Set forth below is the text of a comment that I recently poster to another blog entry at this site:
I see. So when your kids ask what you do for a living, and how you support them, you reply “Daddy sits back and waits for good things to happen!” You’re really instilling some good values there, Rob.
I tell them the whole story, Anonymous.
I explain that there once was a time when we knew very little about how stock investing works. Then some smart and good people came up with the wonderful, liberating idea of rooting one’s strategies in the peer-reviewed academic research. Those people were the Buy-and-Hold Pioneers. I love them and respect them and admire them because of all the breakthrough insights they provided to us. I start by telling them that because it’s not possible to make sense of the rest without first knowing the basics.
Then I note how humans are not perfect creatures and how we sometimes make mistakes. I tell them how Yale Economics Professor (and Nobel Prize Winner) Robert Shiller discovered the one big mistake that the Buy-and-Hold Pioneers made in 1981 and thereby provided us the insights we need to reduce to stock investing risk by 70 percent and to achieve financial freedom five to ten years sooner than we ever before dreamed was possible. I point out to them how Shiller’s “revolutionary” (his word) insight has far-reaching implications, implications that show us that just about everything we thought about stock investing before he came along is in fact wrong and needs to be corrected. I point out how Shiller made the Buy-and-Hold dream (creating a simple, smart and safe way for millions of middle-class people to invest in stocks) come true in the real world.
Then I explain why the Buy-and-Holders were reluctant to take advantage of Shiller’s insights, why they resisted these wonderful ideas that will someday free millions and millions of people to live richer (in every sense of the word) lives. The Buy-and-Holders believed in what they had done. They were proud of what they had done. They had built careers around their ideas. They had staked their lives on these ideas. That had made lots of money on these ideas. They had shared these ideas with friends and neighbors and co-workers and fellow community members. They felt great embarrassment when these ideas were brought to their attention. They elected (not entirely consciously — cognitive dissonance played a big role here) to COVER UP the breakthrough ideas rather than to promote them.
And Buy-and-Hold (which Shiller’s peer-reviewed research reveals to be the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind) caused the most out-of-control bull market in U.S.. history, sentencing millions of middle-class people who were fortunate enough to be born at the best time in history to be a stock investor to failed retirements and impoverished golden years. And the insanity of those Get Rich Quick years made Buy-and-Hold more popular than ever. Now it was not only Wall Street Con Men making a buck from the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind. Ordinary people could get in on the Get Rich Quick fun too! They could strut around proudly, mocking all those who followed more prudent strategies, laughing at any who thought that stocks might continue to perform in the future at least somewhat as they always had in the past and that the reckless and irresponsible and ruthless promotion of these “strategies” might produce yet another economic crisis, this one perhaps worse than all those that similar strategies had caused every time they had been employed in the past.
Then I tell them about the internet and how the invention of this amazing new communications medium made it far more difficult for the Wall Street Con Men to push their smelly Get Rich Quick garbage. Before the internet, the Con Men could threaten figures who tried to tell the truth with career destruction and keep everyone more or less in line. With the invention of the internet, ordinary people like their dad could expose the lies and give the millions of middle-class people who very, very much need access to honest and accurate reports on what the last 33 years of peer-reviewed research says what they require. And he could make the case absolutely air-tight by working with academic researchers and getting new peer-reviewed research published that explored the Shiller ideas in greater depth and thereby provided more and more and more powerful insights for the benefit of the entire country.
Then I explain how the internet also permits social misfits like those of you who have put up posts in “defense” of Mel Lindauer and John Greaney a power that they could never come to possess in pre-internet times. I point out to them how these losers (Greaney once told me that every person who has ever gotten to know him well has come to the conclusion that he is the biggest asshole who ever walked Planet Earth) have learned how to use intimidation tactics to frighten people like Jack Bogle and Bill Bernstein and Scott Burns and Larry Swedroe and Mike Piper and Todd Tresidder and Wade Pfau into silence about what they know about The Great Buy-and-Hold Scam. Through the use of death threats and demands for unjustified board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs, they have managed to keep the greatest act of financial fraud in the history of the United States (the cover-up of the errors in the Old School safe-withdrawal-rate studies) covered up for 12 years.
