GARCH

Research on Safe Withdrawal Rates

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JWR1945
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Post by JWR1945 »

I'm always reluctant to say "This is better than that."
My usual stance is to say "I think this is better than that".
I am willing to take a stronger position when I have control of the criteria behind such comparisons.

In this particular instance, I presented my rationale.

Others can reach different conclusions, of course, according to their own criteria.

Considering the amount of content at your site, you rarely use the words I think.

Have fun.

John R.
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Post by gummy »

These matrix equations are very easy to solve.
Neat!
You get your TV-math degree :D

I've decided to (finally!) advertise your tutorial on my website.
Who knows, we might get some feedback.
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Post by JWR1945 »

For gummy:

I like your idea of using colors to differentiate special terms (HDBR, HFWR, etc).

It is not entirely my tutorial. You have made helpful contributions. Hocus is contributing as well.

Have fun.

John R.
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Post by gummy »

Considering the amount of content at your site, you rarely use the words I think.
Almost all of the stuff on my website is the work of others.
I just describe them in terms (hopefully!) that the average reader might understand.

There are very few of my own contributions (which may explain the few "I think" phrases).

Can you find anywhere where I've said that MY method is better than other methods?

I doubt it.
However, if you ever find such a claim, I'll immediately delete it :o
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Post by JWR1945 »

For gummy:

We are getting close to the tutorial's final clean up.

Here are three nit pick changes:

HFWR, the Half Failure Withdrawal Rate, does not have to end up with something close to one half of its original balance. It only has to come close to one half of its original balance at least one time on or before year 30.

This may be a better choice of words. Consider moving the reference to 2035 to improve clarity:
4. If the equation is (for example) :
y = 0.490x + 0.029
and the most recent
E10/P = 0.035 (or 3.5%)
then we get
y = 0.49*0.035 + .029 = 0.046 or 4.6% as the Calculated Rate for the coming year. This is our best estimate of what history will record as the Historical Surviving Withdrawal Rate when looking back in 2035.
Change to something like this:
4. If the equation is (for example) :
y = 0.490x + 0.029
and the most recent
E10/P = 0.035 (or 3.5%)
then we get
y = 0.49*0.035 + .029 = 0.046 or 4.6% as the Calculated Rate for the coming year. This is our best estimate of what history will record in 2035 as the 2005 30-year Historical Surviving Withdrawal Rate.
Correct my gramatical error by changing remains to remain:
9. The data that remains range between +1.4% or +1.5% above the regression line and -1.8% below the regression line. The total range of the data above and below the regression line is 3.2% or 3.3%.
Have fun.

John R.
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Post by hocus2004 »

Hey hocus:
Concerning "I think...",
a wise man once said:

Don't forget, gummy, this stuff may someday stand the world of conventional investing advice on its head. If that happens ...


I was being a little bit playful when I said that, Gummy.

Still, I stand behind the statement. It's a true statement. I really do believe that this stuff is going to stand the world of investing on its head. And I can present a lot of evidence backing up that assertion. Just look at the number of posts that my May 13, 2002, post generated. The count is in the tens of thousands. Does that not tell us that something is up? I am a reporter by trade, and, when I see an idea generate tens of thousands of posts, my spidey sense starts tingling like mad. This stuff gets to people. It gets to people because they sense that it matters so much. When people come to change their minds about something that matters as much as this does, the world is stood on its head. People have to completely reorient their thinking about how to invest as a result of the discoveries we have made at this board. That's pretty darn cool.

Now, there is someone out there who will have a heart attack when he reads that statement and said, "Oh, the arrogance!" Well, there's nothing arrogant about it. There never has been. I don't claim to be an investing expert because I am not. I am a guy who was putting together a Retire Early plan in the mid-90s, and I did some research into SWRs and I came up with an important discovery. That's all. It's nothing more than that, but it's nothing less than that either.

The way that people should have played this is, all sorts of people should have been contriibuting in a constructive way so that we could develop the insight together. There are all sorts of people who have valuable things to contribute. I'm asking for community input. That's not arrogant. The arrogance is with the guy who says "I alone in this world am incapable of ever getting a number wrong, I will kill anyone who asks any questions about my methodology or who checks the historical data to see if what I insist is so actually is so." That's big-time arrogance. And that guy's response has been the entire problem for 34 months now.

