VII # 114 — There Are 12 Trillion Reasons Why Buy-and-Hold Became So Popular

I’ve posted Entry #114 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called There Are 12 Trillion Reasons Why Buy-and-Hold Became So Popular.

Juicy Excerpt: We live in a society in which all sorts of ideas compete with each other for the hearts and minds of the people in a position to determine which ideas come to dominate and which come to be viewed as failures. I don’t like it that Valuation-Informed Indexing can properly be termed a failure in marketing terms for the ten years for which I have been pushing it. The full reality, though, is that $12 trillion is a lot of money. $12 trillion wins over a lot of hearts and minds.


  1. Evidence Based Investing says

    I see that you are still churning out your Valuation-Informed Indexing column regularly and eager fans of your Beyond Buy-and-Hold column are still getting a weekly fix.

    However I haven’t seen any recent updates of Investing: The New Rules. Is this column still part of your arsenal?

  2. Rob says

    You Goons say this sort of thing all the time, Trebor.

    I am the biggest Wade Pfau booster alive on Planet Earth. Wade did the research showing that Valuation-Informed Indexing dramatically increases returns while also dramatically reducing risk. I am the person who developed the VII strategy. Why the heck would I want to destroy the credibility of the academic researcher who has done more than any other to advance the investing strategy that I believe is going to pull us out of the economic crisis? That’s insane.

    What you are getting at, of course, is that I have argued that Wade made a terrible mistake to sacrifice his personal integrity and flip to the Goon side. He did. That’s going to follow him around for the rest of his lifetime. He will likely have lawsuits filed against him in days to come. He could land in prison. Is the popularity he has achieved by agreeing to side with the Goons and keep the Buy-and-Hold Tragedy going a few more months or a few more years worth it? I certainly do not think so.

    Wade has two small children to worry about. I think in fairness that that should be mentioned. That’s a bit of an explanation. But it is not an excuse. If Wade does not possess the courage to stand up to the Goons, he needs to find another line of work. An academic researcher needs to report his findings honestly and accurately. People look to the academic research to learn the realities. You cannot let internet Goons intimidate you into saying things you do not believe.

    Here is my grand summing-up article reporting on the many blog posts I wrote on my 16 months of e-mail correspondence with Wade:

    I love Wade, Trebor. I loved the work we did together. I miss working with him. I respect him and admire him. It breaks my heart to think about what he has done both to himself and to the many people who look to him to give helpful guidance on stock investing. I implored him not to go down the path he has gone down. Is there anything you can think of that I could have said that I did not say? If you suggest anything that makes sense, I will say it.

    I will always be Wade’s friend. Any time he wants to contact me, he will get a warm welcome. You call that a “screed”.” I call it friendship. As far as I am concerned, Wade and I remain friends to this day. Wade doesn’t see it that way because he is ashamed of his betrayal. That’s something he needs to work out on his own. If he reaches a point where he wants to reestablish contact, I can promise you with 100 percent certainty that I will be there for him. Nothing would make me happier.

    Please take good care. If you happen to be in contact with our friend Wade, I hope you will send him my warm regards.


  3. Trebor Martin says

    It’s clear that with friends like you, Wade doesn’t need enemies. Do you think Wade would agree with your statement that you are “the biggest Wade Pfau booster alive on Planet Earth”?

    I would be willing to bet my kids’ college tuition money that he wouldn’t.

  4. Rob says

    Do you think Wade would agree with your statement that you are “the biggest Wade Pfau booster alive on Planet Earth”?

    In the days before the Goons threatened to destroy his career if he continued publishing honest research, I am 100 percent certain he would have agreed. He demonstrated his feelings of close friendship with me on many, many occasions during the time he was doing honest work.

    Obviously his goal today is to cover up his unethical behavior. This is one of the reasons why I think we need to bring the Campaign of Terror to an end. Wade should feel that he can do honest research and that the Buy-and-Hold Goons will not destroy him. ALL academic researchers should feel that they can post honest research. We all NEED all the researchers publishing honest research.

    But we obviously cannot get there so long as people like John Bogle are pretending that Buy-and-Hold can work. We learned about the errors in the Old School SWR studies in May 2002. The Buy-and-Holders have taken on hundreds of billions in legal liabilities by covering up the mistake for 10 years. So they see it as a major threat if even one academic researcher does honest work.

    The answer is for everyone to start doing honest work on the same day. We need Bogle to give a speech acknowledging the 30 years of research showing that there is zero chance that Buy-and-Hold can ever work in the long term. We need to get that speech written up in the New York Times.

    Once the cover-up comes to an end, the benefits we will all enjoy as we make the transition from Buy-and-Hold to Valuation-Informed Indexing will be so great that we will all be feeling 500 times better about ourselves. We will be focusing on the huge economic boom we will see when we share with other people all the wonderful things we have learned about stock investing over the past 10 years and we will in time be able to put all the ugliness we have seen during the Campaign of Terror to an end.

    Make that speech, Saint Jack!

    We need you to step up the plate, man!

    Wade Pfau (and lots and lots of others, including Rob Bennett) are counting on you!


  5. Trebor Martin says

    There were no threats against Wade’s job other than your rantings here.

    Wade didn’t engage in any unethical behavior…you did by publishing emails you previously told him that you would treat as private.

    There is no “we”, just you.

    Grow up and do the right thing. Apologize to Wade for your incredibly vindictive and petty behavior towards him

  6. Rob says

    Everyone in this field faces an important question today, Trebor.

    We are the first generation of investors who had available to them the research needed to turn stock investing into a high-return, virtually risk-free endeavor. No group of investors who came before us was so blessed. We can all live far richer lives than we ever dreamed possible if we elect to acknowledge mistakes we made in the past and move forward into an exciting future for all of us and all our friends, neighbors and co-workers.

    The alternative available to us is that we can continue the Campaign of Terror, thereby bring on the Second Great Depression, and spend the remainder of our days regretting our foolish and powerfully sad choice.

    Wade can contact me if he elects to take the better path. Bogle can do the same. Bernstein can do the same. Swedroe can do the same. The hand of kindness remains extended.

    There will be no dishonest posts about safe withdrawal rates going up with my name on them. The odds of that one coming through were precisely zero on the morning of May 13, 2002, and remain precisely zero today.

    I of course wish you well in all your future endeavors, my long-time abusive posting friend.



  1. [...] Posted by Rob in Community, economic crisis, Experts, Goons, Rob Bennett, SWRs Set forth below is a comment that I posted to the blog in response to a claim put forward by one of the Greaney Goons that Academic Researcher Wade Pfau no longer views me as his biggest booster alive on Planet [...]

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