I do not know the details of how this is done. But the approach seems to me to be a sound one conceptually.
It was a calculation, ataloss
Speaking of absurd internet statements, I am glad that you have stopped insisting that Bernstein somehow indicated that a 4% withdrawal rate was wrong as a matter of "mathematical certitude." OTOH you seem to have a lot staked on a 2% swr that you are accepting as a matter of faith. This seems similar to me to the people who accept intercsts 4% number uncritically. I agree that Bernstein has common sense but this does not mean that we should accept 2% as if it were an imutable law of the universe. If the 2% is a calculation we should have some of the mathematicians on the board check it.
Do you agree with Ataloss that anyone using the Gordon Equation to assess the effects of valuation changes is engaging in an act of pure guesswork?
I am not quite sure what you mean. I have used the term guess since I thought you did not understand the concept of an estimate. I would think that "pure guesswork" implies randomness. Guessing the result of a coin flip. The Gordon equation is better than that. Calculating the circumference of a circle from the radius is an example of a mathematical operation. If you have the right number for the radius you get the right result for the circumference. The Gordon equation is not like that. SWR "calculation" can never give a definitive answer. This is why Bernstein qualifies his estimate/guess with higher withdrawals "might not be entirely safe."
I'm used to it, KenM If you have the data on your side, you keep pounding on people to look at the data.
show mw tha data
I suppose we could try to find some other way of saying it. Is it more acceptable to say "studies using the conventional methodology deliberately mislead readers as to what the historical data says is safe?" I see the word "invalid" as being a short and sweet way of conveying the same basic concept.
Bernstein says that conventional withdrawal rates may sometimes be misleading (like when valuations are at an unprecedented extreme.) I think that although perfectly valid, historical safe withdrawal rates may not be the best guide to future safe withdrawal rates when there is ectreme overvaluation. This is an application problem not a flaw in the studies.