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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-24-2005, 01:19 PM   #121
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Re: NEWSFLASH: Bernstein slams early retirement!!!

Quote:
Originally Posted by HaHa
This factor as much as anything makes boards such as this less valuable than they otherwise might be. Irving Janis studied this phenomenon and coined the term groupthink, with respect to the Bay of Pigs Invasion, as well as other situations were bad decisions were made at least in part as a result of group dynamics. http://en.wikipedia.org/wiki/Groupthink

Note the conditions conducive to groupthink, and check them against the conditions that pertain to internet special interest discussion boards such as this one. Pretty good fit, IMO.

I notice that the overall tone of confidence in this recent thread (regarding SWR, etc.) is lower than in earlier threads. People have actually mentioned 2% SWRs, and not been shouted down. I would expect that future negative events in the economy or markets could cause further shifts in the tone here, and that these shifts will happen more or less "en masse".

There is irony in this particular thread. On this board we have a doughty group of independent-minded free thinkers, capable of evaluating evidence and striking out happily on their own, shunning and frequently denigrating professional advice. Then one person, Bernstein, says "Hey, I don't think too much of this 4% SWR and very young ER." Look at how many posts this thread has drawn. Did Dimsonís book or paper get much comment? (No) So it looks to me like people are looking to Bernstein as their guru, to lessen anxiety in an area that is naturally anxiety provoking. It is as if the Majarishi came out and said, "Well, I didnít think this yogi meditation crap through very well, maybe it doesnít do much after all."

Bernstein writes about something that he prefers to avoid himself(ER). What he really did is transit from a pretty good job, neurologist, to a really good job, money manager/guru. And one who has defined himself as keeper of the high bar.

Now as his revised opinion sinks in around here, it evidently causes some amount of anxiety. And it should. What other parts of the dogma will be renounced?

People here ask questions about market history that are clearly answered in links on this board, as well as papers referenced in this very thread. To me it sounds a little like asking your buddy what color something is. Wouldn't it usually be better to look at the object for as long as necessary to form one's own opinion?

Ha
Excellent post, Ha. I have worried about being a victim of groupthink myself (note thread asking for some one to play devil's advocate wrt inflation). This is the only board I visit, and I admit most of the literature I've read has been recomended here. At the same time, as a young dreamer with years/decades to go, I can't really see much to change from what I'm doing now.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-24-2005, 01:23 PM   #122
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by HaHa
Wouldn't it usually be better to look at the object for as long as necessary to form one's own opinion?
When the object is future stock market performance, you can stare at it until your eyes bleed if you want to, but I'm not sure it'll do any good. * *It comes down to this: what probabilities do you assign to various outcomes, can you reasonably justify those probabilities, and what can you do to mitigate known risks? * *If you're like me, you don't like surprises.

Most investors simply extrapolate the past to the future, and we know that doesn't work (see the Dalbar study for how poorly that belief system performs).

Some investors fear regression to the mean. * But there are very few physical constraints on the financial markets, so it's virtually impossible to determine if mean P/E (for example) is really meaningful, and it is impossible to tell when reversion might happen.

So, what's left? * For me, the only knowable attributes of the future are demographic trends and supply/demand characteristics. * *I won't bet against the US economy, but I'm definitely hedging my bets. * *Asia ex-Japan has better demographic trends than the US, Europe, and Japan. * *Oil has increasing demand and limited supply. *Ditto for waterfront real estate (ex hurricane zones and flood plains). * Ditto for health care. * *And, who knows, you might even want to speculate on the reserves of fresh water.

Retirement at any age is fraught with risks. * ER simply magnifies those risks. * Keep your job if you want to minimize retirement risk.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-24-2005, 03:48 PM   #123
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by . . . Yrs to Go
I like the idea of being "productive" (which I'll define here as "producing something" beyond clean dishes). For me this is also part of a balanced life.
This is a concept there seems to be a bit of groupthink on, in the RE boards. There is a lot of support for posts which state some opposite of the above.
Though I'm not working and have no specific plans to ever work again, I fully support anyone who wants to work and be "productive" either for themselves or for others.
I've posted before that I don't really expect to never work again, and that if I work again, one of the reasons might include doing something to contribute to society. I am aware of the fact that I am not directly contributing much currently.

