Set forth below is the text of a comment that I recently put to another blog entry at this site:
If the intelligent people don’t agree with you, then that means you will only have stupid people agreeing with you.
The intelligent people DO agree with me, Deleted.
I didn’t discover the errors in the Old School safe withdrawal rate studies by myself, Deleted. I suspected on my own that there was something missing in those studies. But I wasn’t able to put my finger on what it was until I read Jack Bogle’s book. Bogle said in his book that Reversion to the Mean is an “Iron Law” of stock investing. If Reversion to the Mean is an Iron Law, there is obviously zero chance that the safe withdrawal rate could be the same number at all valuation levels. Hence, my May 13, 2002, post asking whether we had gotten this whole SWR thing wrong.
It’s not just Jack Bogle.
Bill Bernstein knows that Buy-and-Hold is a big pile of smelly garbage too.
So does Scott Burns.
So does Larry Swedroe.
So does Michael Kitces.
So does Wade Pfau.
So does Warren Buffett.
So does Robert Shiller.
So do lots and lots and lots of others.
There is no lack of intellectual knowledge in this field.
Our problem is a lack of courage.
There’s tons of money to be made pushing Get Rich Quick garbage. And Buy-and-Hold is the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind.
What we have to decide is — Is making a smelly buck in the short-term the only thing that matters?
Or does personal integrity have some value too? Does learning new things about the subject matter have some value? Does being straight with your readers and clients have some value? Does recovering from the economic crisis have some value? Does entering the greatest period of economic growth in U.S. history have some value? Does keeping your friends out of prison have some value?
I have zero problem with the goal of making a buck, Deleted. I expect to bring 500 million of the little green guys into my life on the day my settlement offer is accepted.
But I don’t buy the idea that making a quick, smelly buck is the ONLY thing that matters.
Honesty matters. Yes, even in the investing field. Yes, I really do believe that.
And, yes, I really do believe that the Wall Street Con Men will all feel 50 times better about themselves once they feel free to share their true beliefs about how stock investing works.
Get Rich Quick is the past. The first true research-supported strategy is the future.
I am sure.
Take care, man.
Rob the Sure