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

To: marc ultra who wrote (1783)	10/24/1998 6:52:00 AM
From: Justa Werkenstiff	Read Replies (1) \| Respond to of 15132

Marc: Your analysis of small caps is right on the money. What I saw at he beginning of the week was a compelling situation. Anytime a two bit player like myself can move the price of a stock up with buy orders those higher prices would stick because they were not met with sell orders, you have to stand up and take notice. And if you snooze, you lose. Let's watch how these puppies perform if we have some down days. I would focus on purchasing institutionally owned small caps now. The tax loss selling for them in this nasty correction should be over at the end of the month. But I personally would not wait for fund flow confirmation to purchase these small caps or the funds. If one waits too long, what is the point? You may have already missed a good part of the period of outperformance and the corresponding gains. Like I said, get there before the herd. And like you said, performance attracts money flow and it will come. And the talking heads have been humping small caps and their short term outperformance all week long. I smell money flow. Your biggest risk IMO is to market perform in this sector. Semi-equips are overextended in the large cap area. Small caps have some more reasonable valuations. I would be very cautious here in going long. While things are looking up, the prices have run past the fundamentals IMO especially in the large caps. I expect some weakness now in the sector but I feel the lows have been seen. The run in TER on strength in the backend is compelling as most of TER is intstitutionally owned and so they were pumping money into this stock. The strength in the sector on Thursday was also compelling with all players, small and large, showing huge gains on Thursday. The Billat sector upgrade on Friday morning which pushed these stocks again was too much, too soon IMO. I was shorting on that run for a trade. I expect weakness and choppiness in this sector with some strength in the middle of November as the AMAT cc approaches.

To: marc ultra who wrote (1783)	10/24/1998 11:50:00 AM
From: J. M. Blackburn	Read Replies (1) \| Respond to of 15132

marc: >I have seen the argument most recently in current smartmoney.com about reasons why small caps won't start moving in particular the story goes that funds won't buy them for liquidity reasons. After 33 seconds of deep reflection I am declaring this argument bogus and here's why. Yes its true Magellan can't reasonably buy a small......< Have you ago noticed how many previously "Closed" Small Cap Funds have reopened? This will have a great positive effect on the small cap sector in the future. They see value and they can handle more money. For the life of me I can't understand how anyone can find fault with Bob over the events of the last few months. Yes, the correction went further than anticipated but if you took the clue when he was talking about allocation last summer and you felt comfortable with taking on a little more risk a few weeks ago you are now in great shape. By using those two opportunities my portfolio is now only down about 2% from its all time high last July and if Bob is right, which I believe he is, we have another 900 Dow points plus to go. Maybe I'll even be able to afford some mail order shopping before to long. Justa, send me out a catalog please.

To: marc ultra who wrote (1783)	10/27/1998 11:36:00 AM
From: marc ultra	Respond to of 15132

Russell outperformning again so far S&P500 +1.14% Russell 2000 +1.25% I believe this may be the 11th straight gain if th Russell finishes up again today. With the S&P making only modest gains at best lately I think the money is strongly flowing to the small caps. Wouldn't go crazy grossly overweighteing the small caps since this can change on a dime and Bob has never called for anything but a market weighting like in a Wilshire 5000 fund, but I think 65-35 or even 60-40 large to small ratio instead of 70-30 might be reasonable here. Keep in mind however that the small stocks have had a huge run here since their lows but if we have a real sustainable trend here which I think we do these tend to last a long time. Note that while I have thrown the midcaps in with the small and micro caps in these ratios the real action has been in the small and microcap area Marc