Set forth below is the text of a comment that I recently posted to another blog entry at this site:
I think even as late as last year you were taking your “career” somewhat seriously, with website redesigns and videos. Your recent lack of effort shows complete capitulation.
There’s some truth to that, Anonymous.
I haven’t given up. I see this as the most important economic and political story of my lifetime. I know by the reaction I have seen over the first 12 years that there are millions of people who would like to be able to learn about a smart and simple and safe way to invest in stocks. I know that there are many, many investment advisors who would like to be doing honest work. I know that there are many academic researchers who would like to be doing honest work. I know that there are many personal finance journalists and bloggers who would like to be doing honest work. There are people who would like to be creating calculators that report accurate numbers and there are people who would like to be creating books that explain what the last 33 years of peer-reviewed research says and on and on and on.
So there’s huge interest. And there’s huge need. And I believe that as a society we will work up the courage and love it will take to overcome this problem. I believe that that is going to happen following the next price crash, which according to the research is not too far away. So intellectually I am a bigger believer in the importance of pushing the Valuation-Informed Indexing message than I have been at any time in the past. If you intended to suggest that I have somehow “capitulated” on the need for honest posting about investing questions, then you couldn’t possibly be more wrong.
But if you are intending to suggest that there has been a change in my level of public activity re these matters in the past year or two, you are right.
It’s painful for you Goons to acknowledge having made mistakes in your investing choices. That’s why as a society we are in the fix we are in. Guess what? It’s painful on my side too. It’s emotionally painful pointing our people’s mistakes to them.
There is something in human nature that makes this hard. We all care what our friends and neighbors and co-workers and fellow community members think of us. A simple way of putting it is — We want to be liked. If you want to see how that affects what people who are informed about the peer-reviewed research talk about it, take another look at the blog entries describing the e-mails that I exchanged with Wade Pfau.
Wade LOVED exploring this stuff. The 16 months he spent working with me were the happiest 16 months of his life. He used to stay up late just thinking about this stuff and plotting out new ways to help millions of people by exploring all of the many powerful insights we have mined but kept secret over the past 33 years. He was talking about winning a Nobel prize. He couldn’t believe his good fortune in having stumbled upon a research topic that would do so much good for so many people, a research topic that would liberate millions to live far richer lives and one where all of the data was on one side so the findings were clear and sharp and pointed to hundreds of exciting real-world implications. After you take that stuff in, investigate why Wade flipped to the Goon side.
Part of it is the obvious stuff. He wanted to be successful in his career. He has financial responsibility for two small children. He didn’t want you Goons destroying his means of making a living. He saw that Jack Bogle supported you and that scared him. He knows that Bogle has money and power and connections and he knows that he doesn’t hesitate two seconds to put those advantages to use destroying anyone who dares to “cross” him by telling the truth about what the last 33 years of peer-reviewed research in this field tells us about how stock investing works. Wade’s fears over what the Buy-and-Hold Mafia would do to his career were the primary reason why he agreed to stop doing research on Valuation-Informed Indexing and to stop promoting the research he had already published with me at the time he flipped.
But there was also another factor at play.
Wade thinks of himself as a good person and for good reason — he IS generally a good person (I of course believe this to be so of all of my many Buy-and-Hold friends). So it wasn’t an easy thing for him to do to make that flip; Wade isn’t in the habit of going along with massive acts of financial fraud that are likely to destroy millions of middle-class lives. When people engage in behavior like that, they need to rationalize the decisions they make as representing something more than the advancement of their self-interests. If you listen closely to the things that Wade was saying when he felt pressures being brought to bear on him, you will hear what he was telling himself. He was telling himself that it is important to be part of the club, not to be an outsider, not to say things that stir up trouble or that makes people feel uncomfortable with choices they have made for themselves or have encouraged others to make.
This comes across clearly in one of the quotes from Wade that I use in the slider at the top of all the pages at this blog. Wade said at the Bogleheads Forum one time something to the effect of: “You see people who push market timing as slimey sellers of snake oil. I don’t want to be seen as that sort of person.” Wade wants to fit in. We ALL do. I’m like all of the other humans. I want to fit in too. So I feel pain just like Wade and just like all of the others when I am painted as some sort of promotor of snake oil or something along those lines.
I’ll tell you something that I find odd that I have seen play out numerous times. I sometimes have people show skepticism over the ideas that I advance and I sometimes have people show a good deal of acceptance of those ideas. Guess which type of experience hurts the most?
It hurts more when people show acceptance.
Not because I don’t want people to accept the ideas — I obviously do want that. But because of all the social pressures that people feel not to tell the truth about how stock investing works, I usually do not gain much traction even among people who accept the ideas. A perfect example is the blogger named “Mr. Money Mustache.” I had dinner with Mr. Money Mustache at one of the financial blogger conferences. We had a great and long conversation about all sorts of things. He’s a super guy and he has a hugely successful blog. He found great merit in Valuation-Informed Indexing and would obviously love to share it with all his readers. And if he promoted the idea, this would be over. He has a huge number of readers and they would share it at other places and The Great Wall of Corruption would come tumbling down.
