I’ve been sending e-mails to various people letting them know about my article on The Silencing of Academic Researcher Wade Pfau, who showed the superiority of Valuation-Informed Indexing strategies over Buy-and-Hold strategies. Set forth below is the text of an e-mail response that I received on the night of December 5, 2012, from Former FInancial Analysts Journal Editor Rob Arnott. I will provide the text of my response to Rob in tomorrow’s blog entry. Thursday’s blog entry will report on a few brief e-mails that Rob and I exchanged with each other in wrapping up the conversation.
Rob Anott wrote:
I’m copying Jack and Bill [the reference is to Jack Bogle and Bill Bernstein] , who you mention in your article.
I’ve had similar experiences to those you describe; so, I can empathize with you for your travails. HOWEVER, we part company on how to deal with this challenge. I roll with it and move on. You seem to be “stuck” in a victim mind-set. Characterizing one’s adversaries as Goons is also unhelpful to your cause.
Jack Bogle is a dear friend; he attacks some of my ideas with relish, and it doesn’t bother me. He’s entitled to a different view, and he’s never personalized his attacks. Bill Bernstein and I have co-authored one journal article, while agreeing to disagree on a couple of other issues. I remain good friends with both, with ample mutual respect. I know Rick, Scott and Larry less well, but I know that we agree on some things and not others.
As you can probably imagine, my work has often triggered overt hostility from the guardians of the status quo. And, as one of the “godfathers” of Tactical Asset Allocation and of the Fundamental Index® concept, which are kissing-cousins to your work on Valuation-Informed Indexing, it’s clear that you and I both think the markets are inefficient in much the same way.
I’ve also had difficulties getting some of my more controversial ideas published. For instance, I’m having a dickens of a time getting any journal to publish my work with Harry Markowitz, Jason Hsu and Jun Liu, which shows that a modest amount of error in stock prices would create – and fully explain – the Fama-French size and value effects. Journals turning down a Nobel Laureate? Yep, it happens. And the journals that published some of my more controversial papers did get “hate mail” for doing so.
I also know of two young professors who wanted to do research on Fundamental Index® and reported to me that their colleagues advised them that this line of research could derail their career prospects. Outrageous? Not necessarily: in the early days of Fundamental Index®, people weren’t yet sure whether this was the investing equivalent of “cold fusion”!
These are the same kinds of problems that you describe. That’s life. Life isn’t always “fair,” nor is our own perception of “fair” necessarily correct.
In summary, I will not be available to help you protest the injustice of it all. Feel free to add me to the list of those who declined to help, alongside Jack, et al, as long as you’re also prepared to provide your readers access to this email.
I would strongly encourage you to *not* abandon your ideas, but to find other ways to make your case, and to give up on the name-calling with those who disagree with you. Best wishes on pursuing a constructive path, exploring new ideas and accepting criticism from others with civility and perhaps even relish.