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

To: Lone Ranger who wrote (1003)	4/8/2001 8:15:45 PM
From: Boca_PETE	Respond to of 10065

sayrep - Try putting the person you refer to on "iggy" as I have done. It makes reading SI a lot more pleasant if you can accept the huge gaps between post sequences. Also, it's a bad idea to bate such people over to this board. P

To: Lone Ranger who wrote (1003)	4/9/2001 5:39:09 AM
From: Math Junkie	Read Replies (2) \| Respond to of 10065

Just a suggestion: I have been told that geode is excluded from this thread and as such I believe it is not fair to talk about him here, since he is prevented from defending himself here. With regard to the questions you sent me, I will do my best to answer. The list of investment calls you sent has previously been posted publicly on Suite 101 (scroll down to the first post): suite101.com As I mentioned to you privately, I believe the last time Brinker called the bottom of a bear market was in 1982. I don't know when his modified model was first put into use, so I don't know whether his under-invested stance from 1988 through 1990 derived from that model or not. But it is clear that one way or another he had learned something by the time 1998 rolled around, because he remained fully invested throughout that correction, which was clearly a more successful strategy than what he employed from 1987-90. He has said his model has been back tested, but there is a big difference between back testing and testing forecasts going forward, so your guess is as good as mine as to how well he will do on the re-entry point this time. (The following email excerpts are posted with permission:) "Also, after pouring through bb's last MT, I have a few questions. Are you still happy with your amat play?" Too soon to tell. I am currently trading it to try to take advantage of the volatility, but I am uncertain as to whether it will drop out the bottom of its previous trading range. If I suffer further setbacks, at least it is in an industry I have confidence in and whose cycles I have ridden out before. "It seems there might be a lot of money to be made by dca'ing into large caps with good balance sheets like csco intc orcl sunw who have been really hammered but who are plush enough to ride out this bottoming process. in your opinion, as you are an electrical engineer, are all of these companies solvent enough to withstand a further deterioration of 30-50% and then to rebound to recover and then lead again the internet." What does being an electrical engineer have to do with knowing who's solvent? <G> Intel has ridden out many cyclical downturns, and I am sure they can do so again. Oracle and Sun have been around long enough to have done the same, but I don't know them as well. People on SI say that Cisco has not been around long enough to have experience dealing with downturns, so I have no idea how they will do. "I ask this because it may be a cheaper play, and you may receive more bang for your buck because all these companies are cheaper than the qqq's." Although I haven't seen a good estimate of forward P/E for QQQ, the stocks you mentioned have P/Es in the 20-25 range, as does AMAT, and it's a pretty good bet that QQQ's forward P/E is a lot higher than that. So from that point of view, yes they are less expensive. "That way for the same amount of cash you could control more shares of proxies for the qqq's." The number of shares you get is irrelevant to the performance of the stock. What matters is how much are you paying for each dollar of earnings, and by what percentage will those earnings grow in the future. "Do you think the qqq's can rally without these companies rallying?" They probably will participate in any rally, but don't forget about specific stock risk. I.e., news specific to a company or an industry could cause any of them to underperform. "the only reason I don't include amat, is that it is more expensive than the qqq's or the companies i mentioned." AMAT is not more expensive. Cheap or expensive is determined by forward P/E, not price per share, and AMAT's P/E is right in line with the companies you mentioned, and far below that of the Qs. P/Es based on forward earnings estimates: CSCO 20.3 SUNW 21.1 AMAT 21.6 INTC 24.1 ORCL 25.7 Source: smartmoney.com (Enter the stock symbol, hit Enter, and click on the earnings tab.)