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Re: Yahoo "Finance Quiz"
Old 05-24-2004, 04:31 PM   #41
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Re: Yahoo "Finance Quiz"

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I understand that you are in your post here making a more narrow point about the discrepancy between the statement made in the Yahoo quiz and the claims of the REHP study.
My point is even narrower than that. I am referring to the single year 1972 and what has happened since then. [I would refer to this as a Historical Database Rate. You would use the term Historical Surviving Withdrawal Rate.] I made no projections.

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Re: Yahoo "Finance Quiz"
Old 05-24-2004, 04:38 PM   #42
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Re: Yahoo "Finance Quiz"

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That is correct John, but the 4% was safe for the very worst of times. Double digit inflation and a flat market for 16 years. In most of the other time periods a much higher number would have been safe. That is why I advocate a 'flexible' Withdrawal Rate.
You need to look for cause and effect. Dividends are what supported a 4% withdrawal rate. Dividend amounts kept up with inflation. Dividend yields were around 3%. A little bit more could be withdrawn because the final balance was allowed to fall to zero at thirty years.

Dividends yields are well below 2% today.

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Re: Yahoo "Finance Quiz"
Old 05-24-2004, 04:43 PM   #43
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Re: Yahoo "Finance Quiz"

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What you are advocating is Market timing. I no longer believe in Market timing as well as Santa Claus or The Easter Bunny.
It is Market Timing when Warren Buffett and other outstanding investors find themselves unable to identify anything worth buying. Timing enters in, but only as a technicality. Sometimes there are no values to be found.

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Re: Yahoo "Finance Quiz"
Old 05-24-2004, 04:49 PM   #44
 
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Re: Yahoo "Finance Quiz"

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In other words, a particularly bad returns sequence can reduce your safe withdrawal amount by as much as 2% below the long-term return of stocks. Recall from Chapter 2 that it's likely that future real stock returns will be in the 3.5% range, which means that current retirees may not be entirely safe withdrawing more than 2% of the real starting values of their portfolios per year ! *
Also,

I don't have a copy of the four Pillars, so I will take the quote that you have. If indeed Berstein Believes that the real returns of Stocks will be in the 3.5% range. I am confused how he arrived at the 2% figure. Does he believe that the invester has 80% under his mattress. He certainly does not emphasize the 2% figure in his writings.

Also, if he does have a substaintial amount in Bonds, Berstein also said that he believes that Bonds may outperform Stocks in the coming decades. This just does not make any sense. If your portfoilo is averaging 3.5% then taking 2% will result in saving money.

And yes, we can all construct a scenario where your portfoilo drops 99% the first year of retirement, and then no matter what happens, you cannot recover.

While I think it is great that we have people here that are as smart as Warren Buffet, Warren still has a job and may be expected to do better than the rest of us who no longer wish to work.

I think for folks that do not believe that the future will be like the past is to take Bob Smiths advice and go for 100% TIPS and lock in about a 3% withdrawal. I will do this before I ever entertain any Market timing Games.
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Re: Yahoo "Finance Quiz"
Old 05-24-2004, 04:54 PM   #45
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Re: Yahoo "Finance Quiz"

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. . . OK, SalaryGuru. Some like vanilla and some like chocolate. That's what makes the world go around.

hi *****,

Well . . . if this whole SWR debate is equivalent to choosing either chocolate or vanilla, then it really doesn't matter and let's not waste anymore time with it. Of course as things stand now I can either choose a real scoop of vanilla or an imaginary scoop of chocolate.

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There are a lot of specifics on many aspects of the question posted at the SWR board.
What do you mean by specifics?
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Re: Yahoo "Finance Quiz"
Old 05-24-2004, 05:25 PM   #46
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Re: Yahoo "Finance Quiz"

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TH, you sum it up well!
Thanks. Brevity isnt my strong point. The good news is all 10 people who give the proverbial rats ass are all here and participating.

I'll say one thing and try to keep it short.

It appears to me that basing your 4% H(SWR)^2/sin(SWR)+the average weight of a chocolate bar after I've taken a bite from it would...uh...hold on...

It appears that going with a 4% historical safe withdrawal rate at a time when the assets you're basing that withdrawal on are highly or overly valued, you might be disappointed. Basing them on a time when those assets are fairly or undervalued might be good. I think this is what I learned from the "6.21 SWR" thread where people were doing firecalcs in late 1999/early 2000. Clearly those pufferied portfolios werent going to stand. Yeah, historically considered it would recover and support it, but I wouldnt quit my job based on that.

