Set forth below is the text of a comment that I recently put to the Joe Taxpayer blog:
he will use your name. He perceives your comments as validation of everything he says. The comments by Wade referred to early is just a small taste of what is in your future. You will soon come to understand.
Here are some comments that Wade Pfau made about his good friend Rob Bennett in the days before Bob and his fellow Goons threatened to send defamatory e-mails to his employer in an effort to get him fired from his job (and Jack Bogle and lots of other big name Buy-and-Hold advocates signaled that that was just fine by them):
1) “If you read Rob Bennett’s stuff carefully, I think he did provide an important contribution in terms of describing a way for PE10 to guide asset allocation for long-term conservative investors. I also think he was right on the issue of safe withdrawal rates.”
2) “I am also extremely grateful to Rob Bennett for motivating this topic and contributing his experience and encouragement.”
3) “You deserve much of the credit as the whole idea of Valuation-Informed Indexing belongs to you.”
4) “I definitely need to cite some of your work as the founder of Valuation-Informed Indexing, as I have not found anyone else who can lay claim to that. Shiller pointed out the predictive power of PE10 but never discussed how to incorporate it into asset allocation, as far as I know.”
5) ”Any data mining that I am doing is in favor of buy-and-hold, not in favor of market timing.”
6) “The findings for “market timing” are so robust anyway, that it hardly matters how we do it.”
7) “What you see in the top part of the graph for each year is the amount of wealth accumulated after 30 years for someone following Buy-and-Hold against someone following Valuation-Informed Indexing….Valuation-Informed Indexing provides more wealth for 102 of the 110 rolling 30-year periods, while Buy-and-Hold did better in 8 of the periods.”
8) “I will take steps in my final paper to test a wide variety of assumptions about asset allocation, valuation-based decision rules, whether the period is 10, 20, 30, or 40 years, lump-sum vs. dollar-cost averaging, and so on, and to show that the results are quite robust to changes in any of these assumptions.”
9) “On a risk-adjusted basis, market-timing strategies provide comparable returns as a 100 percent stocks Buy-and-Hold strategy but with substantially less risk. Meanwhile, market timing provides comparable risks and the same average asset allocation as a 50/50 fixed allocation strategy, but with much higher returns.”
10) ”If everyone increased exposure after a market fall and vice versa, then this would dampen out the big swings in the market aggregates, and we might get shallower boom/bust cycles.”
11) “Yes, Virginia, Valuation-Informed Indexing Works!”
12) “I wrote up the programs to test your Valuation-Informed Indexing strategies against Buy-and-Hold, and I must say that the results look very promising…. I am quite excited about the findings so far. As you say in the podcast, Valuation-Informed Indexing should beat Buy-and-Hold about 90 percent of the time, and I am getting results that support this for various strategies.”
13) ”It makes complete sense to have an equity allocation that is in some way flexible. Having a completely inelastic demand for equities is a bit bonkers; no-one acts that way with life’s other important commodities.”
14) “I have been toying with the idea of sending the paper to the Journal of Finance, which is the most prestigious journal in academic finance.”
15) “Now that I am accounting for risk, I am even more amazed by how well Valuation-Informed Indexing works.”
16) “My idea is to show many different tables with results over the whole period for returns and risks. Valuation-Informed Indexing always provides more returns for often less risk.”
17) “No matter what I try, Valuation-Informed Indexing will still perform better in 85-95% of cases for 30 years.”
18) “The traditional approach to retirement planning (as described on pages 10 and 11 of The Bogleheads’ Guide to Retirement Planning, for example) is counterproductive and possibly damaging.”
19) “Retirees now frequently base their retirement decisions on the portfolio success rates found in research such as the Trinity study…. This is not the information that current and prospective retirees need for making their withdrawal rate decisions.”
20) ”Though I was only trying to do an Old School safe-withdrawal-rate study, all that I ended up doing was showing in a different way what you had been saying all along: the safe withdrawal rate changes with valuations.”
21) “Valuations are the driving factor. ”
22) “Naturally, I am finding that Valuation-Informed Indexing can allow you to reach a wealth target with a lower savings rate, use a higher withdrawal rate, and also have a lower “safe” savings rate, than a fixed allocation.”
23) ”I think I should stay publicly quiet for a while, as I really don’t want anyone sending messages about any topics to officials at my university.”
24) “I don’t want them [the Goons] working behind the scenes to derail me.”
25) “I did warn the editor of the Journal of Financial Planning that they may receive some ‘hate mail‘ after I mentioned your name in the safe savings rate paper.”
What a difference a threat to get the father of two small children fired from his job has on an investing discussion, eh?
Whatever could I have been thinking when I said that lots of my Goon friends will someday be serving long prison sentences as a result of the 11-year cover-up?
Long live Buy-and-Hold! It’s science! With a Marketing Twist!