General Topics starting from September 18, 2006
Updated: November 30, 2006.
Retirement Trainers and Accumulation
My Retirement Trainers help you improve your skill during accumulation.
Retirement Trainers and Accumulation
Learning the RIGHT Lessons
I have made a series of practice runs with Dollar Cost Averaging starting from a balance of $0. Glancing at the Year 30 balances doesn’t tell us the entire story. In fact, that is the wrong place to look for the most important lessons.
Learning the RIGHT Lessons
The Wrong Lessons
The experts have let us down. Too many are teaching us the wrong lessons.
The Wrong Lessons
Denial Is Expensive
Ignoring our cutting edge research can be expensive.
Denial Is Expensive
Dollar Cost Averaging at Year 15
Dollar Cost Averaging reduces the effects of fluctuating prices during accumulation. It does not eliminate them entirely. Valuations matter.
Dollar Cost Averaging at Year 15
The Next Recession
When do you expect the next recession? Within 5 years? Within 10 years?
In either case, it is time to hold cash.
The Next Recession
I Saw My Doctor Today
Right off the bat, he told me that he does not understand what I send him.
I Saw My Doctor Today
Capitalization Weighted Stock-Bond Allocations
The Efficient Market Hypothesis leads to a variable stock and bond allocation. [NOTE: I am NOT an advocate of the Efficient Market Hypothesis.]
Capitalization Weighted Stock-Bond Allocations
Explosive Earnings Growth
I have made another attempt to improve upon P/E10. The result: a warning about earnings growth in times of high valuations.
Explosive Earnings Growth
Capitalization Weighting of What?
This exposes the underlying fallacy related to Sharpe’s Theorem that capitalization weighting matches the return of the market as a whole. It incorporates Dr. Hussman’s observation that money can never enter nor leave the market as a whole.
What has been missing? What is the critical oversight? Dividends.
Capitalization Weighting of What?
Mindless Comparisons to Index Funds
How often have you read that actively managed funds underperform a suitably chosen index? It is a lie.
Mindless Comparisons to Index Funds
New Standards for Financial Reporting
During my professional career, I was never allowed to get away without doing the following. Why do we allow "financial experts" to get away with anything less?
This is based on my “It’s about time...” series of notes.
New Standards for Financial Reporting
System Engineering
Most of my professional work was in system engineering. You can see evidence of this throughout this site.
System Engineering
Today’s Skill
Today’s skill is intermediate-term market timing.
Today’s Skill
Short Term Price Fluctuations
I recently realized that I can say a lot more about short-term price fluctuations than I had previously thought. Here it is.
Short Term Price Fluctuations
I have constructed more tables that tell us about short-term price fluctuations. Rob Bennett has written a Letter to the Editor that puts everything into context.
More about Short Term Price Fluctuations
November 7, 2006 Letters to the Editor
I have constructed tables of conditional probabilities. They may be easier to understand. They show what happened to prices when P/E10 fell within specified ranges during the years of 1921 through 1980.
Short Term Price Fluctuations (Continued)
Basic Estimates and Refinements
I talk about refinements separately from estimates. This example may help you understand the distinction.
Basic Estimates and Refinements
One Time Bets
I was offered a bet recently.
It was the kind of thing that would be a real money maker if I could duplicate its essential features again and again. I cannot. It was only a one-time opportunity.
One Time Bets
Dividend Growth to the Rescue
Here is an alternative calculation of the worst case outcome of a 50% stocks-50% TIPS portfolio.
(Nominal) dividend growth rates of 5.0% to 5.5% are sufficient to support younger retirees.
Dividend Growth to the Rescue
Earlier General Topics
Special Note about Mean Reversion, Time and the Gordon Model, Orders of Magnitude, Using Stock Return Predictions, Eye Opening Calculations with Compact CVTVR L, New Standards for Financial Reporting, Designing a 45-Year Retirement, P/E10 Predictions, Bulls, Bears and P/E10 Predictions, P/E10 Predictions Revisited, Playing with the Toy, More Fun with the Toy, Great Fun with the Improved Retirement Trainer, Accumulation and the Retirement Trainer, Why Dividends Are Better, Dividends versus Capital Appreciation, E10 or D10?, More PE10 Predictions.
General Topics starting from June 27, 2006
Using P/E10, Historical Perspective: Dividends and Earnings, The Story Behind the Numbers, Individuals Pick Winners, Dollar Cost Averaging Today, Year 10 Choices, What Do I Really Think About Dividends?, Allocate 25%, Investment Traps, Early Success with Latch and Hold, Continued Success with Latch and Hold, Adding Constraints to Latch and Hold, The Lower Latch and Hold Threshold, Additional Constraints with Latch and Hold, Idiot Switching, Typical Values of P/E10.
General Topics (starting from January 16, 2006)
Withdrawal Rates at Favorable Valuations, Ridiculous Pessimism, Addendum to Ridiculous Pessimism, Gradually Increasing Bond Allocations: HSWR, Gradually Increasing Bond Allocations: Returns, Gradually Increasing Bond Allocations: Returns Addendum, Asset Weighted Mutual Funds, S&P500 Returns Update, Refusing to See the Obvious, Refusing to See: Dividends, Years to Double, Historical Perspective.
General Topics (starting from September 20, 2005)
The Best Allocations versus Time, Numbers for Transition Planning, High Risk at 4%? at 5%?, Calculated Rates of the Last Decade, TIPS versus Dividends, Faster and Easier SWR Calculations, Post Script to Faster and Easier SWR Calculations, Faster and Easier SWR Calculations: Excursion, Safe Withdrawal Rates with Switching, Safe Withdrawal Rates with Switching Data, Portfolio Lifetimes with Switching, SWR Costs, Historical Context, Design Calculations, Equations for Design, S&P500 Returns, Speculative Return, Should You Buy an Annuity?
General Topics prior to September 20, 2005