Scott Burns spilled the beans re what is going on in his column from the summer of 2005 in which he said that the reason why we rarely hear the findings of "The New School of SWR Analysis (I am the leader of The New School, and Burns' column was written at my urging) is that "it is information most people don't want to hear."
LINKBlogs
Project hCCh and the Degredation of Hocomania Forums
Submitted by BigMoneyJim on Thu, 2008-07-31 17:15.I'm just starting project hCCh: "hocus Community Come home". hocus hasn't been able to reach the community, so I'm trying to bring the community to him. Basically I'm going to try to increase traffic to his blog and/or site without offering the readers my prejudice. The thinking is that fresh readers will bring fresh comments and new interactions with hocus (which have been quite entertaining in the past). And the most fun part is that it is what hocus thinks he wants, and at least the readers will be voluntarily--if unknowingly--entering the fray. I'm not sure how easy or hard this will be, and it will give me some practical experience in bringing traffic to web sites which may help me in a more practical way in the future.
I'm also noticing that the old REHP forums--now rebranded Rob Bennett's Best of Hocomania Discussion Forum--is continuing to drop posts. I have made efforts to link to original material whenever I refer to hocus' writings here or elsewhere so readers can verify the original and judge it in context, but in my occasional checks of material I am finding that posts linked from here are steadily disappearing from the forum. The instance I just stumbled upon is the stealing of the term "bloviating" from M*; that thread has lost the early posts to it. In the recent pasts I have browsed my quotes section so I could link the original quote but found it missing.
Five Characteristics Common to Kooks
Submitted by Schroeder on Sun, 2008-07-13 13:42.gw posted a fine analysis that accurately describes kooks. Rob fits nearly every category . . .
Martin Gardner published a book entitled "Fads and Fallacies in the Name of Science", and dealt with everything from flying saucer nuts to Scientology and chiropractic. The nugget of the book is a list of five characteristic common to the kooks:
1. The pseudo-scientist considers himself a genius.
2. He regards other researchers as stupid, dishonest or both.
3. He believes there is a campaign against his ideas, a campaign compared with the persecution of Galileo or Pasteur.
4. Instead of side-stepping the mainstream the pseudo-scientist attacks it head-on: The most revered scientist is Einstein so Gardner writes that Einstein is the most likely establishment figure to be attacked.
5. He coins neologisms.
Rob, does it ever bother you in the slightest when people like Gardner - who don't know you exist - paint such an accurate portrait of you when they're describing general properties of kooks?
LINK
Feeling Truth
Submitted by BigMoneyJim on Fri, 2008-07-04 16:17.I am reading The Demon-Haunted World by Carl Sagan, which by the way is a wonderful book so far.
I am a practical, results-oriented person who doesn't fully trust my own immediate perceptions, so I tend to assume others do the same. I have noticed in the past that my own memories can change, and sometimes I am not sure if a memory was a dream or if it really happened, so I am skeptical--at times even of my own thoughts. But at times I realize many others are simply not the same, and this book refines that thought for me.
Many people define Truth by how it feels to them, and once they have felt "Truth" (or a "truth") it is nearly impossible to convince them otherwise with evidence and facts, for they Know what the Truth is. (Note capitals.) Several chapters of the book summarize similarities between unscientific and pseudoscientific beliefs and scams (faith healing, charms/talismans, transcendental meditation, visions of Mary/saints/aliens, ghosts, speaking with the dead, etc.). One common thread among those who experience and spread these things is their unwavering faith in their belief and that they serve as a channel between our reality and their belief. (Note that the common theme is that they are privy to a special truth and are specially chosen to deliver it; furthermore you need to interact with them--uncritically--to learn the truth for yourself.)
So naturally I thought of hocus. Here is an avatar or man that intuitively felt something amiss with discussions of SWR and returns even though he fully admits a lot of the math is beyond him. Over time he refines his feeling and at some point feels Truth. Now He is here to help us understand this Truth and is invulnerable to evidence challenging the Truth. How are we to learn the Truth? By joining his Community and conversing with Him, He who discovered and channels this Truth.
Rob acknowledges Greaney’s study accurately reports the historically surviving withdrawal rate
Submitted by Schroeder on Fri, 2008-06-20 20:52.Sifting through the hocomania, we see that Rob acknowledges Greaney’s study accurately reports the historically surviving withdrawal rate . . .
There are many people who have asked that Greaney call his study an Historical Safe Withdrawal Rate study. If he did this, there would obviously be no problem with it. He has never agreed to do this. And of course there is language throughout the study in which he discusses safe withdrawal rates, not historical surviving withdrawal rates. All of that needs to be changed to make the study accurate.
