Question for hocus: what is the SWR right now???

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Question for hocus: what is the SWR right now???

Post by raddr »

hocus,

I keep reading or, really, skimming your posts both on your board and on the NFB Personal finance boards and I see where you repeatedly crown yourself the King of SWRs and cast the rest of us in supportive roles. You also accuse some who have actually made original contributions, such as myself, as engaging in "weasel words", etc. for not pinning down the true SWR for the moment. So my question to you is: what is the SWR right now? I don't think you can tell us this despite chastising the rest of us for not being able to come up with "The Number". If you can't give me a number then you need to not say another deragotory word towards any other poster who says that the number is uncertain. In essence, I guess I'm calling your bluff.
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Post by hocus »

I see where you repeatedly crown yourself the King of SWRs and cast the rest of us in supportive roles

I have done no such thing, raddr. The only thing I have pointed out that is in any way close to what you say here is that it is my insight that kicked off The Great Debate, and that I have been vindicated by the data in the SWR claims that I have put forward to the FIRE community. I have been the leader in the effort to learn the realities of SWRs, but lots of others (including you!) have made a good number of important contributions.

You also accuse some who have actually made original contributions, such as myself, as engaging in "weasel words", etc. for not pinning down the true SWR for the moment.

When have I ever accused you of engaging in "weasel words"? I'm certain it wasn't me who said that. What I have said is that I think you are one of the most informed people on the subject of SWRs alive on Planet Earth.

So my question to you is: what is the SWR right now? I don't think you can tell us this despite chastising the rest of us for not being able to come up with "The Number"

I don't chastise anyone for not being able to come up with "the Number." One of the primary purposes of the SWR Research Group board is to create a place for people to do the work to come up with the Number. It would be a big help to the board community there if you would help us out with a post or two now and again.

If you can't give me a number then you need to not say another deragotory word towards any other poster who says that the number is uncertain.

The number is not known today because we have not yet done the work we need to do to know it. That is not the same as saying that it is not knowable.

Some have been suggesting that the SWR is anything you want it to be, that you just decide in your head what number you want it to be and then you pump out some spreadsheets supporting that particular number and there you have it. No. The SWR is a defined concept and it is a number that is discovered by looking at the data that bear on the questions being examined. The number is knowable, and the way to go about knowing it is to look at the data.

If we all looked at the data together, we would be able to learn what the Number is. We have already done a good bit of work, and so we already possess a good number of important clues. What we should be doing now is digging deeper.

That's what the SWR Research Group board is all about. Please add your insights to our efforts, raddr. It's important work we are doing, and we're having a lot of fun too. It's an adventure finding out the Number. We've already done a lot of good for the FIRE community at that board, and I expect that we will be doing a lot more good for it in the days to come.

In essence, I guess I'm calling your bluff.

I hope I passed the test.
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Post by ataloss »

When have I ever accused you of engaging in "weasel words"? I'm certain it wasn't me who said that. What I have said is that I think you are one of the most informed people on the subject of SWRs alive on Planet Earth.

Look at what happened to Bernstein. He is another person who I would describe as being on the cautious side. He didn't say that "the SWR was 2 percent at the top of the bull market." He used a weasel phrase, like you did. He said it might have been as low as that. Was he right to put it that way? Arguably not. He used data to come up with the number.
hocus 7/17/03

(hocus you can edit this out of the post f you want....)

I am still unclear on how one can be 100% sure that intercst is wrong but unable to generate an alternative swr number.
Have fun.

Ataloss
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Post by hocus »

Here is what raddr said in the post that opened this thread:

Raddr:: "I keep reading or, really, skimming your posts both on your board and on the NFB Personal finance boards and I see where you repeatedly crown yourself the King of SWRs and cast the rest of us in supportive roles. You also accuse some who have actually made original contributions, such as myself, as engaging in "weasel words", etc. for not pinning down the true SWR for the moment. So my question to you is: what is the SWR right now? I don't think you can tell us this despite chastising the rest of us for not being able to come up with "The Number". If you can't give me a number then you need to not say another deragotory word towards any other poster who says that the number is uncertain. In essence, I guess I'm calling your bluff."

Here is part of what I said in response:

hocus:The only thing I have pointed out that is in any way close to what you say here is that it is my insight that kicked off The Great Debate, and that I have been vindicated by the data in the SWR claims that I have put forward to the FIRE community. I have been the leader in the effort to learn the realities of SWRs, but lots of others (including you!) have made a good number of important contributions.

