Set forth below is the text of a comment that I recently put to another blog entry at this site:
It seems that you want to offer up unlikely scenarios with each answer that does not fit your story.
If you had told me that the cover-up of the errors in the Old School safe withdrawal rate studies would continue for 11 years on the morning of May 13, 2002, when I put forward my first post, I would have said that the odds against such a thing happening were 1 billion to one.
So, yes, I guess it is fair to refer to what has happened here as “unlikely.”
Still, it happened, Questions.
It doesn’t help for us to let that paralyze us. We need to try to UNDERSTAND the factors that caused this unlikely turn of events.
Part of it is the money. There is a ton of money to be made in their field and people don’t want to give that up. So they rationalize that getting retirement numbers wildly wrong isn’t such a terrible thing.
Part of it is our litigious society. The Buy-and-Holders are afraid of being held liable for the financial damages they have caused to so many millions. Unfortunately, their fears make them all the less willing to admit mistakes. So the damages keep piling up higher and higher and higher. Perhaps we should seek congressional action to give those who truly just made mistakes some sort of amnesty from civil lawsuits. At least that would be constructive action.
Part of it is that the people drawn to this field tend to be good with numbers but don’t feel comfortable examining the effects of emotions. Well, let’s recruit new people to the field, people who have the skills needed to get the job done.
Part of it is that the advance we have achieved is so huge that it makes the Buy-and-Holder feel envious that they didn’t come up with it. Let’s praise the Buy-and-Holders for their many genuine achievements and invite them to help us come up with more powerful insights, many of which they can get their name on.
The are indeed unlikely events that have taken place, Questions.
That’s no excuse for not behaving in an ethical manner. We MUST behave in an ethical manner. And we must insist that our Buy-and-Hold friends do so as well.
Behaving ethically is the starting point. Without some minimal level of ethics in this field, all of the I.Q. points in the world count for precisely zero. We need to be smart. But we must also be honest.
I am sure.
Rob the Ethical Investing Advisor