Set forth below is the text of a comment that I recently put to another blog entry at this site:
The silencing of Academic Researcher Wade Pfau caused me to give up hope that we can overcome our economic problems without bringing the corruption that has come to dominate The Stock-Selling Industry out into the open.
I know that the Buy-and-Hold advocates are smart and good people. There are people who will question this following the next crash. But I have been watching things closely for a long time and I have seen a lot of evidence supporting my belief re this matter. So I am confident that we are dealing with smart and good people. That’s Step One in the logic chain.
The Bennett/Pfau research showed that the advance that we are on our way to achieving is absolutely huge. A 10 percent reduction in risk would be a big deal. 70 percent? That is just flat off the charts. There’s never before been an advance that big.
And it’s not just Rob Bennett who sees that. Wade expressed that thought over and over in his e-mails to me. Wade is a neutral party. He started out with no bias. He liked my stuff. But he also believed in what he learned from the Ph.D. program at Princeton. His e-mails show that, after studying these issues in depth, be became 100 percent convinced that the shift from Buy-and-Hold to Valuation-Informed Indexing is the biggest advance in the history of personal finance. So we are dealing with something that is positively huge. That’s Step Two in the logic chain.
Opening the internet up to honest posting would bring on the biggest advance in our understanding of how stock investing works ever achieved in our history. And the people who determine whether the internet will be opened up or not (The Wall Street Con Men) are good and smart people. On the surface, those two realities seem to add up to only one possible conclusion — We are going to see a quick opening up of the internet to honest posting.
Yet we have not seen this happen for 12 years now.
So we are missing some piece of the puzzle. There is something going on here that is not obvious, What is it?
It is that the delay in the opening of the internet to honest posting has already gone on too long. Bogle and all the others would LOVE to make the shift to Valuation-Informed Indexing if it could be achieved without anyone incurring huge financial liabilities or going to prison. But things are already too far gone for that.
The Wall Street Con Men and their Internet Goon Squads WANT to help investors. But they can’t. Not without seeing either themselves or their friends incur huge financial liabilities or go to prison. And they just cannot accept taking the path that leads to those events. So they rationalize continuation of the cover-up.
This has obviously been going on since before I came on the scene. I certainly didn’t know it on the morning of May 13, 2002. But the reaction to my famous post revealed the reality. We saw a huge positive reaction from those who hadn’t thought things through and thus liked the idea of enjoying a learning experience. And we saw a huge negative reaction from those who sensed where permitting honest posting on a single topic would lead and who wanted no part of it.
Nothing on the substantive side can change this.
We cannot do any better than showing how to reduce investing risk by 70 percent. That’s the biggest advance in the history of personal finance. No one is ever going to top that.
So worrying about what happens on the substantive side is a little silly at this point. Anyone in this field who achieves a major advance is going to be threatened with career loss by The Buy-and-Hold Mafia. The members of The Buy-and-Hold Mafia are in so deep than they just cannot permit fully honest posting on any important topic.
They are not just engaging in a cover-up at this point. They are engaging in a cover-up of a cover-up of a cover-up of a cover-up. So they are not going to pay attention to reasoned arguments. Things have gone way past the point at which that is possible.
What’s left is to prosecute the financial fraud.
We can elect as a society to do that, permitting us all to move forward together to a world in which we know much more about how stock investing works than we ever have before.
Or we can go over the cliff together following the next price crash.
Those are the only options at this point.
There is no longer any need to prove anything on the substantive side of things because everything that we need to prove has been proven 10 times over.
We won’t be heard because the interests of the millions of middle-class investors and the interests of the Wall Street Con Men and their Internet Goon Squads are now viewed by the Wall Street Con Men and their Internet Goon Squads as being diametrically opposed. The Wall Street Con Men don’t want the millions of middle-class investors learning what the last 33 years of peer-reviewed research says and they are not going to tolerate efforts to get the truth out in an effective way. And that’s that.
But we have laws that we adopted to protect us in these sorts of circumstances.
When we enforce those laws, we all move forward together.