When have I ever accused you of engaging in "weasel words"? I'm certain it wasn't me who said that. What I have said is that I think you are one of the most informed people on the subject of SWRs alive on Planet Earth.

I don't chastise anyone for not being able to come up with "the Number." One of the primary purposes of the SWR Research Group board is to create a place for people to do the work to come up with the Number. It would be a big help to the board community there if you would help us out with a post or two now and again.

Some have been suggesting that the SWR is anything you want it to be, that you just decide in your head what number you want it to be and then you pump out some spreadsheets supporting that particular number and there you have it. No. The SWR is a defined concept and it is a number that is discovered by looking at the data that bear on the questions being examined. The number is knowable, and the way to go about knowing it is to look at the data.

Here is Ataloss's response:

Ataloss:

[ataloss quoting my words from earier in the thread]

When have I ever accused you of engaging in "weasel words"? I'm certain it wasn't me who said that. What I have said is that I think you are one of the most informed people on the subject of SWRs alive on Planet Earth.

[ataloss quoting me from an earlier post]

Quote:
Look at what happened to Bernstein. He is another person who I would describe as being on the cautious side. He didn't say that "the SWR was 2 percent at the top of the bull market." He used a weasel phrase, like you did. He said it might have been as low as that. Was he right to put it that way? Arguably not. He used data to come up with the number. hocus 7/17/03

[ataloss speaking for himself]

(hocus you can edit this out of the post f you want....)

I am still unclear on how one can be 100% sure that intercst is wrong but unable to generate an alternative swr number.

Here is a link to the earlier post of mine cited by Ataloss.:

http://www.nofeeboards.com/boards/viewt ... ght=#p8523

Here is the text of that post and the text of the following one by me on the same earlier thread:

If you are talking about a TSM-dominated portfolio then yes, numerous data (including my simulations) would indicate a 2-2.5% number. However, if you are properly diversified and limit or preferably exclude the still frothy TSM stocks then you may be looking at a 4-4.5% SWR. Big difference.

I of course understand that the SWR changes when you change your allocation.

I'd like to point out the implications of a word choice you made, raddr, because I think that choice goes to the question of why ataloss and some others are having such a hard time understanding what is going on here.

You say that numerous data "would indicate" a number between 2 percent and 2.5 percent. Why "would indicate?" The number is the result of calculations performed on data, is it not? Why not say "the data tells you" or "the data reveals" or "according to the data, the number is such and such?" Why the weasel phrase "would indicate?"

I think it is because you are concerned that someone might look at that number and mistakenly take it to be a prediction of an actual rate of return. You and I know it is not that. A SWR is not an actual return. But you and I are the sort of people who do not like the advice we use to be put to purposes in which it will do others harm. So we are cautious in how we say things, trying to anticipate mistakes that others might make and to do what we can to help others not fall into such traps.

I don't fault you for using the phrase you did. I understand the motivation. But you know what is happening in this debate? The difference in the levels of caution employed by some of those who use the conventional methodology and the level of caution used by those who use valid methodologies is causing some of the people trying to follow what is being said to form mistaken impressions about which side relies on data to inform their SWR calculations and which side does not.

There is one user of the conventional methodology who exercises none of the sort of caution that you evidenced in your statement above. This individual states things in dogmatic terms, the SWR is such and such, according to this individual, and it can never be anything but that. A lot of people have been taken in by these strongly worded assertions. A lot of people have come to believe that someone stating things so boldly and so clearly and so confidently must have some idea what he is talking about. You and I know that he does not. Others haven't followed developments so closely. Those of us trying to put forward accurate information on what the SWR is need to take this reality into account when speaking to this subject to a greater extent than we have in the past, I believe.

Look at what happened to Bernstein. He is another person who I would describe as being on the cautious side. He didn't say that "the SWR was 2 percent at the top of the bull market." He used a weasel phrase, like you did. He said it might have been as low as that. Was he right to put it that way? Arguably not. He used data to come up with the number. The number was produced as the result of a mathematical calculation. Perhaps he should have said the SWR was 2 percent.