For me, I haven't found any balance issues in not working.

Quote:
I'll admit that my situation is somewhat unique.
Maybe not the age part... there's been posts from at least two RE in 30's, and perhaps several more who haven't given their age.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-24-2005, 06:21 PM   #124
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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...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.
I'm not too sure about that. *On Black Monday when the market dropped 25% in one day, it was one of the best buying opportunities in history. *And it didn't take a generation to recover from that drop.

I'll stick with the 4% SWR for now because it's the only rate that has a backbone. *I know we could get hit with a nuclear weapon, or that the Japanese SWR might be lower than the US SWR, or that Venezuela's inflation rate is high than the USA's, or that penicillin was invented during the past century, but the fact is nobody knows the future.

Of course if you say 2% will always be safer than 4%, chances are that statement will always be right. *By why stop there. *If I say 0.01% is the safest rate to use, I'll always be ahead of all you 2% forecasters. *How low do we want to go?
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-24-2005, 06:42 PM   #125
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by Cut-Throat
I have run many scenarios with an 80% market meltdown and could survive and thrive just fine. This keeps me sleeping at night and fishing all day! 8)

An 80% Market meltdown BTW is not an 80% portfolio loss. If you are 50% stocks/ 50% Fixed it is a 40% portfolio loss. I'm very comfortable with these numbers.

Also, consider if we did have an 80% Market Meltdown from our current P/E levels - Don't you think our Rates of return would probably be much larger after the 80% drop?

80% market Drop is tolerable with me. - Never will put money in the mattress however!
I think that you are in the clear. If an 80% equity market drop wouldn't faze you, I think you have the needed margin of safety!

Ha
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-24-2005, 07:08 PM   #126
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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I think that you are in the clear. If an 80% equity market drop wouldn't faze you, I think you have the needed margin of safety!

Ha
A 100% equity drop wouldn't faze me. Must be about as safe as I can be.

JG
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-24-2005, 09:26 PM   #127
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by Cut-Throat
I have run many scenarios with an 80% market meltdown and could survive and thrive just fine. This keeps me sleeping at night and fishing all day! 8)
I could live with that!

Quote:
I'll stick with the 4% SWR for now because it's the only rate that has a backbone.* I know we could get hit with a nuclear weapon, or that the Japanese SWR might be lower than the US SWR, or that Venezuela's inflation rate is high than the USA's, or that penicillin* was invented during the past century, but the fact is nobody knows the future.
Hope for the best and plan for the worst!* I think 4% is reasonable for a "normal" retirement.* But some folks here are talking about spending 50-60 years living off their portfolios.* Under those cirumstances 4% seems aggressive to me.* If you despise work so much that you're willing to risk living the last decade of your life in abject poverty to avoid spending some of your youth working, good luck to you.* You may well be right.* But I'd hate to find out when I'm 70 that I made a terrible mistake.*



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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-24-2005, 09:32 PM   #128
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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A 100% equity drop wouldn't faze me.* Must be about as safe as I can be.

JG
Inflation may eat at you though.

Less of a problem for someone who is 80 vs. someone who is 40.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-24-2005, 09:38 PM   #129
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Re: NEWSFLASH: Bernstein slams early retirement!!!

The things that I've loved the things that I've lost
The things I've held sacred that I've dropped
I won't lie no more you can bet
I don't want to learn what I'll need to forget

From Audioslave "It Doesn't Remind Me Of Anything"

HaHa Said in part"So it looks to me like people are looking to Bernstein as their guru, to lessen anxiety in an area that is naturally anxiety provoking. It is as if the Majarishi came out and said, "Well, I didnít think this yogi meditation crap through very well, maybe it doesnít do much after all."


