Set forth below is the text of a comment that I recently put to another blog entry at this site:
And you believe you should be able to act however you wish, regardless of the impact on the community all in an effort to have your opinions drown out everyone else.
Permitting honest posting would have a positive impact on every board and blog on the internet, Anonymous.
Consider someone like Mike Piper at Oblivious Investor. He feels bad about the lies he tells the people who visit his site. Mike has a heart and a conscience. Mike WANTS to permit honest posting. He even gave consideration to the idea of letting me write one Guest Blog Entry at his site each month so that his readers would be exposed to honest posting about the last 33 years of peer-reviewed research on a regular basis as well as to the smelly Buy-and-Hold garbage that he shoves down the throats of his readers on a daily basis.
Why hasn’t Mike made the switch?
BECAUSE OTHER BLOGS DON’T PERMIT HONEST POSTING.
Mike has to compete with other blogs. There’s a saying that bad money drives out bad. Well, it works that way with investing advice too. Bad investing advice drives out good investing advice. Mike wants to help his readers. But if he gives honest, research-based advice and his competitors continue to push the smelly Buy-and-Hold garbage, guess which sites are going to get more readers? We all possess a Get Rich Quick urge. The sites pushing Get Rich Quick are going to win if there is only one site promoting research-based strategies. Readers won’t have confidence in what that site says unless they hear what it says being confirmed by other sites. Mike feels that he will be driven out of business if he switches over to providing investing advice backed by the last 33 years of peer-reviewed research.
Now consider what happens if ALL of the blogs switch over to giving research-based advice at the same time. Then the blogs that will succeed will be the ones that have the best writing and that pick the best topics and that build the best communities and all that sort of thing. Mike is a star at all of that sort of stuff. So, in a world in which honest posting is permitted, Mike’s blog shoots to the top. And he gets to feel good about the work he does for the first time in a long time too. It’s a win/win/win/win/win.
When Bogle gives his “I Was Wrong” speech, he frees us ALL to give honest and accurate investment advice. Bogle’s speech will be written up in the New York Times. That write-up will launch a national debate. We will advance 33 years in our knowledge of how stock investing works in a few months as a result of that debate. Everybody wins!
When you say that it hurts the community for a community to permit honest posting, all that you are looking at is the embarrassment felt by those pushing or following Buy-and-Hold strategies. You are ignoring the misery experienced by all of the people who place their trust in the Get Rich Quick strategies pushed in that community. It’s not all about turning a quick buck, Anonymous. We need to care about what happens to the people who follow the advice too. In the long run, when we destroy our economic system through the relentless promotion of this Get Rich Quick garbage, we ALL lose.
Communities in which honest posting is permitted do JUST FINE in all areas of human endeavor other than stock investing. Why do you believe that the stock investing field needs to be the one big exception?
It is because investing is so darn important. Because investing is important, it causes more pain for people to learn about major advances. When we achieve major advances, we all feel bad to realize that we have been doing things wrong for a long time.
You know what? We need to move forward sooner or later. We need to experience that pain and move past it. The pain that comes with major advances is not a bad sort of pain. It is a GROWING pain.
We can reduce the amount of pain felt by all concerned by following the posting rules that apply at every board and blog. The Buy-and-Holders made a mistake. That should not be a cause for embarrassment in itself. We are all human, we all have made mistakes. Where we got on the wrong track was with this crazy idea that the mistakes made by the Buy-and-Holders should be covered up. When you cover up a mistake, you go from having done something understandable to doing something unethical and fraudulent. And then you need to cover up the cover-up and then cover-up the cover-up of the cover-up. That road leads down, down, down, down.
The answer is to stop going down and to start moving up. We are the luckiest generation of investors ever to walk Planet Earth. The Bennett/Pfau research shows us all how to reduce the risk of stock investing by 70 percent (it is done by AVOIDING Buy-and-Hold strategies!). We need to get the word out about this wonderful research and thereby transform stock investing into a virtually risk-free activity.
Will it hurt you to acknowledge that you made a mistake?
Perhaps.
For a short time.
In the end, though, you will feel 50 times better about yourself when you are able to invest effectively yourself and to help your friends and neighbors and co-workers to invest effectively too.
Learning important new things hurts because recognizing that you have made big mistakes in the past hurts. The answer is not to continue making those big mistakes for the remaining days of your life. The answer is to come to terms with the mistakes you have made and MOVE FORWARD.
That’s my sincere take re this terribly important matter, in any event.
I naturally wish you the best of luck in all your future life endeavors.
Rob
Funny thing Rob. This is the only financial site I know right now that doesn’t allow HONEST (which I define as truthful) posting.
The words “honest” and “truthful” are not precise synonyms, Anonymous.
You are honest when you say what you believe.
You are truthful when you say what is.
You and I believe different things about investing. You follow the approach rooted in Fama’s research. I follow the approach rooted in Shiller’s research.
It is a logical impossibility that any site could permit us both to post honestly while also permitting only truthful posts. One of us is wrong.