We didn't have death threats on the day this started, Gummy. We had discussions. And we didn't have people telling me that I was arrogant or dogmatic or any other such nonsense when this started. We had people coming forward saying "Thanks, hocus, this is the most exciting discussion we ever had here!" Why were they saying that, do you think? Because I was so off-putting in the way that I came forward with this finding? No. They said that because they appreciated they help I was providing the community by sharing my insight with the community free of charge. I was doing what you are supposed to do on a discussion board. I was contributing. I wasn't threatening people. I wasn't deceiving people. I wasn't wasting people's time. That was the other guy.

The ertire problem that we have experienced with this is that there are a number of community members who are too afraid of the guy to tell him where he can go with his threats and his deceptions and his nonsense. He has built up a reputation over a long period of time of being absilutely ruthless with anyone who crosses him, and to him the phrase "crosses him" means anyone who posts in an honest and informed manner on any of the issues on which he has put forward one of his nonsense gibberish dogmas.

I ain't gonna go cry in a corner because I came up with an insight that changed the history of this movement forever. That's what I aim to do with all the effort I put into this. My goal is not to put up any old nonsense that happens to come into my head. I do my homework. When I put something forward, it's something I have checked out before I go shooting my mouth off. I think it is fair to say that the other guy doesn't play it that way. Too bad for him. I am not going to apologize for getting the number right when he is unable to apologize for getting it wrong.

Why is it that so few challenge him, Gummy? Why is it that we don't have people asking that he come clean? There are lots of people on all different sorts of boards who have advice to offer me on a daily basis. How about him? Why do they have nothing to say to him? It's because, when you say it to me, you are going to get a polite and respectful response. It might be a more frank response that you would like. But it is always polite and respectful. Not so with the other guy, right? So people keep real quiet around the other guy.

That needs to change. I devoted thousands of hours into building this movement in the early days. The Motley Fool board was the first board, and all of the others are essentially spin-offs of it. All that we have learned is in an important respect the result of work done by the pioneers that posted once upon a time at the Motley Fool board. Those people who worked beside me are my friends. And just about all of them have been driven off of that board because of the other indivdual's posting tactics. Should I not care what has happened to them? What sort of person would I be if I did not care?

You can feel free to take shots at me here if you like, Gummy. It's within the rules. But you hang around these boards long enough, there is going to come a day when either interest or one of his stooges is going to tear into you because you made some sort of reasonable comment that contradicts one of the Sacred Nonsense Dogmas. When that happens, you check out who comes to your defense first. Odds are good it's going to be good old dogamtic hocus.

I am not dogamtic on the question of how people should invest for early retirement. On that one I say "Let a Thousand Flowers Bloom." I am dogmatic on the question of how posters are going to treat the friends I work beside in developing the insights put forwrd at these boards. There's only one post that I have ever deleted at this board. It was put up by SalaryGuru. But when TH was slamming him and slamming him good the other day at the Early Retirement Forum, there was no one in the community with the guts to stand up to TH but good old dogmatic hocus. SalaryGuru made a mistake with the word game post he put up here. But he has made useful contributions to this community in the past, and for that he deserves our respect. Respect isn't words. Respect is actions. Respect is when you stick up for the guy when some galoot like TH is trying to drive him out of the community because of a diference of opinion on some nonsense real estate question.

I am dogmatic on that one issue--how we treat our fellow posters, whether we stand up for them when an intercst or a TH sticks their dirty claws into them. That stuff I will not stand for. That stuff I will not permit. Good for me. That stuff does not belong.

There are some things that do not belong. Gummy. There are some things that are over the line. Death threats do not belong. People who use death threats to limit the scope of debate need to make other plans. How many people do you think dared to speak up agains the threats of physical violence endorced by our old friend intercst? FoolMeOnce did it. He was the only one. There were about 60 people who gave a recommendation to his post. But no one else stood up and said words in their own name. There should have been more than one.

There was only one because for so long we have applied a different standard to this individual that people cannot accept that he can be held to any standards whatsoeveer. They are wrong. I am holding him o a standard. It's not a tough one, it's pretty darn mimimal. But it is a standard. And that standard is going to prevail. The individual is going to need to make other plans.

We stand the world on its head on all sorts of questions at these boards. Do we not save more effectively than many people do in the outside world? Should we be ashamed of that? I sure don't think so. I think we should be sharing with the world what we have learned that many others have not. I'm going to do all that I can to get the word out. And I believe that that will stand the world of money management on its head. I sure am not ashamed of the role that I have played in making that happen. The world of money management needs to be stood on its head.

