Set forth below is the text of a comment that I recently put to the Goon Central site:
he’d spend about 80% of his waking hours wailing against Chocolate Cake, with a few mentions of the merits of cherry cake. but mostly against Chocolate.
I agree with you that this is a bad idea strategically, Dab.
I had a fellow come up to me at the Speed Networking Event at FinCon13 who said that he has checked out my blog on several occasions. He noted that he saw something about “a Buy-and-Hold Mafia” and presumed that he must have missed out on some background. I thought that was both very funny and very telling re my marketing difficulties. People lose confidence in anyone who talks about a Buy-and-Hold Mafia. I am not so dumb that I do not get that. I get that loud and clear.
The other side of the story is that The Buy-and-Hold Mafia is a reality and the tale must be told for that reality to come to an end.
I put up my famous post pointing out the errors in the Old School safe withdrawal rate studies on the morning of May 13, 2002. I didn’t know it at the time but discovered later that Bill Bernsteinzzz had published “The Four Pillars of Investing” on April 1, 2002, and wrote (in a confusing and hard-to-follow way) about the errors in the Old School studies in that book. So an argument can be made that I was not first, that Bill beat me by six weeks!
Say that there was no Buy-and-Hold Mafia.
The natural thing for Bill to do would have been to talk about the errors in the Old School studies in all his speeches and talks and thereby help make his book famous and sell millions of copies. If he had played it that way, nothing I starting saying on May 13, 2002, would have been considered even a little bit controversial. Things would have worked out better for me AND for Bill AND for Greaney AND for millions of middle-class investors. So why the heck didn’t Bill (who is obviously a very smart dude) not play it that way?
He didn’t play it that way because The Buy-and-Hold Mafia would have eaten him alive and he knows it. He wouldn’t have been able to post at the Bogleheads Forum any more. Bogle wouldn’t provide blurbs for his book jackets anymore. He wouldn’t be interviewed for articles in Smart Money anymore. His career would have come to an end. So he made a determination that it was better to write about the errors in a gobblygook manner that wouldn’t offend those still trying in the year 2013 to make a living pumping the Buy-and-Hold garbage. You Goons love Bill Bernsteinzz today. You hate Rob Bennett with a burning passion. The difference is that I stated things clearly and Bill used enough gobblygook to remain on your good side.
We need to change that. We cannot change it without having a national debate about the Buy-and-Hold Mafia and all the financial devastation it has brought to millions. If there were another way to do this, I would choose the other way. There is no other way. So, yes, I have elected to play it the way I play it, knowing that that means that I take a big marketing hit.
If you Goons want to sign off on a deal in which I agree to NEVER say anything negative about Buy-and-Hold and to ONLY promote Valuation-Informed Indexing, I will sign that piece of paper in 10 seconds. IF it contains a provision that you won’t come to my threads making all sorts of claims about how there are “studies” showing that timing doesn’t work and all your other garbage. It’s because you make such false claims that I am required to point out the falsity of such claims. Wade Pfau researched the question carefully. There has never been a single study showing that long-term timing doesn’t work. So the claim that timing doesn’t work is 100 percent deception without a tiny grain of truth to it. If no one makes the claim, I don’t need to mention that reality. If someone makes the false claim, I am left with no other ethical choice, marketing considerations be damned.
The background here is that the Buy-and-Holders achieved huge advances. And they personally practice what they preach. But had Shiller published his “revolutionary” (his word) research in 1971 rather than in 1981, there would not be a single Buy-and-Holder today, every last one of us would be Valuation-Informed Indexers. That’s the entire problem. The Buy-and-Holders have their pride wrapped up in a strategy that has long been discredited by the academic research. So they engage in these insanely abusive tactics to keep the word from getting out.
I LIKE the Buy-and-Holders. I called myself a Buy-and-Holder until the evening of August 27, 2002, when Greaney threatened to kill my wife and children and 200 Buy-and-Holders endorsed the post. It was made clear to me on that day that the reasons why people follow Buy-and-Hold strategies TODAY are emotional and not intellectual, that Buy-and-Hold has become the OPPOSITE of what it was originally intended to be (a research-based approach). So I had to move on, give a name to the first true research-based approach and further develop that approach to the best of my abilities.
I am 100 percent happy to talk ONLY about Valuation-Informed Indexing and to never mention Buy-and-Hold again for the remaining days of my life.
But how the heck do we get from where we are today to that magical place without Jack Bogle getting up on a stage and saying the words “I” and “Was” and “Wrong” (or at the very bare minimum “I’m” and “Not” and “Sure”)?
I personally do not see any other way it can be done. Buy-and-Hold must be destroyed for Valuation-Informed Indexing to become the dominant model.
If someone has some bright ideas re another way it can be done, I am all ears.
My AIM is to advance Valuation-Informed Indexing, not to destroy Buy-and-Hold. But it’s pretty darn hard to achieve that aim when I have Buy-and-Hold Goons threatening to kill family members of any poster who puts up a post reporting honestly on what the peer-reviewed academic research of the past 32 years says about these matters.
So, yes, I get it that I hurt myself from a marketing perspective by calling out the Buy-and-Hold Mafia. And I will continue to do so. Because there is no other way to get us all from this awful place where we find ourselves today to the wonderful place that deep in out hearts we all want to reside tomorrow.
Tell me another way it can be done and I am your guy.
If there is no other way, then we continue on the path that ends with you Goons being put in prison cells for a long, long time following a price crash that in all likelihood puts the rest of us in the Second Great Depression.
We all want the same things. We have a legal system that permits us to achieve them together. And then we have you Goons and your terrorist tactics for keeping millions of people from learning about the errors in the Old School studies, why they were made, and what the correct SWR numbers are.
I am a Teddy Bear-type poster, as Petey Person once pointed out.
I put on my Frank Perdue act because I have been given no other options.
Do you and your Goon friends have some new options to suggest, Dab?
If you have something positive and constructive and life-affirming in mind, now would be a good time to work up the courage to spill it.
But then Goons never do that sort of thing, do they?
My best wishes