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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: Alan Whirlwind who wrote (700)6/15/1997 4:16:00 PM
From: Kevin   of 42834
 
Can someone please help me?

Bob says he wouldn't touch KO with a ten foot pole because of valuations relative to it's earnings, historical and present. That would mean he has the same opinion of GE, PG, G, etc. for the same reason.

He wouldn't buy these stocks for the above reason but he is recommending the purchase of an index(total market) where 60%-70% of your investment goes into these "Nifty-Fifty" 50 stocks such as KO. Each of this stocks represents ~2-3% of the S&P500. In the S&P 500 it would be 90% of your money going into these stocks.

The big Blue Chips have become momentum stocks. I think Bob is staying invested because you "don't fight the tape", you go with the flow. I think for any other reason Bob would be taking some chips off the table.

Could someone please help me by pointing out where my logic is flawed or what I am missing? I would sleep a whole lot better if I was wrong.

Thanks,

CARLOS
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