Harvard Law School Professor Alain Lempereur: “It Is Not Easy to Work on This Kind of Topic. I Can Testify Too.”

I have been sending e-mails to numerous people letting them know about my article reporting on The Silencing of Academic Researcher Wade Pfau by the Buy-and-Hold Mafia. Set forth below are reports on five responses.

1) Alain Lempereur, Director of Graduate Programs in Coexistence and Conflict at Harvard Law School, wrote: “Thank you for sharing this with me. I read the piece last week. It is not easy to work on this kind of topic. I can testify too. I was in a business school before…”

I responded: “Thanks for taking the time to read the article and thanks for your response. It certainly has not been an easy 10 years. But I do think we are starting to see some light at the end of the tunnel. I have to point people to the bad stuff to help them make sense of the story. But I also try to emphasize that the good here outweighs the bad by at least 10 to 1. An argument can be made that the good and the bad are connected. People are upset because it hits them that they have wasted opportunities. That’s why things get on the wrong track. But it is because the opportunities are so great that the emotional pain is so intense. As people become better able to take advantage of the opportunities, the good will come to dominate. I bet that the people who replaced cars with horses ran into this sort of problem. We just don’t hear about the foot-draggers today. The bad stuff is forgotten in time and the good stuff gets better and better and better. Or so I tell myself, in any event. Don’t let the bad guys get you down, man.”

2) Rifat Yilmaz wrote: “What do you want me to do with this?”

I responded: “There’s no particular call to action. I learned about the problem by posting honestly about stock investing on the internet. I was amazed to see what Buy-and-Holders did to block discussions (I also interacted with many investors who wanted to learn the realities). I believe that it was the promotion of Buy-and-Hold that caused the economic crisis. The numbers show that. We are all affected by this economic crisis and we all will be affected in more serious ways when it gets worse. I feel that it is urgent to get the message out and the ordinary means of doing so have all been blocked for me. My thought is that we all should do what we can. Perhaps you can share the link with some friends when they express concerns about where the economy is headed. That would certainly help. My belief is that it is only by getting other people involved that we can work up the courage as a society to deal with the problem. The Buy-and-Holders are smart and good and hard-working people. They are in intense emotional pain. The good news is that, if we melt their hearts, we can all begin working together to take things in a very positive direction indeed. We know things today about how stock investing works that no generation that came before us knew! I hope that all makes at least a tiny bit of sense. Please stay positive, please get involved to whatever small extent seems practical in your circumstances and please wish us all luck as we continue as a society down this highly promising but more-than-a-little-scary path that we are on today.”

3) Shelley Marshall, a Senior Lecturer at Monash University, wrote: “Thanks for sharing, Rob. I’ll look forward to reading your paper.”

I responded: “Thanks for your response. I just wanted to be sure that you understood that the paper that I worked on with Wade has already been published in a peer-reviewed journal. It is here: http://mpra.ub.uni-muenchen.de/29448/ It is written in that dry style that academics favor (Not me! We journalists play it a very different way!). But the implications are far-reaching indeed. The graphic on Page 11 suggests that an investor can reduce risk by 70 percent by taking valuations into consideration when setting his or her stock allocation. My best wishes to you.”

4) Vikram D. Amar, Associate Dean for Academic Affairs at the University of California Davis School of Law,  wrote: “Thanks. This is not really up my alley but I wish you the best.”

5) Michal Gilad, wrote: “I am a little confused. What is the purpose of the review? This is by no means my area of specialty.”

I responded: Thanks for your response. I understand that it is not your area of specialty. In some respects that is a positive. People in this field feel limited in what they can say. Their careers are at stake. I am not seeking any particular response from you. I am letting various people know about this. The economic crisis affects us all in a big way. We all need to be thinking about how as a society we can overcome it. We all can help in different ways. Perhaps you have friends who are interested in the subject and you can share the link with them. Each of us can make a small difference and in the end lots of small differences can added together make a big difference. I hope that makes at least a little bit of sense.”

