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The post in which Mungofitch put forth the idea of periodically selling some percentage of the value of one's BRK shares. I think value was based on something simple like 1.45*book/share.

Thanks, in advance.

Take a look at post 8287 here on the BRK board. It might be what you are looking for.

Keyword searches do work for the board you are within when using the search box at the top of the page. I just searched for "withdrawl" and noticed that 8287 references some posts from the old fool board on the topic. Quite useful so thanks to Manlobbi.


Jeff

Take a look at post 8287 here on the BRK board. It might be what you are looking for.

Yes that has some of the information I was looking for.

Also 2517:

So, the percentage of your portfolio you can liquidate and spend each quarter is proportional to how much this number has gone up.
To the extent that the valuation methodology is valid and the smoothing isn't too extreme, by construction your portfolio will always have the same real value and it will last forever.

<snip>

For a SWR strategy based on this, I think it's OK to put a floor on the withdrawn amount. But that's a matter of taste.
(my personal favourite version pays out only 90% of the allowed amount each quarter to give slight long term growth, but also has a floor payment of 1% per quarter)

Keyword searches do work for the board you are within when using the search box at the top of the page. I just searched for "withdrawl" and noticed that 8287 references some posts from the old fool board on the topic. Quite useful so thanks to Manlobbi.

You can also click the author's name (such as when reading their post, then clicking their name) to go to the author's page.

From each author's page, you can then enter a keyword and click "Search across John's posts" to specifically search for posts only by that author.

This feature was not working for a while (though no-one reported it not working) but I have fixed it just now.

- Manlobbi

Also 2517:

So, the percentage of your portfolio you can liquidate and spend each quarter is proportional to how much this number has gone up.
To the extent that the valuation methodology is valid and the smoothing isn't too extreme, by construction your portfolio will always have the same real value and it will last forever.
...
For a SWR strategy based on this, I think it's OK to put a floor on the withdrawn amount. But that's a matter of taste.
(my personal favourite version pays out only 90% of the allowed amount each quarter to give slight long term growth, but also has a floor payment of 1% per quarter)

Here are the figures for how much this strategy would have produced in income. It was proposed about 10 years ago, I think.
The variant here is the one I suggested above: floor of 1% payment per quarter (SWR 4%), and paying out only 90% of the recommended payment to add a tiny buffer and to allow the portfolio intrinsic value to rise very slowly over time.

The start date is chosen to be an unlucky one for any safe withdrawal test: right at the end of a stretch of very high valuation levels.

These columns show the estimated total intrinsic value of the portfolio after the quarterly sales, the *market* value of the portfolio after the sales, the quarterly amount liquidated, the sum of the liquidations in the prior four quarters, and the trailing four payments as a percent of the original portfolio size, assumed to be $1 million in today's money at end of September 1999. All dollar amounts are inflation adjusted to a recent figure of CPI of 314.9.

