Set forth below is the text of a comment that I recently posted to another blog entry at this site:
If you really had a strong case, someone would take it on contingency.
I called about six places and I did not find anyone willing to take it on contingency. There was one fellow who came close. He was a sole practitioner. He loves the case. He wanted to take it. But when he looked closely, he saw how big it was and felt that he would need to put all his waking hours into the case. So his entire career would be riding on this one case. He ended up taking a pass.
It’s possible that, if I just made calls 10 hours a day, that I would eventually find someone. I tend to think that I would. But then, is that the way I want to go about finding a lawyer? I would prefer to be in circumstances in which the lawyers are coming to me and begging me to take them. I have a funny feeling that that will be the circumstance that I will be in in the days following the next price crash. So my inclination is to be a bit patient.
I’ve tried lots of things. I tried bringing legal cases. I tried getting Guest Blog Entries posted. I tried going to FinCon meetings. I tried contacting political blogs. And on and on and on. It seems to me that it always comes down to the same thing. People like to see the validation that comes from having lots of others join in a cause. Think of the sorts of things that they say in advertisements and in television commercials, when they are trying to persuade you of something. They say: “As seen on TV!” Or “four out of five doctors recommend!” Or “50 millions Elvis fans can’t be wrong!” We humans don’t like to trust our own judgment. We like to hear that other humans have come to similar conclusions. When we have the reassurance of knowing that lots of other humans are having the same thoughts, THEN we feel confident enough in what our reasoning capabilities tell us to make decisions based on logic.
That’s the story of bull markets, Anonymous. If you look at the historical record, you see that there has never been a bull market that did a lick of good for a single investor. We have had numerous bull markets in the history of our stock market. But there has never yet been one that produced lasting gains. We ALWAYS give the money back in the bear market that follows. Every single dollar that has ever been earned from overvaluation has been lost through the sub-par returns experienced in the years that followed. So bull markets are just a big waste of time and energy. They hurt us because they make effective financial planning impossible; how can anyone plan his or her financial future when he doesn’t even know how much wealth he possesses? Bull markets are a curse.
Given what a curse they are and given how easy it is to determine that they are a curse, it ought to be pretty darn easy to do away with bull markets, right? Just tell people. People want to act in their self-interests. So, when you show them how much they are hurting themselves, they are going to do what it takes to bring the bull market to an end. That all follows.
But it obviously hasn’t played out that way for the past 15 years, right? Learning what the last 36 years of peer-reviewed research tells us about how stock investing works in the real world cannot possibly hurt a soul. But we sure do see lots of opposition to the idea, do we not? What’s that about?
The opposition is rooted in the conflict that we all face between accepting reality and living in fantasy worlds. It is not true that we humans always act in our self-interest. It makes logical sense to believe that we would. But it is just not true that we actually do that. Alcoholics do not act in their self-interest. Gambling addicts do not act in their self-interest. Smokers do not act in their self-interest. The same humans that smoke and drink and gamble are the ones who buy stocks. It is not reasonable to believe that these creatures are going to amazingly become capable of acting rationally when they buy stocks. It takes great effort for humans to act in their self-interest. They are capable of it when given lots of help. But it does not at all come naturally to them. It is very much against the nature of humans to invest rationally.
Lawyers are humans too. To win their cases, to build strong careers, to make lots of money, they need to please their fellow humans. They all know this on some level of consciousness. They might not ever give voice to the reality. They don’t articulate it in speeches or write it down in books. But they know that part of the job is making their fellow humans happy and they are able to pick up if they possess even a tiny bit of intelligence — and most lawyers possess at least a tiny bit of intelligence — that most of the humans very, very, very much do not want to be told that they need to divide their portfolio balances by two to know how much money they have saved for retirement.
That’s the story here. When I tell people that they need to divide their portfolio balances in two, I am telling them something that they very, very, very much do not want to hear. People want to be able to retire sooner, not later. They want to hear that their portfolio balances are higher than what they appear to be, not smaller than they appear to be. The Buy-and-Holders don’t tell them that the balances are higher; perhaps we should thank God for small favors! But at least they tell them that they are not smaller. I tell them that they are smaller, a lot smaller. So I am not the most popular guy in town at this particular point in time.
Lawyers want to be popular. For the same reason that investment advisers want to be popular. And for the same reason that bloggers want to be popular. And for the same reason that academic researchers want to be popular. And for the same reason that book authors want to be popular. And so on and so on.
I basically have a sign hanging on me that says “I do not want to be popular, I am the fellow telling you that you need to divide your portfolio balance number by two to know the amount of true, lasting wealth that you have working for you.” So I am not popular at the moment. But I think that there’s great potential in the idea of telling people the truth about how stock investing works given the 36 years of peer-reviewed research we have available to us today that teaches us the realities. So I am going to continue going with that.
I might be able to find a lawyer who would take the case today. It would be a lot of work to find him or her. It would have to be someone who is an independent thinker, someone who is willing to take his or her chances with a jury that is probably going to come to the case with a bias against the fellow who is saying that you need to divide your portfolio balance number by two to know the true, lasting value of your accumulated wealth.
Is that going to change following the crash? I think it is going to change. I think that I will have a much better chance of signing up with a top-flight lawyer following the crash than I have today. So my inclination is to wait a bit on the legal side just as I am waiting a bit on publishing the book and on getting written up on the front page of the New York Times and on being the keynote speaker at FinCon and on all the rest. Everything depends on gaining some popularity and the popularity issues changes dramatically when stock prices drop by 50 percent or more.
Does all of that not make at least a little bit of sense? It seems to me to be the best way to proceed, given the realities that apply today.