Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

Why would anyone want to “chips”? I don’t think anyone wants to hand you their money. How are we “in it together”?

Wade Pfau would very, very much like to do honest work in this field. I think it would be fair to say that that one is beyond question given what he told us re his feelings about Valuation-Informed Indexing in scores and scores of comments.

But Wade does not want to give up his entire career as his price of doing honest work. He spent years in school, he has a family support, he does not feel that it is a viable thing for him to have to drop out of this field and start over. So, when threatened by you Goons with threats that appear to have Bogle’s support, he flipped to the Goon side.

Now —

Do you think that Wade would be willing to pay one year’s salary to be able to do honest work for the remainder of his life? I sure do. Everything that I know about the man tells me that he would jump on that deal in a New York minute.

And Wade is obviously not the only one who feels that way. I sometimes get the feeling that just about everyone in the field feels that way. It’s not everyone. But it is lots and lots and lots of people. There are enough people working in this field who want to do honest work that raising $500 million to make it happen is not going to be much of a challenge once we get down to the business of raising the funds instead of arguing over whether we should permit honest posting in this field or not.

The money is just not an issue.

The trouble is that, if Wade hands over that money to someone who asks for it, he is making a statement that Bogle and his Wall Street Con Men pals are corrupt and should be sued and in some cases should go to prison. These are powerful and wealthy and well-connected people. Making that sort of statement is career death.

What to do, what to do?

We need to pull together and persuade Bogle to make a speech in which the words “I” and “Was” and “Wrong” appear somewhere in the mix of words. Bogle can of course include lots of other words of his choosing. But he needs to send a signal that the Campaign of Terror is over and starting here, starting now, things in this field are going to proceed at least largely according to the same sort of ethical principles that apply in every other field of human endeavor. If he cannot say that much, he absolutely needs to say that it is POSSIBLE that he is wrong. Even that much would get the job done.

Bogle won’t do it today. That’s unfortunate.

Will he do it in the days following the next price crash, when he is reading in the newspaper every day how the Buy-and-Hold Crisis is tearing our country apart?

I think Bogle is a great man. I don’t think that a great man will be able to hold back from saying those words at that time.

We will have to wait to see how it all plays out to know for certain. But that’s sure what I believe. I think we are all in a trap here. My job is to get us out of the trap. My job is to make the life of every single person involved better while doing that. I’m giving it my best shot, Anonymous. I can do no more and I can do no less. It’s not like I have any other viable options available to me.

I believe that we will get there. I wish it were not so hard. But in an ultimate sense it is what it is, you know? We all are living in a world that we did not create. We all have to make the best of the circumstances in which we are placed. I sure didn’t choose any of this!

Rob

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

Liar. Here’s an old email to me in which Wade explains your hoax about his “academic career being threatened by anonymous internet posters” to an unfortunate fellow who bit on your 30k email jihad you waged against him in an effort to impugn his integrity and besmirch his good name. The only person who threatened Wade was Rob “hocus” Bennett.

“Dear Vivek,

I understand that Rob Bennett has sucked you into his drama. I’m Wade
Pfau, the academic researcher who has allegedly been threatened. In
writing about your tweet at his blog today, Rob even wrote, “(A number
of Buy-and-Holders threatened to send defamatory e-mails to Wade’s
employer in an effort to get him fired from his job for the “crime” of
having published research showing the dangers of Buy-and-Hold
investing strategies and several big names in the field [including
Vanguard Founder John Bogle] failed to take action against those
advancing the threats, thereby implicitly encouraging them [I have
sent Bogle four e-mails asking for his help with the matter])”

I can assure you that this is all part of Rob’s vast mythology in
which he seeks to make himself into a super hero fighting the evils of
Wall Street. It isn’t true. Rob magnified a very minor situation by
10,000x. The entire story he developed is based on the one minor
comment found here at the start of this discussion board thread:

http://boards.fool.com/hocus-gets-college-prof-to-question-swr-studies-29265775.aspx?sort=whole

“I hope this doesn’t ruin that guy’s chances for tenure.”

That’s it. He imagined all of the subsequent details.

At any rate, I did indeed publish the studies which Rob claims I am
afraid to publish. There is no issue. The main study is this one:

http://www.tandfonline.com/doi/abs/10.1080/09603107.2011.648317

Rob lives in an imaginary world of death threats and threatened
academic researchers and so on, as you would discover if you waste
time reading what he writes. Just thought I’d let you know, straight
from the horse’s mouth.