I naturally point out to them how sad this is. And I point out that it is not the Goons alone who are to blame. I explain that we ALL have responsibilities to stand up and be counted when our country is under attack. If you love something, you fight for it. The Buy-and-Holders are now so full of self-loathing that they are willing to see our economic system collapse rather than to acknowledge the vast amount of human misery they have caused with their deceptions and acts of intimidation. And that is partly the fault of people like Robert Shiller. Shiller should be speaking up more strongly. ALL Valuation-Informed Indexers should be speaking up more strongly. Every last one of us has failed our country in some way (I was afraid to point out the errors in Greaney’s retirement study for the first three years that I posted to the Motley Fool site).
I tell my boys that their dad has spoken up more strongly re this matter than anyone else alive on Planet Earth today. I suggest that they check the Post Archives in the event that they have any doubts whatsoever re this point. I share with them the files in which I keep the 30,000 e-mails I sent on The Silencing of Wade Pfau to every academic researcher listed in the Social Science Researcher Network database. And I share with them the hundreds of kind and intelligent responses I received from people who spent their lives training to do important work and now cannot do it honestly because to do so would hurt the feelings of my good friend Jack Bogle and all of the thousands of Buy-and-Holders who have aided him in this 33-year cover-up of the realities.
I explain to them that I have expressed a willingness to settle my lawsuits against those who have put up posts in “defense” of Mel Linduaer and John Greaney for $500 million and how I have offered to do what I can to spin things in a way that the prison sentences for those who have done so might be reduced a bit. I make the point that love is the answer here and that those of us trying to bring things to a successful conclusion need to keep love in our hearts at all times if we are to do so. I share with them the motto I have used to guide my actions going back to the morning of May 13, 2002 — “Be as honest as it is possible to be without crossing the line and becoming uncharitable while also being as charitable as it is possible to be without crossing the line and becoming dishonest.”
You tell yourself that the same old intimidation tactics that you have employed for the past 12 years will continue to work following the next price crash, Anonymous. I think you are wrong. I know from my conversations with thousands and thousands of interested parties that there are a lot of people who love their country who are going to take effective action following the next price crash, when it will become obvious to every last one of us that we simply have no other choice. With the end of defined benefit pensions, we have left the responsibility of financing millions of middle-class retirements to the millions of middle-class people themselves. That means that we MUST provide them access to honest and accurate reports of what the last 33 years of peer-reviewed research says. It’s imperative.
And, following the onset of the next price crash and the announcement of your prison sentence, we will. I am sure. My good friend Jack Bogle is going to be looking for a way to keep himself out of prison following the next price crash. He knows that his only hope of doing that is to come clean and to hope that memories of his many genuine accomplishments will soften the hearts of the millions of middle-class people whose lives he has destroyed. It’s the same with Bill Bernstein. It’s the same with Larry Swedroe. It’s the same with Scott Burns. It’s the same with Wade Pfau. It’s the same with Mike Piper. And on and on and on and on and on.
Your Campaign of Terror against our board and blog communities has brought on the biggest economic crisis in U.S. history, Anonymous, You have destroyed millions of middle-class lives with your deceptions and your acts of intimidation and your word games. You have demonstrated a great power to cause widespread human misery.
So the heck what?
80 percent of the members of our communities have expressed a desire that honest posting be permitted at every board and blog on the internet. Those people put laws in place to protect them from people like you long before you came on the scene. When those people realize what has been done to them, they will demand enforcement of those laws and you will be put inside a prison cell for a long, long, time to come. Once we are safe from you and the other Goons, there is nothing to stop us all from learning together what the last 33 years of peer-reviewed research says. It gets better and better and better and better.
I end up one of the richest men in the United States. And properly so. I do it not by conning people out of their retirement money but by sharing with them the benefits of the biggest advance in our understanding of how investing works ever achieved in our history. I can live with that, you know? I didn’t choose the rocky road we have travelled. I argued for a brighter, softer, higher road. But I am confident that we will all get to the desired destination regardless of what road we use to get there. And my boys and their children will benefit from the $500 million payout for many, many, many years to come.
That’s a pretty darn heartwarming story. That’s how our system works. And it’s a pretty darn good system, no matter how much you hate it. I tell my boys that story and I hope they learn from it. It’s an amazing, positive story. It’s a story of the triumph of love over hate. Those are the stories that matter most. Those are the stories that my boys need to hear. I am proud that they are able to hear one that has their dad playing the lead role.
I naturally wish you the best of luck in all your future endeavors, my long-time Goon friend.
Rob the Storyteller