The way it works under the published rules of every site and under the laws of the United States is that sites are to encourage HONEST posting so that the TRUTH may over time be discovered by the readers of the sites.
I have never put forward a single death threat. I have never demanded a single unjustified board banning. I have never advanced a single act of defamation, much less thousands of them. I have never threatened to get a single academic researcher fired from a single job.
Under the system required by U.S. law and by the published rules of every board and blog, ALL posters are permitted to post honestly and all readers are thereby permitted to hear both sides of the story and thereby to discover truth. Some of the posts advanced say things that in a metaphysical sense are untrue. That’s the magic of the system. Since humans are flawed creatures, they must permit the expression of untruths in order to gain the capacity to discover mistakes and correct them. If we permitted only ideas we thought of as truths at one point in time to be given expression, we would never advance as a society. If we followed in other areas of human endeavor the practices that the Buy-and-Hold Mafia insists that we follow in the investing realm, we would not be the people we are.
I could be wrong, Anonymous.
I don’t think I am. I sure am not going to say that I am until I am persuaded that I am. But it could be that I am wrong despite all my efforts to get it right.
That’s why I respect the rules of the boards and blogs and the laws of the United States. Those rules and laws say that I must tolerate the free expression of views held by people who disagree with me. I don’t just tolerate the expression of those views. I celebrate it. I encourage it. I insist on it (as much as I insist on recognition of my right to express my sincerely held views).
Your expression of your contrary views (put forward in a civil and reasoned manner) keeps me honest. Your expression of your contrary views (put forward in a civil and reasoned manner) exposes me to thoughts that I could never come up with on my own. Your expression of your contrary views (put forward in a civil and reasoned manner) spices up our conversations in a delightful and liberating (for both of us!) way.
Keep up the good work!
And knock off the funny business!
Please be sure to do that by the close of business today!
Rob
Rob, when do you think the last time a non-goon read anything you wrote?
I don’t know the answer, Anonymous.
I occasionally have people who sign up as subscribers to the site. They must read some of the stuff and like it. There aren’t a lot of them. But they exist. So the number is greater than zero.
Sam Parler is an old friend (he was co-developer of one of the calculators). He posts at a site that charges a fee for membership (so I don’t go there). He sent me an e-mail recently saying that he links to me there from time to time and that recently there was a post that he put up that linked to me that received a strong and positive reaction.
It causes me pain that more people don’t post here, especially non-Goons. If that’s what you are getting at, please know that it certainly causes me pain. You “win” re that one.
The other side of the story is that it would cause me a far worse pain if I were to agree to post dishonestly re safe withdrawal rates or any other critically important investment-related topic. So I have never once in 12 years given that idea even the tiniest bit of consideration. I think it would be fair to say that I have been the big “winner” re that one.
I hope that helps a bit, my old friend.
Rob
Wrong yet again, Rob. Honest and truthful are synonymous. Read the dictionary:
http://www.merriam-webster.com/dictionary/honest
Compare that to this, Anonymous:
http://www.merriam-webster.com/dictionary/truth?show=0&t=1407942545
Not the same thing.
When Martin Luther King gave his “I Have a Dream” speech, there were people (both white and black) who said he was a fool, that people with black skin would never have equal rights in this country and that all he was doing was stirring up a lot of trouble for no constructive reason.
Those people were being honest. They believed that.
Time has proven them wrong. We have a black President today. That never would have happened had there not at an earlier time been people who possessed the courage to stand up and say what they believed whether it was a popular thing to do at the time or not.
We ALL have benefitted from the civil rights revolution.
We ALL will benefit from honest posting on the last 33 years of peer-reviewed research once as a society we work up the courage to permit it at every discussion board and blog on the internet.
You don’t have sole possession of the truth. For our society to continue to make the sorts of advances that it has been making since its earliest days, we need to have procedures in place to permit new ideas to reach people and to grow in popularity over time. We have those procedures in place today in the laws making financial fraud a felony. Now we all need to get down to the important business of ENFORCING those laws and putting those who have posted in “defense” of Mel Linduaer and John Greaney (and my good friend Jack Bogle) in prison cells.
Does all that make good sense to you?
It sure makes perfect sense to me, my long-time abusive-posting friend.
Rob
Rob,
What could a non-goon possibly discuss on this site? Unless they agreed with you 100% and just regurgitated your nonsense you would label them a goon. This site certainly doesn’t need anymore long winded ramblings from “non-goons” you fill that niche more than enough.
Here are some possible topics:
1) Why does Jack Bogle say that there is never a need for an investor to lower his stock allocation by more than 15 percent, even when valuations reach insanely dangerous levels?;
2) Why hasn’t Jack Bogle done something about the terrorist tactics that were used to silence Wade Pfau, the co-author of the research that I did that showed that investors can lower the risk of stock investing by 70 percent by abandoning Buy-and-Hold strategies?
