Yesterday’s blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on April 5, 2012. Wade sent his response later the same day.
He said: “I don’t have any hard feelings toward you, but it is hard to have public communications with you after all the attacks you made toward me at your blog following the Bill Bengen incident. You strongly misinterpreted what I wrote at your blog and attacked me so thoroughly, and that makes it hard to see any paths forward in communicating with you publicly.”
I argued in the blog entry to which Wade here refers that Bill Bengen, the author of the first of the Old School safe withdrawal rate studies, should correct his study now that he has publicly acknowledged that it is in error and gets the numbers people use to plan their retirements wrong. Wade at an earlier time agreed with me that retirement studies that get the numbers wrong should be corrected and he wrote the authors of the Trinity Study, another Old School safe withdrawal rate study, about this. John Greaney and some of the other Goons then threatened to get Wade fired from his job by sending defamatory e-mails to his employer. Wade sent me several e-mails at the time saying that he was concerned that he would indeed lose his job a a result of the smear campaigns of the Goons. He has known about the smear campaigns against me since before we began out e-mail correspondence and has told me on numerous occasions how he is fearful of saying positive things about me and my work at the Bogleheads Forum because of the brutal attacks that he knows will be visited on him if he posts honestly on these questions. Here is a link to the blog entry in which I argued that Bengen should correct his study and the 100-plus comments that were posted to it:
http://arichlife.passionsaving.com/2011/12/27/bill-bengen-buy-and-hold-in-these-environments-is-an-invitation-to-disaster/
I presume that that is the thread that Wade was referring to. That was the one in which I became aware that the Goons had flipped him. It is likely that he is referring to this one as well, which focuses on Wade rather than on Bill and which refers to the position Wade adopted in the Bengen thread (that there is no need for those who author retirement studies that get the numbers wildly wrong to correct those studies when they learn of errors made in them, even though the false claims are going to cause millions of middle-class people to suffer failed retirements):
http://arichlife.passionsaving.com/2012/02/28/wade-pfau-does-not-post-with-full-honesty-at-the-bogleheads-forum/
The e-mail stated: “Related to this, I do wish to kindly request that you don’t use my name so much on your blog, as I would prefer that when people Google my name they didn’t see claims that I’ve joined the Darkside and am posting dishonestly and am causing failed retirements and so on. None of that is true anyway, and it could really hurt if I ever try to find a job and return to the United States one day. Perhaps, if you must keep writing about it, could you please call me WDP or something like that?”
Wade continued: “Regarding that January 2011 blog post, it was very preliminary with ugly graphs and I re-wrote it in March 2011. I didn’t understand why you kept referring to the outdated version anyway. My changing the contents to refer readers to the newer version had nothing to do with wanting to remove your name. I mostly didn’t like the graphs for the old one. If you really care more about seeing your own name than seeing the best presentation of the results, you can still find that original version in the Bogleheads thread on long-term market timing, since I posted it at both places at the same time. I didn’t edit it at Bogleheads. And your name still appears in the research article versions, including in Journal of Financial Planning and still forthcoming in Applied Financial Economics, which in my view is what matters most. Also, in January 2011 I still thought that Valuation-Informed Indexing I was all your creation, and it was only later that I internalized that this is old stuff since the stock formula plans of the 1940s and 1950s. VII is Lucille Tomlinson’s variable-ratio plan from 1953. I have no idea what you mean when you mention including me in lawsuits, as I’ve been nothing but supportive of you.”
He further explained: “I do believe I am still on the Good Side. Planners have been receptive to the idea that 4% is not safe in recent years. I’m getting the message out. More broadly, I am tackling this from the angle that people need complete retirement income strategies that move beyond just considering a safe withdrawal rate. You might be surprised that outside of this small circle of safe withdrawal rate research, there are many people who think that the whole idea of 4% being a safe withdrawal rate is just ridiculous. Retirement income plans must work by construction, it is not enough that they just would have happened to work historically. Drawdowns from a volatile portfolio are inherently risky. There is no safe withdrawal rate from a volatile portfolio. It all goes back to arguments about investing made by Paul Samuelson as far back as the 1960s or earlier. He discovered the “errors” of the old school SWR studies (in the sense of projecting those results forward for future retirees) before they were ever written. Your insight about valuations is important and useful and I still discuss it, but it is ultimately just one piece of a much broader story.”
The e-mail concluded: “So please don’t worry so much about me. I’m still working to help Americans achieve sustainable retirements.”
