“Lots of People WANT to Tell the Truth About Stock Investing. Wade Does. Bogle Does. Bernstein Does. Lots of My Blogger Friends Do. But Everyone Is Afraid to Be the One to Pin the Bell to the Cat. Whoever Speaks Up Is Destroyed. They Have All Seen What Has Been Done to Me for 10 Years Running Now.”

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 my correspondence with Robert Savickas, Associate Finance Professor at George Washington University Business School. Set forth below is the text of the response I sent to the e-mail by Robert described in the earlier blog entry:



I know that you took back some of the words below after you took a look at the “People Are Talking” section of the site. That was kind. But I want to respond to the point you made in the e-mail below because it is an important one and one that is directed to me by lots of good people who are sincerely trying to help me out,
Yes, it is 100 percent true that in ordinary circumstances it works better to use a moderate tone. The types of people who I am trying to reach are indeed turned off by the sensationalist/scandalist tone. I hear this a lot. I believe that there are particular circumstances that apply in this case that require me to report things as they have happened, even when those realities cannot be expressed through a tone that is not sensationalist/scandalist.
Buy-and-Hold is a research-based strategy. Millions of people believe in it. There is now 30 years of research showing that Buy-and-Hold can never work for a single long-term investor.
That’s the reality. Shiller showed that valuations affect long-term returns. So the risk/reward profile for stocks CHANGES with changes in valuation levels. Even the Buy-and-Holders acknowledge that the investor’s choice of a stock allocation is the most important choice he makes. Yet they urge investors to follow practices that insure that they will rarely be going with the stock allocation that is right for them. How could this be?
How does an alcoholic react when a friend tells him that he has a problem?
He reacts with defensiveness, right? He says that he has no problem, that he can quit any day.
Does that means that he really has no problem, that he really can quit any day?
It does not. The alcoholic knows on one level of consciousness that he has a problem. He knows this better than anyone else knows it. But he is desperate to suppress this knowledge. He cannot cope with it emotionally. So he lives in denial of it. Those who remind him of the important truth he is trying desperately to suppress incur his wrath. He is not angry at them because he suspects they are wrong. He is angry with them because he knows with certainty that they are right and he cannot bear to have this truth spoken out loud.
So it is with the Buy-and-Holders. They know on one level of consciousness that it is foolish to stick with a single stock allocation at all times. They know that they have set their retirements back many years by following foolish investing strategies. They know they have hurt their friends by recommending that they follow the same strategies. They know that collectively the Buy-and-Holders caused the economic crisis by failing to sell stocks when prices began rising to insanely dangerous levels. They know all these things and they are desperate not to have to cope with all these realities. So they respond with hate and anger and contempt when they hear someone mention the realities. The anger becomes even greater when the person mentioning the hated realities explains that there is 30 years of peer-reviewed academic research showing that Buy-and-Hold can never work for a single long-term investor.
It’s not just the ordinary investors who are suffering emotional pain. The “experts” are too. The experts possess great knowledge of all the things about stock investing that can be understood intellectually. But they possess very limited knowledge of the emotional side of stock investing because this side of the story is ignored under the Buy-and-Hold Model. So the experts too become defensive when the realities of stock investing are mentioned. In many cases they become MORE defensive. They have more to lose if the realities become widely known. They have built their reputations during the Buy-and-Hold Era. If Buy-and-Hiold is dangerous, their investing advice was dangerous for all those years. If word gets out about what the research really shows, they will lose status and perhaps even be subject to lawsuits (Shiller’s research is public knowledge).
The is the source of our economic troubles today. We are in a transition period from Buy-and-Hold to Valuation-Informed Indexing. I want to spread the word about what works. But the Buy-and-Hold Mafia very, very much does not want me to succeed.
They cannot stop me by pointing to research. There is no research that supports Buy-and-Hold. Wade checked this. He searched the literature trying to find a single study suggesting that long-term timing (the exercise of price discipline) might not be required for long-term investing success. He was not able to find a single study. He went to the Bogleheads Forum and asked if anyone there had ever heard of a study. Bogle and Bernstein and Swedroe all post there. No one at the board knew of a single study. The core claim of Buy-and-Hold (that market timing is not required) is supported by exactly nothing. There is indeed research showing that short-term timing does not work. But there is none showing that long-term timing (the exercise of price discipline) is not required. If short-term timing does not work and long-term timing is required, it is a false claim to say that timing is not required. One form of timing always works and is always required.