And then we are going to stand the world of investing on its head. It too needs to be stood on its head. I am not the only one who says so. Read the comments of Peter Bernstein posted elsewhere at this board. He says much the same thing. Read the comments of Rob Arnot. He also says the same. Read the comments of Andrew Smithers. He says that we are about to see a "revolution" in thinking about what works in investing strategies.

The ideas put forward at this board are new ideas. That is why we generate so much controversy with the work we do here. That is good. We want controversy. Controversy helps us learn. It causes us to question old ideas and get back to the basics and find out where we went off track. The stuff we are doing here to set the world of investing on its head is all good stuff.

There is an element of this that is not good. There is an element that is pure poison. That is the personal attack stuff and the deception stuff and the intimidation stuff. That stuff has no place here. I need some help shutting that stuff down. How many have offered to help? When I have 10 people willing to post at the Motley Fool board willing to insist that the rules of the site be administered in a reaonable way and that intercst's posting privileges be revoked, he will be taken down. How many are willing to do that today? Why so few? What is taking people so long to come around?

These are the questions that we need to be looking at as a community. No one likes this ugliness. No one wants more of this poison, But how do we put a stop to it? Should all of us who want to post in an honest and informed way walk away from the boards because doing so makes an individual who got a number wrong in a study feel bad? Give me a break. That cannot be the thing to do. When there are hundreds of people trying to learn what they need to learn to win financial freedom early in life and one who feels bad because he got a number wrong in a study, it is the one who got the number wrong who must go, not the hundreds who are trying to learn about the subject matter.

If there is some flaw in my logic on that one, then someone is going to have to tell me what it is. Until I hear otherwise, I am going with what my mind tells me is the right thing to do. The right thing to do is not to put forward deceptions. We have heard enough deceptions to make us all sick. My aim is to tell it like it is, to the best of my ability. And I really do believe that this stuff is going to stand the world of investing on its head in days to come. I want people to know that because I want them to know that the work done at this board is important and can save them lots of money and can get them to financial freedom a lot sooner than the nonsense gibberish approach advocated by some others.

There are many acceptable viewpoints on how to invest for early retirement. I want them all to be given voice in our community. I do not want deception to be given voice. Deception destoys us. Deception is poison. I think it is fair to say at this point that no one has been able to find a way to defend the REHP study except through deception. Given that reality, I think it would be a good idea to take that particular approach off the table. If the author of the study is not capable of defending it without resorting to deception, who the heck can?

I think we should put that study in the dustbin of history. I think we should move on. I think the conventional SWR methodology is the SWR methodology of the past. I think the data-based SWR methodology is the SWR methodology of the future.

I think these things because every sliver of data and reasoned argument we have seen put forward for 32 months points in the same direction and the other side has offered up nothing but word games and deception and intimidation in support of their case. There comes a time when we need to make the shift from saying "we think that intercst got the number wrong in the study" to saying that "we know that intercst got the number wrong in the study." The time to do that is when we see that failing to do that has caused us to lose scores of fine community members who had to leave because they could stand no more of the ugliness that are all that intercst and the other DCMs have to offer anymore. The time to do that is now. I think.
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Post by hocus2004 »

I am willing to take a stronger position when I have control of the criteria behind such comparisons.

In this particular instance, I presented my rationale.

Others can reach different conclusions, of course, according to their own criteria.


I responded with enthusiastic support for the Gummy endorsement of using the words "I think"because I took those words to be a rejection of dogmatism. I reject dogmatism on a discusssion board because it goes against the entire nature of the enterprise. The whole point is to have a discussion, and that requires an airing of different points of view. Dogmatism is appropriate only in the most unusual of circumstances.

One circumstance in which dogmatism is indeed appropriate is in the calcuation of a number. The SWR is a mathematical construct. When you are calculatng a number, there really is a right answer and a wrong answer. Two plus two equals four. Two plus two does NOT equal 22. When other community members are saying that two plus two equals 22, we all are under an obligation to se the record straight.

There are still occasions when we have newcomcers come to the board and ask about investing, and posters point them to the REHP study as if it were a legitimate piece of research. That is wrong. The study gets the number wrong, and not by a little bit. The question is one that can cause a retiree's retirement to go bust. We are all under an obligation to correct the record when someone is misled re what the historical data says re SWRs.

