Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:
You have written this same stuff thousands of times. Why don’t you try writing something new that people can learn from and actually see value. Use your own life experiences. Tell people about how your retirement plan failed and what you learned from it. Tell them about how you have to go back to work and how you are looking for a job. Give tips to those that are over 60 and are like you in having to return to the job market. Tell them about how market timing failed for you. Tell them how they should not listen to predictions of the stock market as they are mostly wrong. Try being real instead of living in an imaginary world. We have enough people faking out there.
There’s only one issue in the stock investing realm that I have ever written about, Sammy. I don’t believe that I have anything special to offer re any other issue and so I just keep my mouth shut on all of the other issues. But I believe that the one issue that I write about is huge. The one issue that I write about is the far-reaching implications of Robert Shiller’s Nobel-Prize-winning research showing that valuations affect long-term returns.
If that’s so, it changes everything that we once believed about how stock investing works. We all want the same things. We all want to become effective investors. So you would think that there wouldn’t be one dissenting voice to my proposal that we permit open and frank discussion of the how-to implications of Shiller’s “revolutionary” (Shiller’s word) research findings at every discussion board and blog on the internet. I am here to tell you that there is a whole big bunch more than one dissenting voice to that one. About 10 percent of the population loves my stuff. But another 10 percent hates it so much that they cannot stand it. The 80 percent in the middle is okay with the idea of permitting me to talk. But they don’t feel strongly enough about it to object too much when the 10 percent of super intense Buy-and-Holders demands that I be banned. So I almost always end up being banned sooner or later.
Why the super intense reactions? Paradoxically, it is because Shiller’s research is so darn wonderful. If Shiller is right, it was the relentless promotion of Buy-and-Hold strategies that caused the 2008 economic crisis. If Shiller is right, most of the gains that we experienced in the late 1990s were not real and lasting but just the product of irrational exuberance. When those trillions of dollars disappeared, we were going to see consumer spending power diminish by trillions of dollars. Obviously, that caused an economic crisis because the loss in consumer spending power puts hundreds of thousands of companies out of business and left millions of workers jobless. Bad stuff. That’s the power of a bull market to hurt us all. That’s the power of Buy-and-Hold (which caused the bull market by assuring investors that there is no need to practice market timing when buying stocks) to hurt us all.
We should all be jumping up and down in excitement that Shiller provided us the missing piece of the stock investing puzzle. But the reality is that it is hard to make a transition like this. The vast majority of people who are viewed as experts in this field became experts pushing Buy-and-Hold. They don’t want people to explore the research showing that they got it wrong. And the vast majority of investors bought into the Buy-and-Hold idea and have felt great gratification seeing the strategy appear to work. They don’t like the idea of admitting a mistake either. So we are caught in an in-between place. Those who pay attention to the peer-reviewed research know what works. But very few are willing to “cross” the Buy-and-Holders by speaking openly and frankly about what the last four decades of peer-reviewed research teaches us all.
I think this is the biggest public policy issue facing the United States today. I could write about it for another 10 years and never run out of material. It is fascinating to explore all the ways in which Shiller revolutionized the field. I believe that lots of people will be getting in on this in the days following the next price crash, when lots of people who bought into the Buy-and-Hold concept will be more open to hearing challenges to it. We’ll see.
My best wishes to you and yours.
One-Issue Rob
You are living in your own little imaginary world.
To some extent we all live in our own little imaginary world. None of us has perfect knowledge of objective reality. The human mind is just not constructed to provide that.
That’s why I like the idea of rooting one’s investment strategy in the peer-reviewed research. In theory doing that would take us out of the realm of the subjective and help us to appreciate the realities.
My best wishes to you.
Objective (Or Maybe Not So Much As He Thinks) Rob
The community gives us feedback that allows for an impartial view. The fact that you have been consistently warned and banned gives us this objective view.
But never once in nearly 18 years have I put forward an abusive post!
The shows the power of the Get Rich Quick/Buy-and-Hold urge that resides within each and every one of us. That’s the entire deal here. Is the investment advice field just about turning a quick buck regardless of how much human misery you cause doing it? Or is there a place in this field for advice that actually helps your clients and readers?
I believe that there is a place for honest and accurate investment advice. I believe that we are going to get there. Shiller was able to find a publisher for his book. It became a best-seller. He was awarded a Nobel prize. Wade and I were able to get our research published in a peer-reviewed journal. Thousands of our fellow community members have worked up the courage to “cross” you Goons by expressing a desire that honest posting be permitted. We are close. We are not where we all deep in our hearts want to be. But we are very close.
