Buy-and-Hold Goon to Rob: “Everyone Thinks Their Own Opinions Need to Be Considered. What Matters Is What That Expert Consensus Feels Needs To Be Addressed.” Rob’s Response: “It Sounds Like You Are Saying That a Strategy That Enjoys Consensus Support May Not Be Challenged in Posts Put To the Internet.”

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

But I believe that every single person in the United States would benefit if Shiller would address a lot of the questions that I have raised over the past 17 years about the implications of his Nobel-prize-winning research.”

Everyone thinks their own opinions need to be considered. What matters is what that expert consensus feels needs to be addressed.

Your ego is way too inflated.

90 percent of the experts in this field believe today that Buy-and-Hold is fine. And 90 percent of today’s investors believe that Buy-and-Hold is fine. I think it would be fair to say that 90 percent constitutes a “consensus.” So Buy-and-Hold enjoys consensus support. We agree re that much.

Where we part company is when you say that “what matters is what that expert consensus feels need to be addressed.” It sounds like you are saying that a strategy that enjoys consensus support may not be challenged in posts put to the internet. I couldn’t possibly disagree more. Valuation-Informed Indexing is supported by 38 years of peer-reviewed research and a Nobel prize. If I were to say in a post that I believe that the safe withdrawal rate is always the same number, I would be engaging in financial fraud (I obviously do not believe any such thing — there are tens of thousands of posts that could be submitted as evidence that I do not believe any such thing). It cannot possibly be the case that the right thing for me to do at this point in the proceedings is to agree to commit financial fraud to appease you Goons.

I don’t believe that my ego is inflated. I think that the work that I have done is of huge importance. I believe that the transition from Buy-and-Hold to Valuation-Informed Indexing represents the biggest advance in the history of personal finance. But I of course always give credit to the many fine people who have helped us achieve that advance, a group that obviously includes many Buy-and-Holders and that to a small extent even includes you Goons. So the issue isn’t ego.Thousands of people have done good work. I am one of them and I have long been the lead voice urging that we open the entire internet to honest posting re the far-reaching implications of the last 38 years of peer-reviewed research in this field. So I have played a particularly important role. But thousands of people have made positive contributions. I obviously could never have gotten to first base but for the contributions of many fine people. This has certainly not been anything even remotely close to a one-man effort.

A number of academics told me that the story is that we are as a nation working our way though a paradigm change. That’s the deal. Shiller’s work represents such a huge advance that people who believe in Buy-and-Hold have a hard time letting it in. These academics told me that it will take a crisis to get things to a point where enough people will open their minds to the new model for it to gain some momentum. That sounds right to me. I believe that the crisis that will change things will be the 50 percent drop in stock prices that we should be seeing within the next year or two or three, according to Shiller’s understanding of how the market works. My job is to prepare the ground for the transition. I need to do everything that I can to understand on a deep level why as a society of people we have been so reluctant to make this transition and to pull everyone together so that we do not destroy ourselves in recriminations after that crash arrives and does great harm to millions of lives.

I believe strongly that the Ban on Honest Posting is doing great harm to every last one of us, Anonymous. It hurts me, it hurts you, it hurts Shiller, it will have a long-term negative effect on Bogle’s reputation, and on and on and on. If I had a magic wand, I would wave it in the air and bring the Ban on Honest Posting to a full and complete stop by the close of business today.

I am fresh out of magic wands.

So I have to accept what comes no matter how horrifying the reality is that I see playing out before all of our eyes.

I am here to help. I can assure you of that much. Let me know of some way that I can help you out and I will be there for you in three seconds and you won’t have to ask a second time.

Outside of making that promise, I do not see what I can do for you. I cannot change the realities of stock investing. If Shiller is right in what he believes about how stock investing works (I believe that he is), then Shiller is right in what he believes about how stock investing works and there is nothing that I can do about it except to wait to see how things play out following the next crash and do everything in my power at that time to make life as easy as possible for every single person affected by those events.

I hope that works for you.

My best and warmest wishes to you and yours.

Ego-Inflated (Or Not?) Rob