Set forth below is the text of a comment that I recently put to another blog entry at this site:
Roger Wohlner, the owner of the The Chicago Financial Planner blog: Rob, interesting stuff, but it doesn’t address my question. Can you point to investment results in the real world supporting the valuation approach to investing you advocate? Is their somebody actually achieving superior results using this approach?
All of the returns reported on in the Bennett/Pfau paper are from the real world, Roger. Those results are the results that those following valuation-informed strategies obtained.
If you are asking whether there are people who follow valuation-informed strategies, the answer is “yes.” Please take a look at the “People Are Talking” section of the site. It runs down the left-hand side of this page. You will see quotes from over 100 people endorsing my work. A number of these people are financial planners who advocate valuation-informed strategies. A percentage of their clients are obviously following their advice. Those investors are obviously obtaining far higher returns than Buy-and-Holders while taking on dramatically less risk.
The problem is that the number is too small. Many people have told me that they of course know about the 30 years of peer-reviewed academic research showing that there is precisely zero chance that a Buy-and-Hold strategy can ever work for even a single long-term investor. But they are afraid to give voice to what they believe in a public forum in clear and firm and certain language. Millions of middle-class people believe that the Buy-and-Hold advocates are shooting straight with them. Most of us have never experienced a case of financial fraud so pervasive. I know that I have never seen anything like this before.
This includes people like Jack Bogle. It was by reading Jack’s book that I learned about the errors in the Old School safe withdrawal rate studies. So Jack obviously gets it, at least on some level of consciousness. But what do you think would happen if Jack came clean about what he knows? I think it is fair to say that he is concerned that he would be attacked in the same way that I was and in the same that John Walter Russell was and in the same way that Wade Pfau was and in the same way that the researchers who wanted to do research on Rob Arnott’s ideas were and in the same way that so many others were. Jack Bogle himself does not feel that he can come clean at this point in the proceedings. The cover-up has gone on too long.
Do you have any suggestions?
I have thoughts on how to proceed. But I am not going to say that it will all be 100 percent easy for every single person involved. Looking back, that’s how we will all see it. In the long run, the benefits of telling people the truth about stock investing are so great that I don’t believe that there will be one person who will say it was the wrong thing to do. But how do we get ourselves out of the corner into which we have painted ourselves? How do we achieve the transition from the horrible place where we find ourselves today to the wonderful place where deep in our hearts we all want to be tomorrow?
That’s a question that we address as an entire society. We need policymakers involved. And economists. And academics. And investment advisors. And journalists. And bloggers. And ordinary investors. We all have a stake in seeing that we survive the economic crisis. So we all need to be involved in the solution to the problem.
That’s my sincere take re this important matter, in any event. I see it as my role to inform as many people as possible to the realities so that we all can play the role we need to play in the most intelligent and balanced and calm way possible, given the circumstances that apply.
I hope that helps a bit.
Rob
Bennett/Pfau paper
Let’s call a spade a spade, shall we? Wade Pfau stole your research and put his name on it, throwing you just a tiny crumb acknowledgement to ward off a lawsuit. And once he had the goods, he had the gall to terminate your relationship. He’s profiting handsomely by his theft, leading a charmed life, widely published, widely respected. While Rob Bennett continues to toil in total obscurity, with only the scathingly insulting Goons for company.
A lesser man would find that situation infuriating. It’s so incredibly unfair, I think if it happened to me, it could actually drive me insane.
Wade was a hero for working up the courage to send an e-mail to the authors of the Trinity study asking that they correct the errors in their study. He was the first big name in this field to do that. We all owe him a debt of gratitude for that one.
Wade engaged in an act of financial fraud when he put up a post at his blog saying that he viewed John Greaney as the hero of the 11 years of discussions of the realities of stock investing that have been raging on the internet since my famous post of the morning of May 13, 2002. Wade knew about the death threats. Wade knew about the unjustified board bannings. Wade knew about the tens of thousands of acts of defamation.
He did what he did because he was afraid. He knew that you Goons were capable of following through on your threats because he had seen you do so on numerous earlier occasions. He knew that John Bogle was not going to help and that Scott Burns was not going to help and that Larry Swedroe was not going to help and that Bill Bernstein was not going to help. He had seen all these big names act in a cowardly manner on previous occasions and so he knew what was in store for him when you Goons advanced your threats to destroy his career.
Does Wade go to prison following the next price crash?
