Set forth below is the text of a comment that I recently put to the Joe Taxpayer blog:
That is Robert Shiller’s thesis (not Rob Bennett’s). I don’t think there is any disagreement about it. It’s an established empirical observation. The disagreement is about whether investors can change their asset allocation to take advantage of this. Open and honest debate takes place about this at the Bogleheads site and other places, as you can see from Bob’s link. Again, please don’t be confused by the idea that it is Rob’s ideas that are controversial. He is banned because of his boorish behavior. And as others have pointed out to you, once you finally grow weary of Rob spamming your comments or fail to give him a guest blogger spot, you will instantly join Rob’s list of goons who will be given long prison sentences for financial fraud. At least you’ll be in good company when that happens with people like J.D. Roth and Mike Piper.
Both J.D. and Mike are friends of mine.
J.D. played a role in me getting the interview with ABC News that appears on the home page of my site. When I went to the first financial bloggers conference (FinCon11), I was worried about what sort of reception I would receive. When I was getting my badge, J.D. saw me from across the room where he and a group of my fellow bloggers were sitting and called out to me and invited me to join them. That was a very kind thing to do and I much appreciated it. One time when J.D. was going on vacation, he invited me to write a guest blog entry on saving strategies at the Get Rich Slowly blog, which was the biggest finance blog on the internet at the time. J.D. and I had a long talk at this year’s conference in connection with a book that he is writing about early retirement.
Mike gave me a guest blog entry at his site PRIOR to the 2008 crash. Not many people were willing to do that in those days. He offered an introduction to it that I thought was perfect. He told a joke! He asked (I am paraphrasing): “How can I resist an opportunity to have someone come to my blog and tell people that everything I say about stock investing is wrong?” Mike HATED the idea of banning me from his blog. We exchanged DOZENS of e-mails about it. I once put forward the idea that I would not post any further comments at his blog on a daily basis but that he would give me one guest blog entry per month to tell the other side of the story. He rejected that idea but only after giving it serious consideration. I had a long talk with Mike at FinCon11 and he told me that there was nothing he would more like to see than an end to the Ban on Honest Posting and the Campaign of Terror and that he agreed that Mel Linduaer is a cosmic jerk. He also said that he was afraid of what Mel would do to him and his blog if he raised any objections to his behavior in his postings at the Bogleheads Forum. Mike and I gave a joint presentation on retirement planning at FInCon12. He was 100 percent cordial in all the work we did together planning for that event.
So I like J.D. and Mike and J.D. and Mike like me. Everything is groovy, right?
Everything is not groovy.
Mike banned me from his blog. Not because I broke any of the rules that apply there. He banned me because I posted honestly on what the peer-reviewed academic research of the past 32 years says about how stock investing works. He feels that he will no longer be able to persuade his readers of the merit of his investing claims if they are able to hear the other side of the story. Yes, that is financial fraud. If stocks perform in the future somewhat as they have always performed in the past, Mike’s readers are going to lose most of their life savings. They are going to be looking for someone to hang from a tree and Mike is going to be an obvious choice given that he banned honest posting at his site. I am Mike’s friend and so I care about what happens to Mike. So, yes, it is so that I have said both to Mike personally and in public comments that he has committed financial fraud in an objective sense and that I think that this was a terrible, terrible, terrible choice for my good blogging friend to make.
J.D. did similar things. He feels very funny about bans. So he never went quite so far as to ban me from Get Rich Slowly. But he did direct Goon language at me. He said that I was obviously “mentally ill” to think that there was anything wrong with the Old School safe withdrawal rate studies (this was before the Wall Street Journal and the Economist magazine and Smart Money and about a dozen other major publications all reported that I was right all along about this issue). When I posted at a thread at his discussion board, he sent e-mails to every other poster participating on the thread asking them not to respond to my comments. I once had another blogger suggest that I ask J.D.’s help in resolving the problem with the Greaney Goons since he is a leader in the personal finance blogosphere and since there are responsibilities that go with that role. I thought that was a good idea and I asked for J.D.’s help. I asked him to speak out in opposition to the death threats and the tens of thousands of acts of defamation and the board bannings and so on. J.D. elected not to help out.
So am I friends with these people or am I not friends with these people?
We’re friends as long a the subject of the last 32 years of peer-reviewed academic research doesn’t come up.
We should be friends on EVERY issue.
Why should J.D. and Mike be friends with someone who doesn’t share their views on stock investing?
Because if is often the people who do not share your views on a subject who provide the most help to your efforts to come to a better understanding of it.
