I have been contacting numerous people to let them know about my article reporting on The Silencing of Academic Researcher Wade Pfau by The Buy-and-Hold Mafia.
Yesterday’s blog entry reported on the correspondence with Economics Professor Valeriy Zakamulin. Set forth below is the text of the e-mail sent to me by Valeriy in response to the e-mail of mine detailed in the earlier blog entry:
>
Rob:
>
My comment on the following: “My view is that we are on the verge of a huge breakthrough. We now know how to assess risk effectively (look at the P/E10 value!). Once we know how to assess risk effectively, we know how to eliminate risk. There is no reason why stocks need to be a risky asset class. We made them a risky asset class for many years because of our ignorance of the realities. “
>
You see, the basic postulate in finance, and it is completely rational, is that “no reward without risk”. Since stocks are risky, then they need to provide a higher (expected) rate of return than money markets. This is what we actually see looking back at the history, namely, stocks provided higher returns than bonds and money markets. Without any risk, if stocks are no longer risky, they should provide the same return as money markets. What is the point to invest in stocks in this case?
>
Valeri
>
I replied:
>
Valeri:
>
The Pink Unicorn says
Rob said:
“Again, these are merely the sincere views of a non-expert who has spent a lot of time trying to understand conflicts and weaknesses in the conventional understanding of stock investing. ”
But Rob…….you said you are more of an expert than Jack Bogle, William Berstein, etc…………what are you saying?????
You are the one that is to be saving millions of people in the middle class from impending doom, yet now you say you are a non-expert.
Say it isn’t so.
I only hope you can give me an answer and not delete my post yet again, but do understand you have such limited space given the activity on this site.
Rob says
Both things are so, Pink.
I never went to Investing School. I never managed a big fund. I am no investing expert.
But, yes, I am 11 years ahead of Jack Bogle and Bill Bernstein and Larry Swedroe and all the other Buy-and-Holders.
They aren’t experts either, Pink.
There’s no such thing as an “expert” in a field in which we are as a society only beginning to come to terms with the most fundamental questions. Do valuations affect long-term returns or do they not? That’s the ABCs. When Buy-and-Hold was developed there were smart people who thought that it wasn’t necessary to change your allocation in response to valuation shifts. They didn’t know. If you don’t know the ABCs, you are obviously not an expert.
Now they know.
Now we all know. Now that Shiller has published his research and now that Wade and I have published the research that shows clearly the huge practical implications of Shiller’s revolutionary theoretical findings, we all know. Or at least we all should know.
But Bogle and Bernstein and Swedroe cannot today bear to admit that they don’t know it all. So they play stupid games. And thereby get themselves deeper and deeper into the mess that they created by pretending to know things that they in reality did not know.
I am not an expert. But I am 11 years ahead of those who haven’t even yet acknowledged that they were wrong about safe withdrawal rates and why.
I gave up on Buy-and-Hold on the evening of August 27, 2002, when John Greaney threatened to kill my wife and children if I ever dared to “cross” him again by putting up another honest post on safe withdrawal rates. I never looked back.
When did you come to see that Buy-and-Hold is a big pile of smelly garbage, Pink?
If you haven’t done that yet, why haven’t you? What do you need to see?
What is Bogle waiting for? What is Bernstein waiting for? What is Swedroe waiting for?
It’s one thing not to be an expert. It’s not possible for any of the humans to be true investing experts today. Our knowledge of the realities simply is not yet sufficiently advanced for anyone to claim that title.
It’s something else to be corrupt. If you don’t speak out against death threats and board bannings and tens of thousands of acts of defamation and threats to get academic researchers fired from their jobs, you are a corrupt non-expert.
Is that not so, Pink?
Rob
The Pink Unicorn says
I think millions would disagree with your level of knowledge versus those you have listed.
Secondly, you keep repeating the same lines about death threats and threats to get Wade fired, yet your statements lack any confirmed 3rd party support. To the opposite, we see threats from you that have been documented and Wade has made comments that you have caused him greater harm than anyone else. That seems to undercut your credibility.
