Set forth below is the text of a comment that I recently posted to another blog entry at this site:
I’m not convinced that your wife meant her comment as a compliment
My wife is not a Goon. She loves me. So her negative comment counts for more than the negative comments that I hear from you Goons. People need to know that even my own wife holds some skepticism re my claims. That’s an important part of the story.
This reality doesn’t justify your goonishness. But it does add context to it. It explains it to some degree.
If the peer-reviewed research paper that I co-authored with Wade Pfau showed investors how to reduce the risk of stock investing by 10 percent, it would have been written up on the front page of the New York Times within three weeks of its publication. Everyone would be singing my praises if that were the case.
But 70 percent? That’s a threat. That means that we need to change everything that we tell people about how stock investing works. That means that all the textbooks need to be rewritten. That makes all the people who have promoted Buy-and-Hold strategies (and those people constitute the most powerful people in this field) look bad.
I don’t want to make those people look bad. I want those people on my side. I want those people helping me out. I want those people commenting on my work and linking to me and inviting me to speak and all that sort of thing.
But I cannot lie about what the historical data says, can I?
The historical data says that exercising price discipline reduces the risk of stock investing by 70 percent. So that’s what I need to say, whether it makes me a target of the powerful Buy-and-Hold Mafia or not.
Our unfortunate (!) reality is that we achieved the greatest advance in the history of personal finance in 1981. We didn’t know everything there was to know about even the basics of stock investing prior to the publication of Shiller’s “revolutionary” research. He supplied the critical missing puzzle piece. Now we know. We are the luckiest generation of investors ever to walk Planet Earth.
But what do we do about the Buy-and-Holders? They are powerful. They are determined to stop the millions of middle-class investors from learning what they very, very, very much need to know.
We could praise them to the skies. That would be honest. They have put forward many huge, powerful, positive, life-affirming insights. We could make them heroes in the eyes of the millions of middle-class investors.
They have made it clear that that’s not good enough for them. They cannot bear to say those terrible words “I’ and “Was” and “Wrong.” So what do we do?
We have to keep trying. We have laws in place against financial fraud. We made it a felony. Prison time. We have to push for enforcement of those laws. Once prison terms are announced, all the ugly side of this matter comes to an end. From that point forward, it’s good stuff piled on top of good stuff piled on top of good stuff. The Goons get shorter prison sentences. The rest of us get to enjoy the benefits of learning about the first true research-based investing strategy.
If you ever come up with any better ideas, I hope you will share them with me.
My aim is to make life better for every single person affected by this matter. The millions of middle-class investors. My fellow bloggers. The Wall Street Con Men. Their internet Goon squads. The Buy-and-Holders. The Valuation-Informed Indexers. Everyone.
The best idea that I have been able to come up with given the behavior of you Goons is enforcement of the laws against financial fraud. Announcement of your prison sentence will get all sorts of good things happening at all sorts of places, Interested. That’s the thing that will turn the key. There need to be consequences when people make 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 as their way of blocking millions of people from learning things they very much need to know because of embarrassment they feel over having made mistakes themselves.
I cannot change the realities that apply here. My job is to play the cards that I am dealt to the best of my ability. That means prison for you, my good friend. But I still hold out hopes that it will not mean a prison sentence as lengthy as the one you will be getting if you do not come clean until after the next price crash!
I hope that helps a bit.
My wife is like everyone else. She finds it hard to believe that as a society we are able to make such a huge advance at this time. We have the Buy-and-Hold Pioneers to thank for that. Shiller would never have published his “revolutionary” (his word) research had the Buy-and-Hold Pioneers not first advocated the idea of us all rooting our investing strategies in what the peer-reviewed research in this field reveals to us.
Thanks John Bogle!
And off to prison with you, John Bogle!
Take good care, man.