Today is my last Monday at the job. I offered to notice some time back that Fri 7/12 is will be my last day (according to the payroll, it’s Mon 7/15, but I’m “going for a may day” that day). My boss and I have a good romantic relationship, and we’ve actually been talking about this since early in the year. He’d earlier asked that easily could stay till mid-summer as it’d be considered an assist in some transition and other concerns, so I agreed.
Are you going to do the retire-then-consult-back with your current company? Answer: nope. Is your wife retiring? Answer: not yet. She’s a pretty flexible part-time timetable and so long as that continues, she’ll work another year or two or three. What are you going to do? Answer: Chill for a while, take a day nap if I want.
We have bucket-list travel planned for the next couple of years, plus several not-so-fun-but-neglected tasks around the homely house that someone will have time for you to finally tackle. Will you move? Answer: maybe. Son/DIL/Granddaughter live only 2-2.5 hrs from here, so seeing them for the day/weekend is not a hardship. DW has family in that area (a plus), but we’d be departing a community we have been part of for 20 yrs (a minus). 100k in Roth or after-tax investment accts. We’ll both have small pensions that people can trigger upon leaving or let grow and increase the monthly payment. We’re relying on Soc Sec, since we’re pretty close to being qualified.
I’m sure we all know people who make an effort to enter and out like this, but nobody consistently does it well. If you look at the best track records in investing, that’s just not the way it has been done. Now, if you are Stanley Druckenmiller or some other good macro trader really, that is clearly a different story. There are guys like that who have done well trading the best swings on the market. This debt roof fear is the same. So was Syria. This is all just short-term stuff that are good for macro traders, but is irrelevant noise for the long-term value investor just.
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So yes, despite the actual pundits on TV say, I think it’s OK to ignore all this stuff. Pundits on CNBC will never tell you firmly to switch off CNBC! The other big fear is valuation. Commentator after commentator maintains saying that the marketplace is overvalued or substantially overvalued. Shiller’s cyclically adjusted P/E ratio is an extremely popular indicator now.
Shiller’s cyclically adjusted P/E ratio is an inflation-adjusted P/E ratio. One of the key things is that it is based on the wages of days gone by a decade. This adjusts for the cyclicality in income; the past ten years would include good years and bad years and it is more indicative of the normalized profits power of the S&P 500. This is practical. And this number happens to be 24.25x versus typically 16.5x for the whole period. That means that the stock market is currently 47% overvalued.