Analysts, Gurus &amp; Pundits

Top 52. Jan 5, 1999 8:25 PM

» Holden - Re: Is Barton Biggs a clown?

I have been intending to write about Barton Biggs for some time, but have not gotten around to it. Every time I read his name I mutter something not suitable for family viewing.

Biggs represents the old guard of investing and is the kind of Wall Streeter who would give Jay Scott nightmares. Barton is all pedigree and no talent. As far as he is concerned, it is fine for the little people to make some money in the markets, just not too much. And clearly they have made too much. Biggs often lowers himself to talk to common people like Alan Ableson of Barrons. He does this only because Ableson is also a bear and is one of the few left who hold Biggs in reverence.

Biggs is Chairman of Morgan Stanley Asset Management as well as Morgan’s Director of Global Research. His big claim to fame was that he was an Emerging Markets expert when no one else was. Not that his expertise prevented his clients from losing money there! That “expertise” was parlayed into global expertise. Since he was a partner at Morgan, they can’t get rid of him (if they, indeed, want to) So instead, Byron Wien speaks for the bullish camp within Morgan. And, of course they merged with Dean Witter to better deal with all the little people.

Biggs has been bearish on the U.S. for as long as I can remember. First he predicted inflation and higher interest rates and when that scenario did not play out he moved to the current deflation/recession scenario. He salivated over Russia’s defaults and has been looking for a collapse in Latin America. He has flip-flopped so many times on Asia (currently bullish, I think) that he makes Prudential’s Ralph Acampora look like the Rock.

What makes Biggs stand out from others (bears or bulls) is his contempt for individual investors. He trades for his personal account, the Morgan Stanley funds that he is Chairman of--funds like Morgan Stanley Asia, Africa, Emerging Markets, etc. The only humorous aspect of his trading is that he consistently seems to buy and sell his own funds at the wrong times. It is evidently legal though frowned upon by many as Barrons reported recently.

When you see Biggs on television or read his views in print (like this, for example), there are two things to remember: 1) that Biggs has taken the other side of the trade, and 2) that Biggs has consistently been wrong.

Kirk, the answer to your question is that while Biggs is a bear, he is above all a clown. Therefore, I think it would be more appropriate that Jen find a clown rather than a bear to portray Mr. Biggs.

Holden

-- posted by Holden

"The Clown Bear" - Mr. Barton Biggs

Top 53. Jan 7, 1999 10:59 AM

» JenL_3 - "The Clown Bear?"

Kirk & Holden - How about this?:

I like Holden's Barton Biggs introduction. If you all agree, will add this new Bear to the Honorary Bear sub-list....J.L.

-- posted by JenL_3

Top 54. Jan 7, 1999 11:40 AM

» Holden - ROFL@Barton

Jen—

It couldn’t be more perfect! Thanks for the good laugh.

