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No. of Recommendations: 34
Everyone wants predictive power. For just about everything. Heck, if there was a way to perfect predictive power, one could rule the world. This whole debate about SWR has as its thrust whether The Study utilizes predictive power and, if so, is it the best predictive power that can be had?

hocus seems to want everyone to pitch in and analyze "methodologies" and "data" to refute and/or replace The Study.

hocus: To determine the SWR for all the various asset classes is going to require an examination of lots of different types of data and the use of lots of methodologies.

When someone suggests that he do that work himself, he calls demands for such data a red herring to shut him up.

hocus: The demand for data in every post on this subject is a tactic being used by those who want to block debate. It is not a demand generally being voiced by those who want the debate to go forward.

I think, hocus, that the practical reality is that if you want a tool to determine whether 2% or 4% or 6% is "right" for you, or anyone else for that matter, you'll have to hire the brains to find out.

A similar dilemma faced the residential lending industry a few years ago. Investors wanted to know if they could fine-tune risk predictors so they could charge higher interest rates to those who represented greater risk of default. A company emerged to bring automated decisioning to the lending process.

From their website:

The number of niches is enormous because of all the different combinations of the features [of the borrower, subject property and/or other factors] that define niches. Software developed by GHR Systems, Inc., which many major lenders use to make pricing adjustments, allows lenders to enter up to 40 million prices for each loan program. A second loan program could have a different 40 million. While no one lender uses any significant part of this capacity, in combination the lenders using the system price for several million niches at least. Shoppers need to understand that no lender operates in every niche, and the narrower the niche, the fewer the lenders.

Now, if you were to replace "niches" with "asset classes" or "number of years to retirement" or any number of variables you seek to analyze, you would have one Hellacious spreadsheet in which you could plug in variables to hypothecate just about any situation you cared to fathom. The lending industry didn't pull a discussion board together to debate all day and all night about whether John Doe's 600 FICO score is a greater risk than Mary Jones' 650. It recognized its need for more refined predictive power and set about to get it by hiring brains to formulate software for this very purpose.

To ask this board to go much beyond The Study so as to refute its author is too large a task, I think, as you yourself acknowledged.

hocus: It [the gathering of data] is a project that will keep this board tied up in on-topic posts for years.

But, hocus, if you were to be really honest, it's more the following, isn't it?

hocus: My claim is that The Study does not provide the last word on the question.

The problem is the exaggerated claims made re The Study on this board.

If he [intercst] acknowledges that The Study does not tell us which asset classes provide the quickest and safest early retirement, then we have no problem.


In any event, it's a personal thing, hocus, between you and intercst, except that intercst doesn't seem to care what you think. You want intercst to cry "Uncle!" and he's clearly not going to do so. You want the board to help you overthrow him as "board leader" when it's clearly not interested in that, either. You want the entire board's support in helping you analyze Bernstein's 2% theory when, if you really want the job done, you should do it yourself.

I submit that the brain power to create the statistical model to evaluate every asset class in every month of every year in every conceivable scenario exists...you just have to hire it.

hocus: My purpose from the start was not to tell anyone what the safe withdrawal rate is. It was to ask a question. I want to know the safe withdrawal rate so that I can make better decisions about my own investments. I have used this board as a resource to learn things about early retirement in the past, and I see no reason why I should not be permitted to use it for that purpose now.

I don't think this board is the place to get the information you need. Why not call GHR Systems and see if the brains behind that company can develop a gigantic spreadsheet to backtest, forwardtest and hypothecate every scenario you care to plug into it until you're satisfied with the SWR it generates?

Seems to me you'd also discover an irrefutable foundation for your book. You'd become rich, Rich, RICH in the process by becoming The Authority About The Study. You could overhaul the Social Security System by having a fool-proof way to help people retire. And, most importantly, intercst would become a speck of dust on the fabric you wove of the Final Definitive Intergalactic Study of the Safe Withdrawal Rate.

I happen to know the chairman and founder of GHR Systems. Want me to find out if he's got a spare statistician for hire?







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No. of Recommendations: 2
hocus seems to want everyone to pitch in and analyze "methodologies" and "data" to refute and/or replace The Study.

You have misunderstood something somewhere along the line, Catherine. I do not want this.

It's a personal thing, hocus, between you and intercst

I have great respect for intercst's contributions and he has great respect for mine. Why do you think there is something personal in this?

I happen to know the chairman and founder of GHR Systems. Want me to find out if he's got a spare statistician for hire?

If you think this is the path to riches, Catherine, you should do it yourself. I have other fish to fry.
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No. of Recommendations: 2
Nice job CC for getting to the heart of the matter.Hocus i'm impressed you've kept your posts to a very readable length.I still see intercst's study as a pretty good barometer of what the swr is for all practical purposes,but at least you make your statement and leave it at that.

2828
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No. of Recommendations: 5
Hocus i'm impressed you've kept your posts to a very readable length

Thanks for saying that, 2828.

I still see intercst's study as a pretty good barometer of what the swr is for all practical purposes

That's fair enough. I see is as a pretty good barometer myself in many circumstances.

Catherine:

I forgot to include my best line in one of my recent responses to you.

You said something along the lines of "It sounds like you are sending us all back to work."

I was supposed to say:

Hey, Catherine, what's this stuff about us going back to work? You're still at work, remember? You could count any time you spend participating in the discussions as one of your 3 for 1 activities!

Also, I thought I should note that that last post of yours was a little on the long side.

