“Wade Pfau Is Lying. I Have Zero Doubt About That. The Thing That Is Killing Jack Bogle’s Reputation Is the Cover-Up, Just As It Was the Cover-Up of Watergate That Did Damage to Richard Nixon’s Reputation Rather Than the Crime Itself. I View My Friend Jack Bogle’s Destruction of Jack Bogle’s Reputation As a Tragic Event.”

Set forth below is the text of a comment that I recently put to another blog entry at this site:


Help me out here. If we look at the old thread, John answered your questions. Eventually, you said you finally understood and then issued an apology. Are you now saying you were lying back then? Wade also said the question was answered within 82 minutes after your question. Are you saying that Wade was lying?

Thank you for asking an intelligent question, Anonymous. This one gets right to the heart of things.

I still today have a fairly strong recall of the things that were going through my head on the night when I posted my apology. I was not lying.

When I put the May 13, 2002, post forward, I was not certain I was right. I had a high confidence level. I would put it at 90 percent. I knew that the post was going to cause a commotion. So I went over things several times before posting. Each time I did, I was reassured. So I had a high confidence level. But I did not have confidence of 100 percent. I think what made me have doubts is that no one else had ever said the studies were invalid. There were lots of smart people who believed in them. That gave me pause. But I went over things again and again in my mind and things always turned out the same. So I finally did push the button.

The reaction was extreme in both directions. There were people saying that this was a breakthrough, the best discussion that we had ever had at that board. And there were people saying that I should burn in hell for what I had done. As a general rule, this made me more confident that I was right. The fact that the people defending the study could not control their emotions told me that they were probably in the wrong. But these were people I respected and people whom I considered my friends. And they were talking as if they were very sure of themselves. So their reactions did give me pause.

There were elements of the story that I did not understand in those days. I knew enough to say that the studies were in error. But I didn’t know much of the background. I didn’t understand how the errors came to be made. I was able to follow a logic chain showing that I was right. But there was all this crazy emotion surrounding the issue that was putting doubts in my mind. The doubts were not rooted in logic or in human reason. But us humans are not purely rational creatures. We are social creatures and what our friends say influences what we think. The stuff I was hearing was shaking my confidence a bit. But I couldn’t come up with any logical reason for thinking that I was wrong.

I wasn’t just concerned about myself getting something right or wrong. I was the leader of the board and I cared about it deeply. That board was years ahead of its time. There was information available at that board that was not available in the largest personal finance libraries in the world. So I was very protective of the board and sickened by the thought that I might have done something to cause harm to come to it. So on the night that I put up that apology, I was looking for some way to defuse things. So long as the board remained functioning, I was confident that we could bring things to a good place.

Prometheus put up some point that made sense to me. I don’t recall today what it was. But I sincerely believed at the time that the point that he made showed me to be wrong on a small, technical point. I don’t believe that today (I don’t even recall what his point was today) but at the time I was able to convince myself that I really had gotten something wrong. I felt that that was enough to justify an apology. And I hate it when people (usually politicians) put forward apologies that are not really apologies. If I was going to apologize, I was going to do so clearly and without reservation. So I put forward the words that you have quoted.

I stated the apology more strongly than I believed it. But it was not a lie. I did sincerely believe that I had gotten an element of the story wrong and, given the damage that was being done to the board, I believed that that called for a no-reservations apology. I figured that, if I really were right about other elements of the story (as I believed I was), that that would all come out in subsequent discussions and all would be well. My top priority was protecting the board.

The apology was not a lie. It was overstated. So you could say that it was not 100 percent honest. But the purpose of the small amounts of dishonesty that were present in those words was to soothe ruffled feathers so that over time we could all work together to bring things to a better place. If I had it to do over, I would not have written the apology as strong as I did. But I still would have written it. I had sincere doubts at that moment and this was too important an issue for me to cover up those doubts. My fellow community members needed to know that the person who had brought this controversy to the table was experiencing sincere doubts about at least some of it. I think the apology was a good thing, perhaps not executed perfectly (and that the lack of perfect execution can be excused by the crazy, emotion-filled circumstances).

Wade is lying. I have zero doubt about. He certainly does not believe that Greaney answered any questions to any reasonable person’s satisfaction. He expressed complete and utter disdain for the tactics employed by the Lindauerheads and the Greaney Goons on numerous occasions during our 16 months of correspondence. There is zero chance that he believes the words he put forward in the post in which he praised Greaney for the role he played. Those words were almost certainly dictated by Greaney. Wade posted them in his name because that’s what you Goons insisted on as the price for not destroying his career. Whether Bogle was in on the discussions that led to that deal I do not know for certain. If it is determined after he is questioned under oath that he was, that’s financial fraud, that’s a felony, that’s prison time.