When I put up my May 13, 2002, post, I was pretty darn sure I was right, but I was not certain., At that time, I would say that I was 90 percent sure. The evidence that I have seen has increased my confidence a good bit. I would now say that I am 99 percent sure. There is always that 1 percent chance that you are wrong about something despite the fact that all the evidence points in one direction. So, even in this case, I will not be absoluitely dogmatic and say that I am 100 percent certain that the number in the REHP study is wrong. I would say 99 percent certain.

Still, it is wrong for us to recommend use of a study that we know to be wrong as well as we know anything to be wrong. If there were some sliver of a reasoned argument for the intercst assumption that valuations have zero effect, we could make a case for going a different way with this. But neither intercst nor any of the DCMs has ever put a word of reasoned argument forward in support of the study. Given that reality, we should not be recommending it to newcomers to the community.

All that said, I still do not have a problem with REHP study enthusiasts discussing the study on the various boards. If there are people who want to have such discussions, for whatever reason, they should be permitted to have them. But it is something else to say that REHP study enthusiasts should be permitted to disrupt the conversations that those who do not accept the study as valid want to have amongst themselves to discuss what the historical data really does say. If they want tolerance for a viewpoint that has no support in the data, then they must extend tolerance to a viewpoint that is supported by the data.

It is dogmatism in support of the REHP study that is the problem here. I have not taken a dogmatic position. I do personally believe that the REHP study claims are nonsence and I of course need to be able to say that when discussing it. But I would never disrupt a thread in which REHP study enthusiasts indicated that they wanted to have a conversation in which only fellow believers would participate. That is their personal business, and I do not see it as my place to "convert" those who do not want to be converted.

So there is no issue here of people being able to have discussions of the REHP study. If there are people who want to do that (my sense is that there are a good number who do), it is of course fine with me. The question on the table is whether the community is willing to draw some lines to limit the tactics that may be used by REHP study enthusiasts to disrupt conversations of those who follow the data-based approach or who want to learn about it. On that issue I am a bit dogmatic, and I think properly so. If we are going to permit people to have discussions of what the data does not say, we certainly need to also permit people to have discussions of what the data really does say.
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Post by hocus2004 »

Can you find anywhere where I've said that MY method is better than other methods?

I doubt it.
However, if you ever find such a claim, I'll immediately delete it


This is the sort of attitude that I was intending to endorse with my "May the number of your kind increase" comment. This is a healthy non-dogmatism, in my view.

I think that perhaps the distinction that we need to draw is between saying "my way is better than your way," which is a non-healthy dogmatism, and someone saying "there was an error in a mathematical calculation made here and it needs to be corrected pronto." The latter statement is not an unhealthy dogmatism. It is a matter of one community membr feeling a sense of responsibility for fellow community members and for the integrity of the boards as a whole.

None of us should be insisting that his way is better. We should be putting forward our ideas and allowing others to make up their own minds as to which way offers the most appeal. All of us should be correcting errors when we see errors in the work of others. Errors in work that people use to make investing decisions are dangerous. To fail to point out an error is to fail in one's obligations to one's fellow community members.

There was a community member who once told me that he thought it "rude" that I pointed out the errors in the REHP study. I see it quite differently. I believe that I helped everyone in the community by pointing out the errors in the intercst study, but of all the people I helped, the one that I helped most of all was intercst himself.

How would I feel if I put a study forward in this community and it caused hundreds or thousands of retirements to go bust? I would feel awful. How would I feel if someone caught the error before it was able to do too much harm? I would feel grateful. I would consider that person my best friend in the community.

If intercst were thinking straight, he would consider me his best friend in the community. I gave him a chance to correct the study before it does any more harm. He hasn't thanked me, but he should. If the shoe were on the other foot, I sure like to think that I would be thanking him.

I don't say that my approach to investing is better than anyone else's. I do say that the idea in a study is to get the number right, not to get it wrong. Anyone can make a mistake. But when someone brings it to your attention that you made a mistake, the proper thing to do is to correct it promptly. I don't see my belief on that point as being a case of dogmaticism. I see it as being a case of simple common sense.
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Post by JWR1945 »

gummy wrote:...Anyway, in my colour TV tutorial (on my website)**, I mentioned that our TV would arrive shortly.

