Set forth below is the text of a comment that I recently posted to the Joe Taxpayer blog:
Rob is passionate on his beliefs. The market is very strange, and it takes decades for Rob’s thesis to be proven correct. (I don’t mean the analysis, but the actual results.) He is correct that the assumptions most planners use are in fact, dangerous.
Lots of people say this and I suppose that it is generally true. But there is one way in which it is not 100 percent true and I always feel that I should try to help people understand that so that they have the full story.
I don’t think of myself as a passionate person. I just think of myself as me. But enough people have used this word to describe me that I have come to accept that it applies. There once was a girl whom I had a crush on for years and we were friends and I couldn’t understand why she wouldn’t go on a romantic date with me. It drove me crazy! Finally she broke down and told me that I was too “intense.” This explanation of the problem had never crossed my mind! Other people pick up on this but for me it is just what I am so I don’t really see it.
But I am not particularly passionate about investing or about Shiller. I think Shiller is right. I think Valuation-Informed Indexing is the future. But by itself that is not a big deal for me. I started posting at Motley Fool in May 1999 and I never even mentioned Valuation-Informed Indexing until May 2002. For three years I wrote only about saving stuff. Investing is way down the list of topics re which I care about.
However, I AM passionate about the people in the internet communities to which I have posted. The thing that makes me feel intense feelings is people and their stories. When you post at a board regularly, you get to know people as people. From that point forward, you cannot not care. At least I don’t see how that could be possible.
There was a strange set of circumstances that caused me to become known as the lead proponent of Valuation-Informed Indexing on the internet. The truth that few newcomers know is that I dropped out of the debate on Day Five because of the abusiveness of the Goons. But after I left, hundreds of my fellow community members at Motley Fool picked up the ball and started talking about all the wonderful insights we had developed together in just those five days. That pulled me back in. At that point, I would have felt like a creep not to get involved just because of a few nasty personal attacks.
Then it just grew and grew. The mountain of evidence supporting Valuation-Informed Indexing got higher and higher and the Goons got more and more desperate in their tactics. I have ALWAYS said that we should have shut them down when Greaney advanced his first death threat. All that we have done is hurt them by failing to take effective action. Greaney and I had a lot of good times together and it causes me great pain to see what he has done to himself. I HATE it that as a community we have let these terrible events transpire. But I don’t control it and I have to accept the realities whether I like them or not.
The two things that I am passionate about are our country’s economic system and our country’s political system. It is a core principle that we permit both sides to speak and that we even encourage the expression of different ideas and new ideas. My cause is to make that general rule applicable in the field of investing analysis just as it is in every other field of human endeavor in our society. I couldn’t possibly feel stronger re that one. Please feel free to label me as “intense” and “passionate” re that one all over the internet.
If we permit people to post their sincere beliefs, I am confident that things will work out well. I don’t have any worries once we pull together to open the internet to honest posting in the investing realm.
I DO believe that people will go to prison over this. I of course HATE that reality and I of course acknowledge that it is a 100 percent crazy reality. But I have seen how people react when they learn that they have been lied to and have suffered huge financial losses as a result. It’s not a pretty scene to behold. Today we see all this emotion on the side of Buy-and-Hold. When things flip (I believe this will happen following the next crash), I believe that all that emotion is going to be on the other side. I will then be the guy saying “Hey, the Buy-and-Holders are good and smart people, let’s not get carried away here.” I LOVE the Buy-and-Holders. I only wish they loved themselves as much as I love them.
Anyway, the point here is that I fight for Valuation-Informed Indexing more because I want to see the boards and blogs run honestly than because I care so much about stock investing. Perhaps that’s part of the reason why I see things from a different perspective than most. The more intense you are about investing, the less able you are to acknowledge the evidence showing that you have been following long- discredited ideas. I don’t have that hang-up. I am able to just look at what the research shows because none of the investing stuff is a big huge deal to me. I am not personally invested in it. Whichever way it goes is okay by me. If the Buy-and-Holders are proven right in the end, that’s fine by me, so long as it happens as part of an honest process in which all “sides” feel free to express their sincere views.
If you had told me on the evening of May 12, 2002, that I would spend the next 12 years of my life leading the most controversial debate on stock investing ever held on the internet, I would have told you that you were out of your mind. I would have put the odds at zero. But here we are. Life has a way of playing funny tricks on all of us. You either develop a sense of humor or you don’t last long in this valley of tears. That’s been my experience, in any event.
It’s always nice to hear your voice up close and personal, Joe. Keep fighting re that fees things. When people become passionate about something, there is a reason for it, even if some others cannot see it immediately.
Hang in there, man.
Rob