Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:
Yes, you make stuff up and you are a prolific liar. In fact, a group of people created a website just to track all of the things you have made up and lied about. Your response is always how all these masses of people are wrong and how you alone are right. Just look at the results.
There’s been more than one such web site created over the course of the 17 years in which I have writing about this stuff, Sammy. That much is true enough.
More people would be saying what I am saying if that were not the case. I think that web sites of that nature hurt us all. I think that all of us, including all Buy-and-Holders, should be speaking up in opposition to that sort of thing. Because that sort of thing causes people who have doubts about Buy-and-Hold to self-censor themselves.
I was a Buy-and-Holder myself once upon a time. It was when I saw things like that that I lost confidence in the strategy. Shiller’s big insight is that investors are not purely rational but are capable of acting emotionally. When I saw things like that, it persuaded me that Shiller was onto something.
My best and warmest wishes to you and yours.
Rob
Looks like ESI wrote an article about you on his website:
https://esimoney.com/beware-of-fake-money-experts-with-no-accomplishments/
I am not able to respond to this now but I will try to get to it later today.
Rob
Note this comment, amongst others:
“Of course, mainstream media articles are written by journalists, so the two go hand in hand. Journalists write as if they are experts but they certainly are not. “
“Of course, mainstream media articles are written by journalists, so the two go hand in hand. Journalists write as if they are experts but they certainly are not. “
I wouldn’t really expect a journalist to be an expert in the subject he covers. He should know the rules of journalism and follow them. And he should of course consult experts in the subject that he is writing about. But it is not the job of a journalist to be an expert in the subjects he writes about. I would not expect a journalist who writes about politics to have run for office himself. But I would expect him to know how to come up with good questions and to know when he is being fed a line and to appreciate the importance of telling both sides of the story and that sort of thing.
Rob
Looks like ESI wrote an article about you on his website:
I don’t think that I agree with every word in this article but I am fine with a good bit of it. I think the article is worth reading.
The headline is: “Beware of Fake Money Experts with No Accomplishments”
I don’t put myself forward as an expert re stock investing in any general sense. I don’t have the background or education or training. I have said many times that anyone who follows my ideas on stock investing solely because I advance them is a darn fool.
There’s one exception to that rule. I am an expert on the long-running (38 years!) cover-up of the discrediting of Buy-and-Hold in the peer-reviewed research of Robert Shiller. That is a huge story. The cover-up is the biggest public policy issue facing the United States today. And exposing the cover-up is just the sort of thing that a journalist does. You don’t need a Ph.D. in Economics to see that people who rely on death threats and threats to get academic researchers fired from their jobs are working a con.
I also am a reluctant expert on the how-to implications of Shiller’s work. I don’t feel entirely comfortable writing about that aspect of the story. But it is work that has to be done and everyone else is afraid to take it on given the behavior of you Goons and so I had no choice but to do it myself. I always encourage others to get involved. And, when others get involved, it is my intention to fade into the background a good bit. I don’t think that I should be advising people as to what to do with their retirement money. But someone needs to give people accurate and honest advice. So I have been forced into the role.
If it is true that valuations affect long-term returns (there is 38 years of peer-reviewed research showing this to be so), then there is zero chance that the safe withdrawal rate is always the same number. So why the heck did the Trinity study get approved by its peer-review committee? Shiller’s research was on the books at the time that the Trinity study was approved. Huh? What the f? That’s the problem. Greaney would have included a valuation adjustment in his study had he seen the Trinity authors include one. So that was a big mess-up.
I would have preferred to have seen Greaney acknowledge the error in his study in 24 hours. Then the Retire Early community could have worked together to come up with accurate numbers. And of course we could have run our work product past the Trinity authors and other people with expertise in the field. We cannot do that today. We don’t have the cooperation that we need to get the job done. But I am sure up for it. I believe that we will have the cooperation we need down the road a piece (after the next price crash).
The reason why I became a Buy-and-Holder once upon a time is that I liked the idea that they rooted their advice in peer-reviewed research. I believe in science. So I love the idea of making investment advice more scientific. But part of the scientific process is acknowledging errors when they are discovered. We should have had a national debate on the many ways in which Buy-and-Hold had to be changed as a result of Shiller’s work way back in 1981.
Once there was a delay, it became embarrassing to the Buy-and-Holders for them to acknowledge the cover-up. Now that it has gone on for 38 years, there is a mountain of embarrassment and we are in a real fix. None of that is my doing. I have been calling for the launching of a national debate for 17 years. I have been trying to move the ball forward.
There’s nothing less expert than advancing death threats and threat of career destruction to block knowledge from moving forward. If we are going to ban honest academic research, we would be better off just to shut down all academic research. Having no research is better than having only dishonest research. That should not be a controversial statement. If there weren’t so much money in Buy-and-Hold, not one person on the planet would oppose the idea of opening every site on the internet to honest posting on the last 38 years of peer-reviewed research in this field.