William Bernstein has no more idea than my dog Ted, who posts here sometimes, on what the withdrawal rate is. He can guess and it might be a good guess. Warren Buffett doesnt know either, but he knows a bargain when he sees one and buys it. As soon as anyone comes up with a way to really and truly determine market valuations that works both historically and going forward, and they prove it over a long period of time...well we'll all be dead and wont care.

Me, as usual I'll take what I need, plan, replan and improvise using spreadsheets, cocktail napkins, spit and baling wire, not to mention duct tape (but then I just did), to keep the old portfolio fluffy.

Anything else is mental masturbation. Not that theres anything wrong with that...masturbation has its place and its benefits. But as useful it might be in planning for whether you feel comfortable that you have achieved financial independence and can safely ER...well...masturbation might be more productive.
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Re: Yahoo "Finance Quiz"What do you mean by specif
Old 05-24-2004, 05:57 PM   #47
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Re: Yahoo "Finance Quiz"What do you mean by specif

What do you mean by specifics?

I mean that the data-based SWR tool is not just theory anymore. There was a time when it really was mostly theory. Today, there are numbers attached to the theory.

I am a concepts guy, SalaryGuru. Big scary numbers really do intimidate me. When people say that about me, they are making a fair statement. I absolutely acknowledge this.

Regardless of my Fear of Numbers, I was in a position in the mid-1990s where I had to put together a Retire Early plan. This is when I did the original work on the data-based SWR tool. Most of that work was conceptual. I did look at data; it's impossible to do SWR analysis without looking at data. But I never put together any spreadsheets or anything like that.

I kept all this under my hat during my first three years of posting on Retire Early boards. Then, for a number of reasons, it seemed to me in May 2002 that the time was right to go public. Since I didn't have spreadsheets and all that stuff to back me up, I came forward in a tentative sort of way. I asked a question. I said "Does anyone here think it might be a good idea to include the effect of changes in valuation in our SWR analyses?" JWR1945 did some statistical work to see whether the idea that I was putting forward made sense or not, he found that it checked out, and we were off to the races.

We are now two years down the road. We now have tons of data supporting what I said in the early days of the debate, and we have comments from lots of recognized experts supporting what I said too. We have not been standing still, we have been moving forward. I mean no offense here, but the conventional methodology proponents have not been moving forward. They are making the same arguments that they were making two years ago.

You should go back to the threads from the early days. I think you will be amazed by some of things you will discover that were said. I'll give one example. People were saying "there is no way that you will find data showing that there would have been a benefit from lowering one's stock allocation at times of high valuation, it's just flat out impossible to time the market." A lot of people said this. I stood my ground because I had researched it years earlier and I knew that if people would only look at the historical data they would find that it backs me up.

JWR1945 did that. He looked at the data. He found that it backs me up.

Now, forget everything that anyone has ever said about SWRs. Just focus on that one point. We have shown that you can time the market successfully using the PE10 tool. That's a big deal, isn't it? If the SWR is 4 percent, it's a big deal; and, if the SWR is 2 percent, it's a big deal. It's absolutely huge.

People should be checking that out. JWR1945 has publicly posted the data he looked at to come to these conclusions. You don't have to argue theory with me anymore if you don't enjoy that sort of thing. You can go to the SWR board and argue data with JWR1945 instead. If he is wrong, someone should be able to find a flaw in his research. If he is right, we should be dancing in the streets at what we have discovered as a result of me kicking off this wonderful SWR debate.

What I feel has happened is that people have gotten locked into positions and people now just don't want to back down no matter what the data says. That is not healthy. We need to stop worrying about who is being proven right and who is proven wrong, and just concentrate on what we can learn to help everyone achieve a safe retirement earlier than ever before.

To the extent that JWR1945 or me got anything wrong, I very much want to know that. You are doing me a big favor if you find any errors either in the data or in the theory. But saying "this is something that I never heard about before" is not the same thing as finding a flaw in the data or in the theory. JWR1945 and I both understand that many of our findings are new stuff, controversial stuff. That is precisely what makes these findings so darn important. Nobody else knows about this stuff yet. The people who participate on these boards have an opportunity to learn about this stuff before anyone else does.