I know why he worded things the way he did, and so do you. The two of us have struggled with what is involved with speaking accurately on this issue, and we are aware of the damage that can be done by speaking carelessly. So I can not find it in my heart to find fault with Bernstein for his caution. He doesn't want to mislead, he doesn't want to express greater confidence in the SWR tool than he believes it deserves. He knows what the data says, but he also feels a desire to be fair in how confidently he states things.

Look at what is said of him as a result of his decision to exercise this caution, however. It is said that he pulls numbers out of hats, that he guesses, that he has no idea what the SWR really is. Use invalid methodologies but state things in dogmatic terms, and the world will beat a path to your door. Use valid methodologies, but exercise due caution in your wording, and people will accuse you of playing guessing games and pulling rabbits out of hats.

I think we have been unfair to Bernstein. I think he was reasonable in the way he said things, even if not 100 percent accurate. Obviously, his calculations produced an exact number, so perhaps he shouldn't have used a phrase such as "as low as." But he did it for a good reason. And that's in big contrast to those who use the conventional methodology knowing it to be invalid and put forward their claims in the most confident manner possible.

The problem we face is that thoe who are aiming to work a con are willing to say absolutely anything to score points while those who are trying to impart informed and honest advice are cautious in their pronouncements. It would help, I think, if people parsing the words would bear in mind the motive of the people putting forward the words. When you say "would indicate," that should not be taken as a sign that you did not use data to come to your answer. And when others say "the SWR is" that should not be taken as evidence that the person saying it knows what he is talking about.

It is possible for people using invalid methodologies to use extremely confident language, and for those using valid ones to exercise caution. In fact, when you think about it a little, that's sort of what you would expect to see happen. Perhaps Bernstein and you should be given extra points for stating things carefully and we should detract points from the individuals who assert so confidently that they know the precise number even though they have made clear that they can't be bothered to incluide all of the data bearing on the question being examined in their analyses.

Personally, I am weary of the word games. I have sat at my computer for 14 months now, responding to question after question after question on this matter in an attempt to be certain that there is not one sincere one that I failed to respond to. But things have gone on too long at this point for me to believe that all of the questions being put forward are sincere ones.

William Bernstein does not play guessing games, and he does not pull rabbits out of hats. He is a serious person when the circumstances require that he be serious. There are some others who have put forward "studies" of SWRs for whom I cannot say the same. There are some others who are actively and deliberately working a con on the FIRE community.

I am reaching a point where I am not going to play this game anymore of pretending that a William Bernstein and an intercst are of the same stature and that the views they express on SWRs should be given equal weight. Bernstein is a responsible, honest, and informed analyst. intercst is a con man. When intercst says that it is "loony" for anyone to think tha the number might ever be anything less than 4 percent and Bernstein says that it could be as low as 2 percent, I have no doubt in my mind from that point forward that the true number is a whole lot closer to 2 than it is to 4.

I am looking for a community of people interested in engaging in serious and reasoned discussions of the SWR issue. I am not into semantics games, I don't have the time. If a board can be set up here where those interested in sharing with each other honest and informed insights on how to achieve FIRE early in life, I'm in. If I need to spend hours of each of my days batting back and forth nonsense claims that William Bernstein is puling rabbits out of hats, I have better things to do with my time.

Is it permissible at this site to set up a board where only those interested in engaging in reasoned discussions on a question are permitted to participate and others can be invited out of the discussions? If it is, I will shortly be setting up a board called "SWR Research Group." Those who accept that the convetional methodology is invalid will be welcome to partipate. Those who have possess desires to engage in endless semantics games can use other boards at this site or elsewhere to serve their internet posting needs.

I believe that this issue is the most important issue facing the FIRE community at this time. I believe that it must be resolved. I believe it will be. Whether that happens at this particular site or not depends on how people participating at the board feel about the prospect of going about the business of doing what it takes to resolve it in a manner that has any hope of doing any good for the aspiring early retirees who will live with the consequences of what we decide on this matter.

Text of Second post:

I don't believe that you can say "the number is such and such" - at least not with any reasonable degree of precision. Frankly, no one knows with great precision that future market returns will be so there is some uncertainty as to the SWR going forward. Do you know precisely what that number is?

This aspect of the matter trips people up more than any other.

The key here is making a distinction between the concept of a safe withdrawal rate (SWR) and the concept of an actual rate of return. There is no one who can tell you the actual rate of return that you will obtain on your investments. That's clear. So we should put that question to the side and forget about it.

