Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
So, the answer is to just read Rob’s stuff till you believe it.
Instead of having actual evidence.
The answer is to let the process play out, Laugh.
You have my blessing to never read another word I say. That would be 100 percent on the right side of the line. You travel to the wrong side of the line when you make that decision for others. All of the others get to decide for themselves whether they will read any of my words or not.
Every new idea in the history of the world started with one person believing it. Then it became two. And then four. And then in time four-hundred. And then in more time four-thousand. And like that. That’s the process by which an idea grows from insignificance to dominance. You have to let that process play out as it will without trying to kill the idea in the crib.
Most new ideas die of their own weakness before they grow into anything of significance. It is fine for you to believe that that is what will happen with Valuation-Informed Indexing. If the idea is not strong, it will die without you ever needing to life a finger to kill it. But it is not for you to force the death of the idea. Each member of the community plays a role in determining whether the idea withers or grows and you just have to stand back and let that process play out. You get a vote, like everyone else. You can say “I think this idea is pure stupid.” That’s fine. That’s helpful, actually. Doing that is playing your role. But, after you do that, you have to let it be. Others get to decide for others. You need to respect the line that distinguishes deciding for yourself and trying to force others to make the decision you prefer. You need to let others make up their own minds without interference from you.
That’s it. That’s the secret. I often say “I love my country.” That’s what I mean when I say it. Our country has a process by which these sorts of disputes are resolved. It works. Most new ideas die. Most new ideas should die. So it’s a good thing that our process results in the death of most new ideas. But some new ideas go on to help us all in hundreds of amazing ways. And so it is also a good thing that our process lets a small number of new ideas grow into something very big. You need to respect that process. You need to play your role to the best of your ability and then step back and let others do their thing without any force being applied by you.
What’s evidence to you is not necessarily evidence in the mind of someone else. And what’s not evidence to you might qualify in the mind of someone else. You have to respect that others have different perspectives from yours as to what constitutes evidence. All of the words that come out of your mouth should reflect your perspective. But all of the others get to determine their perspective and to decide on the words that will come out of their mouths. You control the posts that appear with your name on them. But you do not speak for the entire community. If there are 10 percent who are Valuation-Informed Indexers, that 10 percent gets to decide for itself what constitutes evidence from its perspective. The 10 percent has the same right to speak its mind as the 90 percent. No intimidation tactics.
Process-Focused Rob
What a funny headline. You try to speak for people almost everyday.
I speak for people re the process issue but never re the substance issue.
I favor Valuation-Informed Indexing over Buy-and-Hold. So I of course advocate Valuation-Informed Indexing over Buy-and-Hold in all my writings. But you have never once heard me say that someone is wrong to follow a Buy-and-Hold strategy if that is what that person believes in or that someone is wrong to advocate a Buy-and-Hold strategy if that is what that person believes in.
I believe strongly that those who believe in Buy-and-Hold not only have a right to make the case for Buy-and-Hold but that they also have a RESPONSIBILITY to do so. It’s not just the Valuation-Informed Indexers who have a right to post honestly. We all do. If we don’t all post honestly, all of our discussions are gravely compromised. If we don’t all post honestly, all of our discussion boards and blogs become corrupt enterprises.
I think it is at least somewhat fair to say that I speak for others when it comes to the process question. 90 percent of us believe in Buy-and-Hold and only 10 percent of us believe in Valuation-Informed Indexing. So it might seem intuitive that we would ban discussions of what the last 37 years of peer-reviewed research teaches us about how stock investing works in the real world. That’s the majority position, right? Those who believe in Buy-and-Hold have a lot riding on it being a legitimate strategy. Why shouldn’t they throw their weight around? Buy-and-Hold is a lot less likely to remain dominant if we permit honest posting re the last 37 years of peer-reviewed research. Why not just ban honest posting at every internet site? That makes sense, doesn’t it?
No. It does not make sense. Not in this country. Not in a country that has laws making financial fraud a felony.
Our laws against financial fraud reflect what we are as a people. We are TEMPORARILY not enforcing those laws because it hurts so much to acknowledge that as a people we have for 37 years now been tolerating a criminal cover-up of the most exciting research ever published in this field, research that is so important that the author of it was awarded a Nobel prize for his amazing, life-affirming work. We feel ashamed that we all played a role in permitting continued promotion of the Buy-and-Hold strategy to bring on an economic crisis that caused hundreds of thousands of businesses to fail and that caused millions of good, hard-working people to lose their jobs. We failed ourselves by tolerating this criminal cover-up for so long. Please note that I include myself in that condemnation. I knew about the error in Greaney’s retirement study for three years before I worked up the courage to post about it.
