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 guess you are holding back on the usual comments of goons and prison threats that you liberally use on your own site.
The natural order of things is that we all learn new things over the course of time. In the investing realm, we learned something very important in 1981. We learned that valuations affect long-term returns. That is, that the market is not efficient, that risk is variable rather than static, that a Buy-and-Hold strategy can never work. We should have been using the past 35 years to explore all of the many far-reaching implications of that “revolutionary” (Shiller’s word) finding.
It didn’t happen. The advance was so big and the subject matter so important to so many people that cognitive dissonance stepped in to delay our ability as a society to process this new knowledge. As time went on, it got harder and harder to acknowledge the mistake because it was hurting more and more people. Eventually, valuations rose to levels never seen before. So the damage resulting from our failure to teach investors the importance of practicing price discipline grew to levels never seen before too. Eight years ago, we experienced the second biggest economic crisis we have ever seen. And still valuations are at insanely high levels. So those who understand what the new research says are expecting another huge price drop in days to come.
What do you think is going to happen when millions of retirements are wiped out, Sammy?
I didn’t cause any of this to happen. I pointed out the problem in a post that I put to a Motley Fool discussion board on the morning of May 13, 2002. Hundreds of my fellow community members applauded me, saying that my post kicked off the most important discussion ever held at that forum. But you Goons stepped in with your nastiness and your trickery to block the discussions. Then you followed me to scores of other places to do the same.
I don’t have any special knowledge of whether there are going to be prisons sentences or not. I certainly believe that there will be. There were prison sentences in the Bernie Madoff case. This case of financial fraud affects 500 times more people. How could there not be prison sentences when this all comes out? It all happened on the internet, so there are time-stamped Post Archives documenting every one of the many hundreds of thousands of posts.
I want there to be as few prison sentences as possible and I want whatever number of prison sentences there are to be as short as possible. So I want to see this matter brought to a close as soon as possible. I want this written up on the front page of the New York Times so that we can put all the nasty stuff behind us and get about the business of exploring all of the many truly exciting implications of Shiller’s work.
How do propose that we go about getting to that magic place, the place where deep in our hearts we all want to be? If I could sign a piece of paper getting us all to that place without there being any prison sentences at all, I would sign it in two seconds. I know that you would too. But I do not have access to a time machine and neither do you. So we are left with the prospect of seeing whatever prison sentence you will get if you come clean today or whatever prison sentence we will see if you come clean or are exposed at some point later than today.
The logical choice for every single person concerned is that you come clean today. But you do not want to come clean today. So you are going to continue with your nasty garbage. And there is not a thing in the world that I can do about it.
You have yourself to blame for your prison sentence. You are responsible for your own actions. Or you can blame all the journalists and investing experts and economists and researchers and policymakers that have kept this matter hushed up for 35 years now. They all played a role (this group includes me — I held back on posting that Motley Fool post for three years because I was afraid of what the Buy-and-Holders would do to me if I spilled the beans). But placing blame doesn’t solve the problem. Only coming clean solves the problem. Only getting everything out in the open solves the problem.
I am doing what I can. I do not want to see you spend one day more in prison than what is absolutely necessary at this point in the proceedings. But I cannot change things that have already happened. I have offered to write any words that I am able to write to get your prison sentence reduced or, if it is possible, to get it eliminated altogether. It is up to the people of the United States and ultimately to the members of your jury to determine the length of your prison sentence. I am happy to use any persuasion skills that I possess to make the case that they should go easy on you because of the amazingly unique set of circumstances that applies here. I have been saying all along that I am happy to do that.
What else can I do? What do you want from me?
To say nothing, to do nothing, makes matters worse. That’s the one thing that I cannot do in good conscience. I want to help the millions of middle-class investors who need to know how to invest according to the last 35 years of peer-reviewed research. I want to free the academic researchers who have told me that they would like to be able to prepare honest research without seeing their careers destroyed. I would like to see the journalists who would like to tell this amazing and exciting and life-affirming (there is 50 times more good here than bad) story without seeing their readers become enraged with them for doing so (it upsets people to learn that their portfolios are not worth what they believed they were worth, and that is what Shiller’s research is telling us is the case at times of overvaluation). I want to help you Goons avoid prison or at least avoid very long prison sentences. I want to help everyone.
Please tell me what you would have me do to help everyone. Please do not say that I should let the 35-year cover-up extend to 36 years. I know with absolute certainty that that is not the answer. As you of course know as well when you are being even a tiny bit honest with yourself.