PART III OF A THREE PART POST (Interpretation Dec. 18-19, 1999)
Brinker Comment: Bob discussed another article in the December 20th Barron's that addressed how much money people are getting for domain names on the internet. For those who obtained catchy domain names early on, some have made big bucks from selling them. One guy who bought the domain name business.com for $150,000 was able to resell it for over $7 million dollars. Go to domainrace.com for auctions of your favorite domain:
domainrace.com
EC: I just went to the site and here are some current domain names for sale and their highest current bid (except for #7 which is not really on sale):
1. Freebies.net: $10,000
2. Freakz.com: $25,000
3. xtunes.com: $10,000
4. cubano.net: $7,500
5. EGrind.com: $7,500
6. TruckDeals.com: $20,000
7. Davidk.com: 75 cents
Brinker Comment: Bob accurately predicted that the Federal Open Market Committee would not raise interest rates and wasn't worried about whether they would change the bias or not. (Right on the mark again Bob!) Bob did predict they would raise rates in February. Bob then quoted from his own Marketimer Newsletter for December 7th which was excerpted in the December 20th issue of Barron's, "The biggest risk investors must monitor... is the risk that the Federal Reserve will over-tighten and thereby precipitate a period of economic weakness."
EC: When Bob's Marketimer gets excerpted in Barron's, I figure that is worth a link. To get your free complimentary back issue of Marketimer and determine if you want to subscribe, go to this link:
208.238.102.36
EC Continued: Bob mentioned during the show that he would be making revisions to all of his actively managed model portfolios in the Marketimer Newsletter in January.
SUPPLEMENTAL EC ADDED 12/25/2001: Ah ha! Perhaps Bob was already considering the dramatic changes to his model porfolios. In retrospect, Bob says his timing model turned bearish on December 31, 1999; however, almost two weeks before that, Bob was already anticipating making major changes to his model portfolios.
Caller : This caller only has 12% of his portfolio in technology and wants to get closer to 35% technology. He owns a technology mutual fund. Should he dollar cost average more into the mutual fund, or go for individual stocks keeping the 4% rule in mind? Stick with good performing no load funds.
Brinker Comment: Bob discussed the economist Paul Ergman who is now on record saying we are in a bubble. "I have come to the conclusion that beyond any reasonable doubt the dreaded bubble that everyone has been worrying about is here and represents a clear and present danger to a lot of investors."
EC: The above quote was taken from Paul Erdman's article on CBS MarketWatch.com at the following link:
cbs.marketwatch.com
Bob quoted widely from Erdman's column, including Erdman's view that the Nasdaq and its counterparts abroad are in a bubble. Equally worrisome is the "bubblets" that are even more inflated, including AOL, Yahoo, Nokia, China.com and VA Linux -- all of which were subject to criticism by Erdman as further evidence of a bubble waiting to burst!!!
The great thing about reading Ergman's article, is you can then click on his name and e-mail him directly! (maybe I should send him a complementary copy of this interpretation!)
Bob played a little golf with Ergman recently and thinks the world of him. I am surprised that Bob didn't use Mr. Ergman's most famous quote. I did a little poking around the internet and found the following great quote that has been attributed to Erdman. I think you will like it:
"The entire essence of America is the hope to first make money -- then make money with money -- then make lots of money with lots of money." -- Paul Erdman.
quoteland.com
Caller: Carrie the conspirator believes that CNBC is secretly quoting Bob without giving him credit. She also wants CNBC to STOP telling Bob what to do. Bob laughed a bit and then cut to the commercial.
EC: So much I could say, but... never mind!
Caller: This caller is considering putting a large amount of money into General Electric. Bob noted that he is still recommending dollar cost averaging into the market although he emphasized he would definitely hold his shares of GE. Pete tried to get Bob to comment on Qualcomm, but Bob adamantly refused. Bob observed that Qualcomm stock was $25 a share last year and is now $455 per share. Beyond that, like the GoGos, Bob's lips were sealed.
Caller: What are distributions on mutual funds? Mutual fund distributions consist of capital gains, capital losses and dividends paid to mutual fund shareholders. To qualify as a mutual fund, they must pay out at least 98% of all realized capital gains and dividend investment income before the end of the year.
