Set forth below is the text of an e-mail that I sent on January 12, 2010, to Patrick Courrielche, a journalist at the www.BigHollywood.Breitbart.com site.

Patrick:

My name is Rob Bennett. I write the “A Rich Life” blog (http://arichlife.passionsaving.com).
I enjoyed your article entitled “Peer-to-Peer Review — How Climategate Marks the Maturing of a New Science.” I would like to interest you in another story in which a flawed approach to peer review has played a big role — the promotion of Buy-and-Hold Investing and how it caused the stock crash and the economic crisis that followed from it.

Buy-and-Hold is the dominant model for understanding how stock investing works.
It is said to be “scientific” in that it is the product of academic research based on analysis of the historical stock-return data. The reality is that the academic research has shown for 30 years that the odds of a Buy-and-Hold strategy ever working in the real world for a long-term investor are precisely zero.

Rob Arnott, who for four years served as the editor of the Financial Analysts Journal, tells a story of when he asked a group of about 200 academic researchers how many of them still believed in the Efficient Market Theory (the intellectual framework of the Buy-and-Hold Model). Only a few hands were raised. Then he asked how many were going to use the Efficient Market Theory in the research they would be doing when they got back to the office. Nearly every hand in the room went up. Everyone in the field knows that the intellectual support for Buy-and-Hold Investing has collapsed. But it is career suicide to say this out loud today. The result is that far more effective investing strategies cannot be publicly discussed and the errors of the investing “wisdom” that may be discussed has put us in the worst economic crisis since the Great Depression.

The problem is that the “experts” who have advocated Buy-and-Hold for decades are
embarrassed to have the public learn how dangerous their advice has been. I put a post to a Motley Fool discussion board in May 2002 showing that the studies that financial planners use to help us all plan our retirements contain an analytical error that causes all the numbers to be wildly off the mark. My findings have been confirmed by numerous big-name experts. But I have run into a brick wall trying to get the findings publicized. Dallas Morning News Columnist Scott Burns told me that my efforts to get the word out to middle-class investors about the accurate retirement planning numbers would prove to be “catastrophically unproductive.” Scott explained that the general media will not report on this because: “It is information most people don’t want to hear.”

I have received positive feedback from hundreds of middle-class investors and from a number of financial planners (please take a look at the “People Are Talking” section on the left-hand side of the home page of my blog to see 50 linked comments praising my work). But I have indeed run into a brick wall trying to get the matter publicized. Honest posting on this matter has been banned at numerous discussion boards and blogs. The authors of the discredited studies and calculators and books  have even threatened physical violence on those who report accurately on these matters and the owners of the forums and blogs have in most cases raised no objection.

Buy-and-Hold gains its credibility from the fact that it is rooted in “science.” But a “science” that is not corrected when new research identifies flaws in the original theory is not true science. I am trying to get publicity for this matter with the hope of launching a national debate on what really works in stock investing.

Here is a link to a Google Knol that I have written explaining why Buy-and-Hold Investing can never work:

http://knol.google.com/k/rob-bennett/why-buy-and-hold-investing-can-never/1y5zzbysw7pgd/1#

Here is a link to an article explaining how the promotion of Buy-and-Hold caused the economic crisis:

http://www.passionsaving.com/cause-current-financial-crisis.html

Here is a link to an article setting forth links to 20 articles in which leading figures note that the Efficient Market Theory has been discredited by the academic research of recent decades:

http://www.passionsaving.com/buy-and-hold-investing.html

Here is a link to an article containing 101 snippets of posts put forward by middle-class investors expressing a desire that honest posting on these matter be permitted at investing discussion boards:

http://www.passionsaving.com/investing-discussion-boards.html

Please let me know if you have any questions or if I can supply further details that would help you determine whether to explore this in more depth.

Rob
http://arichlife.passionsaving.com