Best wishes, Wade”

In ordinary circumstances, I would not post this comment, Long Time. Since you are a Goon, there is obviously a good chance that Wade never sent this e-mail and that you just made it up. If that’s the case, I shouldn’t post the comment.

However, the full reality here is that Wade has cooperated with you Goons on several occasions. I don’t personally believe that the chances that your report is accurate are zero. That’s a shocking statement. But it is the behavior that we have all seen from Wade in the days following the threats that were made against him that makes it seem at least somewhat possible that your report is an accurate one. So I believe that your comment should be posted and added to the record that your jury will review when your trial date arrives.

As always, I wish you all good things.

Rob

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:

“the e-mails in which he expresses his fears of you Goons are posted at my web site.”

Not true, as you well know. http://arichlife.passionsaving…

“I wouldn’t lose my job even if people did complain about me, and as far as I know, no one ever did email or call my employer. My research has not been impacted by any alleged threats, and it is really insulting and disgusting all of the times you’ve suggested otherwise.”

“You will just spin my comment as proof that I’m really afraid to speak truthfully. You will do this all in a very long series of comments which may approach 10,000 words in total. But it’s all so tiring and implausible. Please don’t spend your day doing this. Go play with your kids. It’s time to move on.”

But of course, it’s never time to move on.

Wade said those words. You are quoting him accurately.

But of course he said those words AFTER being threatened. You are quoting words from a hostage video. He offered very different sorts of words on numerous occasions PRIOR to the time when you threatened him with career destruction if he continued to say publicly what he really believes about safe withdrawal rates.

I have a category for “Wade Pfau” at my blog. There are lots of entries listed under that category. Interested parties can read as many of them as they like to learn the full realities for themselves. You quoted from one above. Please note that I did not fail to include that one in the mix. Things Wade said after the threats were made are indeed part of the story. Wade is not the only person in this field who has been intimidated. LOTS of people in this field have been intimidated, some in direct ways like Wade and many others in indirect ways (such as by seeing what happens to people like Wade and me when they express their sincere beliefs re safe withdrawal rates and other important investing topics.

Things Wade said before the threats were made are ALSO an important part of the story. Interested parties need to read both sorts of comments. And then they need to reflect on how far out of the norms of our society this sort of thing is. Why are people who work in this field AFRAID to say what they believe about Buy-and-Hold?

They are afraid because Shiller’s 1981 finding that valuations affect long-term returns DISCREDITED the Buy-and-Hold strategy and yet advocates of the strategy to his day continue to claim that it is a research-backed strategy. Those people have a responsibility to let people know that there are two schools of thought as to how stock investing works, not one. Every investor alive should know that, if it is Shiller who is right and not Fama, that Buy-and-Hold is very dangerous stuff.

I had not thought that through at one point in time. Wade had not thought that through at one point in time. Lots of others have not thought it through even today. We all need to be thinking this through. If Shiller is right, Buy-and-Hold is dangerous. If people really believe in Buy-and-Hold (millions of good and smart people do), they need to continue to advocate it. But there is no excuse for those people not to let investors know that there is another school of thought and that the lead advocate of that other school of thought has been awarded a Nobel prize for his work in this field.

No one should ever feel afraid that his career will be damaged in even a tiny way because he shares his true beliefs re how stock investing works. All of us, Buy-and-Holders and Valuation-Informed Indexers alike, should be making it our top priority to insure that the days when something like what we saw happen with Wade Pfau can never, ever, ever happen again.

Those are my sincere thoughts re this terribly important matter, in any event.

Rob

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:

You are offering a hyper-technical way of looking at things. I agree that in ordinary circumstances a mention in a credit line would not make one a co-author of a paper. In this particular case, the mention in the credit line was a tiny recognition of a much bigger reality.

What matters is whether Wade thought of us as co-authors at the time the paper was being prepared. He did. He indicated on numerous occasions that he did. He didn’t have any doubt in his mind re this question. He felt bad about it. If Wade had had a means available to him to have made me a named co-author of the study, he would have done that. He was not able to do that because I do not possess the credentials that would be needed for me to be named as a co-author of an academic paper. So he did the closest thing that he could do. He behaved in a 100 percent honorable way. And the question never would have come up again had you Goons not gotten involved.

It was the action of you Goons that caused the confusion. When you threatened him, you caused him to behave in a strange way. The natural thing is for Wade to work with me to get the paper featured on the front page of the New York Times. He now is afraid to do that. He now feels that his career will be destroyed if he takes acts that in ordinary circumstances would be the most natural thing in the world. So now there is this weirdness about the matter that makes it important for people to know whether I played the role of co-author.