World Expert (on the Buy-and-Hold Con!) Rob
“ I would have preferred to have seen Greaney acknowledge the error in his study in 24 hour”
As Wade Pfau pointed out, you are the one in error. You need to correct this by the end of the day.
Wade didn’t say that I was in error. He said that the Greaney study was “dangerous.”
When you Goons threatened him, he said that the problem was solved because Greaney said that everyone is free to take a withdrawal rate lower than 4 percent. That does not solve the problem because that was never the dispute. The dispute is over whether we are all free to point out on discussion boards and blogs that Greaney’s retirement study (and indeed all Buy-and-Hold retirement studies) lacks a valuation adjustment and to tell people the accurate numbers.
I wish you all good things.
Rob
Yes, he did say you were in error. Care to make a wager on that?
And he also said that: “Yes, Virginia, Valuation-Informed Indexing works!”
The difference is that he said that Valuation-Informed Indexing works because that’s what he believes while he said that I was in error because his career was threatened. The fact that you Buy-and-Holders had to resort to extortion to get him to say that tells a tale.
It’s not for me, Anonymous. I once was a Buy-and-Holder myself. But not today, not after what I have seen.
Non-Extorting Rob
I have read his books. He does not recommend VII. If you read your last post, you now confirm that he said you made an error with respect to John Greaney .
Wade Pfau loves Valuation-Informed Indexing. He spent 16 months researching it. He concluded that: “Yes, Virginia, Valuation-Informed Indexing works!” He told me that he was thinking about submitting the peer-reviewed research that we co-authored to the most prestigious journal in the field. Wade believes that Buy-and-Hold is the past and that Valuation-Informed Indexing is the future. There is nothing that would make him happier than seeing you Goons placed in prison cells, where you belong, so that he and hundreds of other academic researchers would feel free to do honest work on what the last 38 years of peer-reviewed research in this field teaches us all about how stock investing works in the real world.
Nothing that Wade said after you Goons threatened to send defamatory e-mails to his employer in an effort to get him fired from his job count for a thing. Extortion is a crime, a felony. There is a good reason why we elected as a people to make extortion a crime punishable with a prison sentence. We need to see our laws enforced in a reasonable manner. I am 100 percent confident that we will see those laws enforced in the days following the next price crash.
Wade Pfau was a hero in the days before you Goons threatened to destroy his career. The research that I co-authored with him is the most important research published in this field in the past 30 years. We intended for that research to benefit millions of people. Wade would still like to see that happen. But he is naturally afraid of what the Buy-and-Holders will do to him is he dares to “cross” them again by saying publicly what he truly believes about stock investing. He shouldn’t have to live in fear. No one should. The fact that a good number of Buy-and-Holders believe that the only way to “defend” their strategy is to engage in criminal behavior tells us all something important about the “strategy.” I myself was a Buy-and-Holder until I saw John Greaney advance his first death threat and 200 Buy-and-Holders endorse it.
Not this boy.
The most important contribution that the Buy-and-Holders ever made was their claim that investment advice should be rooted in peer-reviewed research. They were right the first time.
Wade Pfau Fan (The Honest Version!) Rob
Wade said his job was never threatened. As we have all learned by now, you made up the story about death threats. I can’t find one single piece of evidence that backs up a thing you say.
It will be interesting to see what the members of your jury say, Anonymous.
I wish you the best of luck with it, in any event.
Rob
A) Academic Researcher Wade Pfau’s Statements Showing Interest In and Confidence in Rob Bennett’s Work
1) “I do cite you and John Walter Russell in my paper as the earliest and strongest advocates of this approach [New School safe-withdrawal-rate research].
2) “Are you aware of Shiller offering asset allocation advice based on PE10? …. If you read Rob Bennett’s stuff carefully, I think he did provide an important contribution in terms of describing a way for PE10 to guide asset allocation for long-term conservative investors. I also think he was right on the issue of safe withdrawal rates.” — Posted at the Bogleheads Forum discussion board.
3) “I am also extremely grateful to Rob Bennett for motivating this topic and contributing his experience and encouragement.” — Written in Acknowledgments section of Wade’s breakthrough research paper.
4)”You deserve much of the credit as the whole idea of Valuation-Informed Indexing belongs to you.”
5) “I definitely need to cite some of your work as the founder of Valuation-Informed Indexing, as I have not found anyone else who can lay claim to that. Shiller pointed out the predictive power of PE10 but never discussed how to incorporate it into asset allocation, as far as I know.”
