Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry posted at this site:
Uh oh. Another article from JD Roth that says we should avoid get rich quick timing schemes like VII and stick with buy and hold.
https://www.getrichslowly.org/bull-bear-markets/
Is JD one of the goons?
Thanks for the link, Anonymous. I thought the article was well worth reading.
I don’t agree with your characterization of what J.D. said in the article. Your version is a cartoon version. He made a comment that is generally in tune with Buy-and-Hold, that the market generally goes up (that’s certainly true) and that there is a risk of missing out on gains if you avoid the market at certain times (that’s true of many timing schemes, which are truly dangerous, but I of course don’t think it is at all true of Valuation-Informed Indexing, which is backed by 37 years of peer-reviewed research). At the end, you’ll note that he says that he could understand why some people think we are at a dangerous spot today. He doesn’t endorse taking steps in response to those concerns. But I would call those words somewhat open-minded words. And of course that’s a very, very good thing. We need to hear more open-minded words re these matters.
You ask whether J.D. Roth is a Goon. I have certainly seen him display Goon tendencies. That’s unfortunate. But I have also seen him do lots of wonderful stuff, completely anti-Goon stuff. So he’s a study in contradictions, you know? In that respect, he’s like all of us. We all have a Get Rich Quick urge within us. It is that Get Rich Quick urge that makes stock investing risky, in my view. It is that Get Rich Quick urge that makes Buy-and-Hold so popular at a time when we have 37 years of peer-reviewed research pointing us to a far better path. I wish that J.D. Roth were completely immune to Get Rich Quick thinking. He could change the world if he were. But of course I wish that I were completely immune to it too, you know? And I wish that you were. And I wish that Bogle were. And I wish that Shiller were. And none of us are. We are all human. We are all flawed. That’s the bottom line here.
I’ll tell you a positive memory that I have of J.D. and then a negative one to balance it with the aim of conveying the real story, which has both positive and negative elements.
J.D. and I have had a number of conversations over the years. We used to meet frequently at the Financial Blogger Conferences. One year he went out of his way to introduce me to Todd Tressider, who writes the Financial Mentor blog. That was awesome. Todd and I ended up talking over safe withdrawal rates for about two hours and he introduced me to some people and I introduced him to some people. In the end, Todd played a role in my life very similar to the one that J.D. played — a mix of good stuff and bad stuff. But I sure appreciated what J.D. did to help out. That was awesome.
The negative story is that, one time I was commenting at his blog and he was not happy with what I was saying. I can’t recall the details but I was questioning the efficient market theory, which is the intellectual foundation for the Buy-and-Hold strategy. He has strong views against banning people, so he didn’t want to go that route. But to cut off the discussion, be sent e-mails to people participating on the thread (I think it was mostly you Goons — Surprise! Surprise!). I don’t think that was the right way to proceed. If he felt that you were doing things that were improper, he should have removed you. But there were important points being made in the discussion and he should have encouraged the discussion to continue in a non-abusive way.
You Goons love to divide people. If anyone says anything in support of Buy-and-Hold, you ask if I consider them a Goon. Well, it’s true that I believe that the Get Rich Quick urge is a purely emotional thing and that I believe that it is the Get Rich Quick urge that is behind the popularity of the idea that the Buy-and-Holders push that there is no need to practice price discipline when buying stocks. But it is also true that I think that the Buy-and-Holders are good and smart and hard-working people that have made many positive contributions for which we all should be grateful. I think it would be better if you made a little effort to portray my positions as I myself describe them and hold them rather than misrepresenting them, which is what you do when you use only the word “Goon” and leave everything else out.
There was once a time when slavery was permitted in the United States. That’s a horrible reality. Everyone agrees. We had to struggle as a society to get from the bad place where we were when slavery was permitted to the better place where we are today. Would it be helpful if we referred to everyone who was alive at that earlier time as a bigot? I sure don’t think so. We never would have made the change if a lot of the people who lived at that time didn’t show the courage to engage in a lot of good work to take us from a bad place to a better place. We really did once have slavery and we really did overcome it. We really did once lack the 37 years of peer-reviewed research showing us that long-term timing always works and is always required but we really are today in the process of getting past the poorly-informed views that prevailed in the days when the Buy-and-Hold project was getting off the ground. People can make mistakes and still be very good people. People can do very good things and still make mistakes.
I love J.D. for all of the amazing good work that he has done. And I am disappointed that he has not done more. I say similar things about Bogle all the time, right? I say it about Bogle because I believe it to be true about Bogle and I say it about J.D. Roth because I believe it to be true re J.D. Roth.
J.D. would possess a better understanding of how we can all avoid the terrible human suffering that we see in market crashes if he encouraged all of us to post with 100 percent honesty at all venues and at all times. That’s how a society advances over time. Shiller pointed the way to a huge advance with his “revolutionary” (his word) research findings of 1981. That’s why he was awarded a Nobel prize. When as a society we give ourselves permission to explore the far-reaching implications of Shiller’s work, we will all begin living better and richer lives. I see it as my job to help people do that. And I am 100 percent certain that J.D. sees it as his job to do the same.
J.D.’s post suggests that long-term timing might not work. He says that because he has heard Buy-and-Holders say it millions of times. But he doesn’t really know it because he has never engaged in sustained efforts to understand the Valuation-Informed Indexing concept in depth. That’s what it takes. The shift from Buy-and-Hold to Valuation-Informed Indexing is a paradigm shift. You have to explore the idea from many angles for it to finally click.
I have seen people experience that click on many occasions. That’s what happened with Wade Pfau. It was very exciting for me when things finally clicked for Wade and he openly declared that: :”Yes, Virginia, Valuation-Informed Indexing works!” I would love to see that happen for J.D. There’s noting that would make me happier.
For it to happen, we need to have a small group of people stand up to you Goons. Death threats poison the learning effort. Demands for unjustified board bannings poison the learning effort. Thousands of acts of defamation poison the learning effort. Threats to get academic researchers fired from their jobs poison the learning effort. I mean. come on.
J.D. will see the human suffering that will follow the onset of the next price crash and he will come around at that time. That’s what I believe, Anonymous. I wish that we didn’t have to wait for that. It breaks my heart that we need to wait. But I do think that we need to move forward eventually and I believe that we will, with the help of people (Goons?) like J.D. Roth. We are all in this mess together and we will need to all pull together to figure out how to get out of it. Our laws against financial fraud reveal how we think about the sorts of tactics that you Goons have employed to keep us in the dark for the past 16 years and we will remember why we put those laws in place when we witness the human suffering that will follow the next price crash in the event that Shiller is right in what he believes about how stock investing works.
That’s my sincere take re these terribly important matters in any event, Anonymous. I naturally wish you all the best that this life has to offer a person.
Take good care, man.
Sometimes Goon (and Sometimes Goon Slayer!) Rob
feed twitter twitter facebook