A Rich Life

The Old Ideas on Saving & Investing Don't Work -- Here's What Does

Former Financial Analysts Journal Editor Rob Arnott to Rob Bennett: “I’ve Had Similar Experiences to Those You Describe. My Work Has Often Triggered Overt Hostility from the Guardians of the Status Quo. I’ve Also Had Difficulties Getting Some of My More Controversial Ideas Published. And the Journals That Published Some of My More Controversial Papers Did Get Hate Mail.”

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I’ve been sending e-mails to various people letting them know about my article on The Silencing of Academic Researcher Wade Pfau, who showed the superiority of Valuation-Informed Indexing strategies over Buy-and-Hold strategies. Set forth below is the text of an e-mail response that I received on the night of December 5, 2012, from Former FInancial Analysts Journal Editor Rob Arnott. I will provide the text of my response to Rob in tomorrow’s blog entry. Thursday’s blog entry will report on a few brief e-mails that Rob and I exchanged with each other in wrapping up the conversation.

Rob Anott wrote:

I’m copying Jack and Bill [the reference is to Jack Bogle and Bill Bernstein] , who you mention in your article.

I’ve had similar experiences to those you describe; so, I can empathize with you for your travails.  HOWEVER, we part company on how to deal with this challenge.  I roll with it and move on.  You seem to be “stuck” in a victim mind-set.  Characterizing one’s adversaries as Goons is also unhelpful to your cause.

Jack Bogle is a dear friend; he attacks some of my ideas with relish, and it doesn’t bother me.  He’s entitled to a different view, and he’s never personalized his attacks.  Bill Bernstein and I have co-authored one journal article, while agreeing to disagree on a couple of other issues.  I remain good friends with both, with ample mutual respect.  I know Rick, Scott and Larry less well, but I know that we agree on some things and not others.

As you can probably imagine, my work has often triggered overt hostility from the guardians of the status quo.  And, as one of the “godfathers” of Tactical Asset Allocation and of the Fundamental Index® concept, which are kissing-cousins to your work on Valuation-Informed Indexing, it’s clear that you and I both think the markets are inefficient in much the same way.

I’ve also had difficulties getting some of my more controversial ideas published.  For instance, I’m having a dickens of a time getting any journal to publish my work with Harry Markowitz, Jason Hsu and Jun Liu, which shows that a modest amount of error in stock prices would create – and fully explain – the Fama-French size and value effects.  Journals turning down a Nobel Laureate?  Yep, it happens.  And the journals that published some of my more controversial papers did get “hate mail” for doing so.

I also know of two young professors who wanted to do research on Fundamental Index® and reported to me that their colleagues advised them that this line of research could derail their career prospects.  Outrageous?  Not necessarily:  in the early days of Fundamental Index®, people weren’t yet sure whether this was the investing equivalent of “cold fusion”!

These are the same kinds of problems that you describe.  That’s life.  Life isn’t always “fair,” nor is our own perception of “fair” necessarily correct.

In summary, I will not be available to help you protest the injustice of it all.  Feel free to add me to the list of those who declined to help, alongside Jack, et al, as long as you’re also prepared to provide your readers access to this email.

I would strongly encourage you to *not* abandon your ideas, but to find other ways to make your case, and to give up on the name-calling with those who disagree with you.  Best wishes on pursuing a constructive path, exploring new ideas and accepting criticism from others with civility and perhaps even relish.

Law Lecturer Albert Sanchez Graells: “The Situation [Referring to the Intimidation Tactics Used to Silence Academic Researcher Wade Pfau’s Reporting of the Dangers of Buy-and-Hold Investing Strategies] Seems Well Below Any Professional and Academic Acceptable Standards”

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I have been sending e-mails to various people re my article describing the intimidation tactics used to silence Academic Researcher Wade Pfau’s reporting on the dangers of Buy-and-Hold investing strategies. In response, Legal Lecturer Albert Sanchez Graells posted a tweet saying: “An interesting independent vision on personal finance strategy, well worth a read” and linking to the article telling the Wade Pfau story.