B) Academic Researcher Wade Pfau’s Statements on the Superiority of Valuation-Informed Indexing Over Buy-and-Hold
1) “What you see in the top part of the graph for each year is the amount of wealth accumulated after 30 years for someone following Buy-and-Hold against someone following Valuation-Informed Indexing….Valuation-Informed Indexing provides more wealth for 102 of the 110 rolling 30-year periods, while Buy-and-Hold did better in 8 of the periods.”
2) “I will take steps in my final paper to test a wide variety of assumptions about asset allocation, valuation-based decision rules, whether the period is 10, 20, 30, or 40 years, lump-sum vs. dollar-cost averaging, and so on, and to show that the results are quite robust to changes in any of these assumptions.”
3) “Any data mining that I am doing is in favor of buy-and-hold, not in favor of market timing.”
4) “The findings for “market timing” are so robust anyway, that it hardly matters how we do it.”
5) “The maximum drawdown from market timing is much less. That is how far the portfolio drops from past highs to current lows. The Buy-and-Holder once experienced a 60.96% drop, whereas the worst drop for market timing was 24.16%.”
6) “Market timing provides signficantly higher returns at a comparable level of risk.”
7) “The market timer enjoys a far less risky strategy.”
8) “On a risk-adjusted basis, market-timing strategies provide comparable returns as a 100 percent stocks Buy-and-Hold strategy but with substantially less risk. Meanwhile, market timing provides comparable risks and the same average asset allocation as a 50/50 fixed allocation strategy, but with much higher returns.”
9) “If everyone increased exposure after a market fall and vice versa, then this would dampen out the big swings in the market aggregates, and we might get shallower boom/bust cycles.”
10) ““‘I’m excited about this, as depending on what you have already done, I think I can design a study using the Shiller data to provide historical simulations of Valuation-Informed Indexing strategies against fixed Buy-and-Hold strategies and also lifecycle strategies (declining allocation to stocks as one ages). If Valuation-Informed Indexing consistently outperforms fixed and lifecycle strategies, then the proof is in the pudding so to speak. Given how well valuations help to explain withdrawal rates, I think there is a lot of potential for this topic.”
11) “Yes, Virginia, Valuation-Informed Indexing Works!”
12) “It makes complete sense to have an equity allocation that is in some way flexible. Having a completely inelastic demand for equities is a bit bonkers; no-one acts that way with life’s other important commodities.”
13) “I wrote up the programs to test your Valuation-Informed Indexing strategies against Buy-and-Hold, and I must say that the results look very promising…. I am quite excited about the findings so far. As you say in the podcast, Valuation-Informed Indexing should beat Buy-and-Hold about 90 percent of the time, and I am getting results that support this for various strategies.”
14) “I have been toying with the idea of sending the paper to the Journal of Finance, which is the most prestigious journal in academic finance.”
15) “Now that I am accounting for risk, I am even more amazed by how well Valuation-Informed Indexing works.”
16) You shouldn’t be too excited with great wealth accumulations if they happened due to unusually high valuations, and low wealth accumulations shouldn’t be as scary if valuations are also quite low.”
17) “My idea is to show many different tables with results over the whole period for returns and risks. Valuation-Informed Indexing always provides more returns for often less risk.”
18) “No matter what I try, Valuation-Informed Indexing will still perform better in 85-95% of cases for 30 years.”
19) “I have a new figure for showing this as well. And a nice figure showing the outperformance percentages across rolling periods of lengths between 1 and 40 years. I think it is all quite persuasive.”
20) “You haven’t seen anything yet! This was just the secondary study. I’m still working on the main one!”
C) Academic Researcher Wade Pfau’s Statements of Incredulity That He Was the First Academic Researcher to Examine the Valuation-Informed Indexing Strategy
1) ” I know that there is an extensive literature about the predictability of long-term stock returns dating back to Campbell and Shiller’s work in the mid-1990s. I also know that there is an extensive literature about short-term market timing strategies…. But my question is about LONG-TERM market timing strategies. In other words, using market timing over periods of at least 10 years to obtain better returns than a Buy-and-Hold strategy. The literature seems slim.”
2) “Let me just explain a bit more why I posted about this here. Valuation-Informed Indexing has had critics for years, but until Norbert did it in 2008, nobody seemed to have provided a serious investigation of it. I just couldn’t understand why. And that bothered me.”
3) “Two papers by Fisher and Statman are still all I can find that provide evidence against long-term market timing.”
4) “I’m so confused by why Fisher and Statman didn’t consider risk in their idiot switching tests. Valuation-Informed Indexing is much less risky by pretty much any standard I consider. I must wonder… did I make a mistake somewhere? Why haven’t academics already published research about this?”
