Set forth below is the text of a comment that I recently posted to another blog entry at this site:
“But the buyers and sellers do not have access to commentary on the last 34 years of peer-reviewed research. They do not have access to the information they need to act in their self-interest.”
Are you suggesting the Wall Street institutions that set stock prices don’t have access to the same information as you?
Wade Pfau hold a Ph.D. in Economics from Princeton. I have never taken a single course in investing. Wade should know 50 times what I know about investing.
Go take a look at the hundreds of posts at this site that relate to Wade and the things he learned about stock investing during the 16 months that we worked together. He was learning amazing things on a daily basis. He was stunned and amazed by this. He remarked on it over and over again.
The same thing happened with John Walter Russell. John was obviously a very smart person. And he studied stock investing. But his most fundamental ideas about how stock investing works changed when he met me. Then he spent eight years of his life researching the Valuation-Informed Indexing concept. The more he researched, the more be believed and the more he learned. His knowledge grew deeper and deeper and deeper.
The same thing happened yet again with Larry Evans (if I am recalling the name correctly). When Larry discovered my site, he was slightly hostile. He believed in the Buy-and-Hold garbage and he couldn’t accept that I had really proved that it was all wrong. So he challenged me. He said that he would spend three weeks reading every article at the site and then would write an article giving his assessment of my ideas. He asked whether I would be willing to agree in advance to post his article even though I would not know at that time what he would say. I said that would be fine. He called me after the three weeks and said that every claim that I had ever made checked out. He said that he was laying awake at night thinking how huge an advance VII represents. He was stunned and amazed and excited.
Buy-and-Hold was a mistake, Anonymous. It is the most dangerous investing strategy ever concocted by the human mind. There is no rational discussion that can be held re this matter. Because 100 percent of the evidence is on one side and 0 percent is on the other. It is pretty darn hard to hold a rational argument when all the evidence is on one side. There is no controversy. There is nothing to talk about. Fama never even looked at long-term timing (price discipline). So it is of course impossible that he ever came up with the smallest bit of evidence that there might be some magical, mystical alternate universe where long-term timing (price discipline) might not be 100 percent required.
The Wall Street institutions have access to the same information that I have access to in a practical sense. Obviously.
But they don’t have access to that information in a real sense.
Look at what happened with Wade Pfau. He LOVES, LOVES, LOVES Valuation-Informed Indexing. He thinks it is the answer. He thinks it is the future. He had visions of winning the Nobel Prize with the research he was planning to do showing why VII is better than Buy-and-Hold in every possible way.
Then his career was threatened by some very powerful people. Wade saw all those years he spent in school going down the drain. He saw Jack Bogle and his Wall Street Con Men pals taking away the bread from his family table. He saw the lives of his wife and children being destroyed because he wanted to do honest work that would make the Buy-and-Holders “look bad.” So he gave in to the threats.
Does Wade have access to the information he needs to understand how stock investing works?
In one sense, he does. But in reality, he does not.
Wade has participated in the biggest act of financial fraud in the history of the United States. How do you think that makes him feel? It makes him feel horrible. Wade didn’t get into this field to destroy millions of middle-class lives. He got into this field to help people. It hurts him that he has destroyed millions of lives. So he lies to himself about what he has done. He pretends that financial fraud is no big deal. All the Big Shots in this field are engaging in financial fraud today. So what does it matter if one more researcher flips to the dark side?
Wade has access to the materials he needs to do helpful research. But he cannot bear to look at it. If he looks at it, it reminds him of how he has failed himself and his family and his profession and his country. So he tells the lies he feels he needs to tell to turn a buck in this 100 percent corrupt field. And he tries hard to keep himself as dumb as someone with his intelligence can be. Because it’s only those who keep themselves ignorant of the implications of the past 34 years of peer-reviewed research who are able to earn a buck in this field so long as the long-discredited Buy-and-Hold “idea” remains dominant.
It’s the same with Jack Bogle.
It’s the same with Todd Tresidder.
It’s the same with Bill Bernstein.
It’s the same with Mike Piper.
It’s the same with the owners of the Motley Fool site.
It’s the same with Carl Richards.
It’s the same with the owners of the Early Retirement Forum.
It’s the same with Bill Shultheis.
It’s the same with the owners of Morningstar.
It’s the same with Larry Swedroe.
And on and on and on and on and on.
All of those people would like to feel free to tell the truth about the last 34 years of peer-reviewed research. And all of these people know what the Buy-and-Hold Mafia would do to them if they dared to “cross” them by speaking honestly re the last 34 years of peer-reviewed research. It is only the advocates of a single investing strategy who respond to challenges to their claims with death threats and with threats of career destruction. It is only Buy-and-Holders who do that. And we have seen the Buy-and-Holders do it over and over and over and over and over again. I wonder why.
There are people who work on Wall Street who would like to understand stock investing better than they do today. But they know the price they would have to pay. And they like the money that can be made in this field by being dishonest more than they like the good feeling that comes from telling the truth about the last 34 years of peer-reviewed research.
I like the good feeling that comes from telling the truth about the last 34 years of peer-reviewed research more than I like making a smelly and dirty buck. That’s my secret. Sue me.
I expect to make a lot of bucks too. I expect to make 500 million of the suckers. But I intend to make them honestly. And that one is non-negoitable.
I hope that helps a bit.
I wish you the best of luck in all your future life endeavors, my dishonest and abusive-posting friend.