Different methods of safe withdrawal / strategy. Re: Hocus

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JWR1945
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Post by JWR1945 »

hocus
Or are you saying that intercst thought he knew that the correct answer was somewhere between 70 percent stocks and 90 percent stocks...?

That is what I am saying. At one time he had a mathematics problem to solve and he calculated an answer. The 74% number was his new discovery.

I agree that intercst has greatly misrepresented what his mathematics problem applies to. I agree that he has shown an incredible indifference to the damage that he has caused. In fact, it is way out of my range of experience. It is still hard to believe even though I have seen it again and again.

Have fun.

John R.
hocus
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Post by hocus »

I agree that he has shown an incredible indifference to the damage that he has caused. In fact, it is way out of my range of experience. It is still hard to believe even though I have seen it again and again.

Your reaction reveals the reason why it is taking the board so long to deal with the problem. I am not asking the board to make a small change in its mindset. I am saying, "you know that person who started this wonderful board that has done so much good for you, he is a con artist." The general reaction is "it's not possible." There's cognative dissonance.

People can read the posts and there are varying levels of understanding that there is something wrong with the intercst claims. Everyone knows that there is something fishy going on, some have a better understanding than others of the details. But only those that started this thing with a particularly strong understanding of the matter--the best posters of the board--have had the self confidence to accept the conclusion that reason leads them to--intercst really is engaging in deception. That's why it is the best posters who got disgusted first. The rest are still working up to it, still trying to figure it out.

It is only intercst that is a problem. Telegraph, Hyperborea, Holzgraf, these posters do not possess any personal desire to disrupt. They do what they do out of loyalty to intercst. These are not bad people. They are doing what I did for three years, allowing their personal affection for someone who has helped them influence their judgment. Loyalty is a virtue. When the board gets around to dealing with the intercst problem, all the rest falls into line quickly. The board is healthy at its core.

The board is one or two big steps from health. People look at the surface, and they conclude that there is no way to redeem this board. Not so. A couple of big names demand that intercst knock off the funny business, and the blackness disappears. People are being fooled by what goes on at the surface.

Ask yourself, What caused Prometheuss to put up that recent post of his? It was remarkable. He summed up the four major deceptions better than I could have if he had asked me to write the post for him. Prometheuss was second only to intercst in his disdain for me in the early stages of the debate. What caused him to put those words in a post? Why did he do it?

I believe that he is trying to sort things out himself. He supports intercst. He wants me to go away. But there is some font of integrity at his core that causes him unease when I put up true statements and his side puts up false ones, and it happens over and over again. Prometheuss wants me to knock it off, but there is a limit to how many false statements he can hear from intercst and not be personally troubled by his close association to him. At some point, he asks intercst to knock off the funny business.

That's when Humpty Dumpty crashes to the ground. Once the cognitive dissonance is overcome, the old illusions can never be restored. Then it all goes the other way. Then people start saying, "You know, I sensed there was something wrong about this intercst fellow from the start."

Intercst is pushing his luck. He has relied on his storehouse of goodwill on the board for so long that be believes that it can never fail him. The board is beginning to feel taken advantage of. It's a patient board and a tolerant board, but it's not an unlimited patience and an unlimited tolerance.

Or maybe I'm all wrong about this. We'll see.
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Post by raddr »

And what can you say about Arrete? She's a mouse in the corner for years while intercst gives fallacious advice causing board members to lose hundreds of thousands of dollars of hard-earned wealth. That doesn't bother her. She says nothing while his actions causes a board she has been participating in since day one sinks lower and lower into the mud. That's not worthy of comment in her scale of values. She raises no objection to a viscious smear campaign directed at one of the board's best posters. That's no biggie.