If it were made accurate, there would not be a thing wrong with it. The problem is the inaccuracies. I gave the study a five-star review at Soapbox.com because it does a good job of reporting the HSWR. I have no problem whatsoever with using that methodology to determine the HSWR. That's just what it does.
hocus Switches Blog Software, and Hocoresearcher Labs Follows
Submitted by BigMoneyJim on Fri, 2008-05-30 00:32.I found and added the feeds for "A Rich Life"s blogs and comments, so we're ready for his new blog software. Over the next couple of days I'll figure out if I want to mingle them with the Financial Freedom Blog and comments or if I want a separate category for them. I'll probably mingle them.
Unless hocus removes his old blog--which, knowing him, is possible--he may still get new comments occasionally, and it would be nice to see them in chronological order here.
UPDATE: The old and new blogs and comments are all mingled together in the left sidebar under the renamed heading "hocus Blogs and Comments". In that list everything should appear roughly in the order they are posted. If you click around on the tags/categories you'll find that both blogs are under the same category and both comment systems are under the same category. The comments will probably be titled differently now, but we can't tell for sure until someone bothers to "put forward" a comment on the new blog.
UPDATE 2: Ah, good. The "A Rich Life" comments are titled as "Comment on [...]", so they still stand out from the blog entry titles. Oh, and "F1RST P0ST!1!!!11!" on hocus' new blog comments! (If anyone reads Slashdot...eh, this isn't the crowd, is it?)
Hocoresearcher Labs is Back
Submitted by BigMoneyJim on Mon, 2008-05-26 04:39.Down for three weeks due to a server crash, a busy me and the need to do several updates before brining it back online. It's back and seems to be working at least superficially. I anticipated some troubles with the RSS links, but they seem to be working okay.
I still need to set up the periodic check and make sure nothing major is broken, and then there are some optimizations, but at least we're back.
nfs analyzes VII both before and after taxes
Submitted by Schroeder on Thu, 2008-04-10 21:36.On paper, Valuation Informed Investing (VII) has shown to beat Buy and Hold (B&H). However, in the real world, trading costs and taxes come into play. nfs performed an analysis that shows that after taxes, VII doesn't hold up as well. Here is the analysis.
Recall that black is B&H and violet is VII. The comparison for the recent 20-year experience between with or without tax treatment is more dramatic. Here's without taxes . . .
And here's with taxes applied . . .
Hocus acknowledges the end of the secular bear market
Submitted by Schroeder on Sun, 2008-03-09 21:23.Schroeder: The Dow reached all-time highs last year.
Hocus: What a relief!
Financial Webring Analyzes Valuation Informed Investing (VII)
Submitted by Schroeder on Mon, 2008-02-18 21:48.Martingale offers this interesting comment . . .
**LINK**
If VII is really just the value effect and/or the momentum effect, that's a fairly serious criticism of it, as it could be cheaper in that case simply to follow one of those strategies instead (eg: buy and hold value stocks). It would also imply that you are not getting any free lunch if, as many have argued, there are rational reasons why value and momentum investing have higher returns than the market average. To wit, they are perhaps riskier.
I think Martingale is on to something. His rationale makes sense with respect to the value effect (though I'm not fully understanding how the momentum effect applies).
P/E10 acts like a value-based screen by raising the VII investor's stock allocation when value stocks dominate the S&P 500 (as evidence by lower P/E10 levels ). And conversely, lowers the VII investor's stock allocation when growth stocks dominate the S&P 500 (as evidence by higher P/E10 levels ).
I find this a logical explanation why VII may tend to outperform B&H, as value stocks tend to outperform growth stocks over long periods.
Now the question becomes is whether VII is still an effective value screen as it was in the past. And my answer is, probably not. And the reason is because many companies, including value stocks, have shifted their payout policy away from cash dividends and toward share buybacks. Share buybacks will have the effect of boosting prices more so than when cash dividends were the dominant payout policy.
The Community Owes hocus
Submitted by BigMoneyJim on Sat, 2008-02-02 13:32.I went and looked this up to include in my previous blog but wasn't quite sure how to fit it in. I think it's related but can't quite explain how at the moment:
hocus has in the past indicated he thinks some things are owed to him by his community: [link]
There were several people who came onto this thread to thank JWR1945 for his contribution, which of course was the right thing to do. I have not seen one post yet thanking me for my contribuition. I think it is fair to say that I have put a whole lot more work into this thing than JWR1945 has and have been subject to a whole lot more abuse than he has. So where are the posts saying "thanks for hanging in there, man, you showed a real love for the community doing that." I am owed these posts given what I have been put through.
That thread includes some of hocus' favorite posters--those that he claims support him--taking him to task for his presumptive arrogance and indicating they don't agree with him on several things.
