The Justa and Lars Honors Bob Brinker Investment Club Thread Message Board

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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread

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Oct 31 5:00 PM EST

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To: Math Junkie who wrote (1381)	9/1/2001 10:56:23 AM
From: Boca_PETE	Read Replies (2) of 10065

Richard Palm: To answer your specific questions, (1) As I remember he was advising listeners to dollar-cost-average into the market leading up to the August 1982 call to become fully invested. As I remember (no guarantees since I could be remembering the reasoning given by the late John Shauer who had a financial advice program on following Brinker's 6-10am Saturday slot), his then reasoning was that "nobody knows exactly where the bottom will be". After the August 1982 call, I can remember coming to the conclusion that Brinker was good at market timing many years later. Instead, I saw him more as an expert mutual fund picker because of the success of his radio advice to invest in then new fund 20th Century Ultra. (2) I don't remember him being bearish any time between August 1982 and the 1987 bear correction when the S&P ended up 5.5% for the entire year. Of course he failed to call the top in August 1987 with devastating results to those amounts invested in the 3 month run-up to the 1987 peak. As to the linked August 1982 NY Times article, I see today's similarities with those times. But I doubt if the market will turn up this time because of similarities to those times. The S&P500 and NASDAQ 100 are still richly priced in terms of historical PE ratios. Also, I'm very concerned about the potential impact on U.S. interest rates and equity prices and other international economies and markets by the possible coming implosion of the Japanese banking system. Also, corporations will not likely increase capital expenditures in an environment where capacity utilization is reportedly not lower than it was during the recession of the early 1990's. Then there's the strong risk in my view of political stalemate killing any effort to sensibly stimulate the economy through needed cuts in capital gains taxes and other needed business tax incentives. IMHO, at best, I think Jeremy Siegal and Warren Buffet are on target with their expectation for an extended period of economic stagnation. IMHO, cash is king. FWIW, P

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