A SWR analysis DOES NOT aim to make predictions as to the actual rate of return. I repeat, it DOES NOT aim to do this. People need to get that idea out of their heads if they hope to make sense of this stuff.

What does a SWR analysis do? It assesses the probabilities of various possible future events, looking to available historical data to do so.

I think that it is fair to compare what a SWR analysis does to what a weather report does. Let's say that a weather analysis uses a change in wind velocity to determine the chances of it raining tomorrow. The weather-man does the analysis and he reports that there is an 80 percent chance of rain tomorrow. The following day, it does not rain. Was the analysis invalid?

It was not necessarily invalid. The weather man was not making guesses as to what would actually happen, he was using data to assess the probabilities of various future possibilities. The fact that the one-in-five shot is the one that happened to turn up does not in any way, shape, or form show that the analytical technique used was invalid. It is not reasonable to expect that a tool that aims to reveal to you that there is an 80 percent chance of it raining to be able to predict the future. The tool is not designed to predict the future. That's not something it does.

It is possible for a weather analysis to be invalid, however, just as it is possible for a SWR analysis to be invalid. Say that the data on wind velocity shows that the wind velocity level we have today indicates that the odds of it raining tomorrow are 80 percent,but there is one particular weather man who doesn't like the idea of examining wind velocity when making his weather reports. That weather man says that he is 100 percent confident that it will be sunny tomorrow based on an examination he did of cloud patterns.

Now it may be that cloud patterns can be used to help you assess whether it will rain tomorrow. However, if it has been establshed beyond any reasonable doubt that wind velocity also plays a role, then a weather analysis that does not consider the wind velocity factor is an invalid analysis. That weather report is invalid.

It doesn't matter whether it ends up raining the tomorrow or not. If it rainsa, the analysis was invalid. If it does not rain, the analysis was invalid. The invalidty is not the result of what happens in the future, since the tool does not aim to predict the future in the first place. The invalidity is the result of failing to include factors that bear on the question in the analysis that was done. The analysis was invalid at the time it was done, not at some later data when we know whether it rained or not.

Any SWR analysis that does not consider the effect of changes in valuation is invalid, in my view. It doesn't matter whether the take-out numbers they recommend end up working or not. The tool is not supposed to predict the future, so it should not be required to do that in order to be held valid. The tool aims to assess the probabilities of various future possible events by looking to historical data relevant to the question being examined. If it fails to do that, it is invalid.

The reasons why the conventional SWR methodology is invalid is because it does not even take into account the effect of changes in valuation levels. Nothing that ever happens in the future will ever make such a methodology valid. Nothing. Such an analysis is invalid on the day it was performed, and will always be invalid from that day forward. An analysis that fails to consider factors with a critical bearing on the question can never be valid.

Studies using the conventional SWR methodology are just flat-out wrong. They do not even try to answer the question posed. It is not even trying to deliberately exclude data that is known as a matter of mathematical certainty to affect the answer to the question being posed.

Well at least I'm in good company. I'll take Bernstein as fellow weasel anytime - LOL!

It's the other way around. When it comes to SWRs, he is in your company.You set the standard of excellence in this field, raddr. There is no one on Planet Earth who understands SWRs better than you, with the possible exception of JWR1945. You and JWR1945 stand at the top of the pyramid, and Bernstein stands very near the top.

I say this not just because of your numbers abilities. It's also because you had the guts to take intercst on in Janaury 2002, a few months before I kicked off The Great Debate. The FIRE history books will make note that you planted the flag first. I have been an advocate for honest and informed posting on this issue for a long time now, but it takes something special to do it first, and it wasn't me who possessed what it takes to do that, it was you. I noticed.

Wanderer was first re a different aspect of the question, by the way. I was second on both aspects, the substance aspect and the process aspect.

Where I come in first is on the stubbornness aspect. I think it is fair to say that no one comes close to me in that department. I am the most stubborn advocate of honesty in SWR analysis on the face of Planet Earth at this time. We all make our contributions in the areas in which we are most able to give, you know?

End of earlier post.

I stand by my earlier statements in this thread. The earlier posts support the claims that I made earlier in this thread. Here are some observations resulting from my examination of the earlier posts in this thread and posts from the thread cited by ataloss.

1) I was not making an "accusation" when I said that you employed weasel words. I was offering a compliment.