Graells is not only a law lecturer. His Twitter profile reveals that he is also a Spanish exile, a runner, a jazz fan, a frustrated musician, and a vocational cook. He authors two blogs: (1) Integrity in Public Contracts — Turin 2012; and How to Crack a Nut. 

Albert told me in an e-mail that: “I have read your post and the situation seems well below any professional and academic acceptable standards. I am tweeting your  link. I hope it gives it some extra visibility.”

I responded with the following words:

Albert:

Thanks for the kindness of posting the tweet. I am certain it will help. It may be that we will not see an immediate reaction. But it will cause people to begin thinking about the matter in the back of their minds. And down the road it will cause them to be more open to hearing other points of view.

I certainly agree that in an objective sense “the situation seems well below any professional and academic acceptable standards.” In fairness, I think I need to add that there are some unusual circumstances that apply. What we are seeing here is what they refer to in the psychological literature as “cognitive dissonance.” The Buy-and-Holders made major advances in our understanding of how stock investing works. They made one mistake (for perfectly understandable reasons). By the time we discovered the mistake, they had made a career commitment to  an approach that doesn’t work. They are having a hard time accepting that they made a mistake and the millions of investors who bought into the idea are ALSO having a hard time accepting it and are encouraging those who promote the idea to continue doing so.

We need to get a national debate launched. That’s how we will achieve a healing process. I thought that the publication of Wade’s research would get us there and then this exceedingly unfortunate development closed that natural path to a good place. Now I am stumbling around in the dark trying to figure out what alternate path might help us all get to the place where deep in our hearts we all really want to be.

Your encouraging note brought a nice measure of cheer to my Monday morning.

Rob

Albert wrote back: “Glad to have contributed a drop in the ocean of debate need. Best wishes.”

Rich Toscano at Pacific Capital Associates: “It’s Great to See a Finance Journalist Who Understands that Valuations Matter. It Seems That Efficient Market Zealotry Is Rampant in the Journalism Community. So You Are Doing a Great Service.”

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I have been sending e-mails to various people to let them know of my article on the silencing of Academic Researcher Wade Pfau. Set forth below are descriptions of some of the responses I have received.

1) William Cohan said: “Thank you, Rob. Will take a look.”

2) Rich Toscano at Pacific Capital Associates in San Diego, said: “Haha… that’s a funny coincidence… real estate is just a side interest for me; my “day job” is investing and I am also a big fan of Shiller’s CAPE.  (The coincidence is that there’s not very many of us!)  I’ve written articles on it somewhat regularly; here is the last (admittedly out of date) one: http://pcasd.com/us_stocks_overpriced_once_again . I think it’s time for another!  In fact I was planning on writing an article soon to address some of the critcisms of the CAPE (it’s nice that enough people are finally paying attention to it that it is getting critics).  Some criticisms are good but predictably most come from stock touts simply misunderstanding it. Anyway, it is GREAT to see a finance journalist who understands that valuations matter!  It seems that efficent market zealotry is rampant in the journalism community (even after everything that happened last decade).  So you are doing a great service.  I just love your valuation-based return calculator.  I’ll look forward to checking out your site and blog in more detail.”

3) Edwin Hamilton said: “This is compelling but so far I have only been able to ‘talk to myself.’ Serial herd behavior by the American people — need to expose this deception!”

I traded a number of e-mails with Edwin re my efforts to get the word out. At one point, he suggested checking into whether Lindsey Lohan would be willing to co-blog on the issue. I wrote back: “I tried hooking up with Lindsey. It turns out that she’s a confirmed Buy-and-Holder. Go figure!”

4) David Clay Johnson, an investigative journalist, said: “Thanks. I will take a look at this after I finish my next book.”

