Set forth below is the text of a comment that I recently posted to another blog entry at this site:
Isn’t it just funny as to how all these people like Scott, Jack, Bill, Larry, Rick, Wade, JD, Mike, etc, etc, etc all have experienced significant succcess, yet Rob feels as though these people are wrong and that only he has things right. Meanwhile, Rob has yet to see success with himself.
It is results that matter, Rob.
All of those people know or at least suspect that Buy-and-Hold is a big pile of smelly garbage, Pink. They don’t know all the details. They rationalize their support of the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind because they couldn’t live with themselves if they didn’t. So their strong intellects are not capable of functioning well when it comes to analyzing investing issues. But their behavior shows that they know that there are big problems. They wouldn’t be so defensive if they thought that Buy-and-Hold could be effectively promoted in an environment in which research-based challenges to it were permitted.
And they are not bad people. If we could wave a magic wand in the air to take us all back to 1965 while retaining knowledge of what we learned from Shiller’s revolutionary research of 1981, every one of the people you name would favor getting it right and advocating Valuation-Informed Indexing rather than Buy-and-Hold from the first day. We cannot do that. And they cannot bear to acknowledge that their efforts to promote Buy-and-Hold have caused so much human misery. So they talk themselves into believing that we will find some way to survive this economic crisis WITHOUT coming clean on the dangers of Buy-and-Hold.
The numbers tell a different story . The numbers say that the direct losses from Buy-and-Hold are $12 trillion and that the total losses (both direct and indirect) are in excess of $20 trillion. So ducking the issue won’t work, according to the numbers.
What do you think these people will do following the next price crash? Do you expect them to hold?
I do not. I expect to see their hearts melt when the human misery is no longer theoretical but something they see reported on the news every night. It’s one thing to know that there is 33 years of peer-reviewed research showing that we are headed into the Second Great Depression and to tune it out for personal profit. It’s something else to see your friends and neighbors and co-workers lose their jobs and know it is your fault and yet continue to keep your mouth shut.
I think there is a limit to how much pain these people can cause and continue to live with their acts of deception and intimidation, Pink. I think these people have consciences and I think they are at battle with them and I think they sense that over time they are falling behind in those battles. I think that one more economic crisis will put their consciences over the top.
We only need one of them to break. Once one breaks, all the others have to break, conscience pangs or no conscience pangs, just to limit their prison sentences. I think that at least one will break and that then all the other dominos will fall.
I’m not God. I could be wrong. But I am telling you my sincere belief. I don’t like my position re this matter. But I won’t be going to prison in any event. So I like my position over your position 50 times over.
If it plays out as I anticipate, I end up one of the richest men in the United States and you end up in a prison cell. Those are the results that matter, the long-term results. If it plays out as I anticipate, the lesson that everyone will draw from this saga is that personal integrity pays off in the long term. If you study history I think you will find that this is a lesson that we humans have had to re-learn at many different times and in many different places. This SWR saga is really just one more go at an old, old story.
The sort of success that Bernie Madoff enjoyed before he was sent to prison is a sort of success that I have never desired for myself.
I naturally wish you all the good things that this life has to offer a person.