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Hi hocus, The "fluff" element is generally referred to as "speculation" by Keynes and Bogle too. The other element is the "fluff" element, the part of the price that reflects nothing more than the madness of crowds willing to bid up prices to levels that have no connect...

Hello Mr Solar, Thank you for your comments. I see we are in agreement but I would have worded it differently which perhaps changes the understanding somewhat. I wouldn't say it is a conservative approach, though it may seem that way. To base your current net worth on inflated values (whether the cu...

I don't know if I believe this to be true at all. If the valuation of your portfolio is re-calculated to take full account of overvaluation, then how does overvaluation matter? Are you thinking that the period of slow correction delivers historically less growth during that period? Petey I believe t...

Hi Ataloss, Previous highs is very different from historical mean. Previous highs could be inflated valuation even if not be so much. For my own thinking I reject that idea as only half good. I too cannot see the sense in increasing the swr in times of low valuation. Logic would clearly suggest the ...

Ataloss, I think it's pretty clear that many people are beginning to consider valuation as one key issue of which there many. We are looking at the FIRE subject from multiple angles and sometimes going back to the drawing board rather than starting from someone elses reporting, assuming that meets a...

Hi Ben, I have updated my previous reply to you as it was incorrect. The original post was to put forward a new way of thinking about the issues. This would allow all posters to discuss the matter, throw out what doesn't work, completely discard it if that's what needs be. Once this happens, a "...

Ben, Your withdrawal rate hasn't dropped from 4% to 3%. The understanding of your total assets based on intrinsic value has dropped and so whilst the w/d rate you arrived at has remained constant, your assets have been corrected down. The ideas I've put forward are actually a simplification of what ...

To be a little unfair, I would say that the downward movement of the withdrawal rate is purely because you took the complete wrong valuation of your assets at the time. The w/d rate hasn't changed in that sense, as per my longer posted reply I just made. This is similar to my adjustment for bubble e...

John, The college money issue is a seperate one. Clearly you have an issue on the set withdraw time, are more sensitive to drops in value and are likely to move to less volitile investment closer to when you need the funds. The funds would also not be considered part of the FIRE package that you liv...

Well in order to discuss the initial point, it was necessary to give a simplistic example. Of course you can sell down from high valuations and place funds in other asset classes. That is your perogative. I have more restrictions on that because I'll get killed with capital gains taxes, so I'll be m...

JWR, I am enjoying your multi-post responses, sometimes covering the same paragraph. Interesting to see how your mind works.. I wasn't suggesting re-investing the cash as you had mentioned in an earlier post. That indeed is one strategy to take advantage of a cheaper market to be sure, but that woul...

Interesting stuff. Thanks FMO. Petey Do you think you could add a little about Geraldine Weiss. Her books are all out of print via Amazon.com. Thanks, Petey Gladly. Geraldine Weiss is a popularizer of the theory that dividends are the single best indicator of the overall health and investment qualit...

SUMMARY of posted ideas in the thread so far : Paradigm shift in the approach to asset allocation during the Distribution Phase, a simplification of the safe withdrawal calculation away from methods like Monte Carlo Simulation. A move away from the unsolveable equation that is " How can we kno...

Hey FMO, Do you think you could add a little about Geraldine Weiss. Her books are all out of print via Amazon.com. Thanks, Petey I have recently been attracted to the "deep-value", high dividend stocks which Mauldin recommends. Lately I have been reading the works of Geraldine Weiss, the &...

I want to join in saying " Well Done, hocus ! " People like myself and Ben Solar who are in the accumilation phase I'm sure are especially interested in the issue of what to do about buying in during a high P/E market. It goes to the heart of some of the difficult issues we face outside th...

Could you clarify what you mean here, John?

Thanks mate.

Petey

JWR1945 wrote: Still, I have noticed that Warren Buffett's numbers are matching ours these days. It makes you wonder....

Have fun.

John R.

Killer hocus post! Hocus, do you feel that this book is highlighting that the current market is overvalued and buying at this point even over 20 years via dollar cost averaging might not be the best plan? It gets into the distinction between what is market timing and what isn't, and when is moving o...

Hi, I have decided to start a new thread on the investing options I have here and let everyone view it and see if they have any thoughts. Petey 2. Maximise tax advantages. Investing in low tax/no tax scenarios may give higher net returns than taxed higher risk/higher pretax return investments. Not s...

JWR, Re: Your bond commentary Would you agree that for the most part bonds will get poor results for the reasons I stated, interest rate increases likely etc? If S & P is also likely to get poor results in the 5-10 yr term, you're solely looking at alternative investments at that point, right? B...

JWR, It occurs to me that I've come a long way in my learning process to a point where I'm reading articles and papers by professors of Economics from Yale and Harvard. :) Interesting times! Not fun in a way that a woman would find attractive in a man who likes to have fun. But interesting times fro...