2) I was indeed the first to suggest that the FIRE community discuss the realities of SWRs, but I have been consistent in noting that many others in the community have made important contributions to The Great Debate.

3) I have several times singled out raddr for special praise. I have described him as one of the most informed posters on SWRs in the FIRE community (placing him second only to JWR1945 in the earlier post.)

4) I explained in the earlier post how it is possible to know that one number put forward as the SWR is certainly wrong prior to the time at which one has done the work necessary to know which number is the accurate SWR. A fundamental problem is that intercst is a con man and no reasonable person would put his or her trust in anything that he has said on this subject since May 13, 2002. The data has proven beyond any reasonable doubt that the intercst claims are false claims. The data has not yet revealed to us the true SWR, but we have discovered some extremely important clues during the first 15 months of debate on the question.

5) It is the historical data that is our most useful tool for determining who is offering informed guidance on the SWR concept and who is trying to con the community. If we are to build on the progress that we have already made on this matter, we need to focus our energies on an examination of the data. The SWR is a data-based tool, and it is the data that holds the answers. Ridicule posts and word game posts get us nowhere.

6) The reasons that I gave in the earlier post for setting up the new board appear to be sound ones, given the tenor of the debate that has been held on boards other than the SWR Research Group board since its founding.

7) The greater the confusion that is spread on this matter, the more effort it takes for me to correct the record so that those members of the FIRE community seeking to develop an informed understanding of the realities of SWRs are not misled. I think it would be a good idea if we moved discussions of SWRs to the SWR Research Group at this point, since I have greater abilities there to protect the community from posts aiming to spread confusion rather than an informed understanding of the issues.
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Post by raddr »

Amazing. I'm not going to spend an hour reading all of this verbiage but it looks like I didn't get my number. :roll: Somebody let me know if it is hidden in the mountain of words somewhere. :lol::lol::lol:
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Post by ataloss »

well, at least we know the number isn't 4% :wink:
Have fun.

Ataloss
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Post by JWR1945 »

raddr
Amazing. I'm not going to spend an hour reading all of this verbiage...

You should. It is worth your time.

Let me translate this into technical terms. It may help your understanding.
The key here is making a distinction between the concept of a safe withdrawal rate (SWR) and the concept of an actual rate of return. There is no one who can tell you the actual rate of return that you will obtain on your investments. That's clear. So we should put that question to the side and forget about it.

A Safe Withdrawal Rate is a probability. It is a prediction in the same way that probability theory makes predictions.

You do not gauge the success of probability theory on the basis of any single, particular outcome. Translation: "the actual rate of return that you will obtain on your investments" refers to "a single, particular outcome." Just as probability theory does not guarantee that someone who tosses a coin will produce any specific sequence of heads and tails, a Safe Withdrawal Rate computation does not guarantee a particular outcome.
Any SWR analysis that does not consider the effect of changes in valuation is invalid, in my view. It doesn't matter whether the take-out numbers they recommend end up working or not. The tool is not supposed to predict the future, so it should not be required to do that in order to be held valid. The tool aims to assess the probabilities of various future possible events by looking to historical data relevant to the question being examined. If it fails to do that, it is invalid.

Translation: the tool is not supposed to predict any specific outcome. It predicts the future in the same sense that probability theory predicts the future.

Have fun.

John R.
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Post by raddr »

JWR1945 wrote:

You do not gauge the success of probability theory on the basis of any single, particular outcome. Translation: "the actual rate of return that you will obtain on your investments" refers to "a single, particular outcome." Just as probability theory does not guarantee that someone who tosses a coin will produce any specific sequence of heads and tails, a Safe Withdrawal Rate computation does not guarantee a particular outcome.
Any SWR analysis that does not consider the effect of changes in valuation is invalid, in my view. It doesn't matter whether the take-out numbers they recommend end up working or not. The tool is not supposed to predict the future, so it should not be required to do that in order to be held valid. The tool aims to assess the probabilities of various future possible events by looking to historical data relevant to the question being examined. If it fails to do that, it is invalid.

Translation: the tool is not supposed to predict any specific outcome. It predicts the future in the same sense that probability theory predicts the future.

Have fun.

John R.


Yes, I understand all of this. So what is the number that the "tool" spits out? What are the inputs to the "tool"? Are the inputs reasonable or are they the result of datamining? What are the confidence intervals? Does the "tool" allow for different asset mixes? If so, how?

