Robert Savickas, GWU Associate Finance Professor: “Wow, I Did Not Realize You Achieved This Much Success and Have Many Devoted Believers/Followers. That’s Great, Then Ignore the Opposition. It Is Great to Have Opposition: That Means You Are Doing Something Right.”

I have been contacting numerous people, letting 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 my correspondence with Robert Savickas, Associate Finance Professor at the George Washington University Business School. Set forth below is the text of his response to the e-mail of mine reported on at the earlier blog entry:

Hi Rob,


You got me interested. Can you send me a full version of Wade’s paper?
I know that buy-and-hold creates more risk than necessary.  My whole complaint about it is that it works “on average” because we deal with average returns.  So, if you use buy-and-hold for your retirement savings, you will do pretty well “on average”  There is one little problem with this. The problem is: we have only one life and we get to invest only once. We do not live many lives and invest many times for retirement, so on average, across all those lives, we do well. You get one shot, not the average.  So, if that shot is the unlucky one, who cares about the average.  That’s where  a risk with buy-and-hold is, to my mind. This is also what justifies more active trading, because if you make one mistake, you still have the time to make up for it.  About 10 years ago, I wanted to write an academic paper about this, but got busy with more urgent things.
But I don’t understand the “risk is optional” idea. Risk is always there, because due to our limited minds and knowledge, uncertainty is always there (unlike in the case of God, who knows everything, so there is no uncertainty for Him).
Wow, I did not realize you achieved this much success and have many devoted believers/followers. That’s great, then ignore the opposition.  It is great to have opposition: that means you are doing something right.


  1. The Pink Unicorn says

    Just hilarious! It looks like the professor didn’t take time to read your links.

    So, when are you going to take his advice and ignore the people you call the goons? If you only respond to the “followers” , we might not ever see a response from you.

  2. Rob says

    We cannot ignore the Goons, Pink. The Goons are a big part of the story.

    When the book “A Random Walk Down Wall Street” was published in 1974, Buy-and-Hold was the state-of-the-art strategy. People truly believed in those days. There was genuine peer-reviewed academic research that at least appeared to support the Buy-and-Hold strategy.

    Buy-and-Hold was discredited in 1981, when Shiller published his research showing that valuations affect long-term returns.

    Most of us didn’t immediately see the implications. This was a shock. Our minds were wrapped around the old paradigm. We minimized the importance of the breakthrough. We rationalized. We suffered cognitive dissonance.

    There were obviously exceptions, however. There were people trying to lead us in the right direction — Shiller, Grantham, Arnott, Smithers, Hussman, and on and on.

    Why wasn’t the study that Wade and I did together done by someone else in all those years?

    I wasn’t around. So I cannot say with certainty or precision. But I can sure offer a general guess.

    It was made clear that any researcher who published research showing the huge implications of Shiller’s breakthrough finding would find his or her career ruined by The Buy-and-Hold Mafia. Signals were sent. Signals were received.

    We need to hear about all that. Books need to be written about the intimidation tactics that were employed in those years to keep millions of middle-class investors from learning how to reduce the risk of stock investing by 70 percent.

    But I wasn’t part of the story then. I entered the story on the morning of May 13, 2002.

    What did I represent?

    I represented a new kind of threat to The Buy-and-Hold Mafia.

    I was some guy whose primary expertise in this field was that I had figured out how to post junk on the internet. You couldn’t threaten to destroy my investing advice career because I didn’t have an investing advice career. You couldn’t threaten to destroy my career as an academic researcher because I didn’t have a career as an academic researcher.

    What to do, what to do?

    Enter —

    The Linduaerheads and the Greaney Goons.

    Did Jack Bogle and other powerful people in this field lend direct encouragement and support to the Goons? We don’t know for certain. We don’t know details. But all that will come out in the congressional hearings and in the criminal and civil trials. People will be asked questions under oath and we will hear very different answers than the nonsense gibberish we have been hearing on discussion boards for 11 years now.

    The Goons are part of the story. The Ban on Honest Posting could not be extended in the age of the internet without the “work” of you Goons. So the smelly garbage that those who have posted in “defense” of Mel Lindauer and John Greaney have brought to the table is part of the story.

    It is obviously not the main event. The main event is the finding that we can reduce the risk of stock investing for millions of middle-class people by 70 percent just by opening the internet to honest posting on safe withdrawal rates and other critically important investment-related topics.

    But the Goon story is a big part of the story of how our gangbusters economy happened to be cratered and how millions of people happened to find themselves out of work.

    So I will continue to report on that story.

    While also reporting on the more important story — the breakthrough substantive findings that have been the product of the first 11 years of our discussions of the realities of stock investing.

    I naturally wish you all the best things that this life has to offer a person, Pink.

    Rob the Substance Guy (Who Understands That It Would Not Be Responsible to Ignore the Smelly Goon Stuff All the Same)

  3. Rob says

    I look at it as an outstretching of the hand of kindness, Pink.

    The sooner you come clean, the less economic devastation you cause. The less economic devastation you cause, the shorter your prison sentence.

    As someone who enjoyed a friendship with you prior to the fateful day when I dared to be the first to post honestly on safe withdrawal rates and also as someone who cares about the millions of middle-class workers who hopes for their financial futures have been destroyed by the Buy-and-Hold Crisis, I see it as a win/win/win.

    I certainly wish you the best of luck in all your future endeavors, in any event.

    Rob, the Negotiator Who Cannot Help But Be Drawn to Win/Win/Win Arrangements

  4. The Pink Unicorn says

    If success means that you lie, act like a hypocrit and cause harm yo people that you call friends (like Wade), then yes, Rob, you are successful.

  5. bannwd plop contributor says

    Savickas to Rob: “Wow, I did not realize you achieved this much success and have many devoted believers/followers. That’s great, then ignore the opposition.”


    It’s great to know that even distracted academics who might occasionally allow themselves to get drawn into interacting with trolls, do eventually understand who they are dealing with, and can use their temporarily suspended good judgement to properly defuse said nutjob, merely by applying the zealot’s own claims in a humorous way.

    Bravo, Prof Savickas — well-skewered! My hope for academia is fully restored!

  6. what says

    Ya…I was about to say that the quote Rob used above actually sounded pretty sarcastic.

  7. Rob says

    The jury might go for that one, Banned and What.

    I think you’ve still got a chance here.

    Hang in there.

    Rob the Never-Say-Die Guy

  8. I am scared says

    Oh, no. Rob Bennett is going to put everyone in jail and is going to take all our money when he wins those big lawsuits. If only we had made all those evil people reinstate Rob on all the message boards and agreed with every word Rob said, then we wouldn’t face this horrible wrath. I never should have joined the secret mass goon conspiracy. In fact, I am going to send back my decoder ring, club blazer and commemorative club plaque right now so that I can wash my hands of all this.

    Oh,please King Rob, have mercy on me.

  9. Rob says

    You got it.

    Please don’t count on me being able to rein in the millions of middle-class investors who will realize in a flash following the next price crash that they have been taken.

    I will do what I can.

    But I do not possess a magic wand.

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

    Rob the Wandless

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