Set forth below is the text of a comment that I recently put to another blog entry at this site:
There’s an important follow-up point to be made here, Evidence.
We all need to work together to insure that those who have the guts to post honestly on what the last 32 years of peer-reviewed academic research tells us about how stock investing works are rewarded handsomely for their efforts.
People respond to incentives. We are all drawn to Get RIch Quick strategies. So Buy-and-Hold has always been an easy sell. People have gotten rich pumping Buy-and-Hold strategies for many years now. That’s why we are all today living through an economic crisis.
This nonsense must stop.
In other fields, people are rewarded when they do good work and punished when they do poor work. We don’t give baseball players big raises when they win strikeout records. We reward them for hitting home-runs and punish them for striking out. Nor do we reward doctors for killing their patients. We reward them for curing their patients and we punish them for killing their patients.
So it must be in the investing advice field.
Buy-and-Hold is a big pile of smelly garbage. It was been tried four times. It has brought on collective losses so massive as to bring on an economic crisis each and every time. We must make it the social custom not to honor those who promote the absurd and self-serving idea that price doesn’t matter when buying stocks but to ridicule and shame them. Anyone saying that he believes that a Buy-and-Hold strategy can work for even a single long-term investor either has not bothered to learn about the last 32 years of peer-reviewed academic research in this field or is very slow on the uptake or is just flat-out dishonest. If we tolerate this behavior, we will see more of it. We must as a society make clear that such incompetence (or worse) will not be tolerated.
And we must reward those who work up the courage to call out the Buy-and-Holders on their incompetence and on their dishonesty.
I am the person who discovered the errors in the Old School safe withdrawal rate studies. It is our discovery of those errors that led to all of the other amazing insights that we have developed over the past 11 years, including the absolutely incredible finding in the Bennett/Pfau research paper showing millions of middle-class investors how to reduce the risk of stock investing by 70 percent. And I am the person who for 11 years now has led the effort to get every board and blog on the internet opened to honest posting on SCORES of critically important investment-related topics.
So I need to demand the rewards that are due to me and to do all that I can to make everyone else who works in this field or who has aspirations to work in this field aware that these are the sorts of rewards that go to those who have the courage to take on the big bad Wall Street Con Men and their Goon Squad pals and insist that honest investment advice be provided to the millions of middle-class people very much in need of it.
But this cannot stop me with.
There are thousands and thousands of people who have become millionaires pushing the smelly Buy-and-Hold garbage. We need to make sure that thousands and thousands become millionaires promoting the first true research-based strategy.
That’s how we change the world, my old friend.
Dark times are needed every now and again. It is the change achieved in dark times that lead to the bright times that follow.
We need to flip it. The Buy-and-Holders have taught us the marketing power of the claim that an investing strategy is rooted in the peer-reviewed academic research. Now we need to show that that power can be put to positive purposes by permitting HONEST AND ACCURATE reports of what the peer-reviewed academic research actually says.
We’re on the 99-yard line, my abusive-posting friend. I look forward to hearing the announcement of your prison term (I hope for a relatively short rather than a relatively long amount of time!) and to all the other signs that we have turned the corner on this economic crisis and will be spending our remaining days reaping all the benefits of being born the luckiest generation of investors ever to walk Planet Earth.
Hang in there, my good friend.
Rob the Visionary