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

To: MrGreenJeans who wrote (775)	3/17/2001 1:36:36 PM
From: Boca_PETE	Read Replies (1) \| Respond to of 10065

Mr. GJ: Great Post! RE: ". I give Bob no credit for foreseeing the Nasdaq decline until after it was well under way" You could argue that he incorporated the NASDAQ decline into his forecasts when he projected the NAZ 4200-4400 area target for the top of the first counter-trend rally. Since NAZ had already fallen from 5000, I definitely agree with this point. RE: "he did question PE ratios consistently throughout 2000" Yes and last summer he forecasted PE multiple compression and downside earning pre-announcements and disappointments into year 2001. The only way I could see him justifying a long position in QQQ last October is the reasoning that the NASDAQ at that time was very oversold and that counter-trend rallies are solely based on market internals. In retrospect, it would have been safer to advise subscribers to go short QQQ or in a short mutual fund (ie. RYDEX Ursa..) in the NAZ 4200-4400 area thereby going with the market trend, not against it. RE: "CTR2 - why should I believe this scenario is likely to play out?" The main reason is because few still believe it will happen since whatever bounces we've had have fallen way short and have disappointed. People will be expecting another disappointing bounce after the FED lowers rates again this coming week and traders will act accordingly dumping calls and buying puts. Wouldn't it be interesting if they all got faked out and the market continued up this time rallying all the ways up the the NAZ 2800-3000 area ? Doesn't the market often do the opposite of what the masses expect it will do ? There's your reason, Mr. GJ. RE: "will Bob's model still recognize moabo?...No answers here." He, the only thing we have to go on is the last MOABO at DOW 777 in August of 1982. He was astute enough to get that right. I'd bet he can get MOABO right, but who knows like you say. RE: "FED rate cuts will be the catalyst of a strong equity market going forward.... The economy seems fundamentally strong...this is the main reason I believe we will miss a third ... leg of a bear market after a CTR." Like FED rate hikes, cuts normally take 12-15 months to impact the economy. Just heard a report that Japanese banks plan to sell some U.S securities to repatriate funds into their banking system. Will the depressing effect on interest rates of U.S. repurchases of public debt be offset by the effect of Japanese bank sales of investments in U.S securities thus forcing interest rates up (instead of down as expected)? We shall see, but if rates rise unexpectedly, that could trigger a third leg panic down to MOABO. Also, suppose corporate earnings don't improve for a longer than expected period. Suppose proposed tax cuts don't get enacted due to congressional gridlock this summer by those seeking to make the new President look bad. I'm not ready to give up on the idea of leg three yet for these reasons and other possible exogenous events on the horizon. FWIW, P

To: MrGreenJeans who wrote (775)	3/17/2001 2:39:53 PM
From: marc ultra	Read Replies (1) \| Respond to of 10065

Mr. Green Jeans re <<<My take on the long-term model is more moderated. He went to 60% cash in January. Therefore, I will say at that time he was 60% correct and 40% incorrect based upon what has transpired.>>>> I totally disagree with this. The model flipped from 100%bullish to 100% bearish. which is the way it works. The only thing that changed was he realized it was not practical to go to 100% cash as he had previously indicated he would. I saved one post of mine from a long time time ago which gives my views on this and follows: To:marc ultra who wrote (12023) From: marc ultra Sunday, Feb 20, 2000 8:26 PM Anatomy of a sell signal. Well done or less well done? Unless I missed something, today, one month after the so called "strategic asset allocation", was the first day that Bob finally said flat out his model gave a bear market signal. I can't say this is academic because over on BB.com for instance when I said 5% upside and 20%+ downside is a bear market signal from his model several sharp people argued he was not calling for a bear market but simply reducing risk. Similar discussion on just what the heck his model was saying has gone on here. Bob however carefully avoided the issue of what exactly his model was saying until today. So why did he in fact dance around that precise question until today? As I said at the time one factor might have been the reality involved in calling for 0% US equities hit him in the face when it came to give advice to act on. Forgetting she was flat out wrong, we have the Garzarelli example of the telephone and fax alerts of "sell all US equities now" which caused the willy nilly selling by small investors with no regard to tax consequences. But still what would make Bob not want to use the term bear market or go to 0% US equities or more importantly say out front off the bat the timing model has given a bear market signal. I think the likely answer may be what happened after his model turned bearish. The first group that gets action is accounts under money management. That means him and Sheldon Jacobs have to urgently decide what specific action to take. That specific issue of a bear call while assumedly decided in principle a long time ago was never tested in reality as far as I know. So the money management clients have all these huge built in capital gains I assume. Also looking at his own situation where undoubtedly taxes are a big issue Bob may have thought there are certain things he wants to hold. Then realizing all his followers by newsletter or radio are about to be hit with this news what should he do? Well he conveniently figured out this little 40-60 calcuation where you are greatly protected while still capturing a little upside which he didn't really expect and this was something that could be finessed far easier and without desperate followers throwing their portfolios into huge panicky dislocation. As to money management Sheldon certainly would be agreeable and as to Bob if he is right he's a hero whether he's 40-60 or 0-100 as has already been confirmed by him jumping to #1 in timer's already thanks to his bearish call. What criticism could we have? Well if his model did give a bear signal he could have simply said it while recommending his less extreme position and let people make up their own mind how they want to handle it knowing he was reccomending 40-60. In other words he could have not been so damn careful about using the specific words "the model is calling for a bear market. Of course he can say well when I say 5% upside and greater than 20% downside I obviously was looking for a bear market. Or was it an intermediate correction signal which he said in the past would get him out of the market since it often degenerated to a bear market signal. Last week I think he told somebody in the fall 1998 intermediate correction you would have liked to have had some cash on the side to put in at the bottom. So after years of saying the model is king and he will not interject himself into decisions but use his model, reality told him to interject himself and not talk about the SPECIFIC call by his model. I think his approach will likely do the greatest good for the most people while doing the least harm assuming the call is correct. There are however a lot of sophisticated people here who have believed in the model and would like to know the specifics of the model while getting his strategy. Marc