A Rich Life

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

Rob Bennett’s Responses to Academic Researcher Wade Pfau: #4 — The Safe Withdrawal Rate Concept Is Here to Stay

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I am the person who discovered the error in the Old School safe-withdrawal-rate studies. The error is that the studies do not contain an adjustment for the valuation level that applies on the day the retirement begins. Yale Economics Professor Robert Shiller published research in 1981 showing that valuations affect long-term returns. The error in the Old School SWR studies is likely to cause millions of failed retirements in days to come, in the event that stocks perform in the future anything at all as they have always performed in the past. I went public with what I knew in a post to a Motley Fool discussion board on the morning of May 13, 2002.

For most of the next ten years, the “experts” in this field either denied that the studies were in error or ignored the problem. Since the 2008 price crash, it has become increasingly clear that we are going to see millions of failed retirements and that lawsuits in the hundreds of billions of dollars (collectively) are going to be brought against those responsible for the ten-year cover-up. So we have seen numerous articles in big-name publications in recent months acknowledging that it is not possible to calculate the SWR accurately without taking valuations into consideration.

But we have not yet seen a single one of the Old School studies corrected. The new company line is that the studies are obviously in error but that there is no need to correct them.

I take strong exception to the continued cover-up for five reasons.

One, there are still people finding these studies as the results of internet searches. The searches those people run may not pull up the articles reporting on the errors in the retirement studies. By failing to correct the studies, we are causing additional failed retirements.

Two, many of the people who placed their trust in the “experts” who encouraged them to make use of the long-discredited retirement studies could still save their retirements if we told them how they must change their stock allocations to do so. Corrections of the studies would need to be accompanied by suggestions re what to do now. Those suggestions might spare hundreds of thousands of middle-class retirees from suffering one of the worst life setbacks imaginable.

Three, corrections would clarify the cause of this national catastrophe. Many of the articles acknowledging the errors have employed mumbo-jumbo language that fails to identify the key problem — that Shiller’s research showed that the Buy-and-Hold Model for understanding how stock investing works is flawed right down to its core and needs to be junked and replaced by the Valuation-Informed Indexing Model (Valuation-Informed Indexing is Buy-and-Hold corrected for the errors discovered by Shiller).

Four, investors’ discovery of the ten-year cover-up of the errors in the retirement studies is likely going to cause a political explosion. The sooner those responsible for the cover-up come clean, the better we will be able as a nation to manage and survive the crisis.

Five, acknowledgment of the error presents the opportunity for an amazing learning experience. I was a Buy-and-Holder on the morning of May 13, 2002, when I put forward the post reporting on the error in the studies. I abandoned my belief in Buy-and-Hold on the evening of August 27, 2002, when John Greaney, the author of one of the discredited studies, threatened to kill my wife and children if I continued to press for corrections in the retirement studies and over 100 Buy-and-Holders cheered him on. My reaction to that experience was that Buy-and-Hold must be a fatally flawed strategy to generate such strongly negative emotional reactions in such a high percentage of the investors who follow it. It was because of my abandonment of Buy-and-Hold that I was able to develop the scores of powerful investing insights I have reported on in the ten years since. All of the experts in this field and all investors can share in these insights once we stop doing battle over the absurd question of whether retirements studies that get the numbers wildly wrong should be corrected or not and instead direct our energies to learning what our experience with this situation teaches us about the dangers that follow from heavy promotion of Get Rich Quick investing strategies.

Academic Researcher Wade Pfau came close to being a hero re this issue. I had been trying for close to ten years to persuade the experts in the investing field to press for corrections. Wade was the first person to take me up on the idea. He sent an e-mail to the three authors of the Trinity study, a much cited Old School SWR study. The Greaney Goons, a group of highly abusive internet posters who have worked for 10 years to keep investors from learning of the errors in the retirement studies, threatened to send defamatory e-mails to Wade’s employer with the aim of getting him fired from his job for the “crime” of acting with honesty re this matter. Wade has had much experience both with the Goons and with experts in the investing field who advocate Buy-and-Hold strategies and who have tolerated and even encouraged the Goons on numerous occasions. Fearing for damage that might be done to his career as a result of his honesty on the SWR matter, Wade adopted the Goon-approved position that the studies are indeed in error but that there is no need for them to be corrected.

Several years ago I developed a calculator (“The Retirement Risk Evaluator”) that uses an analytically valid approach to identifying the safe withdrawal rate. In earlier days, Wade offered numerous positive comments about the methodology used to develop the calculator. But his current public position is that there is no need to know the safe withdrawal rate or perhaps no possible way to know it. Wade and other experts seeking to hide from millions of middle-class investors the irresponsibility of the 10-year effort to cover up the error in the Old School studies are suggesting that the SWR concept be abandoned.

This is a terrible mistake.

Wade has done research on “safe savings rates.” He promotes this concept as an alternative to the safe withdrawal rate concept. It is not that. It is a supplement to the safe withdrawal rate concept. The safe savings rate concept certainly has value. Wade certainly should be encouraged to continue his research along these lines and applauded for the many insights he has developed with his work in this area. But there is no justification for abandoning the safe withdrawal rate concept. The SWR concept does something different from what is done with the safe savings rate concept. Those seeking to plan retirements effectively need to make use of both concepts.

Identifying the safe withdrawal rate answers a unique question — What inflation-adjusted percentage of my retirement-date portfolio amount may I take out to cover living expenses each year with virtual certainty that I will have enough assets for my retirement to last 30 years? Many aspiring retirees need to know the answer to that question. There is no way to answer it other than through use of a valid SWR methodology.

Wade’s safe savings rate tells investors how much they need to save each year to achieve a well-financed retirement plan many years later. People need to know that. But people also need to know the safe withdrawal rate that applies for their retirement plan.

Another idea that has become more popular since the error in the SWR studies was widely acknowledged is the idea of retirees setting up multiple pools of savings, with one pool being used to cover essential spending and being invested in safe asset classes and with another being used to cover luxury spending and being invested in risky asset classes. This is another excellent concept that should be explored in depth. But this concept also is not a replacement of the SWR concept. A retiree who employs the multiple-pools-of-saving concept still needs to know what the remaining value of the pool invested in risky asset classes will be in a worst-case return scenario. Few retirees want to live the rest of their lives with zero ability to spend on luxuries. It is the SWR concept that aims to answer this question.

There was never anything wrong with the SWR concept. The concept was a big advance at the time the Old School studies were developed. The mistake was the failure to include a valuations adjustment in the calculations. Shiller’s “revolutionary” (his word) research shows that it is impossible to analyze any investing question effectively without taking into consideration the effect of valuations. The argument that we no longer need to know the SWR takes us backwards rather than forwards. It’s not SWRs we need to avoid, it’s improperly calculated SWRs we need to avoid.