3) Why didn’t the commission that was appointed to identify the cause of the economic crisis assign most of the blame to the continued promotion of Buy-and-Hold strategies for 33 years after the peer-reviewed research showed that the relentless promotion of such strategies ALWAYS caused an economic crisis?;
4) Why didn’t the Wall Street Journal article reporting that the Wall Street Con Men who push Buy-and-Hold strategies “leave out half the story” go viral on the internet?;
5) Why didn’t Wade Pfau learn at Princeton that there is zero support in the peer-reviewed research for the key Buy-and-Hold claim that there is no need to practice price discipline when buying stocks?;
6) Why does Shiller often fail to make the critical distinction between long-term timing (which always works and which is 100 percent required for every investor hoping to have anything more than a zero hope of long-term investing success, according to Shiller’s research) and short-term timing (which the peer-reviewed research in this field indicates can never work)?
7) Why haven’t all of the Old School SWR studies been corrected in the 12 years since the errors in them became public knowledge?;
8) Why haven’t sites like Motley Fool and Morningstar and Index Universe and Early Retirement Forum and Bogleheads Form and Oblivious Investor and Monevator honored their promises to protect us from you Goons?;
9 How long should the prison sentences assigned to those who have put up posts in “defense” of Mel Lindauer and John Greaney and my good friend Jack Bogle be, given the circumstances that apply?; and
10) Why don’t all the people who would like to be making money on the internet take advantage of the huge opportunity that has been presented to them to become pioneers in teaching millions of middle-class people about the first true research-based strategy?
I hope that helps a bit, Anonymous.
Rob
So, what you are saying Rob is that you are not truthful.
Thanks for clearing that up.
It is possible that every word that I have ever put forward concerning stock investing is wrong, Anonymous.It is possible that what I say is not a tiny bit true.
It is important that every person reading my words knows that.
If things ever reach a point where I become too proud to openly acknowledge that, I hope that one of my Goons friends will be kind enough to draw people’s attention to this important reality.
Rob
So in other words they could only talk about the same topics you drone on about every single day here already. Sounds great….
We could talk honestly about safe withdrawal rates, Anonymous. There were no Buy-and-Holders complaining about discussions of safe withdrawal rates until I suggested that we permit honesty in those discussions. So that’s something we all agree is important.
It can’t be that honesty alone is what bothers you. That makes no sense.
What bothers you is that, when the numbers are calculated honestly, it makes you feel bad that you spent so many years of your life following an inferior investing strategy.
I did not do that to you.
There was a time when we didn’t know everything there was to know about stock investing. Then we discovered the missing piece. It didn’t click right away for all of us. And the old, discredited way seemed to be working pretty darn well for a time. So as a society we put off coming to terms with the new discovery for a good number of years. Now things are not working out so hot anymore. So we need to move on.
How do you propose that we get about that important business?
I propose that we do it in a spirit of mutual respect and affection and gratitude.
What say you, my long-time Buy-and-Hold friend?
Rob
Rob,
I prefer truthful numbers because they pay the bills versus your “honest” imaginary numbers.
The peer-reviewed research in this field does not support what you are saying here, Anonymous.
The research-based numbers reflect the effect that investor emotion has on prices.
Investor emotion is by far the biggest factor. It’s not by taking the biggest factor into consideration that you get imaginary numbers. It is by ignoring the biggest factor that you get imaginary numbers.
You have bet everything that the past bull market was the first one in history not to be caused by investor emotion.
I don’t think so. But we will have to see how things play out to know for sure.
My best wishes to you.
Rob
“There was a time when we didn’t know everything there was to know about stock investing. Then we discovered the missing piece. ”
And what if we still don’t know everything there is to know about stock investing, Rob?
What if your “theory” is wrong, but we just don’t know it yet?
Is VII the Unifying Theory of the investment world, Rob?
I believe that we will learn new things as time passes. That’s a good thing, no?
It is possible that the VII theory is wrong and we just don’t know it yet. That’s why I say that I like to see my Buy-and-Hold friends working as hard as they can to keep me and the other Valuation-Informed Indexers honest. If there are any flaws in the theory, you guys will find them, no?
I would describe the discovery that valuations affect long-term returns as the most important advance in the history of personal finance. It lets us reduce stock investing risk by nearly 70 percent. That’s a very, very, very big deal. I am not sure if that makes it a “Unifying Theory” or not. It pulls a lot of things together. It throws light on lots of things that were poorly understood in earlier days. So I can see how it might be thought of as a Unifying Theory. I am not sure how big something has to be to be properly viewed as a Unifying Theory. I would say “maybe yes but possibly no.” I feel confident going with Shiller’s claim that his discovery was of “revolutionary” (his word) impact. It goes right to the root. It changes our understanding of every aspect of the investing experience.
I hope that helps a bit.
Rob
Any updates on your current financial position Rob? You used to be very open about it.
I have enough to last 12 billion years, give or take a billion on either side depending on the rate of inflation. That’s why I say in that catch phrase that “I have not been willing to post dishonestly for 12 years and I won’t be willing to do so for 12 billion years.” When the money runs out, I may need to begin looking at things in a different light.
We need to be practical about these sorts of things, no?
Rob