FYI: Edward O. Thorp pioneered the use of quantitative investment techniques in the financial markets. He is the author of “Beat the Dealer,” which was the first book to prove mathematically that blackjack could be beaten by card counting, and “Beat the Market,” which showed how warrant option markets could be priced and beaten.
Regards,
Ted
http://www.marketwatch.com/story/investing-lessons-from-edward-thorp-quant-pioneer-and-card-counter-2017-07-25/print

@Maurice Yes, except reductive binary arguments--sustainable/unsustainable--are false childish ones. We live in a world of scales and spectrum and there are many shades of grey between sustainable and unsustainable. Last I heard muni bonds weren't used to support wars and revolutions. But by saying everything's unsustainable it rationalizes investing in everything (or nothing if you're on the other side of this childish argument) when some companies and governments are much worse or better than others.
Here's how the federal government spent the 2016 Federal Budget according to Investopedia:
investopedia.com/updates/usa-national-debt/
What Goes into the Current National Debt?
As indicated above, debt is the net accumulation of budget deficits. It is important to look at the top expenses, as they constitute the major factors of national debt. The top expenses in the U.S. are identified as follows (based on the Federal Budget 2016 Total Outlay Figures):
Healthcare Programs (includes Medicare & Medicaid): A total of $1.1 trillion (USD) is allocated to healthcare benefit programs, which includes Medicare and Medicaid.
Social Security Program/Pensions: Aimed at providing financial security to the retired, the total Social Security and other expenditures are $1 trillion.
Defense Budget Expenses: The portion of national budget which is allocated for military related expenditures. Currently, $1.1 trillion is earmarked for the U.S. Defense Budget.
Others: Transportation, veteran benefits, international affairs, education and training, etc. are also expenses the government has to take care of. Interestingly, the common public belief is that spending on international affairs consumes a lot of resources and expenses, but in truth, such expenditures lie within the lower rung in the list.
So even on the federal level it's not just wars. But you already knew that.

Not to knock Clements. I'm sure he writes from the heart. His 3 indictments of market watching:
Promotes hasty decision making and excessive trading.
It shouldn't if you have a long range clearly defined plan (as one of the comments in the link points out). Heck, this argument that viewing something causes irrational behavior is often used to indict (and try to censor) films, video games, a lot of TV drama and the shopping networks. Point is that impulsive people act impulsively.
It's mindless entertainment
Has anyone watched CNN lately? And couldn't you say the same re sports viewing, films, gaming, etc?
Creates the illusion of control over the markets
These people got a real problem! Get burned in the markets a few times and you quickly learn you have no control over them. I can't imagine watching Bloomberg or reading the WSJ would promote this illusion of control.
Fact is that knowledge = power. I've never felt that any learning was useless. But if folks would prefer to turn off the electronic medium and shun financial publications, that's their right I suppose. If market watching is keeping you from engaging in other activities, that's a different issue. But Clements doesn't appear to lament that he wasn't doing other, presumably more worthwhile, things during the time he watched markets.

It is the way of his tweeted support and his snark, his wording (brief) and what it seems to convey and what is behind it, that seems something other than and beyond expedience. That's all.
Clintons' policy history even in its variety and evolutions over the decades doesn't seem notably at odds with their core values wrt the social issues I listed. Maybe I'm naive, and for sure am ignorant compared w your recitation.
I have often wondered about the greed policy monolithicity, or variety of thought, among plutocrats. Of the half-dozen financial moguls I know pretty well, meaning play weekly geezerball with for decades, none of them opposes or has opposed higher taxes and past recent regs on their amassing. Of course Singers and Mercers tend not to live in Boston suburbs, so surely my sample is skewed.

@Davidrmoran There are obvious differences between these politicians. What I am saying is Mooch's once supporting Dems doesn't strike me as a sign of moderation but more so a hedge fund manager's expedience. (Or does expedience count as moderation these days? I'm not asking that facetiously.) A number of hedge fund managers supported Clinton and Obama in 2008 and then when Dodd Frank and the Consumer Protection Act came out switched teams, resenting any form of regulation.
There was a track record for them to believe especially in Clinton's case that she would be a friend to the Street. Both parties have been. While Republicans designed the Gramm–Leach–Bliley Act or the Financial Services Modernization Act which deregulated Wall Street in 1999, Bill Clinton eagerly signed it into law. He was also a supporter of much of the deregulation that occurred in the 1990s--deregulation that allowed many financial service firms to make a mint off M& A activity.
There is no moral equivalency I am claiming though between these three, merely stating that Wall Street never saw any of them until recently as enemies.

