Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
It appears that you didn’t see that the Fed had to step in as a backstop to even money market funds.
They’re trying to keep things from getting out of hand. That makes perfect sense. I applaud them for that.
The question is — Why did we as a nation set things up so that sooner or later we were going to need to take desperate steps to keep things from getting out of hand? Had we been permitting honest posting at every site on the internet all along, the CAPE could never have risen so high. Then you still have the problem of the economic effects of the Coronavirus. But you don’t have the problem of seeing trillions of dollars worth of irrational exuberance disappear into thin air at the same time. Buy-and-Hold takes any economic problem that we face as a nation and magnifies it.
And always at the worst possible time. To achieve what good purpose, you know? A temporary feeling that we all “outsmarted” the market by getting to enjoy the “benefits” of the pure Get Rich Quick approach for a few years? Huh? I’d rather have a stable economy. I’d rather be able to count on most of the money in my retirement plan remaining there for when I need it. I can live with a 6.5 percent real return each year. I don’t need the phony exaggerated returns that the widespread promotion of Buy-and-Hold brings us followed by the horrible economic destruction that always comes in its wake.
The same thing happened in 2008. Shiller predicted the 2008 economic crisis in his book, which was published in March 2000. How was he able to do that? He studied the historical return data. He saw what always happens in the years following a time when the Buy-and-Hold “strategy” becomes popular. Always widespread economic destruction. It’s a logical impossibility that it could ever end any other way.
Irrational exuberance doesn’t last. The market’s core function is to get prices right. That’s what markets do. So, let irrational exuberance go wild (It always does once a large number of investors come to believe that market timing is not always 100 percent required), and you are sooner or later going to see a wipe-out.
No one can say when. Short-term timing really doesn’t work, just as the Buy-and-Holders say. But discourage market timing in general and sooner or later you are going to see a wipe-out. It happens every time because it MUST happen every time. Once most investors refuse to engage in market timing, there is no other way for the market to get prices right, and that is the market’s core function.
Markets are information processing machines. Information comes in and causes ups. And then information comes in and causes downs. The market works things out. That’s what it DOES. That’s what a market IS — it’s an information processing machine. Fill people’s heads with the crazy idea that there might be some magical, mystical alternate universe where market timing is not 100 percent required and the means by which the information processing is achieved breaks down.
We have had mountains of information coming in over recent years telling investors that they need to lower their stock allocations. Have you seen many do it? Investors are afraid to lower their stock allocations. They understand that lowering your stock allocation because prices have risen too high constitutes market timing and they have heard the marketing slogan “timing never works” so many times that some part of their brains believes that there might be something to it. They are afraid to do the right thing, the sensible thing, the prudent thing, the research-based thing.
Buy-and-Hold started out telling people that they should root their investment strategies in the peer-reviewed research and it has evolved over the years into insisting that, no matter what they do, investors must never,never, never give the last 39 years of peer-reviewed research in this field the slightest consideration. I am the true Boglehead. I am the one who says that investors should do what Bogle said they should do in his early years — follow the peer-reviewed research. The Lindauerheads abandoned Bogle’s early teachings because to follow them would mean acknowledging that Bogle (and everyone else!) made a mistake back in the 1960s when they came to believe that Fama’s research showing that short-term timing never works can be interpreted as showing that no form of market timing is required. Huh?
The last 39 years of peer-reviewed research is information, Anonymous. Investors should be considering that information when they decide on their stock allocation. When discussion of 39 years of peer-reviewed research is banned at every site on the internet, the purpose of the market is defeated. The market cannot process information when it cannot even hear it The stock market as it exists today is not even a market in the true sense of the word, When the most important information is prohibited, the market cannot perform its very important job of processing all information available to it.
This is a repeat of what happened in 2008. There were genuine mortgage problems in 2008. Those problems set off the crash. But it was the insane CAPE values that applied that made the crash and the economic crisis that followed from it so devastating. The Fed stepped in and saved us from a Great Depression. That was a good thing. But you can’t just pump prices up to crazy levels and leave them there and expect that to work out in the long term. If you are going to pump prices up to stop a depression, you need to come back in a year or two and let prices drop back to reasonable levels. That’s where the Fed let us down. They let prices remain at crazy levels and thereby insured that we would sooner or later be facing the same sort of problem again. And here we are.
The only long-term solution is to open every discussion board and blog on the internet to honest posting re the last 39 years of peer-reviewed research in this field. I am 100 percent sure.