5) J.D. Roth, the personal finance blogger who started the Get Rich Slowly blog, wrote (in an e-mail dated January 21, 2011, that I failed to report on at the time): “I keep thinking about ways I can write about this subject so that it makes sense. That is, I *do* agree that when the market is high, it makes less sense to blindly invest than when the market is low. But how does one determine what is high and what is low? (I know you have a formula that you like — PE10? — but that’s something experts could argue about for years, right?) I tend to think that’s where re-balancing comes in. If, in a theoretically neutral market, you’re targeting an asset allocation of, say, 50-50, and then stocks grow so that your allocation is 70-30, rebalancing should, in theory, act somewhat like value-informed investing, right? Anyhow, it’s something I’m thinking about, and not just theoretically. It has practical applications to my own portfolio! 🙂

Money Mustache Blogger: “The Interpersonal He Said/She Said Stuff Is Something I Try Not to Get Involved in Since There Is Always An Unlimited Supply of Complainers Against Any Good Idea”

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I have been sending e-mails letting people who don’t read the blog regularly know about my article describing the intimidation tactics used by Buy-and-Holders to silence Academic Researcher Wade Pfau. Set forth below are the texts of some responses I have received:

1) Free Money Finance Blogger: “Thanks. I’m just heading out of town for a week and will check it when I get back.”

2) Doug Short, VP of Research at AdvisrorPerspectives.com: “Thanks for sharing. Advisor Perspective has a strong record of supporting active portfolio management.”

3) Mr. Money Mustache Blogger: “Howdy Rob! Wow – Sorry I never got back to your ancient email until now! The inbox is a crazy place for me these days. I enjoyed your article and the drama tales around value-informed investing. The interpersonal he said/she said stuff is something I try not to get involved in, since there is always an unlimited supply of complainers against any good idea. Instead, I like to just work on preaching in new and unusual ways, while throwing in the occasional joke at the expense of my detractors 🙂 But hopefully you’re still having fun just carrying on with your own message and teaching the world about your findings! Cheers — Pete (MMM)

I responded to Mr. Money Mustache by writing: “Thanks much for your response. I’m fighting the good fight. It’s going to be a blast once we make it to the other side of The Big Black Mountain. Keep on doing what you do, my good man. — Rob

4) Larry Weber (Larry and I had several long telephone conversations a few years ago in which he expressed great enthusiasm for the Valuation-Informed Indexing concept and expressed a willingness to contact Ross Perot, for whom he once worked, and a number of venture capitalists to help us spread the word and bring the economic crisis to an end): Thanks, Rob. I will check it out.

5) Jesse at the Jesse’s Cafe Americain Blog: Jesse posted a link to the Wade Pfau article at his site. When I sent an e-mail thanking him, he wrote back: “Have a GREAT week, Rob!”

 

Jesse’s Cafe Americain Blog Links to My Article on the Silencing of Academic Researcher Wade Pfau

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The high-traffic Jesse’s Cafe Americain blog has linked to my article titled Academic Researcher Silenced by Threats to Get Him Fired From His Job After Reporting on Dangers of Buy-and-Hold Investing Strategies. The link appears at the “Matieres A Reflexion” section of the site (on the left-hand side of the page). The link is titled “Researcher Warns on Buy-and-Hold Strategies.”

Juicy Excerpt: All industries would like to be able to persuade the people who buy their product or service that it is worth buying at any possible price. The Stock-Selling Industry is the only industry that has ever pulled off this act of marketing magic. Millions of investors today believe that it is not necessary to consider price when setting their stock allocations, that it is not possible to successfully time the market.

There is now 30 years of academic research showing that the claim that it is not possible to time the market is false. There really is a wealth of research showing that short-term timing (changing your stock allocation because of a guess at to how stocks will perform over the next year or two) does not work. There is zero research showing that long-term timing (changing your stock allocation in response to big valuation shifts with an understanding that you may not see a benefit for doing so for as long as 10 years) doesn’t work. To the contrary, there is now a mountain of research showing that long-term market timing ALWAYS works. There has never been one time in 140 years (that’s as far back as we have records) when long-term timing did not produce far higher returns at greatly reduced risk.