@davidrmoran There are two things going on--one is the pursuit of raw power regardless of which party. Trump himself was once a Clinton donor until it no longer suited his ends. The other is an undying love for all things Wall Street. Both Trump and Hillary are friends of Wall Street no matter what either of them says otherwise. As was Obama, contrary to popular belief:
https://opensecrets.org/pres08/contrib.php?cid=n00009638
While such a pro-Street ideology might be suitable for the head of an exchange or investment bank, it is not necessarily ideal for the communications director to the most powerful public servant in the world. I wonder if this will affect the fiduciary rule in some way.
Here's an interesting take on the appointment from one financial adviser who supports the fiduciary rule:
https://riabiz.com/a/2017/7/22/in-letter-to-riabiz-ron-rhoades-reacts-to-the-ardent-of-dol-rule-detractor-commandeering-the-white-house-microphone
Obviously hedge funds charging 2% of assets and 20% of profits might not fair so well in a world where advisers must always put their clients interests first.

FYI: Dennis Gartman is the man behind The Gartman Letter, a daily newsletter discussing global capital markets. For almost 30 years, The Gartman Letter has tackled the political, economic and social trends shaping the world's markets. ETF.com recently caught up with Gartman to discuss the latest developments in the financial markets.
Regards,
Ted
http://www.etf.com/sections/features-and-news/gartmans-favorite-trades-right-now?nopaging=1

failed? 'elevated downside capture' etc.
\\\ have come with elevated volatility and downside capture levels. This was evident during the financial crisis of 2007-09, and the fund also lagged in a volatile 2011. But the fund has bounced back: During the trailing five-year period ended June 2017, the fund’s 16.4% annualized gain outpaced the Russell 1000 Value’s 13.9% gain as well as 99% of its large-value peers.

FYI: Jamie Dimon’s (CEO of JPM) definition of a financial crisis is “something that happens every five to seven years.” It’s been eight since the last recession. As you get old enough to observe cycles, as actual cycles, you begin to recognize the economic time you’re in is a point on a curved line and, sooner than you think, the direction of the line will change. Better or worse.
An asset bubble is a wave of optimism that lifts prices beyond levels warranted by fundamentals, ending in a crash. I promised myself that I’d be smarter the next time. “Next” meaning on the cusp of a pop or recession. So, how do you ID when we’ve entered the danger zone, and should you adjust your behavior / actions?
Regards,
Ted
https://www.l2inc.com/daily-insights/no-mercy-no-malice/every-seven-years

FYI: As the Department of Labor’s fiduciary rule takes effect, the nation’s largest independent broker-dealer will roll out a new mutual fund platform intended to remove conflicts of interest in advisor compensation.
Charlotte-based LPL Financial has announced that beginning in 2018 it will offer a “mutual fund only” (MFO) platform with standardized commissions.
Regards,
Ted
http://www.fa-mag.com/news/lpl-reveals--mutual-fund-only--platform-to-standardize-commssions-33689.html?print

It looks like they all did only that some did it better than the others. The only trouble I have is the usual and customary past performance is ..... blah-blah.

Yeah - Me too. If humans lived to be 300 and spent 100 years in retirement these kinds of simulations would be a lot easier. Market cycles are more predictable over 100 years.
Just for fun, from January, 1992:
Dow - around 3000.
NASDAQ - around 600
10-year Treasury - around 7%
Gold - around $350
Never considered PRPFX an income fund. Not sure why it was included. If anything, it's a "wild card" - liable to do almost anything over 25 years - with the potential to hold up better during periods of unusual financial stress due to investments in precious metals (25%) and Swiss Francs (10%).
Personally, I don't think in these terms (generating income in retirement). Probably because my overall positioning is quite conservative, having a lot of hybrid products, I pull distributions "off the top" without the concern about market fluctuations many voice. (That's not to say I don't include income generating investments for diversification within the whole mix.) Guess my approach is quite unorthodox - based on board discussions.
@Mark - I hope @ Old_Joe gives us the color of those things he never thinks about. :)

