Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
Who, specifically, threatened Wade’s career?
Ask him.
He wrote to me and told me that he was scared of what you Goons would do to him if he continued doing honest work. He had posted our research at the Bogleheads Forum and a number of people there responded in a very positive way. And then Mel Lindauer accused him of following unethical research practices. Wade took great exception to that. He shot back at Lindauer and I was very proud of him because so few people have the courage to do that. But soon after that he wrote to me and said that he did not want you Goons following him around the internet and destroying his career. He told me that he warned the journal that published one of his papers to expect hate mail; I am sure that it embarrassed him that he had to do that. And he said that he was concerned that defamatory e-mails would be sent to his employer and that his employer would not want to go to the trouble of figuring out if the charges were legitimate but would just fire him to remove themselves from the controversy.
My personal theory (Wade did not say this) is that Wade expected Bogle to come to his defense when Lindauer attacked him and that it frightened him to see that Bogle was not going to do anything to rein in Lindauer. It’s very scary to fight you Goons alone. We live in a society that has laws and for years we have seen those laws enforced in a reasonable manner. So it comes as a shock to learn that, when it comes to the right to explore the implications of the last 38 years of peer-reviewed research in this field, there are lots of highly respected people who have no desire or intention to do anything to see the laws enforced. It shocked me when Motley Fool did not take action against Greaney after he posted his first death threats. By failing to take action they were sending a signal that death threats are okay when it come to the promotion of Get Rich Quick investment strategies; there’s money in it, so the usual rules just don’t apply. I think that is how Wade felt when he was attacked and saw that Bogle took no action. He knew that, if defamatory e-mails were sent to his employer, he would not be able to count on Bogle’s help. That’s a scary feeling. Again, the Bogle part of this is a personal theory of mine, Wade did not tell me that Bogle’s failure to act responsibly was the reason why he went to the dark side.
Wade was scared on the day he contacted me 16 months before. He was always trying to appease you Goons while always also wanting to dig deeper and do important work developing and promoting the Valuation-Informed Indexing concept. I remember one time he saw how you Goons invaded the Early Retirement Forum with out-of-control hate when my name was mentioned and he just couldn’t believe it. He had never seen anything like that before. I am sure that that left an impression on him. And on numerous occasions he would try to explain himself at the Bogleheads Forum. He would say how Valuation-Informed Indexing is completely in accord with many Buy-and-Hold principles (which is of course so) and that he did not think that Buy-and-Holders should be hostile to hearing about it (and of course most are not — you Goons comprise about 10 percent of the population of Buy-and-Holders). But of course none of that had any effect on you Goons. That scared him. He couldn’t figure out how to do work advancing the world’s knowledge of how stock investing works without losing his ability to earn an income in this field.
It took me some effort to persuade Wade to contact the Trinity study authors about the error that they made in their study. It is a scandal that that study passed through the peer-reviewed process. Shiller’s peer-reviewed work showing that valuations affect long-term returns had already been published at the time the Trinity study was presented for review. And it passed! It is impossible to explain that one. The very purpose of peer-review is to catch those kinds of errors. Wade saw the need to contact the authors of the Trinity study and he eventually did so (I do not believe that he ever received a response but it is possible that he heard something after he flipped to the dark side). Wade was very worried that calling the Trinity authors out on their error was going to hinder his career advancement. After he flipped to the dark side, he told me that it is not reasonable to expect errors in retirement studies to be corrected — that “that’s just not the way that research works.” (that’s a paraphrase but close to his actual words). That’s s chilling statement. I am 100 percent certain that close to 100 percent of the investing population would like to think that errors in retirement studies are corrected when they are discovered. But the threatened and frightened version of Wade Pfau says, no, that is not the way it is done. Of course he thought that corrections were entirely appropriate in the days before his career was threatened. The views that he expressed in public changed dramatically as a result of his personal experience of seeing what happens to people who dare to do honest work in this field.
I now know that this sort of thing goes on all the time. Rob Arnott said that he has had experiences similar to my own. He has known of researchers who wanted to prepare research relating to his investing beliefs (which are similar to my own) who were taken aside and told that publishing such research would do damage to their careers. The American people need to know this. This sort of thing needs to be written up on the front page of the New York Times. If researchers are afraid to do honest research because of what the Buy-and-Holders will do to them if they “cross” them, then the entire field is corrupt. We would be better not to have any academic researchers than to have academic researchers feeling free to publish research supporting a Get Rich Quick approach but afraid to publish research challenging that approach.
I suspect that there were e-mails from you Goons to Wade in which more threats were conveyed. But I of course did not see them and cannot say what was contained in them. I believe that there were such e-mails because the statement that Wade put forward when he flipped to the dark side contained language that was so dumb that it could not possibly have come from his own mind. He had that absurd stuff where he said that Greaney had solved the entire problem when he said that people could in the privacy of their own homes elect to go with a withdrawal rate lower than 4 percent. That of course has never been in question. The issue has always been whether people can point out on discussion boards and blogs where the Greaney retirement study is being relentlessly promoted that that study lacks a valuation adjustment. Wade obviously knows that that is the dispute. That crazy language had to have been suggested by one of you Goons. But I have never seen the e-mail in which that suggestion was made.
The peer-reviewed research that Wade and I co-authored is the most important research published in this field in 30 years. Every investor alive has a right to see it and to use it to inform his investment decisions. It is a national scandal that Wade was threatened and that millions of people have been denied access to that amazing piece of work. Neither Wade nor any other researcher should have to live in fear of a gang of internet goons. But that’s where we are today. The cover-up has been going on for 38 years now and so there are a lot of powerful and wealthy people who very, very, very much do want to see it exposed.
I believe that we are a good people. I believe that this will all come out in the days following the next price crash. We’ll see.
My best and warmest wishes to you and yours, Anonymous.
Rob
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