Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
But the point is that everyone knows what he is referring to. The number is what worked in the past. It is not a guarantee of future success. If you want a different number to be calculated (an estimate of future success) then you need to either do the calculation yourself or work with others to do that calculation.
Endlessly complaining that Greaney (and Trinity etc) accurately calculated a different number than the one you wanted to be calculated is completely unproductive.
It’s honest. That works for me.
In my famous post from the morning of May 13, 2002, I didn’t say that Greaney got the number wrong. I asked a question: Should we be taking valuations into consideration when calculating the safe withdrawal rate? There were many community members who thanked me profusely for putting that question on the table. They said that I had started the most helpful and exciting discussion ever held at that board. So most people had not thought through how important it is to include a valuations adjustment.
It was the widespread interest in these questions that caused Greaney to flip his lid and resort to death threats and acts of extortion and so on to shut down the discussions of what the last 40 years of peer-reviewed research teaches us all about the realities of stock investing. I want to continue those discussions. I don’t want to shut them down. So I think it would be fair to say that you Goons and I are working at cross purposes.
My aim is to open every discussion board and blog on the internet to honest posting re the last 40 years of peer-reviewed research, without a single exception. I view that as the most productive work that anyone could possibly do. The relentless promotion of the Buy-and-Hold “strategy” has taken us to a place where the CAPE value is higher than the one that brought on the Great Depression. My mother lived through the Great Depression and told me stories about it. Not my particular cup of tea, you know?
I naturally wish you all the best that this life has to offer a person, regardless of what investment strategy you elect to follow.
Rob
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