Yesterday’s blog entry reported on an e-mail sent to me by Academic Researcher Wade Pfau on April 6, 2012. I responded within an hour. The text of my response is set forth below.
I need to get out the door to attend some Good Friday services.
I will get back to you either late today or more likely tomorrow.
I didn’t want you to think that I was not responding because of some sort of anger or something.
I sent a follow-up response later that day. The text is set forth below.
I agree 100 percent when you say “I’m doing what I can.” You have done numerous hugely constructive things. There is no one I can think of who has done more. Re this there is zero dispute.
I agree to a point and disagree to a point when you say that “the way that is best done is to provide new research.”
Providing new research is certainly constructive. That’s clear’y a great thing to do.
But is that response mutually exclusive with the response of pointing out the errors in the Old School studies and getting them corrected?
I put up the post pointing out the errors in the Old School research on May 13, 2002. The Retirement Risk Evaluator was published a few years later, MANY years prior to the many recent media reports that finally
report that the Old School studies get the numbers wrong.
I am not a researcher. I did not have the skills needed to create that calculator on my own. If I had not put forward a post pointing out the errors in the Old School studies, John Walter Russell would never have started doing his research and we would not have that calculator today.
ALL of Russell’s research (some of the most important research that has ever been done in this field, in my assessment) exists because I put that post to that board and we thereby connected. It’s the same with the Return Predictor and the Scenario Surfer and my 200 podcasts and every entry in my three weekly columns. None of that material would exist if I had not had help from John and from hundreds of other community members who connected with me because of that post
and the discussion it generated (still going strong today ten years later!).
And to the extent I have helped you, that help wouldn’t have been provided had I not written that post. Anything that you read by me from my Vanguard Diehard days was the product of work effort that followed from the May 13, 2002, post.
You are doing fantastic work, Wade. I know I have said this many times and I know that I have never said otherwise because the thought that there could be an otherwise has never entered my brain. But there
are many roads to Dublin, to quote a phrase. Pointing out the errors in the studies is important work too.
Say that we get the ban lifted. Microlepsis was one of the most effective and most popular posters at Diehards. John D Craig was another. Retire at 48 was another. All were banned when the board moved to Bogleheads. It’s not just Rob Bennett who would be posting there if honest posting were permitted. Lots of people who were banned because they posted honestly would be there and lots of people who silence themselves on important points today would be speaking up if there were not punishments exacted for doing that.
Rober Shiller has said in interviews that he has never told us all he knows about investing because he would be considered “unprofessional” if he did so. Robert Shiller! This guy has tenure! At Yale! And he doesn’t dare cross the Goons. There is a serious problem here, Wade.
You do something very smart in seeking feedback at Bogleheads. It’s a great way to learn about the strong and weak points of a line of research before getting too formal with it. That’s a huge plus of this new communications medium that I’d like to see lots of people taking advantage of.
But not at the price of their personal integrity! Death threats? Defamation? Threats to get people fired from their jobs? Huh?
This stuff is not slightly unethical, Wade. It is so far over the line that, if we tolerate this stuff, there is no longer a line. We cannot become cannibals. When we give a Lindauer or a Greaney veto power over what is said on the internet, we compromise ourselves in very, very serious ways. This is a money field. This is not a field in which any of us can afford to do that.
Research must be subject to challenge. If it’s not, it’s not science. You submit yourself to peer review. What the heck good is peer review if there is an understanding that research done in this field is never to be corrected no matter how wrong and dangerous it turns out to be?
I’ll tell you why I think you got upset about the Bill Bengen thread. I think you know on some level of consciousness that I am right. And I think you feel that I am questioning your ethics.
I am! Not just yours, though. I am questioning the ethics of every person who has seen that those studies have not been corrected and has failed to do anything about it. The entire field is corrupt, Wade. That sounds like an extreme statement but it really is just a statement of obvious objective fact. So many people got so many things so wrong that we have all adopted a policy of not “telling” on anyone. So the mistakes just get worse and worse.
I want to take it the other way.
That does NOT mean that I have it in for Bill Bengen or John Bogle or John Greaney or anyone else. I do not. I like all those people. I’ve learned from them all. I am trying to help them all.
I suggested to Greaney very early on that he join me in writing a New School study. He would be famous today! He turned me down. But he could have done that.
Bengen can do a new study. He can make it better than his old one. I would be thrilled to help him out. I bet you would be too. I bet the entire Bogleheads board would be if a few troublemakers were shown the door first.
The learning process begins with the admission of mistakes. There is nothing whatsoever bad about admitting mistakes. People would LOVE Bill if he would openly admit his mistake and then get about the business of doing a better job. People would love Bogle if he would admit his mistakes and then get about the business of doing a better job. This sort of thing is done in other fields ALL THE TIME. It’s InvestoWorld that is weird.
I’ll tell you the core problem.
We are in the early days of understanding how stock investing works. Our knowledge today is primitive. We do not know it all. And that scares us. So we act like we do.
If we could just admit that, we could learn bunches. By getting so full of ourselves, we close the door to all sorts of wonderful advances.
There are lines of research that you cannot even imagine today. You are thinking too small. You are trying to follow in the footsteps of people who came before you when you have the opportunity to go to places to which they never went.
Yes, do that new research. That’s A+ stuff. But also please try to understand that it’s important that we get lots of other people doing A+ research. And to do that, we need to make clear as a community that we don’t think we know it all, that we understand that the purpose of the research is to help investors and that part of our responsibility in that regard is to correct mistakes and that we all favor the openness to new ideas that has long been characteristic of our society outside of the investing realm.
Does any of this make sense? Does it click?
It’s not “Do new research” or “Identify problems with old research.” It’s both! Both things are wonderful. Both things are needed. The idea that there is something wrong with admitting a mistake or something mean with pointing one out is killing us. I’m proud that I was the person who discovered the errors in those studies! And properly so!