Set forth below is the text of a comment that I recently put to another blog entry at this site:
The one link you pointed to supports that view, Anonymous. There are other links that tell a different story. Buffett has ridiculed the Efficient Market Theory on numerous occasions. The crazy idea that the Buy-and-Holders put forward that it is not necessary for investors to consider price when setting their stock allocations is rooted in a belief in the Efficient Market Theory. So Buffett has pulled the chair out from under the Buy-and-Holders on numerous occasions.
Also Buffett’s personal investing strategy is in direct conflict with Buy-and-Hold. Buffett ALWAYS considers the value proposition he is buying when he purchases stocks. Buy-and-Holders NEVER do. The peer-reviewed academic research in this field shows that the thing that the Buy-and-Holders need to do to take value propositions into account is to look at the P/E10 level that applies when they set their stock allocations. Do we have any reason to believe that Buffett would oppose the idea of Buy-and-Holders doing the very thing (looking at value propositions) that is the basis for all of his many years of success if he knew that there were an easy way (take five minutes once per year to check the P/E10 level) to do it? We do not.
The most reasonable explanation for Buffett’s contradictory remarks and behavior is that he has not seen the peer-reviewed academic research that I co-authored with Wade Pfau. I think it would be fair to say that, once exposed to the Valuation-Informed Indexing concept, Buffett would experience the same epiphany that Wade Pfau experienced when we began working together and that John Walter Russell experienced when we began working together and that hundreds of others of our fellow community members experienced when they learned about the concept. We need Bogle to bring the study to him by the close of business today.
This is imperative business, Anonymous. The Buy-and-Hold Crisis has put millions of people out of work and winning the endorsement of Warren Buffett for the first true research-based approach would help bring that crisis to an end. And of course there is the matter of the upcoming prison sentences for you Goons. It obviously will not be a good thing for you if your jury hears that you rejected this sensible and positive and constructive and life-affiming suggestion. On the other hand, if Buffett agrees to work with us to get the word out about our “revolutionary” (Shiller’s word) findings, there obviously are going to be some jury members who will view your behavior in a somewhat more forgiving light.
Please keep us up to date on Jack Bogle’s response to your request and on Buffett’s response to Bogle’s entreaties to him.