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 haven’t earned a dime with this for 14 years.”
Were you expecting to earn a living by posting on message boards?
Why on earth did you quit your job at the age of 43 without adequate savings? Why didn’t you just go back to work when you found out your plan wasn’t working?
Of course I was expecting to earn living from the work that I have done in the investing field. And of course I still do. And of course I base that expectation on a mountain of evidence.
You engage in deception when you employ the phrase “posting on message boards.” The suggestion is that there is something odd about a plan to make millions of dollars by posting on message boards. There isn’t. Message boards are a new communications medium of great potential to change the world for the better. The pioneers who master use of the new medium will be compensated well for their efforts. I have found myself in circumstances in which I stand to make a lot of money by mastering the new medium. I intend to take advantage of this huge opportunity. Why shouldn’t I?
Steve Jobs did not make his fortune posting on message boards. Bill Gates did not make his fortune posting on message boards. But they both did something similar to what I did. They used a new technology to improve the world in a very big way and they were properly compensated for their efforts. If Steve Jobs had said “I intend to make my fortune by creating an iphone,” many would have thought that sounded odd because no one knew at that time what an iphone was. Now that Jobs has done what he set out to do, they know. Now there is nothing perceived as odd about his plan.
I learned by my participation at a message board (the Retire Early board at Motley Fool) that there are many people who see value in calculating the safe withdrawal rate when planning their retirements. I learned through my own planning efforts that the Buy-and-Hold retirement studies are rooted in error. Shiller showed in 1981 that valuations must be considered when estimating future returns but the Buy-and-Hold studies do not contain adjustments for the valuation level that applies on the day the retirements begins.
I pointed out the error in a post that I advanced on the morning of May 13, 2002, and the board exploded in excitement. Hundreds of posters came forward to thank me profusely for putting forward the most important post in the history of the forum; they had learned something very important about how retirement planning works in the real world that none of the experts in this field had ever bothered to tell them.
The Buy-and-Holders reacted strangely. They threatened to kill family members of any posters who posted honestly on the subject of retirement planning at a retirement planning board. I think it would be fair to say that the Buy-and-Holders know themselves on some level of consciousness that the Buy-and-Hold retirement studies do not contain valuation adjustments. There is no other possible explanation for their behavior.
Over time I have had thousands of people contact me and thank me for my efforts in the most profuse ways possible. I have had numerous economics professors tell me that they are going to add my insights about how stock investing works in the real world to their course materials. I of course always express gratitude for these kind votes of confidence. But I also always ask an obvious question: Why don’t these professors go out into the world and tell EVERYONE what they have learned in a very public and clear and simple and bold way?
The answer is — We didn’t have message boards back in 1981 when Bogle learned that the Buy-and-Hold Model was rooted in error. Bogle couldn’t bear to accept that he had made a big mistake (we all of course make mistakes — by itself this is no biggie) and so he went into cover-up mode. And, because we didn’t have discussion boards, the cover-up succeeded for 21 years until I came on the scene in May 2002. Then I put up my fateful post of the morning of May 13, 2002, and the world of investing knowledge changed in a very dramatic way.
Everything at my site exists because of what I have learned from my interactions with thousands of other investors on message boards, Sammy. I have talked to the biggest-name experts in the field and they have endorsed my work. I have worked with people with greater statistical skills than I possess to create calculators that exist nowhere else on the internet or off. I have explored in great depth the psychology that permits investors to kid themselves into thinking that Buy-and-Hold strategies might somehow work regardless of the mountain of evidence otherwise. I have written hundreds of columns examining every aspect of what we have learned over the past 35 years and added to my own knowledge by adjusting my thinking in response to the feedback that I have received from interested readers (including you Goons!) posting on MESSAGE BOARDS.
I love message boards. I obviously don’t like the abusive stuff that you Goons use to disrupt the conversations that people with good intent are trying to hold on them. But message boards themselves are wonderful. They allow for learning experiences that could not be created in the days when all we had available to us was newspapers and radio and television.
We have rules at all our message boards that prohibit the tactics that you Goons have employed to hold us all back. I am 100 percent certain that those rules will be reasonably enforced in the days following the next price crash. And then we are all off to the races. We couldn’t have done what we have done without message boards. And of course I will be making a mountain of money by virtue of being one of the pioneers in the constructive use of this powerful new communications medium.
And of course there will be many other entrepreneurially minded people joining in as the opportunities become more clear and more compelling. I invite any of such person to contact me to ask about how they can get on board this exciting ride to the future. I was blessed to be put in the circumstances in which I was put. I haven’t enjoyed the nasty stuff. But I think it would be fair to say that the good stuff here has been 50 times more good than the bad stuff here has been bad. And I think it would be fair to say that that rule will end up applying for every single person who gets involved in a positive and helpful and life-affirming way.
I hope that helps a bit, my long-time Goon friend.