Set forth below is the text of a comment that I recently put to another blog entry at this site:
I am curious as to your reaction to Wade being named to Investment News’ 40 under 40 list? Among other things they state that “his Retirement Research blog (WPfau.blogspot.com), which he launched in 2010, became a big hit with advisers interested in retirement strategy.”
Everything that I know about Wade tells me that he deserves the honor, Interested.
Wade is smart, he is hard working, he is ambitious (I mean that 100 percent as a compliment — we need ambitious people to make good things happen in the world), and he is generous in giving compliments to those who help him out. He is a great guy all the way around. I am proud to be able to call him “friend.”
He is ALSO dishonest. Wade has played a big role in a huge act of financial fraud, the biggest act of financial fraud in U.S. history. There is a good chance that he will be going to prison following the next price crash.
Does that cover it, Interested?
If you find that mix of views strange, then there’s a sense in which I am with you. I find it strange myself.
But you know what? If you read great novels, you won’t find it quite so strange after you take some time to reflect on what is going on here. When you hear that one of the greatest investment researchers alive today may be on his way to prison, your first reaction is to think: “How odd.” But when you reflect on how humans behave in the real world, you see that this is really not so strange as it seems on first impression.
Richard Nixon achieved amazing things with his life. He opened relations with China. He brought the war in Vietnam to an end (in a messy way, but still). He ended the gold standard. He greatly increased the size of the programs adopted by Johnson as part of the Great Society. He won one of the biggest landslide victories in U.S. election history. And on and on.
Richard Nixon would likely have landed in a prison cell had he not been pardoned by his successor. As it was, he resigned from office in disgrace.
Nixon ruined himself over a stupid pride thing. No one cared about the break-in. It was a political prank. The story would have been in the news two or three days had he simply come clean when it was discovered. He didn’t want bad press for two or three days. So he went in to cover-up mode. He committed crimes. Felonies. He ruined himself. He ruined lots of people associated with him. He messed up big time.
That’s what my good friend Jack Bogle has done. Jack is one of the giants in this field. I rank him second only to Robert Shiller and there are lots of others who would rank him first. He has changed the world of stock investing in hugely important and positive ways. The work he has done will be helping millions of middle-class investors for many decades to come (because Jack’s work is the foundation for Valuation-Informed Indexing, the investing model of the future).
And Jack too may be headed for a prison cell. Jack too has committed felonies (financial fraud is a felony). Mel Linduaer was using threats of physical violence to stop posters at the Bogleheads Forum from posting their honest views since long before I came on the scene. Bogle knew about it. And he turned his head. He pretended that he didn’t see. And things got more and more and more out of control over time. Now Buy-and-Hold has caused an economic crisis. Up ahead we have another price crash coming, one that may put us in the Second Great Depression. We are looking at one of the most destructive acts in the history of the United States.
And at a time when Bogle’s ideas (one of his most important ideas was the one arguing that we should all root our investment strategies in the findings of the peer-reviewed academic research) are bearing fruit more exciting than anything he ever dreamed of when he was a young man. Huh? Bogle’s ideas take us to places he never even imagined possible and Bogle then decides to turn on them, to reverse course? To join forces with the sorts of individuals who have put up posts in “defense” of Mel Linduaer and John Greaney? Is he mad?
Yes, he is mad.
We ALL are to some extent. We are all humans. And all humans have a bit of madness within them.
Maybe Wade will be spared prison because his lawyers will cite his madness and a jury will let him off. Maybe the same will happen with Jack.
I don’t know. I cannot say.
My job is to tell the story. Straight. True. As it happened.
I love Wade Pfau. And so I am obviously going to say every positive thing I can think of to say about him.
I love Jack Bogle. So I am obviously going to say every positive thing I can think of to say about him.
But I ALSO love the millions of middle-class investors whose lives have been destroyed by the 12-year cover-up of the errors in the Old School safe-withdrawal-rate studies. Those people need to know the truth about what has been done to them. They need to know who to sue to recover damages. They need to know who to send to prison so that they can make some peace with what has happened and feel that justice has been served at least to some extent. The lawyers who will bring their cases need evidence to present to the juries. My job as a journalist is to document what has gone down so that that evidence is available to them.
So I am not in a postion in which I can ignore the crimes in which my good friends Wade and Jack have participated. I need to tell the story HONESTY. Charitably too. To be sure. But honestly also. Both charity and honesty are called for here. There is no other way by which we can all get from the horrible place where we find ourselves today to the wonderful place where we all deep in our hearts hope to reside tomorrow.
I hope that helps a bit, Interested.
My best and warmest wishes to you and yours.