Set forth below is the text of a comment that I recently put to the Joe Taxpayer blog:
“But I don’t believe that. I do not believe you have offered a valid correction to the safe withdrawal rate question. And I believe that retirement income strategies go much further than the question of a safe withdrawal rate. And so that is why I’ve had to endure your ongoing harassment for months on end now.”
Wade DID say these words. The quote is accurate.
Wade WANTS to tell the truth. He is like lots and lots and lots of other people in this regard. He is a good person and he wants to help us all out and he understands that by telling the truth he helps us all out. But he is AFRAID to do so.
Why would Wade be so afraid? Buy-and-Hold is the dominant model. Millions of people have their lives riding on Buy-and-Hold. They have inner doubts as to whether it works. They are TERRIFIED to see evidence that it doesn’t work. And this Wade Pfau fellow has conclusive evidence (peer-reviewed academic research) showing that it NEVER works. How do you think that makes those millions of people feel? And how do you think it makes Wade feel to know that they feel that way?
Wade is on our side. That is not an issue.
The issue here is that Wade is AFRAID to do what he knows he should do.
It’s not only Wade.
Jack Bogle said things in his book that helped me to understand that the Old School safe withdrawal rate studies get the numbers wildly wrong. That shows that Jack Bogle too is on our side and that Jack Bogle too is afraid to do what he knows he should do.
It’s the same with Bill Bernstein. When one of the Goons asked Bernstein whether the methodology used in the Old School SWR studies is analytically valid or not, he said that “OF COURSE” the studies are analytically valid (he said that part because he is AFRAID) while also saying that anyone who gave consideration to using one of those studies to plan a retirement (the purpose for which they were produced) would have to be out of his or her mind (he said that part because he is a good guy and wants to help us all out).
It’s the same with Scott Burns. When I let Scott Burns know about the errors in the Old School SWR studies, he sent me an e-mail back saying “You’re right!” He asked for my phone number because he was on a book tour and he wanted to interview me for an article he would write when he returned. He did all that because he is a good guy and wants to help. He got cold feet and failed to go through with the call because he became TERRIFIED of what would happen to him if he became known to the millions of scared people as The Person Who Brought Down Buy-and-Hold. He ended up writing an article that said that “some people” now believe that the Old School studies are analytically invalid. He didn’t say that HE believed this (although he obviously does) because he is afraid of what will happen to him if he does and he didn’t name the “some people” because he knows that the Goons would not appreciate him giving a link to my site. But he DID spill the beans in a cautious, convoluted sort of way.
I have people telling me to follow the lead of these people ALL THE TIME. They say: “Rob, don’t you get it? Lots of people make lots of money pushing strategies that are 100 percent contrary to Buy-and-Hold principles. There’s a market for non-Buy-and-Holf stuff. You could tap into that market if you would just stop antagonizing the Buy-and-Holders. You make them mad when you point out that there’s 32 years of peer-reviwed academic research showing that there is precisely zero chance that Buy-and-Hold can ever work for a single long-term investor. Just stop doing that!”
I don’t WANT to stop.
I want to bring Buy-and-Hold down.
Not because I am a meanie, as the Buy-and-Holders will claim.
I want to bring it down because I BELIEVE in the Buy-and-Hold project. And the Buy-and-Hold project is NOT to forever push whatever strategy the Buy-and-Holders once thought might work. The true project is to root investing advice in the academic research. That’s what Bogle and all the other Buy-and-Holders started out believing should be done. I think they were right. I want to take it back to that. I don’t want to offer a strategy different than Bogle and all the other Buy-and-Holders. I want to work WITH the Buy-and-Holders to promote the strategy that is in accord with the core Buy-and-Hold belief (that advice should be rooted in research) TODAY. That’s Valuation-Informed Indexing, NOT Buy-and-Hold.
I am not against the Buy-and-Holders. I am against the idea of the Buy-and-Holders not correcting their mistakes when they discover them. That’s why I am seen as such a threat. But I am not trying to threaten anyone. I am trying to help EVERYONE. We all want the same things. We all want to get this stuff right.
Wade said opposite things after he was threatened because he became afraid to tell the truth. Is that really so hard to understand?
Bogle also does not tell the full truth because he is afraid to do so. Same with Bernstein. And Swedroe. And Burns. And on and on and on.
That’s the problem we need to solve.
People are trying to do things in the wrong order. People want to be 100 percent sure that Valuation-Informed Indexing is the answer before letting anyone post honestly about Valuation-Informed Indexing. If you set things up that way, you will go around and around and around in circles. I am 99.99999 percent sure that VII is the answer. But we are not going to see lots of people make the switch so long as it is only me posting honestly about this stuff. People want to hear what Pfau and Bogle and Bernstein and Swedroe and lots of others believe. AND THEY ARE NOT GOING TO TELL US UNTIL WE MAKE IT CLEAR TO THEM THAT IT IS SAFE FOR THEM TO DO SO.
The first thing we have to do is to open the entire internet up to honest posting on safe withdrawal rates and LOTS OF OTHER critically important investment-related topics. That will lead over time to everyone switching from Buy-and-Hold to Valuation-Informed Indexing. But we won’t see that switch until we first permit the discussion. It is through honest discussion that people come to gain confidence in the new ideas. There is no other way that we can bring this economic crisis to an end. We MUST first work up the courage to permit honest discussion. All the other good stuff follows from that.
Are the Goons going to attack us when we say that we favor permitting honest discussion?
But you know what?
The Goons are WEAK today. I was there in May 2002. Things are not going well for the Goons. They are at about 25 percent the power that they possessed in May 2002. The Goons are paper tigers at this point.
The Goons’ favorite tactic is to destroy people one by one. Once they have you isolated, they feel they can scare you. If ten of us stuck together, the Goons would have nothing to work with. They would go down in days. We need ten people to declare publicly that they will stand together for the proposition that honest posting should be permitted on safe withdrawal rated and other critically important investment-related topics. These ten people could be bloggers or investment advisors or academic researchers or journalists or policymakers or whatever. Ten people. That’s all we need. They do NOT need to say that they believe in Valuation-Informed Indexing. They need only to say that they believe that HONEST POSTING on the possible dangers of Buy-and-Hold should be permitted.
We are at the 99-yard line. We are close.
Lots of people are going to become very famous, very well-loved, very rich. Lots of people are going to do an amazing amount of good for millions of other people. This is the biggest turning point in U.S. economic history. On one side is all good, loving stuff and on the other side is all bad, smelly stuff. All we need is 10 brave souls who can publicly attest that they believe that free speech (an idea that has been core to our way of living since the founding of our nation) matters and that intimidation tactics are a big waste of everyone’s time and energy.
I think we are going to make it to the other side and enjoy all the fruits that follow from having a little bit of faith in our system of government and in all the good (but scared) people suffering from the results of this ultimate Buy-and-Hold crisis. Call me madcap.
I tell my Goon friends all the time that they need to understand that I peeked a look at the final chapter of this drama before working up the courage to go forward with that fateful May 13, 2002, post. Love wins in the end. In the end, it’s not even a close call.
It’s not just Rob Bennett saying that. That’s what’s written in the book.
So there’s that.