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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: Justa Werkenstiff who wrote (6337)6/29/1999 12:56:00 PM
From: Justa Werkenstiff  Read Replies (1) of 15132
 
** Brinker and the Internets ** There are some who may still think that Brinker is ridiculing internet investors. I posted previously about one telephone call that was referenced so let me comment briefly on the second call that occurred in the third hour of the same show on Saturday. But before I do, let's put the call in the context of Brinker's appearance on KGO yesterday.

On KGO yesterday, Brinker made a comment about a Paine Webber survey on individual internet investors. After the recent correction, internet investors now had expectations of about 19% per year returns on their nets as opposed to 30% previously. But what intrigued Brinker was the following. He said that the survey showed that 89% of individual investors held or added to their net holdings during the recent decline. Brinker commented: " These stocks have been clocked and here we have the internet traders ... either holding on or buying more. Ron we had two callers this weekend with 35 -40% in AOL and they have ridden it from $175 to $100 and they don't even seem to care."

And this is precisely the point we can gather from those two calls. Brinker is not ridiculing (making fun of them) these investors. No, he is trying to learn what makes these folks tick.He is fascinated that these two guys did not seem to care about the declines in their AOL.

On the second call of Saturday where that caller also had 40% in AOL. Brinker stated to the caller that he had a nice ride up in AOL, but how did he feel about the decline. The caller said he felt like a fool and he should have sold it a long time ago. Brinker did not ridicule him in the least. Brinker just responded by saying it was a question of valuation with AOL.

After the call, Brinker commented: "We have had two calls today from Moneytalk listeners who have 35-40% of their stock market money in AOL. And they have owned this AOL during the decline. Oh yeah ... they had a good part of the advance too but by definition they both have said they have owned this stock since its recent decline over 40%. And in a way I am kinda surprised that investors are willing to accept that kind of volatility. That is extraordinary volatility."

So Brinker's aim was and is not to ridicule but is to figure out how these folks think and why. And why not? Since there is no way to value many of these stocks because of their brief life spans and lack of earnings, they are mainly valued on investor sentiment pure and simple. What better way to gauge sentiment than to ask people how they have felt about the decline in their stocks? There was no ridicule here but just inquiry. And it may be a good thing to listen real close to Brinker's questioning of these callers as an internet investor. If internet investors fail to correctly measure the sentiment in this group, they will suffer the consequences.
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