Tuesday’s blog entry set forth the text of an e-mail that I recently sent to the owner of the Frugal Dad blog proposing an arrangement in which we would work together to publicize the findings of the Retire Early and Indexing discussion-board communities from the first seven years of our investing discussions.
Set forth below is the text of a follow-up e-mail that I sent following the posting of a blog entry at the Frugal Dad site entitled Have We Been Sold a Bunch of Lies About Money? I’ll offer commentary in next Tuesday’s blog entry.
Frugal Dad:
This is Rob Bennett. I sent you an e-mail last week re the extensive investing research that I have done. I have not received a response, and so I assume that you do not have an interest in the idea that I advanced. That is of course fine. But your blog entry today is on precisely the topic that I have explored, and so I felt a need to try one more time to get you interested in exploring this question in some depth.
You are not too far off in suggesting that we have been sold a bunch of “lies” re investing. I think that use of the word “lie” is not appropriate. But it is certainly true that we have been misled in terrible ways. I can explain the entire story and provide links backing up my conclusions on just about all of the important points. I very much want to get this story out to a wider audience and I would be thrilled to work with you in doing so if you have any interest in the idea.
What happened is that there was exciting research done in the 1960s and 1970s showing that short-term timing (changing one’s stock allocation in response to price changes with the thought that this would bring good results within a year or two) does not work. Many “experts” interpreted this to mean that ALL forms of timing (both short-term and long-term) do not work. The result was the investing advice that became the conventional wisdom for the past 30 years — always invest heavily in stocks, even when prices go to insanely dangerous levels. This is the worst possible advice that could have been offered. But it is the result of a MISTAKE, not a lie.
We need to fix the mistake. I have found this to be a tough business. Many “experts” are highly reluctant even to consider the possibility that they made such an obvious mistake that caused such great human misery. Still, the evidence is very strong that this is what happened. It is important that the mistake be corrected before too many more investors become so disillusioned with stocks that they take all their money out. Many people are coming to conclusions along the lines of your own, and this could cause stock prices to drop another 50 percent over the next few years. This could lead us to an economic depression. The stakes here are as high as they could possibly be,.
I hope you will not consider me a pest for writing again. I hope that you will give some thought to my idea. Your readers need to learn the realities. The “experts” have indeed let us down. But it is not right to conclude that they are liars and it is not right to conclude that stocks are a bad investment even when purchased at reasonable prices. If you change your stock investing strategy to one in line with the research of the past 20 years, you can obtain the benefits that stocks really do offer while reducing your risk to a fraction of what applies for those following the strategies that became popular during the past 30 years.
If you have doubts about anything that I am saying, please ask questions. I really can tell the whole story, it really is an important story, and it really is a story that you can understand if you spend just a little bit of time getting up to speed on realities that it took me years to uncover.
I am sorry about your losses. If you check my well-documented record, you will see that I have been warning about this stock crash for a long time. I have worked this incredibly hard for a long time. There IS a good deal to be said for the Your Money or Your Life approach (reading that book’s treatment of investing led me to asking the questions that sparked all of my research into these questions) but the YMYL approach has flaws of its own. I have been working with hundreds of people to come up with something a lot better and we have enjoyed a great deal of success in the work we have done. Our one big problem has been on the publicity side. You obviously could be a huge help in that area.
Rob
Geez. Why don’t you get down on your knees and beg? Let’s face it: he has a successful website and yours is a dismal failure, both because you’re nutty and because you don’t allow free and open posting.
Keep at it, though. I’m enjoying it.
Yeah, Yeah.
The Frugal Dad blog is a great blog. My sense is that at least we agree on that much. That ain’t nothing.
Rob
Have you read much of Frugal Dad’s blog? Go back and get a sense of what he’s about. I doubt he’d be at all interested in your proposal. Try pitching it to someone who focuses on investing, if at all. You would be completely inappropriate on the Frugal Dad site.
Here’s a tip, if a blogger (big or small, especially big) doesn’t write back to you, they don’t like your idea and they’re busy. If you keep writing to them, they’ll dub you a “pest” and automatically ignore e-mails. Pressing this point could lose you any chance of pitching another idea to him later.
It hit me after I posted that another way NOT to get a blogger to like you is to leave long rambling comments the way you did and annoy some of his regular readers. In fact, I don’t think anyone responded positively to you. He would be dumb to have you become involved in his site.
Try pitching it to someone who focuses on investing, if at all.
Thanks for sharing your thoughts with us, Lauren.
I prefer to work with a blogger who does not focus on investing (although I am open to working with someone who does focus on investing). The people I am trying to reach are regular middle-class people who don’t consider themselves investing experts. These are the people who are most vulnerable, who suffer the most from the conventional Passive Investing advice.
A blogger who focuses on investing is more likely to be caught up in the conventional wisdom. He is more likely to have advocated Passive Investing and more likely to be defensive about the idea of letting people know of the errors in this approach.
There’s no need to have studied investing for years to understand the ABCs. The ABCs are easy to understand. “Expertise” is actually often a bad thing in this field. Those who developed their “expertise” during the wild bull find it especially hard to admit that the “insights” developed during those years don’t stand up to reasoned scrutiny.
What I like about the author of the Frugal Dad blog is that he is smart and hard-working and seems to care deeply about his readership. Those are the qualities I’m looking for. I certainly don’t mean to suggest that there are not others who possess those qualities — there obviously are others. But Frugal Dad is someone who has impressed me with his work. So I think it was a logical move to make him my first “victim.”
