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

To: Rillinois who wrote (14722)	6/23/2000 10:28:00 PM
From: Justa Werkenstiff	Read Replies (4) \| Respond to of 15132

Rill: Re: "If calculated correctly to show the true beta of the actual portfolio in question the beta of Model Portfolio I is north of 1.7! Thus, the argument that Model Portfolio I takes on less risk than the broad market is bogus." You are no longer allowed to post on this thread. I don't know what you have been drinking but it is now clear beyond a doubt in my mind that you are, again, posting with an agenda without regard to facts at all. Your agenda is to get Brinker no matter what. You have violated the charter of this thread several times and this is the last straw. I don't know what your problem is but you need serious help and right away. There is no way Brinker's portfolio can have a beta of 1.70 when not one fund has a beta exceeding 1.20. You are clueless as to what a beta of 1.70 represents. I don't know what new math you are operating with tonight, but the whole is no greater than the sum of its parts no matter how you cut it. I don't want to hear any excuses or apologies or explanations. Your time is up. If you post on this thread one more time, I will see that your account is suspended or terminated for harassment and other violations. And if that does not happen, I will move to a moderated thread totally ban you. And if I don't feel like doing that or anything else, I will be gone from SI for good. End of story. Good luck. Post on the Savant thread or create your own thread or go someplace else if they will have you. Let's see if you can depart with an ounce of dignity.

To: Rillinois who wrote (14722)	6/24/2000 10:44:00 AM
From: Rillinois	Respond to of 15132

Thanks to PETE, from STAMFORD, CT, I realized I had made a typing error. Beta should be 1.07 not 1.7. Please reread as it is relevant. I guess PETE and I should type a little slower. There is a big difference between 1.07 and 1.7, but the conclusion still holds true. *Critical Beta Calculation of Model Portfolio I* The beta of Model Portfolio I was 1.0 per MARKETIMER as of December 31, 1999. Initially, I was surprised at the market equivalent beta of the portfolio given the two high octane funds in the portfolio. These funds have betas of 1.2 est. and 1.13 and made up over 60% of the portfolio as of 12/31/99. (The 1.20 beta fund represented 37.5% and the 1.13 beta fund represented 23.5%). Also, there is another fund with a beta of 1.15 that made up another 10% of the portfolio. So, these three funds that have high betas made up over 70% of Model Portfolio I. Furthermore, there is yet another fund that has a beta of 1.0 that made up 17% of the portfolio. So, these four funds made up 88% of Model Portfolio I as of 12/31/99. Now there are 3 international funds with relatively low betas: .55, .72, and .72, but they made up only 12% of the portfolio as of 12/31/99. So how can it be that MARKETIMER calculates the beta of this portfolio as 1.0? Well, after further analysis, it seems that the calculation of beta for the portfolio might be calculated in a way that might give a false impression as to the true beta of the portfolio in its current state. It seems that the respective betas are given the weight of the original allocation (or the allocation that one would use if they were initiating a new portfolio) and not the current weighting in the portfolio. For example, the 1.20 est. beta fund that had a 37.5% weighting in the portfolio as of 12/31/99 was only 20% originally. MARKETIMER chooses to calculate the beta of Model Portfolio I as if the fund was still only 20% of the portfolio. Also, the 3 low beta funds which represented only 12% of the portfolio as of 12/31/99 carry a 25% weighting in the calculation. This calculation is flawed in that it gives more weight to the low beta funds than should be given and give less weight to the high beta funds than should be given. If calculated correctly to show the true beta of the actual portfolio in question the beta of Model Portfolio I is north of 1.07! Thus, the argument that Model Portfolio I takes on less risk than the broad market is bogus. Not only did Model Portfolio I underperform the the S&P 500 and Wilshire 5000 over the period you showed, it is very likely that it did so with MORE risk. Best Regards. Rillinois