Yes, Mike Piper’s readers get upset when I post comments at his blog. He’s telling the truth re that one. It is BAD MARKETING for Mike to permit me to comment at his blog.
But it is GOOD SCIENCE. And Buy-and-Hold is supposed to be rooted in science. Academic researchers are not supposed to over-educated marketing assistants.
If Buy-and-Hold is real, Mike’s readers will be able to handle anything I say in stride.
If Buy-and-Hold is Get Rich Quick garbage DISGUISED as science, their reaction to reports of what the academic research really says will be a massive freak-out. If we see a massive freak-out (we obviously have — that’s why Mike reluctantly banned me), we know that there is something seriously wrong with this Buy-and-Hold “idea.” When we learn that there is something seriously wrong with this Buy-and-Hold idea, the proper thing to do is to INVESTIGATE, not to cover up.
J.D. and Mike (and many, many others — we are obviously only referring to these two particular individuals as examples of people engaging in behavior that we have seen from the vast majority of those advocating Buy-and-Hold strategies) are playing a very dangerous game. Buy-and-Hold has been tried four times in U.S. history. On every one of those four occasions, it made the people following it very, very happy when it filled their minds with Get Rich Quick fantasies while prices were going up to unsustainable levels. And on every one of those four occasions (we are still in the early stages of the fourth ride down, but we are already beginning to see the same pattern play out), people became very, very angry when following Buy-and-Hold caused them to lose most of their life savings, as it always does and as basic common sense tells is it always must. “Widespread and intense anger” translates into “lawsuits for civil damages and prison sentences for repeated acts of financial fraud” in today’s world.
I don’t say that J.D. and Mike have committed financial fraud in an objective sense because I view them as enemies. I say this because I view them as friends.
And of course I say that same thing about Jack Bogle and Bill Bernstein and Larry Swedroe and Scott Burns and Rick Ferri and lots and lots of my other Buy-and-Hold friends.
We have a way of handling differences of opinion that does not involve people being sued for civil damages and people being sent off to prison.
It is called “letting the other fellow have his say.”
It is no crime to believe in Buy-and-Hold with all your heart and mind and soul and for it to be proven wrong at a later date. It IS a crime to advance death threats and demands for board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs as part of an 11-year effort to keep millions of people from learning about errors that were made in studies that those people used to plan their retirements.
I didn’t create this messed-up situation.
I am the fellow who built the Retire Early board into the most successful discussion board in the history of the Motley Fool site. There were responsibilities that fell to me as the leader of that board community. When we saw a fellow coming forward with posts threatening to kill family members of any poster who dared to “cross” him by posting honestly on the subject of retirement planning (at a retirement planning board!), I had zero choice but to call this fellow out and demand his removal from the site.
Had Motley Fool removed him when I sent my first e-mail to them demanding his removal (this was in June of 2002), J.D. and Mike and Jack and Bill and Larry and Scott and Rick and all the rest of us would obviously be in a very, very different place today than the messed-up situation we find ourselves in.
I will continue to show my love for my Buy-and-Hold friends.
NOT by rationalizing to myself that it somehow doesn’t matter if my friends destroy themselves and their lives and their blogs and their financial futures. I will show my love by following the rule that I have followed from the first day of this seemingly endless saga — Alway Be as Charitable as It Is Possible to Be Without Being Outright Dishonest While Also Always Being as Honest as It Is Possible to Be Without Being Outright Uncharitable.
Say that Buy-and-Hold were a legitimate strategy.
In that case, we wouldn’t have to tell lies to defend it, would we?
And we wouldn’t have to advance threats of physical violence to defend it.
And we wouldn’t have to destroy the reputations of our long-time friends to defend it.
And we wouldn’t have to threaten to get academic researchers fired from their jobs to defend it.
And we wouldn’t have to subject ourselves to huge lawsuits to recover financial damages suffered and to prison terms to defend it.
There is something seriously wrong with an investing strategy that compels those seeking to “defend” it to destroy their own lives and the lives of their friends in the way we have seen so many destroy their own lives and the lives of their friends during the first 11 years of our discussions of the realities of stock investing.
That’s my sincere take re this important matter, in any event.
I continue to feel deep feelings of friendship for J.D. and Mike. That’s why I intend to continue to do all I can do to make the millions of middle-class investors whose financial futures are in the process of being destroyed aware of what the Buy-and-Holders did to stop Wade Pfau from reporting to them on the most important research in this field since Shiller’s “revolutionary” (his word) findings of 1981.
More hate is not the answer.
Love is the answer.
I am sure.
Rob