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

To: Kirk © who wrote (16909)	10/21/2002 4:00:18 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 42834

If you add in all their advice, the do well to meet the averages. and that is before you even talk about trading costs and taxes. of course active traders will underperform the indexes in the aggregate due to costs and management fees. there are a lot of arguments for indexing, especially for large investors, but for small investors as well. having said that, there is now more indexed money in the market than ever before, and a lot of short-term volatility (buy stocks/sell bonds, or vice-versa) has to do with these institutions trying to "rebalance" their allocations nearly on a daily basis. i don't think we can know for sure what the effect of these new players on the market will be. for example, as indexes go down, institutional investors may become dissatisfied with indexing/passive strategies and may move more funds to the active side. this could put even more selling pressure on the averages, exacerbating the trend. hard to tell in advance what a sustained downtrend in the indexes will do to the large investors' behavior, but eventually i believe they will change their behavior (probably at the wrong time, if history is any guide). They almost all use asset allocation and just vary allocation small amounts according to market conditions yes, but the norms change over time. institutional investors have much higher equity allocations now than they did in the 70s and earlier. my personal approach is just to look at the expected return. since most of the real return on the market over the past historical hundred years has come from dividends, it makes sense to look at dividends. i am very unimpressed by the SPX's dividend yield. this, coupled with a high PE on questionable earnings, is enough for me to have a very defensive allocation. of course, looking at the dividend yield will tell you nothing about the market in the short term, so it is no wonder that most "investors" ignore it.

To: Kirk © who wrote (16909)	10/21/2002 5:23:05 PM
From: geode00	Read Replies (1) \| Respond to of 42834

Not really related (at least I don't think it's a big issue) but this is from RM today: " Paul Kedrosky VC activitiy 10/21/02 03:28 PM ET Cody: Speaking as someone active in the venture world, as well as a long-time observer of the space, I can tell you very little noteworthy venture investing is going on. Bit of triage, bit of bluster, but that's about it. While partners aren't as mopey as they were eight months ago, they're also still not doing much -- other than feigning higher levels of activity to pacify grouchy limited partners. So not sure who you're talking to, but activity is largely moribund in the layabout venture world. The biggest activity these days? I had a mail message the other day asking for bets on which public pension fund will follow U. Texas in folding and starting to disclose all their ill-performing private investments. (Smart money is on CalPERS, although a couple of Mass. funds are running tight behind.) Hard-ass venture folks think that what's good for the goose (mutual funds) isn't good for the gander (venture funds): they don't want investees to close portfolio performance. But I digress. "