Set forth below is the text of a comment that I recently put to another blog entry at this site:
No one is stopping you from selling your lucky VII scheme. Go short the market. Go start up a fund using your strategy. Do whatever you want. You can do whatever you want. Meanwhile, the rest of us will do what we want.
We are all big boys. We can make our own decisions and don’t need you telling us what to do. Advice can be be taken or rejected. What you want to do is shut down other people and then have you cecome the vaulted leader. How is that working out for you? Not very good, is it. It is not the so called “goons”. It is not some wall street conspiracy. You can find the source of the problem by looking in the mirror.
And you can market Buy-and-Hold, Anonymous. No one is trying to stop you from doing that.
But you cannot engage in acts of financial fraud to stop people from learning what the last 33 years of peer-reviewed research says. Advances in knowledge belong to EVERYBODY. If I want to post honestly at a discussion board about safe withdrawal rates, I have every right in the world to do so. So does Michael Kitces. So does Wade Pfau. So does Bill Bernstein. So does Larry Swdroe. So does everyone.
You have to make a distinction between marketing and research. Marketing is something you do to make a buck. If you want to make some marketing claim to make a buck, that’s your business. But your marketing claims cannot contain false statements about the peer-reviewed research in this field or you will be going to prison following the next crash. That’s financial fraud. That’s a felony.
There obviously is not a sliver of research showing that it is okay to ignore the valuation level that applies on the day a retirement begins when calculating the safe withdrawal rate. There is 33 years of peer-reviewed research showing that that is the most important element of the calculation. I understand that it helps your marketing efforts if you lie about that point. You need to understand that that’s a crime and that you can expect to be prosecuted for it.
There are millions of people who today believe the Buy-and-Hold lies. I know because I have talked to a good number of them. I have had people tell me that everything I say about investing sounds 100 percent right on. But that one thing concerns them. Big Shots like Jack Bogle are saying the OPPOSITE of what I am saying, the OPPOSITE of what makes sense, the OPPOSITE of what the peer-reviewed research in this field reveals. They want to know why.
The reason why is that Get Rich Quick sells. Research-based strategies WORK but Get Rich Quick strategies SELL. The Buy-and-Holders introduced the idea of rooting one’s strategies in the peer-reviewed research. That was a wonderful advance. But then when research was published showing that there is precisely zero chance that a Buy-and-Hold strategy could ever work for even a single long-term investor, they flipped. At that point, they continued SAYING that people should root their strategies in research but they began engaging in insanely abusive behavior aimed at intimidating people who reported honestly on the research (which has since 1981 shown that Buy-and-Hold NEVER works) into not doing so. That doesn’t fly.
This is not just an investing matter. Whether the millions of investors who need to know what the research says have some means to find out or not is a matter of grave ECONOMIC importance. When people cannot find out the truth about what the research says, they see their retirement portfolios wiped out. When people see their retirement portfolios wiped out, they stop buying goods and services. When they stop buying goods and services, hundreds of thousands of businesses go under. When hundreds of thousands of businesses go under, millions of workers lose their jobs. We are in an economic crisis today because the Buy-and-Holders are not willing to acknowledge that the “idea” that it is okay not to consider price when setting one’s stock allocation is a MARKETING claim with ZERO support in the peer-reviewed research in this field. That needs to change.
And this isn’t just an economic matter either. It is a POLITICAL matter. There are millions of people who are in the process of seeing their retirements fail because of the 12-year cover-up of the errors in the Old School safe-withdrawal-rate studies. Those people did nothing wrong. They listened to the “experts” (who were telling lies about SWRs for marketing reasons). We have no choice as a society but to bail those people out. That is going to cost us trillions of dollars in taxpayer money. The Federal budget deficit is going to EXPLODE. That’s all on the Buy-and-Holders and their unwillingness to permit honest posting on any of these questions because honest reporting of what the last 33 years of peer-reviewed research shows puts a crimp in their nasty MARKETING efforts.
There is a limit to how far you can take marketing, Anonymous. The Buy-and-Holders have destroyed millions of middle-class lives through this massive act of financial fraud. People are going to be sent to prison over this. We are going to see hundreds of thousands of civil lawsuits filed. Many reputations will be destroyed as word gets out about what the Buy-and-Holders have done to our country. Giving investing advice is not just about turning a quick buck. There are responsibilities involved. Jack Bogle and the other Buy-and-Hold advocates have failed in their responsibilities to their profession and to their clients and to their readers and to their country in a very, very big way.
No one is stopping you from selling your Buy-and-Hold garbage. But I AM in the process of stopping you from making claims that there is some mystical, magical “research” somewhere that supports it. Wade Pfau has a Ph.D. in Economics from Princeton. If there were ever a sliver of peer-reviewed research supporting Buy-and-Hold, he would have been able to find it. He searched for a long time. He found nothing. He couldn’t believe what he had learned. So he went to the Bogleheads Forum to see if anyone there had ever come across a single peer-reviewed research paper supporting Buy-and-Hold. Jack Bogle had never heard of a single study supporting the smelly Buy-and-Hold garbage. Bill Berntsein had never heard of a single study supporting the smelly Buy-and-Hold garbage. Larry Swedroe had never heard of a single study supporting the smelly Buy-and-Hold garbage. I wonder why.
I will continue posting honestly re safe withdrawal rates and scores of other critically important investment-related topics. If there comes a day when you want help from a friend re the mess you have created for yourself and many, many others, let me know, I will be your guy. So long as the price of admission to your “discussions” is engaging in a felony under the laws of the United States, I am afraid that you will need to find someone else. Not this boy. I can’t go for that. No can do. It’s not my particular cup of tea.
My best wishes to you and yours, Anonymous.
Rob
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