Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

“He stated in his book that the safe withdrawal rate at the top of the bubble was 2 percent, not 4 percent.”

No he didn’t.

Here is what he actually said “A particularly bad returns sequence can reduce your safe withdrawal amount by as much as 2 percent below the long-term return of stocks. Recall from Chapter Two that it’s likely that future real stock returns will be in the 3.5 percent range, which means that current retirees may not be entirely safe withdrawing more than 2 percent of the real starting values of their portfolios per year.”

https://www.passionsaving.com/stocks-in-retirement.html

“can reduce”
“by as much as”
“it’s likely”
“range”
“may not be”

Greaney said that a 4 percent withdrawal IS “100 percent safe.” When Bernstein says that withdrawing more than 2 percent “may not be entirely safe,” he is saying that Greaney’s claim is a false one.

Once we have acknowledged that valuations affect the result, we have opened up the undiscovered continent of investment analysis, Lots of smart people will have lots of different thoughts as to precisely how to go about buying stocks in the wake of the publication of the last 43 years of peer-reviewed research. Each contribution that is made will cause our overall knowledge of the subject matter to advance another tiny bit. In time, the progress achieved will be breathtaking.

The hardest step in the first one, the acknowledgement that valuation-based market timing is alwayus 100 percent required for every investor who seeks to keep his risk profile stable over time, to Stay the Course in a meaningful way. Please mark me down as being 100 percent in favor of taking that magical step, a step that I believe it would be fair to say will provide to be a turning point in U.S. history. We permit advances in understanding in every field of life endeavor other than the investment advice field. I strongly believe that we should permit advances in the investment advice field as well, Evidence.

That’s where I’m coming from re this one, my good friend.

Rob

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

A little hunting around got me this
“In other words, a particularly bad returns sequence <b>can reduce</b> your safe withdrawal amount by as much as 2% below the long-term return of stocks. Recall from Chapter 2 that <b>it’s likely</b> that future real stock returns will be in the 3.5% range, which means that current retirees <b>may not be</b> entirely safe withdrawing more than 2% of the real starting values of their portfolios per year!”

can reduce
it’s likely
may not be

contrast this with “the safe Withdrawal rate was”
When you are quoting someone (eg. your Yes Virgina comment by Wade) you use quotation marks, with this comment from Bill Bernstein you never do. Because you know that it is not accurate. He was clearly not making the certain comment that you depict, but rather was speculating about possible future returns and withdrawal rates.

No. Bernstein was saying that Greaney’s claim that a 4 percent withdrawal is always “100 percent safe” was in error. The safe withdrawal rate is the number that works in the worst-case scenario. When the starting point valuation level is what it was in January 2000, the withdrawal rate that worked in a worst-case scenario was 2 percent, not 4 percent. 4 percent COULD POSSIBLY WORK. That is certainly so. But it was not “100 percent safe.”People using the Greaney study to construct a retirement plan or to decide when to hand in a resignation from a job need to know that.

That’s the entire point of the 22 years of discussion. People need to be able to hear both sides of the story. Could 4 percent work, even for retirements beginning at very high valuation levels?Absolutely. Is it “100 percent safe” at such times? Not even close. Valuations are the biggest factor affecting risk for stock investors. So we should be looking at the effect of valuations on risk at every site where stock investing is discussed.

Rob

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

William Bernstein does not time the market and says Rob Bennett is wrong.

If you dropped all the criminal stuff and all the non-criminal abusive stuff, Bill would be happy to participate in our discussions in a 100 percent honest way and we would learn what he really thinks about all these matters. Full truth be told, HE would learn for the first time what he really thinks re all these matters.

I was a Buy-and-Holder once. I detected some of the contradictions. But there were so many good and smart people who thought that Buy-and-Hold was a good strategy that I didn’t trust my own instincts. I finally worked up the courage to express my doubts out loud and then I saw that there were a good number of smart and good people who shared my doubts and that there was an insane amount of defensiveness on the Buy-and-Hold side of the table. So those doubts grew. And over time I was able to put all the pieces of the puzzle together and become a confirmed Valuation-Informed Indexer (which is just Buy-and-Hold with the one huge error (that market timing is not required) corrected.

