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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 05:09 PM   #81
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by Cut-Throat
I do have to disagree with you on one large point however. I don't think being aware of your investments and running FireCalc is an indication that you'll change your your Investments when they go south. Hopefully they will change your spending. I think those of us who are aware of our investments and aware of History and our emotions would be most likely to stand there and Do Nothing. Time will tell however. I plan on doing nothing, also recognizing that as the market drops, so does the risk of being invested in it and the more likely that it will rise.

When looking at the period of 1966-82 - When the S&P 500 did nothing. It actually did quite a bit. It managed to stay even with Inflation (which was quite hefty during this period).
CT, I'm not so sure the 66-82 period kept up with inflation but that's another story (equity value was dead flat so dividend yield would have had to match inflation, yes?). I do think that a protracted downturn or flat market would severly test the typical devotee of this site who goes far beyond just "being aware" of his/her investments. We all claim to have a long term outlook but we monitor the pile far more frequently than we need to or should. Why? If you have a 15 year outlook why monitor things every 6 days or even every 6 weeks? Think about the underlying mindset behind that excessive awareness.

Think about your core diversified index investment falling far behind after 10 years while certain sectors are winning out. Could you stand pat for that long, or would you abandon the Berstein game plan and shift to the gaining sector or some other theme? 10 yrs is a heck of a long time for us impatient boomers who are over-aware of everything minute to minute and have never experienced the real plane crash.

I believe that different people will respond differently to a potential protracted downturn, but I'm pretty sure their core values and their investing/work/ER/R mindset will change from what they originally imagined.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 05:21 PM   #82
 
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Re: NEWSFLASH: Bernstein slams early retirement!!!

Dave,

I understand what you are saying and it is something that I have thought about. So time will tell. My best moves have been to do nothing! And yes a severe market downturn will test us all. But remember the farther the market falls, the less risk there is in staying invested in it.

You ask - Why would you run FireCalc? - The answer is to adjust spending, not investments. Once your mindset is adjusted to favoring undervalued asset classes, the more likely that you'll keep them and the overvalued asset classes you'll avoid.

What your describing is typical investor behavior. Today the typical investor has abandoned stocks and is attending the latest real estate seminar because his IRA is not gaining 15% anymore.

Another point to consider. You are not dealing with 'typical' investors on this forum.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 07:37 PM   #83
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by Cut-Throat


My gut cannot take individual stocks any more. I once took a $175K hit on one individual stock. And this was after I retired. Granted I did not lose money. I still made money after I sold. But the $175K did disappear from my balance sheet after I retired
Lawdy Lawdy Miss Clawdy. I'd have been terrified of the market and probably put my loot under the mattress, given a 175k hit. I don't do any serious money in individual stocks. I do have about five grand in Brinker, but that was because son-in-law worked for them. I just love them Vanguard indexes. BTW: I believe the dividends are posted/reinvested today.....
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 07:53 PM   #84
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by HaHa
I reflect that there is a time for all things and ol' mikey's time for bravery ain't when the S&P is at 1216.
What is magic about 1216?* *P/E's are much lower now than they were just a few years ago, yet you say that only now do you have your lifetime-lowest equity positiion.* *What makes you more fearful today vs five years ago?

And for CT, who believes that a market drop would be a buying opportunity, do you believe in regression to the mean?* *If so, then you should be very afraid of buying after a drop.* *If we really regress to the mean, market P/E's will have to be at around 5 for the next 20 years.* * That's a sustained 75% drop from today's levels.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 08:04 PM   #85
 
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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And for CT, who believes that a market drop would be a buying opportunity, do you believe in regression to the mean?* *If so, then you should be very afraid of buying after a drop.* *If we really regress to the mean, market P/E's will have to be at around 5 for the next 20 years.* * That's a sustained 75% drop from today's levels
Well, if you don't believe a 75% drop would be buying opportunity than you are more paranoid than Hocu*
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 08:10 PM   #86
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by Cut-Throat
Well, if you don't believe a 75% drop would be buying opportunity than you are more paranoid than Hocu**
OK, but I'm trying to understand what you believe would be a buying opportunity.* *Do you believe in regression to the mean?* *If so, that should influence your behavior.