But someone refers to her as a "fawning admirer" of intercst, and we need to call in an international task force to address the problem of her wounded feelings. Oh my! What a board we have here, one who refers to people like arrete as "fawning admirers." How uncivil we have become! And she is so worried that I am being unfair to ES by continuing to post there. She is oh so concerned about ES at all those moments she isn't engaged in a slam at the wonderful site he has created for us all. As if the ES's of the world needed the support of the Arrete's of the world for their ventures to succeed. It's beyond pathetic.


hocus,

I think I was the "villain" here <chuckle>. Your comments are totally correct of course. I was browsing the other board when I happened upon a nonsensical post by intercst in which he claimed that by breaking down history into months rather than years and thus adding to the already massive data overlap problem that he was vindicated. I was getting ready to blow it off when I saw this from the protagonist you mention above:
Very nice, intercst. It's too bad that you have to go through all these contortions to protect your reputation. Besides, I thought you were retired <g>.

If anyone has posting priveledges at the No Fee site, I suggest they post these URLs.


Clearly she was beside herself that the infidels over here would be proven wrong and that someone needed to post a link at NFB to this ground-breaking research. I was happy to do that - before ripping it to shreds. :lol: It was just too easy.

If one does not wish to be called a fawning admirer then one should not gush about flawed research and suggest that it be thrown in our face over here. :wink: Far from being concerned with ES's feelings, what she really wanted was to discredit us over here. Better luck next time.
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Post by wanderer »

I agree that he has shown an incredible indifference to the damage that he has caused.

that's what finally caused me to post extensively on real estate. when i saw the total absence of discussion while the market melted. meanwhile our port grew and grew (in spite of a fairly heavy us equity exposure). RE literally saved our fi.:)

i attempted to offer a way out. apparently a number of folks thought it was semi-lucid.

honestly, i could care less what people do. i just want an honest appraisal of the facts. we seem to have that here in a variety of areas, here. there's one i'm working on one poster on...:wink:

diff'rent strokes...
regards,

wanderer

The field has eyes / the wood has ears / I will see / be silent and hear
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Post by wanderer »

raddr -

yeah, the "fawning admirers" thing really torqued arrete. I was like, "well, what part of that is inaccurate? she clearly admires intercst, says words to that affect all the time. And

FAWN implies seeking favor by servile flattery or exaggerated attention <waiters fawning over a celebrity>.

http://www.m-w.com/cgi-bin/dictionary?b ... ry&va=fawn

She's sort of servile and engages in exaggerated flattery like inter*st is a celeb." Seemed reasonable to me...:wink:

and it also kinda reminded me of those animals she rehabilitates and sets free.

Seemed reasonable to me...:wink:
regards,

wanderer

The field has eyes / the wood has ears / I will see / be silent and hear
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Post by wanderer »

es -

don't get too light headed with arrete's effusive concern. methinks she be trying to rather transparently get rid of hocus.

but we still luv ya!:wink:
regards,

wanderer

The field has eyes / the wood has ears / I will see / be silent and hear
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ElSupremo
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Post by ElSupremo »

Greetings wanderer :)
don't get too light headed with arrete's effusive concern. methinks she be trying to rather transparently get rid of hocus.


No worries. 8)

ES
(Who's just one of raddr's infidels. :wink:)
"The best things in life are FREE!"

www.nofeeboards.com
raddr
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Post by raddr »

wanderer wrote: raddr -

yeah, the "fawning admirers" thing really torqued arrete. I was like, "well, what part of that is inaccurate? she clearly admires intercst, says words to that affect all the time. And

FAWN implies seeking favor by servile flattery or exaggerated attention <waiters fawning over a celebrity>.

http://www.m-w.com/cgi-bin/dictionary?b ... ry&va=fawn

She's sort of servile and engages in exaggerated flattery like inter*st is a celeb." Seemed reasonable to me...:wink:

and it also kinda reminded me of those animals she rehabilitates and sets free.

Seemed reasonable to me...:wink:


If the shoe fits...
wanderer
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Post by wanderer »

perhaps "oleaginous sycophants"? therealchips, help us here...:wink:
regards,

wanderer

The field has eyes / the wood has ears / I will see / be silent and hear
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Post by wanderer »

It gets very confusing comparing my approach to the intercst approach because we seem to have started with entirely different goals in mind. My goal was to determine the investment allocation that would permit a reasonably safe retirement as quickly as possible. It appears to me that intercst's goal was to come up with an approach that would make the numbers look good for a 74 percent allocation to S&P 500 stocks. I know that last sentence sounds biased, but I am not able to come up with any other reason why he designed his study the way he did.

int*rcst's approach copied that of William Bengen and (probably) the Trinity folks. Which is to say that he was trying to verify there results. He's added some fairly dirty data and other minor bells and whistles but the ideas are theirs, essentially.

