Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“Nobody here has ever missed a meal”
That’s great, but frankly it’s not saying much. Even homeless people get regular meals. The real question is whether your family truly agrees with your course of action. I don’t recall you saying that they do, or that you ever even asked.
I’ve certainly asked. There have been lots of conversations about it. And I have written here about my wife’s feelings about the matter on more than one occasion.
My wife accepts that my work has great importance. She knows that I am honest. She knows about the things that John Walter Russell and Wade Pfau and Rob Arnott and hundreds of others have said about my work. And she knows what an internet Goon is. So she gets the basic picture and we are in agreement that far.
The fact that money has not been coming in for 15 years scares her. I think it would be fair to say that we do not see eye to eye re that one.
I see her reaction as being similar to the reactions of lots of others. Wade Pfau’s reaction is similar in many respects. He gets it that the Buy-and-Hold retirement studies are dangerous; they do not tell the people planning retirements what they need to know. Wade has said that on many occasions. He even wrote to the authors of the Trinity study asking that they correct their study. So Wade gets it.
But then again he doesn’t. Wade is no longer contacting the authors of Buy-and-Hold retirement studies seeking corrections. He is not even asking that the Bogleheads Forum be opened to honest posting. He is not seeking to get the research paper that he co-authored with me written up on the front page of the New York Times. So — Wade DOESN’T get it.
He gets it and he doesn’t get it. At the same time! The same person! That’s where we are today, Anonymous.
That’s my wife. She gets it and she doesn’t get it. At the same time. The same person. That’s where we are as a people.
I spoke with an acquaintance of mine about these general issues a week or two ago. He has every reason to take my side and he certainly did not want to endorse the behavior of you Goons. At one point, I mentioned something you Goons did and his face had a look of intense distaste. So he is not biased against me, he is if anything biased for me. But his conclusion was: “The stock market goes up and the stock market goes down — it always has!”
That’s what you might call a philosophical attitude. Does this fellow get it? Or does he not get it?
It is my view that he does NOT get it. It certainly is true that the market has always gone up and down. But what he is missing is that the downs cause us bigger problems today because millions of middle-class people need to finance their own retirements and the downs throw all their numbers wildly off when it is too late in their lives to make up for the losses. So the huge losses that have been typical in the market in the past are no longer acceptable.
Fortunately, Shiller’s research shows us how to avoid both the ups and the downs. But we cannot talk about Shiller’s research because the Buy-and-Holders didn’t know about it when they developed their strategy (he hadn’t published it yet!) and it makes them feel bad to acknowledge not always having known everything there is to know about the subject. So each day we drift closer to the edge of the waterfalls and all of us who see what is happening keep it to ourselves if we know what is good for us.
This guy thinks he gets it. And he is a smart fellow and a nice fellow and an unbiased fellow. Yet he does not get an important part of the story. He intellectually is capable of getting it. But emotionally he cannot accept what has happened. It is an incredible story. What I am saying is that most of the biggest-name experts in the field — good and smart people — are giving dangerous advice and aren’t even aware that they are doing it. This fellow tunes this out and just retreats to his philosophical stance — the market goes up and down, it always has and it always will.
That’s what I am up against. That’s a different version of my wife’s take. She knows me. So she knows that there is merit to much of what I am saying. But there are elements to this story that are hard to swallow. There’s a thing called “cognitive dissonance.” When a story is too hard for the humans to swallow, this cognitive dissonance thing kicks in.
I believe that the next price crash is going to bring the cognitive dissonance to an end. It is one thing to read peer-reviewed research showing that the continued promotion of Buy-and-Hold is going to put us in the Second Great Depression. It is something else to see with your own eyes the human misery that that entails. I believe that the next price crash will shock the cognitive dissonance away. I don’t have much choice. If I didn’t believe that, I couldn’t get out of bed in the morning.
Maybe I will be proven wrong. I am not God. I have gotten things wrong before. I cannot say with certainty that it is not in the process of happening again.
But what would you have me do? Every piece of evidence that we have seen for 15 years now has supported the peer-reviewed research of the last 36 years. Shiller says that investing is a highly emotional activity and the Buy-and-Holders have let their emotions run wild to the point of threatening to get academic researchers fired from their jobs if they continue to produce honest research. I have developed a funny feeling over the years that this Shiller fellow might be on to something. And you don’t need to have an I.Q. of 140 to see that, if this Shiller fellow is on to something, continued promotion of Buy-and-Hold is going to leave us all in a very, very, very scary place.
So I do what I have to do, Anonymous. You make it sound like a father’s ONLY responsibility is to bring in the bucks. That’s one important responsibility and I have honored it well for 25 years of marriage now. But that is not my only responsibility. If I wake up in the middle of the night and see that the house is on fire, I have a responsibility to bring my family members to safety. I cannot just lay in bed and tell myself “Hey! I bring in a steady paycheck! Let someone else handle the darn fire problem!”
Our economic system is on fire. Things have reached a point where the fire is beginning to spread to our political system. I have responsibilities in that regard too. So I am doing what I can. We have to find a means to work around you Goons and get honest and accurate reports of what the last 36 years of peer-reviewed research tells us about how stock investing works to the millions of middle-class investors who very much want it and need it. That’s my job. I have been elected to carry out the task. So I intend to carry it out to completion.
That’s the deal, Anonymous. I talk to my wife about it frequently. We are not in complete agreement. That makes it harder to do the job. But the job must be done successfully all the same. The survival of our economic and political systems is no small thing. SOMEONE sure has to do this job? Do you see anyone else stepping up to the plate? No, me neither. That’s why I am leading the charge.
I hope that works for you.