Here's a way of looking at it.

But the reasons it's less likely to crash are also the reasons for it's higher valuation.

Essentially the Dow 36,000 argument: as stocks are recognized as less risky than thought, they correct upward.

It's *very* unlikely valuations will crash to the August 1982 lows.

Because: it's different this time.


Once you've pondered for a little bit, you realize that what you're selling in any given bear market is a very small percentage of what you're going to be selling during your whole retirement.

What Poors are selling in a bear market is NOT a very small percentage of what they're selling during their whole retirement.

They cannot afford the luxury of withdrawing so small a percentage that SOR isn't a risk.

And for anyone looking to maximize the expected utility of their wealth, it is inefficient.


(or you have a very small portfolio and therefore much bigger worries to ponder)

How many have portfolios greater than 25X annual spending?

Your 1.65% rule requiring 60X would convince most everyone they could never retire.

And unnecessarily.

Again, the chances of not living out 30 years of retirement is far greater than the risk of market returns worse than history.

Berkshire Hathaway FAQ

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