I do not remember hearing or reading about such a trade personally. It goes against everything BB has preached.
That's the QQQ trade which I pointed out here:
home.ix.netcom.com
Since his most aggressive portfolio was 65% cash reserves at that point in time, 50% of 65% is 32.5% or, basically, 1/3rd of your portfolio.
Bob uses the 4% rule for individual stocks not for exchange traded funds like the QQQs, SPY, DIA, etc.
You're absolutely right that it doesn't sound like Bob. Some people thought (I didn't know those people at the time but I wish I had) it was a joke because it was so unexpected. However, when you look deeper into his record, there are many contradictions that are not apparent unless you are keeping detailed records.
For example, he has always preached being your own financial advisor yet he is a principal in the BJGroup which is a wrap account firm. They charge 1.5%-2% or thereabouts to put your money into no load mutual funds (or QQQs) which is a pretty hefty yearly fee. I find that contradictory as he's always talking about saving a few basis points here and there on funds that are tax efficient, low cost, no load, etc.
He also likes John Bogle but Bogle says he has never met a market timer who could consistently time the market. Bob's a self proclaimed market timer. That is contradictory.
FWIW, I think you get the best advice from Bob through his free show. His newsletter, on the other hand, has been a disaster and he's getting ready to call buy/sell cyclical bulls for the next 8-18 years (I suppose it started in Q1 2000) of this (supposed) secular bear market.
I figure that CBs are also counter trend rallies lasting from 6 months - 3 years. I don't see how they are much different from the 2-4 month QQQ CTR that was such a fiasco. They are longer but I don't see that much difference otherwise.
Therefore, IMO, there is another potential disaster in the offing. It may not happen, he may get lucky and find the gold nugget the next time around...or not. Who knows? |
