Hi IndexUniverse:

Murray Coleman his written an excellent column describing the decline (temporary, I hope) of Morningstar's Vanguard Diehard Forum and the inception of the Bogleheads Forum.

Murray's article is interesting, accurate and balanced.

Congratulations for a job well done!

Taylor Larimore
Miami, Florida

This was a column, not an article. Big difference. And I stand by every word in it!
Mr. Bennett, your personal attacks have resulted in at least a dozen financial sites kicking you off their boards. I wasn't going to bring up names, but your trolling was a major reason why the Diehards decided to start their own moderated site.
Mr. Bennett, your refusal to engage in civil and accurate discussions is well-documented. This is a moderated forum and such behavior won't be tolerated here, either.

In my opinion Murray missed the point when he concluded his coverage of the Diehards forums by writing:

The grassroots effort that started Diehards will no doubt keep it popular for a long, long time. But one has to wonder about the now publicly traded, ever-expanding Morningstar. Although its chat areas are definitely a noncore part of its business, the Diehards episode should be a wake-up call.
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As a Morningstar (M*) stock holder and after being a frequent poster on M* discussion forums for the last six years I have reached the conclusion that these discussion forums are in conflict with M* objective as a profitable company, and thus cause more damage than good. While M* receives most of its revenue from institutions and financial advisors, it's a sad fact that financial advisors have been routinely bashed on M* discussion forums. It seems to me that the investment goal of the Diehards, to be DIYs, caused the gathering of anti- advisor bullies on M* forums. Attacking financial planners, and insurance and annuities providers, has become a norm.
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My question: Assuming that M* 's income from the ads surrounding the conversations is not a deciding factor then why not have M* forgo these discussion forums, and let the newly formed Bogleheads website deal with DIYs?

M* stockholder, two of the most prominent members of the forum (Swedroe and Ferri) are financial advisers, so I don't know how you get off saying there is some sort of anti-adviser lynch mob on the forum. The members are quick to pounce on those advisers who prey on the weak and uneducated by offering products that do not serve their clients best interests and charge outrageous fees. My only guess is that you are actually 'Insurance Man' the new local provocateur. No one buys your weak arguments, so you consider it bullying. It's part of how the forums can help so many people is that there is a distinct philosophy that allows members to guide and help them to what we consider the best courses of action.With regards to censoring the Vanguard forum for reasons of profitability, I imagine it would hurt their public image more than it would bring new advisers to pay for their services who had previously boycotted the site for allowing people to be mean to bad advisers. Are there ny advisers that have such a boycott? Or are you clutching at straws?

Zack: Larry Swedroe and Rick Ferri are NOT licensed financial planners or insurance brokers. As such, most likely they are not prospective purchasers of M* products, such as the Advisors Workstation, the Principia, etc. But Insurance Man (I-M) is very much a likely purchaser of M* products. Not only that I-M is a maven in Financial Planning Software but even provide info and recommendations to other financial advisors on available software programs. So who is more important to M* profits, I-M or a few DIYs? ------------

In addition, why should posts by a financial advisor such as I-M, at the M* Diehards forum, be trashed (deleted) by M* moderators as they have been? Is these moderators’ interest with M* or with the DIYs? ---------------------

Just reminding you about M* target customers (an excerpt from M* filing at he SEC):-------------------

How We're Organized -------------------

We have a decentralized business structure, with three global business segments: Individual, Advisor, and Institutional. Early in our history, our product lineup emphasized products for individual investors. As a result, the Individual segment contributed a majority of our revenue. In the early 1990s, our Advisor segment became a more important part of our business. More recently, we've begun serving more investors through our Institutional segment, which was the largest of our three segments in 2003. We emphasize a decentralized approach to running our business to empower our managers and to create a culture of responsibility and accountability.--------------------

So why not terminate M* discussion forums and let DIYs go to the Bogleheads Website?

Rob, that forum is mostly posts on pornography and sexual enhancements. I looked at the content of some of these posts and it looks like it was created by a random sentence generator or cut/paste from other sources of nonsense. They also all appear to be one post per user with 0 responses to anything and it looks like you created all of the content yourself. You are a very odd duck.

Index fan's link to the DripGuy posts is very interesting and informative regarding the history of the Vanguard Diehard board at M*. The Nords summary,
http://www.s152957355.onlinehome.us/cgi-bin/yabb2/YaBB.pl?num=1189390571/11#11
is excellent, and Rob's reply following it isn't too bad either.

So what really happened at M* to cause its decline? I agree that the M* decline would never have happened if it hadn't been for hocus, and it is quite possible that the Bogleheads forum would never have been started. If hocus had been banned from the start, that would have solved the problem, but the main problem was not M*'s failure to ban hocus.