Comments

  1. Evidence Based Investing says

    “The Silencing of Academic Researcher Wade Pfau”

    Silencing? Not really. Wade has a blog that he updates regularly http://wpfau.blogspot.com/ at which people actually respond to him. You don’t find “0 comments” as a major feature of his blog.

  2. Rob says

    He doesn’t say what he believes, Evidence.

    Wade believed that the Old School SWR studies should be corrected. He said so publicly. That was heroic. We could save millions of middle-class retirements by getting those studies corrected. And everyone who works in this field will start feeling better about himself on the day when we all come clean.

    Now he is afraid to say that. That is being silenced.

    I don’t mean that he never puts forward any words. I mean that he is now afraid to put forward the words that most matter, the words that we all most need to hear, the words that it is his job to bring to us.

    I wish you well.

    Rob

  3. Rob says

    You don’t find “0 comments” as a major feature of his blog.

    If Bogle and every other leader in this field made it a practice to promote my blog in every speech, you wouldn’t see zero comments here either.

    How often has Bogle publicly endorsed this blog?

    I am the person who discovered the errors in the Old School SWR studies, right?

    That’s pretty darn important stuff, right?

    Bogle cares about the millions of middle-class people who fell for those studies, right?

    So why do we not hear more from him about Valuation-Informed Indexing?

    When we reward the people doing good work in this field, we will have more people doing good work in this field.

    I’d like to see Bogle speak out more often. I’d like to see lots of people speak out more often.

    Rob

  4. banned plop contributor says

    1. Even an innumerate troll should know that ‘scores’ equals “more than forty.” Since you already published very private and personal emails from Wade, I can’t imagine you’d have any issue publishing those 40 back and forth sessions.

    2. If Wade publicly ‘requested corrections’ of any allegedly errant studies, then there would certainly be a record. Yet, I have seen you provide no link to any such record, nor any direct quote from him that is in line with your claim.

    3. In order for Bogle to ‘promote’ anything, (something I can;t recall EVER seeing him do, even for top notch quality content), I would think it would have to be a lot more than just a one man cesspool run by an internet crank as a way of trying to sooth his internal pain at being told nearly universally, starting over a decade ago, that his ideas, methods, and techniques in the investing arena were without merit, and therefore would be (as they remain), fruitless. Short version: Don’t hold your breath, Rob!

  5. Trebor Martin says

    Wade says what he believes, just not what you believe. It’s too bad that you are incapable of grasping such a basic concept.

  6. Rob says

    Wade says what he believes, just not what you believe.

    Here’s my article on how the Buy-and-Hold Mafia threatened Wade:

    http://arichlife.passionsaving.com/the-buy-and-hold-crisis/academic-researcher-silenced-by-threats-to-get-him-fired-from-his-job-after-showing-dangers-of-buy-and-hold-investing-strategies/

    No one expresses one belief over and over again for 16 months running and then, on the day a threat is made to get him fired from his job, gives up that belief entirely and starts believing the precise opposite of what he always believed, Trebor.

    Wade has two small children to support. So, yes, the Buy-and-Hold Mafia was able to get him to lie on their behalf. But no one with a bit of sense believes for two seconds that he did not believe what he said for 16 months and that he does believe what he started saying when a gun was put to his head.

    If Buy-and-Hold were a legitimate strategy, there would be no need for the Buy-and-Hold Mafia to threaten academic researchers. If Buy-and-Hold were a legitimate strategy, the Buy-and-Holders would be able to provide a URL for a study that supports their GRQ claims.

    It is an act of financial fraud to threaten an academic researcher for the purpose of continuing an 11-year cover-up of an error made in a retirement study. People will go to prison for this crime following the next price crash. I want no part of it. I hope to become known as the strongest voice on the internet speaking out in opposition to Buy-and-Hold and to the 11-year Campaign of Terror against our board and blog communities.

    I naturally wish you all good things.

