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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Jacob Snyder who wrote (25042)	5/19/2000 2:44:00 PM
From: Bruce Brown	Read Replies (1) of 54805

RE: Cash positions... Jacob wrote: My point is that the rules are changing. I would be curious to know what % cash the regular posters on this thread have, and at what price points (for their favorite gorillas) they will put that cash to work. I think you will find the survey of thread members portfolios back in a series of posts a few weeks ago which listed what percentages of cash people held. I'm hovering around 15 - 25% depending on what the share prices of my portfolio add up to at the end of the day. I know you only recently made your first post about Applied Materials (fine company). However, I'm not using trailing 12 month P/E as a criteria for my entry points into gorillas. Rather, a metric that helps signal for me possible additional share purchases revolves around PSR. Since my wife and I sock away about 20% of our monthly income into the money market fund for investment purposes, I'm always looking for additional purchase points to put that money to work (today was such a day). Glad we didn't wait for 12 month trailing P/E ratios to meet some textbook formula or we would have been in cash for the past decade or more. Our method for additional purchase is the classic dollar cost averaging scheme because the income keeps rolling in and we keep adding shares to our investments just as we have since the late 80's as a married couple. If we had a big chunk of change sitting in cash which we wanted to invest in the market at some point, I'm not sure how I would treat that except to say I would probably choose more than one buying point to put the money to work for each specific equity. It takes more than just one metric to signal a purchase point. Granted, it certainly appears from this vantage point that the metrics had been overextended going into March. Now, the metrics are coming into line a little bit better and the fear of interest rates seems to be helping that process occur at a healthy rate by limiting volume and keeping prices low. By the way, I love the beauty of that fair state you live. BB

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