Rob
If you keep writing to them, they’ll dub you a “pest” and automatically ignore e-mails.
I of course understand.
It was my initial intent to write to Frugal Dad only once. It was just coincidence that he happened to write a blog entry on the precise topic a few days after I contacted him and that blog entry highlighted the reasons why he would be a perfect choice for the project (he indicated that he is losing confidence in the conventional idea that stocks are always a good buy). In those circumstances, I couldn’t resist making a second try. I noted in that e-mail that it was not my intent to become a pest.
I’ll send Frugal Dad another e-mail when I post my commentary piece on Tuesday. And I will continue to follow his blog to the extent I am able. If there comes a time when it sounds like he might be more excited about the idea, I might send him an e-mail reminding him of it. Other than that, I wouldn’t expect to be contacting him again about it.
My guess is that more and more people will be developing an interest in learning about the realities of stock investing in the years to come. I believe that lots of people are just getting over the shock of the price crash. I believe that it is entirely possible that Frugal Dad’s thought of getting out of stocks entirely is a temporary reaction and that he may develop an interest in exploring new approaches for investing in stocks at a later time.
Frugal Dad advocates frugality. Valuation-Informed Indexing is the frugal approach to investing. It’s the approach that says that ignoring prices is just as dumb an idea when investing as it is when spending. I think that advocacy of Valuation-Informed Indexing is a natural for Frugal Dad. The hurdle is getting him to appreciate how different it is and how the differences address his concerns about the losses he suffered following the Passive Investing approach. That’s a big hurdle. But I have hopes that these things will work themselves out over time.
Rob
another way NOT to get a blogger to like you is to leave long rambling comments the way you did
I don’t believe that any of my comments could fairly be described as “rambling,” Lauren. I sure hope not!
and annoy some of his regular readers.
Outside of my first comment (which was in response to the blog entry itself), all of my comments were responses to questions or comments advanced by other community members. I find it more than a little hard to imagine that those readers would be “annoyed” that their questions were being answered.
I don’t think anyone responded positively to you.
There were a number of questions raised. Some of them were very good questions. I consider it very much a positive when people ask questions. That’s how we all learn.
He would be dumb to have you become involved in his site.
I of course understand that there are a number of good reasons why Frugal Dad might elect not to get involved. I can’t say that I agree that it would have been “dumb” for him to have done so, however. I think we could do fantastic work together. If I didn’t think that the idea was one that could help him, his site, and his readers in very significant ways, I wouldn’t have proposed the idea to him.
Rob
Honey, a 4-paragraph response to a single sentence in my comment is a ramble. A second 4-paragraph response to another sentence is also a ramble. I know one shouldn’t feed the trolls, but damn are you really not that self-aware?
Also, if you were doing investing primers then Frugal Dad’s audience might be perfect. But the stuff you post on here is so esoteric and non-specific that it would just convince more people that investing is confusing.
Honey, a 4-paragraph response to a single sentence in my comment is a ramble.
We don’t agree on the meaning of the word “ramble”, honey — I mean, Lauren!
the stuff you post on here is so esoteric and non-specific that it would just convince more people that investing is confusing.
No, that’s not right. You are putting your finger on something important here, honey — I mean, Lauren! Oh my!
The idea that you need to lower your stock allocation when prices reach insanely dangerous levels is not “esoteric” or “non-specific.” It is simple, it is basic, and it is imperative. It would be fair to say that it is an advanced observation during a time when Passive Investing has become popular. It’s not advanced because it is complicated. It is advanced only because it is non-emotional and most of the advice being directed to beginners is influenced by the emotion that comes to dominate during times of price extremes.
That’s my take, honey — I mean — oh, you know.
Rob
It’s less your ideas than your writing that’s the issue. It might be your ideas too, but they’re not clear enough for one to tell. From the sarcastic tone of your response, I’d say that you’re also extremely sensitive to criticism. Don’t worry, I won’t hang around and provide honest feedback if you can’t take it. 🙂
Just one thing before I go, I would disagree that most advice for beginners is emotional right now. I’ve read plenty of articles far more informative and easy-to-read than anything I’ve seen here. You’re competing with dozens or hundreds of people writing about investing basics, people who are a) clear and b) not overly-emotional (about investing or about comments on their site).
Good luck!
I won’t hang around and provide honest feedback if you can’t take it.
But sweetums —
I would disagree that most advice for beginners is emotional right now.
Thanks for sharing your thoughts re that one, Lauren.
I suspect that that’s the one that matters. If some influential blogger who has lots of beginning investors as his readers comes to agree with me that the conventional advice for beginners is poor, I think we’re in. If not, then not.
people who are a) clear and b) not overly-emotional (about investing or about comments on their site).
Again, this is the question on the table. I say that the conventional advice has failed us horribly. Anyone who thinks that the conventional advice makes sense is not going to be in the market for what I am pitching.
My sense is that lots of people are disillusioned with the conventional advice today. It concerns me, though, when people like Frugal Dad elect to get out of stocks altogether. If people give up on stocks, we don’t advance. We need people to become disillusioned with Passive Investing, but not with stocks!
Rob
Good luck!
Thanks, dreamy eyes.
(I’m just joking around, Lauren.)
Rob
Everything you write is rambling.
Is that you, buttercup?
(I’m just joking around.)
Rob