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

To: Lars who wrote (2015)	11/15/1998
From: Lars	Read Replies (1) \| Respond to of 15132

* DON'T ANYONE FORGET THIS POST! * To: don lane (1674 ) From: don lane Thursday, Oct 15 1998 6:41PM ET Here is my favorite quote from last weekend's radio show: "I am Bob Brinker.........and I am here........and I am bullish! And as they say, the rest is history!

To: Lars who wrote (2015)	11/15/1998 12:03:00 AM
From: Lars	Read Replies (7) \| Respond to of 15132

* Summary of Moneytalk 11/14/98 Saturday * · Market is "stubbornly" holding gains. · The bad news bears are in trouble as well as anyone who is short this market. · Saddam Hussein is doing his "safety dance" every 6 months or so; Bob said "he doesn't know what he is smoking over in Baghdad". The president is within hours of possibly striking. Hopefully, we will take action this time. · Those who have sold out b/c of Iraq are "clueless" and "off the page"; Why would you sell out b/c of this episode? Iraq has "no chance" of victory over the US. To those who have sold Bob said "good riddens". Bob also wondered if Clinton will allow Iraq to keep pulling these games. · Caller: $130,000 403b wondering if he should convert to ROTH @ 45 yrs old. Bob questioned the viability of this option by the guy's financial advisor. If the guy left it alone for 20 yrs until he is 65 and earned 10% he would have $874,000 approx. If he converted he would pay $40,000 in taxes over next 4 yrs and end up with $605,000 in 20 yrs tax free. Bob questioned the decision to convert and left it up to the caller. If the caller left it alone and paid taxes on a 10% withdrawal of $87,400 ($24,472 or 28%) he would be left with $62,928. The difference b/t $874 and $605 is $269,000. It would take about 11 yrs to make up for the conversion. Plus, you are ignoring quality of life issues and assuming the caller remains in the same 28% tax bracket. This calculation ignores mandatory distribution at 70 ½. (My calculations are very rough so help me out if I have errors. Also, I would appreciate any information or input on the above scenario. Has a similar situation affected anyone on this thread? What was your decision? How did you arrive at that decision?) · Wholesale prices up 0.2% in October. · Retail sales up 1% in October. · $42 billion Brazil bailout package via IMF. · Sat Nov 14th NYT article "When Theory Met Reality" about Long Gone Capital. · Caller: Would GNMAs be a safe investment for church money. The caller was on a church committee for allocating funds. Bob said that the way to look at it is that the Vanguard GNMA fund has varied 1% around the median price over the prior 52 wk period. · Caller: Charitable life investments. Bob said insurance product and he prefers index fund investing for higher returns and lower taxes. Bob said he doesn't know the product but "if I have any comments I promise to do so". I like that response. That sounds like the fine print of this guy's insurance contract guaranteeing him a rate. HA! · Caller: 71 yr old lady from NJ. $68,000 conversion to ROTH. Tax burden would be approx. $20,000 over 4 yrs. Bob said convert if you review the situation and feel comfortable with conversion. It would depend on if you can pay taxes out of your own pocket and live long enough to benefit from converting to ROTH for tax free status. · Bob commented on internet mania. EBAY selling at 775 p/e on 1999 eps of $0.16. Earthweb was up 248% on first day of trading last week. Opened at 31, went to 85 and closed around 67. I wouldn't want to be the sucker who bought at 85. Oh well, this one will probably be at a 100 next week. HA! theglobe.com which couldn't get ipo'd a month ago went public last week. Open at 9, went to 97 and closed at 63 ½. 15.5 million shares traded which is 5 times ipo. All for a company that helps create websites. Bob said you "can't really have a profit disappointment when you have nothing but red ink". Good grief! BTW, Justa and I are starting our own internet mutual fund. There will be a $10,000 minimum with a 2.0% expense ratio. Hey you are paying for serious expertise here. We also pledge to shareholders to not buy or hold any internet stock selling for a p/e of 1000 or greater. I had to talk Justa down from a p/e of 1500. HA! Send your checks when you place catalog orders. Hurry these stocks are on fire. They are moving as fast as our Market Clappers went. HA! · Caller: The guy had "a watermelon smile so wide that seeds are coming out of my mouth". He has never had profits like these. He started dca'g in August into semis. Interestingly, he mentioned that he didn't buy any in October. Human nature at its best here. Bob mentioned he owned NVLS and TER. In 12 - 18 months these will return possibly up to 3 times their lows from 5 weeks ago. Bob said to let the positions ride. There will be backing and filling but when investors see these stocks turn in second half of 1999 they will jump into the sector. Bob said that this is NOT a recommendation to buy; rather, one should dca over time and build a position. · Bob mentioned a joke by Warren Buffett. For the record Warren doesn't teach any investment class. The joke is framed for IF he did. Warren has said two versions of this joke. Let's use the longer one here for our purposes. Warren said that if he were teaching a class on investments that his final exam would be to pick an internet stock and assign a value to it. Warren said anyone who answered would get an "F". Those who left the paper blank would get a "B". And, those who wrote back to him saying "how the hell could you ask such a stupid question" would get an "A". · Clueless caller of the week: This guy won this one on rudeness. He "corrected" Bob on Rydex OTC being 1:1 versus 1:1.5 leveraged. I think he confused Bob referring to Rydex Nova which aims to do 1.5 times the S&P 500 return. He then proceeds to ask Bob questions regarding a report from Lehman which gives their top picks. He talks about AMAT and claims the report says AMAT will earn $7.70 at the peak of the cycle. Bob responded that those eps figures are hard to believe. Has anyone on the board seen this report? I would be interested in the actual figures. Bob said that as the move to .18 occurs in second half of 1999 that AMAT sales will benefit. · Bob recounted October 10-11 show when he said he was so bullish that you couldn't afford to be out of the market 1 day. What followed? The most explosive 4 week rally in the history of Wall Street with the averages up b/t 20 and 30%. · Caller: Concerned about valuation of S&P 500 versus history. Bob said one must take into account the present factors to understand what is happening. These factors are: low inflation, low interest rates, an economy growing at a moderate pace and a large cash flow into the market via 401k, 403b and IRA money. Bob said all the historical punditry provides "interesting fodder" b/c it doesn't relate to now. Bob said S&P 500 is trading at 22 times his 1999 earnings projection and he believes it will go to 24.5 times his earnings projection. Bob mentioned that this economy and stock market is unlike any in history. The lower multiples in the 70s and 80s for instance were a function of inflation in double digits at times. Also, the world doesn't face the communist threat anymore. Bob referred to the market as an "ongoing journey" if you look at it from a historical perspective. I found this discussion to be fascinating. This is a typical example of Bob Brinker at his best. What a fantastic free service for the individual investor. · Caller: holds Avtel Comm(sp?). Bought at around $2 per share. Last Thursday stock traded at 2 ½ and spiked to $31 on Friday after a press release regarding the internet. They will provide some internet service only to Santa Barbara area. Trading was halted on Friday. Bob thought after being highlighted in Barron's, etc. that the stock would open lower on Monday, possibly significantly lower. Bob said to watch the offer side for a cascading a stock price. Bob's conclusion was to sell if the stock was even in upper single digits on Monday since caller loaded up around $2. Bob had an interesting internet mania comment. "Boys and girls it's come to this…anything related to the internet is a frenzy." This is partially why Justa and I are starting our mutual fund. We believe we have created a computer model that will predict the price movement of the internet stocks. You should act now if interested. We are closing the fund when we reach $100,000,000. I expect there will be a frenzy of cash sent to us overnight this coming week. So act now while your money will buy you more shares! HA!