“I Certainly Do Not Believe That All of the People Who Promote Buy-and-Hold Are Knowingly Participating in a Conspiracy. The Vast Majority Believe in It. So I Think We Need to Be Careful How We State Things.”

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

Who says there is criminal behavior?  Only you.  Funny thing is that it is only you making all these claims on every topic and no one with any credibility will back you up.  So it either the largest conspiracy to ever occur in the history of the world……….or Rob Bennett is wrong and making all of this up.  Which is most likely?

It’s certainly an exceedingly strange set of circumstances. I give you that one. Lots of people with lots of credibility have backed me up. That’s never been a problem. But, if we want to hear those people speak up in clear and complete and direct terms, we need to make them feel safe doing so. So we need to bring the intimidation stuff to a full and complete stop. I’ve been saying that since the first day. The short way of saying it is that we need to apply the same laws in the investment advice field that we already apply in every field of life endeavor outside of the investment advice field.

I call it a conspiracy of ignorance. We did not know how stock investing worked prior to the publication of Shiller’s Nobel-prize-winning research in 1981, So there was no conspiracy prior to that. And we have not had the discussions needed for us to come to terms with the far-reaching how-to implications of Shiller’s findings until this day. So I don’t think it is possible to say precisely how much of a conspiracy there is. There are lots of people who want to speak up. Nothing could be more clear. There have been lots of intimidation tactics employed to stop them from doing so. That’s also super clear. The cover-up has been successful in the sense that Buy-and-Hold is still heavily promoted today and the Greaney retirement study has not been corrected. But I certainly do not believe that all of the people who promote Buy-and-Hold are knowingly participating in a conspiracy. The vast majority believe in it. So I think we need to be careful how we state things.

Is Bill Berntein participating in a conspiracy. He said as clearly as it can be said that the safe withdrawal rate at the top of the bubble was 2 percent. So he believed that the Greaney study is in error.So on the most important question he has been working to expose the conspiracy for 22 years now. But he was awful quiet about the need for Greaney to correct his study while the discussions were raging at Bogleheads In that sense he helped the conspiracy survive. I cannot say in precise detail what is going on in his mind, What I say is that we need to bring the intimidation tactics to a full and complete stop so that he will feel free to speak his mind openly and we will all learn the details. That benefits everyone. I am not able to imagine any possible downside.

It’s a bad scene in lots of ways, But it’s also a good scene in that this is the biggest advance in our understanding of how stock investing works in the history of personal finance. Shiller waan’t awarded a Nobel prize because he has a nice haircut. So I vote for opening every site to honest posting. It’s true, though, that the longer the cover-up continues, the less comfortable people feel about speaking up. The 43-years cover up looks really, really, really bad. That’s what I always say that we need to bring it to an end by the close of business today. Letting it continue for another day just makes things that much worse.

The set of laws that applies in every other field is a good set of laws. It works. We need to decide as a nation of people to apply that good set of laws in the investment advice field as well. That’s where I’m coming from. I sincerely believe that the Greaney retirement study lacks a valuation adjustment. I should be permitted to say that wherever I please. It should not be a controversial question.

My best wishes.

Rob