Fed Supporter (For the Things It Does Right) and Detractor (For the Things It Does Wrong) Rob
Uh oh, Rob. Robert Shiller is once again saying you are wrong. He says that CAPE is not telling us to get out of stocks, which means CAPE is not too high.
https://www.advisorperspectives.com/articles/2020/05/14/robert-shiller-not-much-of-a-sell-signal-for-u-s-stocks
I guess you will be making Shiller go to prison as well as he must be a goon.
The stuff that Shiller is saying in that article is confusing. I think that we should open every discussion board and blog on the internet to honest posting re the last 39 years of peer-reviewed research and see what learning experiences that generates.
Does Shiller say that Greaney included a valuation adjustment in the retirement study that he posted to his web site. That’s what I said in my famous post of May 13, 2002. If I was right re that one, then I was right re something very important and we should all join together to insist that Greaney correct his study. Then we should seek corrections in all the other Buy-and-Hold retirement studies. Then we should move on to all the other issues.
At some point in that process we need clearer answers from Shiller re what investors should do when stocks reach the dangerous valuation levels that apply today. We should all want to know that. So we should all insist that the criminally abusive stuff be brought to a full and complete stop so that he will feel safe participating in discussions and responding to questions. Thats the answer, Anonymous.
Or at least that’s my sincere take as to what the answer is.
I do wish you all good things.
Question Asking Rob
It is not confusing. Your VII strategy is based on CAPE. You said that CAPE is way too high and that we will have a crash. Shiller says that you are wrong and that CAPE is not high. None of this has anything to do with John Greaney. So, are you wrong or is Shiller wrong?
Shiller didn’t say that today’s CAPE is not high. It is INSANELY high. He said that it is not necessarily “signaling” a crash. The CAPE NEVER signals a crash. There is nothing in Shiller’s research that shows that the CAPE ever signals a crash. So that is a 100 percent irrelevant point. What CAPE does is reveal the level of risk in holding stocks at that time. Today’s CAPE shows that stocks are insanely risky today. Investors who decided on a stock allocation when stocks were less risky need to lower their allocations if they want to keep their risk profile constant over time. That’s what people need to know. That’s what people should be asking Shiller about, not about signaling. The signaling stuff was settled a long time ago, in Fama’s research. Signaling doesn’t work. Do we really need to hear that said again?
And Shiller makes a point in this article of pointing out that the returns on the safe asset classes are at rock-bottom lows The suggestion is that stocks possess some relative appeal. That’s true to a point. But a big part of the reason why that is so is that the Federal Reserve has acted to lower interest rates so much. If stock prices had not been priced to crash, the Federal Reserve probably wouldn’t have done that. The Fed is trying to hold off a crash to avoid a depression. Which of course considered by itself is a good thing. But wouldn’t it be better just to permit honest posting at every site so that the market could set the price of stocks in a reasonable manner and we wouldn’t have to worry anymore about depressions? It sure seems so to me.
We should be allowing investors to set the price of stocks where they believe it should be. For them to do that, they need access to accurate and honest discussions of how stock investing works. So we need to open every internet site to honest posting. There is no other way to get the job done.
And that has everything to do with Greaney. Greaney has been the leader of the Campaign of Terror against our board and blog communities for 18 years now. We have had thousands of people express a desire that honest posting be permitted and Greaney has shut those people down. Greaney hasn’t even corrected his study, for heaven’s sake.
My guess is that I am right about some things and wrong about some other things and that the same is true of Shiller. The way for us all to figure out what things we are right and wrong about is to open every site on the internet to honest posting on every subject relating to stock investing.
The only thing that I was speaking about in 2002 was safe withdrawal rates. When I saw the insane abusiveness that that topic provoked in Buy-and-Holders, I became worried that they had gotten other issues wrong as well. So I explored other issues. And now, 18 years later, I have learned that the Buy-and-Holders got EVERY issue wrong. Shiller showed that valuations matter. Buy-and-Holders believe that they do not, that the market is efficient and that investors are rational. If Shiller is right about that one (he is), then the Buy-and-Holders got every issue that they have ever addressed wrong. If valuations always matter and you always fail to consider them, you are obviously going to get every issue wrong.
That is why it has been so hard to get the safe withdrawal rate studies corrected despite the mountain of evidence that Greaney did not include a valuation adjustment in his study. If it was a matter of some guy on the internet correcting an error in a study, it would have been done many years ago. But this just isn’t about Greaney’s study. It is about every Buy-and-Hold retirement study. And it isn’t just about retirement studies. It is about every possible investment-related topic. The Buy-and-Holders cannot bear to acknowledge having gotten every issue they have ever addressed wrong. So the cover-up continues. And we all remain more ignorant of how stock investing works than we need to be.
