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.”
http://www.investmentnews.com/section/40-under-40/profile/26/Wade-Pfau
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.”
Now –
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.
Sound familiar?
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.
Rob
Rob,
Why would someone be expected to update a study to use a valuation methodology that isn’t widely accepted at all?
Because he’s honest.
Because he wants to get the numbers right.
Because he cares about his fellow community members and does not want to see them suffer failed retirements.
Because he doesn’t want to go to prison.
Because he wants to see research-backed strategies become MORE widely accepted over time and to see the smelly Get Rich Quick garbage promoted by the Wall Street Con Men become LESS widely accepted.
Because he wants to direct his life energies to developing the strategies that will be dominant in the future rather than defending those that were dominant in the past.
Because a good percentage of his fellow community members have expressed a desire that honest posting be permitted on every board and blog on the internet.
Because there is a lot of money to be made providing investing advice that is safe, simple and smart.
Because it is exciting to advance the ball re our society’s understanding of how investing works.
Because he wants to come clean.
Because its a lot more fun to steer people in the right direction than it is to destroy their lives.
Because he wants to bring the economic crisis to an end.
Because he wants to bring on the greatest period of economic growth in U.S. history.
Rob
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
I only have to ask you for a link or evidence that even one such person exists to prove that this is all just Hocomania.
“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
I only have to ask you for a link or evidence that even one such person exists to prove that this is all just Hocomania.”
While you are looking up that link, perhaps you can look up the link for the often mentioned death threats as well as the link to the job threats…….the actual links and not just a link to your own allegations.
I only have to ask you for a link or evidence that even one such person exists to prove that this is all just Hocomania.
The peer-reviewed research showing everyone who is open to hearing the message that there will be millions of such people was published in 1981, Anonymous.
The price crash that will make it clear to millions of people that they have been tricked is likely to take place within the next two years.
If there were no time-delay on Buy-and-Hold ruining lives, you and I would be best friends. We are not on different sides of this in a fundamental way.
After the crash hits and people are angry at you for telling lies instead of being angry with me for telling the truth, I am going to point out to them that that long time-delay fooled LOTS of people. I am not going to make it sound like you were the only one taken in. I am going to do just the opposite.
And of course I am going to say the same thing about people like Jack Bogle. I am going to say that he is a good man who was taken in by the long time-delay. I am going to say that not because I feel intimidated into saying that. I am going to say it because I believe it to be true.
33 years of peer-reviewed research is not mania of any kind. Peer-reviewed research is the real thing. Peer-reviewed research tells us HOW IT IS. Peer-reviewed research is science.
That’s why I believe in this. That’s why I think it is an advance. That’s why I want to share it with everyone. That’s why I believe it is the future.
We’re just going to have to wait and see how things turn out. I believe and I want to be at the vanguard of those telling people about the first true research-based strategy. I love the things I learned from people like Bogle and I am proud and happy to be able to share important truths that follow from Bogle’s work that I either discovered on my own or developed on my own.
I get it that you don’t believe. I respect your right not to believe. I always will.
When I talk about your prison sentence, I am talking about the insanely abusive stuff that you do to stop people from learning what they need to learn. I will also report on that stuff. Because I care about tho millions who are in the process of having their lives destroyed too. So I will tell that part of the story too while still trying to present your behavior in the best possible light.
Is there anything more that I could possibly do to help you, given the way in which you continue to behave to this day? I am sure not able to think of anything. So that’s the best offer that I am able to advance.
Bernie Madoff was the toast of the town until he wasn’t.
Jack Bogle will remain the toast of the town until he isn’t.
That’s how Get Rich Quick schemes work. That’s how Ponzi schemes work. That’s how fraud works. That’s how lies work. That’s how Wall Street Con Men work.
You think you are immune to the universal laws. You think that when you fall for a Get Rich Quick scheme there will be no consequences.
I don’t have the power to persuade you to stop thinking that, do I? So go ahead and believe it if you must. What I control is me. I need to do everything in my power to help my good friend Anonymous shorten his prison sentence a bit. Once I have done that, I have to let it go. I don’t like to see you destroy yourself (and millions of others). But if there is nothing that I can do, there is nothing that I can do.
No reasonable person is ever going to say that I have not done everything in my power. I will continue doing that. And we’ll see how things go.
Could anything be more fair than that? I don’t see how.
I naturally wish you all the best things that this life has to offer a person REGARDLESS of what investing strategy you elect to pursue.
Rob
perhaps you can look up the link for the often mentioned death threats as well as the link to the job threats
The millions of middle-class people whose lives have been destroyed will have access to the entire record. So will the prosecutors. So will the members of your jury. That’s how our system works.
The heavy force of emotion that has been arrayed against me for the past 12 years will be arrayed against you following the next crash. People will be embellishing things in those days. I will tell them not to do that. They won’t listen. People are partly rational and partly emotional. The same humans who today look at the years when Buy-and-Hold appeared to be working and ignore 33 years of peer-reviewed research will be ignoring lots of considerations that should cut in your favor following the next crash. I won’t approve. But I won’t have any more power to rein in that emotion that I have to rein in the emotion that is holding us all back today.
