I2: As mentioned heretofore, oftimes Brinker's tone speaks more
loudly than his words. Listeners privy to Brinker's outright dis-
comfort, if not chagrin, vis a vis the rank amateurs who dialed
into Money Talk prior to the mid-1996 market debacle, under-
stand well the import of that statement. As you counsel, listeners
can derive insight into the herd mentality.
This weekend we were treated to at least two callers who were seeking
Bob's imprimatur on borrowing against their homes to invest in mutual
funds. Later, another caller propounded the absurd thesis that past
performance of the market is a guarantee of future success.
In all cases, Brinker was not amused. In the former case, he
counseled the intemperate home owners not to affect such foolishness
or words of that measure. In the latter case, he forcefully reminded
the good Dr. Pangloss that an overpriced market invariably, over time,
reverts to the mean.
Despite Brinker's assertion that the DJIA will trade at new highs this
year, his tone, at present, seems anything but sanguine in the face of
representative reckless bullishness and a DJIA and S&P 500 trading
at P/E's of 20.60 and 22.39, respectively.
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