Related to this, I do wish to kindly request that you don’t use my name so much on your blog, as I would prefer that when people Google my name they didn’t see claims that I’ve joined the Darkside and am posting dishonestly and am causing failed retirements and so on. None of that is true anyway, and it could really hurt if I ever try to find a job and return to the United States one day. Perhaps, if you must keep writing about it, could you please call me WDP or something like that?
So now we see the real threat to Wade’s job, Rob “hocus” Bennett.
And your response to his request? A three month campaign against him, dozens of blog posts and hundreds of messages on twitter. Your campaign of terror against anyone who disagrees with you in full flow.
No wonder you can’t make a living from your internet writing.
So now we see the real threat to Wade’s job, Rob “hocus” Bennett.
I say the guy’s research merits a Nobel prize. I’m the meanest of meanies.
Everybody knows it too. That’s the thing.
Rob
Wade sent me several e-mails at the time saying that he was concerned that he would indeed lose his job a a result of the smear campaigns of the Goons.
Are those emails included in those that you have published over the last three months?
What do you think, Evidence?
Rob
I think you are afraid to highlight which emails you claim Wade said “he was concerned that he would indeed lose his job” because it will show that he said no such thing.
Good point. Evidence.
That make sense.
Rob
The lack of links to these supposed claims demonstrates the weakness of your case.
You’ve saved the best wine for last, Evidence.
Rob
You are much to modest Rob. The best whine is not anything I produce but your years long complaining on this blog.
It’s always something.
That much is for sure.
Rob
And you have added another 10 tweets this morning about Wade.
I think this sends a strong message. You will do whatever it takes to harm the reputation of anyone who crosses you, no matter what their wishes.
I will do whatever it takes to get the entire internet opened up to honest posting on safe withdrawal rates and all other critically important investment-related topics, Evidence.
Once the Ban on Honest Posting is lifted, Wade can go back to being a kid on Christmas morning discovering one exciting insight after another after another. And he will be joined by hundreds of other academic researchers who will also feel free for the first time since 1981 to post honest and accurate and life-affirming research.
It’s a win/win/win/win/win. The only downer here was Wade’s decision to flip to the dark side. I did everything in my power to persuade him not to do that. I warned Wade about the Greaney Goons in my first e-mail to him, back in December 2010.
I don’t control the Goons, Evidence. Perhaps you’ve noticed.
Rob
I warned Wade about the Greaney Goons in my first e-mail to him, back in December 2010.
But you didn’t warn him about the real Goon, the king of abusive posting Rob “hocus” Bennett.
You didn’t warn him that if he ever said anything you didn’t like, you would direct a torrent of abuse and lies at him. You didn’t tell him that you would spend months trying to blacken his name.
That is the warning you should give to anyone you interact with regarding investing.
That makes a lot of sense, Evidence.
Truly outstanding!!!!
Rob
Wade still posts regularly at his blog regarding SWRs and other important investing topics. Do you comment at his blog?
I’ll give a serious answer.
The Buy-and-Holders did something wonderful back in the early 1970s, Evidence. They put forward the first research-supported investing strategy.
Something ended on that day.
The Stock-Selling Industry had for many years made millions of dollars promoting Get Rich Quick strategies. That’s where the money is for those who sell stocks (if not for those who buy them). Once the idea was promoted that investors should root their strategies in the academic research, that marketing idea died. You can’t promote GRQ by citing the academic research. The academic research shows offers zero support for GRQ.
So here we are.
Either The Stock-Selling Industry is going to continue promoting the pure GRQ approach (Buy-and-Hold) and our free-market economic system is going to go under, or we are going to open the internet to honest posting and thereby pressure the “experts” in this field to start promoting Valuation-Informed Indexing and enter the greatest period of economic growth in our history.
I am not the one who came up with the idea of rooting one’s strategies in the academic research. That was John Bogle and the other Buy-and-Holders. You don’t like it that I report on what the academic research says about stock investing? Take it up with John Bogle. It was his idea. All I did was be persuaded by him that the idea was a good one.
I will continue posting honestly on safe withdrawal rates and on many other critically important investment-related topics. Count on it.
I wish you all good things, my long-time Lindauer- and Greaney-“defending” friend.
Rob
Do you comment at his blog?
Since his flip to the dark side, Wade no longer permits honest posting on safe withdrawal rates at his blog.
As you of course know perfectly well, Evidence.
Rob
The term Get Rich Quick is better used for those schemes that the snake oil salesmen try to sell where they claim to have discovered a way to beat the market.