It was my effort to learn how to calculate the SWR properly that led to the investigations through which I developed the Valuation-Informe Indexing model for understanding how stock investing works. Most investors have little idea how big an influence the valuations level that applies on the day they buy stocks has on their long-term return. Comparing the SWR that applies for a retirement that begins at a time of low valuations (1982) with the SWR that applies at a time of high valuations (2000) illustrates the importance of taking valuations into consideration in every investing decision. The SWR for a high-stock portfolio in 1982 was 9 percent. The SWR for a high-stock portfolio in 2000 was 1.6 percent. This means that an retiree with a $1 million portfolio could with complete safety take out $90,000 every year of his remaining life if he retired in 1982 but only $16,000 if he retired in 2000.

That’s a shocking difference!

But it shouldn’t be!

To those who understand the implications of Shiller’s research, the difference in SWRs makes perfect sense. Stocks were priced at one-half their fair-value price in 1982 and at three times their fair-value price in 2000. The SWR should be six times larger in 1982, if Shiller is right that valuations affect long-term returns. Round down the number 1.6 to 1.5 to make the math easy and then multiply by six and you get 9 percent. The SWR changes in response to valuation shifts in precisely the way we would expect if we were analyzing how stock investing works with logic and not with the out-of-control Get Rich Quick emotions that make Buy-and-Hold strategies so appealing to so many.

Those who retire at a time when stocks are priced as they were in 2000 need to know that they need to accumulate a portfolio of six times the size of the portfolio they would need to accumulate for a retirement beginning in 1982 to have the equivalent in income-producing assets financing their retirements. Properly calculated, the SWR illustrates the essential point in a compelling way. We should not be denying investors the SWR concept to keep the long-discredited Buy-and-Hold concept alive another week, another month, another year. We should be reporting the SWR accurately and honestly and using the differences that apply in times of low valuations and high valuations to teach investors that they should not take the numbers on their portfolio statements even a little bit seriously when those numbers are the product of the mass promotion of Get Rich Quick/Buy-and-Hold investing strategies. It is not the SWR concept that should be abandoned but the profoundly dangerous Buy-and-Hold “idea” that there is no need for investors to practice price discipline when buying stocks.

Perhaps the internationally renowned portfolio strategists Danny and the Juniors put it best when they argued in an influential 1958 paper that:

I don’t care what any experts say —

The Safe Withdrawal Rate is here to stay!

Rob Bennett’s Responses to Academic Researcher Wade Pfau: #2 — “I Really Don’t Know How You Think You Come Out of This Whole Episode Looking Like the Good Guy”

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My first reaction to this comment of Wade’s is that it is an odd one for an academic researcher to be putting forward. The value of academic research is that those who produce it are given tenure so that they can report honestly what the historical data reveals. Those trying to make a buck in this field are inevitably going to be drawn to doing the popular thing, which often translates into doing the thing that appeals most to the Get Rich Quick urge that exists within all of us. The reason why we turn to academic research for the straight story is that we imagine researchers to be beyond all that. Their jobs are safe. They are not caught up in the dog-eat-dog world of commerce. They are not salesmen. They can tell the truth because they do not need to worry about whether what they say will make them popular or not.

I think it would be fair to say that we have overestimated the extent to which living the life of the academic can insulate one from financial considerations, especially in a field in which there is so much money floating around. Wade has produced amazing research. But he wants its both ways. He wants to produce great research and to be popular too. He wants the links to his blog that go to those who play ball with The Buy-and-Hold Machine. He wants the job referrals that go to those who play ball with the Buy-and-Hold Machine. He wants the applause that goes to those who flatter investors who have bought into the marketing pitches advanced by The Buy-and-Hold Machine.

Make no mistake. I want those things too. I want links. I want job referrals. I want applause. I want bucks.

But I take strong offense at the idea that I need to post dishonestly on the numbers that my friends use to plan their retirements to get those things. I have seen little bits of corruption at every job I have worked, going back to my fast food days. That’s the way it is with the humans. You take that sort of thing in stride. You understand that humans have a lot of good in them and a bit of bad in them as well and you make the best of things as they are. Fine. But I have never experienced anything like what I have experienced in the ten years since I put forward that fateful post of May 13, 2002, pointing out the errors in the Old School safe withdrawal rate studies. What I have seen in the past ten years has been special and in a very, very bad way. Tens of thousands of links are not payment enough to persuade me to betray my friends. And I consider it a fresh insult every time I am asked.

That said, there is a practical point that Wade is making here that is worthy of some consideration.

I am trying to sell something. I am trying to persuade people of the merits of a new investing strategy. No one buys anything from anyone whom he doesn’t like. Gaining the customer’s respect and affection comes first. When they like you and respect you, they listen to your pitch. If your product is good enough, they buy it. If they hate your guts with a burning passion, as many Buy-and-Holders hate my guts with a burning passion, no amount of historical data will win them over.

I need people to like me. Wade is right about that. And Wade needs people to like him. He cannot do the good work he wants to do if people hate him with a burning passion. One of the things he learned during his 16 months of e-mail correspondence with me is that lots of Buy-and-Holders hate me with a burning passion.

Here are some words that Drip Guy wrote to the Bogleheads Forum when Wade posted about his research showing that Valuation-Informed Indexing has provided far higher returns than Buy-and-Hold at greatly reduced risk for the entire 140 years for which we now possess return data: “Since your own work is overtly at odds with the ethos of the board — here, the theme is John Bogle’s philosophy, which eschews market timing — I myself will no longer obliquely support it by giving you a whetstone on which to sharpen your knife. You must certainly know that this very board came into existence in order to ESCAPE the lunatic behaviors of one individual — the very individual with which you have publicly and openly aligned yourself, and who you are openly quoting and sourcing in your column and are forming your intended paper around.  While there is much merit in open discussion of competing, differing, and varied approaches, as to you, sir, I personally will have no more of it here on this forum, given the poison well from which you are now openly drawing your own water.” That’s hate. And there’s a threat implicit in those words. Drip Guy is telling Wade “We will destroy you if you associate with Rob Bennett.” And Wade knows that Drip Guy is prepared to follow through with the threat.

He knows something else. He knows that no one at the Bogleheads Forum is willing to speak up in opposition to the threat. Not John Bogle. Not Bill Bernstein. Not Larry Swedroe. Not Rick Ferri. Not anyone.

If Wade posts honestly on Valuation-Informed Indexing and on my role in developing the concept, he is finished in this field. That’s what his experiences posting at the Bogleheads Forum taught him. I don’t approve of his behavior. But it would not be fair to him to fail to point out that the opposition to anyone who sings my praises is rooted in nothing short of blind rage. If we are to make the transition from Buy-and-Hold to Valuation-Informed Indexing and thereby bring this economic crisis to an end, we are going to need to come to a understanding of the cause of that blind rage.

