Richard, you still have a few misconceptions.
I know you don't like to think of Graham and Buffett as market timers, but when you consider their success at forecasting long periods of above average and below average market returns, I don't know what else to call it.
Buffett wrote in his 1996 annual report that "inactivity strikes us as intelligent behavior. Neither we nor most business managers would dream of feverishly trading highly profitable subsidiaries because a small move in the Federal Reserve's discount rate was predicted or because some Wall Street pundit had reversed his view on the market. Why, then, should we behave differently with our minority positions in wonderful businesses?"
and this from Brinker's reading list:
The idea that a bell rings to signal when investors should get into or out of the stock market is simply not credible. After nearly fifty years in this business, I do not know of anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently. Yet market timing appears to be increasingly embraced by mutual fund investors and the professional managers of fund portfolios alike. [John C. Bogle in Common Sense on Mutual Funds]
but what he REALLY sells to is the desire for "tips".. the TEFQX tip that B2B is "really the tip of the iceberg" where our own Mark Ultra commented that he thought Brinker was making a call similar to his advice on the show (and UTEK newsletter recommendation) to buy AMAT, NVLS, TER & UTEK in the fall of 1998. You remember Mark getting all hot here in SI about some B2B stocks like FreeMarket.Com from the list posted on Brinker's site that were trading at $200 or so and are now penny stocks?
TIPS! How people want tips! They crave not only to get them but to give them. There is greed involved, and vanity. It is very amusing, at times, to watch really intelligent people fish for them. And the tip-giver need not hesitate about the quality, for the tip-seeker is not really after good tips, but any tip. If it makes good, fine! If it doesn't, better luck with the next. [Reminiscences of a Stock Operator by Edwin Lefevre]
BTW, Graham and Buffett are STOCK PICKERS, not market timers. Even Bogle will give you that something like 20% of stock pickers beat the market over a decade or two and 10% do it over a very, very long time.
Since common stocks, even of investment grade, are subject to recurrent and wide fluctuations in their prices, the intelligent investor should be interested in the possibilities of profiting from these pendulum swings. Benjamin Graham, Ch 8 Paragraph 4 "The Intelligent Investor"
Kirk |
