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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: geode00 who wrote (12329)	2/24/2001 2:54:32 AM
From: Math Junkie	Read Replies (2) \| Respond to of 42834

"How do you figure he's sidestepping losses?" It's a by-product of the fact that the October buy recommendation was not made on the air. So an investor who was following Bob's on-air advice would have gone to 60% cash in January of 2000, might or might not have participated in the May-to July-trade, and would not have participated in the October buy recommendation. Vanguard's Total Market Fund (or the Wilshire 5000) is by definition representative of the average investor, and it is one that Bob has mentioned on the air many times, so it would be the best one to use in calculating the results. Let's suppose an investor had $100,000 in that fund in January of last year, and went to 60% cash. Cash: $60,000 VTSMX: $40,000 Using the VTSMX total return figures for all of 2000 and the first month of 2001, adjusting it for today's closing price of $27.69 per share, and calculating the interest on Vanguard's Prime Money Market Fund, which has averaged about 6% for the past thirteen months, the investor's position based on Friday's close would be: Cash: $64,019 VTSMX: $33,832 Total: $97,851 Performance, 1/1/2000 to today: -2.15% Many investors would LOVE to have those results for the past thirteen months. For example, if the same investor had stayed fully invested, he would be down 15.4% right now. That is why I say that the broadcast has been Brinker's biggest winner in terms of helping investors avoid most of the losses of the past year. By the way, notice that the results for a buy-and-hold investor, -15.4%, is not much different from the results for an aggressive investor who participated in that "horrific" QQQ call. So while it was certainly a bad call, all the weeping and wailing and gnashing of teeth over it is way overdone when the big picture is considered. chart.yahoo.com chart.yahoo.com