It arrived yesterday and it took me a whole day to figure out how to connect our satellite receiver, VCR, DVD and distribute signals throughout the house. :?
(The Missus has a small TV in the kitchen.)
http://www.gummy-stuff.org/TV-stuff.gif

** The very first tutorial I ever wrote was in 1957 and it was on (would-you-believe) colour TV!
...
Was buying a color TV worth it?

Have fun.

John R.
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Post by gummy »

hocus;
I agree :D

John
It weren't jest one of them thar "colour" TVs (which we've had for centuries).

It was one of them thar 16:9 widescreen progressive scan , rear projection 44" LCD HDTVs

... and it's beeyutiful !!

On the above TV screen is a picture of our backyard
... in the days before the snow came
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Post by hocus2004 »

hocus;
I agree


You've done it, Gummy. You figured out how to get me to shut up.

Please don't tell the others.
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Post by hocus2004 »

I've decided to (finally!) advertise your tutorial on my website.
Who knows, we might get some feedback.


Thanks again, gummy.
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Post by gummy »

The tutorial (with the changes) is here:
Like my new TV, it's quite colourful :lol:
http://www.gummy-stuff.org/JWR.htm

I was going to change the name from JWR.htm to NFB.htm and discover that I already have a NFB.htm

... so I thought, maybe SWR.htm, but I got me one of them too :?
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Post by gummy »

Hey hocus:
You say (above, somewhere):
I really do believe that this stuff is going to stand the world of investing on its head..

That "I believe" is a close relative to "I think" Smile
The so-called experts that predict doom-and-gloom or a 40,000 DOW or whatever ... they do so with complete confidence (and appalling arrogance).
And when they're wrong? Do they say so, with a modicum of humility?
Hardly.

Even Einstein said:
No amount of experimentation can ever prove me right; a single experiment can prove me wrong.

and Gandhi said:
It is unwise to be too sure of one's own wisdom. It is healthy to be reminded that the strongest might weaken and the wisest might err.

Now that is admirable, don't you think?

You also say (above, somewhere):
Two plus two does NOT equal 22.
While I agree with that, I can PROVE to you that 10 + 10 = 100 :)

You also say (above, somewhere):
There was a community member who once told me that he thought it "rude" that I pointed out the errors in the REHP study.
I do agree with pointing out errors in other people's work ... as well as my own!

In the first part of my "sensible withdrawals" tutorial I describe the traditional mechanism for establishing a Safe Withdrawal Rate ... then say:
I submit that this is cyber-fiction and real people don't do that.

I would like to have said:
"This is definitely cyber fiction"
but, alas, I recognize the wisdom in the words of Einstein and Gandhi.

Anyway, in the dozen years I've spent browsing discussion forums, I'm always amazed at how confident some posters are.
The most annoying response to an innocent question goes something like:
"You don't know what you're doing! Do it MY way"

Aaah, I sometimes wish I had that much confidence.
(I get a lot of e-mail asking: "How do YOU invest?"
I answer: "You don't want to know. I'm the world's worst investor!")

Anyway, before this post gets longer than it should be, may I ask the history of this E10/P vs SWR research?
Who did what and who suggested what?
(I'm too old to go thru' years of threads ... but it should probably be somewhere in that tutorial.)
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Post by gummy »

P.S.
I said (above, somewhere), that there is little of my own stuff on my website.

One of the things that I thought was my own stuff is the double rotor thingy described here:
http://www.gummy-stuff.org/boat-and-wind.htm

BUT, just before I wrote that long-winded post above, I read my e-mail.
It was from a Peter Sharp. He said he invented it.

I then had to massage the tutorial. :?
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Post by hocus2004 »

That "I believe" is a close relative to "I think"

Thanks a million for putting forward that post, Gummy. Every word of it is gold.

It is theoretically possible that the REHP study will be proven correct someday. I view this as an extreme long-shot, but it could happen.

If it did, it would still be a good thing that I raised my challenge to it. If the REHP study survives the challenge, our confidence in it will be greater than it was before because it will have been tested and we will have learned new things re what is right about it because of its survival of that test.

