Set forth below is the text of a comment that I recently put to another blog entry at this site:
To believe your point, we would have to assume that each and every person has suspended such thought and consideration on your particular issue as part of a coordinated mass conspiracy that was pre-determined and carried on for longer than a decade, risking every shred of credibility as well as potential significant impact on their ability to continue their careers and earning capability.
It’s a fact that the Old School safe withdrawal rate studies have not been corrected for over 11 years, Questions. The discredited findings of those studies were reflected in thousands of articles in personal finance magazines and web sites and so on. Millions of retirements are likely to fail as a result of the errors that were made in those studies and as a result of the 11-year cover-up of those errors.
You are saying that the only way that such a thing could happen is through what you refer to as a “coordinated mass conspiracy.” You’re wrong.
If humans were 100 percent rational creatures, you would be right. But they are not.
Black people could not drink our of water fountains reserved for whites in the pre-Civil-Rights South. Was that the result of a “coordinated mass conspiracy”?
It was the result of a social policy that was reflected in state laws.
There were LOTS of people in the South who had problems with those laws and with that social policy. Most of those people were afraid to speak out. So they rationalized. They told themselves “this is just the way it is, you can’t fight City Hall, this can never change and so it is not worth fighting it, this is not my battle.”
That’s what the MANY people who see problems with Buy-and-Hold tell themselves. They say: “It’s not my fight.” And, once they come to rely on that rationalization, they come to prefer NOT adding to their understanding of the issues. They don’t want to feel bad about themselves. So they intentionally keep themselves in the dark re the most important topics relating to stock investing.
The people you refer to ARE risking their careers, you have that one right. But the part you are leaving out is that they see a more immediate threat to their careers if they give voice to their honest beliefs. Wade Pfau LOVED learning the realities of stock investing. He was like a kid on Christmas morning, jumping up and down with each new discovery. When he did his honest research, he knew that he was doing the thing he had been in training his entire life to do. But when he learned that people like Jack Bogle and Bill Bernstein and Larry Swedroe and Scott Burns would not say a word to help him while his career was destroyed, he flipped. He has financial responsibility for two small children. He told himself that it was more important that he provide for those two small children than that he be a hero by publishing the honest research that would bring the economic crisis to an end.
Wade was not the first person who was intimidated out of doing honest research in this field. Rob Arnott asked at a conference how many of the researchers believed in the Efficient Market Theory. Only a tiny number of hands went up. Then he asked how many of the researchers would be basing the research they would be doing when they got back to the office on a belief in the Efficient Market Theory. Nearly every hand in the room shot up. No academic researcher wants his peers to think that he believes that Buy-and-Hold can work. He would be thought a fool if anyone came to think that he truly believed that. But no academic researcher dares to do honest research so long as the Buy-and-Hold Mafia makes clear that it will destroy the career of any researcher who does honest work. They all need to make a living and they all know that doing honest research is not permitted today. It’s a CLM, a Career Limiting Move.
That needs to change, Questions.
We need Jack Bogle to stand up on a stage and say words that make clear to everyone working in this field that the Buy-and-Hold Era has come to an end and that there will be no more punishments for those who tell the truth about what the last 32 years of peer-reviewed academic research says about how stock investing works in the real world. When people hear a figure as widely known as Jack say that in clear language, they will feel safe again to say what they honestly believe. From that day forward, each day will look brighter than the one that came before it, the opposite of what we have been experiencing in the early years of this economic crisis.