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

To: MrGreenJeans who wrote (1257)	9/29/1998 9:05:00 PM
From: Bill Shepherd	Respond to of 15132

RE: I guess I am curious if Bob will try to "nail" down profits more quickly the next time. MrGreenJeans: My take is that BB's position all along has been that he doesn't try to time the market for these "modest" downdrafts--the tax consequences and risks of mis-timing the precise buy and sell points are too large. However, he has repeatedly said that if his model indicates a bear, he is OUT. The inherent conflict between these two thoughts, of course, is reconciled by your definition of "modest" corrections vs. "bear." Another vexing issue, of course, is once you've removed money from the table, when do you re-enter the market. Even if you had removed money from the table when P/E's exceeded 23-25 and/or when bullish sentiment exceeded 70%, what conditions would cause you to re-enter? In this recent past episode, if you re-entered at 8650, you would have been pretty pissed, no? I too share your curiosity about BB's strategy. The best strategy I can formulate for myself is to re-allocate assets when the P/E's and sentiment numbers get too high, and DCA those funds back into the market when the P/E's and sentiment get more realistic. Regards...Bill S

To: MrGreenJeans who wrote (1257)	9/29/1998 9:35:00 PM
From: Justa Werkenstiff	Respond to of 15132

MrGreen Jeans: Re: "Obviously, it would depend on fundamental conditions at that particular moment in time but I am curious to see if Bob recommends taking profits as price earnings ratios rise to 23? or 25? and if Bob recommends scaling back holdings if sentiment indicates that 70% of advisors are bullish. I guess I am curious if Bob will try to "nail" down profits more quickly the next time." Well as you know, Brinker has a long term timing model so he is not going to dart in and out to take profits and then go long again after the risk subsides due to a correction or otherwise. But when he starts to talk about how expensive the market is on a valuation basis and strongly suggests reviewing one's asset allocation, you know where the risk lies and it is up to you to translate that into profit taking if that is the way you wish to utilize his advice.

To: MrGreenJeans who wrote (1257)	9/29/1998 9:59:00 PM
From: Gary D	Respond to of 15132

Mr. Green Jeans, RE: >>". . .I am curious to see if Bob recommends taking profits as price earnings ratios rise to 23? or 25? and if Bob recommends scaling back holdings if sentiment indicates that 70% of advisors are bullish. I guess I am curious if Bob will try to "nail" down profits more quickly the next time. Any comments?? "<< I wonder the same thing, but I doubt that he will. So far the only "scaling back" BB has ever suggested to my knowledge is checking asset allocation to make sure one is not too heavy in equities for one's age, risk tolerance, etc. To me it makes sense to at some point scale back a bit as upside potential diminishes, given that we can't expect a top to be called exactly. I think Bob believes this too, but I doubt you'll hear Bob explicitly express this on his show as a recommendation. If he were to do so, he would be inviting unwanted questions such as -"Is your recommendation to 'scale back a bit' an admission that you can't time the market?" -"So, you recommended scaling back 30%, but in my case would 40% be ok?" -"what market conditions will warrant scaling back further, from 30% to 70%?" -"I wasn't listening when you issued the 70% scale-back call, I'm still at 30%, so what do I do now?" -"Why are we scaling back in such large increments, shouldn't we scale back in increments of about 5% on a bi-weekly basis?" I'll be listening to Bob for discussion of "hints" of overvaluation, high p/e, and limited future returns, just as we heard from Bob the last time we were over DJIA 9000. But I doubt he'll ever recommend scaling back by any amount short of 100%, and this I don't believe he'll do unless he anticipates a dip of way over 10%. It's much easier to do nothing and have to explain the dip was "greater than expected" if the dip is 12%, than it is to get people (the listeners) out, and then back in unscathed, if the dip is say only 8%. For Bob, I believe it would be counterproductive to issue a sell signal based upon the prediction of a small pullback. Any other opinions of what Bob will do the next time we're in the stratosphere? Regards, Gary D

To: MrGreenJeans who wrote (1257)	9/30/1998 12:07:00 AM
From: Lars	Read Replies (1) \| Respond to of 15132

MrGreenJeans, >>> I am curious to see if Bob recommends taking profits as price earnings ratios rise to 23? or 25? and if Bob recommends scaling back holdings if sentiment indicates that 70% of advisors are bullish. >>> I think many people are wondering the same thing. I know I am. To be honest I will be implementing my own adjustment if we hit mid 20s and above on P/E. I also believe % bullish is something to reflect on too. I will especially be liquidating equity positions in my IRAs and 401k.