The other guy is saying that there may be no challenge to the study. That claim is poison. That claim will turn us all into deceivers in time if we permit it to stand. It goes against our core principles as a community of people sharing ideas on how to win financial freedom early in life. That claim cannot stand.
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Post by hocus2004 »

I was going to change the name from JWR.htm to NFB.htm and discover that I already have a NFB.htm

... so I thought, maybe SWR.htm, but I got me one of them too


It's proper that it be named after JWR. He's the one who did most of the work that made it possible.
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Post by gummy »

hocus:
I went to sleep (after my last post) and now I wake up and realize that I don't really understand this scheme that will stand the financial world on its head.

When I look back at your post (above, somewhere) you say:
The number used in the conventional studies is the long-term average return for stocks (about 7 percent real).
The implicit assumption is that stocks provide the same sort of return from all possible valuation-level starting points.
This assumption is false.
...
That's what this all comes down to.
...
The expected long-term return starting from the valuation level that applied on January 2000 is about 3.5 percent real.
Okay. If that's what this all comes down to, then I assume that your suggestion is to (and here's the crux of the argument, I think):
Change your withdrawal rate EVERY YEAR depending upon the current valuation level, namely E10/P.

Am I right in this interpretation?
If so, then I think the tutorial should make this clear.
If not, then I think the tutorial should make this clear.
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Post by gummy »

P.S.
If your scheme IS to change your withdrawal rate every year depending upon the latest "valuation level", then we're in total agreement :)

Our disagreement may just be what one takes as the "valuation level", eh what?

(For me, it's last year's portfolio return ... for whatever portfolio allocation you may have.)

One more thing:
I think it's inane to do studies that claim to PROVE (?) that a certain scheme is best, based upon regression lines, standard deviations, correlations and all that mathemagical paraphernalia as it pertains to historical data.

I'd prefer some logical arguments, based upon common sense. THEN see if this common sense strategy would have worked in the past.

This format seems to be lacking in many articles I read, written by all them thar financial gurus.

I can recall, a few years ago, reading an article by a financial analyst who described some investment strategy, claiming it to be optimal.

He backed up his claims with what appeared to be a regurgitation of an entire textbook on probability and statistics.

I wrote to him asking if he ever applied his "optimal strategy", assuming it was, say, 1950 or 1960 or 1970 ... to see if it would have worked in the past.

He never responded to my e-mail
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Post by hocus2004 »

May I ask the history of this E10/P vs SWR research?
Who did what and who suggested what?


In late 1995/early 1996, I was putting together the investment strategy for my Retire Early plan. Prior to this time, I had all of my money (it was not much at the time) in stocks. As a result of the research that I did in developing my investment strategy (which included investigations into the SWR concept), I determined that changes in valuation levels affect long-term returns. I did not prepare any tables or things of that nature as I am not capable of doing such things. I did not determine SWRs for all sorts of investors and all sorts of scenarios because at the time I was only interested in putting together my own plan. Once I had learned enough to know that I needed to move my money out of stocks, I turned my attention to other aspects of my plan.

When I discovered the RetireEarlyHomePage.com web site, one of the things that excited me about it was that intercst too used the SWR concept to develop his investment strategy. I of course quickly came to the realization that he had not come to the same conclusions as I had, but I didn't see this as a particularly big problem at the time. A little later, he started the Motley Fool board. I had been toying with the idea of starting my own board. When I saw that he had started one, I decided that it made more sense for me just to post there since the topics we were interested in exploring seemed to be so similar. I was a little concerned that he might have some sort of special power at the board because he had founded it, so I checked the Motley Fool rules. The rules made it crystal clear that board founders possess no special powers and provide rock-solid protections to all community members against posters who engage in abusive posting practices. After reading the rules, I was no longer concerned, and I commenced posting.

I had already done a good bit of work developing the Passion Saving concept (this approach to money management will be explored in depth in the book that I will be self-publishing in a few months). My posts on Passion Saving caused the board to explode in popularity. We were able to bring in scores of fine posters and we built what I think can fairly be described as the most thought-provoking board on the internet (there were a number of others who expressed agreement with this assessment). I put up a few posts trying to let people know about the great deal available with TIPS (which at one time were paying 4.1 percent real, which translates into an SWR of 5.85 percent, in contrast to the SWR of stocks at the time of 1.6 percent.) Intercst reacted with anger to any posts that raised the possibility that some might want to consider investing in something other than the 74 percent S&P allocation recommended in the REHP study. I didn't want to see damage to the wonderful board community that we had built, so I keep my mouth shut.

