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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: Timelord who wrote (12759)	3/6/2002 10:25:59 PM
From: geode00	Respond to of 23153

I do want to correct the impression that Bob recommended 32.5% of conservative portfolios invest in the Q's as this is blatantly incorrect. The "sample" marketimer page clearly states "of cash reserves" - which if the port was 90% invested (I don't know what it was, this is an example only), cash would only be 10% so 32.5% of 10 is 3.25%, which is within his 4% guidelines. You would have to know what his cash position was at the time he made that call to properly weigh the %. He has 3 portfolios. They do not include all his picks for some unknown reason. Putting that aside, the most aggressive portfolio was 100% invested in equities (fine by me) and then he market timed (sort of) out of 65% of them during the first part of 2000. He recommended, 50% of the cash reserves (see above) in the QQQ counter trend rally trade. That would mean 32.5% of a total portfolio. That was the max, with a smaller percentage allocation for more conservative portfolios. The percentage allocations work out between the portfolios, the bulletin and the Marketimers that followed so Bob was clearly following the portfolios in this recommendation. The QQQ trade, however, never made it to the portfolios which is one reason they look better for marketing purposes than they should. The latest article regarding this: marketwatch.com illustrates how much of a fiasco this trade was. People have lost real money following Bob on this trade. No one knows yet how the original January 2000 asset reallocation will turn out as he hasn't issue a buy yet. It is inexplicable how Bob, who used to appear conservative and rational, advised such a thing whole heartedly. He sent it out as a special bulletin and got the BJGroup involved in it. I'm not even talking about the direction of the QQQ trade. I'm saying that even the attempt was absurd. For someone who is supposedly a professional, this trade violated every basic trading rule: - no price - no date - no stops - when the trade started going badly, he reset it in January of 2001 but did so in a way that made it appear it was a brand new trade and not one that was already 2+ months old. - turning a trade into an investment. The QQQs have been a hold since around April of last year. - trading counter the trend which is contrary to the "trend is your friend" mantra that Bob frequently espoused. - when his customers complained that the trade was dropping like a stone, Bob cut off their access to his discussion boards and cut off their subscriptions. Nice huh? Since this fiasco, he has relegated the QQQs to a line or two in his newsletter. He missed the April/01 rally and the September/01 rally. He recently advised a tax loss trade out of the QQQs and into XLK for a 31-day wash sale period. Then he, inexplicably again, went right back into the QQQs which he is holding for some price recovery during the next "cyclical bull" during this "secular bear". This is inexplicable because, as far as I can tell, the high valuations of the broader market are keeping him from issuing a buy signal to return to a fully invested position (for his most aggressive portfolio). Why then did he advise jumping right back into the QQQs after the tax loss sale? Who the *#&)@I!! knows?

To: Timelord who wrote (12759)	3/7/2002 2:47:35 PM
From: Math Junkie	Respond to of 23153

Timelord, the actual percentages were as follows: His recommended percentages for the QQQ "trade" were 30% to 50% of cash reserves for aggressive investors, and 20% to 30% for conservative investors. Prior to that recommendation, his overall asset allocation ranged from 65% cash, 35% equities, to 32.5% cash, 17.5% equities, 50% bonds, depending on how close one was to retirement. That means that the range of QQQ exposure on the original recommendation was anywhere from 32.5% to 6.5% of one's portfolio.