This article exposes the cover-up.

“The Only Way It Could Be “Off-Topic” for Me to Try to Help My Friend Jack Bogle Learn About the Mistakes He Has Made and To Get on the Right Track Is If Bogle Was a 100 Percent Corrupt Individual Going Back To the First Day”

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Set forth below is the text of a comment that I recently put to the Investor Junkie blog:

And yes Mr. Bennett, that very much and emphatically includes you.

Thanks for including me, Hogie. The questions we are discussing here are of huge importance. I am confident we agree on that. The points made in your first comment are obviously sincere and intelligent. So I see considerable value in that comment and want to respond to it. I don’t see the point made in the second comment (that I posted off-topic — something I would never do in a million years) as being quite so obviously sincere. My take is that it is the product of cognitive dissonance. You believe it because you must believe it to maintain confidence in Buy-and-Hold. And so you have been able to persuade yourself that you really do believe it. Humans do this kind of thing ALL THE TIME in areas other than investing. I wish that we all could accept that it is likely that they do it in the investing realm as well.

You don’t say what it is that you believe that I ever said that is “off topic.” I can come up with only one guess — the majority of the board believes in Buy-and-Hold and I say that Buy-and-Hold doesn’t work. Is that it? My view is that Bogle himself doesn’t hold as a primary belief a belief in Buy-and-Hold. Bogle’s primary belief is that investing strategies should be rooted in the academic research. This belief led him to a belief in Buy-and-Hold because once upon a time the academic research really did support Buy-and-Hold. Now that the research supports Valuation-Informed Indexing (call it Buy-and-Hold 2.0 if that makes it easier to accept), Bogle should be disowning Buy-and-Hold and shifting to support of VII instead.

And he would! If only he would tolerate discussion of the research findings that show him to have been wrong in his early beliefs! My aim is to make him aware of how he got on the wrong track (and of course to make all other Buy-and-Holders aware of the same). How do I do that without describing what the research shows? I MUST do that to achieve my goals. And yet it is precisely my descriptions of what the academic research of the past 30 years shows that causes the Buy-and-Hold dogmatics to lose their cools and to dismiss me as “off-topic” and “abrasive” and worse. Do you see the problem I face?

I noted up above that I formed my friendships with Academic Researcher Wade Pfau as a result of my postings at the Bogleheads Forum. Wade found VII exciting and wanted to learn more about it for the purpose of doing research. He found that VII checks out in every possible way. He was so excited about his findings that he expressed a belief that he might win a Nobel prize in Economics as a result of it (I am personally convinced that he will). He told me that he was amazed that no earlier researcher had looked into the things he looked into. He marveled at his finding that we know today (by examining the data that our mutual friend John Bogle has been advising us for years to study for guidance) what we need to know to reduce the risk of stock investing by 70 percent! While greatly diminishing risk!

Here’s a link to an article at my site that tells the Wade Pfau story:

http://arichlife.passionsaving.com/the-buy-and-hold-crisis/academic-researcher-silenced-by-threats-to-get-him-fired-from-his-job-after-showing-dangers-of-buy-and-hold-investing-strategies/

I find it more than a little hard to believe that you could read that article and read Wade’s research (a link is provided in the article to the underlying research) and conclude that the work Rob Bennett did at the Bogleheads Forum was “off-topic” to the purpose that John Bogle intended to pursue when he began his career, Hogie.

It may be that those findings upset Bogle today, now that he has spent 30 years telling people a very different story. It hurts him because he wanted to do good work and because he is human and made a mistake and that mistake hurt millions of people who Bogle intended to help. But who is Bogle’s real friend — the people who continue the cover-up and thereby aid him in causing even more financial losses for the people he intended to help or the guy who has worked unceasingly for 10 years and without receiving a dime in compensation to get Bogle and all his followers back on the track that he and they had intended to pursue going back to the first day — using research and data to learn WHAT REALLY WORKS IN THE LONG RUN.