There are three elements.

First, I put forward insights. In ordinary circumstances, that is seen as a good thing. I know that because I put forward many important insights in the days before I posted about investing and I was the most loved poster at the Motley Fool site because of them. Putting forward insights does not by itself cause rage. But in the particular circumstances that apply in the investing realm, it does. The particular circumstances that make something that is ordinarily seen to be a good thing (advancing insights) to become viewed as a very bad thing are contained in the remaining two elements of the story.

The second element is the core of the problem. The insights are of earth-shaking significance. Making the shift to Valuation-Informed Indexing reduces investing risk by 80 percent. Buy-and-Hold caused the economic crisis and making the shift to Valuation-Informed Indexing would bring it to an end. All four economic crises that we have experienced since 1870 were caused by the widespread adoption of the Buy-and-Hold “idea” that there is no need for investors to lower their stock allocations when prices rise to insanely dangerous levels. Once we open the internet to honest posting, millions of middle-class people will be able to retire five to ten years sooner than they imagined was possible during the Buy-and-Hold Era. Valuation-Informed Indexing takes the emotion out of stock investing. It is the first truly research-based investing strategy and the first emotionally balanced investing strategy.

When someone gives you directions to the restaurant you are trying to locate, you thank them. They obviously possess some piece of information about the world that you lacked but you don’t see that as being a big deal. By sharing the information with you, they make your life better. They are doing you a favor! You say “thank you” and you go on your way.

It’s different when someone says you are living your life wrong. You don’t thank someone when they tell you that you married the wrong person. You don’t thank someone when they tell you that you are going about this business of raising your children all wrong. You don’t thank someone when they tell you that you have wasted 20 years of your life doing work for which you are not suited and which has little value in this world. You don’t thank someone when they tell you that your religion is a false one, that you are on the road to hell and you had better make some changes pronto.

We like people who help us out in small ways. We do not like people who offer to shake up our foundations and change our lives around from top to bottom.

I thought I was offering the ordinary sort of insight on the morning of May 13, 2002. I read some things in John Bogle’s book about how stock prices are determined and what I read told me that studies that did not contain adjustments for the valuation level that applies on the day the retirement begins could not possibly get the number right. I told my friends what I thought I had learned. I didn’t do it in even a slightly arrogant way. I didn’t even put forward a declarative statement. I posed a question. I asked my friends at the Motley Fool board: “Should we be considering valuations when calculating safe withdrawal rates?” I obviously believed we should be doing that, but I wasn’t certain and I didn’t pretend to be certain.

So I did nothing offensive. Zero. Nada. Zilch. There are Post Archives. This can be checked.

The problem is that the Buy-and-Holders had formed doubts in their own minds about those Old School safe withdrawal rate studies long before I came on the scene. They didn’t want to think about those doubts. They wanted things to go on as they had been going on during the huge bull. There were implications to what I was saying that they did not want to entertain. They wanted me to drop it and they made that clear. I didn’t want to drop it. I wanted to learn. I took the defensiveness as a sign that there was a lot to learn here. And the more I explored, the more I did learn. I learned amazing things. I generated insight after insight after insight.

In ten years, I revolutionized our understanding of how stock investing works.

I feel like I should apologize for that statement.

None of us are supposed to stand above all the others to that extent. None of us are supposed to be smarter or better or more ethical or whatever.

I cannot apologize. The insights that I have generated are too important. I am happy and proud to have produced them. So no apologies.

I can share credit. That’s honest. I obviously could not have done what I have done without huge amounts of help from people like Robert Shiller and John Bogle and Bill Bernstein and John Walter Russell and Wade Pfau and hundreds of other fine people. By no wild stretch of the imagination am I saying that I produced these amazing insights on my own or that I am smarter or better or more ethical than these other people. But I cannot deny the power of the insights. If our free market system is to survive, we need to make the shift to Valuation-Informed Indexing. I love our economic system. I cannot betray it by pulling a Wade Pfau and doing the popular thing and saying that perhaps Buy-and-Hold is not really all that dangerous, perhaps we will find a way to muddle through without Bogle ever having to say The Three Magic Words (“I” and “Was” and “Wrong”).

I violated a Social Taboo. I did too much. I generated investing insights of far too great a power. I made lots of smart and good and hard-working people look bad by doing so.

I cannot change that. I can offer the hand of kindness to these people. I can praise them to the skies. Because they have achieved things that justify me praising them to the skies. I can say that I love them and respect them and am grateful for all the things they have taught me over the years. But I cannot deny the power of the insights themselves. The insights are our salvation. The insights are the means by which we bring an end to the financial misery we brought on because of the ignorance about how investing works into which we were born and which we have only begun to rise above in recent decades.

People hate that. People are small that way. It’s one of the deficiencies of the humans. Some people will no doubt hate me even more for stating things so frankly here. Again, I cannot apologize. We need to get over the hate and start enjoying the benefits that come from learning about the insights. So it is my job to help interested parties understand where all this hate comes from. It comes from a place in the human psyche that hates, hates, hates, those of us who get too big for our britches. I am no investing expert. I am some guy whose only claim to expertise in this field is that I figured out what buttons to push to get my words to appear on other people’s computer screens. I am not supposed to know things that John Bogle does not know. And I obviously do. And so a good number of people hate me with a burning passion and for ten years now have not been able to give it up.

The third element is that the manner in which I tapped into all these powerful insights makes it seem so darned unfair that I was the one to develop them.

I contacted Dallas Morning News Columnist Scott Burns about my safe-withdrawal-rate findings in February 2005. The first two words of Scott’s response to my e-mail were: “You’re right.” He asked me in that e-mail for my telephone number so that he could interview me for an article. Then he got cold feet. Five months later, he published an article on the SWR findings but did not mention my name or include a link to my New School SWR calculator (“The Retirement Risk Evaluator”). Nor did he note his personal belief that I was right in my criticisms of the Old School studies; he presented the findings as if they had just appeared on the internet somewhere and as if he was not able to verify whether they were solid or not. This strange reaction on Scott’s part led us into an exchange of e-mails in which he offered a number of inappropriate personal comments.

Scott said that my efforts to get the discredited studies corrected would prove to be “catastrophically unproductive.” He said that the enthusiasm I evidenced re my efforts to give investors accurate SWR numbers demonstrated a desire for “personal aggrandizement.” Huh? Why would it be a bad thing to try to get discredited retirement studies corrected? And why would it be a bad thing to develop a calculator that offered access to the correct numbers?

The “problem” was that Scott knew for years that valuations matter. Shiller published his research showing that valuations matter in 1981. Scott was angry that I was using information that had been readily available to him for decades to produce the most powerful investing insights in history. How dare I? That could have been Scott Burns doing that!

