Set forth below is the text of a comment that I recently posted to another blog entry at this site:
Everyone but you must be suffering from cognitive dissonance.
No that’s not right.
We are ALL suffering from it. But all to different degrees. Lots of people know that Buy-and-Hold is garbage. Many more people believe in it enough to follow it themselves but have doubts that they are trying to silence.
Even I am suffering from cognitive dissonance to some degree. I still come up with new insights all the time. Why? We are 13 years in. Shouldn’t all the implications of Shiller’s research have hit me by now? They haven’t. That’s because I do not have thousands of people writing daily about Valuation-Informed Indexing and thereby pushing me forward at a quicker pace. I am human like all the others. And I have my Goon side like all the others. I see lots of stuff that most others do not see today. But I do not see it all. And that will come only when lots of others see more than they see today.
We all learn from each other. Each time one of us works up the courage to post honestly, it helps all the rest of us. It’s not an accident that we have had big names declare this site the best investing site on the internet. When I wrote to all the academic researchers in this field, HUNDREDS of them expressed a desire to be be free to do honest work. Those people have doubts about Buy-and-Hold, Anonymous. There’s no question about it. And I have had a number of investing advisors call me and ask me to spend some time going over this stuff with them. Those people have doubts. People have had grave doubts for years. They are just afraid to express them because they know the Buy-and-Holders will try to destroy their careers if they dare to “cross” them by doing honest work.
The Ashe study from the 1950s showed the power of peer pressure. People were asked to identify which of three lines on a card matched the length of a line on another card. The test was an easy one. 95 percent of the people tested got it right. That is — until peer pressure was introduced. When four fake study participants gave the wrong answer, 65 percent of the real study participants got the answer wrong too.
What do you think happened when one of the four fake study participants gave the right answer?
That changed everything.
When the real participants were able to hear one other person giving a sensible answer, the vast majority gave the right answer themselves.
That’s what we will see following the next crash. LOTS of people want to post honestly. We have seen that going back to the first day. The next crash is likely to put us in the Second Great Depression. That will scare people. When people get scared, a certain number will work up the courage to post honestly. And then the entire Wall of Deception will come tumbling down.
There are billions to be made giving research-backed investing advice. We are in the investing field today where we were in the computer electronics field at the time when Bill Gates and Steve Jobs made their fortunes. Lots of people are waiting for a signal that it is safe to write about the dangers of Buy-and-Hold. Once a few stick their necks out, you will see THOUSANDS of experts in this field posting honestly in no time.
That’s what that Wall Street Journal article saying that the Buy-and-Holders tell “only half the story” was all about. Arends was floating a test balloon. He wants to see that it is safe to tell the truth. Then he will be running a ten-part series telling hundreds of truths based on the peer-reviewed research of the past 34 years.
Without the massive act of financial fraud, Buy-and-Hold would have died over the course of five or ten years. The 34-year cover-up has delayed the fall of Buy-and-Hold. But it has set things up so that it will only take six months to bring down Buy-and-Hold rather than five or ten years. Support for BH is a mile wide and an inch deep. People are just waiting for a small number of people to take on you Goons and then it is over fast.
You are running out of time, Anonymous. The Buy-and-Hold Era is on its way to the graveyard of U.S. history.
I am sure.
Take care, man.