You don’t have to look at any links. You know perfectly well what you have done. You need to think about how those links are going to be perceived by the members of your jury after they suffer through another price crash.
The problem, of course, is that you are going to prison either way. So, while it was only wounded pride that caused you to behave the way you did in May 2002, today it is wounded pride PLUS a desire not to go to prison. I get that. I guess I sort of sympathize in a way. I sympathized with what happened to Richard Nixon. I didn’t vote for him and I believed that he had to resign. But I didn’t think he was all bad. I thought that he had some major accomplishments. I sympathized because I saw him as a fellow human caught in a terrible trap of his own making. That’s why I sympathize with you, Anonymous.
Tell yourself that there is not 12 years worth of links that I could put forward.
That’s easy.
Now try to get yourself to believe it enough to permit you to sleep easy at night.
That’s very hard.
It’s not my doing, Anonymous. I implored you to knock off the funny business long before it became a criminal matter.
Anyway, I do wish you well.
Rob
“The millions of middle-class people whose lives have been destroyed will have access to the entire record. So will the prosecutors. So will the members of your jury. That’s how our system works.”
The peer reviewed research supports buy, hold and rebalance and doesn’t support market timing schemes. In fact, Shiller has even stated that himself.
If you can persuade a jury of that, you’re home free, Pink.
I wish you the best of luck with it.
Rob
First it’s “the millions of middle-class investors whose lives HAVE BEEN destroyed”, and in the next breath “there WILL BE millions of such people”.
So you nimbly shift from a statement of fact (which is obviously false) to a wild prediction. And you pretend you’re consistent.
Millions of lives are in the process of being destroyed. They have been in the process of being destroyed since the morning of May 13, 2002.
Get Rich Quick investing strategies do not destroy people’s lives instantly. It takes time for the damage to play out. That’s just the way it is.
The research showing how things work was published in 1981. There is no need for predictions. All anyone needs to do is to read the peer-reviewed research.
The length of your prison sentence will be determined by the people whose lives have been destroyed. That’s not my call.
That’s the story.
That and my wish that you enjoy all the best of luck in all your future life endeavors.
Rob
I need to do everything in my power to help my good friend Anonymous shorten his prison sentence a bit.
Oh I’m so scared.
We’re all scared, Anonymous.
We’re just scared of different things.
You’re scared that word of what you have done will get out to the millions of middle-class people whose lives you have destroyed.
I’m scared that the power of the Wall Street Con Men will destroy the country I love.
Life is full of things to be scared about. It is also full of things to celebrate.
I celebrate the last 33 years of peer-reviewed research. You celebrate the power you gain by associating yourself with the Wall Street Con Men.
Life is a drama. These stories play out over time.
I never had any choice re the role I play. I am not capable of posting dishonestly re the numbers that my friends use to plan their retirements. Whatever gene one must possess to commit financial fraud is a gene that for some reason was not handed out to me (except to the small extent that I committed financial fraud in the days before I worked up the courage to post honestly on SWRs).
Perhaps you feel that you never had any choice either. I don’t see it. From my point of view, it seems so obvious what you should do. But I didn’t live your life. I see it as my job to at least TRY to understand where you are coming from.I doubt that I will ever fully get it. But I listen to you. I ponder what you say. I try.
I know you are scared. When you deny it with your sarcasm, you do just what a person who was scared would do.
If you were truly not scared, you would not post here.
And, if you took a vow not to post here, I would interpret that as a different way of you signaling that you are scared.
There’s nothing that you could do at this point that would convince me that you are not scared.
Other than to initiate a healing process.
And I hold out very little hope for that one at this point.
I don’t want you to be scared. I want to free you.
But I cannot reach you. You are too darned scared.
That’s my sincere take, in any event.
And every word I say here is a word inspired by love. You probably cannot let that in. But it’s so all the same, my frightened and abusive-posting friend.
Rob
It was a mistake to lie about this stuff, Anonymous.
You f’d up. Big time.
I didn’t do that to you.
You did that to you.
And in a lesser way everyone who encouraged you to lie helped to undermine you.
There are people who today are not in the circumstances in which you find yourself but who someday will be if we don’t bring this massive act of financial fraud to an end. We all should be doing all we can to help those people out.
And, yes, we all should be doing all we can to help you out too. I cannot say how long your prison sentence will be. But it is hard for me to imagine that we cannot shorten it a good bit by having you come clean by the close of business tomorrow rather than at some later date. The logic chain behind that statement is unbreakable. As you know.
That’s my best offer. It’s the best offer that I can extend without landing myself in the circumstances in which you already find yourself.
Which would obviously be an insane thing to do.
Hang in there, man. It gets better. A LOT better.
Rob