Datamining in Intercst SWR Study

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JWR1945
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Joined: Tue Nov 26, 2002 3:59 am
Location: Crestview, Florida

Post by JWR1945 »

hocus responds to my comment:

One could advance a plausibility argument that he is afraid of learning something new instead of deliberately lying.

I asked you to come up with anything you possibly could imagine, and you did so. I thank you for that. However, I don't think this explanation works when considering the contradiction brought out by examination of the statements in the two links I provided above. The statement in the first link shows that he possesses a clear appreciation of the limitations of the study. It is not me or DataSnooper or raddr saying that the study lacks statistical validity. Intercst says that. So why use numbers from the study as part of a calculation in which you purport to tell people how likelyas a statistical (or probability, if you prefer) matter they are to have their retirement plans succeed as they age, which is something that happensin the future?

I don't believe the plausibility argument either. But that is for reasons outside of the narrow context of these posts.

The statement in the first link does not show that intercst understands the limitations of his study. It shows that he knows that he cannot defend his assertions. He may believe his conclusions to be true...even though he, himself, cannot prove them. He is aware that other approaches can be questioned as well. He exploits that vulnerability.

Critical thinking shows that there are a variety of useful approaches, each with its own strengths and weaknesses. It is not an either/or situation. The various approaches are complementary.

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Then in the second statement he uses numbers pulled from his study in a new calculation that would make sense to perform only if those numbers provide a statistically valid insight into what may happen in the future....
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I can't say in a general sense whether his understanding of statistics is superficial or not....

The second statement is prima facie evidence that his understanding of probability and statistics is superficial. It was OK that he made the post and that he made a mistake. What is not OK is that he never corrected it.

Perhaps, to simplify what raddr has said:

intercst stated that a 59 year old man has a 1% chance of making it to age 99 and that a (some specific number) withdrawal rate provides a 1% chance of failure (or a 99% chance of success) within 40 years. He wrongly concluded: "Combining the probabilities of the portfolio's running dry and the odds that our retiree will actually live long enough to see his portfolio run dry yields"￾ is 0.1%.

Suppose that a particular withdrawal rate does have a 99% chance of lasting 40 years. But suppose that the single failure (out of 100 historical sequences) happens in year 5. Unless he is certain to die within 5 years, he will have (something very close to) a 1% chance of that he will see his portfolio run dry.

Have fun.

John R.
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