I wasn’t wrong in what I said on May 13, 2002. I was right. That’s the problem. The Buy-and-Holders don’t want to acknowledge that I was right because it means that they will have to acknowledge getting many, many things wrong. I think they are better off doing that. I think that the thing to do when you get something wrong is to correct the error, put it behind you and get on with your life.
Shiller showed that the Buy-and-Holders got everything wrong when he showed in 1981 that the market is not efficient. Buy-and-Hold makes no sense in a world in which the market is not efficient. If we all were thinking clearly, we all would have moved forward at that time. The best that we can do today is to move forward today. I believe that Shiller and everyone else should be doing everything in their power to make that happen as soon as possible.
A good first step would be getting the Greaney retirement study corrected. I am right that the Greaney study lacks a valuation adjustment. Shiller is not saying that I am wrong on the key issue. If he thinks that I am wrong on some other issue, it would be good if we could all talk over why he thinks that and see if there is any merit to what he says. But we cannot do that without first opening every site to honest posting. For so long as people are afraid to post honestly, we are not getting the complete story from anyone. We need to apply the laws of the United States in the investment advice field just as we do in all other fields of human endeavor.
That is my sincere take re these terribly important matters, in any event.
I naturally wish you all good things.
Right-on-Safe-Withdrawal-Rates (and I Believe on a Lot Else as Well!) Rob
Sorry, but Shiller says you are wrong. You just haven’t listened. He has said this before. Larry Swedroe also said you were wrong back in 2018:
https://www.advisorperspectives.com/articles/2018/04/02/beware-of-the-misinterpretations-of-the-cape-ratio
You didn’t listen to him either.
Wade Pfau said you were wrong about John Greaney. He wrote whole article on this back in 2010. You ignored Wade as well.
I guess that is why The New York Times won’t write a story on you. They are worried that all these facts will come up and that they will then be blamed for fake news.
If you run a search for Google on the question “What is Modern Portfolio Theory?”, the following words will appear on your computer screen:
What is the portfolio theory assumption?
The Portfolio Theory of Markowitz is based on the following assumptions: (1) Investors are rational and behave in a manner as to maximise their utility with a given level of income or money. (2) Investors have free access to fair and correct information on the returns and risk.
Shiller discredited the premise of Modern Portfolio Theory when he published research showing that investors are NOT rational, that they are at times highly emotional and that they at times create lots of irrational exuberance in stock prices. This is why he was awarded a Nobel prize.
Had we all been thinking clearly back in 1981 when he did that, we would have launched a national debate on the far-reaching implications of Shiller’s research. Unfortunately, we are humans. We are flawed creatures. We were not expecting Shiller’s findings. We were shocked by them. We experienced cognitive dissonance re them. We just kept on recommending Buy-and-Hold strategies and suggesting that they were supported by the peer-reviewed research even though that was no longer the case. As the years passed, it got harder and harder to come clean because the harm done by the cover-up grew larger and larger.
None of the people you mention truly believe that John Greaney included a valuation adjustment in the retirement study posted at his web site. Robert Shiller doesn’t believe that, Larry Swedroe doesn’t believe that, Wade Pfau doesn’t believe that, the editor of the New York Times doesn’t believe that. Freakin’ John Greaney himself doesn’t truly believe that. If Greaney truly believed that he had included a valuation adjustment in his study, we never would have seen a single death threat or a single demand for a single unjustified board banning or a single act of defamation or a single threat to get a single academic researcher fired from a single job. I mean, come on.
So if everyone gets it that the Greaney study is in error, how is it that 18 years have passed since I advanced my famous post and the study has not been corrected to this day?
Getting the numbers right in retirement studies is what investment analysis is all about. If all of these people (and everyone else who works in this field) acknowledges that the Greaney retirement study and indeed all Buy-and-Hold retirement studies need to be corrected, where is it going to stop? The entire Modern Portfolio Theory will need to be corrected. Which means that every textbook in this field will need to be corrected. And every article written about stock investing over the last 39 years will need to be corrected. Modern Portfolio Theory is the language that people in this field speak and Shiller was awarded a Nobel prize for showing that that language is flawed in a very serious way.
So people go along to get along.
And knowledge does not advance.
And investors get hurt.
And we move ever closer to the next economic crisis.
Not this boy, you know?
If Greaney’s study truly does not include a valuation adjustment, it should have been corrected within 24 hours of the moment when he learned of the error. And we then should have moved on to correcting everything else that those who believe in Modern Portfolio Theory got wrong. The idea of being an “expert” is endeavoring to get things right, not deliberately getting them wrong.