              Port IV    Port MV    Quarter       TTM    % orig val
1999-12-31    1004315    1121142      43348
2000-03-31    1007846    1072011      33805
2000-06-30    1010798    1000686      26302
2000-09-30    1013329    1141071      25655    129110         12.9%
2000-12-31    1015747    1260921      27013    112775         11.3%
2001-03-31    1017336    1138303      16001     94971          9.5%
2001-06-30    1018553    1177646      12659     81329          8.1%
2001-09-30    1019474    1184716       9635     65309          6.5%
2001-12-31    1020105    1277479       7110     45406          4.5%
2002-03-31    1014578    1184713      11145     40549          4.1%
2002-06-30    1007127    1093332      11441     39331          3.9%
2002-09-30    1000405    1191790       9917     39613          4.0%
2002-12-31     992975    1156460       9853     42356          4.2%
2003-03-31     987718     999979       9951     41163          4.1%
2003-06-30     991957    1123845      10761     40482          4.0%
2003-09-30     997475    1137250      10240     40806          4.1%
2003-12-31    1019745    1273153      10138     41090          4.1%
2004-03-31    1030350    1371305      22875     54014          5.4%
2004-06-30    1032834    1255398      27168     70421          7.0%
2004-09-30    1035074    1193883      23254     83435          8.3%
2004-12-31    1037522    1186134      25190     98487          9.8%
2005-03-31    1039722    1127530      21472     97084          9.7%
2005-06-30    1041741    1065618      18592     88508          8.9%
2005-09-30    1043594    1018596      16277     81531          8.2%
2005-12-31    1045383    1071721      16499     72839          7.3%
2006-03-31    1047359    1075298      18265     69633          7.0%
2006-06-30    1049117    1050143      15836     66876          6.7%
2006-09-30    1051143    1069287      18544     69143          6.9%
2006-12-31    1053815    1221860      27887     80531          8.1%
2007-03-31    1056170    1177638      23633     85899          8.6%
2007-06-30    1058519    1119273      22358     92421          9.2%
2007-09-30    1061119    1200533      26476    100353         10.0%
2007-12-31    1063325    1396878      26076     98542          9.9%
2008-03-31    1065062    1291006      18952     93862          9.4%
2008-06-30    1066463    1118529      13227     84731          8.5%
2008-09-30    1067676    1199070      12257     70511          7.1%
2008-12-31    1068706     896744       7779     52214          5.2%
2009-03-31    1065569     778882       8673     41935          4.2%
2009-06-30    1053805     779516      13999     42708          4.3%
2009-09-30    1051044     878384       9839     40291          4.0%
2009-12-31    1047314     854085      10904     43416          4.3%
2010-03-31    1048880    1044258       9962     44705          4.5%
2010-06-30    1044629    1005826      11092     41798          4.2%
2010-09-30    1042123    1031833      11253     43212          4.3%
2010-12-31    1046968     987136      10339     42646          4.3%
2011-03-31    1052741    1007922      10947     43631          4.4%
2011-06-30    1055212     902664      10655     43194          4.3%
2011-09-30    1052016     815757      11012     42953          4.3%
2011-12-31    1054769     866508      10813     43427          4.3%
2012-03-31    1065392     904734      10782     43262          4.3%
2012-06-30    1073420     909618      10932     43538          4.4%
2012-09-30    1085077     949419      10851     43377          4.3%
2012-12-31    1092234     950407      15997     48562          4.9%
2013-03-31    1095196    1068522      26009     63789          6.4%
2013-06-30    1098080    1117817      26421     79278          7.9%
2013-09-30    1100951    1102960      25890     94317          9.4%
2013-12-31    1104454    1123902      32082    110402         11.0%
2014-03-31    1107667    1146165      29924    114317         11.4%
2014-06-30    1110846    1116855      28768    116664         11.7%
2014-09-30    1113958    1189147      29898    120672         12.1%
2014-12-31    1116917    1271525      30310    118900         11.9%
2015-03-31    1119686    1203186      26779    115755         11.6%
2015-06-30    1122282    1097105      22842    109830         11.0%
2015-09-30    1124679    1030861      19777     99709         10.0%
2015-12-31    1127024    1027232      19233     88632          8.9%
2016-03-31    1128970    1087839      16876     78729          7.9%
2016-06-30    1130659    1081287      14536     70423          7.0%
2016-09-30    1132262    1062228      13534     64180          6.4%
2016-12-31    1134234    1177416      18427     63373          6.3%
2017-03-31    1136371    1173410      19860     66358          6.6%
2017-06-30    1138517    1167192      19796     71617          7.2%
2017-09-30    1140547    1239353      19857     77940          7.8%
2017-12-31    1143456    1303723      29844     89357          8.9%
2018-03-31    1146013    1274299      25593     95089          9.5%
2018-06-30    1148733    1155397      24621     99915         10.0%
2018-09-30    1151978    1289783      32705    112763         11.3%
2018-12-31    1154448    1207256      23246    106165         10.6%
2019-03-31    1157137    1160069      24257    104830         10.5%
2019-06-30    1159824    1190257      24814    105023         10.5%
2019-09-30    1162700    1133945      25248     97566          9.8%
2019-12-31    1166197    1199384      32369    106689         10.7%
2020-03-31    1168796     943748      18889    101320         10.1%
2020-06-30    1171050     913851      15828     92334          9.2%
2020-09-30    1173293    1057580      18194     85280          8.5%
2020-12-31    1176231    1123947      25267     78177          7.8%
2021-03-31    1179272    1197575      27794     87082          8.7%
2021-06-30    1182771    1239917      33019    104273         10.4%
2021-09-30    1186050    1169556      29101    115181         11.5%
2021-12-31    1189494    1228357      32006    121920         12.2%
2022-03-31    1192494    1388249      31432    125559         12.6%
2022-06-30    1194728    1025541      17256    109795         11.0%
2022-09-30    1196650     973792      14076     94771          9.5%
2022-12-31    1198310    1108391      13824     76589          7.7%
2023-03-31    1199702    1088521      11361     56517          5.7%
2023-06-30    1201123    1212316      12914     52176          5.2%
2023-09-30    1200551    1185845       9710     47809          4.8%
2023-12-31    1200072    1192566      13774     47759          4.8%
2024-03-31    1203638    1380028      11644     48042          4.8%
2024-06-30    1206371    1305216      14404     49532          5.0%
2024-09-30    1208314    1451362      21009     60831          6.1%
2024-12-31    1210382    1404747      21605     68661          6.9%
2025-03-31    1212166    1611266      21337     78354          7.8%

Generally, there is a lot of variability of the withdrawals. But that can be seen as the sum of (a) safe withdrawal rate of 4% inflation adjusted, plus (b) a highly variable but large and fairly frequent chunk of extra money when value growth has been good lately.

The value metric uses is the simple average of (16 quarter WMA of my two-and-a-half-column method, scaled) and (16 quarter WMA of real book per share, scaled).
The two are in fact extremely close, so just using book gives pretty much the same result. The main difference, still small, is that my two-and-a-half-column method has been more conservative lately because net earnings in operating subsidiaries have been weak.

Jim

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