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

To: Investor2 who wrote (11196)	1/15/2000 1:16:00 PM
From: Dogbert	Respond to of 15132

"Those folks will be posting messages ridiculing Bob's call in a matter of days or weeks..." Try hours or even minutes. The wailing started almost immediately after the news broke. Some have axes to grind, newsletters and websites to promote, and some are, almost like celebrity stalkers, consumed with shadowing Mr. Brinker and pointing out his every mistake. They think it makes them look smart, and their newsletters and websites more 'enlightened'. Actually it just makes them look pathetic.

To: Investor2 who wrote (11196)	1/15/2000 2:29:00 PM
From: E_K_S	Read Replies (2) \| Respond to of 15132

Did Mr. Brinker state how he plans to hold his 60% cash while he waits for a market correction and consolidation? I concur that he is trying to look forward with his timing model and evaluating the "overall" Risk/Reward of stocks vs cash. A conservative long term investors could conclude that the risk free return from Treasuries or GNMA's will provide an excellent "risk free" return over the near term (6-8 month's) while one waits for the equity market to return to a better Risk/Reward valuation. If you look at the current GNMA return of 7% and assume little or no inflation, then the risk free return is acceptable given the high valuation ( and risk vs reward) in the current equity markets. Did Brinker delineate his "sell signal" to raise cash was for TAX DEFERRED ACCOUNTS specifically or was it just a general call? IMO a move of tax deferred money into Treasuries or GNMA's is a very conservative and prudent move given the higher relative "real rate" of return now provided in the bond market, especially if the Fed raises rates in the future. =========================================================== For a taxable account, I believe there are better hedges one can implement than to just raise cash. With State and Federal tax rates as high as 35%, a QQQ or SPY short hedge may provide a better overall portfolio hedge. Until stock gains can be converted to long term capital gains (equities held for one year or more), I would use any strength in the market to slowly take long term gains by writing covered calls on current holdings and evaluating specific holdings on a company specific earnings basis. =========================================================== Therefore, the specifics to Mr. Brinker's market call are important especially to the individual that have several types of accounts (IRA, 401K, personal money w/ mutual funds, or personal money in specific equities). His general call for raising cash may apply more specifically to certain types of equity holdings vs company specific investments. It is prudent however to continue to review (1) company specific valuations and forward business growth, (2) mutual fund holdings (especially cash available for investment) and (3) IRA and 401K holdings. A rebalancing of the latter into cash may help reduce overall portfolio risk significantly w/ little or no tax event. EKS

To: Investor2 who wrote (11196)	1/15/2000 3:50:00 PM
From: Kirk ©	Respond to of 15132

I'm sure that all of the different perspectives will certainly lead to a lively discussion over the next few months. Indeed. I just hope this group stays civil as I enjoy our usual friendly discussion even when we don't all agree. regards Kirk out

To: Investor2 who wrote (11196)	1/15/2000 8:15:00 PM
From: Lars	Read Replies (1) \| Respond to of 15132

Investor2, >>> Others (probably the older, more experienced investors) would likely accept weeks or months of sideways or slightly higher equity prices before they make the "right or wrong" judgement. The third thing that will effect the "right or wrong" assessment is the investment style of the individual. The short-term traders who try to sell at the top of each minor correction and buy back at the bottom of the next dip will accept only an error of perhaps 5%. On the other hand, those who are simply trying to avoid those periods like 1966 to 1982, where the market dropped over a 16-year period, might accept an error of 10 or 15%. I'm sure that all of the different perspectives will certainly lead to a lively discussion over the next few months. >>> Good points. I think Bob is going to be subjected to vicious criticism in the days and months ahead. The discussion will get lively. Many will forget what he has helped them achieve in the past decade; rather, they will suffer from being legends in their own minds. I have immense respect for Bob regardless of what happens. He has made a tough decision and I respect him for that.

To: Investor2 who wrote (11196)	1/17/2000 5:55:00 PM
From: sea_biscuit	Respond to of 15132

If this is correct, your evaluation of whether Bob was 'right or wrong' is theoretical and/or subjective. Why be so fuzzy? Brinker has a passive portfolio, doesn't he? With 75% in VTSMX and the remaining 25% in a few international funds? Why not use that as the benchmark going forward? On the other hand, those who are simply trying to avoid those periods like 1966 to 1982, where the market dropped over a 16-year period, might accept an error of 10 or 15%. Fine. I understand that. But all these attempts at "fuzzification"... why is there a need to indulge in that, huh????