Another great post and a good reason to read this board. *There may be some groupthink but there have been a range of ways people have apporached ER. Real Estate, govt jobs, tech work even marrying well (although it isn't called that JG : ) heck someone even made money off time shares. As to the best withdrawal rate, I do not have a clue. I wil lstart with 4% or 5% and adjust as I stare at the market. If it has dropped badly that year maybe 0% (I can do that if I live on my pension). *The Vanguard Diehards board (which I like) thrives on a continued two or three controversies, *still gets old sometimes.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-25-2005, 08:24 AM   #130
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Re: NEWSFLASH: Bernstein slams early retirement!!!

Heh, heh, heh, heh, heh.

Lets refresh - er ah - one more time.

De Gaul and the Norwegian widow.

All my books are in Lake Ponchartrain courtesy Katrina.

May - I say may buy - the latest Zweig edited version of Ben Graham's classic: The Intelligent Investor.

Did save my file cabinet of Drip dividend stocks and the computors at Vanguard are still running just fine.

Perhaps Bernstein will achieve enlightenment aand discover the wisdom of the Norwegian widow. Then of course - he will write another book.

Yawn - if we resurrect old recurring topics - I vote for dryer sheets.

Heh, heh, heh.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-25-2005, 09:25 AM   #131
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by . . . Yrs to Go
Inflation may eat at you though.*

Less of a problem for someone who is 80 vs. someone who is 40.*
True!
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-25-2005, 10:35 AM   #132
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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I'm not too sure about that.
We already have a case study. Look at your depression era raised relatives. Many, if not most people who went through the depression wouldnt touch equities again or at least not for a long time.

My dad wouldnt touch stocks until 1966. Oops.

Now he wont buy an equity to save his life. Tried to get him to buy $10k worth of the s&p500 back in 1998. "noooooo!"
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-25-2005, 11:24 PM   #133
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Re: NEWSFLASH: Bernstein slams early retirement!!!

My personal take on this:

The wealthy elite who own rather than produce are very nervous when the upper middle class workers 'get it" and begin taking their educations and skill sets and begin walking away from the factories, institutions and corporations which act to perpetuate the wealthy elites comforatable cash flows as the capital lenders and asset owners. Bernstien and the gnomes of the banking class truly consider themselves above those like myself who worked and produced real assets rather than passively owned to make wealth.* The plow horses are starting for the barn too early for these aristocrats, who would rather mine us until we drop dead on the job keeping their assets well oiled with the blood of our labor.

All the more reason to ER and take the one certain source of wealth, your life and time, and invest it in a quality life rather than the promise of monetary wealth.* I would rather be a freed slave with modest means but my own life than a rich servant whose days are bought and sold by others.* Rage against the machine!
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-26-2005, 07:23 AM   #134
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by LEX
My personal take on this:

The wealthy elite who own rather than produce are very nervous when the upper middle class workers 'get it" and begin taking their educations and skill sets and begin walking away from the factories, institutions and corporations which act to perpetuate the wealthy elites comforatable cash flows as the capital lenders and asset owners. Bernstien and the gnomes of the banking class truly consider themselves above those like myself who worked and produced real assets rather than passively owned to make wealth.* The plow horses are starting for the barn too early for these aristocrats, who would rather mine us until we drop dead on the job keeping their assets well oiled with the blood of our labor.

All the more reason to ER and take the one certain source of wealth, your life and time, and invest it in a quality life rather than the promise of monetary wealth.* I would rather be a freed slave with modest means but my own life than a rich servant whose days are bought and sold by others.* Rage against the machine!
Loafers of the world, unite!

JG
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-26-2005, 07:35 AM   #135
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Re: NEWSFLASH: Bernstein slams early retirement!!!