Except it would have taken a level of courage that Scott Burns did not possess at that time for Scott Burns to have done that. What we have learned over the past 10 years is that offering good investing advice is not primarily an intellectual endeavor. The thing that makes stock investing hard is that we all possess an inclination to fall for Get Rich Quick strategies, and, once we fall for them, we become emotionally addicted to Get Rich Quick thinking. But we never lose the common sense that tells us that Get Rich Quick approaches always turn out badly in the long run. The true investing experts are not those who promote Buy-and-Hold strategies but those who warn us of their dangers.

The “experts” in this field are envious of Rob Bennett and the mountain of investing insights he has generated over the past 10 years by ignoring the ruthless attacks of The Buy-and-Hold Machine and by following the academic research where it led him. It would be dishonest of me to deny the power of the insights. So that cannot happen. It is the experts who have rationalized their continued promotion of the purest and most dangerous Get Rich Quick scheme ever concocted by the human mind for 30 years after the research showed that there is precisely zero chance that it can ever work for any long-term investor who need to make some changes.

These people are great people. They have a lot to offer. They have done good work in the past. They are smart. They are hard-working. They are good.

But they are going to need to get over their anger and envy and hate if they are to going to continue to do good work in the Valuation-Informed Indexing Era.

My hand is outstretched to all of them. There is nothing I would rather do than to work with them to help the millions of investors who were taken in by the Buy-and-Hold mumbo jumbo to learn what really works.

But I cannot bring about healing by agreeing to post dishonestly about the Old School safe withdrawal rate studies or any other critically important investment-related topic. It is the Buy-and-Holders who got it wrong. It is the Buy-and-Holders who have been behaving uncharitably and in fact shamefully for ten years now. It is the Buy-and-Holders who at this point need to extend the hand of kindness to get us out of the economic crisis brought on by their relentless promotion of dangerous and irresponsible and research-discredited investing strategies.

In the long run, all the ugly stuff will get blown away in the wind. It is the insights we have generated together over the past 10 years that will live on forever. We need to have the smartest people in this field united in their effort to spread knowledge of those insights to every middle-class investor. We need to get over our personal regrets over our earlier bad behavior and move on to better things and better days. All of us have a role in helping the Buy-and-Hold advocates come to recognition of why it is so important that they take that step soon.

We will all be viewed as Good Guys when we make it together to the other side of The Big Black Mountain!

The short version?

Some people need to get over themselves.

Academic Researcher Wade Pfau’s Responses to My Reporting on Our 16 Months of E-Mail Correspondence

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The purpose of this blog entry is to set forward in one place links to the responses that Academic Researcher Wade Pfau has made to my reporting on our 16 months of e-mail correspondence.

1) Wade’s first response came when I told him of my plans to report on our e-mail correspondence. He said of this e-mail at a later date: ““About that first email I sent you in our exchange, please under no circumstances try to summarize or excerpt from it. If you must use it, please include the entire message with nothing left out. I think that is only fair, because you will then have free reign for your rebuttal, and I won’t be around for further rebuttals to that.”

Juicy Excerpt: “I don’t have any hard feelings toward you, but it is hard to have public communications with you after all the attacks you made toward me at your blog following the Bill Bengen incident. You strongly misinterpreted what I wrote at your blog and attacked me so thoroughly, and that makes it hard to see any paths forward in communicating with you publicly.”

2) Wade’s second response came in the form of a post to his blog. In this blog, he praised John Greaney, the leader of the Goons, as the hero of our ten years of discussions on safe withdrawal rates.

Juicy Excerpt:  “Rob desperately wants someone besides him to say that the Trinity study needs to be “corrected,” but I’ve explained that this isn’t how research works. Rather, new studies with new methodologies come to replace old studies. This is a case, however, in which old studies were already available to suggest that we shouldn’t project the findings of the Trinity study forward to future retirees.”

3) Wade’s third response came in a comment to one of my blog posts reporting on our e-mail correspondence. I refrained from responding at the time on the thinking that it was more fair to let Wade have the floor to himself for at least that one blog post.

Juicy Excerpt: “You shouldn’t have posted my private emails. That is so unethical. And it really doesn’t help to build you up. Posting my outdated private emails will only give second thoughts to anyone in the future who might have been willing to give you the benefit of the doubt.”

4) Wade’s fourth response came in a comment to another of the blog posts reporting on our e-mail correspondence. In this case, I set forth my responses in comments that followed his comment.

Juicy Excerpt: “If I *did* lack personal integrity, I could have made this all stop just by saying the meaningless sentence you want so desperately to hear: “I think the errors in the traditional safe withdrawal rate studies must be corrected by using Rob’s analytically valid method.” But I don’t believe that.”

5) Arty, a long-time contributor of comments to my blog (and a mighty fine one!), offered a comment that I think can fairly be said to express Wade’s views. I suggest that those looking to understand Wade’s take re all this consider giving Arty’s comment a look. I responded to Arty’s comment at the blog.

Juicy Excerpt: “Speaking only from a human point of view, if Wade requested you not share personal correspondence, I hope you can find a way to honor his request for those things he wishes to remain between the two of you only…. we can discuss his work—as it should be on its own merits— without the private communications.”

I will be advancing my responses to a number of points raised by Wade (and Arty) in blog entries that I will post in coming days.

Addendum:  Wade posted a sixth presentation of his take on things in a comment made to a blog entry in which I reported on an article on my work that appeared at the The Big Picture blog. My take on the points raised by Wade’s comment follow as additional comments to that blog post.

Juicy Excerpt: Congrats Rob, It’s your finest hour. I hope you can learn a lesson from this. The blogger completely bypassed ‘the Wade Pfau story’ and wrote solely about the underlying investment ideas. In this regard, I’m glad to see his post. Your 1,000 email campaign probably would have been a lot more effective had you stuck to the issues that the blogger discussed, rather than turning it into a personal vendetta against me. No one likes to see a negative campaign.

Purcellville Police Warned of Possible SWAT-ing Attacks by Goon “Defenders” of Mel Lindauer and John Greaney

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I have notified the Purcellville police that I may be the target of SWAT-ing attacks by the internet goons who have advanced posts at various investing discussion boards and blogs in “defense” of Mel Lindauer and John Greaney, the two individuals who have led the 10-year-long Campaign of Terror against the Retire Early and Indexing discussion board communities and the Personal Finance Blogosphere.

Wikipedia defines SWAT-ing (or Swatting) as “an attempt to trick an emergency service (such as a 9-1-1 dispatcher) into dispatching an emergency response team. The name is derived from SWAT (Special Weapons and Tactics), one type of such team. Such action places law enforcement and citizens at risk and are criminal actions. In addition, it reduces law enforcement coverage and costs taxpayer money.” The Wikipedia entry explains that: “CNN interviewed Erick Erickson to discuss an incident in which he had been the victim of swatting. The caller to 911 claimed: ‘I just shot my wife, so…. I don’t think I could come down there…. She’s dead, now…. I’m looking at her…. I’m going to shoot someone else, soon.’ —911 caller. That incident prompted Sandy Adams to push for a Justice Department investigation.”