Personally, I do not believe in RTM as anything but a statistical artifact.* * However, if the market dropped 75%, you're damn right I would become as paranoid as *****.* *In fact, what you'll probably find is that an entire generation will avoid the stock market like the plague if that were to happen.* *Which sort of self-reinforces RTM, so it may be a psychological artifact rather than a statisitical one.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 08:24 PM   #87
 
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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OK, but I'm trying to understand what you believe would be a buying opportunity.* *Do you believe in regression to the mean?* *If so, that should influence your behavior.
A buying opportunity. - If you are Investing $500 a month in stock via Dollar cost averaging and the Market Drops 10% one month you just saved yourself 10%. That is a buying opportunity.

Do you believe in regression to the mean?* *If so, that should influence your behavior.

I don't know and I don't care. My Behavior would not change

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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 08:28 PM   #88
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by Cut-Throat
Do you believe in regression to the mean?* *If so, that should influence your behavior.

I don't know and I don't care. My Behavior would not change
Ah, blissful CT, I honestly hope for all of our sakes that you never have to learn what RTM means.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 08:34 PM   #89
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by davew894
I dont know how Bernstein could make such broad statements about ER's, with respect to not retiring.
I think that Bernstein believes the only real way to keep ahead of inflation over five or six decades (not just three or four) is to keep working.

But what the heck does he know. I don't think he can imagine NOT working. He probably has as much of a writing jones as Isaac Asimov.

It's worth pointing out that legions of publisher's lawyers have piled onto guys like Bernstein and told them not to post on discussion boards for just this reason. If he said "C'mon in, the water's fine, you can all retire early!" he'd be sued by thousands of people who drank *****' Kool-Aid. It's much better to say the more conservative "Most people can't afford to ER", which only gets him pilloried by us. And he hasn't exactly rushed right over here to learn more about us, has he?
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 08:46 PM   #90
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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I don't think he can imagine NOT working.
You're joking, right?* *He has retired from neurology and is now "working" as a financial adviser.* *Let's see, he's managing $120M in assets, and probably charges 1% -- that's $1.2M year in retirement.* * He may not always be right, but he's definitely not stupid.*
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 08:49 PM   #91
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by wabmester
You're joking, right?* *He has retired from neurology and is now "working" as a financial adviser.* *Let's see, he's managing $120M in assets, and probably charges 1% -- that's $1.2M year in retirement.* * He may not always be right, but he's definitely not stupid.*
Wab, I think that if you're managing $120M in other people's money then it's hard to call yourself "retired". I think he's charging $1.2M/year in SALARY. It pays better than being a Wal-Mart greeter but it's still work and the customers are probably just as demanding.

Maybe on his deathbed he'll be wishing that he was managing $150M.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 08:53 PM   #92
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Wab, I think that if you're managing $120M in other people's money then it's hard to call yourself "retired".
Perhaps. Then my dream "job" is to manage $120M for people who believe in passive index investing!
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 09:07 PM   #93
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Perhaps.* *Then my dream "job" is to manage $120M for people who believe in passive index investing!
Perhaps you should check into this guy. I've been reading about him in the local press for a decade. He lives in Manoa, he always seems to be surrounded by beautiful young staff assistants du jour, and he's made a great living out of taking people's money from them and refusing to give it back. (And believe it or not they're thrilled to pay him for this sadistic abuse. But apparently if you're a consenting adult it's quite legal.) And he's always smiling!
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 09:14 PM   #94
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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So, YTG, how do you define productivity?
Pretty much like the rest of the English speaking population does. *As far as definitions go I'll turn to Webster where my dictionary says productive means "having the quality or power of producing esp in abundance." *

The funny thing about so many of the responses is how many people seemed to think that my comment was disparaging in some way. *Me thinks they doth protest too much. *My point wasn't that surfing the web all day was bad or in any way inferior to some other activity, only that it does not fit the common definition of "productive". *This is neither good nor bad, it just is what it is. *I find it interesting that so many of you feel the need to redefine leisure activity as something else. *Why do you suppose that is?

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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 10:10 PM   #95
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by . . . Yrs to Go
Pretty much like the rest of the English speaking population does. As far as definitions go I'll turn to Webster where my dictionary says productive means "having the quality or power of producing esp in abundance."

The funny thing about so many of the responses is how many people seemed to think that my comment was disparaging in some way. Me thinks they doth protest too much. My point wasn't that surfing the web all day was bad or in any way inferior to some other activity, only that it does not fit the common definition of "productive". This is neither good nor bad, it just is what it is. I find it interesting that so many of you feel the need to redefine leisure activity as something else. Why do you suppose that is?