The test should be--Do the claims check out or not? Yes or no? If they check out, we should all be grateful about what we have accomplished, and move forward to exploration of the implications of our findings. If they do not check out, then obviously JWR1945 and me will be grateful to have that pointed out to us.

Forget SWRs for now. How about timing? Is it really possible to time the market successfully, as JWR1945 and me claim it is? (We are talking about long-term timing here, not short-term timing.) If what I have said in theory re timing and what JWR1945 has said with data re timing checks out, we have discovered something that is going to stand the world of investing on its head for years to come.

Shouldn't some of us want to take a serious look at these claims? The posts are over on the SWR Research Group board, at NoFeeBoards.com. Let's change the world together, one mind-bending (but entirely accurate) investing insight at a time.
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Re: Yahoo "Finance Quiz"What do you mean by specif
Old 05-24-2004, 07:28 PM   #48
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Re: Yahoo "Finance Quiz"What do you mean by specif

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What do you mean by specifics?

I mean that the data-based SWR tool is not just theory anymore. There was a time when it really was mostly theory. Today, there are numbers attached to the theory.

I am a concepts guy, SalaryGuru. Big scary numbers really do intimidate me. When people say that about me, they are making a fair statement. I absolutely acknowledge this.

. . .
Hi *****,

I was really only joking when I asked that question. It was a take off on the statement, "It depends on what the meaning of "is" is."

But what you have in the SWR board posts is still very far short of a useful tool. To demonstrate my point, let me give you an example.

Take the case of a 50 year old couple with $2M invested 50% in equities and 50% in TIPS at 2%. They will recieve pensions (with no COLA) starting at age 55 of $14,000 per year and SS benefits starting at age 62 of $17,000 per year. What is their historical safe withdrawal rate?

Today, I can use Dory's FIRECALC and give you an answer to that question in a matter of minutes.

Similarly, by using some simple annuity equations available in the literature or on the internet, I can convert the pension and SS benefits to a net present value, add that to the nest egg and use intrcst's Safe Withdrawal Calculator and get an answer to that question in a matter of several minutes.

How do I get an answer using your "tool"? You and JWR claim I could read the hundreds of posts on the SWR board, extract the methodology described, develop a simulator based on that methodology and come up with a better answer. That may or may not be true, but it's not a tool until I finish that process.

Then there is the problem that the methodology you describe in those posts is not justified. Without appropriate justification, it is likely to be invalid.

You and JWR can argue with anyone you want about this. You can post long posts till we are all tired. But you will have little success converting anyone to your methodology without offering an easy way for people to explore that methodology (a tool).
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Re: Yahoo "Finance Quiz"
Old 05-24-2004, 08:14 PM   #49
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Re: Yahoo "Finance Quiz"

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Berstein believes that the 'real' return of a stock/bond portfoilo to be in the 3% range going forward. *He has stated this in books that he wrote before the 2002 downturn of stocks. A 2% withdrawal rate would mean that you are *actually saving money.
I am only a marginal participant in these discussions. We all have our minds more or less made up- why annoy people? Still, I feel that I should point out a possible flaw in the above quoted statement.

It may not be important, but it is possible to lose a portfolio with a real return of 3% , while withdraing only 2% real. I am sure you know this, it is what the SWR concept is all about. It has to do with volatility, and the exact path that prices may take on their way to a long term real return of 3%.

Many would survive, some might fail.

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Re:  Can we get back to the Yahoo! "Finance Quiz"?
Old 05-24-2004, 08:31 PM   #50
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Re:  Can we get back to the Yahoo! "Finance Quiz"?

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As I read it, Jim is using a withdrawal rate of 3% on a 100% stock investment portfolio, yet it fails miserably. *I ran the numbers on FireCalc and according to that (as well as Intercst's and other analyses) the answer Yahoo gives is dead wrong.

Can anyone tell me if I'm missing something?
And this, Walker101, is what's known as hijacking a thread.

Did anyone happen to decide whether Yahoo!'s example is right or wrong? Anyone from Yahoo! come forward to defend it?
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Re: Yahoo "Finance Quiz"
Old 05-25-2004, 03:07 AM   #51
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Re: Yahoo "Finance Quiz"

What you have in the SWR board posts is still very far short of a useful tool.