I'm in!!!
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-26-2005, 07:43 AM   #136
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Originally Posted by LEX
My personal take on this:

The wealthy elite who own rather than produce are very nervous when the upper middle class workers 'get it" and begin taking their educations and skill sets and begin walking away from the factories, institutions and corporations which act to perpetuate the wealthy elites comforatable cash flows as the capital lenders and asset owners. Bernstien and the gnomes of the banking class truly consider themselves above those like myself who worked and produced real assets rather than passively owned to make wealth.* The plow horses are starting for the barn too early for these aristocrats, who would rather mine us until we drop dead on the job keeping their assets well oiled with the blood of our labor.

All the more reason to ER and take the one certain source of wealth, your life and time, and invest it in a quality life rather than the promise of monetary wealth.* I would rather be a freed slave with modest means but my own life than a rich servant whose days are bought and sold by others.* Rage against the machine!
I reread this and am still a bit muddled. *It sort of reads like something from
Trotski. *Was it intended as humor?.........yet, no smiley face??
Anyway, I never begrudged "the man" his power and money and never felt
enslaved in any way (not by my job anyway) * * Last night I saw a
commercial for a cell phone company. *Big shot - big office - big desk.............
etc etc. *He is explaining how great his new cellphone is and how he is
"sticking it to the man". *Young guy listens and says "But you are 'the man' *"
I can relate as I used to be 'the man'............now just sailing gently into
the sunset. *

JG
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-26-2005, 07:47 AM   #137
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Re: NEWSFLASH: Bernstein slams early retirement!!!

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Loafers of the world, unite!*

JG
Amen brother!*
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-26-2005, 08:04 AM   #138
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Re: NEWSFLASH: Bernstein slams early retirement!!!

Quote:
My personal take on this:

The wealthy elite who own rather than produce are very nervous when the upper middle class workers 'get it" and begin taking their educations and skill sets and begin walking away from the factories, institutions and corporations which act to perpetuate the wealthy elites comforatable cash flows as the capital lenders and asset owners. Bernstien and the gnomes of the banking class truly consider themselves above those like myself who worked and produced real assets rather than passively owned to make wealth. The plow horses are starting for the barn too early for these aristocrats, who would rather mine us until we drop dead on the job keeping their assets well oiled with the blood of our labor.

All the more reason to ER and take the one certain source of wealth, your life and time, and invest it in a quality life rather than the promise of monetary wealth. I would rather be a freed slave with modest means but my own life than
Great post LEX. So great Adam Smith said the same thing in Wealth of Nations. He said it so well Karl MArx used to quote from Wealth of Nations all the time. So yeah, I guess it just migt sound a bit Trotski-ish. But it's also a tueism if human history.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-26-2005, 08:27 AM   #139
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Re: NEWSFLASH: Bernstein slams early retirement!!!

Quote:
Originally Posted by LEX
My personal take on this:

The wealthy elite who own rather than produce are very nervous when the upper middle class workers 'get it" and begin taking their educations and skill sets and begin walking away from the factories, institutions and corporations which act to perpetuate the wealthy elites comforatable cash flows as the capital lenders and asset owners. Bernstien and the gnomes of the banking class truly consider themselves above those like myself who worked and produced real assets rather than passively owned to make wealth.* The plow horses are starting for the barn too early for these aristocrats, who would rather mine us until we drop dead on the job keeping their assets well oiled with the blood of our labor.

All the more reason to ER and take the one certain source of wealth, your life and time, and invest it in a quality life rather than the promise of monetary wealth.* I would rather be a freed slave with modest means but my own life than a rich servant whose days are bought and sold by others.* Rage against the machine!
That is a gem of a post.* It put into better words what I've been saying about working for a "boss" and making the company and the owners rich on your back.* Work as a slave employee for your master boss if you must, but if you have to work, at least try to do it for yourself as your own master.* Of course, the ultimate freedom is when you don't even have to work for yourself anymore.
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Re: NEWSFLASH: Bernstein slams early retirement!!!
Old 09-26-2005, 08:49 AM   #140
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Re: NEWSFLASH: Bernstein slams early retirement!!!

good one, lex. Not to mention being a slave to the government (for taxes).
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