I’ve been sending e-mails to numerous people letting them know about my article on The Silencing of Academic Researcher Wade Pfau by the Buy-and-Hold Mafia. Set forth below are reports on five response.
1) Sumon Bhaumik, a Professor in International Business and Economics at Aston University, wrote: “I admire your passion about these financial issues. I am an economist and in my profession disagreement is rife. For example, both James Tobin and Milton Friedman were believers in capitalism, but had very different views about various aspects of policymaking. Joan Robinson and Paul Samuelson had difficulty agreeing about the definition of capital. Today, Sachs and Easterly both want to see an end to global poverty but have very different views about how to get there. And none of these people are (or have been) silenced. Hence, while I am aware of the failings of my discipline (and profession) in the recent past, I do not have the same degree of concern about it as you seem to have about aspects of the finance discipline. I would therefore rather not take a position in the discussion that you seem to have in mind, at this point in time. Good luck with your endeavours.”
I responded: “I understand.
“Lots of good and smart people have said things along these lines to me. Former Financial Analysts Journal Editor Rob Arnott told me that he believes that I am right on the substantive issues but that I am “strident” in my presentation. I am grateful when people take the effort to give feedback because they are obviously trying to be kind. But of course it hurts to hear those sorts of words because I obviously do not like to think of myself as the sort of person who goes looking for fights.
“You are of course right when you say that experts engage in intellectual battles of this nature all the time. That’s how as a society we learn. What makes the investing matter different is that the battle between those who believe that the market is efficient and those who do not affects millions of ordinary people in a very direct and very serious way — our retirements are at stake! I got involved not because I wanted to play a role in the intellectual debate but because I have an internet business and because I have read Shiller’s book and have been persuaded to his view of how stock investing works. My words in support of the Shiller model upset non-experts who favor the Bogle/Fama view and they engaged in the insanely abusive practices that are often employed on internet discussion boards to silence the expression of non-majority viewpoints (it is because the internet is so open by nature that those seeking to silence dissent must be so brutal to achieve their goals — we have never before seen a communications medium with so much potential to spread knowledge and thus, those who do not want to see knowledge spread have never before felt so threatened). I did not choose the fight. I was put in circumstances in which the survival of my business and of my reputation were dependent on my working up the courage to engage it.
“I believe (I hope!) that in the end this will work for the good of all. These issues really do affect all of us, not just the experts. So we all should be involved in the ongoing discussion. We need a national debate on the question of whether the market is efficient or whether valuations affect long-term returns. I believe that we will see this debate engaged following the next crash and that its fruit will be a new understanding of how stock investing works that will help our society advance in very important ways. I believe that we will bring an end to this economic crisis and enter a new period of sustained economic growth that would not have been possible had we not first experienced these difficult growing pains.
“That’s where I am coming from, in any event. You have done me a kindness in taking time out of your day to share your impressions. I am grateful for your good wishes. Reading your words has brought a nice little measure of good cheer to my Sunday morning!”
2) Siegfried Dewitte, a Behavioral Researcher with the Research Center for Marketing and Consumer Science in Leuven, wrote: “I am sympathetic to your case because I find the primacy of truth above business interests essential. Unfortunately I don’t have expertise in this field, so my opinion and moral support will not further your cause. Good courage to tackle this issue!” I responded: “Your kind words help!”
3) Bohui Zhang, a Researcher at the Australian School of Business, wrote: “Thanks very much for the e-mail. I will be reading your article and getting back to you shortly.”
4) Omer Moav, a Professor of Economics at Warwick University and Hebrew University, wrote: “Thank you, Rob.”
5) Luke McDonagh, a Fellow at the London School of Economics, wrote: “Hi Rob. Thanks for sending this to me. It looks very interesting. I am very busy with teaching commitments this week but I have made a note of this and will give it the time it deserves to read it properly in due course.”