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JWR1945
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PostPosted: Mon Jul 05, 2004 2:58 pm    Post subject: Reply with quote

th
Quote:
Uhh..I said that. And it had nothing to do in its original context with the "conventional methodology". Further, 60% stock is not something i'd consider "high". Further, the study absolutely showed many end balances higher than zero.

No, you did not!

You do not have to defend it. And you definitely are not responsible for its context.

Telegraph said that. Those words were in green in ataloss's post.

Telegraph and the others made ridiculous claims like this. Whenever someone mentioned holding TIPS to maturity, it was ignored, never considered possible. [I am not kidding. Holding to maturity was always considered impossible.]

Have fun.

John R.


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JWR1945
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PostPosted: Mon Jul 05, 2004 3:10 pm    Post subject: Reply with quote

peteyperson
Quote:
This is also ignoring that it is discussing a strategy for investments that are no longer available, were only available for a year or two? and a strategy that cannot be replicated by anyone reading the posts now. This makes it something very few people can use in a practical sense and so not very useful in post or book form to discuss. It is like guys getting together talking about current dating opportunities and women and discussing Marilyn Monroe and everyone failing to mention that she's not available as she's dead. The 4% TIPS are dead too.

You are striking out against the wrong person. It is ataloss who has dragged us back into the past with his quotes by telegraph.

If we are going to get beat up with ataloss's quotes from the past, then we need to be able to respond in terms of the investments of the past.

I would very much prefer to get away from those past posts. I don't see how they accomplish anything constructive.

Have fun.

John R.


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bpp
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PostPosted: Mon Jul 05, 2004 4:00 pm    Post subject: Reply with quote

Hi Petey,
Quote:
Many say that the US Govt is "risk-free" and ignore or aren't aware that the US Govt defaulted on their financing agreements on War Bonds.


Do you have a reference for this?

I have heard that the US government has never defaulted on a bond, and can't find anything to the contrary on the web. You're not thinking of Confederate bonds by any chance, are you?

Bpp


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th
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PostPosted: Mon Jul 05, 2004 4:03 pm    Post subject: Reply with quote

JWR1945 wrote:
th
Quote:
Uhh..I said that. And it had nothing to do in its original context with the "conventional methodology". Further, 60% stock is not something i'd consider "high". Further, the study absolutely showed many end balances higher than zero.

No, you did not!

You do not have to defend it. And you definitely are not responsible for its context.


You must be right John. Not only do I not agree with your ludicrous claims, I dont even know what I myself have said. What WAS I thinking?

I couldnt be bothered to search for the quote and its location, but I said nearly the same thing, if not word for word. And I agree with it. And defend it. Easily.

I'm as done with you as I am with your other buddy...see ya later...



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peteyperson
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PostPosted: Mon Jul 05, 2004 10:23 pm    Post subject: Reply with quote

Hi bpp,

The reference for this is probably long gone. It was definitely US war bonds though.

Petey
bpp wrote:
Hi Petey,
Quote:
Many say that the US Govt is "risk-free" and ignore or aren't aware that the US Govt defaulted on their financing agreements on War Bonds.


Do you have a reference for this?

I have heard that the US government has never defaulted on a bond, and can't find anything to the contrary on the web. You're not thinking of Confederate bonds by any chance, are you?

Bpp


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bpp
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PostPosted: Mon Jul 05, 2004 10:56 pm    Post subject: Reply with quote

Hi Petey,
Quote:
The reference for this is probably long gone. It was definitely US war bonds though.


To make sure we're talking about the same thing, these are World War II War Bonds? Also known as Defense Bonds, Victory Bonds, and after the war as E and then EE Bonds (which are also labelled Patriot Bonds now)?

The only things I can find related to default are bonds that the Confederacy issued during the Civil War, which were sold in Europe and defaulted on (so there may be a memory of them in UK financial circles). But I can't find anything indicating that the currently-standing US federal government has ever defaulted on a bond. In fact, I can find several places where it is stated that it has never defaulted.

Furthermore, since the abolishment of the gold standard, I can't even see why it would ever need to default -- it can just print up the dollars needed to redeem the bonds, at the cost of some inflation, if needed.

While thinking about this, a thought struck me: what was the purpose of the War Bonds in the first place? Ostensibly, to raise money, but since the gold standard had been abolished in the 30's, the government could always just print any money it really needed if pressed against the wall. Or deficit-spend, and plan to pay it all off afterwards. I think the real purpose of the War Bonds was to take money out of circulation, and thereby prevent (or delay) inflation due to the massive government spending of wartime.

If this is so, then is that also the real purpose of federal government bonds now? Hmm...

Then again, I could be all wet.

But seriously Petey, if you have any recollection of the details of this purported default, I would very much like to hear more. (And not just as the holder of some EE Bonds, either!)