That’s my sincere take, Anonymous. I think that everyone in this field should be endeavoring to get things right. I do that. And I encourage all others to do that. I say that we all need to stand up to you Goons when you threaten us so that we can get things back on track.
People do not want to see their loved ones threatened. People do not want to see their careers destroyed. So it takes a good bit of courage today to speak up about this stuff. But I believe that more people will work up the courage in the days following the next price crash, when they will be able to see how much human misery has been caused by the cover-up.
We’ll see, you know?
I wish you the best of luck with it, in any event. I hope that that helps at least a tiny bit.
My best wishes to you and yours.
Theory Correcting Rob
Shiller Pfau and Swedroe don’t agree with you. GYou either have to convince them that they are wrong or else you have to learn how to deal with it.
I disagree. I am 100 percent confident that they all agree with me re the key issue (that the retirement study posted at John Greaney’s web site lacks an adjustment for the valuation level that applies on the day the retirement begins). I presume that none of us agree on everything. But no reasonable person would expect that we would. So no biggie. The biggie is that we all need to work together to get the error in the Greaney retirement study (an error that was made in all Buy-and-Hold retirement studies) corrected.
I don’t have to convince anybody of anything. Everybody is already in agreement. Now, that’s intellectually. Intellectually, there’s no disagreement because the facts are so obvious (if the study truly contained a valuation adjustment, we would never have seen any death threats). Where we don’t agree is emotionally. The Buy-and-Hold/Ge Rich Quick urge is a strong emotional urge. Millions of investors want to believe that the numbers on their portfolio statement reflect reality and do not need to be adjusted for the effect of irrational exuberance. And lots of “experts” want to at least pretend that they see nothing wrong with that as there is such a huge marketing benefit that goes with pushing a pure Get Rich Quick approach that masquerades as a research-based approach.
Will the marketing benefit disappear when the next price crash crushes the retirement dreams of millions? I sure think so. But we are just going to have to wait to see how it all plays out to know for sure. In any event, I didn’t feel good about myself in the days when I kept it zipped re the error in the Greaney study. A lot of the people who posted at the Motley Fool board had become friends of mine over the years. So I did not feel right engaging in dishonesty re the numbers that they were using to plan their retirements. So those days are over for this boy. I will post honestly or I will post not. And that one is non-negotiable.
I naturally wish you all the best that this life has to offer a person, in any event.
Waiting-It-Out Rob
No, they don’t agree with you. If they did, they would say so.
Death threats never had any effect on human behavior. Extortion never had any effect on human behavior. Um — that makes perfect sense, Anonymous.
Every person who has looked at the Greaney study agrees that it lacks a valuation adjustment. That includes Greaney. No, he doesn’t say it. Because he doesn’t want to correct the study, not because he doesn’t agree that it lacks a valuation adjustment.
And everyone else has similar reasons for not saying it. Some do not want to see their family members threatened. Some do not want to see their careers destroyed. There’s a reason why we have laws against death threats and against extortion and so on. It’s because we don’t want to see situations like this develop. Once we let people pretend for a time, it gets even harder to set things straight. Today it’s not the mistake that people are covering up. It’s the cover-up of the mistake and the cover-up of the cover-up.
I believe that there is going to come a time when everyone is going to feel safe posting honestly re how stock investing works. I don’t think that it will be before the next price crash and that breaks my heart. But I think we will get there. You act like the 18-year cover-up says everything there is to say about us as a people. I believe that the fact that we have laws against death threats and extortion and financial fraud says something too. I think that we are a better people than this 18-year cover-up suggests.
We’ll see, you know?
I certainly wish you the best of luck with it, in any event.
Greaney Study Skeptic Rob
You say that, if all of these people believed that the Greaney study lacks a valuation adjustment, they would say so. I say, that if you were not worried that these people would say that the Greaney study lacks a valuation adjustment, you never would have threatened them.
The criminal stuff evidences desperation.
Law-Abiding Rob
I say that if criminal stuff and/or threats actually happened, you would provide the proof versus making it up.
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.”
Where is the link to the threats and criminal stuff?
Shiller, Pfau and Swedroe want proof.
The link has been supplied.
When a large enough percentage of the American people wants you to be prosecuted, they will insist on that and it will happen.
One of the problems with Get Rich Quick schemes is that people are happy with them until they explode in their faces. Madoff wasn’t prosecuted until his fund blew up. That’s the way these things go.
There’s nothing else that I can do for you. I can wish you luck with it. That’s as far as I can go.
Rob