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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: Kirk © who wrote (11109)1/13/2000 8:40:00 PM
From: Justa Werkenstiff  Read Replies (2) of 15132
 
Kirk: Re: " How does rotation sound?

Bob's portfolio #1 had a banner year and it is loaded with internet heavy funds. (Almost funny in light of his strong warnings of valuation for the first 10 months of 1999). I believe this sector will get shaken out as many of us bought $500 power tools from Amazon and
only paid $400 to have them delivered to our doorstep thanks to the generosity of the stockholders. This is a broken business model and only the very rich with deep pockets will survive the eventual shakeout."

Maybe so, but so long as people continue to but the stock (idea), they will give the b2c company currency in he form of its own stock value to continue to buy traditional businesses at some point.

Re: "A sector rotation of massive proportions, say internet stocks into semiconductor stocks (what I have bet on) may take the whole market sideways for a year as the dollars slosh from overvalued internet stocks to undervalued semiconductor stocks (LRCX is STILL
only at a PEG of 1.0)."

I agree, we are seeing a rotation out of technology at this point and I have invested in the other side of that rotation by buying financials and health care.

I don't consider LRCX any great bargain here.

Re: "A mutual fund timer can not take advantage of this and it is uncertain if the fund managers of the hot internet stock funds will see this.... so perhaps getting a nice rate of return on cash is a good risk/reward way for Bob to go until he gets a 20% correction to come back in on?"

Well, if Bob were just making a call on a sector fund or a fund overweight these stocks, then he would just switch out of the fund into something with less risk. But the fact that he has not done this and the fact that he advised passive portfolio holders to go to mostly cash tells me he is making a market call of some kind.
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