Set forth below is the text of a comment that I recently put to another blog entry at this site:
Does anyone other than you believe that you have “develop[ed] a new model for understanding how investing works that will reduce risk by 70 percent”?
Surely you must have shared this with others whose opinions you respect. What did they think?
|The committee that approved publication of the research paper in a peer-reviewed journal obviously thought well of it, Curious.My co-author Wade Pfau was very excited about it. He said that he was giving thought to submitting the paper to the Journal of Finance, the top journal in the field. Over and over he expressed amazement that no one had thought to examine the question we researched together (how much it reduces risk to exercise price discipline when buying stocks) before.
The scores of academic researchers who responded to my e-mail campaign thought well of it. Rob Arnott, the former editor of the Financial Analysts Journal, told me that my work in this field is “sound.” Carol Osler said that we are seeing a change in the paradigm for understanding how stock investing works and that I must be patient to see all the experts in the field come around (she expressed the thought that this would likely happen following the next price crash). Robert Savickas said that he will be teaching Valuation-Informed Indexing to his class at George Washington University. Barry Ritholtz linked from his hugely popular blog to my article on “Why Buy-and-Hold Investing Can Never Work.” Scores of others offered exceedingly kind comments. Not one of the 30,000 academic researchers to whom I sent a link identified any problems with the research paper.
The Bogleheads Forum found that the paper was of huge importance. Fred Flintstone said that it challenged core principles of Buy-and-Hold. Many others expressed a desire that the Ban on Honest Posting be lifted so that they could engage in reasoned discussion of the findings of the paper. You Goons were obviously impressed by it or you would not have threatened to send defamatory e-mails to Wade Pfau’s employer in an effort to get him fired from his job. My good friend Jack Bogle was obviously not able to come up with any grounds for challenging the findings of the research in civil and reasoned debate or he would have done something about you Goons when he learned about the threats you made to silence Wade.
The short version is that tens of thousands have seen the paper and most who expressed an opinion have either praised it to the skies or have been so threatened by what they saw (because they have staked their lives on a belief in Buy-and-Hold strategies) that they either engaged in or tolerated acts of financial fraud to keep more people from learning about it.
I think it would be fair to say that there are few research papers that have ever been published that have had that sort of impact in the short amount of time that the Bennett/Pfau research paper has been available for people to review. Wade once told me that there is a saying among academic researchers that no paper ever wins a Nobel Prize without being hated by some (because the most important papers are seen as a threat to those who built their careers around the ideas that are being discredited by the advance in knowledge). I think it would be fair to say that the Bennett/Pfau paper showing how investors can reduce risk by 70 percent just by abandoning Buy-and-Hold strategies fits that pattern!
My best wishes to you.