“Greaney and Bogle Have a Responsibility to Tell People About That Research and to Warn People That They May Be Wrong in Their Claim and to Permit and Invite and Encourage Posts Exploring the Implications of the Research Showing That They Are Wrong”

Set forth below is the text of a comment that I recently posted to another blog entry at this site:

I doubt you have many friends who twist a difference in opinion about the future into the other side having been “mistaken”.

It’s not a difference of opinion, Anonymous.

If John Greaney was putting forward statements at the Motley Fool board that “It is my OPINION that a withdrawal rate of 4 percent will work for those beginning retirements today,” I never would have felt a need to put forward that famous post of May 13, 2002.

He didn’t say that.

He said “the historical data shows that a 4 percent withdrawal is 100 percent safe.”

That’s a lie. Backed by threats of physical violence and threats to get academic researchers fired from their jobs, it is a criminal act of financial fraud.

Greaney BELIEVES that 4 percent is going to work. Bogle BELIEVES that Buy-and-Hold is going to work. That is not in dispute. That is not the issue.

Greaney is telling lies about what the academic research says. Bogle is telling lies about what the academic research says.

That’s the act of financial fraud.

Most people don’t check this stuff out as carefully as I have. Most people at the Moltey Fool board heard what Greaney was saying and noticed that no one was calling him out on what he was saying and assumed (quite understandably) that he was telling the truth. It’s the same with Bogle.

But Greaney and Bogle ARE NOT TELLING THE TRUTH.

The truth is that Greaney and Bogle believe that Buy-and-Hold can work and probably will work. But the further truth is that Greaney and Bogle are engaging in abusive practices to block millions of people from finding out about the 33 years of peer-reviewed research showing that they are wrong to believe what they believe. Greaney and Bogle have a responsibility to tell people about that research and to warn people that they may be wrong in their claims and to permit and invite and encourage posts exploring the implications of the research showing that they are wrong.

This is not about opinions.

It stopped being about opinions when the Buy-and-Hold Pioneers adopted the wonderful practice of rooting their investing claims in the peer-reviewed research. Once you do that, you take on a responsibility to correct your claims when subsequent research finds them to be in error.

Now –

There’s a thing called cognitive dissonance. It is possible for humans to know one thing with their minds and to be unable to acknowledge that thing with their hearts. There are circumstances in which humans say things that in an objective sense are falsehoods but that in a subjective sense they believe to be truths. I believe that that is what is going on here. That part of the story needs to be told too and that part of the story cuts against a finding of financial fraud.

But there are limits.

Death threats are over the line. Demands for unjustified board bannings are over the line. Tens of thousands of acts of defamation are over the line. Threats to get academic researchers fired from their jobs are over the line.

If as a society we are going to elect to permit a finding of cognitive dissonance to excuse any crime, then we cannot justify keeping Bernie Madoff in prison. Madoff told a writer with New York magazine that he thought he was helping people. It may well be that that’s a lie he tells to himself and a lie that he believes about himself. The bottom line is that he created documents reporting on transactions that never took place. That’s a line you cannot cross. There’s no point in having laws against financial fraud if we are going to permit a claim of cognitive dissonance to cancel out their effect in all cases.

I will be claiming that cognitive dissonance applies in this case. I owe that to my Buy-and-Hold friends. I believe that to be the case.

I will NOT be claiming that prison sentences are inappropriate for those who crossed the line and for those who helped out those who crossed the line or who covered up for those who crossed the line.

That’s where things stand, Anonymous.

I have zero problem with you stating an opinion different from my own. I believe that you really do hold a different opinion. I believe that you have both a right and responsibility to express it.

But I also know that you have crossed the lines that make you guilty of financial fraud on thousands of occasions. And I am telling. My expectation is that papers will be filed following the next price crash. I will argue for a good measure of charity when the time comes. But I will also argue for at least a small measure of justice. Our society cannot survive to face another day without any justice whatsoever being achieved re this matter.

And I love my country.

The more you evidence your hate of it, the more I will rise up in protection of it.

I love my country. Deal with it.

My best wishes to you and yours.

Rob