This is going to be a hit or miss post, since I've been out and about traveling and won't be caught up for some time. Some offhand thoughts:
"If Bengen 'concluded that a 4% drawdown rate resulted in certain survival', he was wrong" and "The article is dominated by references to Wade Pfau observations. He too is a very strong advocate of Monte Carlo simulations to help arriving at retirement decisions. "
The NYTimes article has a graphic with three other spending models by Pfau. All three show 100% survival over thirty years (worst case shows money remaining for all models). That includes a model with a constant (inflation adjusted) drawdown amount.
Yet the simple Monte Carlo tools advocated (based on mean and standard deviation inputs) intrinsically contradict this - they are built on the premise that failure is always possible (since they say that a portfolio can lose value year after year after year after ...). Does that mean that Pfau, like Bengen, was also wrong in concluding certain survival?
A problem is that by design, these simple tools are unable to conclude that survival is certain. Regardless of inputs. If you build a conclusion (failure is always possible) into a tool, you've rigged the results. You can't use these tools to "prove" that 100% success is impossible. They're unable to say anything but.
It's fine to use random number generators (aka Monte Carlo) to "run" models many times and see what outcomes might result. The problem is not in how models are used (trial and error - random numbers), but with the models themselves. Unfortunately these tools conflate the creation of the models with the Monte Carlo running of the models to generate a range of possible outcomes. Don't confuse a criticism of these tools with a criticism of Monte Carlo simulations.
These tools create simplistic models that usually assume each year's market's performance is independent and that returns are normally distributed (bell curve).
But data suggest that stock market performance is a leading indicator of business cycles. Thus stock market performance is itself cyclic (not independent from year to year) albeit with an upward bias.
"stocks as a whole move in advance of the economy" = AAII Journal, Aug 2003
As to the bond market, the trivial Monte Carlo models assume that nominal returns are independent of inflation. The Fischer hypothesis suggests the opposite.
"The Fisher hypothesis is that, in the long run, inflation and nominal interest rates move together." http://moneyterms.co.uk/fisher-effect/
The first paragraph by Pfau in his Forbes column says that the models need to include correlations - something that's antithetic to simplistic free Monte Carlo tools that assume independence of inputs in building their models.
His penultimate paragraph states simply that: "the results of Monte Carlo simulations are only as good as the input assumptions, ... Monte Carlo simulations can be easily adjusted to account for changing realities for financial markets."
It's certainly easy from a mechanical perspective to adjust the models (e.g. by changing the mean return for bonds). What's not easy at all is figuring out what adjustments to make. That gets right back to the results being "only as good as the input assumptions", or as I wrote before, GIGO.
Again quoting Pfau: "Many financial planning assumptions are based on historical returns; however, these historical returns may not be relevant in the future."
https://www.onefpa.org/journal/Pages/MAR17-Planning-for-a-More-Expensive-Retirement.aspx
At best, even if a model is good and analysis sound, all you're going to get is a sense of whether you're saving enough (i.e. what MikeM wrote). It's of less help during retirement because, as hank noted, extraordinary events happen.
I'm wondering who the unnamed "professionals in this field" are. Or even what "this field" is. But for the record - I've never taken a statistics course in my life. I'm just an individual investor like most people here, albeit one who did once ace a course in writing and research.

FYI: Legendary economist and financial thought leader, Burton Malkiel shares investment lessons learned more than four decades after writing his classic book, A Random Walk Down Wall Street.
Regards,
Ted
http://wealthtrack.com/malkiel-financial-thought-leader/

Thanks @ Mike & Ol Skeet for getting this back on track. Agree it's a good article. I view most anything financial in the NYT times with a healthy dose of skeptism. They're great at a lot of things - but financial analysis and reporting isn't their forte. To the crux of the issue: I think where you run into problems is (1) trying to formulate a simple one size fits all approach to retirement drawdowns and/or (2) assuming the next 25 years will be like the last 25 years (interest rates, inflation, equity valuations, etc.).
I can't relate to the central question of how to survive "X" number of years on "X" number of dollars invested. Reason: I enjoy both a defined benefit pension with a partial COL rider and also a decent SS income stream. And, supplementary health insurance through retirement plan as well. Conceivably, these would provide for basic living expenses - though it would be a very "spartan" lifestyle without travel or other things that make retirement enjoyable.
In my highly atypical instance, even after taking distributions, retirement savings have roughly doubled over the nearly 20 years since retirement (albeit in nominal dollar terms only). At the same time, more than half of that has now been placed under the Roth umbrella, whereas at the time of retirement none was. Much of the reason for the increase is that the money was left largely undisturbed during the first 10 years.
As far as the article's mention that withdrawals are not linear or equal every year - I couldn't agree more. There have been years when I needed to take a larger sum - say as a sizable down payment on a new car or for unexpected home repairs - and other years when I've needed very little.
I don't envy those without a pension or other solid income stream in retirement. Not everyone would be satisfied with a somewhat spartan lifestyle either. As I look at the markets over the past 10-20 years, I'd not be eager risking a large retirement nest egg with an aggressive approach in retirement. Lots of warning signs IMHO. But, no one really knows. As I said at the start, the problem with these mathematical models is that the next 25 years could be markedly different than the last 25 - as others, notably msf, have tried to explain.