I am the person who discovered the errors in the Old School safe-withdrawal-rate studies (the studies do not contain an adjustment for the valuation level that applies on the day the retirement begins). I shared my discovery with my fellow community members at a Motley Fool discussion board on the morning of May 13, 2002. John Greaney, the author of one of the discredited studies, has for the past 10 years led a brutal Campaign of Terror against all board and blog communities that have shown an interest in discussing the errors in the Old School SWR studies. The effort was led at Indexing communities by Mel Lindauer, co-author of The Bogleheads Guide to Investing, who made a positive reference to the Greaney study in his book and who has posted in “defense” of Greaney and the Old School studies at the Bogleheads Forum discussion board.

When Academic Researcher Wade Pfau contacted the authors of the Trinity study (another discredited Old School SWR study) seeking a correction, the LIndauerheads and Greaney Goons threatened to send defamatory e-mails to his employer in an effort to get him fired. I have in recent months been reporting on my 16 months of e-mail correspondence with Wade, in which he made many references to the “hostile environment” he experienced when posting on the internet about his research findings showing that the Old School retirement studies get the numbers wildly wrong and about his fears that the Lindauerheads and Greaney Goons would be successful in their efforts to destroy his career if he did not agree to play ball with them.

Wade has announced that he will no longer be doing research on Valuation-Informed Indexing, the investing strategy that I developed as a result of the loss of confidence I experienced in Buy-and-Hold after seeing many Buy-and-Holders fail to speak up in strong terms in opposition to the Campaign of Terror (Wade’s research shows that Valuation-Informed Indexing has provided far higher returns than Buy-and-Hold at greatly diminished risk for the entire 140 years for which we have stock return data). He also announced that, while he still believes that the Old School studies get the retirement numbers wildly wrong, there is no need for them to be corrected. He has praised Greaney as the hero of the  10 years of discussions and has characterized me as “unethical” for insisting that the discredited retirement studies be corrected before they cause more failed retirements.

I have contacted the Purcellville Police re this matter previously — much of the history of my efforts to resolve the matter by contacting the appropriate authorities is described here. I have seen an escalation in the threats since I began reporting on Wade’s decision to capitulate to the demands of the Goons. On July 6, 2012, I received an e-mail containing the following text: “Coming.tanks 4 address and phone number.will help me find u.” One of the Goons recently started a thread at the site owned by Greaney setting forth this image in the thread-starter:

 

Greaney Site Gun Image

John Greaney’s argument for why there is no need to correct the errors in the Old School safe-withdrawal-rate studies

 

I have made public notice at earlier times that I expect to bring civil lawsuits for the recovery of damages to my internet writing business against the owners of web sites that permit Lindauer and/or Greaney “defenders” to post defamatory comments about me or about those who have posted in support of correction of the Old School studies or Valuation-Informed Indexing or in opposition to the Campaign of Terror against our board communities or who in some other way lend support to the efforts of Lindauer and Greaney to continue the ten-year cover-up of my discovery of the errors in the studies. I also expect to help the millions of middle-class investors who have suffered financial losses as a result of the 10-year cover-up to recover the financial damages they have suffered. And I of course will cooperate in any way I can at congressional hearings and in criminal proceedings against those who have posted in “defense” of Lindauer and Greaney.

I intend for this blog entry to put all concerned parties on notice that I would expect SWAT-ing actions to be considered in the criminal and civil and congressional proceedings that I expect will follow the next crash in the price of stocks.

Ed Rager, Mel Lindauer and Taylor Larimore to Rob Bennett: “You’ve Constantly Misquoted, Distorted, and Disrespected Jack Bogle and Bill Bernstein. Your latest Post “Jack Bogle’s Big Mistake” Was, in Our Opinion, the Final Straw. Jack and Bill Both Join Us at Our Private Events Because They Enjoy Meeting with Friendly, Like-Minded Diehards in a Relaxed and Secure Atmosphere….You Will Not Be Allowed to Attend.”

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While I was looking through my old e-mails to recover the ones that I sent to the Morningstar site administrators and reported on in the last few blog entries, I came across the e-mails that I sent to sign up to attend the Vanguard Diehards Conference with John Bogle in 2007. I had intended to ask Bogle questions about the cover-up of the errors in the Old School safe-withdrawal-rate studies, which I had reported on at a Motley Fool discussion board on May 13, 2002, and which have not been publicly acknowledged by the “experts” in the investing advice field until recent months. I thought that these e-mails too were worth reporting on. I did not receive a response to the question I posed in the last e-mail.

Set forth below are the texts of three e-mails: (1) the e-mail that I sent to Ed Rager on February 17, 2007; (2) the response that I received from Ed on February 18, 2007; and (3) the reply that I sent on Feburary 19, 2007.

Ed:

This is Rob Bennett (“hocus” on the boards). I’d like to make my reservation to attend Diehards VI.

I live in the area. So I do not need a hotel reservation.

My personal information is:

[….]

Please let me know what I need to do to transfer the registration fee of
$189.

Thanks for all the work you did putting this together.

Rob

Hi Rob:
Our Diehards get-togethers are private social meetings of friends and like-minded souls who love, admire, and respect Jack Bogle and his teachings.  You’ve constantly misquoted, distorted, and disrespected Jack Bogle and Bill Bernstein.  Your latest post “Jack Bogle’s Big Mistake” was, in our opinion, the final straw.  Jack and Bill both join us at our private events because they enjoy meeting with friendly, like-minded Diehards in a relaxed and secure atmosphere.  We want them to continue to enjoy and attend our private social events.  Therefore, we regret to inform you that you will not be allowed to attend.
Ed, Taylor and Mel
<br>
Ed, Taylor and Mel:Boo, baby!These statements are of course absurd.Have you notified Jack Bogle of what you have done?

If you have notified him, would you please let me know his reaction?

Rob

Rob Bennett to Academic Researcher Wade Pfau: “The Issue of Your Job Search Is NOT Entirely Private. It Goes to Motive… It Is of the Utmost Importance That We Make Clear to People WHY So Many Experts Fail to Speak Out Against Buy-and-Hold 30 Years After the Academic Research Showed That There Is Zero Chance That It Will Work for Any Long-Term Investor”

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Yesterday’s blog entry reported on an e-mail sent to me by Academic Researcher Wade Pfau on April 7, 2012. I sent a response within 20 minutes. The text is set forth below.

Wade:

I’m happy to use the entire text of the first e-mail, Wade.

Is it your preference that I run the entire text of your other e-mails?

