Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:
Bogle, Shiller, Buffett, and countless other successful investors say you are wrong. Does any person you can name say you are right?
They do not.
Bogle, Shiller and Buffett have all made statements suggesting that they believe that there is zero chance that Buy-and-Hold can work. But none of the three have ever explained in any detail either why they do believe it can work despite the mountain of peer-reviewed research showing otherwise or why they do not believe it can work. All three (and hundreds of other “experts” in this field, to be sure) continually and repeatedly duck this critically important question.
Shiller and Fama were both awarded the Nobel prize in Economics on the same day a few years back. The New York Times report on this development noted how odd it was that two men whose research showed entirely different things about how stock investing works were awarded the highest honor in the field. It’s not even logically possible that both Shiller and Fama are right. So why give the one who is wrong the highest honor?
That’s where we are as a society today. The mountain of research showing that Buy-and-Hold can never work for a single investor has grown so large that even the biggest names in the field can no longer entirely ignore it. So even people like Shiller and Bogle and Buffett offer occasional glimpses into their real beliefs re this critically important subject. But none of these three (or of the hundreds of others) dare to give voice to the plain and obvious and clear and provocative and exciting truth — Buy-and-Hold was a mistake and could be seen as one by anyone following the peer-reviewed research in this field as early as 1981.
We are as a society working up the courage to enjoy 35 years of powerful research-based insights on the single day when we open up the first large web site to unrestricted, honest discussion of what the peer-reviewed research really says. I have spoken to numerous researchers and professors and advisors who would like to feel free to do honest and helpful work in this field but who today hold back because they know that their careers will be destroyed by you Goons or other Goons much like you should they dare to “cross” you by doing so. But all that will come to an end following the next price crash, when the dangers of covering up the realities any longer will become so real to all of us that we will feel that we have no choice but to put Buy-and-Hold behind us and move forward together.
That’s my sincere take, Dan. If you really wanted to know Shiller’s beliefs, you would drop all the nasty stuff and ask him and he would be happy to tell you. it’s the same with Buffett. It’s the same with Bogle. It’s the same with the hundreds of others. The only problem that we face today is that Valuation-Informed Indexing represents such a huge advance that it pains the Buy-and-Holders to hear that they were taken in for a long time. Keeping quiet about this matter is not charity, it is cowardice.
Deep in our hearts, we all want the same things. Deep in our hearts, we all want to learn the realities of stock investing so that we can invest effectively for our retirements.
I wish you the best of luck in all your future endeavors, old friend.