I played the role of co-author. I spent years of my life developing the concept that was being explored in the paper. I gave Wade the idea for the paper — he never in a million years would have thought to write that paper had he not learned about Valuation-Informed Indexing from me. He of course had lots of questions he wanted answered before he put his name to such a grounds-breaking piece of research. He asked them of me and I answered them, promptly and in depth. My role was at least equal to his. There certainly was no doubt in Wade’s mind at the time that that was the case, he was entirely open and free about saying it multiple times. And we have a published record of him doing so available to us today to confirm what indeed happened.

You Goons are involved in a cover-up. I was right in what I said on the morning of May 13, 2002, the retirement study posted at John Greaney’s web site really does not contain an adjustment for the valuation level that applies on the day the retirement begins. Greaney of course understands today that there is 35 years of peer-reviewed research showing that a valuation adjustment is required since valuations affect long-term returns and long-term returns affect the safe withdrawal rate. Greaney cannot think of any way to explain his behavior to people who know the realities and so he engages in all sorts of abusive behavior to intimidate people into not talking about them. One of the people he needs to intimidate is Wade Pfau since Wade knows things that Greamey does not want people to know.

One of the things that Wade knows is the role that I played in getting that paper completed. A simple way of describing my role is to say that I was the co-author. So that is what I say. If you want to note that I am not listed on the face of the paper as co-author, that’s okay, you are being correct in a hyper-technical way by noting that. But people who want to know the full realities need to know the background, that Wade certainly thought of me as the co-author and that he said so on numerous occasions. So I tell them that part of the story.

It’s up to the readers of these words to decide how they feel about it all, Sammy. You have told your view of things and I have told my view of things. People will decide that they think. I have a funny feeling that the intensity of the feelings that most people will have about what happened here will change dramatically following the next price crash. But we are going to have to wait to see how things play out to find out for sure. That’s where things stand.

Anyway, I really do wish you all the best things that this life has to offer a person, my good friend.

Rob

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:

According to your previous posts, you said you needed the windfall or you would not have enough. Was this a lie or are you lying with this latest post?

The rest of your post is nonsense.

In the time that I was posting at the Bogleheads Forum (about 18 months), Wade Pfau was reading my posts and thought that Valuation-Informed Indexing was incredibly exciting. He had never learned about it when he was earning his Ph.D. in Economics at Princeton but he could see that it all made sense and that the entire historical record supported it. He was afraid to post because you Goons were injecting healthy doses of abusiveness into every thread. But he kept reading. After I was banned, he contacted me and told me that he would like to prepare research on VII with me. The research paper that resulted was published in a peer-reviewed journal. I think it would be fair to describe it as the most important research published in this field in the past 35 years.

There were people telling me at the time that I was crazy to keep posting because your abusiveness ruined every thread. Lots of smart and good people wanted to participate in constructive discussions. But they weren’t doing it and so lots of people told me that I should just give up, let the lowest members of the community have veto power over what the rest of us said. That didn’t seem right to me. In the end, those posts had more value than any posts I have ever advanced. Wade was quietly reading them and they ended up producing this amazing research paper that will be helping investors invest more successfully for many decades to come.

Do you see what I am getting at, Sammy? It’s an ill wind that blows no good. We know as a society that certain sorts of posting are helpful and certain sorts are not. That’s why we have rules at every site prohibiting the tactics that you Goons employ. We need to tune you Goons out and just proceed with our business. It is important business and we should not permit the lowest among us to hold us all back.

Wade should have been posting from the first day that he got interested in Valuation-Informed Indexing. He and I would have written that paper a lot sooner had he done so. And we might have done an even better job because we would have had that entire community feeding us ideas. We might have even gotten Jack Bogle involved! Wouldn’t that have been something.? Please don’t dismiss the idea. If we could get Wade involved, we could get Jack involved. They are both smart people with a desire to help others learn how stock investing works. What grounds do we have to believe that Jack would not respond in ways similar to how Wade responded if the circumstances were right?

When you put one foot in front of the other and just do what you know is right, good things happen down the line. That’s my sincere belief, Sammy. I have seen things like what happened with Wade happen HUNDREDS of times during these past 15 years. We all just need to hang in there and let the process play out. The Goon stuff is nasty as all get-out. But it is ultimately trivial. You Goons act the way you act because you are in pain to see that you made a mistake when you fell for the Buy-and-Hold marketing slogans. We can use your experience to learn how Get Rich Quick strategies can become addictive and we can use what we learn to help others not to make the same mistakes.