I don’t think we know for sure.
He deserves a Nobel prize for his research. I think that much is clear enough.
And he engaged in an act of financial fraud that puts what Bernie Madoff did in the dust. That much is clear enough AS WELL.
Do we not put him in prison but deny him the Noble prize as his penalty for participating in a massive act of financial fraud?
Perhaps.
Do we put him in prison and ALSO give me the Noble prize, making him the first (I am sure without even checking!) Nobel prize winner to have his prize sent to a prison cell?
Perhaps.
I don’t know, Bizarro.
The Post Arhives reveal to us all what Wade did.
My job as a reporter is to tell people what happened. The good and the bad both.
The rest is out of my hands.
I LOVE, LOVE, LOVE the Wade Pfau who worked up the courage to stand up to you Goons and to demand corrections in the errors in the Trinity study.
My assessment of the Wade Pfau who agreed under duress to join in on this massive act of financial fraud is that he is behaving in an “insane” way. I TOLD my friend Wade that at the time he was doing it. I feel for him. I have a family to support as well. I know precisely how low the sorts of individuals who have put up posts in “defense” of Mel Lindauer and John Greaney are capable of going. But I don’t think that participating in a massive act of financial fraud can ever be the right answer.
I believe that, if Wade stood up to you Goons, it is you Goons who would go down. He would be a hero to millions if he worked up the courage to return to doing honest work.
If he really is not capable of that, I think he needs to find another line of work. It’s a horrible thing to say. But dealing with you Goons (and the Wall Street Con Men who offer you their implicit support by failing to speak out about your abusive behavior) is part of the job of being a researcher in the investing field today. I don’t like this reality any more than Wade or millions of others like it. But I acknowledge the reality. I certainly am not willing to participate in the massive cover-up myself.
That’s my sincere take re this important matter, in any event, Bizarro.
I wish you great prosperity and the best of health for many years to come.
Rob
Rob,
Do you think that they will just give you the Nobel prize and send Wade to jail? Do you think Wade will have to spend more or less time in jail versus Jack, Scott, Larry and Bill or is there someone in the later group that will serve the bulk of time in jail?
I don’t know the answers to your questions, Loony.
Nothing like this has ever happened before. We are in uncharted waters.
My expectation is that all the people you refer to, and lots and lots of others, will be called to testify under oath. Then we will work through the testimony together as a nation of people.
I will testify honestly. Re that one, there is zero give. Beyond that, it is out of my hands. And that is as it should be.
Don’t let the bad guys get you down, man.
Rob
Wade, the only person defaming anyone is YOU. You are defaming poor Wade Pfau, accusing him of committing “financial fraud”. You should be ashamed of yourself, Rob.
I meant to say Rob is defaming people, obviously.
I am a meanie, Sensible.
That much is for sure.
Everyone knows it too.
Rob
Rob,
Do you think you should contact the Nobel committee to let them know that you are the primary author of the paper instead of Wade? Maybe you could alert e New York Times.
Your attitude tells the tale, Loony.
If I win a Nobel prize, does that hurt you in some way?
The peer-reviewed academic research that I co-authored with Wade Pfau shows you how to reduce the risk of stock investing by 70 percent.
I charged you zero for that research. Learning how to reduce the risk of stock investing by 70 percent is the greatest gift you have ever received in your lifetime.
All you can think to do in response to that wonderful gift is to fret that I may win a Nobel prize and you will not.
You know what?
If you had not responded with envy when I showed you that the Old School safe withdrawal rate studies get the numbers wildly wrong, you could have spent the last 11 years doing wonderful research yourself instead of putting up Goon posts.
You don’t get even with me by tearing me down to your level.
You get even with me by pulling yourself up to my level.
I have the hand of kindness extended to you, Loony.
But I don’t get down in the gutter with you.
I wish you all good things, my long-time abusive-posting friend.
Rob
I HAVE alerted the New York Times, Loony.
I engaged in correspondence with Carl Richards, who had a blog at the New York Times.
Carl said that my stuff was the best stuff on investing he had ever seen. He said that my work has “huge value.”
He also banned me from his blog.
Why? Because Goons like you put up abusive comments when I posted the stuff of “huge value” there.
You have denied millions of people the information they need to invest successfully.
I will testify honestly re what you have done when you are put on trial for your multiple acts of financial fraud following the next price crash.
You have my best wishes.
Rob