Set forth below is the text of a comment that I recently posted to another blog entry at this site:
Why do you think they are banning you?
At every place that I have been banned it has been for the same reason, Zippy. I say: “Buy-and-Hold is a big pile of smelly garbage” and then I explain why and cite the last 34 years of peer-reviewed research in this field. That’s it. That’s the distinction. Nobody else does that, at least not at sites where lots of Buy-and-Holders congregate. I call the Buy-and-Holders out on their b.s. Consistently. Firmly. Boldly. Clearly. Buy-and-Holders HATE that.
There are two things that people who give investing advice have in mind when they do so. One, they want to help their clients and readers. Two, they want to make a buck.
There was a time when Buy-and-Hold really was the cat’s pajamas. It was state-of-the-art stuff. So most of the smart and good people who work in this field came to endorse Buy-and-Hold strategies. They thought that they were helping people. They thought that the peer-reviewed research supported their claims (that was never strictly true but we didn’t know that it was not true until 1981, so they held this belief in good faith). Then Shiller showed in 1981 that Buy-and-Hold is garbage, that it is the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind.
This put the Buy-and-Holders in a tough spot. Should they acknowledge that they made a mistake? Or should they cover up Shiller’s findings, play them down so that people will not think they are such a big deal? They elected to cover them up. They cared more about making a buck than they cared about helping their clients and readers. That’s human nature, is it not? We all want to help people. But it’s a tough world and we all want to make a buck too. The Buy-and-Holders put making a buck first.
The Buy-and-Holders are not bad people. In my experience most of them are very good and very smart people. So it would not be reasonable for me to believe that the Buy-and-Holders covered up Shiller’s research knowing that they were going to cause an economic crisis and possibly a Second Great Depression. Good and smart people wouldn’t do something like that.
If the Buy-and-Holders thought through what they were doing, the would not have done it. They would have looked ahead to what was going to happen down the road as a result of the cover-up and came clean about what Shiller’s research showed us about how stock investing works. This is where you have to keep in mind that investing experts are human. They were shocked by Shiller’s findings. Shiller’s findings turned everything we thought we knew about how stock investing works on its head. His 1981 findings are in the process of bringing about a paradigm change. The Buy-and-Holders didn’t see the implications of Shiller’s findings because they experienced cognitive dissonance. They continued to advocate Buy-and-Hold strategies because they continued to believe that Buy-and-Hold strategies worked (at least on one level of consciousness — they also experienced doubts on another level of consciousness, which explains why they have become so defensive over this topic).
So they still believed in Buy-and-Hold. And they still advocated Buy-and-Hold. But there was no longer support in the peer-reviewed research for Buy-and-Hold. The reality from 1981 forward was just the opposite. From 1981 forward, the peer-reviewed research showed just the opposite from what it was thought to show prior to 1981. The peer-reviewed research for the past 34 years has shown that there is precisely zero chance that a Buy-and-Hold strategy could ever work for even a single long-term investor either in this solar system or in any other far distant one.
As the years passed, the doubts that the Buy-and-Holders started to entertain one one level of consciousness grew bigger and bigger. The research kept showing the same thing — Shiller was right and the Buy-and-Holders were wrong. But, if it was hard to acknowledge the error in 1981, it was 50 times harder at a later date to acknowledge the error. To cover up an error relating to the numbers that people use to plan their retirements is financial fraud. That’s a crime under the laws of the United States. A felony. Prison time. Yikes! The cover-up continued. As sand continued to pass through the hour glass, the case for Buy-and-Hold grew weaker and weaker and weaker and the fear of the Buy-and-Holders that this was all going to come out and become public knowledge grew stronger and stronger and stronger. The abusive tactics employed to keep people in line (that is, to punish those who dare to “cross” the Buy-and-Holders by reported honestly on what the peer-reviewed research says) grew increasingly insane.
We are now 34 years down the line. A good number of the Buy-and-Holders are now looking at prison sentences when this all comes out. It has to come out. Our economic system will collapse if we do not find a way to get accurate information on retirement planning out to the millions of middle-class people who desperately need it and want it. But the Buy-and-Holders understand that, if this comes out, they will go to prison or be sued for all they are worth. They cannot bear for it to come out. So we see these bannings and the death threats and the threats to get academic researchers fired from their jobs and all the other garbage we have seen.
