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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76106  
Subject: Hi gang... wow!!! Date: 4/14/2013 2:13 AM
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Got me a bit of a tan, and wayyy too many additional pounds (all-inclusive family-oriented resort vacationing... great for managing the toddler, relaxing overall... hell on the svelte figure!)

I've done a very surface skimmage over the past several epic threads (just here... nothing about the derivative spin offs at RECFIRE or anywhere else anything may have emigrated.)

Ray, I suspect you may not see this for a while (at least I hope so... "going dark" on technology once in a while is a great cleansing process!) THANK YOU for uploading your spreadsheet. I just downloaded it, and haven't even cracked the cover (and might not even really be able to for a couple days yet... much to catch up on for me... 3 big family private reserve cases in development/processing, and a big periodic compliance audit knocking on my door I need to prep for as well.)

From the commentary in Ray's posts, I *SUSPECT* there are some issues being missed or ignored... particularly around drawdowns and risk of ruin. I won't say this is for certain until I've dug in & gotten deeply dirty on Ray's work (I have no doubt that it is of the highest integrity at his disposal from assumptions and data available. Often times mistakes occur from *expectations* and perception rather than outright deception.)

I noticed that references to drawdowns were limited to just 2-3 years (again, I very superficially skimmed so far, so if I am wrong I apologize in advance.) The S&P500 has quite a few 50% (70% including inflation) drawdown periods where highwater is not re-attained for 20-25 years. That is not insignificant, and in every one of these periods a zero-floor, capped hedge position will outperform, all else equal.

What I also anticipate doing... is using a financial projection relational database to build out a model, from scratch, rather than initially conforming to Ray's model... and when I am done we can compare & contrast. Models are often built from an 'expectation skew' (not saying that Ray's necessarily is... but building fresh on an app designed for the purpose may allow us to cross-view for discrepancies.)

*SO*... although I am back, I must still pre-apologize that my model production is not promised to come quickly, simply because while I trust it will be interesting, its of lower importance in my limited daily hours of productive time. I hope to have something ready near the end of this coming week, but it might be 2 weeks.

Again..... *wow*.... !

Cheers,
Dave Donhoff
Leverage Planner
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