Set forth below is the text of a comment that I recently put to another blog entry at this site:
Out of curiosity — I know you say that those who support Greaney or Lindaur, or Pfau, or Bogle, or Burns, etc are all felons, who will be going to prison. Super.But, putting aside those that are just supporters of the GRQ terrorists, how many people have actually made death threats related to their defense of the corrupt evil of buy and hold investing?I think I’ve seen you name at least four or five, is that right? But, is it more like a dozen? Even more? Could you please list them? And provide links to the actual threats? Do you think these horrible criminals will get more prison time than those whose crime is just read Bogleheads casually, or to have bought a book on Passive Investing, or merely quietly practice the dark art of non-Lucky Seven investing in secret on their own? Or is everyone who ever even toyed with buying and holding indexes without using PE10 going down, Rob? Curious to hear your take on these specific matters.
There are millions of good and smart people who follow and believe in Buy-and-Hold strategies. I was of course one of them and I don’t see that these people have anything whatsoever to worry about. I think they are mistaken. But their mistake is understandable. There really is academic research showing that short-term timing doesn’t work. We really did not have available to us the research needed to come to an understanding of how things really work until 1981. Shiller’s research findings were truly “revolutionary.” So it is not hard to see why it would take some time for people to come to see the implications that follow from his work.I believe that it is the people who have in some way participated in the 11-year cover-up of the errors in the Old School safe withdrawal rate studies who are in danger of going to prison.
There are four categories of people that I believe are in danger: (1) those who advanced death threats or other threats of physical violence; (2) those who demanded unjustified board bannings or who agreed to such bannings; (3) those who engaged in tens of thousands of acts of defamation; and (4) those who threatened academic researchers or who were aware of threats made to academic researchers and who failed to do anything about it.
The number of people at risk is in the hundreds or perhaps in the thousands. I do not feel able to give a list of who will be sent to prison and who will not be sent to prison. That’s something we have to decide as a society. I am confident that my role will be to argue for fewer prison sentences and for shorter prison sentences that what most others are calling for.
The issue is just too big and too novel for me to feel up to giving any kind of a precise count.The best way to understand it is to look at a particular case. I think Mike Piper is a good case to look at. Mike is a fine blogger. He is smart. He is hard-working. He is helpful. He HATED the idea of banning honest posting at his blog. He directed a lot of energy to finding some other means of dealing with the situation. All that obviously counts AGAINST a prison sentence.
The other side of the story is that we will be seeing millions of people’s financial futures ruined because of the 11-year cover-up and Mike played an important role in keeping that cover-up going. He obviously knows that the Old School SWR studies don’t contain a valuations adjustment. He knows that Mel Linduaer is one of the leaders of the cover-up. He has acknowledged thinking that Mel is a jerk and has said that he doesn’t speak up against Mel only because he is afraid of him. All indications are that that is indeed so.
If you post claims about retirement planning at your blog that you know to be false and millions of people experience failed retirements as a result, that’s obviously financial fraud. In ordinary circumstances, you obviously risk going to jail by doing that. Are you excused if the most abusive poster in the history of the internet threatens to destroy your business and if you know from personal experience that this individual is capable of going through with his threat and if big names in the field indicate that they are going to side with the abusive poster? WHO THE HECK KNOWS?
No one has ever seen a case of financial fraud as big as this one, Anonymous. Perhaps Mike is going to prison, perhaps he is not. Perhaps it will be a short prison term, perhaps it will be a long one. No one knows.
I’ll tell you what I think. We are the luckiest generation of investors who ever walked Planet Earth. The peer-reviewed research that I co-authored with Wade Pfau shows us how to reduce the risk of stock investing by 70 percent. We shouldn’t be talking about how long Mike Piper’s prison sentence is going to be. We all should be working together to tap into the benefits of the amazing research findings of the past 32 years. We should all be working to bring the economic crisis to an immediate stop and to bring on the greatest period of economic growth in U.S. history. What’s the downside?
If Mike is not sent to prison, I expect to be working with him for many years to come. That one is easy. If Mike IS sent to prison, I obviously won’t be able to work with him. But I am going to feel bad about him being sent to prison despite being such a nice guy and such a smart guy. So I want there to be lots of posts in the record when Mike’s prison sentence is announced showing that I did everything in my power to bring his potential prison sentence to the attention of Mike and his friends and to implore them to do everything they could to see either that there is no prison sentence for Mike or that his prison sentence is as short as it can possibly be given today’s circumstances.
We all are going to have to live with ourselves following the next crash, Anonymous. I don’t think it is even a tiny bit responsible to hold off on talking about the prison sentences until the events that lock them into place have already taken place. I think the responsible thing to do is to talk about those prison sentences NOW and to do what can be done to get them reduced a bit NOW. So that’s what I do.
The only way to answer the questions you are posing is to look at history and see how things have gone down in the past. We know that Bernie Madoff is in prison. We know that with the 11-year cover-up of the errors in the Old School safe withdrawal rate studies we are looking at an act of financial fraud that makes what Madoff did look like a drop of water in the Atlantic ocean. So there is clearly a problem here.The other side of the story is that we have never seen a case of financial fraud as big as this. So we just cannot give details of what is going to happen with a high degree of confidence. We are in 100 percent uncharted waters.
I hope that helps a bit.
My best wishes.