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: #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.

Rob Bennett’s Responses to Academic Researcher Wade Pfau: #1 — Wade Pfau Is a Smart and Brave and Generous Man Who Has Published Research Worthy of a Nobel Prize

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I get sick of hearing myself say bad stuff about my friend Wade Pfau. So, for this post, I am taking a break from that stuff and focusing on the other side of the story. This one should be easy to write.

Academic Researcher Wade Pfau is smart. He’s hard-working. He’s brave. He’s generous. He’s kind. He is a super guy.

I say Wade is smart because he recognized the power of Valuation-Informed Indexing soon after we began our e-mail correspondence in December 2010. Actually, he recognized it before that. Wade learned about me by reading my posts at the Vanguard Diehards board and at some other places. Goons were attacking me relentlessly at those places. A lot of people fell for their b.s. Wade did not. He saw through it. He knew that I was onto something and he wanted to know more. And, after we talked things over a bit, he knew what to do with the insights he picked up. He developed research proving the superiority of Valuation-Informed Indexing over Buy-and-Hold in record time.

Wade LOVED talking this stuff over. He loves his work. He is good at it. He helps people. We need more people in this world who are as good at what they do as is Wade.

Wade is ambitious. This is the first thing I said to my wife about him when he contacted me and we got to know each other a bit. I mean this 100 percent in a good way (there is a good way to be ambitious and a bad way to be ambitious — Wade is ambitious in the good way). I am ambitious. I like people who are ambitious. I have had other people show interest in my work and then see their efforts not go anywhere because they did not push hard enough. I could tell from the start that Wade was going to push if he discovered reasons to do so. There are lots of obstacles that hold back positive initiatives. We need ambitious people to break through to the other side. Wade has done that and has helped us all by having what it takes to push past obstacles.

Wade is generous. He made it a practice from my first contact with him to thank all the people who helped him with his research. I never insisted that Wade acknowledge me in his research papers. I never even asked that he do so. He ALWAYS did so.

Wade also always thanked the Bogleheads Forum community in his research. That was a super thing to do. What we most need to do is to heal the rift that has developed between Buy-and-Holders and Valuation-Informed Indexers. We are all on the same side. We all want the same things. We all believe in research-based investing strategies. Wade’s policy of thanking people on “both sides” was a great way to heal wounds. It didn’t totally achieve its intended goal. But that’s not Wade’s fault. He did his part. It SHOULD have worked. It was a smart initiative.

Wade is kind. He has said some nasty things about me in recent days (I understand that it is his view that I have said some nasty things about him). I do not believe that he ever enjoys saying those things. He wants to be friends. He does not like conflict. He didn’t go into this field to engage in battles. He wants to do his research, see it help people, and go on with his life. This is 100 percent understandable and healthy. He did nothing to create the unfortunate set of circumstances in which he has found himself.

Wade’s research is going to win a Nobel prize. I don’t know when. I hope soon. The sooner this happens, the better things will go for all of us. Few people appreciate today how important Wade’s research is. My sense is that even Wade does not fully appreciate this. His understanding of what he has done will grow over time. So will the understanding of lots of others. Lots of people who today don’t give Wade the credit he merits will one day look back embarrassed at what they overlooked when they first came across his research.

Wade is brave. I have been trying for years to get people in this field to write to the authors of the Old School safe withdrawal rate studies and DEMAND (not just ask for!) corrections. Wade was the first to actually do this. I haven’t seen the text of his e-mail. I am sure he was 100 percent polite. He probably asked rather than demanded. Fine. He’s the first person in this field to do anything along these lines. That took guts. That made a difference (it scared the Goons out of their pants, that much is for sure!).

I am proud to be able to call Wade a friend. I much enjoyed our friendship and learned much from it. I will always look back at the 16 months of our e-mail correspondence with fondness and with a good feeling about what can be accomplished in a short amount of time when the internet is used for its potential to help people with mutual interests in doing important and good work to connect with each other.

Wade Pfau is a super guy who has done super work. That is written in the books and can never be changed.

Don’t forget! If you ever do, you’ll have Old Farmer Hocus to answer to!

 

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.

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.”