I am not an off-topic poster, Hogie. I’m not anything close. You’ve got the wrong guy re that one.

And I ain’t anti-John Bogle either. I rate John Bogle as the second most important investing analyst in history (I rank only Robert Shiller higher). The only way it could be “off-topic” for me to try to help my friend Jack Bogle learn about the mistakes he has made and to get on the right track is if Bogle was a 100 percent corrupt individual going back to the first day and never even intended to help a single middle-class investor but just to get rich himself exploiting their weaknesses. I don’t believe that for two seconds and I am 100 percent confident that you don’t believe that for two seconds either.

So our only difference of opinion is whether Bogle was wrong in saying that it is not necessary for investors to practice long-term timing. Wade’s research shows that he was very. very. very wrong. There would be no problem here if you had any confidence that Wade messed up. If you thought Wade had messed up, you could hold a view different than mine and we could still be friends. The problem is that somewhere in your consciousness you entertain at least a small belief that perhaps Wade (And Rob! And the hundreds of our fellow Bogleheads who have written warm and enthusiastic endorsements of my work!) is on the right track. I have a funny feeling that, once you work up the courage to give those thoughts the serious consideration they merit, we are going to be working together to discover some very exciting truths about how stock investing actually works in the real world.

I wish you all good things, Hogie. It would make me feel greatly encouraged if you could say in your next comment here that you feel the same way about me and about the hundreds of our fellow Bogleheads who have said that they found great value in my thousands of “off-topic” posts at the Bogleheads forum. Take care, man.

Rob

Kevin at the Invest It Wisely Blog: “I Don’t Usually Mind a Little Bit of Controversy, But I Was Contacted by the Person in Question (Academic Researcher Wade Pfau) and Asked to Take It Down”

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I’ve recently been sending e-mails to many people (I’ve sent 650 so far) in an effort to make them aware of The Wade Pfau Story and thereby to bring the economic crisis to an end and to open up honest posting on the realities of stock investing at every investing board and blog on the internet. I sent one to my friend Kevin at the Invest It Wisely blog. Kevin was kind enough to link to the article.  This naturally caused a freak-out at Goon Central, the site owned by John Greaney (the individual who led the effort to intimidate Wade into agreeing not to publish further research showing the superiority of Valuation-Informed Indexing by threatening to have a number of Goons send defamatory e-mails to his employer).

Kevin late last night sent me the following words:

Hey Rob,

I think this one touched a personal nerve. I don’t usually mind a little bit of controversy, but I was contacted by the person in question and asked to take it down, and if they can verify their identity I’ll probably comply (I know that ties right into the theme of your post, haha… but I don’t want to take sides here — I’m more interested in the theories themselves rather than any personal disputes). I’ll swap the post for another one that’s “less personal” if you don’t mind.

Thanks!

Kevin

This morning I sent Kevin an e-mail containing the following words (I have also added an Addendum to the Wade Pfau article linking to this blog entry):

Kevin:

Every single person involved (including Wade) is more concerned about the theory than about any personal disputes. That’s true of me. That’s true of you. That’s true of Lindauer. That’s true of Greaney. That’s true of Bogle. That’s true of Shiller. That’s true of every single person affected by the economic crisis and of every single person who at one time or another was taken in by the Buy-and-Hold mumbo jumbo.

The question is — How do we turn to a discussion of the theory now that we have collectively as a society spent 10 years covering up the errors in the Old School safe withdrawal rate studies that became public knowledge on the morning of May 13, 2002? If you or any of the people named above offer me any suggestions for making that happen without them incurring hundreds of billions of dollars in legal liabilities for the failed retirements they have already caused, please know that I am 100 percent in.

