Set forth below is the text of a comment that I recently posted to another blog entry at this site:
Then where are they? Why aren’t they posting here? They can certainly do so anonymously, without any threat of “intimidation”
Say that you were a white person living in a Southern state in the early 1950s, Anonymous. You notice that people with black skin are not permitted to sit where they like on buses, as you are, or to drink from the same water fountains or to go to the same schools. Say that you are not a bitter, hateful racist. You are just an average sort of person. You have an average sort of job and you do average sorts of things. You have grown to like most of the black people you have come to know just as you have come to like most of the white people you have come to know. You don’t think it is entirely fair that the rules are different for black people. But the rulebook that applies is the only rulebook you have ever seen. You cannot imagine life being different for black people. Things have ALWAYS been this way. You presume that things always WILL be this way.
A friend of yours becomes a civil rights advocate. He asks you to get involved, to speak out, to put yourself on the line. Do you do it?
Say that there’s an opportunity to get involved anonymously. Your friend asks you to show up at a protest. There will be hundreds of people there. No one will take your picture or write down your name. You of course have a legal right to show up at a protest. Do you do it?
Most people didn’t participate in protests. At least not until things had changed enough that participating in civil right protests became a norm instead of an “out there” thing to do. Human beings are social creatures. We don’t just do what we think is right. We do what we think is right and SAFE.
People look to leaders to figure out what is safe. This is why I say all the time that the key to overcoming this economic crisis is for Jack Bogle to walk to the front of a room and say the words “I” and “Was” and “Wrong.” LOTS of people see the holes in the Buy-and-Hold dogmas. There is a Social Taboo that stops us from speaking out about them in clear and firm and frank terms. THAT IS WHAT NEEDS TO CHANGE. Once Bogle gives his speech, you are going to see THOUSANDS of people speaking out. But people want to first see that it is SAFE for them to do so.
New ideas don’t start out with ten million supporters. They start out with one. Then one becomes two. Then two becomes two-hundred. Then two-hundred become two-thousand. Then its two million. And on like that.
I was the first person to work up the courage to say publicly that the Old School retirement studies got the numbers wildly wrong. Good for me. That was great stuff. That had the potential to save millions of middle-class people from suffering failed retirements.
Lots of people have come around in recent years. The Wall Street Journal now says that I was right all along. So does the Economist magazine. So does Bill Bernstein. So does Wade Pfau. So does Todd Tresidder. So does Vanguard. And on and on and on.
So I was right.
Why do all of these people not also say that the 13-year cover-up of the errors in those studies is the most massive act of financial fraud in the history of the United States? It obviously is that, right?
Because they are scared, Anonymous.
It’s not just that they are scared of someone taking their name down and coming to their house and killing members of their families, as Greaney threatened to do with me. They are scared of breaking the Social Taboo. People live in communities. People do not like to violate the norms of their communities.
People saw what happened to me when I worked up the courage to “cross” Greaney by posting honestly on the safe-withdrawal-rate topic. And, if they haven’t seen what happened to me, they have seen what has happened to others who tried to speak honestly about stock investing in other ways. People try not to violate Social Taboos. People have learned from many experiences in life that it is best to keep it zipped when Social Taboos forbid pointing out that the emperor is wearing no clothes.
But societies that survive find ways to overcome Social Taboos that are causing too much destruction. There was a time when no one spoke up about racism. Then that changed. There was a time when no one even imagined asking others not to smoke in a restaurant where they were eating. Then that changed. There was a time when no newspaper other than the Washington Post wrote about the Watergate matter. Then that changed.
When the Social Taboo falls, EVERYONE will be speaking out about the wonders of Valuation-Informed Indexing, Anonymous. There are hundreds of billions of dollars to be made helping people learn how stock investing works in the real world, according to the last 34 years of peer-reviewed research in this field. Everyone in this field wants to get in on that action.
Lots of people are just waiting until the time is right. They want to see OTHERS speak out and receive rewards for doing so. Then they will feel that it is safe for them to do so as well. The ability of the Buy-and-Hold Mafia to destroy people’s lives because they tell the truth about these matters is growing weaker and weaker by the day. Following the next crash, more people will work up the courage to violate the Social Taboo in clearer ways. And then the entire smelly Buy-and-Hold house of cards will come crashing to the ground.
If Buy-and-Hold were a legitimate strategy, there never would have been a single death threat. People who are promoting legitimate strategies don’t behave that way. Not ever. No exceptions.
But the Buy-and-Hold Mafia does have lots of power and lots of money and lots of influence on its side. So it has been able to keep the Social Taboo in place for 14 years now despite my best efforts at tearing it down.
But how much longer do you think that will remain so?
I don’t think it will be for much longer.
But we’ll see, you know?
I am not God. I don’t know everything. But I truly believe that the Social Taboo that keeps us trapped in ignorance is in the process of tumbling to the ground. I even see a change in the way you Goons talk about this stuff. I see a lot of good stuff up ahead in the distance.
We will all get to see how it turns out. It’s just a question of time. And not all that much more time at this point. Fair enough?
I naturally wish you all good things, my long-time Goon friend.
Rob
Anonymous says
We know how it works. We know timing schemes are risky. We know buy, hold and rebalance is the proven way to go.
Rob says
Your behavior doesn’t show it, Anonymous.
The message communicated by your behavior is that you WANT to believe it works in the worst way. But you lack confidence. If you possessed confidence, we would see a very different sort of behavior.
