Buy-and-Hold Goon to Rob: “You Constantly Present Yourself As the One Wise, Rational, Sensible Person in a World Where All the Rest of Us Are Frightened Little Rabbits.”

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

“We want to get along with others. We want to have friends. We want to be popular. We want to see people praising us and linking to us.”

Among the vast number of things that aren’t helping your cause, your smug, condescending attitude ranks right up there. You constantly present yourself as the one wise, rational, sensible person in a world where all the rest of us are frightened little rabbits.

But whatever helps you get through the day.

I don’t doubt that there are many people who feel that way, Anonymous. It is not my intent to make people feel that way.

I believe that we all have inclinations that make us frightened little rabbits. I played the role of frightened little rabbit myself for three years. I knew in May 1999 that Greaney got the number wrong in his study. I had studied safe withdrawal rates on my own before I ever visited his site. So the first thing that I looked for was the valuation adjustment. There was none there. For three years, I kept my mouth shut. It wasn’t until the morning of May 13, 2002, that I worked up the courage to ask my fellow community members: “Do you think we should be considering valuations when we calculate the safe withdrawal rate?” So it would be fair to refer to me as Frightened Little Rabbit #1, right?

Shiller is a frightened little rabbit, no? We discussed just yesterday how back in 1996 he was saying things very much in tune with what I say today and then his prediction didn’t work out and he became a frightened little rabbit and now he just tries to keep it zipped re the controversial stuff. This is the guy that I describe as the most important investing analyst ever to walk Planet Earth. And he’s a frightened little rabbit in the extreme! If Shiller would stop being such a frightened little rabbit, things would go a lot easier for me, no? I have to acknowledge that that is what he is if I am going to make any sense of what has gone down over the past 16 years.

We are all frightened little rabbits. That’s a core reality of stock investing. And we all possess a powerful Get Rich Quick urge within us. That’s a second core reality. It is these two core realities that make stocks a risky asset class. Wade Pfau and I showed in the peer-reviewed research that we co-authored that we can all reduce the risk of stock investing by 70 percent just by not being frightened little rabbits and by working to rein in that Get Rich Quick urge a bit. Pretty darn exciting stuff, right? But how many of the millions of middle-class investors living in the United States today and seeking to put together effective retirement plans even know about the amazing Bennett/Pfau research? It’s a small number. Because the editors of the New York Times are frightened little rabbits. Wade would love to be awarded the Nobel prize he very much deserves for the work he did with me on that study. But he sees that most of us are frightened little rabbits and he worries that that might be so of the editors of the New York Times too and so he keeps his mouth shut for the time-being.

I don’t say that we are all frightened little rabbits because I want to hurt the feelings of my Buy-and-Hold friends, Anonymous. I say it because there is now 37 years of peer-reviewed research showing that this is what they need to hear to make sense of stock investing and to invest effectively for the long run. None of this is personal. I want people to be able to invest more effectively so that they can retire earlier. There’s no way to do that without pointing out that all the humans possess a Get Rich Quick urge and have an inclination to be frightened little rabbits at times. I don’t do it to hurt their feelings. I do it because I believe that it is something they need to know.

I 100 percent respect the right of any who don’t want to hear my message to just tune it out. But I know from long experience that there is a large number who very, very, very much want to hear the message and I believe strongly that they have every right to hear it. If you would just tune it out when it bothers you, all our troubles would go away. You would get what you wanted (freedom from having to hear how you can sometimes be a frightened little rabbit) and those who want to hear the message would get what they want. That’s the answer.

I do believe that you can be a frightened little rabbit at times. I get that it hurts for you to hear that. I believe it all the same. I don’t say that I am any different. I say that I have been a frightened little rabbit at times too. I say that every human has that inclination. I mean no offence. But if you take offence, I think the best thing for you to do would be just to tune out the message that you find offensive while permitting those who have expressed a desire to be able to hear it to make their own decisions about what messages to listen to.

I wish you all the best that this life has to offer a person, my sometimes frightened little rabbit friend.

Rob