To begin with, hocus' investment views were not mainstream diehard, but hardly so extreme as to justify his ban. There have been many who espouse much more extreme views who are still happily posting (see DG's reference to Chip Plumb.) Hocus' main fault was the way he continually hijacked and monopolized threads. He also irritated people by claiming in effect that he was the SWR messiah. M* erred in my opinion by not stopping this activity by hocus. M* probably failed to act, because hocus' posts were respectful and they didn't appear to constitute any specifically prohibited activity. If everyone had ignored hocus, that probably would have solved the problem.

What actually caused the M* forum decline, and that of other forums before it, was the amazing level of hocus bashing. Hocus' activity seems to generate enoumous cult followings of attackers (the above referenced thread is only one example). People often want to psychoanalyze hocus, but they should instead try and psychoanalyze the cults. M* diehards organized its own cult of hocus bashers as other forums had done before it. There were no holds barred for this cult; any attacks and insults against hocus were fair game, and M* did nothing to stop these (now mainstream) attacks even though they did violate M* express policies. The cult claimed that their actions were justified because hocus was preaching investment policy that might be detrimental to newbies who didn't know better (but as stated above the hocus views were not extreme). The hocus bashing attacks were relentless and that is what eventually consumed the forum as described by nords in the above link. Failure to control the hocus bashing was the primary cause of the decline of the M* forum.

Bennett claims that Mel linked to a site of a person who allegedly threatened Bennett with bodily harm. But Bennett is the most prolific poster at the site Mel linked to. MANY posts at that site ask Bennett to provide any proof of his many allegations. He never does. Bennett's stories and investment theories seem to be based on conspiracies, song lyrics, analogies, jokes, bodily functions, and misquotes. His own web page bills him as a financial advisor who creates asset allocations you can dance to. He has no known qualifications as a finance advisor and claims he can't even do math. He posts under the name hocus which means 'to deceive' but he also signs up under additional names to support himself. He seems to be a passive-aggressive who has been posting the same disproven stuff for years and whenever anyone reacts he adds that reaction as 'proof' of the conspiracy against him. M* made a huge mistake in letting hocus run his comedy club in their supposedly serious forums for so long.

Rob, it seems you may have missed the point of my post. The problem was never your specific views on investing. The problem was twofold: first, the way that you hijacked and monopolized threads; and second, and more importantly, the way a cult formed (as had happened on other forums) to join in on the sport of hocus bashing. The combination of the two resulted in an enormous distraction from the main purposes of the diehard forum and led to its subsequent decline.

The problem was never your specific views on investing.



If you want to get right down to the nitty-gritty, the 'problem' is that I told Greaney that he was wrong and I told Lindauer that he was wrong.



Cancel that. Let's go big picture.



I told everyone that Bogle got some things wrong.



Bogle's wrong about some things. Can we say that on the 'Bogleheads' board? We better. If we don't. Bogle's going to feel awfully bad when people following his uncorrected investing advice suffer big-time pain because no one cared enough about the guy to fill him in on the big secret.



I learned as much from Bogle as anyone else ever has. Bogle got me on the track that led me to development of the Valuation-Informed Indexing approach. I have fond feelings for the guy. I respect his accomplishments. All that stuff.



That's part of the reason why I say out loud that he got stuff wrong. I would want him to tell me if the tables were turned. I do for him what I would want him to do for me.



Bogle's a human. He makes mistakes. When we identify one, we owe it to the guy to let him know. I am incapable of seeing it any other way.



This is why I say that Lindauer disses Bogle. He says that we should not say anything about Bogle's mistakes. I think that's a dissing of the man. It shows a lack of respect for him. It suggests a belief that he lacks personal integrity.



I cannot play it that way. I can say it with respect. I can say it with warmth. I can say it with charity in my heart. I cannot not say it. When you know that the guy made a big mistake (the mistake is the idea that people don't need to change their stock allocations when prices go to la-la land levels), and when you know that it is going to hurt many people in very serious ways, you have to say it.



I couldn't post anymore if I betrayed my fellow community members by failing to speak up about the errors in the Old School studies. I couldn't call myself a Boglehead anymore if I failed to do all that I could to let Bogle know of the errors he has made in development of his investing recommendations.



The idea that it is a bad thing for Bogle to admit having made a mistake and that it is a bad thing for me to point out the mistake to him is the idea that I am against most strongly. My take on this one is what distingushes me from some others. I like Greaney as a person and I like Lindauer as a person and I like Bogle as a person and I think that all three would be a lot better off if they acknowledged their mistakes.



I view the idea that we all should spend most of our life energies covering up our mistakes as deeply sick. I hate that idea. I see that idea as the enemy of our hopes of investing successfully for the long run.



Rob