Yesterday’s blog entry reported on my correspondence with Kevin, owner of the Out of Your Rut blog. Set forth below is follow-up correspondence:
Thanks much for your response.
I agree with most of what you say.
I obviously don’t agree with the part about backing down until the worm turns. There are three reasons. One, learning is a building block process. I learn by exploring things and talking things over. I have learned AMAZING things over the past 11 years that I would not have learned had I not been fighting the good fight (always in a fair way, I hope).
Two, one gains credibility by speaking out BEFORE the crash. I don’t want people seeing me as a sunny-day solider willing to get involved on their behalf only after they suffer devastating losses.
And, three, I just don’t have the heart to keep it zipped. Too many people are suffering. I don’t want to come across as a martyr. But I have run into lots of people who are suffering in serious ways. This includes big names in this field who very much want to be doing good and honest work and don’t feel free to do so today. That’s just too sad and too horrible.
The Goons ARE significant. And fraud IS keeping systems afloat. And powerful people DO have a vested interest in keeping it going. I don’t mean to be glib, but what else is new?
Powerful people had a vested interest in keeping slavery going once upon a time. Powerful people had a vested interest in keeping people from learning that smoking causes cancer once upon a time. Powerful people had a vested interest in covering up what was going on in the Penn State football program. All of those cover-ups were exposed because good people worked up the courage to speak up. That’s part of the JOB of a blogger., in my assessment.
The powerful people you refer to do not want to see the Second Great Depression. How the heck does that help them? Buy-and-Hold started out as something good and real. It got off track. Those people do not today possess what it takes to get it back on track. They need a little push from outside.
This is what I truly believe. I am not anti-Bogle, as the Goons assert. I am Bogle’s best friend in the world. I am helping him realize his vision, with him kicking and screaming every step of the way. The guy has done some amazingly wonderful things in his life. He has ALSO screwed up big time re the issue of valuations. Does that make him all bad? It does not. I personally do not believe in the cynical take any more than I do in the head-in-the-sand take. People are people. We are all flawed. The Buy-and-Hold Pioneers are flawed humans, not monsters and not saints.
Did you know that I learned about the errors in the Old School safe withdrawal rate studies by reading John Bogle’s book? That’s a fact. HE started all this. He wouldn’t have put that passage in his book if he was a monster seeking ONLY to cover up. He HELPED me. I can say the same about Bill Bernstein and Larry Swedroe and Scott Burns and lots and lots of others.
They ARE flawed. They HAVE made mistakes. I say that all the time. I am famous for it. But these people did not wake up one morning thinking “Gee, wouldn’t it be nice if I could come up with a way to bring the U.S. economy to its knees?” They LIVE in the U.S. economy. They want it to succeed. They are blinded by their pride. They are suffering cognitive dissonance. They have devoted so much energy and time to this failed idea that they cannot bear to hear the truth about it. That ain’t saintly behavior. But it ain’t monster behavior either. It’s flawed human behavior.
I obviously do not mean to single you out in any way, shape or form. I of course understand that you have done more than 99 percent of the bloggers out there. I am thinking out loud. I am always trying to come to grips with why people don’t act when there is so much good to be done by doing so and so much to lose by failing to do so.
I don’t think the Fed is covered in glory either. But the Fed is a political institution. It is the Fed’s JOB to stop a deepening of the economic crisis. So it is doing what it can. We all know that the Fed can only perform stopgap measures. But educating people about the last 32 years of peer-reviewed research is NOT a stopgap measure. That is something with real and long-lasting benefits. What millions of investors understand is far more important than what the Fed does or does not do. I mean no disrespect but I view blaming the Fed as a way of getting ourselves off the hook for OUR role (I include myself in that — I was afraid to tell my fellow community members what I knew about safe withdrawal rates prior to May 13, 2002.)
I of course agree that the aim of the Goons is not to debate but to discredit. But I think it is important to keep in mind that they hurt themselves each time they hurt others. The Goons are in the process of seeing their retirement plans destroyed just like all the rest of us. They know not what they do, you know?
My view is that the hard part of giving sound investing advice is understanding the Goon within all of us. We ALL have a Get Rich Quick impulse, the Goons are just more obvious about it. I talk to them because I care about them and because I want to learn from them and use what I learn to help them and others. I ALWAYS let the Goons know that I oppose the abusive garbage. So it is not that I am afraid to say that. I of course find dealing with them to be an intensely unpleasant experience. I do it because I need to know as much as possible about the Get Rich Quick impulse to be able to do effective work helping millions of others understand the true risks of stock investing. The Goons represent the dark side of all of us magnified by a factor of 20. We become good investors not by ignoring that dark side but by learning enough about it to overcome it.
A doctor cuts into human flesh to remove cancerous tissue.. It’s a messy and ugly business. But his purpose is a positive and constructive and life-affirming one. That’s the spirit in which I interact with the Goons. I don’t intend to let them pull me down into their darkness. I intend to lift them up to the light. I intend to make them more effective investors, no matter how much they resist the idea. If they refuse, I can use what I learned from my dealings with them to help millions of others with less serious pride and denial issues.
I really don’t think that anything is going to happen to people who stand up. Say that the Wall Street Con Men sue me. That runs the risk of bringing more attention to my site, does it not? That’s the last thing in the world they want to see.
The Goons have been threatening to have their Wall Street Con Men pals sue me for years now but they never file papers. I don’t think they dare to do it. Buy-and-Hold is dying. It has been dying for a long,
long time now. There were things that they once could do that they cannot do today. This is one of those cases where the only thing there is to fear is fear itself. They beat us because we so fear them that we don’t stand up to them. Once a group of 10 of us stands up to them, the bullies will run away in tears. I’ve talked to lots of people about this stuff. I don’t have 10 willing to go public today. But I think I am getting close.
Yes, people will listen after the next crash. But we are not going to have much time to fix things at that point. We need to be preparing now. And the best thing for every single person involved (including the Goons and the Con Men) is if we AVOID that crash. We will never drop below fair-value if the truth gets out. If we fall to one-half of fair value, as we have after every earlier bull market, it will be because people are still trying to believe in Buy-and-Hold and becoming depressed to see it not working. Illusions are dangerous. The difference between falling to fair value and falling to one-half of fair value might be the difference between going into the Second Great Depression and avoiding the Second Great Depression.
Thanks for caring enough to engage in a little back and forth. I of course get it that your heart is 100 percent in the right place. I wish I knew more like you. I could change the world in a very, very positive way if I did.
You’re one of the good guy’s, Kevin. Hang in there. We need more good guys running around this big old goofy planet of ours.