Frankly, if there are not good answers to all of these questions then I would have little use for the "tool" and would stick to my best guesses based on valuation inputs (e.g. Gordon equation) plugged into my MC model.
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Post by JWR1945 »

raddr
Yes, I understand all of this. So what is the number that the "tool" spits out? What are the inputs to the "tool"? Are the inputs reasonable or are they the result of datamining? What are the confidence intervals? Does the "tool" allow for different asset mixes? If so, how?

The number is actually the probability distribution along with confidence intervals. To the extent that a single number is mentioned, it should be associated with a high level of safety (which should be specified).

Focus on a single number is a carry over from the Retire Early Home Page and the repeated assertion that a withdrawal rate around 4% was 100% safe. Absolute certainty was claimed when probabilities and confidence limits should have been put forth. Such assertions were made emphatically and recklessly in spite of all evidence to the contrary, including your own.

A very close analogy exists with estimating the probability that a real coin, not a hypothetical fair coin, will come up heads. There are a variety of ways to estimate the true probability that the coin will come up heads. The most obvious is to toss the coin many times and measure the mean. You never can determine the true mean. You can only measure a sample mean. Yet, the idea that a true mean exists is useful.

There are other ways to estimate the true probability that a coin will come up heads. For example, you can determine its shape (in detail) and its physical contents (along with how they are distributed) and model coin tossing.

Regardless of what you do, you can never determine the true probability, but the idea still makes sense.

It is not true that a real coin will follow a binomial distribution. A real coin will wear down over time. It does not have a constant probability of coming up heads. Yet the idea of a binomial distribution is useful.

The tool is what you use to determine an underlying probability distribution.

Have fun.

John R.
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Post by ataloss »


Have fun.

Ataloss
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Post by raddr »

The tool is what you use to determine an underlying probability distribution.

John,

So what is the probability distribution? What are the inputs? So hocus is wrong that a "single SWR number" does not exist? :?
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Post by JWR1945 »

ataloss
I would point out that hocus hasn't obviously renounced any of these misstatements. He assures me I would not have to guess on this matter:

Those are not misstatements.

As soon as you state things in terms of probability theory and its applications, everything falls into place.

Have fun.

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Post by JWR1945 »

raddr
So what is the probability distribution? What are the inputs? So hocus is wrong that a "single SWR number" does not exist?

I hope that it isn't intentional. You are confusing me.

You do research to determine a probability distribution. Part of that research is to examine various theoretical distributions and see what they imply. You also look at empirical data to approximate an underlying distribution. You refine your answers. But you stick with the general idea that such an underlying distribution exists.

Part of the process of any investigation is to determine which inputs are important and which have little effect.

Very often, it is possible to prove that a particular answer is wrong even when you do not have the right answer. By a host of methods, your sensitivity studies being prominent among them, we know for sure that it was wrong to predict, with the information available in the year 2000:

that a 4% withdrawal rate (based on a portfolio's initial value and increased to match inflation) from a portfolio consisting of the S&P 500 index and commercial paper (with annual re-balancing but without transaction charges related to re-balancing) will have a very high degree of safety (very close to 100%) over the years 2000 to 2030.

That is how I interpret the idea that a particular, single SWR number is incorrect. I need clarification behind your choice of words: So hocus is wrong that a "single SWR number" does not exist?

In terms of real world applications, there are numerous special cases in probability theory. The notion that there is a correct, general distribution remains useful. There are still a variety of applications that you approach using a variety of useful, different, real world methods.

Have fun.

John R.
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Post by raddr »

JWR1945 wrote:
I hope that it isn't intentional. You are confusing me.


John,

It's certainly not intentional. I'm just trying to understand where you and hocus are coming from. I think that your intentions are good but, frankly, you and hocus have gotten the rest of us confused. By the same token, I feel that the tone you are using toward me is a little condescending. I hope that is not intentional on your part. Sometimes it is difficult to discern the "tone" of a message in this medium.
You do research to determine a probability distribution. Part of that research is to examine various theoretical distributions and see what they imply. You also look at empirical data to approximate an underlying distribution. You refine your answers. But you stick with the general idea that such an underlying distribution exists.

Part of the process of any investigation is to determine which inputs are important and which have little effect.