Stock prices went down a bit in late 2000. Intercst seemed to lose interest in the subject of early retirement. Since that time, he has for the most part posted on political developments and other off-topic stuff. Lots of community members complained about the lack of on-topic posting. Those who complained were attacked. Good posters began leaving the board, first in a trickle and then in a flood.

Wanderer was the most effective and most popular poster in the community. He put forward a post in February 2002 saying that he thought that there were some circumstances in which investing in real estate might make sense. Intercst led a Smear Campaign aimed at driving Wanderer off the board. He was accused of "mental illness." Almost no one spoke in his defense. He left the board (ultimately joining the old Index Funds board started by ES at the MSN site and then suggesting formation of the FIRE board here, which led to creation of the SWR board when the FIRE board was overtaken by DCMs).

I felt that there was no hope for long-term survival of our movement if posters like Wanderer were no longer permitted to post. The only other board community in existence at the time was the Early Retirement Forum, but that was a small board at the time and intercst held "Moderator" status at the SWR section of that board. I felt that the community's survival depended on me putting forward something that would draw the community together again.The thing that had always pulled us together in the past was on-topic discussion. I had always held back from reporting to the communitty what I knew about SWRs. I decided that at this point there wasn't much risk anymore that doing so would cause conflict (because the board was going down anyway). So I decided to try for a Hail Mary pass.

The board community caught the Hail Mary pass in the end zone. There were scores of posters who came forward and expressed astonishment that we were once again talking about early retirement at the early retirement board. We were learning, and we were enthused about it. Intercst declared that the "board culture" the REHP board demanded "ridicule" of anyone who suggested an investing strategy not approved by him. There was a strong negative reaction to that claim at the time (several posts speaking in opposition won over 60 recommendations). But intercst and a band of supporters persisted in turning any thread with the words "SWR" appearing in it into a circus event.

Then I discovered what Bernstein says about SWRs in his book "The Four Pillars of Investing." I put up the "What Bernstein Says" post on August 27, 2002. A poster there said that we should drop all of the personal attacks and permit reasoned discussion. Intercst's main supporter, Galeno, put up a post saying that he had zero interest in reasoned discussion, that he was going to come after me with a baseball bat if I said anything further about SWRs and he implored the rest of the board community to join him in using threats of physical violence to block me from posting further on the subject. Intercst said that this was the best solution to the "problem" that he had seen yet, and he too urged others to adopt the "good doctor Galeno prescription" of violence against fellow community members with viewpoints other than his own.

FoolMeOnce said that he could no longer in good conscience partiipate at that board community, given that it was now being ruled by violence. I grew increasingly concerned about the number of community members we were losing because of intercst's posting tactics. I asked Motley Fool to intervene. Motley Fool said that they agreed that it would be "ideal" if I were permitted to present my views and that the site's posting rules did not permit intercst to set the agenda for the entire board. However, they added that they had (without ever telling anyone) assigned intercst the status of "Board General." They suggested that, until he was removed as Board General, they were not willing to enforce the site's posting rules agains him.

I asked that fellow community members speak out against intercst's posting practices so that we could make a case to Motley Fool that he should no longer serve as "Board General." Some did so, but most of those who did so were posters who did not have a long history in the community. As a general rule, the posters who spoke out against intercst quickly left the board community after doing so (and after being smeared for doing so).

On November 23, 2002, I asked for revocation of intercst's posting privileges. That post won 25 recommendations. During the discussions of this proposal, death threats were posted against me. Motley Fool then sent me an e-mail saying that, theyb greatly appreciated the many contributions I had made to the site over the years, but that they did not want me to post to the REHP board anymore. I believe that this was the result of their lawyers insisting that action be taken so that Motley Fool would not be held liable if some crazy person took action on intercst's call for acts of physical violence against anyone who asked questions about the methodology of the REHP study. Eventually I was banned from the Motley Fool site, and then subsequently reinstated. Motley Fool has never said that I broke any posting rule, and I of course never did.

When I was banned from Motley Fool, I began posting more regularly at NFB. I received a warm welcome. Most of the board leaders at the FIRE board were people who came here to escape intercst--people like Wanderer, raddr, PeteyPerson, FoolMeOnce, and BenSolar. I mentioned my plans to have intercst removed from the Motley Fool board so that honest and informed posting could be permitted there once again. Ataloss did not like this idea and launched a smear campaign against me here. When he was not able to hold up his side in the discussions, raddr switched over to the DCM side to help him out. Ultimately, Wanferer switched over to the DCM side as well. JWR1945 was also once a popular poster here. All of his research backed me up, so the three leaders of the smear campaign began including JWR1945 in their smears too.