    Rob

  7. Rob says

    In order for Bogle to ‘promote’ anything, (something I can;t recall EVER seeing him do, even for top notch quality content)

    My friend Jack Bogle is one of my heroes, Trebor. He most certainly HAS promoted something — he has promoted Buy-and-Hold. Bogle is the King of Buy-and-Hold.

    We now know that Buy-and-Hold is in error. We now know that Buy-and-Hold caused the biggest economic crisis in U.S. history. I am highly confident that Bogle is going to promote Valuation-Informed Indexing as the CORRECTED form of Buy-and-Hold.

    The only question is whether he will wait until after the next price crash puts us in the Second Great Depression or whether he will act now and thereby save millions of middle-class people from great suffering.

    I think it would be fair to say that anyone who has ever felt even a sliver of affection or respect for my good friend Jack is doing all he or she can today to get him to give that speech by the close of business tomorrow.

    Don’t let the bad guys get you down, Banned.

    Rob

  8. Rob says

    Since you already published very private and personal emails from Wade, I can’t imagine you’d have any issue publishing those 40 back and forth sessions.

    The same link I provided up above will work for you too, Banned.

    The “very private and personal e-mails” you refer to show that you have been engaged in criminal behavior for 11 years in your efforts to cover up the errors in the Old School safe withdrawal rate studies.

    They deal with a personal and private matter for you — your personal and private prison sentence. What the historical stock-return data says is not “personal and private” for an academic researcher in the investing field. People like Wade look at the data and talk about the data on a daily basis.

    The only thing that ever made this a “very private and personal” matter for Wade was when you threatened to get him fired from his job for the “crime” of publishing honest research. Wade has two small children to support. So, yes, keeping his job is indeed a private and personal matter of some importance to him.

    Once Bogle gives his “I Was Wrong” speech, none of us has to post dishonestly ever again. And there won’t be any additional people going to prison at that point. Nor will there be an economic crisis once we are all able to take advantage of what we have learned from the last 32 years of peer-reviewed academic research.

    We all should be working to make that day a reality, in my assessment.

    I wish you all good things.

    Rob

  9. Rob says

    as a way of trying to sooth his internal pain at being told nearly universally, starting over a decade ago, that his ideas, methods, and techniques in the investing arena were without merit

    There are over 140 comments at the “People Are Talking” section of this site (please take a look to the left side of this page) refuting what you say here, Banned. The first comment is from Rob Arnott, the former Editor of the Financial Analysts Journal. The second is from the Wall Street Journal, a highly respected publication.

    I learned about the errors in the Old School SWR studies by reading my friend Jack Bogle’s book. Perhaps you’ve heard of him?

    Rob

  10. Rob says

    Yet, I have seen you provide no link to any such record, nor any direct quote from him that is in line with your claim.

    I believe you, Banned.

    Rob

  11. banned plop contributor says

    Bennett said: “If Buy-and-Hold were a legitimate strategy, the Buy-and-Holders would be able to provide a URL for a study that supports their claims*.”

    Yes.

    They would.

    Ahem:

    http://www.bogleheads.org/wiki/Callan_periodic_table_of_investment_returns

    *(please do take notice that what Mr. Bennett claims people say is very often not at all what they actually say. If anyone is interested in finding out ‘what buy and holders’ actually say, think, or do, I invite you to see it firsthand by making a visit to Bogleheads.org. The site (including wiki) is an excellent resource, and people are more than happy to outline their own unique ideas and methods with specificity and with support, as well as discuss ideas other than the ones they happen to chose to follow themselves. I’ve never run across a more friendly, helpful, and accommodating bunch of people on the internet, anywhere.)

  12. banned plop contributor says

    To my own input: “In order for Bogle to ‘promote’ anything…”

    rob replied: “My friend Jack Bogle is one of my heroes, Trebor….”