Rob

Wade responded within 25 minutes. He said: “My preference is that you do not write about any of my emails!” He then identified the e-mail that he wanted me to run in full text. He said: “Beyond that email, I feel that my emails to you are meant to be private, and I don’t want them posted publicly. As long as you posted the entire above email first, please then just summarize any other emails I sent you without using quotes or excerpts. I wrote the first email under the assumption that you would post it publicly, but my other emails to you were written under the assumption they would be kept private. Also, please do not mention that I am looking for a job in the United States, as this is something I do not want my university to know. Some of these matters are very private!”

I responded the next day. The text of my response is set forth below.

Wade:

There obviously would be no good purpose served in reporting on matters that are entirely private.

The issue of your job search is NOT entirely private. It goes to motive. Most people have common sense and so most people understand that the price they pay for stocks must affect the value proposition they obtain from them. I have asked people why the general rule does not apply in the case of stocks. The answer I get is that “the experts say that is so and I presume that they know what they are talking about.” So it is of the utmost importance that we make clear to people WHY so many experts fail to speak out against Buy-and-Hold 30 years after the academic research showed that there is zero chance that it would work for any long-term investor.

The obvious (to those who have watched The Great SWR Debate) explanation is that the experts are AFRAID to express their honest views in public. It is  certainly not only you. You are in very good company. Bogle is afraid to speak in complete honesty. Bernstein is afraid to speak in complete honesty. Tressider is afraid to speak in complete honesty. Burns is afraid to speak in complete honesty. And on and on and on. (These are all great people who have provided many powerful insights — that should go without saying but I don’t think it hurts to say it often given the circumstances.)

This is the problem that has to be overcome. When this one is overcome, all our problems are over. We will not all be in agreement, nor should we be. But at that point all this ugliness will be behind us. We won’t be associated  with people who engage in death threats and defamation and board bannings and all this sort of thing. We will be free to do the work we all want to do and to feel good ourselves while doing it.

So THAT sort of thing I very much need to report on. That’s the thing no one else is doing. And it is because no one else is doing this important work that we are in an economic crisis today.

I offer this preface so that you understand where I am coming from. There is ZERO desire here to do anything to cause you any discomfort. I want to see you win the Nobel Prize. That will be one of the happiest days of my life. It is not going to happen until we get to a point where we are all posting in complete honesty and moving things forward at a good pace. I didn’t ask for the job of doing this important work. I was volunteered. I obviously have never been offered any other options. So I obviously just have to do what I have to do, even when it pains me to see that the situation as a whole has caused some pain for people whom I think of as good friends and good people.

I think it is probably possible to avoid mentioning your interest in a job in the United States. I can’t make a commitment at this moment because I haven’t given much thought yet to how these articles would be put together. But my first thought is that it would be okay for me to say something like “Wade mentioned a private matter that caused him to not want the articles to appear at this time.” I don’t at the moment see why people would need to know more than that. [Please see the note at the bottom of this blog entry re Wade’s blog post to understand why I ultimately decided that it was necessary to include Wade’s words re the job in the United States to tell this story in a complete manner.]

That’s not the case with the earlier threats by the Goons to get you fired from your job in Japan. Those threats appear to have played a big role in your move to the dark side. Those threats are already public. The Goons posted them at Greaney’s board for all the world to see. So that stuff is already public and serves as a powerful demonstration of the the power of the Goons to block the public’s ability to learn about very important matters.

One of my jobs is to bring lawsuits against the Goons and those who have permitted them to post at their sites and those who have failed to speak up when they posted at sites at which they post and thereby have lent credibility to the Goons. I think it would help to diminish people’s anger for us to see that there are prison sentences served by those who have posted in “defense” of the Goons on more than a small number of occasions.

A showing that the Goons made threats to get a respected researcher fired from his job for the “crime” of speaking honestly about a matter of great public policy significance and that the researcher did indeed feel intimidated by this threat is PRECISELY the thing we need to get before people to get the major political blogs writing about this story. I believe that this story is going to break as a political story rather than as an investing story because most of the owners of the investing blogs are too compromised by their desire to be on good terms with the hot shots in this field.

I am not going through all this to further inflame you. That’s the last thing in the world I want to do. I am going through all this in an effort to help you better understand how you have managed to get yourself entangled in some very, very dangerous and foul stuff. My personal belief is that your worry about the U.S. job is trivial compared to what is coming down the road. After the next crash, people are going to be very, very angry about what has been done to them and will be looking for people to hang from a tree. Anyone who has put forward words in “defense” of the Goons has set himself up for a world of pain at that time, in my assessment. I pray that my friends will soon catch on to this reality and cease engaging in further acts of self-destruction, Anyway, the purpose here is to help you understand the realities. If you are not capable of appreciating them today, I hope that perhaps you will reread this e-mail at some later date when you are in circumstances that help you come to a better appreciation of what is going on here.

I love you, man. I believe that my appreciation of your research is greater than your own (because I am in circumstances which permit me to see implications that follow from it that you are not able to let into your consciousness today). My hope and belief is that there will be a day when we are both on the other side of the Big Black Mountain of hate and anger and shame and guilt that separates us today and have a beer together and laugh together at the craziness that for a time caused us to think there was some significant difference in our self interests. I don’t think there is. I think we are very much on the same side, regardless of how things may appear to look on the surface..

If you have any further concerns or questions re what I will write  or what I have written, please always feel free to drop me a note. My aim is be FAIR both to my readers and to those I write about. I work that side of things very, very hard. I think about it and think about it and think about it. I lose sleep over it. So don’t ever think that I dismiss any request you make casually. Never do I do that. I obviously cannot promise to go along with every request. There are millions of people today who have lost jobs because of all this Buy-and-Hold garbage and I obviously need to worry about the career prospects of those people too. But I care about you and I will always remain open to spinning things in your favor to the extent that it is possible for me to do that in good conscience.

Hang in there. It is my strong sense that things are in the process of getting better. The Goons are feeling more and more desperate every day. Perhaps there will come a time in the not too distant future when all the ugly part of this will be behind us and we will have only the fun, fulfilling parts of the project to work together on. Let us pray!

Rob

This e-mail was my last communication with Wade.

Wade wrote a blog entry at his site making defamatory comments about me (while also making a number of legitimate points) on May 16, 2012:

http://arichlife.passionsaving.com/2012/05/17/wade-pfau-bennett-desperately-wants-someone-besides-him-to-say-that-the-trinity-study-needs-to-be-corrected-but-ive-explained-that-this-isnt-how-research-works/

He deleted the comment that I posted to that blog entry. I checked his site a few weeks later to see that he had deleted comments that I made to other blog entries at his site.

Academic Researcher Wade Pfau: “The Role of Valuations in Affecting Safe Withdrawal Rates Will Definitely Find Its Way Into the Retirement Management Analyst Curriculum…. As I Am in the Early Stages of Hoping to Return to a Job in the United States, I Do Request That You Tone Down a Bit Whatever You Will Be Writing About Me. I Am Just Concerned About What Potential Employers May See When They Google My Name.”