Since his flip to the dark side, Wade no longer permits honest posting on safe withdrawal rates at his blog.
You mean he has banned you. A common reaction from anyone that encounters your brand of investing wisdom.
The term Get Rich Quick is better used for those schemes that the snake oil salesmen try to sell where they claim to have discovered a way to beat the market.
That’s a perfect description of what Buy-and-Hold is today, Evidence.
The Greaney Goons don’t like it that Wade Pfau published research showing that Valuation-Informed Indexing provides far higher returns than Buy-and-Hold while greatly reducing risk. What is their way of dealing with this reality? Learning about it? Trying to find holes in the research? No. Their response is to threaten to get the researcher fired from his job. If that’s not the thought process of a snake-oil salesmen, what the heck is?
And please note the reaction of OTHER Buy-and-Holders to reports of what the Greaney Goons did. As you mentioned above, I have put up numerous tweets reporting on what the Greaney Goons did to Wade Pfau and on how Wade felt that his career would be destroyed if he did not agree to post dishonestly on safe withdrawal rates and other important issues. How have OTHER Buy-and-Holders reacted to learning about this? How many have demanded prison sentences for those who have posted in “defense” of Lindaurer and Greaney? Not one. Is that not also the mark of snake-oil salesmen?
You say that those who use the academic research to invest effectively are seeking to “beat the market.” Couldn’t it be said that the Get RIch Quickers are trying to beat the market? No market can function without price discipline. But the Buy-and-Holders say that they know of some magic pixie dust that we can all sprinkle in the air so that we won’t need to exercise price discipline IN THIS ONE MARKET, a market in which they just happen by a fortunate coincidence to have made hundreds of millions of dollars as a result of the belief that many investors now hold that this market is differert from all the others, that this is the first market that ever existed in which price discipline is 100 percent optional.
Who is trying to “beat the market” now? The investors who follow the research and their common sense, which tells them that price discipline is mandatory? Or the investors who say that, for some reason they can never disclose, there is something different about this market that causes it to behave according to principles that have never worked in any market ever known in the history of the world?
I HONOR the market, Evidence. I RESPECT the market. When the market tells me that I MUST consider price to have any hope whatsoever of achieving long-term success, I don’t imagine a fantasy world where I might be able to beat the rules that have governed every market since the beginning of time, I do what the market says must be done — I CONSIDER PRICE when setting my stock allocation.
You are the one investing according to the fantasy that you will be able to beat the message of 140 years of stock investing history, not me, Evidence.
Rob
You mean he has banned you.
He didn’t ban me because of my looks, Evidence.
He banned me because I was the person who discovered the errors in the Old School SWR studies in May 2002, ten years before the “experts” in this field figured things out and because, once I discovered those errors and reported on them on the internet, the Lindauerheads and the Greaney Goons made clear that they would destroy anyone who posted honestly about my discovery and because they threatened Wade that they would get him fired from his job if he “crossed” them and because he knew from his experience with them that they were 100 percent capable of following through on these threats.
I don’t say that Wade had no cause to fear the Goons, Evidence. He has every cause in the world. I will so testify in court.
What I say is that, once Wade realized that it was impossible to execute his responsibilities as an academic researcher in an honorable way, he was left with no choice but to find another line of work. I think that with his help we can get those who have posted in “defense” of Lindauer and Greaney on more than a small number of occasions put in prison cells and then none of us have to worry about this garbage anymore. That’s what I advised him to do. But if he truly believes that there is no way that he can post honestly given the Goon threats to destroy those who do so, his only legitimate choice is to find another line of work.
Posting dishonestly on safe withdrawal rates is not an option for someone who has elected to make a living as a retirement researcher. The failure of the authors of the Old School studies to correct their studies for 10 years after they learned about the errors in them has already caused one of the worst social tragedies in our nation’s history. Each day that the ban remains in effect is a day that hundreds more failed retirements are caused by our failure as a society to take effective action re this matter.
No one who works in the field of retirement planning can duck this one, Evidence. If Wade lacks the guts to stand up to the Goons, he lacks what it takes to do this type of work today. I wish it weren’t so as much as he wishes it weren’t so. It’s so. He’s either going to have to work up his courage or start looking in the want-ads. The Lindauerheads and the Greaney Goons are not going to start adhering to our society’s most fundamental social norms because we ask them “pretty please with sugar on top.” I’m pretty darn sure of that much at this point.
