Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“Evidence is the one advancing 100 percent inconsistent statements under his name, not me. “
I have been 100% consistent.
A calculation of the withdrawal rate that survived in the past is different than an estimate of what withdrawal rate will survive in the future are 2 different calculations.
Changing the first calculation to try and turn it into the second one wouldn’t correct the study, it would break it.
You seem to be the only person who can’t understand the difference between the two.
I of course agree with you that the two calculations are different.
What I proposed in my post of the morning of May 13, 2002, is that we look at the second calculation. Thousands of community members expressed excitement over this idea. They thanked me for starting the most important discussion ever held in the history of the Retire Early board. Greaney freaked out. He had been trying to deceive people into thinking that he had calculated the safe withdrawal rate and he could see that honest discussions were going to cause people to lose confidence in his false clams that a 4 percent withdrawal is always “100 percent safe.”
People need to know the safe withdrawal rate to be able to plan effectively for their retirements. I believe that we should be permitting honest discussion of this question at every discussion board and blog on the internet, without a single exception. I believe that that’s the answer.
I am sure of it.
And it wouldn’t “break” the Greaney study for him to add a few paragraphs at the end of it noting that in no way shape or form can a 4 percent withdrawal be considered the safe withdrawal rate, that he never even tried to calculate the safe withdrawal rate. Doing that would bring an end to the deception, which would be a very good thing. Once the deception was brought to an end, we would all be free to discuss what we want because the Buy-and-Holders would no longer feel a need to “defend” their long-discredited retirement studies. We could all move on to better and more enjoyable and more productive pursuits.
Rob
As Evidence has said many times, feel free to go do the work that you think needs to be done.
I’m doing it. I write a column for Value Walk every week. I learn a little from each one I write, I respond to questions and concerns from you Goons here. i sometime learn from doing that. I spend time every day working on a book that I believe addresses the most important public policy concern of our time — the 4-year cover-up of the challenges to the Buy-and-Hold Model raised by Shiller’s amazing,Nobel-prize-winning research.
You Goons don’t want people talking about the far-reaching implications of that research at discussion boards where Buy-and-Holders are the majority (which is all of them). We couldn’t possibly disagree more. I believe that it is by talking things over that we all learn more about this important subject matter. I think of Buy-and-Holders as my friends and I want to learn from them and teach them when possible. And of course the published rules of all the sites as well as the laws of the United States show that that belief is the NORM in our society.
A good number of us tolerate violation of that norm in the investment advice field because our Get Rich Quick is so strong that we cannot bear to see Buy-and-Hold toppled. But I believe that we are going to realize in the days following the next price crash that we don’t have any choice but to permit learning in this field to continue. If we really believed in 1980 that we already knew everything that there ever would be to know about this subject, we should have just shut down all the Ph.D. programs and declared that there will be no further research because to permit research would be to open the possibility that we would learn that there are flaws in the Buy-and-Hold concept. We permitted research to continue because deep in our hearts we believe that learning is a positive.
That’s my sincere take re these terribly important matters, in any event.
Rob
No one needs to do a thing just because you say so. There are no “far reaching implications” from your repetitive rants. All we see if some guy repeating the same tired lines do that his wife will get off his back about getting a real job.
I believe that we need to open every discussion board and blog on the internet to honest posting re the past 40 years of peer-reviewed research in this field. I don’t view that as optional. I view it as 100 percent imperative.
That’s it. That’s what I believe. I have never said that anyone needs to do anything I say just because I say it, But I strongly believe that I need to participate honestly in discussions of stock investing in which I participate. I sincerely believe that John Greaney failed to include an adjustment for valuations in the retirement study posted at his web site. So that’s what I say when discussions of safe withdrawal rates come up in discussions in which I participate. I think that the fact that that causes so much agitation among a good number of Buy-and-Holders is telling. It shouldn’t take 20 years to determine whether or not a study contains a valuations adjustment It shouldn’t take much longer than 20 mintues.
Rob
“What I proposed in my post of the morning of May 13, 2002, is that we look at the second calculation. ”
Is this the proposal you are referring to?
https://boards.fool.com/price-adjusted-safe-withdrawal-rates-17209214.aspx?sort=whole
And here is the relevant quote
“What I am thinking would be useful is a calculator that allowed you to choose three options: (a) a purchase at a time period in which stocks were priced low, using the conventional valuation criteria; (b) a purchase at a time-period in which stocks were priced about average; and (c) a purchase at a time-period in which stocks were priced high. After entering your choice of (a), (b), or (c), the calculator would tell you what sort of long-term safe withdrawal rates were provided to other investors investing at similar price levels obtained in earlier historical periods.