Rob Bennett to Academic Researcher Wade Pfau: “You Feel That I Am Questioning Your Ethics. I Am! Not Just Yours, Though. I Am Questioning the Ethics of Every Person Who Has Seen That Those Studies Have Not Been Corrected and Has Failed to Do Anything About It. The Entire Field Is Corrupt, Wade.”

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Yesterday’s blog entry reported on an e-mail sent to me by Academic Researcher Wade Pfau on April 6, 2012. I responded within an hour. The text of my response is set forth below.

Wade:

Thanks.

I need to get out the door to attend some Good Friday services.

I will get back to you either late today or more likely tomorrow.

I didn’t want you to think that I was not responding because of some sort of anger or something.

Rob

I sent a follow-up response later that day. The text is set forth below.

Wade:

I agree 100 percent when you say “I’m doing what I can.” You have done numerous hugely constructive things. There is no one I can think of who has done more.  Re this there is zero dispute.

I agree to a point and disagree to a point when you say that “the way that is best done is to provide new research.”

Providing new research is certainly constructive. That’s clear’y a  great thing to do.

But is that response mutually exclusive with the response of pointing out the errors in the Old School studies and getting them corrected?

I put up the post pointing out the errors in the Old School research on May 13, 2002. The Retirement Risk Evaluator was published a few years later, MANY years prior to the many recent media reports that finally
report that the Old School studies get the numbers wrong.

I am not a researcher. I did not have the skills needed to create that calculator on my own. If I had not put forward a post pointing out the errors in the Old School studies, John Walter Russell would never have started doing his research and we would not have that calculator today.

ALL of Russell’s research (some of the most important research that has ever been done in this field, in my assessment) exists because I put that post to that board and we thereby connected. It’s the same with the Return Predictor and the Scenario Surfer and my 200 podcasts and every entry in my three weekly columns. None of that material would exist if I had not had help from John and from hundreds of other community members who connected with me because of that post
and the discussion it generated (still going strong today ten years later!).

And to the extent I have helped you, that help wouldn’t have been provided had I not written that post. Anything that you read by me from my Vanguard Diehard days was the product of work effort that followed from the May 13, 2002, post.

You are doing fantastic work, Wade. I know I have said this many times and I know that I have never said otherwise because the thought that there could be an otherwise has never entered my brain. But there
are many roads to Dublin, to quote a phrase. Pointing out the errors in the studies is important work too.

Say that we get the ban lifted. Microlepsis was one of the most effective and most popular posters at Diehards. John D Craig was another. Retire at 48 was another. All were banned when the board moved to Bogleheads. It’s not just Rob Bennett who would be posting there if honest posting were permitted. Lots of people who were banned because they posted honestly would be there and lots of people who silence themselves on important points today would be speaking up if there were not punishments exacted for doing that.

Rober Shiller has said in interviews that he has never told us all he knows about investing because he would be considered “unprofessional” if he did so. Robert Shiller! This guy has tenure! At Yale! And he doesn’t dare cross the Goons. There is a serious problem here, Wade.

You do something very smart in seeking feedback at Bogleheads. It’s a great way to learn about the strong and weak points of a line of research before getting too formal with it. That’s a huge plus of this new communications medium that I’d like to see lots of people taking advantage of.

But not at the price of their personal integrity! Death threats? Defamation? Threats to get people fired from their jobs? Huh?

This stuff is not slightly unethical, Wade. It is so far over the line that, if we tolerate this stuff, there is no longer a line. We cannot become cannibals. When we give a Lindauer or a Greaney veto power over what is said on the internet, we compromise  ourselves in very, very serious ways. This is a money field. This is not a field in which any of us can afford to do that.

Research must be subject to challenge. If it’s not, it’s not science. You submit yourself to peer review. What the heck good is peer review if there is an understanding that research done in this field is never to be corrected no matter how wrong and dangerous it turns out to be?

I’ll tell you why I think you got upset about the Bill Bengen thread. I think you know on some level of consciousness that I am right. And I think you feel that I am questioning your ethics.

I am! Not just yours, though. I am questioning the ethics of every person who has seen that those studies have not been corrected and has failed to do anything about it. The entire field is corrupt, Wade. That sounds like an extreme statement but it really is just a statement of obvious objective fact. So many people got so many things so wrong that we have all adopted a  policy of not “telling” on anyone. So the mistakes just get worse and worse.

I want to take it the other way.