Their approach looks very much like the managerial finance, EMH approach - a risky and riskless asset combined to achieve some optimal return (in this case the highest withdrawal rate that wouldn't fail assuming the future was identical to [or better than] the past) while minimizing risk.

That is where the idea for the study comes from - it essentially replicates and drops a few other bells and whistles in the mix. it is a very handy summary of the data points collected by the above referenced folks and Mr. Shiller.

imo.:wink:
regards,

wanderer

The field has eyes / the wood has ears / I will see / be silent and hear
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Post by hocus »

That is where the idea for the study comes from - it essentially replicates and drops a few other bells and whistles in the mix.

That's a useful summary of the intellectual background of the study, wanderer. All that you say here sounds right to me. But I still stand by my statement to Petey that I cannot figure out what he was trying to do in designing the study the way he did.

I understand that he was in part copying the work of these other individuals. But he was doing more than copying. He was taking the work of these individuald and adding to its value by giving it a specific application in helping people put together successful plans for early retirement. This is the intercst contribution to the field, taking the research that already existed and tailoring it for use by aspiring early retirees.

It is at this point in the formulation of the intercst research, the point at which he tailored it for use by early retirees, that everything fell apart. For academics, it is perfectly fine to provide insight into what happened in the past. That's an interesting question, and it is the job of academics to pursue such theoretical matters. But this is not the purpose of research done to help aspiring early retirees. What we need to put together our plans is some sort of insight into what may happen in the future, given what we know about what happened in the past.

Safe withdrawal rate analysis is a powerful tool for providing this insight. Intercst did exactly the right thing in turning to this earlier research for help in provding insights to a Retire Early board. But he dropped the ball in designed the "bells and whistles" (the part he added to the earlier research) in a way that misleads rather than informs.

To make the research done by these other individuals useful in any practical sense for early retirees, you must make adjustments so that it gives you some idea of what withdrawal rates will suceed in the future. It is not the safe weithdrew rate, it is the safe withdraw rate. There is not one early retiree on the face of the earth with an intense desire to know what happened in the past and no interest in applying that information to learn what might happen in the future.

So why not incorporate into your study data that bears on the question of what the safe withdrawal rate will be in the future? Valuation levels have always affected stock returns, and stock returns affect the SWRs of investors investing in stocks. So why not include an adjustment for valuation levels in your study? It makes no sense whatsoever not to do this.

This was the question I asked in the post from May 13, 2002, that started all this. I said that I liked the intercst study, but that I thought it would be even better to have a SWR study that provided us with a number that possesses some practical value. The board community was excited about the prospect of figuring out this number. But intercst went nuts. He doesn't want to know the true SWR and he doesn't want anyone else on the board to know it either. He is passionate about this.

This to me is a riddle. It is all but inexplicable. The only explanation for his intensity on the this question that I have been able to come up with is that his real goal all along was not to know how to invest for early retirement, but to rationalize a 74 percent S&P stock allocation. Stocks come first for intercst. If investing in stocks permits early retirement, that is OK with him. But if investing in stocks requires a delay in retirement of many years, that is OK with him too. Investing in anything other tha stocks is "irrational" in his world view, and the historical data be damned if it says anything different.

I have at times referred to people who save nothing and thereby become stuck doing work that doesn't excite them as "wage slaves." Intercst supporters' love for stocks is so great that they are not willing to look at any data that shows them how to attain financial independence sooner with alternate asset classes. I think that it is fair to refer to such people as "stock slaves."

My interest is in learning how to achieve financial indepedence as early in life as possible, regardless of the asset class used. Intercst is coming at the problem with an entirely different goal in mind. That is why we have so much trouble communicating with each other.
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