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

To: Alan Bell who wrote (7995)	8/22/1999 11:38:00 PM
From: Kirk ©	Respond to of 15132

Alan.... and if you are a bull, wouldn't high beta positions be better than ones with a beta of 1? (i.e. make more money?) I think if you follow BB's strategy of ONLY owning the market on the way up, then a hedge to neutralize that beta of one position follows for on the way down. (equal risk both ways, assuming you call the direction correctly) Me....I go for high beta....living on the edge of a fault zone does that I suppose. 8) regards Kirk, king of my yard

To: Alan Bell who wrote (7995)	8/23/1999 12:37:00 AM
From: Oblomov	Read Replies (1) \| Respond to of 15132

Note that there is more than one Spider: XLB The Basic Industries Select Sector SPDR Fund XLV The Consumer Services Select Sector SPDR Fund XLP The Consumer Staples Select Sector SPDR Fund XLY The Cyclical/Transportation Select Sector SPDR Fund XLE The Energy Select Sector SPDR Fund XLF The Financial Select Sector SPDR Fund XLK The Technology Select Sector SPDR Fund XLU The Utilities Select Sector SPDR Fund So, big cap tech (IBM, CPQ, AOL) is better hedged by XLK than QQQ, but QQQ is obviously a better hedge for Nasdaq stocks. If it is a high negative beta that you want, just put your money into USPIX - it is a Profunds fund that is 200% short Nasdaq. That is a bit too risky for my taste. This bull market will not die easily. In the case of an incipient bear market, my plan is to sell Jan 00 ITM calls against my longs (to defer taxes), and to go short an equal number of shares in XLK and XLF. If the pattern of earlier corrections and bear markets is repeated, the financials will top out first. In fact, this may already have happened. See: MER, C, JPM, MWD, SCH, NITE. Senior tech may have already topped, too - see: LU, IBM, CPQ, HWP, AMAT. Market leadership is deteriorating one stock at a time. INTC is still strong, however; it is the market bellwether at the moment. If INTC puts in a top, and the dollar and treasuries continue to weaken simultaneously (dollar below 110Y and 30-yr above 6.3% yield), I will implement my bear mkt strategy. (I know, I know... can't time the market... but what if the most atractive investment at the time is short sales and cash?) AA

To: Alan Bell who wrote (7995)	8/23/1999 9:44:00 AM
From: Investor2	Read Replies (1) \| Respond to of 15132

RE: "Clearly, one wants to hedge the Nasdaq stocks/funds with QQQ. But would it be better to use QQQ for everything. The QQQ has a higher beta allowing one to hedge an equal amount of S&P like stocks with a lower amount of money." My opinions only: First, I'm not too sure that I like Bob's suggestion on Moneytalk that shorting SPY or QQQ is a good strategy for a Bear market. Granted, if there is a bear market, it could be appropriate for experienced investors. However, there are too many people listening to the show who have no idea of the risks involved with shorting anything. Second, shorting QQQ is even more risky than shorting SPY, due to the high beta that you point out. To say that it is "better" is to ignore the risk side of the equation. Best wishes, I2