That does NOT mean that I have it in for Bill Bengen or John Bogle or John Greaney or anyone else. I do not. I like all those people. I’ve learned from them all. I am trying to help them all.

I suggested to Greaney very early on that he join me in writing a New School study. He would be famous today! He turned me down. But he could have done that.

Bengen can do a new study. He can make it better than his old one. I would be thrilled to help him out. I bet you would be too. I bet the entire Bogleheads board would be if a few troublemakers were shown the door first.

The learning process begins with the admission of mistakes. There is nothing whatsoever bad about admitting mistakes. People would LOVE Bill if he would openly admit his mistake and then get about the business of doing a better job. People would love Bogle if he would admit his mistakes and then get about the business of doing a better job. This sort of thing is done in other fields ALL THE TIME. It’s InvestoWorld that is weird.

I’ll tell you the core problem.

We are in the early days of understanding how stock investing works. Our knowledge today is primitive. We do not know it all. And that scares us. So we act like we do.

If we could just admit that, we could learn bunches. By getting so full of ourselves, we close the door to all sorts of wonderful advances.

There are lines of research that you cannot even imagine today. You are thinking too small. You are trying to follow in the footsteps of people who came before you when you have the opportunity to go to places to which they never went.

Yes, do that new research. That’s A+ stuff. But also please try to understand that it’s important that we get lots of other people doing A+ research. And to do that, we need to make clear as a community that we don’t think we know it all, that we understand that the purpose of the research is to help investors and that part of our responsibility in that regard is to correct mistakes and that we all favor the openness to new ideas that has long been characteristic of our society outside of the investing realm.

Does any of this make sense? Does it click?

It’s not “Do new research” or “Identify problems with old research.” It’s both! Both things are wonderful. Both things are needed. The idea that there is something wrong with admitting a mistake or something mean with pointing one out is killing us. I’m proud that I was the person who discovered the errors in those studies! And properly so!

Rob

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: “I Strongly Believe That There Are Things You Must Do and Things You Must Not Do to Protect Your Reputation As An Ethical Person. I Believe Today That There Is Serious Reason to Question Whether You Have Managed to Stay on the Right Side of the Line…. Are You Insane, Man? Please Think!”

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Yesterday’s blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on January 1, 2012. My next e-mail to Wade was dated April 5, 2012, and was titled “Concerns Re You Going to the Dark Side.” The text is set forth below.

Wade:

I hope things are going well with you.

This e-mail will not be a pleasant one to write (or to read). I don’t think I have any choice but to write it, given recent developments.

Before I start, I want to state the obvious preface. I have great feelings of respect and affection for you personally and I admire your research work probably more than anyone else alive on Planet Earth today. In ordinary circumstances, that would be the basis for a wonderful relationship. As you know, there have been things that stood in the way of that since our first communications. Those obstacles have always saddened me. My strong sense is that the problem side of the relationship has grown much worse since your postings at my blog re whether Bill Bengen should correct the errors in his SWR study. The purpose of this e-mail is to (1) attempt to confirm whether that is indeed the case or not; and (2) get some things off my chest that I need to get off my chest to fell that I have always dealt with you in good faith.

You are of course aware that there has been an organized effort on the internet to destroy my reputation which has been led by Mel Lindauer and John Greaney  and which has made it impossible for me to earn a living for 10 years now. I believe you know that I plan to bring lawsuits against the sites that have permitted the Lindauerheads and the Greaney Goons to engage in defamation and death threats and other tactics to block numerous board and blog communities from learning what they need to learn what the last 30 years of academic research says about safe withdrawal rates and other important investment-relarted topics.

I believe that we all have a responsibility as part of the ethical demands of our respective professions to speak up when we see this sort of behavior. I have of course spoken up. You have spoken up on a few occasions in small ways but generally have kept quiet re this aspect of things. It’s not easy to say where precisely the line should be drawn re speaking up or not speaking up. My problems are of course not your problems and I of course do not expect you to feel as  great a concern re this aspect of the question as I feel since I am directly involved. That said, I strongly believe that there are things you must do and things you must not do to protect your reputation as an ethical person. I believe today that there is serious reason to question whether you have managed to remain on the right side of the line.