A joke!
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No. of Recommendations: 2
Catherine: hocus seems to want everyone to pitch in and analyze "methodologies" and "data" to refute and/or replace The Study.

Hocus: You have misunderstood something somewhere along the line, Catherine. I do not want this.

What?!

You've said that intercst's study is flawed. You've invited people to discuss reasons why. But you don't want to find a better study?

Hocus, I'd request that you clarify exactly what you're trying to do here, because if you're not trying to find better analysis than what intercst has done, why would you post 40+ times in the last day?

dan
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No. of Recommendations: 0
hocus seems to want everyone to pitch in and analyze "methodologies" and "data" to refute and/or replace The Study.

You have misunderstood something somewhere along the line, Catherine. I do not want this.

I've misunderstood something?! You just posted this a couple of hours ago!

hocus...this board needs to get to work answering the questions it [the study] does not address.

Catherine:Sounds like we're being ordered to go back to work!

Catherine, I believe strongly that the board as an entity needs to get to work examining the realities of safe withdrawal rates.
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No. of Recommendations: 0
You could count any time you spend participating in the discussions as one of your 3 for 1 activities!

In my world, there are no 3 for 1 activities since I work for myself.

My post was long, but concise, eh? I edited it several times for your reading ease. :-)
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No. of Recommendations: 2
If you're not trying to find better analysis than what intercst has done, why would you post 40+ times in the last day?

Every post I have put up has been a response to a question or comment of a community member. I have other things to do, and I would appreciate it if people would stop talking about this so that I could get to those other things. Having been responsible for starting this thing, I think I have an obligation to respond to genuine questions and comments that arise from it.

I'd request that you clarify exactly what you're trying to do here

I'm trying to have a discussion about early retirement on a discussion board about early retirement, Galagan. People who are reading more into it than that are making a mistake. I know what I am trying to do better than anyone else possibly could, and that is what I am trying to do.

If you are curious about why things are so confused, you might want to look at the "We've Found the Data!" post. I explain there that I was studying the question of safe withdrawal rates years before I ever heard the names intercst or Bernstein.

I have zero desire to find fault with the intercst study. If he didn't bring it up in every thread in which I discuss SWRs, I wouldn't need to. But he brings it up as if it addresses every aspect of the SWR question, and it doesn't. So, to make my points, I am forced to explain why the things he says about the study are not so. I am not being left any choice in this matter.

If you doubt my word on this, I can point you to a bunch of posts in the transcript in which I say that the intercst study became a valuable analytical tool for me when I discovered it. I recommended that readers of my Soapbox report buy the study and make use of it. I suspect that people got this idea that I have something against the study from reading some of the nonsense posts that have been put up during this thing. Widespread confusion is the natural result of disruptive posting.

I do not believe that the intercst study factors in everything affecting the safe withdrawal rate. But then how could it? Much of the data needed to do that is not even publicly available. If I asked intercst to address every aspect of the question, I would be asking the impossible of him. That's what some people are asking of me when they demand that I answer every last question before a discussion can even begin.
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No. of Recommendations: 7
If you're not trying to find better analysis than what intercst has done, why would you post 40+ times in the last day?
______________________________________________________________________
Every post I have put up has been a response to a question or comment of a community member. I have other things to do, and I would appreciate it if people would stop talking about this so that I could get to those other things. Having been responsible for starting this thing, I think I have an obligation to respond to genuine questions and comments that arise from it.


You read it here.

He's begging us to ignore him so he can do other stuff.
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No. of Recommendations: 3
You read it here.

He's begging us to ignore him so he can do other stuff.


Be careful, ogrecat. It might be a trick!

I'm sorry. Something has put me in a playful mood this afternoon. I think it was that long (but concise!) post by Catherine.
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No. of Recommendations: 4
CatherineCoy: "Everyone wants predictive power. For just about everything. Heck, if there was a way to perfect predictive power, one could rule the world. This whole debate about SWR has as its thrust whether The Study utilizes predictive power and, if so, is it the best predictive power that can be had?

. . .

I think, hocus, that the practical reality is that if you want a tool to determine whether 2% or 4% or 6% is "right" for you, or anyone else for that matter, you'll have to hire the brains to find out.

. . .

I submit that the brain power to create the statistical model to evaluate every asset class in every month of every year in every conceivable scenario exists...you just have to hire it.

. . ."


I think that much of this work has already been done by the insurance industry. If you want a proxy then price inflation adjusted immediate annuites with lifetime inflation-adjsuted annual payments.

The insurance industry is in business to make money, so it is not in the industry's interest to offer to high a rate of return.

It is onlya proxy, because the insurance industry must price to cover its costs of sales (and servicing). The other concern I have is that without more detailed knowledge of how the various insurance companies compiled their respective analysis, it is impossible to know whether they are using the expected terminal values to subsidize annual payouts (thereby inflating the annual payout number in a way that a single indivudal could not because the insurance industries benefits from selling many annuties whil a the single retiree has only his/her own nest egg to support himself/herself.

Buying an annuity causes all loss of remainder value (but the single retireee cannot spend/beenfit from the money after death anyway) and removes all market risk but trades it for the bankruptcy risk of the insurer. There is no free lunch!

Regards, JAFO








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No. of Recommendations: 2
Hocus yuk's:

Hey, Catherine, what's this stuff about us going back to work? You're still at work, remember? You could count any time you spend participating in the discussions as one of your 3 for 1 activities!

Also, I thought I should note that that last post of yours was a little on the long side.

A joke!


Now, THAT's funny
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