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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: Kirk © who wrote (1210)9/27/1998 8:10:00 PM
From: Justa Werkenstiff  Read Replies (1) of 15132
 
Kir: Re: "BB is looking for one of the BEST increases from the low of a "midterm Off Presidential election year correction". If I am reading what BB says on the radio and add that with the newsletter numbers, then BB is looking for the next advance to be above 50% from DJIA 7539 and for that to happen over 6 to 24 months. Do others read the newsletter numbers and todays optimismn the same way?"

While anything possible, I think it is important to state that Brinker made no such market call. Let's think about it. But in order to do so, let's assume we are at January 1, 2000.

A gain of 50% off the S & P lows of 957 would put us at S & P 1435.50. Brinker projects operating earnings of $51.50 for 1999 so at 1435.50 we would be nearly 28x trailing operating earnings at the end of 1999 should we achieve those numbers.

On the other hand, if we assume that 24.5x is the ceiling on operating earnings, the operating earnings for 1999 would have to be $58.57 for 1999 in order to get us at 1435.50.

So, in order to get us to 1435.50, we have to either have a multiple expansion above the historic highs or we have to have earnings at 13.8% higher than projected by Brinker, or a combination of both, all coming before the end of 1999.
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