Yesterday’s blog entry reported on an e-mail that academic research Wade Pfau sent me on December 16, 2010. I sent my response on December 24, 2010. The text is set forth below.
I have a few minutes today to write up some responses to this e-mail, which I didn’t get to write up when I first received it. I hope you are enjoying your holiday and I of course understand that you may not be able to look at this for some time.
You asked about citations. I thought your linking to the Google Knol was a good choice. That provides an overview of the New School SWR approach with links to additional materials for those who want to explore deeper. There’s one big problem with linking to the Knol, however. My sense is that Google may pull the plug on the Knol site at just about any time. So it may be that the link will not work for long. My second choice would be to link to the calculator page as
that contains both the essential tool and links (when you scroll down the page) to more materials.
You asked about the timing of John’s essential findings. I’ll provide some links to the SWR Research Group, a forum that I founded in July 2003. John did much of his research there and others commented on it in real time (the comments often led to further research). Unfortunately, abusive posters insisted that the board (and the entire site at which it was housed) be shut down. After it was shut down, one of the abusive posters put the board back up (without acquiring rights to the material) and added some abusive introductory material. It does not appear to me that the posts themselves were doctored. I understand that you may not want to cite to a source with abusive material in it.
But these links will at least address the timing question you had. And there is a lot of material at this board that you may want to at least know about. When it comes to providing a link, you might link instead to the www.Early-Retirement-Planning-Insights.com site. John reposted much of the material first produced for the SWR Research Group board at his own site (which passed to me on his death).
Here’s a thread that John posted on July 24, 2003 called “Safe Withdrawal Rate vs. P/E10 Data.” He would have described this as the date at which he felt confident enough that a valuation adjustment is needed in SWR research to have characterized research not containing a valuation adjustment as “analytically invalid.” I had been using that term for some time at this point.
Here’s a thread that John posted in March 2005 called “Our Standard Analysis Procedures.” This describes his methodology.
You asked for recommendations re what to read re the work that John and I did together. I would suggest starting with the material at the Foundations section of his web site:
I hope this material helps a bit. Please let me know if you have questions about any of it.
Wade responded later the same day. He said: “I hope we can stay in touch. I would like to do a VII study, but it will probably take a few months before it gets finished.”