" A fellow named Bill Bengen initially used that [Monte Carlo] calculation discipline when he concluded that a 4% annual drawdown rate resulted in high portfolio survival odds for an extended retirement period."
Not exactly. He concluded that a 4% drawdown rate resulted in certain survival, not merely a high probability of survival: "no client enjoys less than about 35 years before his retirement money is used up." Survival is typically taken in financial publications to mean lasting 30 years.
More importantly, for the most part he used actual not statistical data. He looked at rolling 50 year periods, starting with 1926 (i.e. 1926-1976) and ending with the 50 year period 1976-2016. Monte Carlo had nothing to do with this.
You may well ask: what "actual" data did he use for years that were in his future (his paper was published in 1994)? Well here he did use statistical data. But of the simplest kind, again no Monte Carlo simulation. He merely "extrapolated the missing years at the average return rates of 10.3 percent for stocks, 5.2 percent for bonds, and 3.0 percent for inflation - a concession to the 'averaging' approach, but one that was unavoidable."
Bengen used actual returns over multiyear spans (i.e. he did not assume that year-to-year returns were random and independent). He filled in missing data by using constant annual returns (i.e. no variation of returns). Everything Monte Carlo is not.
Quotes are from Bengen's original paper, cited in the NYTimes article linked to by MJG. See Figure 1(b) in that paper for how many years a 4% drawdown rate would last if started in any year from 1926 to 1976.

Hi Guys,
You all know I'm forever suggesting Monte Carlo analyses when addressing the retirement decision. It works. But that's not just me talking. The financial planning industry has been talking that same talk for at least several decades. A fellow named Bill Bengen initially used that calculation discipline when he concluded that a 4% annual drawdown rate resulted in high portfolio survival odds for an extended retirement period. Here is a Link that updates some of his initial thinking on this matter:
https://www.nytimes.com/2015/05/09/your-money/some-new-math-for-the-4-percent-retirement-rule.html
Enjoy! Note that Mr. Bengen now feels that a more generous 4.5% drawdown rate is portfolio survival safe. With a little more attention to market conditions, more recent studies are currently suggesting that a 5% drawdown results in acceptable portfolio survival odds. However, note that these are just statistical studies with many assumptions embedded in the analyses so be cautious. Risk at the 5% drawdown schedule must be higher than at the 4% level. That's obvious. The final decision is always yours alone. It must include your comfort level; your sleeping well each and every night. Take care. Sleep well.
Best Regards

I find Cinnamond a lesson in the difficulty of market timing, or of assuming that a measure that worked in one economic cycle will work just as well in the next. The investing world is littered with investors who got one or two big calls right, then keep on making big calls... BUT I have enormous respect for him for quitting when he still had a lot of AUM. For a manager to say, "I don't understand this market, so I'm giving my investors back their money and getting out" is the kind of humility and integrity that would make the financial world (and the world as a whole) a better place if it were more widespread.

FYI: The bond market is flashing warning signals that bad times may be ahead for the stock market and the economy.
That is probably not what most people want to hear — stock investors especially. In the first half of the year, after all, stocks have performed spectacularly. The Standard & Poor’s 500-stock index returned 9 percent through June, churning out gains so regularly that it may seem churlish to note that clouds are appearing on the horizon.
Yet like a long-range forecast about a possible storm, an old and trusted financial indicator is telling us that trouble may be looming.
Regards,
Ted
https://www.nytimes.com/2017/06/30/your-money/clouds-are-forming-over-the-bond-market.html