Maybe because that's the mindset of those who ER, redefining the mandated paramaters of life, and what's important. You don't have to work to 65, you don't have to have your primary adjective be "consumer" etc. etc.

A lot of what people listed as filling their days sounds like the work of a house spouse. I bet telling a stay at home parent they are engaged in "leisure activity" might cause something to get thrown at you. Seriously, nothing in that definition said the activity had to generate fiat money. It's not money we want anyway, it's the goods and services, and the utility we derive from money, that people want. So if you gain utility from the above mentioned tasks, you've just cut out the middle man. A strong argument for increased productivity in an ER state, IMHO .

(CAVEAT: all statements above come from a punk 31 year old still working full time who doesn't know jack! )
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 10:31 PM   #96
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by wabmester
What is magic about 1216?* *P/E's are much lower now than they were just a few years ago, yet you say that only now do you have your lifetime-lowest equity positiion.* *What makes you more fearful today vs. five years ago?
Five to six years ago I put maybe $500,000 to work in oil and gas, UST, Altria, and several other tobacco companies; plus a smaller slug into gold stocks. I thought there was some risk in the tobacco, essentially none in the oil and gas. Gold is always risky, since no one needs it and central banks seem hell-bent on getting rid of it. Still, it was cheap enough that to me anyway it seemed like good odds. Similarly there were good buys in fall of 2002.

I don't have positive judgments on any available investments now.

I don't think there is anything magic about 1216, as I suspect you know. It just happened to be the quote when I wrote my post.

Lastly, I am not exactly fearful. I just don't like the odds as I see them. It is a game to me, an important one, but still a game with its own niceties.

Ha

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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-23-2005, 11:02 PM   #97
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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I don't have positive judgments on any available investments now.
From your picks, I'd say that you like brutally beat-up sectors, right? Pharma and financial stocks not beat-up enough for you right now? I think I might buy MRK et al if they get a bit more beat up. I love health care -- one of those relatively rare sectors in which demand will always exceed supply.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-24-2005, 05:53 AM   #98
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by Nords
I think that Bernstein believes the only real way to keep ahead of inflation over five or six decades (not just three or four) is to keep working.

But what the heck does he know.* I don't think he can imagine NOT working.* He probably has as much of a writing jones as Isaac Asimov.
Ahh, Asimov.............what an amazing amount of production, and the
most amazing thing is that a lot of it was good.

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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-24-2005, 05:55 AM   #99
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by wabmester
OK, but I'm trying to understand what you believe would be a buying opportunity.* *Do you believe in regression to the mean?* *If so, that should influence your behavior.

Personally, I do not believe in RTM as anything but a statistical artifact.* * However, if the market dropped 75%, you're damn right I would become as paranoid as *****.* *In fact, what you'll probably find is that an entire generation will avoid the stock market like the plague if that were to happen.* *Which sort of self-reinforces RTM, so it may be a psychological artifact rather than a statisitical one.
I avoid the stock market "like the plague" now and my reasons are
almost entirely psychological.

JG
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-24-2005, 08:55 AM   #100
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by . . . Yrs to Go
The funny thing about so many of the responses is how many people seemed to think that my comment was disparaging in some way. Me thinks they doth protest too much. My point wasn't that surfing the web all day was bad or in any way inferior to some other activity, only that it does not fit the common definition of "productive". This is neither good nor bad, it just is what it is. I find it interesting that so many of you feel the need to redefine leisure activity as something else. Why do you suppose that is?
Well, I don't have anything against actively-managed mutual funds either, but I don't post about them on the Vanguard Diehards board!

You're defining "leisure" activities in terms of work-- "leisure is what you do when you're not working". But most of what you define as "leisure" activities are as close to work as I'll ever come again. And some of those activities create more sweat & muscle fatigue than I ever "produced" in a department-head meeting...

One of the reasons we doth protest so much is that a well-known author, who apparently wouldn't know ER if it bit him in the assets, has dismissed it out of hand. Yet this is a guy who's spent years researching asset allocations before promulgating an opinion on the subject. I think we ERs feel a little slighted by a guy who has a lot of credibility in the asset-allocation area yet apparently feels no need to do any ER research before arriving at a conclusion.

Quote:
Originally Posted by Laurence
(CAVEAT: all statements above come from a punk 31 year old still working full time who doesn't know jack!* )
Well, I won't pass judgment on the "punk" comment, but you know more than I did at that age...
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