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

To: Kirk © who wrote (12711)	3/23/2000 5:43:00 PM
From: sea_biscuit	Respond to of 15132

The problem with market timing, being wrong, then saying you are protecting wealth does nothing for the 20 and 30 something year old investors that let a good chunk of market gain sit on the table and will miss seeing that compound for 50 or 60 years if they do not get an opportunity to buy in at a lower level (plus taxes). I really feel that even if one were so stubborn, they wouldn't have to wait for more than 10 years. In fact, at that time, the problem could well be that stock prices have fallen so far and for so long that one would be afraid to get back in! History has shown, however, that those are actually the best times to get into the market.

To: Kirk © who wrote (12711)	3/23/2000 6:39:00 PM
From: sea_biscuit	Respond to of 15132

A very crude thumb rule on when to get (or get back) into the market is when the infernal Motley Fools abandon their weekly radio program (with its silly stock-market games and quizzes etc.,) "due to lack of listenership". It might not be anywhere close to the exact bottom of the market, but it will definitely be a better entry point than now.

To: Kirk © who wrote (12711)	3/23/2000 6:44:00 PM
From: Justa Werkenstiff	Read Replies (3) \| Respond to of 15132

Kirk: Re: " The problem with market timing, being wrong, then saying you are protecting wealth does nothing for the 20 and 30 something year old investors that let a good chunk of market gain sit on the table and will miss seeing that compound for 50 or 60 years if they do not get an opportunity to buy in at a lower level (plus taxes)." Assuming the investor has investments which are suitable to holding for 50 or 60 years (index investors), then you have a point. Yet it is hard for me to imagine holding on for a lifetime. You gots to spend your money before you meet your maker. My grandfather used to say, "You can't take it with you." And who is to say that capital gains taxes won't be greater then than they are now? Moreover, if you are a retail mutual fund owner chances are you will sell any fund fund before you expire. Chances are you will sell and buy countless funds during your lifetime. They will all underperform at some point. Maybe the manager moves or loses his ability in a changing market. Besides those funds pay taxes as you buy and hold because they trade. And if you are an individual stock person, the argument assumes that companies you are invested in today will be around in 50 or 60 years or will prove to be good investments for that long. I don't think so. There are always opportunities and for a young investor and there is plenty of time. A good trader can make up for plenty of time out of the market. Re: "So...what are you going to do?" Watch those municipals pay out a tax equivalent return of 10-12.5% every year. Send a letter to the Treasury thanking them for capital appreciation to boot. Trade the market when conditions are favorable until there is an entry point with limited downside risk. And then I will take on some long term positions for the next cycle. Re: "Holding on to all those banking stocks would have made you look great." I feel great. Made a good trade. Took some dividends to boot. Not much more I could ask for. Many are trading at lower prices from where I sold them still. In fact, if I still held them from where I bought them, I might be under water now. So selling them made me feel great because I felt they could go lower and they did and I got out with a nice profit. Re: "You are right, cash does provide you with options, but I am glad I have my options with an intact, personal portfolio, up 20% from the call, no taxes paid and still have "options" like going to cash should I wish." Glad you are doing well.

To: Kirk © who wrote (12711)	3/23/2000 8:18:00 PM
From: Rillinois	Respond to of 15132

Kirk, Re: Something I don't see people discuss is protecting critical mass is done with asset allocation to begin with. I totally agree. When Bob came out with his "tactical asset allocation" advice he argued that if the market went up 10%, his 40/60 allocation would return 7% with less risk. Isn't this the whole idea behind asset allocation in the first place? It was entertaining, however, to see Bob transform from a tactical asset allocator at the beginning of the year to an outright grizzly bear talking down the market at the ABSOLUTE BOTTOM of the correction. What's unfortunate is hearing Bob's market commentary of late. He views everything through the eyes of a BEAR. Many things that he used to interpret as positives for the market are now negatives. Higher oil prices used to be a tax on consumers thus slowing the economy...now it's inflationary. The core CPI used to be what's important...now, of course, how could you exclude food and energy. Market internals used to be secondary...now they support the true weakness in the market disguised by the cap-weighted indices. Bearish viewpoints in the media used to be viewed as a necessity to keep the bull alive....now they are held up as expert commentary. Greenspan speeches were to be ignored as nothing but jawboning....now we hang on to every single word as the gospel truth. When there were plenty of reasons for being out of the market Bob would point out that the market was within a few points of the all time highs despite all the bad news....now, of course, the market is being run up by a bunch of crazies that ignore all the fundamentals. (something about inmates running the asylum) When the NASDAQ used to hold up relatively well as compared to the broader market it used to be referred to as market leadership....now it's those crazies again, buying things blindly. The only blind people in the market are the ones who sold out of the market because a newsletter writer told them to. And now some of these people are justifying their decisions because the market is just too risky at this point. Says who? The same guy that told you to sell out? Does anybody see a conflict of interest here? Best Regards. Rillinois P.S. Nice recommendation on MSFT. BTW, has anybody figured out how much CSCO has gone up since Bob said it was too expensive to buy. I believe his reasoning was that the PE was 80x's. I think it's over 200x's now.

To: Kirk © who wrote (12711)	3/23/2000 9:10:00 PM
From: MrGreenJeans	Read Replies (1) \| Respond to of 15132

Kirk Something I don't see people discuss is protecting critical mass is done with asset allocation to begin with. Some start at 50:50 stocks/fixed and might go to 30% stocks if they have a very large net worth. Excellent point. Bob should mention this more often. I have heard him say that once one is at critical mass one must take action to preserve that position, that capital, or else one may regret being in that position and then having the market take it away. It is an important point that he cannot mention often enough. Yes, I agree that 50% equities, 50% cash and bonds would be a good starting point. I would be interested in hearing the amount others on this board think critical mass is defined as for me critical mass would be having cash, bonds and equities north of $2 million dollars.