There is only one way out of this mess. We need to demand that Jack Bogle give a speech in which he says the words “I” and “Was” and “Wrong” and have that speech written up on the front page of the New York Times. Then everyone is freed to post honestly and we all enjoy a huge learning experience and we bring this economic crisis to an end and all other sorts of good stuff happens.
But how do we get the Buy-and-Holders to go along with this? They don’t want to go to prison. They don’t want to be sued for all they are worth.
My idea is that we should do everything that we can to help them out of this fix they are in without crossing the line and committing acts of financial fraud ourselves. We should try to understand the pressures they were under and how those pressures influenced the choices they made. We should acknowledge all of the many amazing contributions they made to our understanding of how stock investing works. We should enact some sort of amnesty that would limit the damages that can be obtained in lawsuits against them. We should keep the prison sentences to a minimum and prosecute only in extreme cases. We need the Buy-and-Holders on our side and they want to be on our side. So we need to do what we can do.
But it’s a tough transition to pull off. If we tell the millions of middle-class investors that most of the experts in this field have been lying to them about what the peer-reviewed research says, they are going to be very angry. There’s no getting around it. These people are going to lose most of their retirement money. Many of them are too old to pull off a redo. We have a serious social policy problem on our hands. Unless we step in and help people recover from their losses, millions will suffer failed retirements. But stepping in would cause the biggest expansion in the Federal debt that we have ever seen. So there are tough public policy questions in play here.
Everybody wants to come clean. Every site owner who banned me felt bad doing it. They set up their sites with the idea of helping people and it is going to come out that they have been destroying people’s lives instead. And they have been pressuring their friends to destroy people’s lives too. Buy-and-Holders stick together. It is a mafia. They don’t link to people who report honestly on the last 34 years of peer-reviewed research. They don’t invite people who report honestly on the last 34 years of peer-reviewed research to speak at their conferences. They duck questions that their readers ask them about the obvious contradictions in the investing advice that they offer.
It’s a big mess.
People ban me because I am trying to let the cat out of the bag. I am trying to expose this massive act of financial fraud and thereby to bring it to an end and thereby to help every single person involved live a better life in the future. The cover-up has been going on for a long time and has hurt millions of people in very serious ways and so the guy exposing it is seen as a big-time threat to the vast majority of people who work in this field today.
That even includes people who believe in Valuation-Informed Indexing, like Shiller. Shiller doesn’t say “Buy-and-Hold is a big pile of smelly garbage” because he has lots of friends who advocate Buy-and-Hold strategies and he knows how sensitive this issue is for them. So he feels social pressure to keep it zipped and to a large extent he does so.
I of course feel that social pressure too. But I resist it like crazy. I tell the truth re these matters to a greater extent than anyone else working in this field today, including Shiller. So I am viewed as a threat by the Buy-and-Holders. I am trying to make it hard for anyone to earn a buck advocating Buy-and-Hold. So people who do that or people who are friends with people who do that want to stop me. Hence the bans.
I don’t want to be stopped. So I march on.
The winner in this battle will be revealed following the next price crash. I think that the pain is going to be big enough to change lots of minds. But I am not God. I could be wrong. We are going to have to wait and see to find out for sure how things are going to turn out.
I wish you all good things. I am your friend. I am happy to do anything that I can to help you out. And of course that goes for all my Buy-and-Hold friends. None of the work that I have done over the past 13 years would have been possible without the contributions of my many Buy-and-Hold friends and I am of course grateful.
But I do want this all to come out. I do want to expose the Buy-and-Hold Con. I do want to bring all the nastiness to an end. I do want us to recover from this economic crisis and to enter a period of sustained economic growth. I love my country and I want to see us survive this mess and prosper in future days.
I am hated. Because I tell the truth about the last 34 years of peer-reviewed research in this field. I don’t apologize for it. I am proud of it. I know that many of my Buy-and-Hold friends want to be freed to tell the truth too and I want to help change things so that we all can learn from them. People who want to keep the cover-up going or who are afraid to speak up against it because of the social pressures applied to them by those who want to keep the cover-up going ban me to stop me from spreading the message.
That’s it, Zippy. That’s the deal here. We all need to work up the courage to stand up to you Goons if we want to invest more effectively in the future. And of course we all do.
I hope that helps a bit.
I naturally wish you all the best that this life has to offer a person.
Take care, man.