ES concluded that things had gotten out of hand. He put up a post saying that he was going to begin administering the site rules in a reasonable manner even if that meant that he would need to take action against posters whom he viewed as long-time friends. Raddr initiated an e-mail campaign to have me banned from NFB. ES wrote me an e-mail saying that he was sorry to have to ban me and that he also appreciated all of my many contribuions, but that he felt that if he did not give in to their demands, the DCMs would burn his entire site to the ground.

I then began posting more frequently at the Early Retirement Forum. The same pattern that we saw at the other two communities played out once again. Community members loved discussions of the realities of SWRs. We had two of the most popular threads in the history of the site when I began raising questions about the REHP study there. As much as people loved reasoned discussions, that's how much they hated the smear campaigns and other ugliness that was soon brought to the table by the DCMs to block any further reasoned discussions. Intercst threatened to use his influence with Dory36 to have me banned. Dory36 did not go along with intercdst's recommendation, but also did not do anything to rein in intercst's abusive and dishonest posting practices. So the friction continued. It appears to be abating a bit in recent months, but I still have not tried putting up a thread-starter on the SWR question over there.

When I was reinstated at NFB, the posters who had engaged in extensive amounts of decpetive posting here left the board for the newly formed raddr-pages.com site.

From the beginning, JWR1945 has been focused on substance questions and on what the historical data really says re SWRs. He put up two bigs posts within a week after my May 13, 2002 post asking whether changes in valuation levels might affect SWRs. One was titled "Hocus Is Really Onto Something!" The other was titled "Hocus Started It All, and I Am Having a Ball!" These posts were incredibly popular (especially given their technical nature), winning large rec counts. His research into SWRs has been wildly popular in every forum in which it was posted--the Motley Fool board, the FIRE board, the SWR board, and the Early Retirement Forum. He has been smeared at all of these places and also at the raddr-pages,com site, where he was banned from posting before putting up a single post. All of the smear campaigns have been led by DCMs. No one has ever raised any fact-based criticism of JWR1945's work. None of those leading smear campaigns against him has been willing to post any questions about it at this board, where JWR1945 would be able to respond to it without being pulled into the middle of a vicious smear campaign. He has given links so that people can check the validity of the data he uses in his research. No one has ever discovered any flaws in the work he has done. Those engaging in smears have claimed to have discovered flaws, but none of them has ever been willing to state a case in a reasonable manner so that any points they might have could be considered by reaonable people.

It is Robert Shiller who advocates using PE10 as a valuation tool. I believe that he got the idea from Benjamin Graham. Most of the research that has been done on the Data-Based SWR tool has been done by JWR1945. I have contriibuted questions and comments, but I am not capable of doing statistical research and have never attempted to do any. There have been major contributions from a number of other community members. These include raddr, BenSolar, Biggaloot, FoolMeOnce, Bpp, hyperborea, and Wanderer. You of course have also made significant contributions, Gummy. There is a large number of others who have made significant contributions. It would take a long time to identify them all and list them all, although it would probably be a good idea at some point to attempt to do so.

The bottom line is that JWR1945 has played the lead role in refinement and enhancement of the Data-Based SWR concept, which I initially developed in the mid-90s. I consider him co-developer of the tool. But the work we are doing is community work. We ALL play a role, even those who just ask questions that send the investigations in new direction. Even lurkers play a role. We can tell which threads are being read by large numbers and which are not. That tells us what sorts of questions need to be explored in more depth to win more people over to the data-based approach.

I see our development of this tool as an exciting test of the new internet discussion-board communications medium. This is not a case where an idea was developed by one person sitting in a room. It is a case where breakthrough research was conducted out in public, with all sorts of people possessing an interest in learning what it takes to win financial freedom early in life playing a role in its development. I hope to be able to use the development of the SWR tool as a test case to demonstrate to skeptics the power of this new communications medium and to lobby large sites like the Motley Fool site for adoption of reasonable protections for discussion board communities from the harmful effects of excpetionally abusive posters and exceptionally abusive posting practices.
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