EC: Distributions can be paid using cash, i.e. by sending a check to the shareholder. Most mutual fund companies give the option of using this cash to purchase additional mutual fund shares. (i.e. reinvestment of distributions) In that instance, even though the shareholder receives only a statement listing the reinvestment, the shareholder still owes taxes on those reinvested distributions. The record date is the date when the mutual fund company records who owns how many shares. The payable date is the date when the distribution is actually given to shareholders. If you want an easy to understand explanation of mutual fund distributions, go to the following link (in the top left hand corner of the page is a "NEXT" icon. Click on that to read the following segment. It will take you through all the topics associated with distributions:
theory.stanford.edu
Caller: This caller wants to put a few hundred a year away for his grandson. What is the best way to go about this? Bob suggested a mutual fund that permitted small contributions to get started. Bob referred to the TIAA-CREF Mutual Fund Family and suggested their Equity fund.
EC: The TIAA-CREF Equity Index Fund is a designed to track the overall U.S. stock market as represented by the Russell 3000. Want to invest in it? Here is a direct link:
tiaa-cref.org
*********************************
GUEST CONTRIBUTOR
*********************************
Title: Don't Expect Home Newspaper Delivery Anymore
Author: Broker Ron
I have been around too long to buy into these so called "red hots" nets. Sure, people are making loads of money. Nasdaq up 70%. Stocks go up 20, 30, 40 points a day. I say the odds are better in Vegas. There is little difference between putting your money on Redhat versus Blackjack. (although you will get free drinks with the latter!) Linux hasn't caught on, yet we value the company at 17 billion. Sears is valued at 11 billion. Paa-lease! I will admit, a lot of day traders are making lots of money. Buy why settle for 70% return? In Vegas, if you put your money on red or black on the Roulette wheel, you make 100% if you are right (with no taxes to boot). Wall Street sends you confirmations, Vegas sends you cognac. As a broker, I have several clients who trade every day with me. The strategy? Simply look for a tech stock that is down say 10 to 20 points with no news. We buy and sell it 3 hours later and play for 15 points. The game is sweet. Let me stop and say that this is the clients' game. I simply scope out the board and check the trading patterns. My money is not on the line and I can't talk him out of playing. I win or lose no matter what he does. I warn clients like this with EVERY trade. I constantly remind them about that game we all played in Kindergarten -- musical chairs. When the music stops, you better be near a chair to grab, otherwise you are out. No one has ever said to me "maybe you are right this time" Instead, they always want in! So the game continues in the Net world. Many people will get crushed or destroyed when the music does stop. For now it is "play time." Will the B2B mania continue? I don't think so. The net rotates every four months. First, there were the ISPS which were on fire (AOL, AtHome, Earthlink), then the e-tailers (Amazon) then we found auctions (Ebay, Ubid), then portals (Lycos, Infoseek) then brokers (E-trade, Ameritrade), then security issues (Verisign, Security Dynamics) then infrastructure.... on and on. Today, unquestionably the hottest sector is Business to Business stocks. The craze will be over by February in my opinion Perhaps the next play will be the net advertisers. Wall Street's smart money is either out or getting out and being replaced by unsophisticated investors. I get calls from people who all of sudden want to buy CMGI with their Visa cards. Does that indicate a market top? I THINK SO! For a while, I was unsure; however, I then received a sign whose importance no one can deny. My paperboy quit his paper route last week so he wouldn't miss Maria Bartiroma's pre-market comments. NUFF SAID!!!!!
-Broker Ron.
EC: Thanks Broker Ron! Always entertaining. Personally, I analyze each market using the Maria Bartiromo Market Hairdex. Even when I don't follow market data, as long as I know what Maria's hair is doing, I feel confident predicting the market's trend. Want to learn more? Go to the Maria Bartiromo Market Hairdex site and see for yourself!
tiac.net
Final Thoughts from David K:
To E-mail Me, Click on the Following Link and Drop Me a Line:
mailto:davidk555@earthlink.net
Disclaimer: I am just a listener to Moneytalk and provide this service on my own volition. I am not associated with ABC Radio Networks, Moneytalk or Bob Brinker and this service is neither sanctioned by, nor written under the auspices of ABC Radio Networks, Moneytalk or Bob Brinker. This e-mail is simply my own interpretation and commentary of some of what is discussed on the show, along with educational information I provide that I think is useful to help better understand financial issues. There are also editorial comments, useful links and contributing editors and even special alerts. I am also a frustrated writer and comic and try to weave humor throughout. You should not rely on any statement made in David K's Interpretation of Moneytalk, Educational Links and Other Financial Information or Special Alerts as constituting financial advice. Also, under no circumstances does the information in any of my e-mails represent a recommendation to buy or sell stocks. |
