Set forth below is the text of a comment that I recently put to another blog entry at this site:
The information has been out there for many years. People have had time to make considered opinions, Rob. The only one needing to make the “I was wrong” speech is you.
We certainly agree that the research we need to come to a better understanding of how stock investing works has been out there a long time, Deleted. It’s been 32 years!
The problem has not been a shortage of time to make considered opinions. The problem is a shortage of DESIRE to make considered opinions.
Say that there is a machine with a lever you can press. Say that we put it in the hands of the Wall Street Con Men. Each time they press the lever, they get $10. And each time they press the lever, $100 is taken out of the pockets of middle-class investors and destroyed.
How often do you think the Wall Street Con Men are going to press that sucker?
That’s the experiment that we have been running for 32 years now.
We KNOW that Buy-and-Hold cannot ever work for even a single long-term investor. ALL of the research ever done points to this finding. There is ZERO research pointing in the other direction.
But we ALSO know that Buy-and-Hold is the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind and that Get Rich Quick schemes possess great appeal to the weak humans. There has never in the history of personal finance been an “idea” with so much power to destroy middle-class wealth while enriching the Wall Street Con Men beyond their wildest dreams.
Now we know what happens when we put that sort of temptation before people!
We also know the solution to the problem.
Car makers would like us not to look at the price of cars we buy, just as the Wall Street Con Men like us not to look at the price of stocks we buy. How have we avoided the big mess we have in The Stock-Selling Industry from infecting The Car-Selling Industry? Why is it that the sleeziest used-car dealer in the country possesses ten times the ethics of the most respected stock-selling expert in the field today?
The difference is US!
There’s an old saying that applies here: “You Can’t Cheat an Honest Man.”
Car dealers know they cannot get away with what the Wall Street Con Men get away with. If some sleezeball car dealer were to say that he was run across some mystical, magical “research” showing that it is possible to get a good deal on a car without even taking price into consideration, we would as a society laugh him out of business.
That’s what we need to do when we hear some sleezeball investing “expert” tell us that he has a sneaky feeling that all of the rules that have governed stock investing for 140 years are going to be turned on their heads and that this is going to be the first time in history when a pure Buy-and-Hold strategy is going to end up working out well for one or two long-term investors.
Huh? I don’t think so. SHOW US THE URL.
If the Con Men really had a “study” showing that the smelly Buy-and-Hold garbage could work, they wouldn’t be shy about sharing the URL with us, Deleted. I mean, come on. There are billions of dollars to be made here. And you say they are holding back?
They are not holding back.
There do not provide a URL for the magic study because the magic study does not exist.
Wade Pfau was right. Buy-and-Hold is garbage. Valuation-Informed Indexing works.
We need to get prison sentences announced for you Goons. Then Wade will feel safe doing honest research again. He and I will work together to get that research written up on the front page of the New York Times. Once everyone knows how they have been conned, I have a funny feeling that no one hoping to be able to get a job in this field is ever again going to want to be associated in any way, shape or form with Buy-and-Hold. I mean. come on.
My best wishes to you, old friend.
Rob, the Fellow Who Thinks We Should All Be Working Together to Bury the Smelly Buy-and-Hold Garbage 30 Feet in the Ground So That We Can Spread the Word About the First True Research-Based Strategy, Which Reduces the Risk of Stock Investing by 70 Percent