Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“I’ve got the entire site, Anonymous.
I’ve got five calculators that exist nowhere else on Planet Internet. I’ve got over 200 articles. I’ve got over 200 one-hour-long podcasts. I’ve got thousands of blog entries. I’ve got close to 200 Guest Blog Entries. I’ve got 350 entries for one weekly column and over 100 entries for a second and over 100 entries for a third. I’ve got endorsements from thousands of my fellow community members and from a good number of the most respected names in the field. I’ve got my name on the most important piece of peer-reviewed research published in this field in over 30 years. And I’ve got a Nobel prize awarded to the fellow who showed that what I said in my famous post of the morning of May 13, 2002 — that valuations affect long-term returns — is so. And of course I’ve got laws stating that financial fraud is a felony in the United States, punishable by imprisonment.”
So how is this all worth anything? What I mean by that question is how do you monetize this? Are you going to put a pay wall in place and charge people to access the information? What is the plan to turn all of this into money?
I’m a journalist, Curious. My job is to get the story out.
The transition from Buy-and-Hold to Valuation-Informed Indexing is the biggest advance in the history of personal finance. My job is to tell two huge stories: (1) why this advance has been delayed for 36 years; and (2) how middle-class people should invest for their retirements given what the last 36 years of peer-reviewed research tells us about how stock investing works in the real world.
There are so many ways to monetize this once every discussion board and blog on the internet has been opened to honest posting on the peer-reviewed research that I wouldn’t be able to count them all. I can’t say that the question of how to monetize is one that I have worried about for more than 15 seconds over the past 15 years. There are so many exciting possibilities that it is silly.
My job is to get the word out re what the research says and to bring an end to the abusive stuff so that all the thousands of others who have doubts about Buy-and-Hold feel comfortable expressing those doubts openly and plainly; there’s huge leverage in that because thousands of other people are obviously going to be able to bring things to the table that I am not able to bring to it. This should be an easy thing to pull off; we have laws against financial fraud. But in this particular case it has obviously been a very, very difficult thing to pull off. But once that part of the job is done, there is just no limit to the good stuff (including financial rewards to the pioneers) that follows.
I could write books, I could record CD sets, I could put advertising on the site, I could give speeches, I could do consulting on an hourly basis and on and on and on. And of course lots of other people could too. I certainly don’t mean to suggest that it is only going to be me making millions. There are going to be thousands of us making millions.
This is a paradigm change. All of the textbooks are going to need to be rewritten. Do you really not see how much money there is to be made living through a time when all the textbooks on investing are being rewritten? The authors of textbooks get paid big money to offer their advice in their area of expertise. It is very hard to get to be an author of a textbook. But when a field is revolutionized, amazing opportunities spring up. The opportunities available here are equivalent to the opportunities that were available on the internet in the first six months of its existence. Have you ever heard of Amazon? Facebook? Google? That’s the kind of opportunity we are looking at here. There are going to be people who make the sort of dollars that were made by the people who founded Amazon and Facebook and Google.
That’s why the resistance is so strong. The people who are making money under the old paradigm do not want to give up their turf. The flaw in their reasoning is that, if the last 36 years of peer-reviewed research is legitimate research, our economic system will not be able to survive unless we open the internet up to honest posting. The pressure to give people access to the thousands of investing insights that we all should have been mining together over the past 36 years is going to be too strong for turf defenders to continue to hold things up. Once people in this field see a break in the wall, there is going to be a rush to be among the firsts to develop the new paradigm. A process that should have taken place gradually over several decades will take place in the space of a few months or perhaps a few years.
I don’t have any worries whatsoever about monetization. My biggest worry is that the next crash will bring on an economic crisis so severe that it wipes us all out. In which case all of my monetization dreams amount to nothing. My second big worry is that people will be so angry when they learn what has been done to them that we will see a political explosion.
I try to address the second one by explaining to people the pressure that those in this field are under to keep this under wraps and by showing them the opportunities for a better future that will be available to all of us if we keep our cool and declare “victory” when the floodgates open rather than getting caught up in recriminations that serve no positive purpose.
I try to address the first one by developing the Valuation-Informed Indexing concept to the fullest extent possible prior to the opening of the floodgates. We can keep the economic crisis from getting out of hand if we get the word out about what works because it is by dropping to P/E10 levels far below fair value that we really hurt ourselves economically and drops that low are every bit as irrational as the price jumps we saw in the late 1990s. My hope is that we will never go to a P/E10 of 8 again or that, if we do, we will only stay there for a short time.
Those are my thoughts, in any event. That was an interesting question, Curious.