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

To: Oblomov who wrote (8008)	8/23/1999 9:22:00 AM
From: orkrious	Respond to of 15132

Andrew, given your well-articulated discussion of efficient market theory, you: a) are just out of MBA school, which I doubt given your age b) have a much better memory than I do c) had an old finance text handy Jay, at what point would your faith in the market be shaken? I guess if I saw declining fundamentals in our economy, or in the business I am invested in, I would consider divesting my self of the affected companies. I guess I look at investing more from an individual perspective than from a macro view. As long as I thing my investments' prospects are good, I'm going to hang in there. I really only own one stock right now that i truly consider overvalued, SNDK. they are the dominant force in flash memory right now, and they have the patent protection to insure their dominant position in the future. I bought in as a long-term investment in january at 26, and it's close to 90 with an historical PE of 150. Overvalued? Definitely. But with the explosion coming in the use of the products that need their CF and MMC cards, digital cameras, MP3, and various other portable devices, a few years from now, today's prices should look cheap. Would I buy it here? Not unless I had a gun at my head. But given that it is likely to be the next INTC of its niche, I am not going to try and time it and get out and then back in when the market is at more reasonable levels. Anyway, as long as I own good growth at a reasonable price, I'm going to hang in there. If I perceive a change in the fundamentals, I'll get out. Jay

To: Oblomov who wrote (8008)	8/23/1999 10:40:00 AM
From: Kirk ©	Read Replies (1) \| Respond to of 15132

It is obvious that some people beat the market by a wide margin consistently; whereas, most players underperform. I would guess that the distribution of returns among the players in the market is shaped like a negative exponential distribution. IMO, this means that it is possible to outperform the market, either through stockpicking, or asset allocation. Excellent points. I think that EMH holds much better for a $10B mutual fund but for a small investor of say under $10M....it is much easier to beat the market if the investor can detach their emotions from their stocks, indicators, etc. I like the idea of learning Bob's indicators and then being able to judge for yourself when the risk/reward is right for you or even just vary your allocation to stocks according to risk (what I do). As p/e's have gotten above nose bleed levels, I have been pulling from my winners that are way out of whack with 4% guideline and putting them into well yielding bonds (GNMA and intermediate) plus cash. Bob teaches alot of good stuff. I wish most would forget the magic sell signal and just look at what he is teaching and adjust their allocations accordingly. If the signal ever materializes, you might be surprised and be ready for it or even already at an allocation you want. What I am looking for is all that money on the sidelines to come rushing back in to stocks, driving sentiment to 80% and having bond yields skyrocket as nobody want to buy bonds.... I'll sell more stocks then and buy bonds as that is how I see it peaking out. JMHO