A Rich Life

The Old Ideas on Saving & Investing Don't Work -- Here's What Does

“Each Investor Should Be Permitted to Decide for Himself or Herself Whether the Advice Is Good or Bad. That’s Not Something That a Gang of Internet Goons Should Be Able to Decide for All of Us.”

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

I’m glad that you failed to succeed in selling your bad retirement advice to others.

My view is that each investor should be permitted to decide for himself or herself whether the advice is good or bad. That’s not something that a gang of internet goons should be able to decide for all of us.

Rob

Comments

  2. Within reason.

    But web-site owners need to follow the law, just as does everyone else. Death threats are not permitted. Acts of extortion are not permitted. Financial fraud is not permitted. Acts of defamation are not permitted. A web site owner who permits that sort of thing can be held responsible for the damages suffered.

    Rob

  4. That’s not an entirely untrue statement.

    There are two levels of contention between the Buy-and-Holders and the Valuation-Informed Indexers. There are the matters of substance, which are what ultimately matter. In the days when Buy-and-Hold was being developed, we did not have Shiller’s Nobel-prize-winning research showing that valuations affect long-term returns available to us. So the people who came up with Buy-and-Hold advanced this loony tunes idea that market timing might not always be required (there was research showing that short-term timing does not work). Now that Shiller’s research is available, we need as a naton of people to correct that error. The Buy-and-Holders feel that it would make them look bad to acknowledge the error. So they continue to suggest that market timing (price discipline!) is not required. That’s the thing that matters. We need to be reminding investors of the importance of market timing at every site on a daily basis and it makes the Buy-and-Holders feel bad for people to learn of their mistake.

    Then there are the matters of process, the abusive and in some cases criminal acts that a number of Buy-and-Holders have engaged in (and that a much larger number of Buy-and-Holders have tolerated) to block discussions of the susbtantive questions. This is where the death threats and the acts of extortion and so on come into play. The substantive error is understandable. An error was made at a time when all of the research was not yet available. Who cares, you know? The criminal behavior is something different. That translates into prison sentences. So there is a very, very high level of concern re that stuff. People who would be willing to permit discussion of the substantive matters are not willing to permit discussions of the criminal stuff.

    That means that the Buy-and-Holders possess an important piece of leverage in their efforts to suppress discussion of the last 41 years of peer-reviewed research, Engage in criminal behavior and the discussions will be shut down just about everywhere. They get what they want even though they have nothing to offer on the substantive side because their behavior is so outrageous that most site owners do not want to entertain discussions of such things.

    I am in favor of doing anything within the realm of reason to make it easier for Buy-and-Holders to engage in constuctive discussions. So I praise them to the skies for all of the many amazing contributions they have made to our understanding of how stock investing works. However, I draw the line at engaging in criminal behavior myself. If I were to say that I believe that the retirement study set forth at John Greaney’s web site contains a valuation adjustment, that would be an obvious case of financial fraud. Fraud is a crime in the United States. It is a felony. That means prison time. So thanks but no thanks, you know? Not this boy. No can do.

    The Buy-and-Holders did great work. They made one very big mistake. It is in everyone’s interest that that mistake be corrected as soon as possible. So I am not willing to ignore the mistake with the hope that doing that would appease you Goons. But I do very much believe that all of us trying to get the internet opened to honest posting re the last 41 years of peer-reviewed research should make it a regular practice to point out how, outside of that mistake, the Buy-and-Holders have done a good amount of amazing, helpful work.

    My best wishes to you.

    Rob