Set forth below is the text of a comment that I recently posted to another blog entry at this site:
There is PLENTY of good information out there. This site, however, doesn’t really offer anything other than someone that wants comic relief since all you talk about is how you hate buy and hold and you call people goons all day.
We disagree, Anonymous.
I believe that 90 percent of the information about stock investing available on the internet today is compromised by the desire of the person putting forward that information to be liked by the people reading the information.
The promotion of Buy-and-Hold strategies created $12 trillion in Pretend Gains. Millions of middle-class people are counting on using their share of the Pretend Gains to finance their retirements. So it causes them great pain to hear what the last 33 years of peer-reviewed research tells us about how the market really works. Since the people giving the information want to be liked, they hold back on telling people stuff that they very, very much need to hear.
It’s a vicious cycle. Experts don’t tell the truth because their careers will be destroyed if they do. And the only way that could change would be if the people listening to the advice came to see how much less risky and more profitable stock investing would be if they knew the realities. But how can they ever come to understand these realities so long as the experts don’t dare to talk about them?
There’s good stuff mixed in with all the Get Rich Quick garbage. That much is certainly so. There are lots of smart people in this field. And there are lots of hard-working people in this field. And it is my strong impression that most of the people working in this field very much want to help people. But they can’t! If they tell the truth in a clear and uncompromised way, they will be destroyed. So they keep it zipped.
And each time one expert decides to keep it zipped, the pressure increases on all the others to keep it zipped as well. Because if one were to tell the truth, it would make all those keeping it zipped look bad. So there’s a Buy-and-Hold Mafia that goes around and makes sure that researchers who try to publish honest research suffer very serious penalties for daring to step out of line. And to see that bloggers who put up honest posts suffer very serious penalties. And to see that community members at discussion boards who post honestly suffer very serious penalties.
It’s not only the Buy-and-Holders who hold back. The Valuation-Informed Indexers hold back. Robert Shiller himself holds back! This guy won a Nobel Prize for his “revolutionary” (his word) research. And even Shiller fears telling the whole truth about the wonderful and far-reaching peer-reviewed research of the past 33 years. Shiller limited the discussion of the how-to aspects of stock investing to two paragraphs of his book. I wonder why, I wonder why.
If Shiller had published his book in 1961, before Fama published the research that led to development of the Buy-and-Hold strategy, we would all be in a very different place today. We would be enjoying the greatest period of economic growth in U.S. history rather than enduring the worst of the four economic crises that have been brought on by the reckless and relentless and ruthless promotion of Buy-and-Hold strategies by our Wall Street Con Men friends.
What a mess!
Anyway, I do indeed hate Buy-and-Hold. And I do indeed make reference to the Goon phenomenon in just about everything I write.
Not because I don’t view the Buy-and-Hold Pioneers as heroes to the middle-class. I very much see them as that. I think it would be fair to say that I see them as that to a greater degree than they see themselves as that.
And not because I enjoy focusing on the Goon problem. I focus on the Goon problem because I want to bring the Goon problem to an end. It doesn’t seem likely to me that we are going to bring the Goon problem to an end by ignoring the Goon problem. When everyone else in this field is as focused on the Goon problem as I am, we will be well on our way to bringing the Goon problem to an end, in my assessment.
All that I can do is all that I can do, Anonymous.
I think we are in a bad place today. A place that none of us wanted to find ourselves in. I believe that we all share a desire to work together to get us all to a far better place. I much look forward to the day when I will be able to join hands with all of my many Buy-and-Hold friends and work together with them to lead us to that place.
Until then –
It’s back to hating Buy-and-Hold and calling people Goons!
Please take good care, man.