I was questioned the other day by one of the Goons as to whether we were still in e-mail communication. My answer was that I presumed we were. I don’t recall us having a back-and-forth discussion since the day you posted on the Bengen blog post. My recollection is that I sent you a copy of an e-mail that I sent to a visitor at my site because he referenced you in the e-mail and I wanted you to see both his words and my words. I did not receive a response to you re that e-mail but I did not see that as being a big deal.

Today, I was communicating with another financial blogger and wanted to send him a link to the blog post in which you explored Valuation-Informed Indexing and found that it beat Buy-and-Hold in 102 of 110 of the rolling 30-year time-periods in the historical record. As you obviously know, this post of yours was a big help to me in trying to overcome the Campaign of Terror against me and the many board communities in which numerous community members have expressed a desire that honest posting on SWRs and other valuation-related topics be permitted. The goal of the Internet Sewer Rats has been to persuade my potential readers and customers that I have not done important work and your mention of my name in a post that shows that I was right all along made it impossible for them to continue to maintain that position.

You have removed my name from the post. Why?

You of course have a right to re-write posts. In this case, however, the action is an exceedingly odd one. You have been attacked by Lindauer yourself. You have acknowledged in posts that Drip Guy has sent you e-mails and you have changed positions you have taken in discussions at the Bogleheads board as a response to his threats. When you contacted the Trinity authors about correcting the errors in their SWR study, the Greaney Goons put up posts threatening to get
you fired from your job if you followed through and you then retreated from your position after letting me know that you were indeed concerned that you might lose your job as a result of their actions. We of course both know that the Sewer Rats have employed similar tactics in numerous other cases.

I believe you are making a huge mistake, Wade.

Please don’t hear that as a threat. I hope you will hear it as a friend speaking to a friend. I said similar words to Greaney 10 years ago and he is where he is today because he ignored those words (Greaney was my personal friend in earlier times). I said similar words to Lindauer. It breaks my heart to see another one of my friends take this horrible path. Are you insane, man? Please think!

I am a journalist, Wade. My job is to tell this story in as honest and as complete and balanced way possible. I take the responsibilities of my profession seriously and I will honor them. I WILL let personal friendships influence me (I have done
this with Greaney on many occasions). I think it would be inhuman of me not to do so. But I WILL also honor my responsibilities to my readers.

There are millions of middle-class people who have been done great harm by this economic crisis. They need to know the story here. The hardest question for them to understand is — Given that the academic research has shown for 30 years that Buy-and-Hold can never work for any long-term investor, why are there still people today advocating it? I need to tell BOTH sides of that story. That’s my job.

My strong hunch is that you would prefer to stick to the research and keep away from all this ugly junk. Guess what? Every single one of us feels the same way. The full reality here is that the reason your research has not received the attention it merits (I understand that you have received a great deal of attention and that that attention is fully deserved) is because people cannot come to terms with the ugly, emotional side of all this. If our free market economy is to survive for much longer into the future, we all need to work up the courage to deal with that side of things. We need to do so with love, to be sure. But we need to do so with honestly as well. There is no other way.

If I hear a response from you that indicates that you want to deal with the issues at stake here in a responsible way, I will do whatever I can to put in place a process that will work to help every single person involved come out of this looking as good as it is today possible for them to look. That’s the love part of the formula.

The honesty part of the formula is that, if I do not hear from you, I need to report on what you have done in this case and in your other interactions with the Goons on the Bogleheads Forum and elsewhere. I hate being put in these circumstances as I know you hate being put in these circumstances. The bottom line here is that these are the circumstances into which we were born and we both need to work up the courage to make the best of them.

Please always know that, if you see something that I have written and you feel that I have not told things in a precisely fair way, I will be thrilled to give you space in the article or blog post to tell your version of events in your own words. My preference is that it be done in that way.

Please also know that I will of course always respect the work you have done. I very much still believe that you are someday going to win that Nobel Prize and that we are going to see your name on the front page of the New York Times. It will be a great day for all of us when that happens.

Please also know that I will do everything I can to slant things as much as I can in your favor without failing to honor my obligation to my readers to provide them with the detail they need to hear to  make sense out of the amazing circumstances that apply in InvestoWorld today.

Please also know that I will always think of you as a friend and will always wish the best for you and will always be\ honored to be associated with you in any way (even if this crazy mixed-up world of ours puts me in circumstances in which I need to name you in lawsuits at other times!).

