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To: Berney who wrote (7450)	12/30/1999 10:43:00 AM
From: smolejv@gmx.net	Read Replies (2) \| Respond to of 11051

Wish e'body love, piece of mind and health. And a pile of money to all Dee-U-Deedes. I did not get much involved in the social life this year, but boy did I ever enjoy it even when just passively reading the messages. DJ

To: Berney who wrote (7450)	1/3/2000 2:08:00 PM
From: MonsieurGonzo	Read Replies (4) \| Respond to of 11051

Berney:" That Was The Year That Was " >hope you will share your changes in the equity world... ...the only significant change that I have made, Berney, is diversification of the fixed-income holdings such that we now have a "ratio" of 3:1 = BONDS:PFD STOCKS, such that the total APR Yield is ~30% higher than a simple bond basis. The automatic re-investment of periodic BOND distributions is turned off; whereas the PFD stocks are all DRIP enabled. Revenues from operations flow into these "fixed-income" accounts; all cash is converted to MoneyMarket Funds T+3; some MM funds are withdrawn for taxes every 90-days; surplus MM funds are then allocated to balance BONDS:PFD every quarter. As usual... 10% of BONDS:PFD capital will be liquidated and converted to buy more CORE stocks on any SnP apparent dip trigger; then 2x this amount at some lower SnP level, etc. CORE STOX - PICKING THEM (1) F/A I do the same thing that you do, Berney; ie., classical F/A on a set of mostly large-cap, sector-index component stocks, within these sectors: TECH TELCO RLX DRG FIN ENE. My ADR's are concentrated within TELCO, which also includes TEL-EQUIP (as opposed to calling LU NT ALA, NOK ERICY, etc. "TechStox"). I include BTK.X stox within DRG sector holdings; I call GE a FIN; ENE is a bastard construct that includes UPS + FDX trans stox, which are really "inverse energy" holdings - but nonetheless highly correlated to underlying energy commodity prices. (2) Visible Energy I back-test index component stox' performance from previous major and minor "dips", and pick only those that exhibit "visible energy" w.r.t. market and sector index gains; sector bellwethers always make this cut. The qualified set of "nifty" BigBoyz does not change much; however, "what's nifty-est" does change: I buy them all, so end up holding 40~50 stox in CORE, at any given time. (3) Implied Leverage I weight my sector holdings such that... SECTOR ==> 60% : 40% = BASIS : IMPLIED LEVERAGE ...for example... INTERNATIONAL ==> 60% : 40% = TELCO ADRs : TEL-EQUIP ADRs INT ==> 60% : 40% = DT + TMX + NTT : NOK + ALA DRUGZ = DRG:BTK are weighted in a similar fashion, but I increase diversification to 6 DRG : 4 BTK stox, and so on. I have posted all these CORE constructs before, fwiw. CORE STOCKS - TIMING THEM (1) BUYING I define the classic SnP "dip" buy trigger as... SnP .GT. ~10% decline from a recent top .AND. SnP .LE. SnP 200d EMA ...and subsequent, lower "buy" triggers are arbitrarily spaced-out at horizontal supports = fibonacci retracement levels. Gonzo makes no attempt to further "time" anything - he just throws BOND $$$ at all the CORE stox in a "batch-like" buy programme - relying on (1) the BigBoyz F/A; (2) visible energy of the nifty; and, (3) construct weightings' implied leverage - to eventually out-perform the indices. During '99, I executed only one buy programme, fwiw -- and at that time, I thought the entire equity market was falling apart (^_^) (2) SELLING You will recognize everything above as more or less "classical investing" practice, and I do not pretend that what I do is anything else. I measure my CORE's performance against a 50:50 = OEX:NDX standard. At our level, dudes - I believe it is selling, or - "what you do after you buy", rather than stock picking or apparent dip timing - that is the most challenging aspect of what we do. Some CORE stox, those that lost their apparent "visible energy" w.r.t. their index, were completely eliminated from my CORE mix. Examples during '99 include the RLX sector stox SWY and WAG, and the FIN sector stox CMB and STT. otoh, I still hold losers like MRK PFE SGP WLA along with JNJ BMY - because imho the entire sector had no "visible energy" (and AMGN BGEN DNA MEDI, etc. BioTechs more than made up the lousy performance of the BigDrugz). During 1999, Gonzo ran his harvester over CORE when ever ~10% of the stocks (ie., 4 or more of them) had +34% capital gains: those stox with .GT. +34% gains were given a haircut back to their original levels - ie., about ~2.5% of total principal basis equity. I found this "harvesting" approach to be too simplistic, Berney. I am satisfied with our ability to "pick winners"; and execute "buy programmes" without emotion. otoh, I am not yet satisfied with my ability to manage winners, and feel that I could do better, in this regard. Good Luck to all the dudes in 2K !!! -Steve