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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: sea_biscuit who wrote (7221)	7/27/1999 9:27:00 PM
From: Math Junkie	Respond to of 15132

<<One thing to keep in mind is that while Brinker's model has helped his subscribers stay invested during this bull market, it has been untested as far as getting out before the bear strikes (and getting back in time for the ensuing bull market) is concerned. >> Well, it has been back-tested, but of course I do acknowledge that back-testing is never as valid as forward-testing. There have been some pretty silly systems which seem to work when back-tested, which is why any model, in order to be worthy of being paid any attention at all, must have logical reasons for believing that there is a causal connection between the elements of the model and the events it seeks to predict. Believe me, I do think about the risks in following any investment plan, and I know Bob is keenly aware of the risks himself, because he talks about them often, and he counsels his readers and listeners to limit their risk through such means as diversification, avoiding margin, and adjusting one's asset allocation according to when one will be needing the money. This is where Bob's real hedging is, contrary to some of the blather we have seen on here lately, and it is the type of hedging that works to the financial benefit of his readers and listeners. Any market timer who advised people to follow their timing advice without giving them a risk management methodology that allows them to recover if he or she is wrong would be a fool, and would have fools for subscribers. I also think you do us a service to remind us of the risks, because there are those among us (myself included) who have a tendency to follow Bob's market timing without using all of his risk management strategies, and I think we need to be reminded from time to time just how dangerous that is.