Set forth below is the text of a comment that I recently posted to another blog entry at this site:
If you wouldn’t respond to an opinion your children have in that manner, it’s bullying. Like “Chocolate ice cream is smelly garbage” wouldn’t work.
If Shiller is right that valuations affect long-term returns, the 12-year Campaign of Terror against our board and blog communities caused the biggest economic crisis in U.S. history, Anonymous. Millions of people have lost their jobs in this economic crisis.
If terrorists caused this much human misery, not one person would have any problem with their “ideas” being characterized as “smelly garbage.”
I don’t say that the Buy-and-Holders intended these results.
So I guess that if you want to refer to all of the wreckage we see before us as “unintentional smelly garbage,” I am okay with that.
The wreckage is real.
Numerous discussion board communities have been burned to the ground. Millions of people are in the process of suffering failed retirements.
This stuff is not a joke. Very serious harm has been done to many people.
How do we get from where we are to where we all want to be? That’s what we all need to be thinking about.
I am sincere when I say that the hand of kindness is extended. I view the Buy-and-Holders as my friends. I don’t like referring to the work product of my friends as “smelly garbage.” But then I didn’t use that phrase on the morning of May 13, 2002. I began using that phrase only after I saw a lot of damage done to a lot of people. It is with that human misery in mind that I refer to Buy-and-Hold as “smelly garbage.” Buy-and-Hold became smelly garbage in my mind when I saw with my own eyes how much harm a dogmatic belief in Buy-and-Hold principles could bring about.
I truly believe that Buy-and-Hold was a big intellectual advance over what came before it. I truly believe that the Buy-and-Holders are good and smart people who have contributed many genuine and powerful insights. I truly think of these people as my friends. I truly want to reduce frictions and heal wounds.
But we are not going to be able to act as if the last 12 years did not happen.
We can spin things in a positive direction. We can set things up so that the bad stuff is to a large extent buried and the good stuff highlighted. It makes all the sense in the world to do that. But please try to think of realistic solutions to our problems.
I’ll give you something concrete.
Wade Pfau raved about Valuation-Informed Indexing when he did the research showing how superior it is to the old understanding of Buy-and-Hold (one way of highlighting the positive is calling VII “the new Buy-and-Hold” or “Buy-and-Hold 2.0,” which is what it really is). His excitement shows us two things.
One, it shows us that even people who are super-educated about these matters do not appreciate the effect of valuations today. Wade was not faking. He holds a Ph.D. in Economics. So he should have known all this. But his e-mails to me show that he did NOT know all this until he explored it in depth. That’s wonderful. That lets the Buy-and-Holders largely off the hook. They were not lying when they said they didn’t believe that VII works. They hadn’t yet enjoyed their epiphany experience. Letting the Buy-and-Holders off the hook in that way is a 100 percent positive and constructive and life-affirming way to go.
But, two, it shows that this advance is a big deal. A guy with a Ph.D. in Economics did not know about this until he was exposed to our discussions. Now he knows. VII is a very, very, very big deal.
You clearly have a lot of worries about me obtaining too much wealth and fame as a result of the discovery of these powerful insights. Those worries are silly.
I AM going to obtain a lot of wealth and fame. As you say above, good for me. I have developed something wonderful beyond belief. I earned a lot of wealth and fame. Let’s all be grateful that our system insures that I will get what I deserve.
But let’s not stop there. LOTS of people are going to enjoy a lot of added wealth and fame as a result of these breakthroughs. We are already seeing this with Wade. He holds back on what he says because of the threats made by you Goons. But he is still doing wonderful work. And he is becoming well known in this field for the work he is doing. That’s helps us all! That’s is how it is supposed to play out.
I want that for everyone.
I want it for Bogle and Bernstein and Swedroe and Burns and on and on and on.
THAT’S the way to play it.
I will get the wealth and fame coming to me. And lots of other people will get the wealth and fame coming to them. There is plenty of wealth and fame to go around here. This is the biggest advance in our understanding of how stock investing works ever achieved in history. So let’s not focus on small, petty stuff, okay?
The more wealth and fame we see being handed out, the better is it for those of you who have engaged in Goon-type behavior. What you need is for the millions of middle-class investors not to be too angry about the 12-year cover-up. The more exciting the story we tell, the less angry and the more excited they are. Being honest about this stuff is a win/win/win/win.
What we all need to do is to do everything in our power to unleash all these powerful and mind-blowing insights. FORGET about who gets the credit. People will figure out who to give credit to when they hear about all that went down. People will be fair. I played a huge role. But lots of others played important roles too. And lots of others will be playing important roles in days to come. So there are going to be lots of people obtaining lots of wealth and fame. It’s not a problem.
A rising tide lifts all boats. The spreading of the word re VII is going to bring on the biggest rising of the tide that any of us has ever seen. Can we all make an effort to stop worrying about Rob Bennett becoming rich and famous and just enjoy that?