We were intellectually ready to move on to Valuation-Informed Indexing in 1981. People didn’t immediately comprehend the implications of Shiller’s revolutionary findings. So the transition got held up. We had a huge bull market and there was little interest in learning about a new model for understanding how stock investing works until the crash in 2008. Now there is interest. But the Buy-and-Holders have been engaging in highly abusive tactics to cover up the errors in the Old School safe withdrawal rate studies for 10 years now. I put a post to a Motley Fool board pointing out the errors in these studies on the morning of May 13, 2002. The Buy-and-Holders at the time denied that there were errors and demanded that I be banned from every significant discussion board and blog at which I tried to tell the story. There is now a universal recognition in the field that the Old School studies get the numbers wildly wrong. This has been reported in every leading periodical in the field.
But the studies still have not been corrected! If the studies were corrected, there would be a discussion of WHY the errors were made and that would be the end of the Buy-and-Hold Model. So for now we are in this strange twilight zone. It was when Wade sent an e-mail to the authors of the Trinity study (one of the Old School SWR studies) suggesting a correction of the errors in it that the Buy-and-Hold Goons threatened to get him fired from his job. Bogle did not speak up. Bernstein did not speak up. Swedroe did not speak up. Wade has seen the Goons destroy people’s careers. He has financial responsibility for two small children. So he buckled. He wasn’t happy about it. He felt that he had no practical choice.
That’s where things stand today. Lots of people WANT to tell the truth about stock investing. Wade does. Bogle does. Bernstein does. Lots of my blogger friends do. But everyone is afraid to be the one to pin the bell to the cat. Whoever speaks up is destroyed. They have all seen what has been done to me for 10 years running now.
Or problem is not an intellectual one. it is a POLITICAL one.
I have tried to interest political bloggers in the story. But political bloggers defer to the “experts” in the field. They of course do not appreciate the level of corruption that applies today in this field. They have no way of knowing. And they do not have confidence in their own knowledge of how investing works. So the political bloggers too keep their mouths shut.
I have great respect and affection for the Buy-and-Holders. I view them as pioneers and heroes. I want to work with them constructively. I appreciate that they are suffering from cognitive dissonance, which is a very real phenomenon written up extensively in the psychological literature. But the Buy-and-Holders feel so threatened by reports of what the last 30 years of research really says that they cannot bear to hear me make those reports. And the new internet communications medium has made it easy for someone like me to file such reports and to have them heard by the people who need to hear them. So the Buy-and-Hold Mafia has felt it necessary to engage in insanely abusive and even criminal behavior. THIS IS THE STORY. If I don’t tell this aspect of the story, I am not doing my job as a journalist. I try as hard as I can to place the Buy-and-Holders in the best possible light. But there are things that I need to say to tell the story in a way that makes sense. It just wouldn’t make sense to say that there are all these amazing things that we now know about stocks but that I am the only one that knows them.
I am not the only one that knows them. Shiller knows. Shiller has said that he has never dared to tell us all he knows because he knows that he would be branded “unprofessional” if he were to do so. Lots of others SUSPECT that there are flaws in the Buy-and-Hold Model. But they have never explored these doubts with any great care because the subject rarely comes up. The subject rarely comes up because the Buy-and-Hold Mafia has made the price that is paid by those who bring it up so high. We all learn from talking things through. So long as the discussions are not held, we all remain in ignorance of all sorts of important investing truths.
We live in the best time to be a stock investor in the history of Planet Earth. But we cannot benefit from what we “know” because we cannot discuss what we know and thus we cannot share what we know. And the economic crisis caused by the promotion of Buy-and-Hold strategies threatens to put us in the Second Great Depression (stock prices will fall another 65 percent in the not-too-distant future if Shiller is right).
It’s a mess!
I always try to speak as charitably as I possibly can about the Buy-and-Hiolders without engaging in outright dishonesty or failing to tell the story that very much needs to be told. My motto is: Be as charitable as possible without crossing the line and becoming dishonest while also being as charitable as possible without crossing the line and becoming dishonest.
Anyway, that’s where I am coming from. I wish that the story I tell were not so “out there.” But the good in it is 10 times more good than the bad in it is bad. It is the advance in our understanding of how stock investing works that people will be talking about 100 years from now. I hope that all these words make at least a tiny bit of sense to you.