Rob
Those who buy and hold will get the market return. Always have, always will. Because that is what the market return is. It is the return you receive if you invest at the start of a period of time and hold to the end of that period of time.
It is what investors collectively do. When you look at the totality of investors they buy and hold. Investor A may sell to Investor B and at some point in the future buy back from Investor C but the total return available to all investors is the buy and hold return and no magic market timing scheme (either short term or long term) can change that.
Those who buy and hold will get the market return.
This is correct.
In 2000, the most likely 10-year annualized market return was a negative 1 percent real. The certain market return on TIPS was 4 percent real. Giving up 5 points of market return each year for ten years running means losing 50 percent of your initial portfolio value.
The idea of offering investment guidance is not to help your readers and clients lose 50 percent of their life savings, Evidence.
We should permit honest posting on what the academic research tells us about effective stock investing at every discussion board and blog on the internet.
That’s my sincere take re this important matter.
Rob
“I don’t say that Wade had no cause to fear the Goons, Evidence.”
— but Wade does and he would know.
“He has every cause in the world. I will so testify in court.”
— No you won’t. Because this will never end up in court.
In 2000, the most likely 10-year annualized market return was a negative 1 percent real. The certain market return on TIPS was 4 percent real. Giving up 5 points of market return each year for ten years running means losing 50 percent of your initial portfolio value.
Those who invested in 2000 did not lose 50 percent of their initial portfolio value over the next ten years.
“Giving up 5 points of market return each year for ten years running means losing 50 percent of your initial portfolio value.”
WRONG. Elementary math error. The correct answer is 40.1%.
Some financial advisor. ROFLMAO!
the total return available to all investors is the buy and hold return and no magic market timing scheme (either short term or long term) can change that.
That’s like saying that those who go into credit-card debt to the tune of hundreds of thousands of dollars are acting just as responsibly as those who pay off their balances every month.
The U.S. economy produces an average long-term annual return of 6.5 percent real. That’s true regardless of whether we follow Buy-and-Hold strategies or Valuation-Informed Indexing strategies.
The difference is that, once we ban honest posting and thereby trick millions into thinking that Buy-and-Hold can work in the long run, our Get Rich Quick impulse runs wild and we end up as a society borrowing trillions of dollars from future investors to live high in the here and now. We went into debt in the late 1990s to the tune of $12 trillion.
That’s why we are in an economic crisis today. It is going to take us decades to pay off that debt.
Had we permitted honest posting, we never would have incurred that $12 trillion in debt. If we permitted honest posting, we wouldn’t be in an economic crisis and we could plan our financial futures with a reasonable degree of confidence.
Please tell me again what is so wonderful about this economic crisis? Why is it so imperative that we keep the ban on honest posting so that it continues to worsen until we are in the Second Great Depression?
My personal inclination is to try to bring the crisis to an end. Call me madcap.
Rob
WRONG. Elementary math error. The correct answer is 40.1%.
You are the one who is wrong, Junior High Math.
You are applying the 5 percent to the starting-point figure and then reducing that figure by the amount of the loss and getting a lower number because you are reducing that figure after taking each loss. The 5 percent loss is not taken from a different figure each year. The 5 percent loss suffered each year is 5 percent of the initial portfolio value.
I am not saying that you experience a 5 percent reduction of portfolio value each year. I am saying that you see a return 5 percent less each year than what you would have experienced if you had been open to referring to the academic research of the past 30 years when deciding on your stock allocation at different valuation levels.
Rob
The U.S. economy produces an average long-term annual return of 6.5 percent real.
No it doesn’t.
I has averaged about 3.6% real
http://www.efficientfrontier.com/ef/702/2percent.htm
It has averaged about 3.6% real
You are wrong, Evidence.
Worse, you are dishonest and abusive and not willing to correct mistakes in retirement studies when they are brought to your attention.
My best wishes to you, my long-time abusive posting friend.
Rob
Rob Bennett says 6.5% Bill Bernstein says 3.6%
Who should I believe?
Not a hard decision to make.
Good point, Evidence.
Rob
Those who invested in 2000 did not lose 50 percent of their initial portfolio value over the next ten years.
They are doing super, Evidence.
Buy-and-Hold is a winner.
Rob
Wade does and he would know.
Wade says something very different today from what he said before the Greaney Goons threatened to get him fired from his job.
I wonder why.
Rob
this will never end up in court.
I believe you, Evidence.
No, really!
Rob
Wade says something very different today from what he said before the Greaney Goons threatened to get him fired from his job.
