The Big Picture blog early this morning posted an article reporting on Academic Researcher Wade Pfau’s research showing the superiority of Valuation-Informed Indexing over Buy-and-Hold. The report is titled: Buy-and-Hold is Dead (and Never Worked in the First Place).
Juicy Excerpt: Attorney, tax expert and financial writer Rob Bennett told us…”The thing that I have done that no one before me has done is to explain the practical IMPLICATIONS of Shiller’s findings. Even Shiller has never done this…. Shiller and many others have been keeping their mouths shut about the practical implications of his theory for three decades now.” Bennett’s website provides endorsements for his stock timing theories and argues that the prevailing Buy-and-Hold dogma helped to cause the financial crisis.
After seeing the report, I sent the following words to Wade:
I hope things have been going well with you. I think of you often. I miss talking things over with you!
I am of course continuing my work to spread the word re your breakthrough research on Valuation-Informed Indexing and on the true cause of the economic crisis. An article was posted early this morning at The Big Picture blog that reports on the essential points:
I’d be grateful to know your thoughts. My thought is — You need to get to work finding a journal for the follow-up research on VII that you told me about! I noted in my first comment on the discussion thread for the article (the comment has not yet appeared at the site) that you would be thrilled to get back to work on that paper if you were given some encouragement. Please consider these words of mine as encouragement that you direct some energies to this important project! Soon! Today! Yesterday!
I also wanted to share with you the words that I sent to the author of the article when he showed me a draft version yesterday night. Thoughts of your good work (and the good work of John Walter Russell and John Bogle and Robert Shiller and so many others) came flooding into my brain when I read the words of the article. Here is the text of my e-mail:
If you have followed Bob Dylan’s career, you know that he has always been a smart-aleck in his dealings with the press. He gave a clue why in some words he put forward after he wrote the first volume of his autobiography and read the reviews of it. He said that those reviews brought him to tears. Most of the people who reviewed his records were not musicians and thus were not able to appreciate the struggles he was overcoming in producing the records. Many of the people who reviewed his autobiography had written books of their own and thus “got” what he was trying to do. The reviews of his autobiography were the first reviews that he fully respected.
That’s the feeling I experience reading your words. What’s different about your write-up is that it shows that you appreciate the scope and significance of the project. That’s the thing that very few others get. It almost brings me to tears to see that after ten years of work someone is seeing how big a deal this is and helping me get the word out to the millions of people who need to hear the message.
You of course have also done very important work, my old friend. Please take a bow!
I will ask my boys to say a prayer for you. My understanding is that God listens with special care to the prayers of children.
And, as John Walter Russell used to regularly advise us all — Have fun!
Addendum: The article now appears at the ZeroHedge.com site and at the WashingtonsBlog.com site. The Financial Times links to the article at its “Alphaville/Further Reading” section, referring to Valuation-Informed Indexing as “An Alternative to Buy-and-Hold.”