That’s my sincere take re these terribly important matters, in any event.

My best wishes to you and yours.

Rob

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

Is it your opinion that banning you from the boards is a felony and that it is the leading cause of the financial crisis?

I am not the only one who has been banned, Anonymous.

And there are a great number who have not been banned but who have been intimidated into silence or into self-censorship.

Wade Pfau spent many years in school earning his Ph.D. in Economics. He has every right in the world to post his honest views at every investing discussion board and blog on the internet. When you Goons threatened to destroy his career if he continued to do honest work, you committed an act of financial fraud that has done harm to millions of middle-class investors.

It was Wade’s intention and it was my intention to get the peer-reviewed research that we prepared together featured on the front page of the New York Times. We are still going to do that. We will do it shortly after your prison sentence is announced. That day will be known for generations to come as the Second American Independence Day.

There are millions of middle-class Americans who want to know the truth about what the last 35 years of peer-reviewed research says about how stock investing works in the real world. Those people are going to get what they need. I am going to see to it.

My best wishes to you.

Rob

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:

Of course, Wade is the person that explained to you that you are wrong on the SWR issue. Wade is also the person who asked you to stop talking about him, yet you still sent out over 30,000 emails about him. Wade is also the person who said you have caused him thousands of times more harm than any so called “goon”.

Wade is a super guy trapped in circumstances that he did not create.

He is the only person who has contacted the authors of the Trinity study (the study that was primarily responsible for the once widespread belief in the “4 percent rule”) pointing out the need for a correction in their study. Once that correction is issued, everyone working in this field will feel free to write honestly about the error that the Buy-and-Holders made in believing that it is not necessary for stock investors to exercise price discipline when buying stocks. We will all then be free to participate in a national debate as to whether it is Buy-and-Hold or Valuation-Informed Indexing (the model that says that valuations MUST be taken into consideration when an investor sets his stock allocation) that is the future of investing analysis.

You are right that there was one occasion on which Wade said that I am wrong on the SWR issue. But there were also scores and scores of occasions on which he said that I was right on the SWR issue and that he was extremely grateful to me because of what he learned in the hundreds of e-mails that he exchanged during the 16 months in which we worked together producing peer-reviewed research that he believed was important enough that he might be awarded a Nobel prize for his efforts. On the one occasion in which he expressed a belief that I was wrong, he was under extreme pressure; you Goon had threatened to get him fired from his job if he did not issue that statement — the man had two small children to provide for.

Wade and I do not communicate with each other today. But that will change and we will be good friends again after this matter gets cleared up. Wade obviously hopes that that will happen soon. As do I. As do thousands of others. We’re close, Sammy. We live in a great country and we are in the process of working together to build up the courage to make this happen. My personal hunch is that even you have secret feelings from time to time in which you wish that the nasty stuff could be put behind us and we all could work together to figure out how this stock investing stuff really works. Imagine!

I naturally wish you all the best that this life has to offer a person in any event.

Rob

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

Based on Ken’s advice, it looks like you need an academic guy, or some expert, to be your spokesperson. Does anyone come to mind?

I have a feeling that there might be someone who could help but I can’t quite bring the name to my mind at this moment. It’s on the tip of my tongue.

I’ll get back to you if it comes to me, Anonymous.

Take good care, man.

Rob

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

Don’t you care about SWR at all? If so you would have some insight or opinion on the substance of Wade’s article. Assuming you even read it.

It’s cool that Wade is getting deeper into this stuff. I am not persuaded by every word that he wrote. But that doesn’t matter much. What matters is that he is digging. That’s how we all learn. So my first reaction is just to be excited that he continues to dig deeper into this stuff.

This paragraph sounds like a cop-out to me: “It is not a conservative guess about a safe withdrawal rate, but rather it is the best guess based upon the historical relationship between withdrawal rates, market valuations, and interest rates. It could end up being more or less (we won’t know which for another thirty years).”

It’s fine to calculate the “best guess” rather than the “safe” number. I have zero problem with that. John Walter Russell and I did that with the Retirement Risk Evaluator. The withdrawal rate that has only a 50 percent chance of working out (rather than a 95 percent chance — defined as “safe”) is the “best guess” number because factors that cannot be known can push it in either direction.

But people want to know the “safe” number to plan their retirements. It is hard for me not to speculate that the reason why Wade does not want to give that number is that he knows that you Goons will come after him if he writes honestly about this question. This is an important matter. He should not permit your intimidation tactics to influence him.