D) Academic Researcher Wade Pfau’s Statements on the Dangers of the Conventional Retirement Planning Advice
1) “The traditional approach to retirement planning (as described on pages 10 and 11 of The Bogleheads’ Guide to Retirement Planning, for example) is counterproductive and possibly damaging.”
2) “Retirees now frequently base their retirement decisions on the portfolio success rates found in research such as the Trinity study…. This is not the information that current and prospective retirees need for making their withdrawal rate decisions.”
3) “This article provides favorable evidence based on the historical record for long-term conservative investors to obtain improved retirement planning outcomes (lower savings rates, higher withdrawal rates) using valuation-based asset allocation strategies.”
4) Wade sent me a link to an article in Business Week that was published more than eight years after my post pointing out the errors in the Old School retirement studies and which he characterized as “quite sympathetic to the point you were trying to make all along”.
5) “Though I was only trying to do an Old School safe-withdrawal-rate study, all that I ended up doing was showing in a different way what you had been saying all along: the safe withdrawal rate changes with valuations.”
6) “Valuations are the driving factor. ”
7) “This is similar to your drunk driving analogy, which I agree with.” The discredited but uncorrected retirement studies find that in most circumstances a 4 percent withdrawal rate provides a huge cushion for the retiree using it. However, in each of the three cases in history when stocks reached insanely high price levels, retirements using a 4 percent withdrawal came within a whisker of failing. To say that this shows that a 4 percent withdrawal is “100 percent safe” (these words are used in the Greaney study) for a retirement beginning at a time of insanely high price levels is like saying that driving drunk is “100 percent safe” because 97 sober drivers drove their cars 20 miles without incident while 3 drunk drivers were paralyzed for life in car accidents but did not die. The fact that 4 percent only worked by a whisker in the cases in which valuations were high at the beginning of the retirement shows that a 4 percent withdrawal is high-risk at times of high valuations, not that it is “100 percent safe.”
8) ” Actually, this issue shouldn’t really even be all that controversial. It’s just common sense that the probabilities from the Trinity study shouldn’t be interpreted as forward-looking probabilities for new retirees.”
9) Naturally, I am finding that Valuation-Informed Indexing can allow you to reach a wealth target with a lower savings rate, use a higher withdrawal rate, and also have a lower “safe” savings rate, than a fixed allocation.
E) Academic Researcher Wade Pfau’s Statements Showing His Concerns that Continuing to Report Honestly on the Investing Realities in the Face of the “Hostile Environment” for Doing So Created by Buy-and-Holders Would Harm His Career
1) “I was trying to pay tribute to your accomplishments in what I knew would be a hostile environment.”
2) “Valuations and long-term investors is a somewhat controversial topic.” Wade posted these words to his blog in October 2011 as his explanation of why he was abandoning his plan of doing further research on the superiority of Valuation-Informed Indexing strategies over Buy-and-Hold strategies. He had told me in earlier days that “You ain’t see nothing yet!” when I praised his breakthrough research in this area. After his flip to the dark side, Wade removed the page containing this blog entry from his site.
3) “We have both read and met to discuss your paper. Unfortunately, we did not find the paper’s incremental contribution to the academic finance literature, assuming the analysis proved to be correct, rose to the level that we are seeking for papers in the JFR. Thus sending the paper to a reviewer would be inefficient.” These words are from an academic journal’s “desk reject” of Wade’s breakthrough research.
4) ) ““ I was discouraged when I first received the “desk reject” by the editors of the same journal that published the Fisher and Statman paper. I realized that I didn’t have a chance with one of the top journals.”
5) “I think I should stay publicly quiet for a while, as I really don’t want anyone sending messages about any topics to officials at my university.”
6) I don’t want them [the Goons] working behind the scenes to derail me.”
7) “I did warn the editor of the Journal of Financial Planning that they may receive some ‘hate mail‘ after I mentioned your name in the safe savings rate paper.”
Evidence is not something from your board. Evidence is when you have something from a verified 3rd party. Try again.
The prosecutor presents the evidence and the members of your jury reach a conclusion as to what to believe as a result of the evidence that has been presented.
A very simple test to determine whether the things said at my site are legitimate or not is to look at whether Greaney’s study has been corrected or not. Greaney’s retirement study is posted at his web site, not at my site.
There are scores of people who have confirmed that Greaney’s study lacks a valuation adjustment who have said this at places other than my site. Just as one example, Bill Bernstein said it on Page 234 of his book. His book was published in May 2002. Greaney’s study has not been corrected to this day.
Rob
There is no prosecutor and William Bernstein did not say John Greaney is wrong. Stop making things up.
It will be interesting to see how things play out, Anonymous.
I naturally wish you all the best that this life has to offer a person.
Rob
We already have seen it play out. That is why you are having to go back to work.
Okay.
My best wishes to you.
Rob