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:
Sigh. Obviously my point was that you were given the explanation. Not that you agreed with it.
I get that your one uncompromising principle in life is “he who defines the question wins the argument.” You barrage people with this nonsense until they ban you or just give up the hopeless attempt to reason with you. To you, this is victory. So good for you, you win again. Hope it makes your day.
I like the part where you say that my one uncompromising principle is that “he who defines the question wins the argument.” I wouldn’t state it quite that strongly. But the general thrust of that statement is on point.
Buy-and-Hold makes perfect sense to anyone who believes that the market is efficient, that investors act in their own self interest. It all follows from that. If you believe in the premise, the strategy is ideal.
Valuation-Informed Indexing is for people who believe that humans are emotional creatures, that they are often their own worst enemies and that the job of an expert in this field is to steer people away from Buy-and-Hold strategies, to point out their dangers.
The only difference between the two sides is the starting-point premise. If you believe that investors pursue their self-interest, you tell them to look at their portfolio values and to applaud themselves for keeping up their confidence in stocks even when it was questioned by events or by the voices of doubters. If you believe that investors are destroying themselves by pricing stocks so insanely high, you tell them to consider where they will be following the next price crash and to take steps now to protect their financial futures.
People believe different things. And, yes, whoever defines the question wins the argument. Buy-and-Holders see evidence everywhere that Buy-and-Hold works. Valuation-Informed Indexers see evidence everywhere that Buy-and-Hold is dangerous.
You say that Buy-and-Holders “give up the hopeless attempt to reason with you.” Putting forward death threats is not “reasoning,” Dan. It is bullying.
I accept that there are lots of Buy-and-Holders who will never be convinced by anything that I say. I have no problem with that. I could be wrong. I don’t want the responsibility that would come with knowing that people were going along with what I said just because I said it.
My problem with you Goons is that your nastiness makes it impossible for the thousands of community members who have said that they DO want to hear what I say and take it into consideration to do so. Those people have a right to be able to hear both sides and to use what they hear to make informed decisions. The tactics that you have employed for 15 years now to block productive discussion at hundreds of places has hurt millions of good people. You are off base with the abusive stuff.
You say: “To you, this is victory” (referring to times when Buy-and-Holders have banned me because they see that many people find great value in my stuff and they see that as a threat. Yes, I do consider the bannings a kind of victory. They are sad sorts of victories because every board or blog that bans honest posting renders itself a corrupt enterprise by doing so. But, yes, the fact that my Buy-and-Hold friends have demanded that I be banned shows that my arguments are too strong for them to feel that they could prevail in reasoned debate and that certainly is a win for the case that I am making.
I would prefer to have fewer such victories and more reasoned debate. That helps everybody. But I am proud to be able to say that I am on the side that has never in 15 years put forward a single abusive post. I even permit people who have threatened to kill my wife and children to post daily at my blog and I always wish them well and often pick up valuable insights as a result of my interactions with them. I love that sort of thing. I live for that sort of thing. I believe that it is because the U.S. culture generally encourages that sort of thing that we have become such a great country. And I believe that in the end our belief in free discussion will win the day even in the investing realm and that my work will be seen by the millions of people who want to see it before making decisions about what to do with their retirement money.
I would say that I have won every discussion that has been held on the merits and lost every discussion that has been held in the process realm. I always make strong arguments that get banned because the Buy-and-Holders who own the sites are threatened by the excitement they see among their readers when these ideas are advanced. I don’t want to be banned and I always urge my Buy-and-Hold friends not to give in to the urge to silence those posting about the last 36 years of peer-reviewed research. But, yes, when they break down and ban me in desperation, I view that as a win for Valuation-Informed Indexing and as a loss for Buy-and-Hold.
If Buy-and-Hold inspired confidence in those following it, we would never see this sort of thing happen. And if Buy-and-Hold does not inspire confidence in those following it, what are the real chances that the Buy-and-Holders are going to stick with their high stock allocations after suffering devastating losses in the next stock crash? The behavior of the Buy-and-Holders is not the only thing that causes me to doubt the merit of the strategy. But it certainly is a persuasive reality, in my eyes.
My best wishes to you.