How To True A Drill Chuck On R8 Arbor?

I bought and refurbished an Albrecht chuck. When I was done it still has some run-out it thought was too much (around 0.004") A couple (real) machinist friends said you simply indicate it and then give it a slight rap or two with a rubber dead-blow mallet. I didn't believe it was kosher, but it brought it within 0.001".
 
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