Set forth below is the text of a comment that I recently posted to another blog entry at this site:
Rob, you have only to look at your father and to me for two immediate counterexamples that totally disprove your claim.
My father experienced the Great Depression (caused by a widespread belief in the core Buy-and-Hold “idea” that consideration of price is not necessary when buying stocks that developed during the 1920) not as an investor but as a child. It left a mark.
He experienced the stagflation of the 1970s as an investor. That left a mark as well although certainly a smaller one.
No one was to blame for those two marks experienced by my father. We did not in those days have 33 years of peer-reviewed academic research showing us how to avoid economic crises by teaching people rational investing strategies. We do not have that excuse available to us today.
And the risk is far greater today. We are a richer nation. That means that the highs brought on by Get Rich Quick strategies are higher than any of those we have seen before and the lows that follow the highs are lower than any of those we have seen before.
It was a P/E10 of 25 that caused the stagflation of the 1970s.
It was a P/E10 of 33 that caused The Great Depression.
In January 2000 we achieved a P/E10 of 44.
My father loved his country.
If he understood why it is so important that we make the shift to Valuation-Informed Indexing, he would have felt great pride towards me for what I am doing.
If he did not understand (I had a small number of conversations with him about it before he died and my general, vague sense was that he did not understand), he still would have got it that there was something wrong with the “side” that resorted to the use of death threats and demands for unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their job.
Why? Because he loved his country. And he knew that those who resort to those sorts of tactics thereby tear the social fabric of his country apart. He would have understood that those sorts of tactics are not within the scope of tactics by which disputes are resolved when his country is working in tune with its foundational beliefs.
There was a day when people argued that there was no need for an expansion of civil rights for people with black skin because we all had been getting along just fine for many years without that expansion of civil rights. Those people are today viewed as fools and ethical zeroes.
That perception is harsh. Lots of those people were smart. Lots of those people possessed ethics in other areas of their lives but just were afraid to listen to what the ethical voices within told them because they were afraid of what would happen to them personally if they did and because they presumed that the society around them could withstand the social destruction that would follow from their failure to listen. I don’t think those people were fools or social zeroes anymore than I think that the people who fail to speak up about you Goons are fools and social zeroes. But I am 100 percent confident that those people were wrong. And I am 100 percent confident that the people who fail to speak up against you Goons are wrong.
The History Train doesn’t ask Jack Bogle for his blessing before it moves forward, Anonymous. It moves forward with him or without him. If he stands on the tracks, he ends up broken and bloodied.
Jack Bogle’s true friends are the ones who warn him that the train is coming and implore him to get off the tracks. Please write me up as possessing the loudest and most strident voice in that group.
And please understand that I wish you all the best regardless of how you elect to play it.