Don, the procedure is given differently in different places! Practical Hints 6th ed, page 20 says to tighten the nut until resistance is felt to hub rotation, then back off 1/2 flat (meaning 1/12 of a turn). Not mentioned, but implied IMO is to do that as a minimum, and move the nut more if necessary to line up the cotter pin hole (IOW, 0.5 to 1.0 flat). This is the way I do it.
Earlier manuals (like the workshop manual) I think gave larger clearances; while at some point (TR4 maybe) they said to torque the nut to 10 ftlb before backing off.
Also someplace it notes that if you are replacing the felt, to check the bearing clearance BEFORE installing the felt and mark the nut's position. Then remove the hub, install the felt, and put it back with the nut in the same position. This is because some new felts are so thick that they bind and cause a false clearance reading. This is in a later manual (maybe TR4A, don't recall offhand), but IMO is good advice for all TRs with that felt seal.