Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Of course it is not greedy for some guy to expect to be paid $500 million for doing nothing, right?????
No, it isn’t greedy at all.
I didn’t put up my post of the morning of May 13, 2002, pointing out the error in the Greaney retirement study for the purpose of making money. I did it because I was part of a community and there were people in that community who had been taken in by the Greaney study, who were putting together retirement plans based on a belief that the numbers in the study were accurate. I knew from reading John Bogle’s book (Bogle said that Reversion to the Mean in stock prices is an “Iron Law” of stock investing) that the study was in error (the Greaney study lacks a valuation adjustment). So I had an obligation as a member of that community to point out the error.
Did I expect to make money from doing so. In a vague sort of way, I did. Clearly it was a big deal that there were smart people using a retirement study that got the numbers wildly wrong. After we got the Greaney study corrected, I intended to take the issue to other sites and get all the other Buy-and-Hold retirement studies corrected. That would greatly increase my popularity as a personal finance journalist across the internet and would certainly translate into money down the line a bit Buy $500 million? Please give me a freakin’ break. That’s nuts.
The $500 millions thing came later. You Goons didn’t want people learning about the error. So you engaged in all sorts of abusive behavior and even a good bit of criminal behavior to suppress the discussion that thousands of our fellow community members and a number of experts in the field very much wanted to see go forward. And you would brag about how much financial harm you have done to me with your abusive and in some cases criminal behavior. I needed responses to that. One natural response was to explain that the abusive and criminal behavior could only succeed for so long, that at some point the guy who pointed out the error was going to be rewarded financially for what he had done.
How big would be those rewards. Under our system, what I would have to do (with the help of lawyers) is show how much I would have earned had there never been any abusive or criminal behavior. The answer is that I obviously would have earned a very big muliiple of $500 million. The shift from Buy-and-Hold to Valuation-Informed Indexing is the biggest advance in the history of personal finance. It will permit millions of people to live richer and fuller and freer and more fulfilled lives. That’s clearly worth a whole big bunch more than $500 million. You Goons obviously believe that or else you never would have behaved in the ways you have. I didn’t suggest a number larger than $500 million only because that number is so insanely high that it seems silly to me to use a higher number, So I went with that.
That doesn’t mean that I did this primarily for the money. I didn’t. I did it because I care about the people I got to know at the old Motley Fool board and I like the idea of being able to help those people and millions and millions like them. That’s my driver, helping people and being able to use my life energies to do highly meaningful work. But I sure don’t plan to turn down the $500 million. I earned it. It’s been a hard road. Have you seen anyone else doing what I’m doing? So I earned it.
And it makes some very positive statements for me to receive that $500 million. When it is announced that I have received the $500 million, you are going to see THOUSANDS of people rush in to begin giving honest, accurate, research-based investment advice. Money provides an incentive for behavior in our country. One of the things that has kept Buy-and-Hold going (not the only thing, but surely one important thing) is that it permits the people hawking it to bring in so much money. It’s a healthy development for us to demonstrate as a nation of people that it is possible to make huge amounts of money in this field doing honest, research-based work. That’s the best possible statement. I am honored to play a role in making that sort of statement.
It is a healthy development. It has nothing to do with greed. It’s one of the reasons why our system works well in the end, despite its imperfections. We reward merit with financial incentives. And there’s about 10 billion times more merit in getting the safe withdrawal rates right than in getting it wildly wrong. Accurate safe withdrawal rate calculations help people rather than destroy their lives. So I offer precisely zero apologies for accepting the $500 million. I will be grateful for it, I will say “thanks.” I am grateful to live in a nation of people that created a system of government that permits this sort of thing to happen. We all should be. We all benefit from the merits of that system.
That’s where I’m coming from re this terribly important matter, in any event.
My best wishes, etc.
P.S. If you truly believed that getting the Greaney retirement study corrected was “nothing,” you never would have insisted on a ban on honest posting re the peer-reviewed research at every site. I mean, come on.
Rob
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