“Believing in Valuation-Informed Indexing At Our Boards and Blogs Is Like Being the First Black or the First Woman Ever Hired At a Big Corporation. You Have This Feeling That, If You Make One Mistake, You Will Be Crushed For It.”

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

There are thousands of people on the various financial boards that are not buy and holders, yet they aren’t banned like you are. Why is that?

They self-censor themselves, Anonymous. They put forward posts indicating that they hold some doubts re Buy-and-Hold. Yes, I acknowledge that that is tolerated by the Buy-and-Holders. But they pull their punches. They don’t share with their fellow community members the full extent of their concerns re Buy-and-Hold. They walk on their tip-toes. They let things slide that they shouldn’t let slide. They keep it zipped re the most sensitive issues. They don’t argue their points as forcefully as they are capable of arguing them.

I don’t play that game. I post with FULL honesty. I believe that this stuff is too important for me to do otherwise. I play to win. I love my Buy-and-Hold friends. I show them respect and affection and gratitude for the many things I have learned from them. But I do not hesitate to go into intellectual battle with them when they say something that I think could be dangerous to my fellow community members in the event that the point were to remain unchallenged.

It is my job to argue my points as forcefully as I possibly can argue them. I certainly do not want my Buy-and-Hold friends to do anything less. They believe in Buy-and-Hold and so they have a responsibility to argue forcefully for it, just as I have a responsibility to argue for Valuation-Informed Indexing. There is not one case that I can recall where a Buy-and-Holder pulled his or her punches. The Buy-and-Holders fight (intellectually) all out all the time. They are right to do so. They need to do that for the boards to work.

But it is a very, very, very small number of the Valuation-Informed Indexers who do the same. I try hard to argue my points as forcefully as I see the Buy-and-Holders arguing theirs because I don’t think that the boards can achieve their purpose unless we ALL feel free to say exactly what we believe. I want to set an example for other Valuation-Informed Indexers. I want them to look at me and say “that fellow is saying what he truly believes, maybe I can get away with doing the same” and then follow suit. I want to make all the posters who believe that Buy-and-Hold is dangerous to feel as welcome in our board and blog communities as do the Buy-and-Holders.

The root problem is that 90 percent of the population believes in some form of Buy-and-Hold today while only 10 percent believes in some form of Valuation-Informed Indexing. Believing in Valuation-Informed Indexing at our boards and blogs is like being the first black or the first woman ever hired at a big corporation. You have this feeling that, if you make one mistake, you will be crushed for it. So you become highly reluctant to say anything even the tiniest bit controversial. You avoid not only actual mistakes but even statements that are 100 percent accurate but that will be perceived as mistakes by the 90 percent on the other side of the table.

Anyone who compares what I said on the morning of May 13, 2002, with what Wade Pfau said in his Ask Me Anything session on Reddit this week will gain a good sense of the nature and extent of the problem. I didn’t say that the Buy-and-Hold retirement studies were in error in my famous post. All that I did was ask a question. I asked “Should we be giving consideration to valuations when calculating the safe withdrawal rate?” That post was like a nuclear bomb. We are still feeling the reverberations from that one today. But Wade’s life was not threatened when he made a much stronger statement in his Reddit session. He said flatly that he does not believe that the safe withdrawal rate is always 4 percent. I implied that, Wade said it plainly. But my post generated 50 times more flak.

Why? Because no one had ever said such a thing before when I said it. It came as a shock when I said it 15 years ago. Enough people have said it by now that there were no expressions of shock when Wade said it. I am highly confident that there were lots of people listening in when Wade spoke who did not agree with what he said. But things have reached a point where saying something that was a complete and total heresy in 2002 has become sort of ho-hum today. So Wade “got away” with it.

I am happy that Wade got away with saying that the Buy-and-Hold studies are in error (that’s my word, not his, but that is what he is saying, he is saying that 4 percent is not always safe). But I want Wade and lots and lots of other people to feel free to give expression to lots and lots of other implications of the last 36 years of peer-reviewed research in this field. I want to see people saying things that have never been said before at every investing discussion board and blog on the internet on a daily basis. I want to see more and more and more and more of it.

If we all feel free to post honestly, there will be some things said that will ultimately be revealed to be wrong. You know what? That’s a good thing. We should all want false claims to be revealed to be false. By permitting honest posting, we will encourage the posting of both more true statements and more false statements. Both types help us all. The true statements teach us things we would never have learned had we not permitted the posting of those statements. And the false statements confirm our confidence in our current beliefs when they are exposed as false. It’s all good so long as posters from both “sides” follow the published rules of the various boards and blogs.

My post of May 13, 2002, asking whether we should be giving consideration to valuations when calculating the safe withdrawal rate should not have come as a shock to anyone. It came as a shock to lots of smart people because as a community we had fallen into the bad practice of thinking that we knew it all and had nothing new to learn about the subject of stock investing. My question was a good one and I did a good thing by posting it. Wade Pfau ,might well not be questioning the accuracy of the Buy-and-Hold retirement studies today had I not worked up the courage to advance that post. Wade learned much of what he knows about safe withdrawal rates from me and from the hundreds of other brave posters who informed me by posting honestly themselves in the years from May 2002 until the time when Wade saw the first post of mine that he saw at the Bogleheads Forum.

Those who believe that the last 36 years of peer-reviewed research in this field is legitimate research should not have to risk being made to run a gauntlet as punishment for the “crime” of posting their sincere views on stock investing. We should ENCOURAGE all posters to post honestly, both the Buy-and-Holders and the Valuation-Informed Indexers. I was banned because I was not willing to accept the second-class status to which you Goons (not all Buy-and-Holders, but a significant percentage of them, perhaps 10 percent and a highly influential 10 percent) would like to assign any community members who holds views not in accord with your own.

I offer no apologies for posting honestly, I am proud that I do so. I do not respond to acts of intimidation aimed at shutting me up. If anything, acts of intimidation make me more convinced that Buy-and-Hold needs to be effectively challenged at every board and blog on the internet. When we see death threats being posted by a small percentage of the Buy-and-Hold community and the much larger percentage of the Buy-and-Hold community keeping their mouths shut re the violation of U.S. law, we have a serious, serious, serious problem on our hands.

I call that sort of thing out every time I see it. So you Goons see me as a greater threat than any of the other community members who do not share your views on investing. I wear your hatred of me as a badge of honor. I am banned at every board and blog on the internet where a large number of Buy-and-Holders congregate because I won’t tolerate the b.s. of the lowest of the low among us. Good for me, you know?

I am your best friend. Anonymous. I hold you to minimal standards of human decency. Had all the others who disagree with you on investing held you to those same standards all along, you wouldn’t be today on a path that will land you in a prison cell in the days following the next crash. Those people let you down with their cowardice. I tried to lift you up. Your hate has been stronger than my love for 15 years running now. But I believe with my entire heart, mind and soul that my love (and the love of all the community members who adopted the rules that govern posting at all of our boards and blogs — and that’s all of us!) will triumph in the end. We will of course have to wait to see how things play out following the next crash to know for sure.

I wish you all the best that this life has to offer a person in any event, my long-time abusive, Buy-and-Hold-believing friend.

Rob