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

To: marc ultra who wrote (12044)	2/20/2000 8:59:00 PM
From: Mr. BSL	Respond to of 15132

Anatomy of a sell signal. Nice post Marc. Now all Bob has to do to come full circle is call the NASDAQ a major average. Regards, Dick

To: marc ultra who wrote (12044)	2/20/2000 9:00:00 PM
From: Boca_PETE	Respond to of 15132

marc u: I agree with your interpretation of Brinker's initial comments about the change - that "5% upside and 20%+ downside is a bear market signal from his model". I took it that way initially and made necessary adjustments to get to his targeted allocation. On my own, I decided to be even more conservative and increased my cash reserve by excluding Phantom Assets from my overall asset allocation so as to end up with even less equity allocation on which to calculate the 25% U.S and 15% International Equities targets. During our last visit to within 3% of the 1469 S&P high, I added ProFunds UltraBear shares to my holdings and now have about 24% of my remaining U.S. equity fund holdings hedged. Hope to double up that hedge on the next S&P rally (if we get one, but it won't be the end of the world if I'm unable to). Like Bob says, everyone needs to decide for themselves how to respond to the change in outlook. I have no regrets for opportunities missed. P

To: marc ultra who wrote (12044)	2/21/2000 12:04:00 AM
From: Math Junkie	Read Replies (1) \| Respond to of 15132

Marc, your post deals with issues that I have been wrestling with this weekend as well. When he talked about the model being clearly bearish, and not wanting to recommend 100 per cent cash in order to make it easier for people to confine the selling to non-taxable accounts, I remember thinking, "I wish he had told us this a month ago, when the market was near its highs". I also find that explanation hard to swallow, because after the January newsletter came out, he told callers with new money to dollar-cost-average in up to the 40% invested level. If the only reason for not going 100% cash was tax consequences, such advice would not have been appropriate for people for whom the tax consequences of staying completely out of the market would have been zero. On the other hand, I can imagine that it would be extremely difficult, and really going out on a limb, to advise subscribers and listeners to go completely to cash when the model's ability to forecast a bear market had never been tested going forward. Up till now it had only been back-tested. And I can just imagine how strident his critics would have become if he had recommended 100% cash. It was bad enough as it was.