We obviously do not know what number will barely work at the end of 30 years. But we know what the odds are of various possibilities. He should be willing to identify the “safe” number (the number that is virtually certain to work (John and I defined “safe” as the number with a 95 percent chance of working out).

Wade is trying to stay out of trouble and he is putting millions of middle-class retirements at risk to do so. This is where we part company. There’s still good stuff in the article and I think we all should be grateful that Wade continues to do the good work he does. But he is not being fully honest here. He is playing games. I find it highly offensive and irresponsible and, frankly, shameful.

People don’t behave like this in other fields of human endeavor. People shouldn’t behave like this in the investing advice field either. I of course have sympathy for the fact that Wade has kids to feed and he fears the consequences of behaving in a fully honest manner re these questions. But there are responsibilities attached to putting yourself forward as an “expert” in this field. Wade knows about the history of this question and he knows how dangerous the Old School SWR Studies are and I am not able to feel good about his ducking of this very important question.

That’s my sincere take re that one, in any event. We won’t KNOW what will survive for 30 years. OBVIOUSLY. No one ever thought we could know such a thing. But we know the worst case scenario today. And we should tell people that. To duck the question just extends the cover-up to the great harm of every single person involved.

I don’t personally buy what he is saying about interest rates. It seems to me that the effect of interest rates would be factored in to the price. So you don’t need to separately count that. Mispricing is the product of emotion, which by definition CANNOT be factored in (investors cannot be aware of their own irrationality — if they were they would stop being irrational!). It’s possible that I am wrong. I certainly don’t object to Wade looking at the question. But I am not personally convinced at this point in time.

Saying that “investors should remain cautious and flexible” is just verbiage. It tells us nothing. The Old School SWR studies were promoted in thousands of places. The numbers in those studies are wildly off the mark from the numbers you get from an accurate and honest analysis. That’s the headline here. Wade should be focused on warning people about the dangers of the Old School studies and about the need to get them corrected immediately and about the 14-year cover-up and about the intimidation tactics that have been employed to keep him from promoting the research that I co-authored with him. AND he should continue digging, as he does in this article. That’s my take.

What I am saying here benefits ALL of us, Anonymous. Including you Goons. The worst thing for all of us is continuation of the cover-up. You don’t see it and Wade is afraid to take you on at this point in time. But I am pretty darn sure that we will all be breathing a lot easier when this massive act of financial fraud comes to a full and complete stop.

My bottom line is that there is a mix of good and bad in this article. The continued probing will yield good fruit in time, I have no doubt of that. But Wade is ducking the most important issues. And that’s a darn shame. For everybody.

Again, thanks for bringing the article to my attention. I am happy to know about it even if I am not 100 percent thrilled with the content.

I guess those observations ended up not being so terribly brief after all!

Rob

Wade Pfau recently published an article in the Wall Street Journal titled What Is the Sustainable Spending Rate for Retirees in 2016? I thank my Goon friend Anonymous for letting me know about the article.

Juicy Excerpt #1: An alternative way to view the historical data is to go beyond merely considering past withdrawal rate outcomes by seeing how they relate to retirement date values of the underlying sources of returns. We can find a way to investigate these implications by following the approach described in 1998 by John Campbell and Robert Shiller. They found useful predictive power in estimating the relationship between Shiller’s PE10 and the subsequent ten-year real return for stocks.

Juicy Excerpt #2: Sustainable withdrawal rates from a diversified portfolio including stocks can be expected to share this relationship with market valuations.

Juicy Excerpt #3: Until 1986, we can see that the relationship between the predictions and the actual values is close. The two variables (PE10 and interest rates) can explain 55% of the fluctuations in the historical spending rates.

Juicy Excerpt #4: this is not an estimate of the “safe” withdrawal rate. It is not a conservative guess about a safe withdrawal rate, but rather it is the best guess based upon the historical relationship between withdrawal rates, market valuations, and interest rates. It could end up being more or less (we won’t know which for another thirty years). To be conservative, a lower withdrawal rate is required to account for the additional random fluctuations from outside the model. This analysis further confirms the idea that the 4% withdrawal rate cannot be treated as safe for retirees in today’s market environment.

Juicy Excerpt #5: A 4% withdrawal rate should never be treated as an almost guaranteed annuitization rate from one’s assets, but this is especially true for today’s retirees.

Juicy Excerpt #6: These exercises about looking at the impacts of interest rates and market valuations illustrate that assumptions about future returns matter a great deal.

Juicy Excerpt #7: Unfortunately, we do not know what the future will bring, and, ultimately, retirees should remain cautious and flexible.