    As usual Rob has his wires crossed:

    1. I have never posted as “Trebor.” I have no idea how he makes these attempted associations, but I am not the first person Rob has misidentified. For a self-described reporter, Rob is shockingly loose on details and facts, even the simple and obvious ones.

    2. John Bogle is most certainly not Rob’s friend. I doubt the man has even heard of Rob, beyond one of his actual friends or associates mentioning to be on the lookout for an obsessed crank that seems fixated on Bogle and a few others who have not apparently welcomed the innumerate crank into the circle of respected financial researchers.

  13. Rob says

    Yes. They would. Ahem:

    I am grateful to you for putting forward something that deals with substantive issues, Banned. We work out our differences by dealing with substantive issues.

    There is a contradiction in the words used to introduce the table set forth at the link. First, it says: “By owning the entire market (all of the asset classes), susceptibility to changes in market variations is minimized.” Then it says: “Large variations over a short period of time, but tends to be stable when viewed over the long term.”

    The first statement cannot possibly be true if the second statement is true (and the second statement IS true). These are not my words. These are the words of the Bogleheads, the primary advocates of Buy-and-Hold. And these words show why Buy-and-Hold can never work for even a single long-term investor.

    The second statement is a wonderful summation of the 140 years of U.S. stock market history available to us. Year to year variations in returns are indeed INSANE. And long-term variations are indeed minimal. We are in complete agreement re this statement.

    Where we differ is re its MEANING. You take this statement as signifying support for a Buy-and-Hold strategy. I take it as a warning NOT to follow a Buy-and-Hold strategy.

    If returns are stable over the long term and if that stable return is a good one (it is), you want to be heavily invested in stocks as a rule. We agree re that point.

    If returns are wildly variable in the short term, you want to be heavily invested in stocks during the short-term periods when returns are very, very good but you do NOT want to be heavily invested in stocks when returns are very, very bad. You want to avoid taking the huge hit that comes from being invested in stocks during price crashes. Avoiding crashes will increase your return DRAMATICALLY while also diminishing your risk DRAMATICALLY. The lifetime benefit is counter-intutively high. You would need to work the numbers to see how huge a difference this makes.

    That’s Valuation-Informed Indexing, Banned. The only difference between Buy-and-Hold and VII is that with VII you lower your stock allocation at times of price crashes (those times when the short-term variation works against you) and increase it at times of huge price jumps (those times when the short-term variation works to your benefit). That’s the entire deal.

    Now –

    Buy-and-Holders would have to be insane not to want to take advantage of return predictability if it existed. They obviously do not believe that these times of short-term variability (in both directions) can be predicted. I obviously do. That’s the only issue in dispute.

    This is where I say the Buy-and-Holders have never put forward a single sliver of evidence supporting their position. This was Wade Pfau’s most important finding. This is why Wade says that the research that he and I did together belongs in the Journal of Finance, the most important journal in the field.

    Wade has a Ph.D. in Economics from Princeton. He makes a living doing investment research. If there is anyone alive who is able to determine whether there is a study showing that long-term timing is not required, Wade is that person. Wade spent months trying to find such a study. He never found one. He was amazed. He kept thinking that he had done something wrong. He must have missed it! But he looked and he looked and he looked and he never found any such study.

    He wanted to be sure. So he went to the Bogleheads Forum to see if anyone there knew of one. No one did. Not John Bogle. Not Bill Bernstein. Not Larry Swedrow. Not Rick Ferri. Not Taylor Larimore. None of these people have ever seen a single study supporting the core principle upon which the Buy-and-Hold strategy is built.

    If these people never heard of a study, there is no study, Banned. There is zero reason for any rational person to believe that long-term timing (paying attention to price) is not absolutely required for anyone hoping to have a realistic chance of long-term investing success.

    Now — to the first statement that appears before the presentation of the table!

    The first statement says: “”By owning the entire market (all of the asset classes), susceptibility to changes in market variations is minimized.”

    No! This is false!