What we have is an incredibly exciting and promising unfinished tool.

The tool can be put to use today. I put it to use in 1996, and what I learned from the tool saved my retirement. Today's version of the tool is a far more sophisticated one that the 1996 version.

Today, I can use Dory's FIRECALC and give you an answer to that question in a matter of minutes.

But will the answer provided serve the purpose of insuring you a reasonably safe retirement plan? I say that it will not. We make extensive use of the mechanical aspects of FIRECalc at the SWR board; the mechanical aspects of the tool are a godsend. What we do is work the mechanics of our research to overcome the effects of the false assumptions of the conventional methodology studies that are generally embedded in the FIRECalc tool. So we get the best of both worlds. We get all the power of the tool without needing to take on the baggage of the "misleading" (that's William Bernstein's word) conventional methodology study results. I think that approach makes a lot of sense.

Then there is the problem that the methodology you describe in those posts is not justified. *Without appropriate justification, it is likely to be invalid.

I think that the methodology has been justified and is valid. I of course would not want anyone to make use of the tool in design of their plan until they are personally convinced. I don't think that anyone should be surprised that there are some not convinced today. The idea of the tool was only put forward two years ago. Most of the data backing up the idea has only been put forward in the past 10 months. This is a new SWR tool.

I think this is the SWR tool of the future. The future is not here yet, so we are all going to have to wait a bit to find out for sure. But I think it is fair to say that there are at this point already a good number of extremely positive signs.

You and JWR can argue with anyone you want about this.

My strong preference would be not to argue with anyone about any subject, SWR-related or not. That said, I love to discuss early retirement from all sorts of angles with all sorts of people. I think it is fair to say that the SWR question has been by far the hottest question on the minds of aspiring early retirees for the past two years. What we need to do is to find a way to talk about SWRs and to learn about SWRs without arguing about SWRs.

Dory36 has done a lot to make that possible at this board, in my view. My recommendation is that we all just aim to continue walking down the path he has marked out for us. It appears to me to be a good path.
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Re: Yahoo "Finance Quiz"
Old 05-25-2004, 03:24 AM   #52
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Re: Yahoo "Finance Quiz"

I am only a marginal participant in these discussions. We all have our minds more or less made up- why annoy people?

I have read every one of the tens of thousands of posts that have been put forward in the Great SWR Debate. I understand why it seems at times that people have their minds made up and are unwilling to change them. There have indeed been a number of posts put up that suggest that.

There are many posts that suggest otherwise, however. The tone of the debate has changed dramatically over time. There are all sorts of questions on which defenders of the conventional methodology were at one time confident and are now at best tentative.

JWR1945 and I have put forward some very dramatic claims. The "Stocks for the Long Run" investing paradigm has been dominant for 20 years now, and we are saying that that paradigm is flawed in serious ways. If you look at earlier times in which such dramatic changes in how people think about an important subject have been put forward, you will find that people do not reverse long-held beliefs overnight.

What people do is take information in, puzzle over it a bit, and very gradually come to a new way of seeing the issue under discussion. That is happening here in a big way. I watch all of the boards and it is happening in somewhat different ways on all of them. The community is coming around, but slowly.

I more than anyone wish that things would speed up and that we could bring this to some sort of resolution in the near-term future. I've given up thinking that that is likely to happen. Change of this scope occurs slowly or not at all, that's what I have come to believe.

One of the benefits of the new discussion-board communications medium is that it allows you to hear the views not of an individual who wrote an article or a book or who produced a television show, but the views of an entire community of people. There are both pros and cons to taking in your insights that way. One of the cons is that community-speak is a messy sort of speak. Communities often don't arrive at "yes" or "no" answers in a manner that allows you to follow the logic thread from Point A to Point B to Point C.

But it is a mistake to dismiss the wisdom of communities. There is a logic at work when communities hash things out, it's just a different sort of logic than applies with the thought processes of an individual. I believe that we are watching how communities cope with a dramatic change in how they think about an important question, and I find it a fascinating thing to watch.

We are learning a lot about SWRs, and that is an important thing to do. We are also learning a lot about how discussion board communities cope with change, and I believe that what we have learned about that is going to do us a lot of good in future days as well.
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Re: Yahoo "Finance Quiz"
Old 05-25-2004, 03:56 AM   #53
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Re: Yahoo "Finance Quiz"

This, Walker101, is what's known as hijacking a thread.