Unless someone comes up with something, the only effect of a further continuation of the cover-up is to expose all the people named above to even larger financial liabilities and to even longer prison sentences. Is that what you want for people like Wade and Bogle and Lindauer and Greaney and possibly even Shiller (Shiller has said that he has never told us all he knows about stock investing because he fears what the Buy-and-Holders will do to his reputation if he does so — How are the millions of people who are in the process of suffering failed retirements going to feel when they learn that and how are we going to restore confidence in our economic and political system without taking  into consideration how those millions of people are going to feel about what has been done to them?). It is sure not what I want for them. I am going to do all that I can to keep both their legal liabilities and their prison sentences as limited as possible.

Thanks for all the help you have offered. I know you are sincere and that you are trying and that you are scared. I believe that we are all sincere in our own ways and we are all trying in our own ways and we are all scared in our own ways. I believe that there will come a day when one of us will come up with the magic words that takes us all to the place where we all feel safe and where we are are all moving forward together on a daily basis and where we have all put the ugly side of this matter 100 percent behind us.

I am of course happy to submit guest blog entries for posting at your site at any time you are willing to host them. It obviously is a positive step for you to host them. But it is also obvious that those guest posts will have 1,000 times the positive effect they have today after we have together taken those steps we all need to take to put the ugly side of this matter 100 percent behind us and to spend the remainder of our days exploring together all the amazing investing insights that are opened up to us once Wade and hundreds of other academic researchers in this field feel free to do honest and productive work once again.

Please have confidence that we are collectively working up the courage to take this to a positive place. If you think it is possible for you to say anything to Wade to reassure him, I hope you will do that. He is obviously in a very dark place today. He has done work that will win him a Nobel prize and make him known as a hero to all of us. Those of us who love the guy need to reach out to him and show him that we care and that we are there to help in a real and truly effective way.

Most of all, please understand that there is no “dispute” between Wade and me any more than there is any dispute between you and me or between Mel and me or between John and me or between Jack and me. We all want the same things. We all want to  learn how to invest effectively and to do what we can to teach others to invest effectively. We all want to bring the economic crisis to an end. We all want to do what we can to limit the civil liabilities and criminal penalties of those who have participated in the 10-year Campaign of Terror against our board and blog communities.  It’s a question of us working up the courage to show our desire for those good things with actions that are positive and helpful and life-affirming.

Hang in there, man. I read the last page of the story before I dared to put forward the May 13, 2002, post. It gets better. A LOT better. The ugly side of this gets blown away in the wind in time. The insights we mine together make all of our lives richer and fuller and better for many, many years to come. The smart and good and hard-working young man who contacted you wins a Nobel prize on the last page of the story. Remind  him of that. That’s been a dream of his for many years now and he needs to get back on the path leading to realization of that dream to start feeling good about himself again. He needs to keep that in mind to keep his spirits up when the world seems to be closing in on him because of mistakes he made in the sorts of weak moments we all experience from time to time.

Wade once told me how he was was looking forward to watching with his wife a version of Season Six of the Lost television show with Japanese subtitles. If you talk to him, please tell him that I recommend that he consider the advice that Jack took to heart at the end of that season — Sometimes it is best to just “let it go.” There are times when it is best to continue the fight and there are times when the only possible way forward is just to let it go.

And please tell him that there are people in this world who love him and who are wishing all good things for him and look forward to having a beer with him on the day he is awarded his well-deserved Nobel prize.

Rob

Addendum: Kevin sent me a response e-mail after I posted this blog entry. He said:: “I hope you two can make it up someday! I’m definitely not scared of publishing stuff that other people disagree with, but I do try to respect other’s feelings and he seems to be taking it personally. I’ll still be happy to link to non-personal posts from you that don’t call out anyone in particular.”

I sent a reply saying: “I understand your decision. He IS taking it personally. That’s for certain. And we WILL make it up. Wade’s a great guy. He has two small children for whom he has responsibility. He is afraid of what will happen to them. My guess is that Bogle’s heart will melt a bit following the next price crash and we will all be on the same page at that point.”

Kevin then wrote: “Thanks for understanding, Rob. I appreciate it!”