We are liars. We believe that honest posting re how stock investing works should be permitted. That belief is reflected in our laws, good and necessary laws. But we get quiet when we see those posting in “defense” of Mel Lindauer and John Greaney and Jack Bogle advance death threats and demands for unjustified board bannings and thousands of acts of defamation and threats to get academic researchers fired from their jobs because we don’t want their fire directed at us. We have principles. We have beliefs. But we lack the courage to stand up for them when there is enough money and power on the other side of the table to do serious harm to those who dare to do so.
I do indeed presume to speak for the people who support the laws against financial fraud in theory but who are afraid to speak up at our boards and blogs because they love their family members and because they do not want to see their reputations and their careers destroyed. Those are good people. Their goodness evidences itself in the laws that we have enacted and in the published rules of every site to which I have posted. Their cowardice in the face of those engaging in the criminal acts is a temporary thing. It does not reflect what they truly are. So, yes, I dare to speak for the goodness in my fellow community members, both the Buy-and-Holders and the Valuation-Informed Indexers, who hold back from speaking their minds in the face of such horrors.
I don’t believe at this point that it is at all likely that we will as a people work up the courage to speak up prior to the next price crash, which will do great, lasting harm to millions of us. But I am 100 percent certain that we will work up that courage once we have seen that ocean of human misery with our own eyes rather than just having read the peer-reviewed research that shows that it is coming. There is a big difference between seeing peer-reviewed research showing that such a day is coming and reading about the ocean of human misery in the morning newspaper.
It is really the laws against financial fraud that speak for us all and that reveal what sort of people we are down deep inside. I merely take note of those laws and thereby give voice to a very positive assessment of the people who adopted those laws.
It will be interesting to see how this all plays out in the days following the next price crash.
I naturally wish you the best of luck in all your future life endeavors, dear Goon friend.
Funny-Headline-Writing Rob
“I speak for people re the process issue but never re the substance issue.”
Wrong, Sluggo. You speak for many peopl, with Robert Shillerbeing the most commonly used person. For example, Shiller says not to use his work for timing, but you say he means short term and not long term. You have also said he wants to say many other thangs, but pulls his punches. What about Wade? You make many comments about what you say he really means, but then say he is too scared to make those comments.
Wade said the same thing over and over and over and over again. Then he was threatened and he took it all back, Gee, I wonder what was going on there.
All of Shiller’s work shows why long-term timing (price discipline) is required. And of course he advocated it himself in the paper he wrote in 1996 saying that those going with high stock allocations would regret it within 10 years. Yes, he pulled back from making those sorts of predictions when the 1996 prediction did not pan out. And I of course have never said that Shiller continues to make those predictions. But the Nobel-prize-winning research that shows that long-term timing always works and is always required is still out there. So why shouldn’t I tell people that and give Shiller credit for being the one who prepared the research?
If I did not say that long-term timing always works and is always required, Wade would never have contacted me to ask if I would be willing to work with him on research showing that Valuation-Informed Indexing is superior to Buy-and-Hold. Where would we be then? I think it would be fair to describe that research as the most important research published in this field in 30 years. So I sure wouldn’t like us to be without it. And you Goons obviously think it is pretty darn important too or else you never would have threatened Wade. Please give me a freakin; break.
The big mistake was made in 1981, Bogle should have come out within days of the publication of Shiller’s “revolutionary” (his word) research showing that Buy-and-Hold can never work in the long term and told all the people who follow his advice that there was now serious research casting doubt on the Buy-and-Hold strategy. If he still believed in Buy-and-Hold, he of course could have said that too. But he certainly should have let people know that the research cast doubt on the merit of the Buy-and-Hold strategy. Then we never would have experienced any of these problems.
Now we have a huge mess on our hands because the big problem for the Buy-and-Holders is not the mistake they made in thinking that it is not necessary to practice price discipline when buying stocks but the 37-year cover-up. I didn’t cause that cover-up, Anonymous. I have been working hard to bring it to a full and complete stop for 16 years now. Once the cover-up is brought to a full and complete stop, we all live better lives from that point forward. That’s the path that gets my vote.
No one should be afraid to post honestly at any board or at any blog. My sincere take.
My best wishes to you. It will be interesting to see how it all plays out.
Non-Punch-Pulling, Non-Scared (Kinda, Sorta) Rob (AKA Sluggo)