Rob says
Millions would disagree with what I say about my level of knowledge TODAY, Pink. We agree re that one.
How about tomorrow? What happens tomorrow matters.
Bogle does not believe that he can respond effectively to my questions about Buy-and-Hold, Pink. We know that beyond any reasonable doubt.
I announced plans to ask Bogle questions at one of the Bogleheads annual meetings and he responded fearfully. And, when Rob Arnott copied Jack on his e-mail to me saying that my views on investing are “sound.,” Jack did not respond. Nor has Jack responded to my e-mails to him.
Jack sees the entire Buy-and-Hold house of cards collapsing before his eyes and can’t figure out where to turn.
What are the millions going to say about who is better informed re the realities of stock investing following the next price crash, Pink? I think it is fair to say that there will be few calling Bogle an “expert” tomorrow. And, once word gets out all across the internet that I discovered the errors in the Old School safe withdrawal rate studies a full 10 years before any of the big-name “experts” in this field, who do you think is going to be perceived as the true expert in the eyes of millions of middle-class investors?
Now —
The full truth is that people will be overstating my expertise then as much as they are understating it today. That’s unfortunate. The reality is that I know lots of things that Bogle and Bernstein and Swedroe do not know. But Bogle and Bernstein and Swedroe also know lots of things that I do not know.
If those guys were as smart as they pretend to be, they would acknowledge what they do not know. They would stop playing this stupid little-boy game of pretending that they knew it all on the day they were born. Everyone sees through that garbage. Many have been reluctant to say they see through it for so long as they have continued hoping that Buy-and-Hold might work out okay for the first time in history. But, if Buy-and-Hold destroys as many lives this time as it has on every earlier occasion it was tried, millions are going to acknowledge that they have at least suspected for a long time now that a lot of the “experts” possess an expertise primarily in marketing.
Get Rich Quick sells, Pink. I get that loud and clear.
Research-based strategies work.
I am the most knowledgeable person today on the subject of how average middle-class people should invest in stocks not because I spent 20 years in school or possess a genius level I.Q. I am the most knowledgeable today because I am honest, because I care about what will happen to the people who will follow my advice.
That’s gives me a huge edge in a field that I think can fairly be described as 100 percent corrupt today, Any field in which errors in retirement studies have been publicly revealed but not corrected for 11 years is 100 percent corrupt. No?
I ain’t no great shakes in my knowledge of stock investing. And, in fairness, I learned most of what I know from people like Bogle and Bernstein and Swedroe. But the full reality here is that I am 11 years ahead of those guys today. Because when I saw the reluctance of the Buy-and-Holders to acknowledge their errors, I abandoned ship and got about the business of figuring out why the “experts” in this field are so arrogant and puffed-up and defensive.
It’s not all a math exercise.
Honesty matters. Caring about what happens to the people who follow your advice matters.
This is a field in which you can quickly go to the head of the class just by being honest and by caring about what happens to the people who follow your advice.
I look forward to the day when my good friends Jack and Bill and Larry catch up to me and then surpass me. Nothing would make me happier. I pray every day for that to happen.
Rob
The Pink Unicorn says
Rob said:
“I look forward to the day when my good friends Jack and Bill and Larry catch up to me and then surpass me. Nothing would make me happier. I pray every day for that to happen.”
Surpass you? I hate to break it to you Rob, but you are not even in the same zip code as these guys.
We have already seen the market in good times and bad times. We know the risks. Don’t hold your breath for the millions to come beating down your door. One point of commonality :The millions of people people in the middle class that you after refer to have a similiar problem as you. They have never really saved enough money.
Rob says
We know the risks.
I don’t think you do, Pink. We disagree re this point.
I wish you the best of luck with whatever strategies you elect to pursue, in any event.
Rob
The Pink Unicorn says
Rob,
Here is the difference:
I KNOW you don’t.
Rob says
Okay, Pink.
Rob
what says
If CDs returned the same as stocks, the real return of stocks would be 0 due to inflation.
Rob says
Thanks for stopping by, What.
Rob