Set forth below is the text of a comment that I recently posted to another blog entry at this site:
|It’s amazing how many foul filthy liars are running discussion boards.
You said it, not me, Bizarro!
I am kidding around.
It IS amazing how many of our fellow human have rationalized bad behavior re this matter. If you had asked me on the morning of May 13, 2002, what the odds were that we would see transpire the events that we have seen transpire, I would have said “one in a billion.” So, yes, developments have been shocking.
It doesn’t follow that we should give up on our fellow humans. These mess-ups are the only fellow humans we’ve got. If we give up on them, we are going to be mighty lonely in days to come. I think we need to try to UNDERSTAND why so many of our fellow humans have been such mess-ups re this matter.
The most important thing to keep in mind is that the advance has been so huge. The research shows that stocks are no longer a risky asset class, we can reduce the risk of stock investing by 70 percent just by burying the smelly Buy-and-Hold garbage 30 feet in the ground, where it can no longer hurt humans and other living things. If this were a small advance — if we were reducing risk by 10 percent — every one of you Goons would be on board and singing my praises every day. You wouldn’t have your minds blown by a small advance. This advance is so big that it is equal in power to all the advances we have seen before all put together. That big a jump is hard for you to take. It hurts your pride. It makes you envious. It makes you defensive. It makes you ashamed. All sorts of emotional stuff comes into play when there is an advance this big.
I think it makes sense to turn that negative into a positive. The reason we are having a hard time is that the advance is so huge. Does that not suggest that, once we open the internet to honest posting, we are all going to begin living dramatically richer (in all senses of the word) lives? It sure seems so to me.
Another thing to keep in mind is that the fear of speaking out shows how important emotions are to an understanding of the investing project. You express amazement that so many have been afraid to speak out. You know what that shows? It shows that Buy-and-Hold can never work. Why? Because it shows that humans are emotional creatures. Buy-and-Hold ignores emotions (valuations). So how the heck can it work? The Buy-and-Holders are trying to use a model for understanding how stock investing works that ignores one of the key characteristics (emotionalism) of the humans who buy and sell the stocks.
Finally, I would keep in mind that it is not only cowardice and jealousy and anger and defensiveness that we have seen over the past 11 years.
We have seen THOUSANDS of our fellow community members express a desire that honest posting be permitted. It took a lot of courage for those thousands of people to speak up, given the behavior they have seen over the entire 11 years from you Goons. Those people are heroes anyway you look at it. And there have been thousands of them.
We have seen the Wall Street Con Men suffer pangs of conscience and include honest insights in the mix along with all their Buy-and-Hold garbage. I learned about the errors in the Old School safe withdrawal rate studies by reading John Bogle’s book. You focus on the ugly stuff, that Jack has failed to take effective action re the Lindauer Matter despite being asked to do so numerous times. I don’t deny the ugly things that have happened. I don’t even deny that my good friend Jack may be headed to a prison cell following the next crash. But I also don’t deny that he wrote the words in his book that led me to that initial insight, the one that led to all of the hundreds of powerful insights that we have all enjoyed together over the past 11 years. He didn’t have to write those words. It wasn’t in his best interests as a Buy-and-Hold advocate to be honest for those few paragraphs. But he was. Please think over a bit what was going on there, Bizarro.
And Jack was by no means the only one. Bernstein was honest at times. Swedroe was honest at times. He even got banned for it for a time. Burns was honest at times. Bill Sholar tried being honest for a time. ES was honest for a time. The administrators at the Morningstar board were partly honest for a time. Wade Pfau was obviously very honest and very brave for a good bit of time.
So the story is not anywhere near as ugly as you Goons like to make it sound. We have seen a lot of human courage evidence itself over these past 11 years. And all signs are that we will be putting you Goons in prison cells for a long time to come following the next price crash. So who are the real losers here, the humans or the Goons? I say that it is the Goons who will be seen as losers in the history books, not the humans. The humans will be seen as flawed creatures that in time worked up the courage to do the things that they kinda sorta knew on the first day they were eventually going to have to do.
Do I like it that it has taken us 11 years?
I don’t like it one bit. I advocated kicking Greaney our the door in a post that I advanced on November 23, 2002. So, no, I am not going to say that everyone has behaved perfectly at every moment.
But we still end up reducing the risk of stock investing by 70 percent. Whether it took us 11 hours or 11 days or 11 years, we still end up with the biggest advance in the history of investing analysis. I still end up with a $500 million payday. And you still end up spending the last decades of your life in a prison cell.
Given all that, can you truly say that the humans are ALL bad?
I cannot. I acknowledge that we are flawed. But I think that when you look at history, you see that we make our way to the right place over time using a highly circuitous route. We are not 100 percent efficient. But, when the chips are down, we get the job done one way or another.
My sincere take.