Honey's Brinker Beehive--Not a Fan Club

Top 506. Feb 17, 2006 4:48 PM

» mrs1123 - I went to 98% cash today.

I was probably foolish to do so. I suspect we will have two weeks of up days just so I look more foolish. But I didn't do it from fear. For me it was knowing that last years gains were pretty good. The gains were 3x what I would make in the money funds this year. I lost the feeling that the market was going to remain bullish. I looked at articles that spoke of the different reasons for the market uncertainty and going to cash just seemed right for me. I know for sure that I will make 4% and with the interest rate possibly going up again I was comfortable to have that lower gain just to preserve what I made. I even had the thought that Bob Brinker might be wrong about a continuing Bull Market. But that was really more of a passing thought and wasn't the basis for my decision of going to cash. It was more about not wanting to see the gains erode away. If the market goes up wildly I am hoping it will be at the end of the year so I will have time to get back in.

-- posted by mrs1123

Top 507. Feb 17, 2006 5:24 PM

» honeyoneohone - I went to 98% cash today.

In response to I went to 98% cash today. posted by mrs1123:

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Thank you for sharing your decision with us, Mrs1123. It's nice to have feminine input here. I too, cut back a little on my stock market allocation yesterday.

Even if Brinker isn't wrong about the market direction, he almost never gives guidance that avoids 10-20% dips in the market. If he ever does, then it is usually AFTER the fact.

Brinker's usual M.O. is to wait until one of his famous "gifthorse" buying opportunities presents itself, then he will recommend that people buy, buy, buy.

The only thing wrong with that plan is if one is already fully invested as the market drops, one doesn't have any money to buy the stoopid "gifthorse" because you just rode it down. smile (Of course, some people might have new money, but that is more the exception than the rule, IMO.)

-- posted by honeyoneohone

Top 508. Feb 17, 2006 6:08 PM

» allancoleman - I went to 98% cash today.

In response to I went to 98% cash today. posted by mrs1123:

congradulations on your independent decision mrs1123 . i reached your asset allocation a couple months and a few S & P 500 points less than the market's present level .

and honeyoneohone is correct that bob brinker's model does not account for market dips . also agree with you there is plenty of time before year's end to catch a rally .

-- posted by allancoleman

Top 509. Feb 17, 2006 7:21 PM

» honeyoneohone - I went to 98% cash today.

In response to I went to 98% cash today. posted by allancoleman:

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Hi allancoleman,

Are you expecting just a pullback in the 10-20% range, or are you leaning toward thinking that Brinker may be staying with this "cyclical bull" market a little too long?

"Years end" seems quite a long time frame to wait for another buying opportunity--don't you think?

-- posted by honeyoneohone

Top 510. Feb 17, 2006 7:39 PM

» allancoleman - I went to 98% cash today.

In response to I went to 98% cash today. posted by honeyoneohone:

hello honeyonehone ,

i don't personally feel the market will pullback in the 10-20% range . and if we do get a pullback that deep , i may buy back in . but , of course my crystal ball isn't as good as Normxxx's or Bob Brinker's . however i do feel we are ' range bound ' for awhile and feel it will take a move beyond the 1310 level in the S & P 500 to carry us into another substainable move to the mid 1300's and beyond .

i do agree with your assessment that bob may be too bullish . and although " Year's end " , may be a long wait for some , but i've learned to accept what the market gives me . that and the fact that i'm presently sitting in over 4% to 6% fixed income assets and spending / withdrawing less than 4% of my asset base . so that assures me of growing my critical mass . always a ' cat bird seat ' to be in . smile . wouldn't you agree . ?

-- posted by allancoleman

Top 511. Feb 17, 2006 9:38 PM

» mrs1123 - I went to 98% cash today.

In response to I went to 98% cash today. posted by honeyoneohone:

I like your question about a pullback
in the 10-20% range. Even though you didn't address it to me I have to open my mouth about it.