Wade is certainly guilty of financial fraud in an objective sense. I see it as a more complicated question as to whether he will be prosecuted or not. Wade obviously did not want to commit financial fraud for any selfish reason. He is very proud of the wonderful work he did with me. He showed courage in trying to stand up to you Goons for a time in an effort to get the word out to the millions of middle-class workers who very, very, very much need to know about it. He has two small children for whom he is financially responsible. When he saw that Bogle was not willing to speak up and Bernstein was not willing to speak up and Swedroe was not willing to speak up, he came to possess a sincere belief that you Goons could make it impossible for him to earn a living in the field in which he had spent many years of hard work gaining expertise. He truly had a gun to his head. That obviously doesn’t excuse the behavior. But it is equally obvious that there are mitigating circumstances here and that a prosecutor needs to take those circumstances into consideration when deciding whether to bring a case and that, if a case is brought, the jury will need to take those circumstances into consideration as well.

Wade does not possess a complete understanding of Valuation-Informed Indexing. He is strong on lots of important points. But he hasn’t put the entire thing together in his head. So he does rationalize. I think he tells himself that we will not end up in the Second Great Depression regardless of whether we open the internet up to honest posting or not. I think he would pass a lie detector test on that point. Again, that doesn’t excuse the behavior. But it puts it in a different context than it would be in if this were not so.

I believe the same of Bogle. I believe that Bogle rationalizes. I believe he tells himself that we will all get through this somehow even if he does not acknowledge the errors that he so obviously (to someone who is looking at things objectively) made. I believe he suffers from cognitive dissonance (as does Wade, to a lesser extent). I believe that he feels it would be a terrible thing if people found about the mistakes he has made and about the huge amounts of energy he has exerted to cover them up for so many years. I think he is wrong about that. I think that the vast majority of people would have forgiven the mistakes in two seconds had he come clean. I think that the thing that is killing his reputation is the cover-up, just as it was the cover-up of Watergate that did damage to Richard Nixon’s reputation rather than the crime itself. I view my friend Jack Bogle’s destruction of Jack Bogle’s reputation as a tragic event. I also view it as tragic that so few of the people who claim to be his friends have been brave enough to step forward and try to help him out in a moment in which he obviously is in great need of help.

I believe that you Goons follow Buy-and-Hold strategies. To that extent, you are sincere in the things you say. I don’t believe for two seconds that you are sincere when you say that I am on meds or that I stalk women or that the 200 quotes offered in praise of my word at the “People Are Talking” section of this site are not real or re any of the other garbage you post on daily basis as part of your effort to intimidate anyone who posts honestly on these matters. I believe you will go to prison following the next crash. But I believe that it is important that the millions of middle-class people whose lives have been destroyed by the 12-year cover-up not give in to desires for retribution. Prison sentences make sense as a way for society to give voice to its core belief that certain types of behavior cannot be tolerated among civilized people. But we need to keep in mind the circumstances that apply re you Goons as much as we need to keep in mind the circumstances that apply re Wade and Jack. And we always need to remember that it is love that we all deep in our hearts want to see win the day here, not hate.

I think that covers most of what you asked, Anonymous. Have you ever seen the movie Rashomon? People see things from different perspective because they have lived through different sets of life circumstances and possess different personality types. I don’t think it is a good idea to be too quick to label something a “lie” just because it evidences a surface contradiction. You can learn something by trying to understand what is going on below the surface and then trying to made sense of why the contradiction surfaced. There are grays in this world, not just blacks and whites.

I hope that helps a bit, in any event.



  1. Anonymous says

    So, do we believe in the credibility of Wade, Jack, John, Mel, JD, Mike, Rick and Larry or do we believe in Rob…………not a hard decision, Rob. You don’t come anywhere close to those mentioned.

  2. Rob says

    Whose name is on the May 13, 2002, post pointing out the errors in the Old School SWR studies, Anonymous?

    It ain’t Jack Bogle’s.

    It ain’t John Greaney’s.

    It ain’t Mel Lindauer’s.

    It ain’t J.D. Roth’s.

    It ain’t Mike Piper’s.

    It ain’t Rick Ferri’s.

    It ain’t Larry Swedroe’s.

    I wonder why.


Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Comments links could be nofollow free.