Bpp




Last edited by bpp on Tue Jul 06, 2004 6:41 pm; edited 2 times in total
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ataloss
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PostPosted: Tue Jul 06, 2004 10:25 am    Post subject: Reply with quote

for the record, the telegraph quote was intended to show "the other side" of the hocus presentation of this ancient thread

here is another favorite from hyperborea (in green):


While some of the posts on this board are rather long and technical, I wouldn't want them anywhere else, because they are all about FIRE.

That would be fine if they were about investing or FIRE. They're not. They're about who gets to be "board general", or how he could tell us his secret undiscovered investing method but won't until we have a discussion on whether everybody really "loves" him, or he posted something once that got a lot of recs (though for a fair analogy more people have read a romance novel than have read a finance book but that won't help us FIRE).

hyperborea was ahead of his time



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JWR1945
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PostPosted: Tue Jul 06, 2004 1:34 pm    Post subject: Reply with quote

For th: You have really gone off the deep end by siding with telegraph in this series. Remember, what I told peteyperson. If ataloss insists bringing up the past, which he did, then we need to be able to respond with the context that existed at that time.
Quote:
Quote:
With 4% TIPS a retiree could withdraw 4% of his initial balance (plus increases to match inflation) for 30-years and still ended up with his original balance (plus inflation).

True, if you could buy 4% tips today without paying a 25% markup, resulting in a sub 3% real yield. But you cant. So whats your point? That you were right once? I was right once too. Wink

If this had started without ataloss's having brought back the past, I would not have mentioned this. At the same time, we would not be seeing telegraph's remarks.
Quote:
Quote:
Even if we had insisted on using 2002 TIPS rates, a person could easily withdraw 4% for 30 years and end up with a significant final balance. The conventional methodology insisted that the final balance had to be zero.

Guess that requires one is in agreement with what is "significant". And wrong again, the 'conventional method' makes no such insistence. I hate to have to keep defending something I don't believe in, but you're forcing my hand with these completely out of context, incorrect and ridiculous statements.

Do the math. The coupon was 3.375%. Withdrawing 4% plus inflation each year for 30 years would still leave about 80% of the initial balance in terms of real dollars. How can you say that 80% is not significant? Only by shooting from the hip!

And, yes, the conventional methodology requires planning for a final balance of zero. It allows for the possibility of better returns, but its claim for safety is based upon a final balance of zero.

My point is that ataloss brought up a discussion that is out of context and so forth. My point is that we should not have to respond to such posts.
Quote:
The quoted remark was demonstrably false when it was made. Yet that was typical of the time and the place (discussion board).

This is, of course, true. No one can defend such remarks in the context that existed when they were made.

Again, I want to get away from rehashing the past.

Have fun.

John R.


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ataloss
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PostPosted: Tue Jul 06, 2004 2:06 pm    Post subject: Reply with quote

Quote:
If this had started without ataloss's having brought back the past,


Thank you again jwr for saying that I brought up the past but I have to give full credit to my mentor and hero hocus (he did cite his post/thread from the hocus board- second thread in this one) Hocus quoted the part about..why don't you share your ideas but forgot the part about actually making a point. I just wanted to add that for the record.

by the way, this is my favorite post from that long ago thread:

I was always taught that if you can't explain your idea in one or two sentences, you don't have one.

nmckay



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hocus2004
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PostPosted: Tue Jul 06, 2004 2:47 pm    Post subject: Reply with quote

Here is a link to the thread under discussion.

http://www.nofeeboards.com/boards/viewtopic.php?t=2698


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th
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PostPosted: Tue Jul 06, 2004 2:53 pm    Post subject: Reply with quote

JWR1945 wrote:
For th: You have really gone off the deep end by siding with telegraph in this series. Remember, what I told peteyperson. If ataloss insists bringing up the past, which he did, then we need to be able to respond with the context that existed at that time.


If this is the deep end, I'm going to look for something deeper.

And I dont have do do any such thing as you suggest. Apparently your opinion of being able to predict the future, tell people what they have and havent said and win wars against unstructure opponents also gives you the feeling that you get to state the parameters of a discussion as well? Laughing

My opinion is in contrast with todays, yesterdays or tomorrows situation.

Living off of fixed income investments in avoidance of equities would have barely worked ONCE if one was willing to buy into a new class of investment instruments (tips) which few would have felt comfortable in making a major (leave alone total) investment at the time they were available with the high interest rates. If one could live off of ~4%.

Wasnt doable before then. Hasnt been able to be done since. May not be able to be done unless rates take off. Cant work right now without portfolio cannibalization. Come on now, pick the nit. Tell me about german cd's in 1835 that one could have made a consistent real return of four percent on. That will surely cement your point.

Maybe you and Hocus should get your stories straight as well. He's over on dory's board saying he doesnt recommend getting out of equities, just "taking a little off the table".