I would never intentionally hijack a thread on any subject, Nords. It is against my posting religion.

My sense is that everyone here now accepts that Yahoo got the number wrong. It's good that we got that cleared up.

I dispute the suggestion that that was the only issue contained in the words of the initial post. If you read my post just above this one, you will see that I believe that we as a community have been coping with change throughout the course of the Great SWR Debate.

We all accept that Yahoo got the number wrong, correct? So none of us would use the Yahoo number from this point forward. We all accept that it would be dangerous to do that, and so we refrain from it.

Why is it that we apply a different standard to the conventional methodology SWR numbers? Are those numbers any less wrong than the Yahoo numbers? Yahoo left out the effect of dividends, and dividends are a critical part of the equation, so the Yahoo numbers are clearly wrong. The conventional methodology leaves out the effect of changes in valuation levels, and changes in valuation levels are a critical part of the equation, so the conventional methodology numbers are clearly wrong.

Both sets of numbers are wrong. Yet we are dismissive of the Yahoo claims and protective of the conventional methodology claims. I think this is a mistake.

I think that the difference in the two scenarios is that for a variety of reasons we have an emotional attachment to the conventional methodology numbers. We very much want those numbers to be right, so when we see world-recognized experts declaring them to be wrong or data showing them to be wrong, we work up all sorts of rationalizations to persuade ourselves that the errors in this case don't really matter all that much.

We are not talking only about what the data reveals. We are talking about how we feel about what the data reveals. Here's what William Bernstein says on Page 56 of The Four Pillars of Investing: "On an intellectual level, most investors have no trouble understanding the notion that high past returns results in high prices, which, in turn, result in lower future returns. But at the same time, investors find this almost impossible to accept on an emotional level."

That may be Bernstein's most important insight of all. He is saying that, when putting together a Retire Early plan, it is important to look at data. But looking at data is not enough. You also need to develop the emotional fortitude to accept what the data is telling you. That's the far more difficult aspect of the investing project.

We as a community have a pretty good grasp of what the data says. We get that part. We are having trouble dealing with the emotions that come to the surface when we consider what the data is telling us to do because what the data is telling us to do is so at odds with just about everything we have heard and believed about investing for the past 20 years.

These conflicts reveal themselves in the words we use in posts. We are now seeing posts that use words like "worry" in connection with the conventional methodology SWR claims. That is a positive sign. It means that we are getting closer to the point at which we can talk openly about the strategies implied by a reasoned examination of what the data reveals.

The purpose of my initial post in this thread was to highlight that development. The error made by Yahoo is no big deal, in practical terms. How many people are going to put together their retirement plans based on something said in a Yahoo quiz? The errors we have discovered in the conventional SWR methodology are a very big deal indeed. These errors are likely to cause losses in the many millions of dollars in days to come.

There is a reason why we demand accuracy in Yahoo quizes. When people are offering advice on money questions, there is the potential for very serious life setbacks if that advice is rooted in error. We should apply the same standard to the conventional methodology studies. The studies are valuable, they have provided us many powerful insights. But the bottom-line numbers generated by the studies are not in accord with what the historical data says re what is safe. That is a problem, and we need as a community to continue our struggle to come to terms with what we have discovered in the past two years about the realities of SWRs.
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Re: Yahoo "Finance Quiz"
Old 05-25-2004, 05:54 AM   #54
 
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Re: Yahoo "Finance Quiz"

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It may not be important, but it is possible to lose a portfolio with a real return of 3% , while withdraing only 2% real. I am sure you know this, it is what the SWR concept is all about. It has to do with volatility, and the exact path that prices may take on their way to a long term real return of 3%.

Many would survive, some might fail. *
mikey,

I think if you read all of my posts, you would see that I understand volatility. That's primarily why I disagree with SWR and instead advocate a Flexible withdrawal rate. My above statement referred to averages. I think we all understand what happens if you start your withdrawals and then enter a 10 year bear market with high inflation. I maintain under those circumstances, there is no 'SAFE' withdrawal, despite the formula used.

In other words, I have said that in a 3,4 or 8 year bear market, who would actually continue to spend their SWR? Wouldn't we all try to reduce expenses in those times? That way we would not deplete our portfoilo. And also after the market had a good runup, wouldn't that be a good time to spend a little extra - Buy that new car, take an exotic vacation etc. etc.