Something you claim but have never been able to document.
Good point.
Rob
The failure of the authors of the Old School studies to correct their studies for 10 years after they learned about the errors in them has already caused one of the worst social tragedies in our nation’s history.
And yet you still haven’t contacted the authors of the Trinity study. What are you waiting for?
Wade contacted them, Evidence (as you well know).
They did not respond.
That tells us all what we need to know.
Rob
That tells us all what we need to know.
That you give up easily.
You contacted one large law firm about your lawsuit and gave up when you couldn’t reach a decision maker.
You won’t contact the Trinity authors because Wade didn’t get a response (Though I don’t know what your excuse is for all the years before Wade was unfortunate enough to encounter you)
Hard to argue.
Rob
Here is an update to their study with data through 2009
http://www.fpanet.org/journal/CurrentIssue/TableofContents/PortfolioSuccessRates/
The original study includes their email addresses
http://www.afcpe.org/assets/pdf/vol1014.pdf
pcooley@trinity.edu.
chubbard@trinity.edu
dwalz@trinity.edu
They do respond to correspondence re their study
http://www.fpanet.org/docs/assets/D20F341C-1D09-67A1-AC09CC145170DA23/Voice.pdf
They didn’t respond to Wade Pfau’s correspondence pointing out the need for a correction, Evidence.
I wonder why.
Rob
http://wpfau.blogspot.com/2012_05_16_archive.htm
“Hocus desperately wants someone besides him to say that the Trinity study needs to be “corrected,” but I’ve explained that this isn’t how research works. Rather, new studies with new methodologies come to replace old studies. This is a case, however, in which old studies were already available to suggest that we shouldn’t project the findings of the Trinity study forward to future retirees.”
That’s an accurate quote, Evidence.
Rob
Another good one from the same article
http://wpfau.blogspot.com/2012_05_16_archive.html
“Much to my surprise, the “debate” that has supposedly been raging for the past 10 years was actually resolved just 84 minutes after it began. A fellow named intercst replied:
I’m not aware of anyone who has been successful in timing when stock prices are high or low over the long-term. If you possess this unique ability that others lack, perhaps the easiest thing to do is to adjust the safe withdrawal rate by the amount that you consider stocks to be higher than they have ever been. If stocks are 25% higher, drop the 4% withdrawal to 3%. If you feel stocks are 50% higher than they have ever been, then drop the 4% down to a 2% withdrawal.”
That’s also an accurate quote.
Rob
so in other words, rob has been proven wrong, but won’t admit it.
gutless, sniveling coward.
You got me, Canyon.
Good one.
Rob
top 46th return from a google search of WP is:
http://www.s152957355.onlinehome.us/cgi-bin/yabb2/YaBB.pl?num=1335645949/85
nothing directing to this plop before that.
I hope that puts your mind at ease, Canyon.
Rob
what is the basis for these lawsuits you keep mentioning? you the plaintiff or defendant?
What do you think, Canyon?
Rob
i have no idea, that’s why i’m asking.
what possible basis could there be for a lawsuit for posting thoughts and opinions on an internet forum?
To advance a death threat is not to post a thought or opinion.
To engage in defamation is not to post a thought or opinion.
To push for or adopt an unjustified board banning is not to post a thought or opinion.
To threaten to get an academic researcher fired from his job because he posted his honest views on retirement planning is not to post a thought or opinion.
You of course know all this, my long-time abusive posting friend.
Rob
You advanced the death threats
http://www.retireearlyhomepage.com/cgi-bin/yabb2/YaBB.pl?board=HOCO;action=display;num=1129304509
You engaged in defamation
http://www.passionsaving.com/taylor-larimore.html (one example, you have produced thousands)
The justified board bannings (of you) were for your abusive behavior.
http://www.bogleheads.org/forum/viewtopic.php?t=3
The firing threats did not happen, as the supposed victim of those threats has documented.
http://arichlife.passionsaving.com/2012/06/17/academic-researcher-wade-pfau-i-do-not-wish-to-antagonize-the-goons-too-much-i-do-not-want-them-working-behind-the-scenes-to-derail-me-i-did-warn-the-editor-of-the-journal-of-financial-pla/#comments
you did all those things?
Good one, Canyon.
Rob
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I think the egg has been cracked and is cooking in the skillet.
Watching it sizzle is entertaining. I really hope Rob gets help with his mental condition before he spirals down the drain but there does not appear to be anything we can do at this point.
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Now you’re making at least some sense, Canyon.
Rob