“It Does Hurt Me When I Get No Reaction (From Most) or a Hostile Reaction (From the Goons). And the Hurting Slows Down My Efforts to Get the Word Out.”

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Set forth below are the text of some words that I recently posted to the Goon Central board re me efforts to send out 1,000 e-mails letting people know about the Wade Pfau Story:

this very unhealthy turn, of calculated and purposeful escalation of annoyance-on-purpose Providing notice of a coming hurricane drags people down, Drip Guy.

Are the people who tell people in an area about to be hit meanies because they do so?

Most people don’t want to hear this message. I get that loud and clear.

I don’t think I am a meanie for doing what I can to get the word out.

Now —

It does hurt me when I get no reaction (from most) or a hostile reaction (from the Goons). And the hurting slows down my efforts to get the word out as extensively as I should be getting it out. That tells me that, even though I SAY that I don’t view myself as a meanie, there must be some part of me that is buying into the crazy idea that I am. I am one of the humans. I am flawed.

I fight those feelings. That’s the point of this thread.

I have had to fight this battle over and over again over the past 10 years and all signs are that I will be fighting it over and over again in days to come. I’ll win some. I’ll lose some. But if we all go down (I don’t think we will, but I no longer put the odds at zero or at anything close to it), I’ll be able to say that I went down swinging. I HATE it when a guy who can hit gets called out looking.

Today is a small move forward. Tomorrow I might be back where I was yesterday. The next day I might short forward more than I did today. The courage comes and goes. I’m just a reporter reporting to you the story.

My actions are certainly purposeful and calculated and they certainly do annoy. Morningstar was right when they called my words “inflammatory.” I don’t go along with the “unhelpful” part, though. I do this in an effort to be helpful. If you find someone else to take on the job, I’ll step aside. No matter how scared I am, I know someone has to do this job. If no one else steps forward, I will continue to wake up each day with a prayer that I find the courage needed to do it to the best of my ability.

My best wishes to you and yours, in any event.

Rob

“The Same Emotional Roadblocks That Make It Hard to Bloggers to Address These Matters Make It Hard for Me to Get the E-Mails Out”

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Set forth below is the text of a thread-starter that I put to the Goon Central board:

This is tentative. I think I am beginning to make some slow progress in getting the e-mails out.I should have had hundreds of them out by now.  I think the number was about 12 through yesterday. For today, I think it will be five or six more. No great leap forward. But small movement in the right direction. My hope is that the next week will be better.I believe that the same emotional roadblocks that make it hard for bloggers and blog readers to address these matters frankly make it hard for me to get the e-mails out. We are all social creatures. We don’t like to point out shameful things. Our inclination is to cover them up. We don’t like to hurt people’s feelings. We don’t want people angry at us. This is the wall that must be overcome. It is by breaking down this well that I earn that $500 million.

I know from past experience (and from what I have seen with the first 12 or so this time) that the response rate will be very low. 50 e-mails won’t cut it. I need to get hundreds out. Perhaps thousands. The number needs to be big enough so that even a tiny response rate will yield results.

I may fail in this. The track record is mixed. I have been slow to act re many aspects of this. I always act eventually, though. I don’t quit.

Anyway, that’s the story.

WIsh me luck!

Rob

VII #96 — We Need a New Kind of Investment Research

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I’ve posted Entry #96 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s titled We Need a New Kind of Investment Research.

Juicy Excerpt: Research appeals to the brain. The will has primacy over the brain. So long as our emotions direct our wills, all the research in the world will not produce good results.

An investor who has an emotional attachment to Buy-and-Hold strategies can rationalize following them despite mountains of research showing they can never work. It’s the interpretation of research that matters, not the research findings themselves. And interpretation is under the control of the will, not the intellect.

Hundreds of “researchers” continue to produce new research showing that Buy-and-Hold can work. How do they pull off this magic trick? By leaving out valuation adjustments. Why do they leaves out valuation adjustments? Because research that includes them always shows that Buy-and-Hold doesn’t work!