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Yesterday’s blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on April 6, 2012. Wade responded a few hours later.

He said: “Thanks for sharing.  And I’ll keep plugging away at this. I’m not sure if you saw the news before, but I recently became the curriculum director for the Retirement Management Analyst designation, which focuses on the post retirement period. I was surprised to learn that CFPs don’t learn about post retirement, and their curriculum doesn’t even cover things like the Trinity study. The role of valuations in affecting SWRs will definitely find its way into the RMA curriculum.”

I responded the next day. The text of my response is set forth below.

Wade:

Please take good care. You’re the best.

I will send you an e-mail when I post the articles. My intent will
obviously not be to stir things up. I just feel better if you hear
news that you might consider unpleasant coming straight from
me rather than finding out about it through some other means.

Rob

Wade responded the same day. He said: “As I am in the early stages of hoping to return to a job in the United States, I do request that you tone down a bit whatever you will be writing about me. I’m just concerned about what potential employers may see when they google my name.”

He added: “About that first email I sent you in our exchange, please under no circumstances try to summarize or excerpt from it.  If you must use it, please include the entire message with nothing left out. I think that is only fair, because you will then have free reign for your rebuttal, and I won’t be around for further rebuttals to that.”

Academic Researcher Wade Pfau: “The Reason I Contacted Them [the Authors of the Trinity Study, an Old School Safe Withdrawal Rate Study) Was To List Some Concern I Had (Valuations, Fees, 30-Year Time-Period) About Whether the Results of Their Study Are Applicable for Recent Retirees. I DIdn’t Think the Trinity Study Is Helpful for Recent Retirees. Now, I Think Even More Strongly Than Before That the Trinity Study Is Not Helpful.”

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Yesterday’s blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on April 7, 2012. I sent a follow-up e-mail one hour later. The text is set forth below.

Wade:

I thought of a way to reduce the long response I sent a few minutes ago to something much shorter. So I thought I would pass that along. Then I promise to shut up.

You sent an e-mail to the Trinity authors asking them to correct their study.

Why?

Rob

Wade responded the same day. He said: “‘I’m glad to see you’ve pulled back your troops as it seemed you’ve been trying to start a war with me when we really have nothing to be fighting about.”

The e-mail continued: I” don’t have any problem with what you wrote in your last message, except that I have a slightly different view about the issue of correcting old studies. The way I think that is best done is to provide new research to replace the old research. On the issue of old school SWR studies, that is what I tried to do with my August 2011 Journal of Financial Planning article. Now it is just a matter of getting the word out about it, and the results from that article have been featured in the Wall Street Journal and SmartMoney. In June I’ve been invited to speak to a group of high level people from a bunch of different finance companies about this same topic. I’m doing what I can.”

Wade explained: “You asked about why I contacted the Trinity authors. I’m not sure why you even feel a need to ask. It seems like you’ve decided in your mind that I’m a Goon when I’ve not changed my outlook on this or any other relevant issue. The reason I contacted them was to list some concerns I had (valuations, fees, 30 year time period, etc) about whether the results of their study are applicable for recent retirees. I didn’t think the Trinity study is helpful for recent retirees. Now, I think even more strongly than before that the Trinity study is not helpful.

He concluded: “This is why I’m so confused about your attitude toward me since the Bill Bengen incident.”

Rob Bennett to Academic Researcher Wade Pfau: “People Cannot Live In This Sort of Dishonesty Forever. What We Are Going Through Is a Temporary State. It Will Change After the Next Crash. Then Things Will Be Flipped. There Will Be Lots of Angry People Demanding the Heads of Those Who Failed to Speak Up And I Will Be the One Asking for Mercy and Asking People to Understand the Pressures That People In This Field Faced.”

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Yesterday’s blog entry reported on an e-mail sent to me by Academic Researcher Wade Pfau on April 5, 2012. Wade sent a folow-up e-mail later the same day.

He said: “Coincidentally the article stemming from that January 2011 blog post was published today. I’m attaching it and you can find your name on page 12 of the PDF. So please take it easy and don’t act like I’m an enemy of you or anyone because I don’t agree with 100% of your views.

Here is the link for the article:

http://dx.doi.org/10.1080/09603107.2011.648317

I responded the next morning. The text of my response is set forth below.

Wade:

I am of course grateful for the mention in the paper. Thank you.

I wish that you could read the paragraph that makes the mention through my eyes. You thank the Bogleheads, which is appropriate. And you thank Rob Bennett, which is appropriate. But there is something
horribly wrong being conveyed with those words.

I am a Boglehead, Wade!

The way it should be is that, when you are thanking the Bogleheads, you are thanking me because I am one of the leading voices in that community. I am not saying that you should have taken on that question in that paragraph. That obviously is not the place for it. But the idea that there is some distance between the Bogleheads concept and the Rob Bennett concept is the problem that is holding us all back .

You of course ran into the same thing. You posted some wonderful research at Bogleheads and Mel Lindauer suggested you had doctored the results. You came back at him in a firm way. That was one of your finer moments. That’s what we need. We need people speaking up to that segment of the Bogleheads community that opposes integration with those who accept and explore the message of the last 30 years of research.

We cannot have two camps. Wade. We can of course have disagreements within a single camp. That is healthy and to be expected. But we cannot have two camps. The same research applies for everyone. Investing works in the same way for everyone. Everyone must favor learning and therefore everyone must favor permitting all voices to be heard.

This is why it is so important that the Old School SWR studies be corrected. A big part of it is that we don’t want to see millions of failed retirements. We don’t want to be dishonest to our customers, the people who make use
of the research. But another very important consideration is that we don’t want to be dishonest with OURSELVES. Mistakes are a wonderful thing. They bring on learning experiences. Mistakes that are covered up do not bring on learning experiences. They bring on rigidity. Our participation in cover-ups undermine all the good work we do.

You didn’t create this problem. I obviously understand that. But you are part of it whether you like the idea or not and whether you think that is fair or not. Every single person working in this field today is affected by this problem. The work of each and every one of us is affected. How we deal with this problem determines to what extent the implications of our work can be explored and to what extent our findings can be heard and put to good use.

You have a part to play. I do too. My job is to REPORT the story. It’s an important job. I take pride in it. I cannot yield to pressure to perform my job dishonestly.

It is dishonest not to correct a study that gets the numbers that people use to plan their retirements wrong, Wade. That is not  a controversial statement. It is an OBVIOUSLY true statement. The strange thing is that you don’t hear lots of people saying that today, only me. That’s exceedingly odd. But the oddness of our circumstances does not change the objective reality. The Old School studies must be corrected and we must make an effort to learn from the mistakes that caused them.

