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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: upanddown who wrote (39236)	12/13/1998 6:20:00 AM
From: Skeeter Bug	Read Replies (2) \| Respond to of 132070

>>Of course, these returns assume that one had set all the recommended trades and rebalanced them weekly -- not really feasible -- but the numbers reflect the strength of the program nonetheless.<< john, it means the returns are impossible and the actual valueline mutual fund returns are much, much less. ;-)

To: upanddown who wrote (39236)	12/13/1998 11:52:00 AM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

John, I did read the piece. My opinions on Value Line have been stated here many times. Love the stats on cos., options, convertibles, etc., but hate the recommended strategies. And, in no way, shape or form do I believe the results. This is the original "recent price" firm. Let me state why I don't believe the results. There are two reasons. A while back, a lot of customers complained that analysts were changing recommendations on stocks over the weekend after news had come out, but using Friday's closing price. So, a co. closes at $35 and then announces that the SEC is requiring them to restate their phony eps down to a loss. The stock opens Monday at $12. The analyst, who has a sell in at $35, looks smart on paper, but was of no use to the customers whatsoever, as there was never a time when they could act on that recommendation at that price. I think that is how Value Line builds its performance. As proof, look at the performance of their mutual funds. In no way do they approach the performance of the services. In fact, most of the funds have not beaten the indices over the years, while the services have killed them. O.K., with that as background, VL tends to buy calls on stocks that have been going up and puts on stocks that have been going down. This is consistent with their earnings and price momentum stock model. That is the opposite of what I do. IMHO, big profits come from catching bloated stocks before they head down and undervalued stocks before they head up. Not after they've completed most of that move. I don't really know what they mean by rebalancing. The firms who managed 90/10 mutual funds in the past had a braindead system where the 90 and 10 portions had to be marked to market and readjusted every quarter. That was a bad system. But every week would just be goofus. I do appreciate the fact that VL recommends people use a discipline, thought their 80/20 approach is a bit much for me. MB