That's why I have always seen SWR as a rough planning tool based on averages. Not something to be followed to the gnat's eyeball. In recogizing this, I think your budget should actually be twice as large as 'needed', so there is some slack to cut back on during those tough times.

I also see SWR as something that should be continually calculated every couple of years. Not something that is done once at retirement, put on the shelf and then set up an automatic withdrawal amount based on the answer.
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Re: Yahoo "Finance Quiz"
Old 05-25-2004, 09:38 AM   #55
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Re: Yahoo "Finance Quiz"

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In other words, I have said that in a 3,4 or 8 year bear market, who would actually continue to spend their SWR? Wouldn't we all try to reduce expenses in those times?
I found that I cut back spending when stock prices were down in spite of the fact that I live entirely from my (Federal CSRS) pension, which includes reasonably priced health insurance and cost of living adjustments. I know that it didn't make sense. I just did it.

Have fun.

John R.

P.S. I expect my investment accounts to be passed on to my daughters when the time comes.
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Re: Yahoo "Finance Quiz"
Old 05-25-2004, 11:03 AM   #56
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Re: Yahoo "Finance Quiz"

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Cut-Throat
You need to look for cause and effect. Dividends are what supported a 4% withdrawal rate. Dividend amounts kept up with inflation. Dividend yields were around 3%. (Snip)Dividends yields are well below 2% today.
I believe this is a very important point. Perhaps because it is so easy to unleash microprocessor power on abstract data, we sometimes forget that it is real earnings bought at an appropriate price that created the abstractions that we massage statistically. I think it is a pretty safe generalization that corporate ROIs, prudent debt levels, and in fact all the drivers of profitability and return are bounded.

Therefore, if we pay more relative to cash earnings, we will ultimately get less. And, we will be exposed to downward price surprises, should security buyers decide that they won't play until they get more up front return.

Mikey
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Re: Yahoo "Finance Quiz"What do you mean by specif
Old 05-25-2004, 11:34 AM   #57
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Re: Yahoo "Finance Quiz"What do you mean by specif

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What do you mean by specifics?If what I have said in theory re timing and what JWR1945 has said with data re timing checks out, we have discovered something that is going to stand the world of investing on its head for years to come.
*****, I may be wrong, but I don't think JWR 1945 claims that he discovered market timing. You however appear to make that claim. I think that this is very strange. Essentially everyone believed in valuation based market timing until the EMH was popularized 30-35 years ago. And more recently, but well ahead of you, the whole group of psychology based academic market researchers have made and popularized valuation-based market timing. Shiller is one prominent example, but there are many more. If you don't know their work you should, because they clearly put you in a derivative position.

The effort to apply this in an algorithmic way to the SWR concept appears to have been made by JWR1945, and is very helpful.

Your posts are articulate, and IMO good popularizations of these ideas. But they might go down a little easier with less ego.

Mikey
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Re: Yahoo "Finance Quiz"
Old 05-25-2004, 11:43 AM   #58
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Re: Yahoo "Finance Quiz"

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mikey, I think if you read all of my posts, you would see that I understand volatility. That's primarily why I disagree with SWR and instead advocate a Flexible withdrawal rate.
Cutthroat,

I admit I may have missed one or 2 of your posts. Never miss a picture, though!

I do realize that you understand volatility. When I post I try to remember that there may be readers who are not posting, and since we were discussing SWR, I felt it was reasonable to discuss it as what it is- an attempt to fix a withdrawal rate in advance.

What we might or might not do if the you-know hits the fan is possibly more important, but IMO it isn't narrowly part of SWR.

Mikey
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Re: Yahoo "Finance Quiz"
Old 05-25-2004, 12:57 PM   #59
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Re: Yahoo "Finance Quiz"

Your posts are articulate, and IMO good popularizations of these ideas. But they might go down a little easier with less ego.

Thanks for putting forward this post, Mikey. My sense is that the concern you are raising is one shared by a good number of others. The best way to address an issue like this is to talk it through.

If what they write on my tombstone is that I was a good popularizer of ideas cooked up by others who were ten times smarter, that is A-OK by me. It makes zero difference to me who gets the credit for the ideas that help people achieve financial independence early in life.