Mr. Money Mustache elected not to write about Valuation-Informed Indexing at his site. He didn’t offer me much of an explanation of why he made that choice. He said something about how, no matter how great an idea is, there are people who will find ways to criticize it. There clearly is something that causes him to hold back. This is not a fellow who is afraid of offending corporate interests. He once let go of an advertiser who was bringing him thousands of dollars per month because it insisted that he stop using obscenities in his articles. He not only told the advertiser to go to hell, he told the story on a stage at the financial bloggers conference. So he is not the type whom you would expect to be afraid to go up against the big money boys who push all the smelly Buy-and-Hold garbage.
So why did Mr. Money Mustache not blow the whistle on this massive act of financial fraud?
I think it’s that concern about not being liked that affected Wade and that affects all the humans, including me. Mr. Money Mustache wants to be liked. And he IS liked. His readers LOVE it that he includes obscenities in his articles. His attitude toward that sort of thing is the secret to his success. People don’t read him just because he is intelligent. They read him because they LIKE him. And lots of his readers are Buy-and-Holders (how could it be otherwise when honest posting about what the last 33 years of peer-reviewed research says is banned at every large investing site?). So, if Mr. Money Mustache spreads the word about what works in stock investing, he is going to face social disapproval. There’s no getting around it. He doesn’t want to face social disapproval. So he holds back, at least for the time being.
It hurt me more to be rejected by Mr. Money Mustache than it hurt me to be rejected by bloggers who believe in Buy-and-Hold. I believe that both types of bloggers should be permitting honest comments at their sites. But the rejection hurts more when it comes from someone who is not emotionally invested in Buy-and-Hold and who is capable of appreciating the arguments for Valuation-Informed Indexing on an intellectual level. It’s because things seem more hopeless when it happens that way. When I am rejected by a Buy-and-Holder, there is always the hope that that person can be convinced by the arguments and come around in time. When I am rejected by someone who sees the merits of the arguments, the natural question in the back of my mind is — What can I ever hope to do to change this?
I have seen more of that sort of thing in recent years. In the early days, most of the rejections seemed to be the result of intellectual disagreements or misunderstandings. Lots of people really believed in Buy-and-Hold back in 2002. Doubts about the strategy have been growing since the onset of the economic criss in late 2008. So today more of the rejections that I face are rooted in these concerns about social disapproval and fitting in. So the rejections have become harder for me to take than they were in earlier days.
So, yes I have cut back the public work that I do promoting the VII concept. I still do things. I obviously respond to questions and comments from you Goons. I am giving a presentation at FinCon14. I had a blogger write to me last week and request a Guest Blog Entry. I of course supplied that within 24 hours. I work on the book when I have time to do so. I review old articles and run the calculators to sharpen my thinking and my arguments. I keep busy with this stuff.
But I am less inclined to show up at blogs and enter comments pointing out the dangers of Buy-and-Hold. I know that it is important that I do so and I know that I have a responsibility to force myself to do as much of that sort of thing as I am able to do. But it hurts to feel social rejection over and over and over again. So I have cut back. It has become hard for me to face the negative emotions that follow from telling people the truth about stock investing and causing them to feel the pain that comes from seeing that they have made terrible mistakes that have done great harm to their financial futures.
Does that help, Anonymous?
I continue to see great value in the VII concept and I continue to feel a responsibility to spread the word far and wide. But it hurts to do so. And in recent days I have been inclined to give myself a bit more of a pass re doing the hardest parts of the job. I feel that I have done a lot and that I deserve a bit of a break. I expect to get back to that sort of work in days to come. I have hopes that that sort of work will become easier following the next crash. But, yes, for the time-being I have “capitulated” in certain respects. I still believe in the concept as strongly as I ever have. And I of course possess zero willingness to post dishonestly re any aspect of the stock investing experience. But I have taken a lot of blows over the past 12 years and they hurt and I am not today in a mood in which I feel too much excitement over the prospect of taking on too many more. I have pulled back because it hurts too much emotionally to be as out there as I have been for most of the past 12 years.
Teling people the truth about stock investing at a time when prices are high and they don’t want to hear it is hard work. It’s obviously not hard work in a physical sense. And I wouldn’t say that it is all that hard in an intellectual sense either — perhaps it is moderately hard in an intellectual sense. But this is VERY hard work emotionally. It’s draining. It takes a lot out of you. That’s why so few people are willing to push too hard re all this stuff.
I hope that makes at least a small bit of sense to you, Anonymous.
I wish you all the best that this life has to offer a person.