Set forth below is the text of a comment that I recently posted at another blog entry at this site:
It sure does take this VII a LONG time to work. 15 years now and still vastly inferior returns to anyone using buy and hold. It would take now a greater than 65% drop in equities to even be on equal footing and that doesn’t even account for rebalancing and how much more conservative a persons portfolio would have become over the course of 15 years. VII where you can spend 20 years stashing your cash in a mattress during your peak working years then retire just to throw it all into equities.
You’re wrong, Anonymous.
If you do the math, you will see that you are wrong.
There have been six different people who have done the numbers on my personal situation. I have been following VII strategies for 18 years and I have been ahead of where I would have been had I followed BH strategies for a long, long time.
I’m not as far ahead now as I will be after the next crash. Today, it is a close call. But I am ahead. And I of course have been taking on far less risk. So I am as of today ahead while taking on less risk and I will be in a few years far, far ahead while taking on less risk. Then I will benefit from decades of compounding on the positive differential!
It’s all good, Anonymous. It’s good piled on top of good piled on top of good piled on top of good.
You yourself understand how great it is!
I know that you don’t say out loud how great VII is and I know that you don’t even dare entertain the thought in your own head. But I also know that on a second layer of consciousness you know how great it is. It’s because you know how great it is that you feel so much anger. You think about how many years you have wasted following long-discredited strategies and it causes you pain and you lash out.
Imagine how a person reacts when he is confident in his belief. If you were confident in your beliefs, you would laugh off any challenges to them. You would maintain your beliefs. But you would have zero problem being friends with me. I would post about VII and you would post about BH at the same boards and there would be zero problem.
You can’t do that. It hurts too much. Valuations is a sore spot with you. I just can’t stop digging at that sore spot. And it drives you freakin’ nuts.
That’s because you know. You silence the voice within you that knows. But you know. And it hurts. That’s the psychological reality here.
These psychological realities have been destroying the hopes of stock investors for many, many years. Shiller’s breakthrough lets us bring those days to an end. We know all we need to know to reduce the risk of stock investing by 70 percent. But we have to be able to talk about what we know for it to do us any good.
People like you will have to work up the courage to face their fears. And people like Bogle and Bernstein and Pfau and Burns will need to work up the courage to say some things that will cause people like you to get angry with them. That is the job. That’s how you help people become more effective stock investors. The job is to help people cope with that Get Rich Quick urge that resides within all of us and that destroys us if we are not fortunate enough to run into investment advisors who possess the courage to do the hard things that go with taking on this job.
I’m your friend, Anonymous. You hate me with a burning rage. I get it loud and clear.
A true friend still tries to help. It is the false friend who says “Oh, let me back off of telling you the truth about what the peer-reviewed research says, doing that might cause me to lose a sale.”
The test of friendship is whether the person is willing to tell you not what you want to hear but what you need to hear.
I have been a true friend to you. Believe it or not, that’s the story here.
I wish you all good things.