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<<Bernstein is saying that he looks at things that have not occurred in the past to make his future estimates of safety.>>

He does not say any such thing, markr33. He is saying that to limit yourself to "looking at the past" in the manner that intercst did produces misleading results. You have to incorporate other factors into the equation, factors like the overvaluation of stock prices.

OK, I agree that it might be prudent to take into account factors such as overvaluation of stock prices. Would you suggest using P/E or perhaps 10-year average P/E as a measurement of overvaluation ?

If that is the case, you really ought to look at the latest RE spreadsheet which incorporates these concepts as well. See -

for more information.

It really is remarkable, but it appears that reacting to valuation changes only reduces the historically safe withdrawal rate (HSWR) !

See post -

for more information. The thread starts here -

Also see the thread starting at -

for an even more interesting analysis of treatment of high, medium, and low P/E which might even raise the HSWR slightly.
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