That’s how we achieve healing. That’s how we bring everyone together. That’s how we learn how to interact with warmth and kindness and good cheer and good humor. That’s how we become able to feel good about our futures again and about the work we all do.

If I were to say that it doesn’t matter much whether Bill Bengen corrects his study or not, I would be dissing Bill Bengen. I would be saying that his work doesn’t matter much or that I have such a low opinion of his ethical standards that I never expected him to be able to adhere to the most basic social norms. I’ve obviously never said such a thing about Bill and I obviously never will.

I would have been saying the same sort of thing about you if I reacted any other way to your statement that it was “harsh” of me to insist that Bill correct his study. I’ve obviously never said such a thing about you and I obviously never will.

This is a people business. People cannot live in this sort of dishonesty forever. What we are going through is a temporary state. It will change after the next crash. Then things will be flipped. There will be lots of angry people demanding the heads of those who failed to speak up and I will be the one asking for mercy and asking people to understand the pressures that people in this field faced and all this sort of thing.

Everyone working in this field today wants to fix this problem,  Wade. Even the Goons want to fix it. They obviously won’t say so in direct words. But there is a part of them that wants to fix it. I talk to them every day. I know.

We cannot fix it in a day. I understand that. We need to be making consistent, measurable progress. We can’t settle for less than that. We need to work up enough courage to be able to insure that at least that much is being achieved at all times.

I am a Boglehead, Wade. If you have gotten in the habit of thinking otherwise, that’s a problem. It’s a trick that the Goons have played on you. We are all working toward the same goal and that needs to come through. This is your problem. Not
just yours. But it is the problem of everyone who works in this field and you are such a one.

I am always going to have the hand of kindness outstretched and I am always going to be willing to do whatever I can do to get things back on the right track. I am never going to be willing to post dishonestly on safe withdrawal rates. It is
an insane thing that pressures were ever exerted on me (or you or anyone else) to do such a thing.

I wish you all the best, my man. I am always available to talk over any aspect of this with you or with anyone else who sees opportunities to take things to a better place.

Rob

Academic Researcher Wade Pfau: “I Don’t Have Any Hard Feelings Toward You, But It Is Hard to Have Public Communications With You After All the Attacks You Made Toward Me At Your Blog Following the Bengen Incident…. I Have No Idea What You Mean When You Mention Including Me in Lawsuits, As I’ve Been Nothing But Supportive of You.”

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Yesterday’s blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on April 5, 2012. Wade sent his response later the same day.

He said: “I don’t have any hard feelings toward you, but it is hard to have public communications with you after all the attacks you made toward me at your blog following the Bill Bengen incident. You strongly misinterpreted what I wrote at your blog and attacked me so thoroughly, and that makes it hard to see any paths forward in communicating with you publicly.”

I argued in the blog entry to which Wade here refers that Bill Bengen, the author of the first of the Old School safe withdrawal rate studies, should correct his study now that he has publicly acknowledged that it is in error and gets the numbers people use to plan their retirements wrong. Wade at an earlier time agreed with me that retirement studies that get the numbers wrong should be corrected and he wrote the authors of the Trinity Study, another Old School safe withdrawal rate study, about this. John Greaney and some of the other Goons then threatened to get Wade fired from his job by sending defamatory e-mails to his employer. Wade sent me several e-mails at the time saying that he was concerned that he would indeed lose his job a a result of the smear campaigns of the Goons. He has known about the smear campaigns against me since before we began out e-mail correspondence and has told me on numerous occasions how he is fearful of saying positive things about me and my work at the Bogleheads Forum because of the brutal attacks that he knows will be visited on him if he posts honestly on these questions. Here is a link to the blog entry in which I argued that Bengen should correct his study and the 100-plus comments that were posted to it:

http://arichlife.passionsaving.com/2011/12/27/bill-bengen-buy-and-hold-in-these-environments-is-an-invitation-to-disaster/

I presume that that is the thread that Wade was referring to. That was the one in which I became aware that the Goons had flipped him. It is likely that he is referring to this one as well, which focuses on Wade rather than on Bill and which refers to the position Wade adopted in the Bengen thread (that there is no need for those who author retirement studies that get the numbers wildly wrong to correct those studies when they learn of errors made in them, even though the false claims are going to cause millions of middle-class people to suffer failed retirements):

http://arichlife.passionsaving.com/2012/02/28/wade-pfau-does-not-post-with-full-honesty-at-the-bogleheads-forum/

The e-mail stated: “Related to this, I do wish to kindly request that you don’t use my name so much on your blog, as I would prefer that when people Google my name they didn’t see claims that I’ve joined the Darkside and am posting dishonestly and am causing failed retirements and so on. None of that is true anyway, and it could really hurt if I ever try to find a job and return to the United States one day. Perhaps, if you must keep writing about it, could you please call me WDP or something like that?”

Wade continued: “Regarding that January 2011 blog post, it was very preliminary with ugly graphs and I re-wrote it in March 2011. I didn’t understand why you kept referring to the outdated version anyway. My changing the contents to refer readers to the newer version had nothing to do with wanting to remove your name. I mostly didn’t like the graphs for the old one. If you really care more about seeing your own name than seeing the best presentation of the results, you can still find that original version in the Bogleheads thread on long-term market timing, since I posted it at both places at the same time. I didn’t edit it at Bogleheads. And your name still appears in the research article versions, including in Journal of Financial Planning and still forthcoming in Applied Financial Economics, which in my view is what matters most. Also, in January 2011 I still thought that Valuation-Informed Indexing I was all your creation, and it was only later that I internalized that this is old stuff since the stock formula plans of the 1940s and 1950s. VII is Lucille Tomlinson’s variable-ratio plan from 1953. I have no idea what you mean when you mention including me in lawsuits, as I’ve been nothing but supportive of you.”

He further explained: “I do believe I am still on the Good Side. Planners have been receptive to the idea that 4% is not safe in recent years. I’m getting the message out. More broadly, I am tackling this from the angle that people need complete retirement income strategies that move beyond just considering a safe withdrawal rate. You might be surprised that outside of this small circle of safe withdrawal rate research, there are many people who think that the whole idea of 4% being a safe withdrawal rate is just ridiculous. Retirement income plans must work by construction, it is not enough that they just would have happened to work historically. Drawdowns from a volatile portfolio are inherently risky. There is no safe withdrawal rate from a volatile portfolio. It all goes back to arguments about investing made by Paul Samuelson as far back as the 1960s or earlier. He discovered the “errors” of the old school SWR studies (in the sense of projecting those results forward for future retirees) before they were ever written. Your insight about valuations is important and useful and I still discuss it, but it is ultimately just one piece of a much broader story.”

The e-mail concluded: “So please don’t worry so much about me. I’m still working to help Americans achieve sustainable retirements.”