My guess is that such a calculator would show an investor investing during a time when low stock prices prevail would be likely to obtain a safe withdrawal rate higher than the 4 percent return that the conventional calculators (those using all investment price levels in their data set) suggest. Presuming that we see such prices again in the future, that would allow people with money to invest at that time to retire with confidence of obtaining a long-term safe withdrawal rate greater than the safe withdrawal rates suggested by the conventional calculators (higher than the 4 percent figure we often hear cited on this board, that is).
On the other hand, it would show a lower safe withdrawal rate for investors putting money into stocks today. Personally, I would be willing to accept a safe withdrawal rate assumption of less than 4 percent, given the low rates paid by safe investments like ibonds today. However, if the modified calculator showed asafe wtthdrawal rate for stock investments made at today ‘s prices of less than 2 percent, my inclination would be to go with ibonds or some similar investment.”
Those words offer a very good overview of the issues that I believe we all need to be examining. I have learned a lot as a result of the last 20 years of discussions. So I don’t know that I would sign on to every word of the post today. But I believe that the part that you quoted does a great job of pointing to the sorts of trade-offs that should be considered.
This is not a situation where someone is going to craft a perfect three-sentence statement and that is going to be the end of it. The effect of valuations on long-term returns affects every strategic issue. We need to have thousands of people making contributions from thousands of different angles and we all need to be learning from those contributions and adjusting our own takes as we go. I have better formed views today than I did at the time I wrote those words. But I certainly don’t think that I today know it all. I want to continue learning. For that to happen, we need to make everyone feel 100 percent free to post their honest thoughts.
That’s where I am coming from.
Rob
As Wade Pfau said, Greaney gave you your answer the same day:
“I’m not aware of anyone who has been successful in timing when stock prices are high or low over the long-term. If you possess this unique ability that others lack, perhaps the easiest thing to do is to adjust the safe withdrawal rate by the amount that you consider stocks to be higher than they have ever been. If stocks are 25% higher, drop the 4% withdrawal to 3%. If you feel stocks are 50% higher than they have ever been, then drop the 4% down to a 2% withdrawal.”
Think of all the time you wasted over the last 20 years.
That’s not an answer to the question that I put on the table.
My question is: Can we talk about this stuff in civil and reasoned discussions?
I say that we should be able to do that. It is by talking things over that we all learn. I wanted to hear what thousands of my fellow community members had to say about these matters, not just what Greaney had to say. I knew what Greaney had to say before I advanced the post.
Rob
“ That’s not an answer to the question that I put on the table.”
Yes, it was the answer. You just decided you needed some kind of story line. The world doesn’t have to play along with you.
I don’t control what the world does. I acknowledge that. But the fact that you Goons have felt a need to resort to tactics that violate U.S. law tells me that the world is more on my side than it is on your side. For the time-being, the world has tolerated your criminal behavior. That’s because you are on the side of a pure Get Rich Quick approach to stock investing. I am telling people to take the number reported on their portfolio statement and divide by two to know the true value of their portfolio. What a surprise that that doesn’t make some people happy!
In the long run, I believe that the world will show itself to be on the side of permitting honest posting re the last 40 years of peer-reviewed research. The test will come in the days following the next price crash, when the human misery that always follows the heavy promotion of a pure Get Rich Quick approach will be evident to anybody with eyes. We”ll see how it goes, you know.
I naturally wish you the best of luck with it. I don’t feel that I can say that I believe that the Greaney study contains a valuation adjustment. But I don’t see any reason why I shouldn’t be able to wish you the best of luck in your endeavors in any event.
Rob
If you have proof of any laws that have broken, then bring them to the police. It needs to be real proof, not like the made up death threats you have been trying to peddle.
I brought it to the police in 2002. A policeman came to my house and wrote up a report. He asked me to show him the death threats and I did so. He asked me if I thought that one of you Goons was really going to kill one of my loved ones or if it was just talk. I said that it was my personal belief that the motive was to silence me and others and that I did not personally think it likely that one of you Goons would commit murder. But I said that it scared my wife that people were threatening on a public discussion board to murder her and our children and that anyone who makes such a threat is by definition crazy, so there is no way to know for sure what they will do.
Such threats do not have a place in discussions of Shiller’s Nobel-prize-winning research. Such intimidation tactics have been holding us all (every investor on the planet) back for 20 years now. It is my strongly held belief that we all need to work up the courage to stand up to you Goons so that the use of such intimidation tactics becomes a thing of the past. So long as they continue to work for you, you will continue to make use of them. Millions of people are getting hurt.. So more of us need to work up the courage to stand up to you. I believe that it will happen in the days following the next price crash. We’ll see.
Rob