But I suppose thats part of the routine. Pick at nits, change the subject, bounce between more than one story to suit creating a disruptive dialog, choose conditions from one space and situations from another that are incompatible, suggest measuring and prediction of unmeasurable and unpredictable chaos, avoid answering direct questions, suggest people have said things they havent said (or vice versa), ask questions five and six times that have already been answered, bemoan persecution and censorship and then pursue persecuting and censoring others.

Its really sort of fun to watch once you know what game is being played.

ES - with full understanding and having first hand knowledge of the "JWR/Hocus" experience, this is not a very good experiment. These guys have exactly two or three minor points coupled with a bunch of potentially bad ideas/advice and a lot of bad baggage.

That having been said, I still dont feel the need to run for the hills or wig out because they're here.



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ElSupremo
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PostPosted: Tue Jul 06, 2004 3:08 pm    Post subject: Reply with quote

Greetings th Smile

I'm happy your hanging around th. Because when any of you folks are posting about any other subject those posts are wonderful, informative and intelligent. Since I know there will be more of those type of posts in the future it's easier to skip over this stuff. Cool



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hocus2004
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PostPosted: Tue Jul 06, 2004 3:11 pm    Post subject: Reply with quote

"Maybe you and Hocus should get your stories straight as well. He's over on dory's board saying he doesnt recommend getting out of equities, just "taking a little off the table". "

Here's a link to the post at the Early Retirement Forum.

http://early-retirement.org/cgi-bin/yabb/YaBB.pl?board=saferate_board;action=display;num=1089131542


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th
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PostPosted: Tue Jul 06, 2004 4:22 pm    Post subject: Reply with quote

ElSupremo wrote:
Greetings th Smile

I'm happy your hanging around th. Because when any of you folks are posting about any other subject those posts are wonderful, informative and intelligent. Since I know there will be more of those type of posts in the future it's easier to skip over this stuff. Cool


I agree. Perhaps we can keep more of "this stuff" in the sub forum where it belongs. Maybe mark that one "For entertainment value only!" ? Wink



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ataloss
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PostPosted: Tue Jul 06, 2004 5:06 pm    Post subject: Reply with quote

I for one am not posting on the hocus board. Salaryguru had a post which apparently failed to show enough admiration for our esteemed swr expert and it was pulled. jwr doesn't like the fact that I exposed a bit more of the old thread that hocus cited and it didn't support the contention that the masses at tmf were yearning for more hocus. That would have been pulled at the hocus board I am sure.

maybe next time he cites a thread from there he will be able to find one that suggests more true interest in his "insights." Or maybe next time I won't feel like posting the other side



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hocus2004
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PostPosted: Wed Jul 07, 2004 1:19 am    Post subject: Reply with quote

"Salaryguru had a post which apparently failed to show enough admiration for our esteemed swr expert and it was pulled."

Here is a link to the "Dead Posts File" thread. This contains an explanation of my reasons for deleting the SalaryGuru word game post.

http://www.nofeeboards.com/boards/viewtopic.php?t=2636

"it didn't support the contention that the masses at tmf were yearning for more hocus."

A link to the "Square One" thread is provided above.

"maybe next time he cites a thread from there he will be able to find one that suggests more true interest in his "insights.""

Here is a link to the "Motley Fool Takes Action" thread. I added a post to that thread this morning in which a good number of community members there express a desire for honest and informed debate on the realities of SWRs.

http://www.nofeeboards.com/boards/viewtopic.php?p=22242#22242

path40a: " I quickly realized that there was an on-going debate and some history between someone named intercst and someone named hocus. Both seemed to present thoughtful information, albeit from differing viewpoints (always good, IMNSHO). I then noticed that the tone of the discussion shifted to one which was quite combative, with perhaps an endgame intending to silence the less popular opinion....While I see nothing wrong in taking sides in a debate, I find the goal of silencing dissenting voices appalling."


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ataloss
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PostPosted: Wed Jul 07, 2004 1:44 am    Post subject: Reply with quote

I could respond but jwr would accuse me of bringing up old irrelevant crap Laughing



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salaryguru
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PostPosted: Wed Jul 07, 2004 9:24 pm    Post subject: Reply with quote

hocus2004 wrote:
. . . This contains an explanation of my reasons for deleting the SalaryGuru word game post.

http://www.nofeeboards.com/boards/viewtopic.php?t=2636

. . .


hocus,

There was nothing about my post that was a "word game". My post was direct, completely accurate, and contained nothing that was not in good taste. Everyone but you and JWR who posted comments about your action told you the same thing. That seems like a pretty self-riteous action to me.

