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

To: Lars who wrote (4262)	4/4/1999 7:45:00 PM
From: Lars	Read Replies (4) \| Respond to of 15132

* Moneytalk Summary April 4, 1999 Sunday * · Employment report caused bond market rally on Friday; yield just at 5.6%. · Decrease in number of new jobs (46,000); may get rebound in April. · Unemployment rate 4.2%; the lowest in 29 years; tight labor market. · 3.4% unemployment rate for high school graduates used to be the rate for college graduates. · 13.5% of the people left their job willingly; very high historically. · Productivity continues to offset wage gains. · Caller asked about Mike Murray newsletter that talked about the death of IBM, MSFT splitting and another computer glitch; Bob said everyone is entitled to their own opinion. Thousands of investors must be missing the coming calamity for IBM. MSFT already split into 5 divisions so this is no surprise. Bob said there will always be computer glitches. · Bob commented on the bull market from Aug 12th 1982 with 777 on the DOW to the present. The market went up 12 pts on Friday August 13th to 789 and hasn't looked back. The caller mentioned it took from 1972 to 1987 for DOW to go from 1000 to 2000. Bob said to look at percentages which has been ignored by financial media. Also, the greatest bull market of all time continues from 1990. The move from 1000 to 2000 was a 100%, the 9000 to 10,000 move was 11% and the 8000 to 9000 move was 12.5%. Bob reminded the caller that from 1966 to 1982 oil, guns & butter, etc. forced the market to meander around in a couple hundred point range. · Caller asked about value vs. growth; Bob said to be careful about this and that it would be better to take a diversified approach by buying the S&P 500 or the Total Stk Mkt Index. The caller was 42 yrs old and wants to allocate money to fixed income and asked about GNMA vs. high yield. Bob said to put up to 25% into GNMA in tax-deferred accounts; munis in taxable. Bob reminded caller not to obsess over value vs. growth. · Caller asked about residential property in Silicon Valley; renting for 3 yrs; low end home is $600,000; if they buy house they will be leveraged; looking to buy in "low rent area" Sunnyvale; 3 BR 2 Bath good school with a little commute; husband makes $150,000; couple has $200,000 in retirement funds; $150,000 liquid; they are 39 yrs old with 2 kids; Bob said they are "impoverished yuppies." Bob said to borrow the $400,000 b/c there is no purpose to keep paying rent after you factor in the tax benefit in CA; $28,000 in interest but $11,000 they will get back; plus they are paying $2,250 per month in rent now so with tax treatment they would about be even. · Bob referenced Barron's article page 45; Internet casino companies on Nasdaq BB; Bob noted these are not blue chip companies and there is substantial risk; Nevada is against this obviously; interesting development on internet. · Bob recommended viewing bobbrinker.com due to the recent updates by webmaster Bob Jr. which include an updated reading list and a NEW video list. · Caller asked Bob about MSFT holding which is 60% of net worth; bought at $8 per Bob's recommendation; his accountant said taxes would be $40,000; Bob recommended selling 1/3 now and 1/3 in January and the other 1/3 some other time; I thought this was interesting since the caller seemed really concerned about the value of the position and since it was 60% of his net worth. I would have thought he should sell down to at least 20% of net worth, pay the taxes and be thankful for the Brinker homerun. · Barron's article on Web based retailing; analogous to mail order concept years ago which Wall Street went crazy over; competition increased and the companies had to spend more money to stay in business; author said "if you think WMT will roll over think again." Bob said it will be interesting to see what happens this time; obviously there will be more competition; Personal note: I have checked drugstore.com for instance and they are more expensive than my local Target by a substantial amount. For example, Mach3 razor $6.99 vs. $4.99 at Target. BTW, I highly recommend everyone try the Mach3. It is an excellent shaver! The Mary Kay gang loves it too. I must note I own Berkshire Hathaway stock so I am just slightly biased. For me it makes sense to keep making my monthly visit to Target. · Caller told Bob of 3700 sq ft home in Silicon Valley sold for $3.7million; $1 million over asking price as I recall; house was from 1970s; Bob said this is a different world; stock options are fueling this trend; caller said sellers are going somewhere too; maybe to retire in a more reasonable area; caller is thinking of selling too. · Caller asked Bob about international positions; he adds up business from GE, LU, INTC et al and adds to Harbor International fund to calculate exposure; net worth of $5million; 4 daughters and 11 grandchildren; if he sells property business he will trigger huge tax liability; asked Bob about CRT for property; he has annual income of $100,000; 600 to 1 on one investment which would trigger a $1million liability out of the $3 million equity position; he doesn't want to own real estate here forward; Bob said to look at CRT and make sure he uses caution on any decision since we are talking millions of dollars. · Caller asked about home equity loan for home remodeling and trip to Europe; "I'm sound"; net worth of $700,000; she had the best laugh of the weekend per the Mary Kay gang; Bob said go for it and bring laptop to listen to Moneytalk over net in Europe; I wonder how much per minute usage would run? Ha! · Caller asked about PFE 3 for 1 stock split per a Saturday phone call to Moneytalk; husband worked 21 years at PFE and they have $1.5 million in stock; "stock up the kazoo" as she said; Personal note: Hey can Bob talk? Hmm. Guess not. I don't know how he can stand callers who ramble on especially when they are tacitly bragging like this one. I wonder if she ever heard of specific stock risk. Well, I am sure Bob would have cautioned her but he couldn't talk. I wish the old Bob would have given her hell! Bob is being to kind lately. Ha! · Caller asked about UTEK; Bob said he has a hold on the stock; caller said she misses part of 3 hour show; hmmm….try the net; asked about 2 weeks ago when Bob commented on Nasdaq 100 symbol QQQ; Bob said MCI, Dell, INTC and MSFT make up 40% of the value; Bob said he will comment further in April newsletter which comes out soon; QQQ trades at 5% of index; Bob said if you want to buy this make sure you DCA into it. · Caller asked about taking sabbatical for 2 years; has $350,000 in market and wouldn't have to touch it; wife is teacher who would quit and travel with him to Central and South America; they also want to set up their garden again; he said they only need $8,000 per year to live on and they are in their 40s; Bob said to do it and that it would be a great memory to have and build the relationship; Personal note: This is where Bob is so far above the rest it isn't even funny. He takes into account the personal side of financial planning. He has priorities and he knows you can't take it with you; Bob said to take the laptop to Central America and get on net to hear Moneytalk; I bet it would $3/ minute to listen. Ha! · Bob mentioned that it will be interesting to see how the market digests the news from Friday at the open.

To: Lars who wrote (4262)	4/4/1999 7:58:00 PM
From: Lars	Respond to of 15132

* Millionaire Next Door * For purposes of wealth building, income doesn't matter that much. Once you are in a high-income tax bracket, say $100,000 or $200,000, it matters less how much more you can make than what you do with the money you already have.

To: Lars who wrote (4262)	4/4/1999 8:00:00 PM
From: Lars	Respond to of 15132

* Millionaire Next Door * How did Mark Stewart purchase his automobiles at cost? He faxed his requests for price quotations to the sales managers of automobile dealers. What is Mark Stewart? An astute buyer of motor vehicles and a millionaire. He never shops in person.

To: Lars who wrote (4262)	4/4/1999 8:02:00 PM
From: Lars	Respond to of 15132

* Millioinaire Next Door * In America, fewer than one in five households, or about 18%, are headed by a self-employed business owner and/or professional. But these self-employed people are more than four times more likely to be millionaires than those who work for others.