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

To: Kirk © who wrote (14184)	5/16/2001 1:41:25 PM
From: Skeeter Bug	Respond to of 42834

kirk, the 90/10 strategy is part of his broader asset allocation. he also haas some dollars allocated to income strategies and some dollars for cap appreciation. the %s swing depending on his view of the value of the various markets. kirk, you can't see how holding calls on amzn, csco, dell, qcom, etc. while the bubble was building up led to a ton of profits? man, i can. i can tell you that mike didn't apply the strategy he wrote about as a bullish strategy until mid to late 2000 (ha, ha, what a contrary indicator, huh? ;-) however, he did use it very successfully on the bearish side. he made aa ton on micron's various collapses. he made a ton on the collapse of banks and tech back in 1998. sometimes he made some dough just from the volatility. of course, he lost some, too. mike says he has never has a negative year. i happen to think mike has better valuation / market skills than the avg fella so i'm not sure others can expect similar results. he says he has had a couple years where he doubled his dollars allocated to the 90/10 strategy. i can't recall if he ever posted an avg return. i know mike has been bearish on fundamentals for some time. my perception is that mike began to use the 90/10 system long (as opposed to short) at the wrong time believing that the knuckleheads had one more stampede in them around 7/2000 to 8/2000. one could not have made a more piss poor call. however, i can see why he did b/c this bubble lasted beyond my wildest imagination. that is the beauty of his system, though. i bet he still was net positive even though he was overweighted calls and underweighted puts when the big kahuna hit - the puts paid many 100% of % while he only lost 100% on his calls. even if he didn't, he still could only lose about 5-6% in a year if he made the worst or 10 worst or 100 worst market calls in the history of the universe. the number one factor to be aware of is greed. when the 10% is hot money, one must be disciplined to not change the 10% to 20% or 30% or 40% or 100%. human nature is like this and the end is almost always very nasty.