Set forth below is the text of a comment that I recently posted to another blog entry at this site:
I have a feeling if you read it 7x, you would be reading between the lines and finding where Shiller had written a secret code to warn you of the Goons.
Once you read it 15x, it will teach you how to succeed in your quixotic crusade.
That’s not too far off the mark, Laugh.
I understand that you are making fun of me. But the reality really is a strange one. The words of a book don’t change each time you read it. Yet I really have seen exciting new stuff in Shiller’s book each time that I have read it. How does that happen? How do I miss important things on the earlier reads? That shouldn’t happen and yet it does.
Our minds can only take in so much at a time. That’s the reality. That’s why we have to encourage everyone to post with full honesty and frankness. That’s why it is so critical that no one feel any intimidation when they post. At atmosphere of intimidation causes people to be timid, to hold back. When they do that, we all miss out on a lot of what is in other people’s brains. We all lose. That’s what has to change here.
I wrote a column that will show up at the Value Walk site on Tuesday that gets to the heart of things, in my assessment. I talk about how I used to be ashamed to tell people that I had paid off my mortgage. That’s crazy. That’s something to be proud of, not something to be ashamed of. I should have been spreading the word to all my friends about how they could live richer lives. What was holding me back? It was peer pressure. It was a Social Taboo. That’s what we are up against here.
Everyone wants to know how to invest more effectively. And we all DO know how to do so today — Intellectually. But we all are afraid of giving voice to what we know because it will hurt the feelings of all our Buy-and-Hold friends for them to see that they made a mistake many years back and have left it uncorrected for a long time now. That’s the only thing holding us back. That weird reality creates this strange situation where we say things in code and we need to read books multiple times to hear important parts of the message contained in them.
That’s what I need to change. That’s the job here. When those of us who have seen through the b.s. part of the Buy-and-Hold story start speaking plainly and clearly and frankly, it gets a lot easier for everybody. The practice of speaking in code holds us all back. We need to give that up. It will be huge when we do that.
When I was writing the column, I had to look up what happened in that famous peer-pressure research from the 1950s where they showed people cards and asked them to say which lines on the cards were the same length and when people would give obviously wrong answers if there were others giving those crazy answers (because they were working with the researcher) before it was their time to speak. All of us would deny that we could ever behave that way. But we all do. Peer pressure is a huge force with humans.
And bull markets are a peer-pressure phenomenon. There’s nothing else to them. When we reach the point where we can talk openly about what we know from the psychological literature, we eliminate most of the risk of stock investing. The thing that had made stock investing risky from the beginning of time until now is that we humans flatter ourselves that we do not respond to peer pressure but really we do.
When one of us gains the ability to post honestly, we all gain the ability to post honestly. When we all gain the ability to post honestly on safe withdrawal rates, we all gain the ability to post honestly on every possible subject. We are up against a Wall of Ignorance that was ready to collapse on the morning of May 13, 2002, and needed just one good hard push for it to topple. The purpose of the past 13 years has been to supply that one good hard push and to thereby make all of our lives a lot richer than they have ever been before. We are close today. I think the next crash is going to supply the final elements of that push. We’ll see.
The researchers asked the participants in that study why they gave such crazy answers. Many of the participants said that they knew the right answers all along! So why did they say such crazy things? It seems so impossible!
They said they were being polite! They didn’t want to hurt the feelings of the people who gave crazy answers before them!
That’s why Shiller writes in code. He doesn’t want to hurt Bogle’s feelings. He knows a hugely important thing that Bogle does not yet appreciate. But he holds back from saying it clearly because he knows it will make Bogle feel bad for Bogle to see how many lives he has destroyed. Some friend, huh?
But it is human. That’s what the research is telling us. Bogle is responding in a human way — we all have a hard time acknowledging that we have gotten something terribly wrong. And Shiller is responding in a human way — we all have a hard time letting people know that they have made a mistake. This is a painfully human story in all respects.
There’s your conspiracy! It’s those darn humans and that darn desire to be polite that is hardwired into them! Whatchagonnado?
We’re all too darn polite. We can’t help ourselves. That’s why millions of people are unemployed today. That’s why millions are on their way to experiencing failed retirements. We need to learn how to be less polite. Our excessive politeness is killing us!
That’s a joke. But it’s a joke that expresses an important truth. We really do need to learn to be less polite when there are important truths that have been discovered and that need to become better known. There’s nothing polite about participating in a cover-up that causes an economic crisis. There’s nothing polite about letting your friends suffer failed retirements because you don’t have the courage to say what needs to be said to stop them from suffering failed retirements.
Shiller really does talk in code. That’s the reality here. He does it because he wants to be a nice person.
And one of the things he talks in code about is you Goons. Shiller has experienced the Goon phenomenon. He was telling the truth about stock investing long before I was. I would bet $5 that he has seen MANY death threats and MANY threats of career destruction directed his way. I would bet that he could write a book about the hundreds of intimidation tactics directed his way over the course of the past 34 years.
The difference between Shiller and me is that I want him to write that book. I think that’s the key. I think he needs to stop being so darn polite and just take a blast at those darn Goons! Not out of meanness. He needs to blast them because there is a part way down deep in the Goons where they want to get all this investing stuff right too. The Goons don’t like being told that they made a mistake. But they don’t like suffering failed retirements either.
Shiller INSULTS you Goons when he holds back from blasting you. When he does that he suggests a belief that you are ALL Goon and nothing else. He’s wrong. The Goon Conversations that appear at this site on a daily basis show him to be wrong re that one.
We all need to work up the courage to start blasting you Goons. We need to stop insulting you by thinking that you precious flowers will melt into nothingness if we happen to mention what the last 34 years of peer-reviewed research shows and work up the courage to appeal to your non-Goon selves and thereby lift you up to the human level rather than letting you pull us down to the Goon level. That’s how this thing ends. That’s what this thing has been leading up to since the first day.
The Buy-and-Holders show zero hesitance in stating their case. They are “Diehards” to borrow a apt characterization. The Valuation-Informed Indexers are frightened little babies, living in fear of their own shadow lest they hurt the feelings of one of the Diehards by saying what they truly believe in too clear a way. Those on my side of the table need to stop being such frightened little babies. We cannot win this battle of ideas playing it that way. It’s because we act like frightened little babies that this battle of ideas has produced such little good fruit in 34 years.
I’m polite too. I care about you Goons too. The difference with me is that I care enough not to insult you. I respect you for your genuine accomplishments, which came from a belief that this stuff matters. If you believe that it matters, then there is a part of you deep down that wants to get it right. That’s my core belief. Shiller needs to stand up to Bogle and say precisely what he believes, straight, no chaser. That’s when the huge advance takes place. That’s when all the ugliness gets buried 30 feet in the ground, where it can do no further harm to humans and other living things.
Shiller needs to stop being so darn polite to Bogle, gosh darn it!
I look forward to the day when none of us feels the need to speak in code re how we all need to go about financing our retirements.
Rob the Polite (But in a Different and Deeper Way)