@LewisBraham: its been an odd ride with Bruce, hasn't it? I say this as someone who is a current FAIRX shareholder. Believe it or not, I've actually been more concerned by Bruce's personal qualities than his investment approach per se.
There was the phase when Bruce talked up betting on the jockey and the horse, and actively asked shareholders on calls (and in letters) to recommend jockeys. That felt a little odd to me, but I held on.
Somewhere around that time, Bruce made a huge short-term investment in PFE, before they switched to a better "jockey". The thesis was that PFE was cash-heavy, and therefore could play a "merchant bank of Venice" role. Indeed, after PFE switched jockeys, they did enjoy a nice uptick in performance. So, Bruce may have been a victim of "premature accumulation" as he likes to say. Those in the know always chuckle when Bruce uses that line.
Then there was the departure of two analysts who went on to found Goodhaven. About that time, Barrons (or a similar publication, but maybe it was Vanity Fair) had a damning piece on some of the bizarre decisions Bruce made with respect to hiring staff of questionable investing and business backgrounds. I should have punted on FAIRX then. I guess the M* "OMG Manager of the Millenium" award should have been a tip-off, but I nurtured myself on the hype.
Then there was the period when Bruce seemed to be practically tripping over himself to appear on any financial / news segment that would have him. Bruce's oft-repeated rationale was: "...the best way to communicate with shareholders...". Which is hooey, because he thereafter adopted a stilted, pre-canned conference call format. On those calls, a few of which were taped, you'd swear Bruce was reading from a teleprompter.
Now we have the "liquidity risk" stories that pop up here and there in the financial press. Yes, journalists need a story, etc., etc., but Bruce should have realized that chasing hot-money chasers creates a lot of fair weather friends.
In general, I have no problem with buy and hold, nor deep value approaches. But the other stuff doesn't mix well with the humility and equanimity that I think are required to succeed in this paradigm. Bruce might prove to be another object lessons that brilliant investors and analysts do not necessarily make good fund managers.

https://www.sec.gov/Archives/edgar/data/1496315/000116204417000567/grandprixfundsupplement.htm
497 1 grandprixfundsupplement.htm
GRAND PRIX INVESTORS TRUST
(the “Trust”)
566 West Lancaster Blvd., Suite #1
Lancaster, CA 93534
GRAND PRIX INVESTORS FUND
Supplement dated June 29, 2017 to the Grand Prix Investors Fund’s Prospectus, Summary Prospectus and Statement of Additional Information, each dated December 1, 2017
______________________________________________________________________
The Board of Trustees of Grand Prix Investors Trust (the “Trust”) has determined that it is in the best interests of the Grand Prix Investors Fund (the “Fund”) and its shareholders to close the Fund effective July 28, 2017 (“Liquidation Date”).
Effective immediately, the Grand Prix Investors Fund will not accept any new investments, and will no longer pursue its stated investment objective. The Grand Prix Investors Fund will begin liquidating its portfolio and will invest in cash equivalents until all shares have been redeemed. Any capital gains will be distributed as soon as practicable to shareholders and reinvested in additional shares, unless you have previously requested payment in cash. Shares of the Fund are otherwise not available for purchase.
Accordingly, the prospectus has been amended:
References to Grand Prix Investors Fund. All references to the Fund in the Trust’s Registration Statement are deleted effective as of June 29, 2017.
Suspension of Sales. Effective immediately, the Fund will no longer accept orders to buy shares of the Fund from any new investors or existing shareholders.
Prior to July 28, 2017, you may redeem your investment in the Fund, including reinvested distributions, in accordance with the “How to Redeem Shares” section in the Prospectus. Unless your investment in the Fund is through a tax-deferred retirement account, a redemption is subject to tax on any taxable gains. Please refer to the “Tax Status, Dividends and Distributions” section in the Prospectus for general information. You may wish to consult your tax advisor about your particular situation.
ANY SHAREHOLDERS WHO HAVE NOT EXCHANGED OR REDEEMED THEIR SHARES OF THE GRAND PRIX INVESTORS FUND PRIOR TO JULY 28, 2017 WILL HAVE THEIR SHARES AUTOMATICALLY REDEEMED AS OF THAT DATE, AND PROCEEDS WILL BE SENT TO THE ADDRESS OF RECORD. If you have questions or need assistance, please contact your financial advisor or the Fund at 1‐800‐453-6556.
IMPORTANT INFORMATION FOR RETIREMENT PLAN INVESTORS
If you are a retirement plan investor, you should consult your tax advisor regarding the consequences of a redemption of Fund shares. If you receive a distribution from an Individual Retirement Account or a Simplified Employee Pension (SEP) IRA, you must roll the proceeds into another Individual Retirement Account within sixty (60) days of the date of the distribution in order to avoid having to include the distribution in your taxable income for the year. If you receive a distribution from a 403(b)(7) Custodian Account (Tax-Sheltered account) or a Keogh Account, you must roll the distribution into a similar type of retirement plan within sixty (60) days in order to avoid disqualification of your plan and the severe tax consequences that it can bring. If you are the trustee of a Qualified Retirement Plan, you may reinvest the money in any way permitted by the plan and trust agreement.
You should read this Supplement in conjunction with the Prospectus and Statement of Additional Information dated December 1, 2016, which provides information that you should know about the Grand Prix Investors Fund, and should be retained for future reference. These documents are available upon request and without charge by calling the Fund at 1‐ 800‐453-6556.
______________________________________________________________________
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
#