“The Problem Here Is That Natural Process of Fixing Mistakes After They Are Revealed Has Not Applied in the Investment Advice Realm. There Is a Lot of Money That Flows From Being Recognized As an Expert in the Investment Advice Realm. And People Feel That Acknowledging This Huge Mistake Will Make People Feel That They Are Not Really Experts. So Instead of Acknowledging the Mistake and Fixing It, We Have Been Covering It Up for 41 Years Now. Which Makes It Really Hard to Change Course.”

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

Again, what friends?  You put a link to posts that are from 2001 to 2007, which are from 15 to 21 years ago (which also lack and context).  Where are these friends?

Everyone on the planet wants to know how to invest effectively, Anonymous. There is not a single exception. Everyone alive is my friend.

Does that include you Goons, people who have threatened to murder my loves ones if I continue to post honestly re the error that John Greaney made in the retirement study posted at his web site? It does. It doesn’t appear that way on the surface, I of course get that. But why this insane intensity on the part of you Goons to block millions of people from learning about what the last 41 years of peer-reviewed research in this field teaches us all about how stock investing works in the real world? You don’t feel that intensity because you believe that getting the safe withdrawal rate right doesn’t matter. You feel that because you believe that getting the safe withdrawal rate right matters a great deal. You can’t bear to acknowledge the mistake you made. But imagine that you had never made the mistake. Imagine that this was the first time we were ever discussing safe withdrawal rates. Then you would be thrilled to talk things over with me without any abusive stuff sidetracking the discussions. If we could come to this stuff fresh, we would be the best of friends.

We made a mistake AS A SOCIETY back in the 1960s. I don’t believe that there was any bad intent. We just didn’t know it all at that time. So we were vulnerable to making mistakes and we made one on the biggest issue out there (whether market timing is always 100 percent required for every investor or whether there might be some circumstances in which it might not even work). We messed up. Big deal, right? When you mess up, the truth eventually comes out and you fix the mistake and you move forward. That process of fixing mistakes is just part of life.

The problem here is that natural process of fixing mistakes after they are revealed has not applied in the investment advice realm. There is a lot of money that flows from being recognized as an expert in the investment advice realm. And people feel that acknowledging this huge mistake will make people feel that they are not really experts. So instead of acknowledging the mistake and fixing it, we have been covering it up for 41 years now. Which makes it really hard to change course. Now it’s not just the embarrassment of acknowledging the mistake that people are worried about. It’s the prison sentences for the criminal acts that were committed as part of the cover-up and the civil lawsuits to recover financial losses and on and on and on. The more damage the mistake causes, the greater the intensity of the desire to cover it up becomes.

I am working at cross purposes with the people who want the cover-up to continue. I want to help every single person involved by bringing the cover-up to a full and complete stop, by opening every internet site to honest posting re the last 41 years of peer-reviewed research. I oppose the cover-up. But you know what. A lot of the people working to keep the cover-up going deep down inside would like to see the same laws that govern behavior in every field of human endeavor outside of the investment advice field to apply in the investment advice field as well. People who work in this field at basically the same as people who work in all other fields. They want to be free to do honest work. They want to be free to help people rather than destroy their lives.

So, yes, all of those people are ultimately on the same side as me. Yes, they are all my friends. We are in unfortunate circumstances at this moment in time that have made some people feel pressured to pretend that they are not my friends. But the idea of having a ban on the discussion of Shiller’s Nobel-prize-winning research at every site on the internet is just not a viable long-term proposition. When you discover that you have made a mistake about something important (safe withdrawal rates are important), you need to correct the mistake and get on with your life. There is just no other way to play it.

I am your friend and you are my friend. You cannot bear to acknowledge it at this time. But how about after the next price crash? If stocks continue to perform in the future anything at all as they have always performed in the past, you are going to be seeing millions of lives destroyed as a result of your relentless promotion of the pure Get Rich Quick/Buy-and-Hold “strategy..” I have a funny feeling that you are going to recognize then that I was being your friend all along by suggesting that we open every site on the internet to honest posting. It’s important that mistakes be corrected and the only way that it can ever happen is for us to permit honest posting. People are not going to correct mistakes until they see that they are indeed mistakes and that can’t happen until they first give themselves permission to talk things over.

We’ll see, okay?

Rob