    The research that Wade and I did shows that the far bigger factor is the valuation level that applies when the asset is purchased. Just paying attention to valuations alone takes 70 percent of the risk out of stock investing. Owning a large number of asset classes does virtually nothing to minimize risk compared to the simple act of taking valuations into consideration when setting your stock allocation. Buy-and-Holders do not minimize risk by going with a pure Get Rich Quick approach. They MAXIMIZE it! Just as common sense tells us must be so!

    There never can be any justification for failing to take price into account when buying something, Banned. It cannot be. It is a logical impossibility.

    If you want to say that Buy-and-Holders sincerely believe that it is not necessary to take price into account, I can go along with that statement. But I cannot go along with a statement that there is research supporting such a statement. Wade checked this very, very, very carefully. There is no such research. There never will be any. The idea that it is not necessary to take price into account when buying stocks is dangerous and false and wrong and absurd.

    Buy-and-Hold was a mistake.

    It was a mistake made by good and smart people who were trying to help us. But it was a mistake all the same.

    That mistake caused our economic crisis. That mistake needs to be fixed.

    I wish you all good things.

    Rob

  14. Rob says

    I’ve never run across a more friendly, helpful, and accommodating bunch of people on the internet, anywhere.)

    I am the person who discovered the errors in the Old School safe withdrawal rate studies. The Wall Street Journal ran an article on these errors a few weeks ago. I told my fellow community members at the Motley Fool’s Retire Early board about them on the morning of May 13, 2002.

    The reaction of several members of the Bogleheads community when I let my friends know about those errors was to threaten to kill my wife and children. This is not the response of rational people.

    The Buy-and-Holders are in great pain. They made a mistake. It caused an economic crisis. It caused a wipeout of their accumuated wealth of a lifetime. The next step down is another 65 percent price crash that will cause another loss of wealth large enough to cause a Second Great Depression.

    There are lots of good and smart people who meet at Bogleheads. That much is certainly so. A good number of those people voiced support for the idea of permitting honest posting when I was posting there. I was one of the most popular posters.

    For that board to be opened to honest posting, we are going to need to hear a statement from Jack Bogle that he was wrong about the Get Rich Quick aspect of the Buy-and-Hold strategy. Get Rich Quick is for losers! It never, ever, ever works!

    Yes, we want to direct people to that board. But not until it is opened to honest posting on SWRs and many other critically important investment-related topics.

    That’s my sincere take, in any event.

    Rob

  15. Rob says

    I am not the first person Rob has misidentified.

    There are only about three Goons remaining at this point.

    They meet at John Greaney’s board and they terrorize our board and blog communities, using different names on different days.

    I care about the Goons.

    But I don’t care to enable them.

    The Goons have committed criminal acts of financial fraud. They will be going to prison following the next crash.

    We all have a responsibility to stand up to them and to insist that they be removed from every board and blog to which they have posted. Every site on the internet has published rules protecting us from the sorts of people who have put up posts in “defense” of Mel Linduaer and John Greaney.

    For obvious reasons.

    Rob

  16. Rob says

    I doubt the man has even heard of Rob,?

    My friend Jack obviously knows all about me.

    He has told us that he visits the Bogleheads board on a weekly basis. He was there for the two years during which half of the threads put to the board concerned my investing ideas.

    The Vanguard Diehards board was shut down and the community moved to the Bogleheads board so that the Goons could escape my posting re the peer-reviewed academic research of the past 32 years. There wouldn’t even BE a Bogleheads board if it were not for me. Bogle was there to see that take place.

    I have sent Jack four e-mails letting him know about the Lindauer matter and asking for his help.

    Rob Arnott is a personal friend of Jack’s. He copied several of his e-mails to me dealing with these issues to Jack. So Jack obviously knows.

