Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:
” I also acknowledge that I have been wrong before and that it could be that it is happening again.”
Yes you are wrong. Wade Pfau pointed that out to you a long time ago (as did many others), but you have chosen to ignore it.
Because you decided to ignore it, you have suffered substantially for a very long time. You somewhat acknowledge that in a recent post at your blog in which you say the following:
“I’m not making any money, Reality. You got that one right. I haven’t made a dime in 13 years. That makes me very, very, very sad. It makes my wife even sadder!”
Instead, you have banked your future on some kind of windfall coming from what you describe as “settlement payments” (all part of a fantasy).
It’s true that I haven’t made a dime in 13 years.
I believe that I will be seeing settlement payments. But it’s not right to say that I have “banked my future” on that belief. I say what I say about investing because that’s what I believe about investing. I believe that everyone should be saying what they believe. That’s how we handle things in every other field of human endeavor. That’s what would work in the investing realm too, in my assessment. When we all say what we believe, the people listening in get to hear all sides and eventually people figure things out.
That brings us to Wade Pfau. Yes, Wade has said that I am wrong. But he said that after working with me for 16 months and saying that I was right over and over again and praising me to the skies and saying that he couldn’t sleep at night because he was so excited about the stuff he was learning from me and saying that he was going to submit the research paper that we co-authored to the leading journal in the field. And it so happens that he said that he thinks I am wrong only after a group of you Goons threatened to destroy his career. And I am supposed to believe that he was shooting straight the one time he said I was wrong and not shooting straight the hundreds of times he said the opposite? No, Sammy. I don’t believe that. Not for two seconds.
Wade isn’t the only one who has behaved that way. I have had numerous investment advisors call me on the telephone after reading material at my site and pick my brain about all sorts of questions. I have spoken to several of these people for hours at a time. And then at the end of the call several of them have said to me “please don’t tell anyone that I spoke to you, okay?” Huh?
And I have had numerous site owners ban me from their sites after telling me that they think that my stuff has huge value. I ask them why and they say that hearing what I have to say upsets their readers too much, their readers want to believe in Buy-and-Hold and seeing my research-based arguments just causes them too much pain. Huh?
And I have talked to academics who have told me that lots of researchers in this field want to do research showing how dangerous Buy-and-Hold is in the long term but that they have been taken aside and warned that it would be a career-limiting move to publish such research. Rob Arnott is one of the ones who told me that and Rob served for several years as the editor of the Financial Analysts Journal. He is no dummy. He has a well-deserved reputation as a straight shooter. Huh?
And I have had thousands of my fellow community members put up posts expressing a desire that you Goons knock off the funny business. They are not the majority. There are lots of Buy-and-Holders who hate my stuff. But a lot of the people who express a desire that honest posting re the last 34 years of peer-reviewed research be permitted are among the smartest and most popular posters at the various boards. They get quiet once they see that the site owners are not willing to take action against you Goons. But they often say what they believe before it becomes clear that they will be punished for standing up to you Goons. Huh?
Buy-and-Hold was once a wonderful thing. It stopped being a wonderful thing when Shiller published his “revolutionary” (his word) research and the Buy-and-Holders failed to update their strategy to reflect the new findings. The result is that, 34 years later, the Buy-and-Holders are too ashamed to come clean re the mistake they made and most of us have been intimidated into not demanding that they do so. That’s too sad, in my opinion. I think we need to stand up to them and that they need to come clean. I think that’s best for everyone.
I could be wrong. That’s always a possibility. But I haven’t been dishonest. I say what I truly believe. That’s important to me. You say that I have “suffered substantially for a very long time.” I’ve suffered financially. I’ve suffered lots and lots of hits to my reputation. I’ve been defamed tens of thousands of times. I’ve lost contact with lots of good friends when I was banned from discussion boards where I played a leadership role for years (I was once banned from a board that I founded — beat that!). But I can go to sleep at night knowing that I have insisted on my right to post honestly for 13 years running and that I’ve been able to develop hundreds of amazing insights as a result and that lots of good and smart people have praised my work product to the skies because they appreciate how important it is that we explore the implications of Shiller’s revolutionary findings in great depth.
All of that matters to me. I see myself as a huge winner re this matter despite the financial and reputational hit. I would do it all again, you know? Despite all that I have been through, I would do it all again because the good side of this story is 50 times more good than the bad side of this story is bad. We have seen more advances in our understanding of how stock investing works over the past 34 years than we have seen advances in computer technology over that time-period. By a factor of 20! And I have played a leading role in developing many of the insights and in spreading the word about them. That’s pretty heady stuff for a guy who never went to investing school and who never managed a big fund. I have achieved things on the content side many, many times beyond anything that I ever thought it might be possible for me to achieve in the days before May 13, 2002.
I believe that I will see those settlement payments. I don’t think that’s a fantasy at all. I believe that everyone in this field wants this nasty stuff to go away. I think thats true of Jack Bogle, who is the lead Buy-and-Holder. I got started on this journey because of things I learned from reading Jack’s book. That tells me that deep down he wants to help people. So I believe that following the next price crash, he is going to look deep down and decide that he needs to come clean about the doubts that he feels about his claim that it is not necessary for investors to exercise price discipline when buying stocks.
And I believe that this story is going to lead to legislative changes that will limit the ability of you Goons to ruin sites and to ruin people’s reputations and to intimidate good people into not posting their sincere views at web sites. I believe that this new communications medium is going to be freed to achieve its full potential as a result of how many lives you Goons have damaged over the course of your 13-year Campaign of Terror against our board and blog communities.
I talk to people at the annual personal-finance bloggers convention (FInCon) each year and I can tell you that lots of people would like to see these matters addressed in a responsible way. There’s lots of money to be made giving people accurate and honest and research-based investing advice and lots of people would like to be earning good money while helping people out if only they do not have to go up against you Goons to do so.
We’ll see how it all turns out, Sammy. I believe that we are going to see some exciting developments following the next price crash. I believe that most people are basically good. And so I am not able to imagine how things could ultimately go down any other way. There is too much potential for good here and the nasty stuff has caused too much human misery.
I naturally wish you all the best that this life has to offer a person, in any event.