You may post whatever you want on your own board. You may question my abilities, disparage my knowledge, accuse me of playing "word games", call me names, or take a virtual p!$$ on my leg. You can control that discussion entirely as far as I am concerned. You have made it clear that my inputs are not welcome and I don't see anything that I can gain by posting in that environment. I don't even read that board any more.

But none of that changes the fact that your's (and JWR's) attempt to include a type of perturbation analysis to include valuation information in the historical SWR calcuation is without mathematical merit.

Let me recount some of the problems:

1) You have not adequately characterized a relationship between your single metric (PE10) and the forward looking 30 year valuation data that is actually needed to do what you would like to do. If you bother to complete that analysis you will find what many others have found over the decades . . . backwards looking metrics are not adequate to predict the future. Stated another way, "Past performance is no guarantee of future results."

2) You have not completed a principle component analysis to prove that that PE10 is a primary and independent factor or that it is orthoganol to other critical factors. If you bother to complete this, you will find that PE10 is only one of a large number of metrics that correlate to the historical SWR and that it is not an independent variable.

3) You have not provided any justification or cause-and-effect analysis to explain why the PE10-SWR correlation is or should be linear in the range of observed data. If you bother to look at this, you will see that it doesn't look linear and that it is better fit to a decaying exponential or to a logarithmic function . . . and by the way, the use of one of these functions changes your conclusions dramatically.

4) You have not provided any logical explanation for why the assumed functional dependence of SWR to PE10 would be expected to follow outside the range of observed data. This is a problem inherent to any empirical curve fit approach. It is no less applicable here.

5) You have not examined the accuracy (error bars) implied by the data or included this in your analysis. If you bother to do this, you will see that your PE10 to SWR curve fit is accurate to less than + or - 1.0% SWR. This kind of accuracy is simply not useful for most ERs.


hocus2004 wrote:
path40a: " ....While I see nothing wrong in taking sides in a debate, I find the goal of silencing dissenting voices appalling."


I find it amazing that you have the audacity to quote this in a post discussing why you removed my post. Do you even see a problem with that?



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hocus2004
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PostPosted: Thu Jul 08, 2004 1:01 am    Post subject: Reply with quote

"There was nothing about my post that was a 'word game'."

Here is the section of the "Dead Posts File" thread that explains why the earlier SalaryGuru post was indeed a word game post.

hocus2004: "There are three word games being played in the SalaryGuru post.

"One, he puts forward a claim that "No one has proven a 4% initial withdrawal rate (with appropriate allocation and fees) has ever failed for a 30 year retirement." No one has ever put forward a contrary statement on this point. To suggest that there is some sort of dispute on this question is to play word games. It will not be tolerated at this board.

"Two, he says that "these studies have not failed," reiterating the word game described above in support of this claim. The obvious reality is that the conventional methodology studies have indeed failed. These studies purport to tell us a withdrawal rate that is safe according to the historical data. The historical data reveals the number they have given to be a high-risk withdrawal rate at the valuation levels that have applied since the late 1990s. A high-risk withdrawal rate is not a safe withdrawal rate. The studies failed to do what they purport to do.

"Three, he says that "as of today, no one has proven that the 4% figure will fail." Again, this is a question not under dispute. The 4 percent number has been proven to be a high-risk withdrawal number for those with high-stock percentage portfolios. Whether it will fail or not is something that will be determined in future days. It is not something that we need to concern ourselves with at this board. Our purpose is to determine the withdrawal rate that is safe according to the historical data, presuming that stocks perform in the future somewhat in the way in which they have performed in the past."

"none of that changes the fact that your's (and JWR's) attempt to include a type of perturbation analysis to include valuation information in the historical SWR calcuation is without mathematical merit.... "

If there are any community members interested in having a discussion of the points put forward by SalaryGuru in this section of his most recent post, please put up a post at the SWR Research Group board kicking off a thread on these questions. The SWR board is a community resource that was created to provide community members seeking a safe place to discuss the realities of SWR a way to escape the various posting practices that have been employed to block reasoned discussion during the 25-month Campaign of Terror led by intercst and encouraged and supported by the various Defenders of the Conventional Methodology.


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bpp
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PostPosted: Thu Jul 08, 2004 2:05 am    Post subject: Reply with quote

Hocus,
Quote:
The 4 percent number has been proven to be a high-risk withdrawal number for those with high-stock percentage portfolios.


It has only been shown to fall into the category of "high-risk withdrawal" according to your (or JWR's) chosen criteria. These criteria assume, further, that the correlation between historical withdrawal rate and 1/PE10, found using only data from 1923 onwards, can safely be extrapolated into the future, and beyond the limits of the historical 1/PE10 range, without change. You may find the assumptions behind this definition of high-risk to be solid enough to put your money behind it, but to someone who does not accept your assumptions, you have not proven a thing. I myself find the plots somewhat intriguing and suggestive, but it is a long way from that to considering anything to be proven.

Bpp


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