Here's what does matter--that people hear those ideas, have the opportunity to ask questions about them, and make use of them to achieve their most important life goals. I have made it my life's work to see that those things happen.

When someone tries to diminish people's perceptions of the data-based SWR tool by ridiculing me, I do not see that as an attack on me as a person. I see it as something worse. I see it as a tactic to suppress understanding of an idea that has the power to help millions of people retire earlier. I need a means of dealing with those tactics.

The way that I tried to deal with them for a long time was to ask other community members to to do what they could to correct the record when something was said that appeared to be an act of gamesmanship. I didn't get many takers. I am not going to say why, but I think it is safe to presume that most of us who have been around the block a few times on these boards know the reason.

We need to find a way to permit people who visit these boards to converse in an honest and informed way on the subject of SWRs. It is an issue of great importance. It is an issue that is greatly misunderstood. It is an issue re which JWR1945 and I have come to some amazing findings. I agree with your suggestion that many of these findings are rooted in nothing more than simple common sense; that's why it was possible for me to come up with them. But we have a problem on these boards--common sense isn't nearly common enough on them, or at the least there are not many posters who are willing to give voice to their common sense given the circumstances that prevail.

I believe that you understand that the SWR is what the data says it is, Mikey. I need people to stop contesting that so that I can move on to discussions of the strategies that follow from an understanding of this common-sense reality. We need to give up this fiction that the SWR can be whatever we wish it to be or dream it to be or hope it to be. The SWR is a defined concept determined by making reference to data. It is what the data says it is.

When the Debate About Having a Debate ends and the real fireworks (the good kind!) begin, I will have some ideas re investing strategies that I will be putting forward. For the most part, however, I will be sitting in the back row taking in the knowledge being put forward by the scores of people in the various communities who have a good bit more to offer than I do when it comes to discussions of investing and numbers and lots of other stuff.

For now, though, what these communities are in desperate need of is someone who cares enough about our future to insist that we talk straight on this matter. That role seems to have fallen to me by default. I don't like being stuck in this role. If there is someone else who wants to take over the role of community scold, please let me know and you can have the job. Someone must do it, though. We must learn how to talk straight again if we are to move forward in the way that we should want to on the board project.

If you have suggestions for a better way for me to handle things, I am entirely open to hearing them. I put forward about a dozen different compromise proposals in the early days of the debate, most of which showed a great openness to giving the other side its due. I'm not willing to let the thing die altogether, though. There are too many people who told me how much they learned during the early days, when there was some honest and informed back and forth on the realities of SWRs, for me to let that spark die out altogether. The SWR issue is the most important issue that we have ever considered, and we should care enough about people's desires to achive safe early retirements to do what it takes to allow the debate to move forward.

I did not personalize this debate. I remember how I cringed the first time I saw a thread with my name in the title. If I had known then that it was going to happen about 500 more times in the course of the next two years, I surely would have crawled up into a great big ball and died. But I have become more or less oblivious to that sort of thing because I had to become oblivious to get done the job that needs to be gotten done. They say it takes a tough man to make a tender chicken, and the advancement of the Retire Early idea is a tender chicken that I want to see being served up on middle-class America's supper table in the not too distant future.

The debate should not be about persons. It should be about issues. You help me bring about that transition, and you will have my unending gratitude. You think up something to help us pull off that magic trick, and I firmly believe that in the long run you will have the unending gratitiude of the Retire Early community as a whole as well.
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Re:  Can we get back to the Yahoo! "Finance Quiz"?
Old 05-25-2004, 01:42 PM   #60
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Re:  Can we get back to the Yahoo! "Finance Quiz"?

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And this, Walker101, is what's known as hijacking a thread.

Did anyone happen to decide whether Yahoo!'s example is right or wrong? Anyone from Yahoo! come forward to defend it?
It was mentioned a couple of times, but not exactly like this, so I may be misunderstanding something: FIREcalc would assume a $30k withdrawal each year against a portfolio calculated with inlfation-adjusted returns. The Yahoo scenario isn't clear, but I take it they are changing the withdrawal yearly based on inflation; the results might vary depending on whether they calculate withdrawals and inflation from the beginning of the year or the end. I suspect they've made a serious goof such as perhaps using inflation-adjusted returns while raising the withdrawal for inflation which would double (or square?) the effect of inflation.
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