Again, I understand all of this and you don't need to explain it to me another time. All I asked for is a specific number or probability function. If you don't have either of these to show us then fine - I'm okay with that. Just say so. We'll understand. :wink: Since many out there, including myself, don't keep up with hocus' board I thought maybe we had missed out on something earth shattering. :shock:
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Post by JWR1945 »

raddr
All I asked for is a specific number or probability function. If you don't have either of these to show us then fine - I'm okay with that. Just say so. We'll understand.

That's the problem.

I have already posted my answers on the Safe Withdrawal Rate Research Board. You just haven't read them.

If you choose to limit yourself to reading a single post, I recommend this one that I wrote about Same valuation but not as safe dated Sun Aug 10, 2003 at 2:32 pm CDT.
http://nofeeboards.com/boards/viewtopic ... 9780#p9780

If you have time and if you would like to see a lot of references (which have the details), read this one: Same valuation but not as safe dated Sun Aug 10, 2003 at 2:32 pm CDT.
http://nofeeboards.com/boards/viewtopic.php?t=1256

Have fun.

John R.
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ataloss
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Post by ataloss »

it isn't evident to me that jwr/hocus have come up with anything new

but rather we are in this cycle of hocus saying ridiculous things and jwr attempting to explain them away or change the subject :)

this is defined as big progress in swr "research" :):):)

I would point out that hocus hasn't obviously renounced any of these misstatements. He assures me I would not have to guess on this matter:
Those are not misstatements.

As soon as you state things in terms of probability theory and its applications, everything falls into place.
jwr1945

first I am accused of posting despicable things by jwr (i.e. hocus' own inconvenient words) then after jwr understands that hocus is not retracting them the defends them as correct. Discusswing swr with either of them if a waste of time :)
Have fun.

Ataloss
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ataloss
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Post by ataloss »

thread summary:

raddr challenges hocus to state the current swr

hocus has a 585 word post without a swr but including:

You also accuse some who have actually made original contributions, such as myself, as engaging in "weasel words", etc. for not pinning down the true SWR for the moment.

When have I ever accused you of engaging in "weasel words"? I'm certain it wasn't me who said that

ataloss provides the missing quote:
Look at what happened to Bernstein. He is another person who I would describe as being on the cautious side. He didn't say that "the SWR was 2 percent at the top of the bull market." He used a weasel phrase, like you did. He said it might have been as low as that. Was he right to put it that way? Arguably not. He used data to come up with the number.
hocus 7/17

hocus posts 3800 words without either specifying a swr or explaining his weasel words misstatements

jwr1945 steps in again to clarify/change the subject


amazing :)
Have fun.

Ataloss
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Post by raddr »

JWR1945 wrote:
I have already posted my answers on the Safe Withdrawal Rate Research Board. You just haven't read them.

If you choose to limit yourself to reading a single post, I recommend this one that I wrote about Same valuation but not as safe dated Sun Aug 10, 2003 at 2:32 pm CDT.
http://nofeeboards.com/boards/viewtopic ... 9780#p9780


Okay I read it. It's an interesting post and might have some utility for an S&P500 dominated portfolio but it really doesn't apply to those of us shunning the still overpriced large cap sector. Historically ScV would've allowed for a much greater SWR than the S&P500 in spite of the relatively low dividend yield vs. large caps. Your dividend analysis just doesn't look to apply to the micro/small cap sector.

Oh, and I still didn't see any answers to questions I posed at the beginning of the thread.
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ataloss
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Post by ataloss »

I am saying that I have no ability to know the future. Thus, I cannot tell you what actual rate of return will apply to someone who retired in the year 2000. But I can easily calculate the SWR that applies for a retirement beginning in the year 2000. I don't need to predict the future to do that. When you calculate the SWR for a retirement beginning in the year 2000, you get a number that is not even in the same ballpark as the one that intercst reports in his study. His findings as to the SWR that applied in 2000 are way, way off the mark.

hocus 5/24/03

ataloss
waiting.....
Have fun.

Ataloss
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ataloss
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Post by ataloss »

Hocus earlier today:
That's a little more than 100 words, but enthusism is always bubbling over in hocus World. What you get when you ask a question of me is an honest, informed, and enthusiastic response, however many words it requires to get the job done. Take it or leave it.


waiting..............................................
Have fun.

Ataloss
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