July 08, 2019 : Financialindependence

Today is my last Monday at work. I provided notice a while back again that Fri 7/12 is will be my last day (regarding the payroll, it’s Mon 7/15, but I’m “taking a may day” that day). My manager and I’ve a good relationship, and we’ve actually been discussing this since early in the entire year. He’d previously asked that easily could stay till mid-summer as it’d be an assist in some transition and other concerns, therefore 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 versatile part-time routine and so long as that continues, she’ll work another year or two or three. What are you going to do? Answer: Chill for some time, take a day nap if I want.

We have bucket-list travel prepared for the next couple of years, plus several not-so-fun-but-neglected projects around the house that someone will have time for you to finally deal with. Are you going to move? Answer: maybe. Son/DIL/Granddaughter live only 2-2.5 hrs from here, so viewing them for the day/weekend isn’t a hardship. DW has family for the reason 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 we can bring about upon leaving or let to develop and raise the monthly payment. We’re relying on Soc Sec, since we’re fairly close to being qualified.

I’m sure everybody knows people who try to get in and out like that, but nobody consistently does it well. If you look at the best track records in investing, that’s not the way it has been done. Now, if you are Stanley Druckenmiller or various other excellent macro investor, that’s a different story. You will find guys like that who have done well trading the big swings on the market. This debt ceiling 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 what the pundits on TV say, I think it’s OK to ignore all this stuff. Pundits on CNBC will tell you firmly to turn off CNBC never! The other big fear is valuation. Commentator after commentator maintains saying that the market is overvalued or overvalued substantially. Shiller’s cyclically adjusted P/E ratio is an extremely popular indicator now.

Shiller’s cyclically modified P/E ratio can be an inflation modified P/E ratio. Among the key things is that it’s based on the earnings of the past a decade. This adjusts for the cyclicality in cash flow; 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 shape is currently 24.25x versus an average of 16.5x for the whole period. That means that the currency markets are currently 47% overvalued.