So that’s what matters at this point. We need to enforce the laws of financial fraud against those who use abusive tactics to keep the millions of middle-class investors from learning what they need to learn.
I cannot see into the future. But I remain optimistic. If Shiller is right, we will be seeing another price crash within the next year or two or three. The 2008 crash opened the door A LOT. So there is every reason to believe that the next crash will open the door a lot MORE. That will get us to where we need to go. Once we have enough people concerned enough about where our economy is headed to stand up to you Goons, we are home free. The work on the substantive side is top-notch. Once we have the courage we need to possess to move forward on the process side, it’s all downhill sledding.
I am still going to do what I can to help people understand what the research says. The substantive side is the side that really matters in an ultimate sense.
But I don’t pretend anymore that we can achieve what we need to achieve on the substantive side without first bringing the corruption that has come to dominate this field during the Buy-and-Hold Era out into the open. Things have to be done in a certain order.
We need lots of people reporting honestly what the research says for the millions of middle-class investors to gain confidence in what works. And we are not going to see lots of people speak in honest and clear and informed ways until we do something to rein in the intimidation and deception tactics of the Buy-and-Holders. These issues are confusing enough to a lot of people that they just are never going to be able to make sense of things until we decide as a society to hold the Buy-and-Holders to the same ethical standards that we hold all other people doing work in all other fields of human endeavor.
Exposing the corruption is Job #1. Lots of good stuff will follow from that. But the good stuff cannot come first. Exposing the corruption must come first. The good substantive stuff will come second, after we have reassured people like Wade Pfau that they can do honest work in this field without seeing their careers destroyed by the sorts of individuals who have put up posts in “defense” of Mel Lindauer and John Greaney (and my good friend Jack Bogle?).
That’s why I write about the themes that I write about today, Anonymous. The 12-year saga has taught me that those are the themes that matter most. The substantive stuff matters most in an ultimate sense. But the process-oriented stuff needs to be worked out for constructive discussions on the substantive stuff to begin.
We are working at cross purposes, Anonymous.
The thing that you most do NOT want to see is a discussion of the corruption issues.
That’s the stuff that I MOST want to see at this point in the proceedings. I no longer believe that we can move forward together until the corruption stuff has been publicly examined to the point necessary for us to be able to put it behind us.
I want to see everyone posting honestly. I don’t mean just Valuation-Informed Indexers. I want to see Buy-and-Holders post honestly too.
Jack Bogle doesn’t possess full confidence in Buy-and-Hold. If he did, he would have disassociated himself from the sorts of individuals who have put up posts in “defense” of Mel Linduaer a long, long time ago.
I don’t know what level of confidence in Buy-and-Hold Jack possesses. Perhaps he believes that there is an 80 percent chance that it can work. Perhaps he thinks that the odds are 50-50. Perhaps he believes that there is only a 20 percent chance that Buy-and-Hold can work. I don’t know. But I WANT to know. And I know now that Jack is not going to tell us until he comes to the conclusion that continuation of this massive act of financial fraud is a bad idea. So the focus of all of us who want to bring this to a successful conclusion has to be to bring the Ban on Honest Posting to a full and complete stop by the close of business Monday afternoon.
That’s the difference you are seeing in my posting habits. That’s why I have “gone off the deep end,” in your terminology.
I want everyone on the planet to learn how to reduce the risk of stock investing by 70 percent. The finding of the Bennett/Pfau research is the most important finding in the history of personal finance and I want to spread the word far and wide.
My many Buy-and-Hold friends don’t want that. They feel that they will be held accountable for the 12-year cover-up if the truth comes out now.
I love my Buy-and-Hold friends. I want to see them in a better place.
But I believe that continuation of the cover-up will only put them in a worse place than where they are today.
So I want to bring the cover-up to a close.
That means talking about the corruption, not avoiding the subject.
Even many people who believe in the principle of Valuation-Informed Indexing are avoiding the subject today. They care about the Buy-and-Holders as I do and they don’t want to see them hurt. I think that they are choosing a bad path. I believe that continuation of the cover-up just makes things worse and worse and worse as times goes on.
I hope that helps a bit, Anonymous.
Please take good care.