I agree strongly about the community feedback issue. But I don’t tale the dark view of what the community has done that you do. Yes, honest posting is banned just about everywhere today. Obviously that is an exceedingly unfortunate reality. But there have been lots of good signs. We are an imperfect people but we are a fundamentally good people. We are working ourselves to a place where we will all be able to pull together and change the world in a very life-affirming way.
I think that the next price crash will do the trick. If you look at the Bernie Madoff matter, you see that people take a very different view of Get Rich Quick approaches after they have been exposed for what they are. I think that that is what we are going to see with Buy-and-Hold. And, once there are a few people posting honestly, the floodgates are going to open. There are millions of investors who would love to have access to honest, accurate, research-based reports on how stock investing works. So there are hundreds of millions of dollars to be made promoting Valuation-Informed Indexing strategies. I don’t think it is realistic for you Goons to think that you will be able to hold back the History Train indefinitely.
I wear my many bans as a badge of honor. You can’t post honestly about the last 38 years of peer-reviewed research without getting banned in today’s InvestoWorld. I would rather be honest than be non-banned and celebrated for encouraging people to take steps that will likely ruin their lives somewhere down the road a piece. That one is not even a close call in my book. And I have a funny feeling that a lot of the people who are for the time-being keeping their mouths shut about the dangers of Buy-and-Hold feel the same. Once the floodgates open, we are going to see an explosion of honest, accurate, research-based posting.
It will be interesting to see how it all plays out in the days following the next price crash. That much is for sure. I believe that we will be seeing the greatest economic advance in our nation’s history in those days. I just wish that we didn’t need to see the widespread human misery that will come with a price crash to get us there.
My best and warmest wishes to you and yours.
Proudly Banned Rob
“ But never once in nearly 18 years have I put forward an abusive post!”
Really? You never called anyone a goon? You never made up accusations of death threats and job threats? You never told people they were going to prison? You never called respected people, like Jack Bogle, con men? I guess you have been hacked, if that is the case.
I have probably used the word “Goon” hundreds of thousands of times over the past 17 years, Anonymous. I would be too terribly shocked if someone did a count and discovered that I have used the word “Goon” more often than I have used the word “the.” That’s probably not quite the case. But it is a somewhat rare event for me to craft a post here and not have the word “Goon” appear somewhere in it.
That’s what you are supposed to do!
The problem is not that I use the word too frequently. It is that others use it to infrequently.
I love Jack Bogle. I rank him as my second most favorite investment analyst of all time, second only to Robert Shller. So it breaks my heart to have to refer to him as a con man. But how else can I tell the story that needs to be told here. Bogle permitted his name to be used in the title for a discussion board that permitted posting by the sorts of “individuals” who have put up posts in “defense” of Mel Lindauer and John Greaney. Huh? What the f?
Say that lots of people had called Bogle out on his “there might be an alternate universe in which market timing might not be 100 percent required” b.s. when he first advanced it. Then Bogle would never have gone so far down the dark path he went down, right? All of his good stuff would have remained. And his awful, horrible stuff would never have existed. Wouldn’t that be a better world than the one we are living in today?
Wade Pfau would not have flipped if Bogle had addressed The Lindauer Matter. Then you Goons might well not be headed to prison cells? Wouldn’t that be a better world for every single person affected by the matters? It sure seems so to me.
The right thing to do when you see someone advancing death threats or threatening to get an academic researcher fired from his job is to call that person out and thereby bring a quick stop to the nonsense. By keeping quiet about this garbage for 38 years, we have caused the garbage to spread and spread and spread. Which is a good thing how? You Goons would not be involved in criminal stuff if it didn’t work for you. And it works for you only because so many of us are afraid to call you out on it.
It’s not calling people out on death threats that is abusive. It is advancing death threats that is abusive. That is the way that we play it in every field of human endeavor except the investment advice field. We need to start playing it that same way in the investment advice field as well.
I mean, holy, moly!
My best wishes, etc., etc.
Abusive (Not Really, Not By a Long Shot) Rob
So you admit you have been abusive and you want to try justifying your poor behavior.
I don’t approve of any of the criminal stuff. That much would be fair to say.
Please feel free to spread the word all over the internet.
Buy-and-Hold!
Science!
Poorly Behavin’ Rob