The story is in the process of playing out. There is only one possible way that it can play out, given what the last 32 years of peer-reviewed academic research shows us. So it will play out that way. Our nation will enter the greatest period of economic growth in its history. A group of patriots will take us there. And you Goons will end up serving long prison terms.
And I and the other patriots will retain our humanity until the last day. I will see you carried off to prison, my old friend. But never will I delight in it. Until the last moment, I will work to persuade you to do what you need to do to have your prison sentence shortened a bit.
Because that’s what the humans do.
We are not just Get Rich Quick savages. We have good within us.
That’s what you forgot when you signed up with Mel Lindauer and John Greaney.
I naturally wish you all good things, my long-term Goon friend.
Rob the Human