I will close by letting you know of three things that I have in mind at the moment (the purpose of this e-mail is to assure myself that I have done every last thing that I can do to avoid going ahead with these steps):

1) I am going to start a thread at the Goon Central board letting them know that I have sent you this e-mail (without posting the text).  Drip Guy asked me about you directly yesterday, which suggests to me that he feels you have been compromised. I argued yesterday that this was not the case. I don’t want the Goons thinking that I play games re this sort of thing and I have been careful always to respond honestly to their questions. So I think I need to let them know that my sense of where things stand has changed as a result of what I learned today;

2) I expect to post the text of this e-mail at my blog within another week or two. This is obviously an important development in the saga. If you have indeed gone to the Dark Side, that is a major win for the Goons, who have been feeling greatly weakened in recent months aside from this development; and

3) I am in the process of writing a long article that will detail 101 incidents of this nature (you are not the only one who is afraid of what the Goons will do to your reputation if you state your honest beliefs about investing in clear terms!). You are certainly not the focus of the piece. But my expectation is that you will be mentioned in five or so of the incidents. I just want you to know that that is in the works as I feel that each time we go a step down the dark path, it makes it harder to move to the better path for all concerned. How I wish that others could see this point as clearly as I do!

The Goons are not going to win, Wade. They CANNOT win. If we don’t help people learn what they need to learn about stock investing, the numbers show that the whole thing is going to go down (please ask if you have questions about this
aspect of things). There was a big change in people’s attitudes after the 2008 price crash. I’ve been doing this for 10 years and I can tell you that nothing had as much impact as that. The next crash is going to hurt worse (because it follows on
so many down years) and is going to cause a much bigger change in public opinion. You want to be positioned on the right side of things when that happens. We are going to need to act quickly then and we need you working with us!

If you have particular concerns or questions, please let me know of them and we can do out best to resolve them when they can be resolved with relative ease.

I cannot post dishonestly on safe withdrawal rates. It is insane that I was ever asked to do this and it is insane that there is even one responsible person who ever thought that it might be possible that I would go along with such a demand. Just
about anything else is negotiable because, once we achieve the right to post honestly on that topic, a lot of the ugly feelings of shame will dissipate. I cannot give an inch on that one. For reasons that should be obvious to all reasonable people.

Sorry for the long e-mail. I hope it leads to good things!

I wish you the best in all your future endeavors, my good (non-Goon, please?) friend!

Rob

Rob Bennett to Academic Researcher Wade Pfau: “I Do Not Think He [Harold Evensky] Goes Nearly Far Enough in Warning People of the Dangers of the Old School Safe Withdrawal Rate Studies”

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Yesterday’s blog entry reported on an e-mail that I sent to Academic Researcher Wade Pfau on January 1, 2012. I sent a follow-up e-mail later the same day. The text is set forth below.

Wade:

I’ve now had a chance to look at the paper.

I am certainly glad to see his positive comments re your work. He is advancing the ball by pointing people to a new way of thinking about retirement planning.

I do not think he goes nearly far enough in warning people of the dangers of the Old School SWR studies. My view is that many just do not seem to get it yet that VII and Buy-and-Hold are OPPOSITE models. People are trying to work out the differences between them. Buy-and-Hold and VII are a fork in the road. You take one path or the other. The two choices take you to very different places.

My sense is that people who have gained “expertise” (I put the word in quote marks because there can be no true expertise in this field until our understanding of how stock investing works advances to something less primitive than what it is today) under the old model find it painful to acknowledge that most of what they have learned and taught was discredited by Shiller’s findings.

I wish that people could respond to the things we have learned in more positive ways. It’s not even a little bit true that the time spent learning about the Buy-and-Hold stuff was wasted. There were important insights mined in those days and people who understand them well have a head start in learning about the new model. Also, those who get involved in developing the new model obviously will be miles ahead of those who jump aboard the train years later. Many people see
only threats to their status. I see huge (and I do mean huge) opportunities.

That’s my take, for good or for ill. I greatly appreciate you thinking of me. As I noted in an earlier e-mail, it makes me feel less lonely in my never-ending struggle when someone like you does that. It means a lot to me.

Please take care.

Rob