The blank space appears before the bullet instead of after because of collapsing margins.

The bullet doesn't count as content, so the bottom margin of the previous P, the bottom margin of the previous LI, the top margin of the LI and the top margin of the P are collapsed into one margin whose size is the biggest of the 4 margins.

( Contrary to his claims, there's nothing wrong with what ww said. I was just expanding on it. )