Bernstein already believes that the Buy-and-Hold retirement studies get the numbers wildly wrong. That’s a good start. Chapter Two of his Nine Pillars of Investing book is the best concise statement of the case for Valuation-Informed Indexing that I have ever seen. So we are not going to have much trouble bringing Bill Bernstein on board once we open the internet to honest posting and he is expressing his sincere views and hearing lots of others express their sincere views. We just need to take that one critical step. We need to follow the laws of the United States in discussions of stock investing just as we follow them in every other field of human endeavor.

I think we are going to get there, Anonymous. In the event that stocks continue to perform in the future at least somewhat as they have always performed in the past, we will be seeing a devastating price crash in the not too distant future. That will give a lot of people the courage they need to stand up to you Goons. And then we are on our way. It will not be too long a time after that when we will see people like Bill Bernstein singing the praises of market timing to the skies. I am sure.

Perhaps not 100 percent sure. But pretty darn sure. The intellectual case for market timing is just too strong for me to imagine that we could not get a guy like Bernstein to join the party once he could see that it was safe to do so. And I think that it is going to become an entirely safe thing in the days following the next price crash, when irrational exuberance over Buy-and-Hold/Get Rich Quick becomes irrational depression over Buy-and-Hold/Get Rich Quick.

We’ll see.

Bernstein Fan (The Chapter Two Version!) Rob

Set forth below is the text of a comment that I recently posted to the discussion thread for one of my columns at the Value Walk site:

“We will have to see how it all plays out following the next crash.”

Why wait? You could rejoin every single board that banned you TODAY. Just pick a new user name and tone down the crazy. You’ve been talking about writing another book for years. And talking about joining political boards. But you throw up your hands and say absolutely none of it can be done until after the next crash. Honestly, you act as helpless as a newborn baby. Take some control of your life, man.

We need to have everyone feeling free to say precisely what they believe about stock investing, Dan. Hiding under new user names and “toning down” is exactly the OPPOSITE of what we need to see. We need to see people working up the courage to stand up to you Goons.

Take Bill Bernstein. In May 2002 I put forward my famous post saying that the safe withdrawal rate was really 2 percent because of valuations That’s the one that brought on all the commotion. Bernstein published a book in the SAME MONTH in which he said that you need to subtract two percentage points from the 4 percent SWR to account for the high valuations. That’s the same thing, isn’t it? Subtract two from four and you get two — Bernstein, a guy that all Buy-and-Holders love — was saying the exact same thing as the hated Rob Bennett going back to the first day!

So why doesn’t Bernstein get harassed? He doesn’t say anything that hurts Buy-and-Hold from a marketing perspective. He doesn’t say “the Buy-and-Holders got the numbers wrong” or “the Buy-and-Holders need to correct theirs studies” or anything like that. So the Buy-and-Holders just ignore the comment buried deep in his book and continue to push the same garbage studies. The money keeps rolling in!

I tell people that we need to figure out the realities. If the Buy-and-Hold numbers are really as wildly off as Bernstein says they are, we need to get those darn studies corrected before they cause even more failed retirements. It makes it hard to work a con on millions of people when someone says something like that. So I am Public Enemy #1.

I wouldn’t want to get the numbers wrong in my retirement plan. So I try to help out the people who to this day are being taken in by the Buy-and-Hold studies. There are millions of people who have been taken in by these studies. So this is a big deal.

That’s what is meant by the term “bad behavior.” I am exposing the great Buy-and-Hold con. I want to do that, Dan! I don’t want to post under some phony name and I don’t want to “tone down the crazy.” I want to expose the con. Not because I don’t care about my Buy-and-Hold friends. I want to expose the con because I want us all to move on to better things. I don’t want to see my Buy-and-Hold friends continue to waste their energies covering up all the time.

Bernstein should have said things in the way that I said them. If he had, we would have seen that article in the New York Times years ago and we all would be living far richer (in every sense of the word) lives today.

We don’t need to see Rob Bennett tone down, Dan. We need to see everyone else tone UP. This affects each and every one of us. We need to get this stuff right. It’s important. We don’t get there by toning down. We get there by toning UP. Either Buy-and-Hold can meet the challenge we put to it or it cannot. If it cannot, we all need to move on to better things.

Rob