Set forth below is the text of a comment that I recently posted to another blog entry at this site:
Has “Boo” ever read your site?
She had read a small number of articles and we talk about the subject from time to time. But she certainly does not look at the site often and has read only a small percentage of the material presented at it.
One day a few weeks ago she was on the computer to do something else and she happened to see one of my recent blog entries because I had left the page up on the screen. She said: “Your headlines are too long!” I said: “Grrrrr….”
Possibly implicit in your stated question is an important follow-up question: “Does your wife agree with you about these matters?”
Boo is obviously not a Goon. She does not support the use of death threats or any of that sort of thing. She of course thinks that that stuff is beneath contempt.
But I think that I owe it to my readers to report that I do not believe that my wife truly “gets” all that I say about investing.
She accepts that the work that I have done is important. She knows about the Wade Pfau story. She understands that there must be merit to what I say or I would not have had a guy who has a P.D. in Economics from Princeton saying the sorts of things about me that Wade has said about me. She is of course proud when people write to tell me that I am the first person who ever talked about how stock investing works in a way that truly makes sense. I often show her those sorts of e-mails.
But she has a mental block about much of this. She is not alone in that. I have spoken to many thousands of people over the past 12 years. Lots of smart people have a mental block re this stuff. This stuff comes to me very easy. It seems clear and simple to me. But I have seen too many smart and good people struggle with it to believe that that is true for everyone. There are more people who struggle a great deal with this stuff than there are people who find that it comes easy.
Valuation-Informed Indexing represents a paradigm change. That’s why.
It’s not one thing that is new. The foundation stone is new. The entire model for understanding how stock investing works is new. Shiller’s “revolutionary” (his word) 1981 finding turns everything on its head. It’a all good. Shiller turned stock investing into a virtually risk-free enterprise. So it is a huge advance. But people have to be exposed to it a lot of times and from a lot of different angles and people have to be able to ask a lot of questions to truly get it.
Some of the behavior of you Goons is truly criminal. But all the evidence that I have seen tells me that your confusion over how this works is for the most part genuine. I believe that that’s true of the Wall Street Con Men as well. I believe that just about all of them see that there are problems with Buy-and-Hold. But they don’t see an alternative and so they tell themselves that the problems are not that grave and that things will somehow work out. I believe that, if people like Bogle and Benrstein and Burns knew how much human misery they were causing, they would flip today. I don’t think of these people as bad people although I obviously believe that they have done very bad things by letting the cover-up continue on so long.
My boy Timothy “gets” the concept better than anyone else in the family. He’s not old enough to understand all the history and context. But we have had several long conversations about it in which he has asked some highly intelligent questions. That tells me that he gets it to a greater extent than most.
Most people struggle with this. It’s NOT hard. But it’s a way of thinking about stock investing that is very different from how people have become accustomed to thinking about stock investing in recent decades. A lot of people are engaging in a lot of funny business. But there is a lot of genuine confusion too. People need to know that. That’s an important part of the story.
The fact that my wife struggles to fully understand this stuff does not tell me that it is not important to open the internet up to honest posting on the last 33 years of peer-reviewed research. It tells me the opposite. It tells me that it is CRITICAL that we all pull together to get the word out re what really works. We ALL need to know how to invest effectively for the long run. The fact that the wife of the person who has worked this so hard for 12 years struggles with some of it is an amazing fact. It is an amazing fact arguing that we all need to work a lot harder to separate myths from realities and to figure out what the research is really telling us.
I hope that helps a bit.