    Jack obviously knows that it was a criminal act of financial fraud for the Lindauerheads and Greaney Goons to threaten to get Wade Pfau fired from his job as his “punishment” for publishing honest research. The idea that Jack would have gotten himself involved in this criminal enterprise without thinking it through carefully is of course 100 percent absurd. We will learn all the details when Jack is called to testify before congressional hearings and in civil and criminal trials. But he obviously knows about my contributions and he is obviously aware that by failing to speak out about the Lindauer matter in the strongest possible terms he has encouraged the Goons to continue their criminal enterprise.

    I have on numerous occasions encouraged Jack to have nothing whatsoever to do with the sorts of individuals who have put up posts in “defense” of Mel Lindauer and John Greaney. There are hundreds of posts in the Post Archives to that effect.

    I look forward to working with Jack to rebuild our broken economy after he gives his “I Was Wrong” speech, thereby opening the entire internet to honest posting on safe withdrawal rates and hundreds of other critically important investment-related topics.

    Rob

  17. sparky says

    Rob,

    Giving a link to your own article is not proof. Further, you seem to think you have given it credibility by repeating it over and over again and sending your article to thousands of people that have no clue as to who you are or why you are sending it to them. You are living a life of delusion and you don’t apply basic standards as to what establishes facts when it comes to your own personal agenda.

    Lastly, you seem to call everyone your “friend” as a way of trying to warm people to your thoughts. In your comments about Jack listed above, I doubt he knows you anymore than you know me and my pink unicorn.

  18. Rob says

    Giving a link to your own article is not proof.

    The research that I did with Wade is peer-reviewed research, Sparky.
    And it is based on the entire history of stock performance in the United States, 140 years of it.

    If the entire historical record isn’t enough proof for you, there is nothing that would be sufficient proof for you. 140 years of stock market history is all we have available to us.

    I wish you well.

    Rob

  19. Rob says

    Lastly, you seem to call everyone your “friend” as a way of trying to warm people to your thoughts.

    I refer to all Buy-and-Holders as my friends because I feel such great respect and affection and gratitude to them, Sparky.

    We are the luckiest group of investors ever to walk Planet Earth. The research that I did with Wade shows us how to reduce the risk of stock investing by 70 percent. That’s AMAZING!

    I couldn’t have produced that research without the help of people like Jack Bogle. VII is Buy-and-Hold with the one error that has been discovered in it corrected. So we obviously owe Jack and all the other pioneers a great debt.

    Now if we can just persuade that old lug to give that darn “I Was Wrong” speech by the close of business today!

    Rob

  20. Rob says

    I doubt he knows you anymore than you know me and my pink unicorn.

    Jack Bogle doesn’t know about Rob Bennett even though I am the person who added the missing piece to his investing strategy that makes it workable in the real world.

    That makes a whole big bunch of sense, Sparky.

    My best wishes to you and yours.

    Rob

  21. sparky says

    Rob,

    Can we persuade you to give your “I am delusional” speech By the close of business today?

  22. banned plop contributor says

    Rom made five or more rapid-fire wandering and bloviating narcissistic posts:

    “There is a contradiction in the words used to introduce the table set forth at the link…”

    “I am the person who discovered the errors in the Old School safe withdrawal rate studies…”

    “There are only about three [people who think Rob is a crank] remaining at this point…..”

    “My friend Jack obviously knows all about me…..”

    “The research that I did…..”

    And of course, he is:

    Wrong.

    Wrong.

    Wrong.

    Wrong.

    Wrong.

    Rob: fat, lying, and delusional is no way to go through life, son.

  23. Rob says

    Can we persuade you to give your “I am delusional” speech By the close of business today?

    I’d be happy to put one together that argues that all of us humans suffer from delusions from time to time and that we all need to help each other out when we see that our friends are missing a piece of the puzzle.

    Have I gotten things wrong from time to time? YES!

    Important things? YES!

    Could it be that it is happening again? YES!

    All that I can happily and in good conscience sign my name to, Sparky.

    Take care.

    Rob

  24. Rob says

    fat, lying, and delusional is no way to go through life, son.

    You’re one of them there Unemotional Investors, Banned.

    I can tell.

    Rob

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