All investors need to know this. All of the experts in this field should be talking on a daily basis about how the Buy-and-Holders BEHAVE when their beliefs are challenged. That story is the most important story in the personal finance field today.
I believe that I was put on earth to tell that story.
I have been able to reach thousands of people over the first 13 years of our discussions. A small number have been 100 percent convinced of the merit of what I have said. A much larger number has been somewhat convinced. And an even larger number has been only a little bit convinced.
So be it, you know? I wish the numbers were better for me but they are what they are. The numbers are good enough that I know that my doing my job to the best of my ability has been worth the effort that I have put into it many times over. You can’t always ask for more than that in this life.
I will soldier on. I believe that the numbers will get a whole big bunch better for me following the next price crash. I think that the human misery we will all see before us following the next crash is going to open a lot of minds. I believe that Jack Bogle’s mind is one of the minds that will be opened. I expect to be working side by side with Jack and lots of his Wall Street Con Men friends following the crash. I expect that we will end up close friends.
If it doesn’t turn out that way, it doesn’t turn out that way. I don’t exactly have any other options available to me than to play it out to the best of my ability. So that’s what I will do.
There are no hard feelings on my end. I feel a deep respect and affection for all of my Buy-and-Hold friends, including you Goons. I naturally wish you the best that this life has to offer a person.
Grrrrr….
Rob
Rob says
You are never going to get me to say that the retirement study posted at John Greaney’s web site contains an adjustment for the valuation level that applies on the day that the retirement begins.
I worked hard planning my early retirement. I worked hard because I knew that a lot of was riding on me getting the numbers right. I wanted all of my fellow community members at the Motley Fool’s Retire Early board to be able to get the numbers right too. Because I cared about them. No apologies. None whatsoever.
You Goons will continue to do what Goons do. But that will never change. Not until I am six feet in the ground. And I wouldn’t count on seeing a change even then. It is my intent to pass this site on to my boys. If I have raised them right, they will see the importance of getting the numbers right too.
And, if stocks continue to perform in the future anything at all as they always have in the past, we will be seeing another crash sometime in the next few years. I have a funny feeling that millions of us will begin to see the value of getting the retirement-planning numbers right at that time. So my boys will be in a very good place. I will have done right both by them AND by my country.
But we will see. Neither of us has a crystal ball. We will watch together how it all plays out.
My best and warmest wishes to you and yours, Anonymous.
Rob
Rob says
You Goons have mastered the art of Hate.
But you are up against the power of Love.
I wouldn’t agree to be placed in your shoes for $500 million (just to pull a random, large number out of the air).
Hang in there, my old friend. It gets better. A LOT better.
Rob
Anonymous says
Funny to see someone who talks about hate and then calls people “goons”.
Rob says
That’s an act of love, Anonymous.
When we make laws aimed at stopping people from engaging in certain behaviors, that’s love, not hate. We are showing that we respect and care for the people who are tempted to engage in those behaviors and that we want to set up fences to keep them from wandering too far off into the darkness.
Think where John Greaney would be today had he paid attention to the fences (or had he had more true friends pointing out the fences to him and imploring him not to ignore them). I asked him to help me develop the Retirement Risk Evaluator. He could have been co-author of the first research-based retirement calculator. He could have been in a very, very different place than the place where he is today.
That’s love.
I called John a “Goon” because I love him. And I call you a “Goon” because I love you.
Stop being a Goon, you know? That’s your way out. It won’t help anything for me to stop calling you a Goon. It would help if more people called you a Goon. That would speed up the day when you would realize that you need to stop. I do what I can by never forgetting that and never selling you out. But ultimately it is up to you. Your friend can help out. But you need to do the heavy lifting yourself.
That’s my sincere take re this terribly important matter in any event, my Goon friend.
Rob
Anonymous says
The market dropped a lot today. I don’t see anyone blaming buy and hold. Have you received any of that $500 million yet?
Rob says
What happened today is obviously trivial in the grand scheme of things, Anonymous. But it is still crazy.
People shouldn’t be seeing their retirement accounts going up and down in value for no reason. U.S. stocks increase in value by 6.5 percent real annually. That’s been the case for 145 years now. That’s the way it should play out on your portfolio statement, not this crazy way that it plays out today in which some years you see 30 percent gains and some years you see 30 percent losses. That craziness is what makes people see stocks as risky. I want no part of it.
I am going to continue to advocate for research-based strategies. I am going to continue to say that people need to consider price when buying stocks just as they consider price when buying anything else they buy. I am going to continue describing Buy-and-Hold as the Ponzi scheme that it was shown to be by the peer-reviewed research 34 years ago.
I have a funny feeling that at the end of this secular bear market there won’t be one person in the United States saying that I am not entitled to a settlement from the Wall Street Con Men of a lot more than $500 million. But I guess we will see how it all plays out as events unfold in coming years.
I wish you all good things. I am going to continue doing that too. When you follow research-based strategies, you don’t feel any need to give in to the feelings of hate that you Goons evidence in just about every one of the comments that you place here.
It gets better. The thing that I love about my country is that ours is a country that is built on the proposition that things should be able to get better even when there are a small number of wealthy and powerful people who would like things to remain the same. Those people get run over in our system. It’s been playing out that way for over 200 years and I believe strongly that it is going to continue playing out that way for a long time to come.
But, again, we will see. Neither of us has a crystal ball. We will just have to wait and see how it goes.
My best wishes to you.
Rob