I don't have a sense of where the market is going at all. For me running from the market was about protecting gains. Yes I would hate to miss a run up. But I know that gains evaporate much quicker than it takes to build them. Risk tolerance really does seem to change with the money one has. Obviously if one has $10,000 they don't want to go to cash because the rise on principal from interest is very low. But if you have $100,000 the money from interest will be greater and it is easier to justify escaping the risk of an uncertain market and be accepting of the interest only gains.

"Years end" doesn't seems like a long time frame to wait for another buying opportunity if you have lived through the many rocky summers when you saw the market stay flat or retreat. Also if you jumped in later in the year and had big gains collecting 4% gains while you wait isn't really that terrible.

I guess it really depends if last years gains were that of a minimum wage job or were enough to support a family of four in how you position yourself in the market this year.

-- posted by mrs1123

Top 512. Feb 18, 2006 8:25 AM

» honeyoneohone - I went to 98% cash today.

In response to I went to 98% cash today. posted by allancoleman:

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Hi allancoleman,

Thank you for your commentary. As I told our friend, Mrs1123, it's good to get various opinions of people who respect Bob Brinker and see how much they really do follow his recommendations.

Yes, Bob is definitely very bullish right now, and for those who do not care about a 10-20% fluctuation in the market and trust Brinker's recommendations completely, it would probably be a good idea to stay fully invested. (Note the TWO very big qualifications there.) smile

In the February 2006 Markettimer, Brinker makes the following statement about "outliers" and his market forecast:

"The outlier scenario is important, because if the current cyclical bull market is an outlier, that would mean it could extend well beyond the typical timeframe of up to approximately three years for such cyclical bull markets. If that occurs, and we think it is quite possible it will, then we would remain fully invested in concert with our stock market timing model remaining bullish, without regard to the length of the cyclical bull market.

BTW: How does the world look from up there in that "cat bird seat" anyways? I've never quite managed to sit myself in one? smile smile smile

-- posted by honeyoneohone

Top 513. Feb 18, 2006 8:47 AM

» allancoleman - I went to 98% cash today.

In response to I went to 98% cash today. posted by honeyoneohone:

hi honeyoneohone ,

it feels very good being in the ' cat bird seat ' with regards to my critical mass . ensures that i won't ever need to budget during my retirement . at least if i can control my greed and keep a prudent eye on risk . i agree with mrs123's opinion that the more critical mass you have , the lower one's tolerance for risk becomes and the lower your stock asset allocation . also helps to have a ' zero ' debt policy . that really helps on the retirement budgeting . just leaves pizza smile and a couple flights a year to hawaii to pay for .

also means later , after a few more major expenditures like possible new vehicles ( ? ) , etc ; that i'll probably be able to start a gifting program . course at my present age of 61 , i'm aways from that yet . still have maybe 30 more years of retirement expenses and a few more down markets to plan for yet .

my biggest priority now is to follow bob brinker's advice to ' focus on your health ' after achieving critical mass . probably the best 'no brainer ' advice he ever gave out . and certainly surfing every day in hawaii and walking 5 to 10 miles a day in alaska & hawaii really assists me in that goal .

-- posted by allancoleman

Top 514. Feb 18, 2006 9:01 AM

» Kirk - I went to 98% cash today.

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In response to I went to 98% cash today. posted by allancoleman:

Your trouble will probably be spending enough.

I made 65% in my overall stock plus bond portfolio in 2003, 0.5% in 2004 and 14% last year. THis year I'm up about 4% already. I'm way, way above where I was when I left a job in 1998 yet the bear market jitters (2000-2002) has me only spending at 3.5%... where extra newsletter and consulting income covers the rest of my spending. I wonder if I should be spending more, say 5%, given my long term success and high probability I can continue to do well. I just found the median price for homes in my town went over $2M! All those Google billionaires must be buying homes... so I think my house is a great backup that could be sold for long term care somewhere if I ever needed it... or even downsize or get a reverse mortgave if the 5% spend rate depleted my portfolio too much. I guess these are great "problems" to have and ponder.

REIT funds are up huge YTD... I guess higher rates means landlords can raise rents. Glad I added a REIT index fund to my portfolio a couple of years ago.

-- posted by Kirk