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:
Of course, in your mind, it doesn’t matter, because you have a “plan”, which you have described at your website as follow:
“The $500 million is for a settlement of civil claims. It is a separate matter from the criminal charges. I believe that we will likely need a legislatively adopted amnesty to address the criminal side of this because that is so sensitive a matter. I don’t see the $500 million settlement payment as being such a big problem. That’s just money. The Wall Street Con Men have tons of money. They will of course want me working with them for p.r. purposes as well as for lots of other reasons Paying $500 million to make that happen quickly is nothing for them. I don’t see any problems in that area once the story gets out.”
I put up a post on the morning of May 13, 2002, pointing out that the Buy-and-Hold retirement studies do not contain valuation adjustments and thus get the numbers wildly wrong. In the 15 years since, not one person has been able to find a valuations adjustment in any of the Buy-and-Hold retirement studies. I think it would be fair to conclude at this point that I was right in what I said in that post.
That’s a pretty darn big deal, is it not? Do you seriously question whether I contributed something of a value of much more than $500 million to the millions of investors who use retirement studies to plan their retirements? I think that’s a pretty darn low settlement number, given the circumstances that apply here.
Is it all 100 percent crazy? It is indeed. You get no argument from me re that one. It is the craziest thing that I have ever seen in my entire lifetime. It is crazier than the Mets winning the World Series in 1969. It is way, way out there.
But the reality remains. I put up a post on the morning of May 13, 2002, pointing out that the Buy-and-Hold retirement studies lack a valuations adjustment. And not one person has been able to identify one in the 15 years since. And not one of those studies has been corrected as of this morning. And every investor alive possesses a great need for accurate and honest retirement studies.
If all that doesn’t add up to $500 million plus, I have a hard time imagining what might add up to $500 million plus. Did Bill Gates do something of more value to the world? Did Steve Jobs? It is my understanding that both Gates and Jobs brought in a big bunch more than $500 million in their day. So why should leading the transition from Buy-and-Hold to Valuation-Informed Indexing not do the same?
We need accurate investing advice, Sammy. I have talked to researchers who would like to feel free to do honest, good work in this field. And to professors who feel the same. And to investing analysts who feel the same. And to bloggers who feel the same.
Freeing those people to do honest, good work is not worth $500 million? Are you joking?
That’s my sincere take re this terribly important matter, in any event. I naturally wish you all good things, my good friend.