  1. The Deleted plop contributor says

    “It’s a mess!”

    When I read your posts, that is what I think about what you wrote.

    Also, take your reference to the alcoholic and change to you as a mentally ill person.

  2. The Pink Unicorn says


    Why keep repeating the same stuff over and over again. Repeating things doesn’t make them true.

  3. Rob says

    The idea that repeating things doesn’t make them true cuts both ways, Pink. The Buy-and-Holders say over and over again that there is no absolute requirement to engage in long-term timing. That doesn’t take away the 32 years of peer-reviewed academic research showing that this is an absolute requirement.

    We repeat realities in all sorts of fields. Don’t doctors continue to tell us not to smoke even though it has been said many times? Why shouldn’t they?

    I suppose that, when there is not one smoker left, they will stop saying it. I would think it would work the same way in investing. When there is not one Buy-and-Holder left, there will no longer be a need for those of us who give honest advice to report on its dangers.

    We ain’t there yet, my man.

    We ain’t even close.

    Perhaps you’ve noticed.

    Rob, the Fellow Who Has Noted That There Are Still People Pushing Buy-and-Hold in 2013, 11 Years After Our Discovery of the Errors in the Old School Safe withdrawal Rate Studies

  4. The Pink Unicorn says


    You have been already given enough data over time to know that many have well constructed portfolios that have performed very well over time despite your denials. At the same time, we see that market timing has not worked and the Professor at GW even demonstrated that fact.

    No one is buying your snake oil.

  5. Rob says

    You’re wrong, Pink.

    I’ve exchanged a dozen e-mails over the past three days with a woman who holds a Ph.D. in Biology. She’s smart as smart can be but never knew how investing works because the Wall Street Con Men have worked so hard to block honest posting. She is thrilled to finally have found someone who reports honestly on what the last 32 years of peer-reviewed academic research says on the subject.

    This is not someone I contacted through my e-mail campaign, by the way. This is someone who contacted me after coming across some of my internet postings. There are of course millions of people like her who would be thrilled to learned what works in stock investing from someone who is both honest and informed.

    After your prison sentence is announced, there will not be one site owner on the internet who will permit anyone who has ever posted in “defense” of Mel Linduaer or John Greaey to post at his or her site. I mean, come on.

    What’s going to hold us back then?


    We are the luckiest generation of investors ever to walk Planet Earth and we soon will all be enjoying the benefits with which we have been blessed.

    I wish you all good things, both in your pre-prison days and in your prison days.

    Rob, Who Will Continue to Care About His Goon Friends After They Are Sent to Prison

  6. The Pink Unicorn says


    I can tell you that the moon is made from green cheese and can say that I spoke to someone that backs my opinion. It doesn’t matter who you spoke with. The numbers don’t lie. Yip already gave you a list of portfolios with returns that show you are wrong. The problem is that you just can’t back up your comments with actual facts, supported by 3rd party data sources.

  7. Rob says

    I will continue to post honestly on safe withdrawal rates and scores of other critically important investment-related topics, Pink.

    I naturally wish you the best of luck with whatever investing strategies you elect to follow, my good friend.

    Rob, the Stubbornly Honest Poster

  8. The Pink Unicorn says

    I will continue to post honestly with the ability to back up my comments with FACTS.

    Try it sometime.

  9. Rob says

    If you believe in Buy-and-Hold, you are doing the right thing to advocate it, Pink. I applaud you for helping us all out in that regard.

    I do not believe that Buy-and-Hold can ever work for a single long-term investor. So, for me, advocating Buy-and-Hold is an act of financial fraud.

    That’s a felony.

    That translates into a prison term somewhere down the line.

    Not this boy.

    I’d be grateful if you would make an effort to find someone else.

    My warmest wishes to you and yours.

    Rob, the Fellow Who Sees Little Appeal in the Idea of Committing a Felony

  10. bannwd plop contributor says

    Bennett still lied: “I do not believe that Buy-and-Hold can ever work for a single long-term investor. ”



    Via buy-n-hold.

    Right here.

    In the flesh.

    Your scheme, Rob?

    Um, notsomuchactually.

  11. Trebor Martin says

    I imagine that email was enough to scare Mr. Savickas off. Is it safe to assume this email marks the end of your correspondence with him?

  12. Rob says


    There are a few more. There was one point where there was a break in our correspondence. It might have been after this one, I don’t recall. You’ll be able to tell by the wording of his next response. After the break, he said something like “Sorry I haven’t gotten back to you in awhile.”

    You are right that frank statements scare lots of people off.

    That tells me that we all need to hear more of them.

    I always remember one guy who told me in response to one of my blog comments that: “I’ve never heard Buy-and-Hold described as a Get Rich Quick scheme before.”

    I thought: “That’s the problem!”

    If you want people to believe something, a good first step is to say it.

    So we all need to make an effort to say what we really believe, straight and with no chaser.

    I do more and more of this all the time. It does scare people off. But the longer the Buy-and-Hold Crisis goes on, the fewer people there are who get scared off. And, when we find someone who is not scared off even by very clear and direct language, then we’ve really got something.

    So I try not to let the reality that people are scared off by direct language hold me back too much.

    I believe in being kind. That hasn’t changed even a little bit. I believe that as much as ever, perhaps even more than before. But I also believe as much as ever that honesty in all things is very important too. The perfect combination is complete honesty combined with complete charity.

    That’s my sincere take re these important matters, in any event.

    Rob the Kind and Honest (or is it Rob the Honest and Kind?)

  13. Rob says

    The full truth here of course that it is the reality that is scary, not the fact that someone finally spoke out about the reality.

    My words here are honest.

    We all should be scared.

    But not because I spoke honestly.

    We should be scared because what I described is today’s reality and this reality is very much at odds at what we aim to be as a people.

    Rob, the Fellow Who Loves Our Way of Life and Who Believes That Personal Integrity Has a Place Even in the Stock-Selling Industry

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