An earlier blog entry described the background of my recent correspondence with Michael Kitces on safe withdrawal rates (SWRs). Set forth below is the text of an e-mail that I sent to Michael on November 24:
I share all of your e-mails with John shortly after I receive them. Shortly before I completed my response to your e-mail of this morning (which I sent a few minutes ago), I received the following response from John re your comments.
“Oops! He has a point.”
John is obviously not even a wee bit biased against me. So I wanted to let you know that he thinks you raise a fair and good point. If the revised title does not address your concerns, please just let me know and I will make additional efforts at changes so that things are said properly.
Here is the response that I sent to John:
“Are you able to expand on your comment?
“I’m in the process of crafting a response to Michael and I did make a small change in the title of the podcast in response to his comment (the new title is “My Conversations with Michael Kitces — Even the Best-Informed “Experts” Just Do Not Get It).” I made that change because I don’t want any newcomer to the site to get the idea that I am making a particular dig at Michael.
“However, I believe that the point that no one is today an “expert” on investing is an important one that stands up to scrutiny. We learn by talking things over with others. I have found it all but impossible to engage in truly fruitful discussion of investing with most others because of the dogmatism that has come to surround the Passive Investing model. Have you not had a similar experience? Do you not think that this reality holds all of us back? Do you not think it holds Michael back, preventing him from achieving a level of “expertise” that would be far more helpful to his clients?
“If the point is that Michael should not be singled out as lacking expertise, I agree (it was never my intent to suggest that but I think the change of wording is appropriate to assure that no one gets the wrong idea). But I really do not see how it is possible for anyone to attain true “expertise” in this field for so long as discussions of the basic realities (the question of whether valuations affect long-term returns is as basic as it gets) are as restricted as they are today.
“Please do not interpret these words as a suggestion that you not say so if you disagree. I very much want to hear your thoughts if you think I am off base re this. I of course want to do the right thing. I just want to balance fairness to Michael with fairness to the middle-class investors who need to know if their expectations re what “expertise” means are not being met today (not in Michael’s case in particular, but
My usual practice (as I believe you know) is to post both your e-mails to me and my e-mails to you as entries at my daily blog. In the event that you would prefer that I not follow that practice re any particular e-mail, please just let me know. I see the e-mails as a valuable learning tool for my readers, but I of course do not want to make you feel that you cannot speak to me without what you say going public.
All in the investing field are struggling to come to terms with newly discovered realities today. My sense is that the issue that you and I are talking over in these e-mails is part of that process, a process that down the road will bear good fruit. Thanks for working it as hard as you do!