Holden

-- posted by Holden

Top 55. Jan 8, 1999 9:10 AM

» Holden - Abby Vs. Ralph

Its OK to be wrong, just don't be wrong for long!
...An old axiom on Wall Street

January 8, 1999: 8:31 a.m. ET

NEW YORK (CNNfn) - In dramatic juxtaposition to
moves by another influential market guru, Prudential
Securities' Ralph Acampora Friday advised investors to
stay aggressive in stocks, saying that the market is
riding a once-in-a-lifetime bull trend.
"I'd be 100 percent fully invested in equities," the
chief technical analyst for Prudential said in an
interview on CNNfn's "Business Day." "I would be
buying banks today. I would be buying computer stocks.
I would be buying low depressed Dow stocks like
Boeing (BA) and Sears (S), 3M (MMM) and DuPont
(DD). There are an awful lot of names."
Acampora's comments came one day after another
market guru, Abby Joseph Cohen of Goldman Sachs,
cut her recommended stock position.
"Abby's done a great job," Acampora said. "I think
she's fine-tuning it a little bit."
Acampora reiterated his conviction that the Dow
Jones industrials could hit 11,500 during the upcoming
year before slipping back to slightly under 10,000 by the
end of 1999.
Not only will 1999 be the third year of President
Clinton's term in office -- historically the best year in the
presidential cycle for stocks -- but Acampora said that
the market has already factored in a lot of the gloom
that now hovers over traders.
"We had a bear market last year and that discounted
a lot of the negatives people are talking about," he said.
"Would you be surprised if Brazil devalued? I wouldn't
be surprised. Would you be surprised if there were a
problem with Russia? I wouldn't be surprised."
Acampora noted that "the bull market is only 3
months old. . . . We're in the early stages of something
that's going to last a long, long time."
Although he anticipated some concern over the Year
2000 computer problem, Acampora also said he still
stands by the technology sector -- particularly the
big-cap industry leaders -- as the primary engine of the
renewed bull market.
"The IBMs (IBM), the Microsofts (MSFT), the
Compaqs (CPQ), the Intels (INTC). Go for it," he said.
"This market is just bubbling up from underneath. I'm
not saying sell your house…but be aggressive."
However, despite his apparently insatiable zest for
buying, Acampora discounted the recent Internet sector
run-up.
"That's one sector in the market that I would really
worry (about)," he said, referring to recent explosive
gains in such stocks as Amazon.com (AMZN) and
eBay (EBAY). "I think that's just a short-term
phenomenon in that sector."

I know which horse I will be betting on.

Holden

-- posted by Holden

Top 56. Jan 8, 1999 9:38 AM

» KirkL - Amazing.....

I wonder what BB will target the market at? He usually goes in small increments. I remember his talking about recoveries from "off presidential year elections" and how this could be one of the best ever. I calculate an average recovery or bull run of 50% from the correction low (newsletter numbers from awhile back). $7539 x 1.5 = $11,308 !!! Newsletter "magnitude of advance following decline" numbers range from 22% in 6 months to 92% in 28 months. (Sept 98 Newsletter).

I believe Ralph might be right on for his prediction of a huge run followed by a good sized correction. Still,the market is more risky now than when it was at 8500 and will continue to get riskier as it goes higher unless earnings follow.

Pulling just a bit as risk increases allows you to still participate in the rally, but to have good cash available if there is a correction. When earnings catch back up, you can alway put the $ back in, but you should be pulling anyway just to maintain a constant asset allocation in a rising market.

I like to see Abby and Ralph in agreement. Even Ralph said Abby was just "fine tuning" an already agressive position.

-- posted by KirkL

Top 57. Jan 10, 1999 8:11 AM

» Kirk - Elaine Garzarelli Speaks

Elaine is still bullish. Read her words Here

" We remain bullish, as all major U.S. stock indexes set new highs this week. Our indicators signal a continuing bull market with limited corrections. "

Kirk's reminder: This is no time to be overly agressive in asset allocation. Check it today and pare back to the appropriate level so you can sleep at night if we have a correction. Corrections usually come when everyone is bullish. Even if only 10%, it would be nice to have some funds to buy on the dips!

-- posted by Kirk

Top 58. Jan 10, 1999 9:12 AM

» JenL_3 - Garzarelli.com

Kirk - Thanks for the "Lady Elaine" article. She does indeed sound bullish now. Noticed a link in the article to her own website Garzarelli.com. That's a good place to keep track of "Her Ladyship"......J.L.

-- posted by JenL_3

Top 59. Jan 12, 1999 10:39 AM

» Kirk - Motley fools or Bob Brinker?

Marketimer @ $185 per year since 1994 or 5x$185 = $925 bought a gain of 72%

Motley Fools Portfolio since 1994 = 10x gain! Price? A book or two and follow their website.

It is hard to argue with numbers though I was throwing bricks at the Fools like many others. Were we, the grizzled ones, wrong? Of course we were! My portfolio saw much more than BB's, maybe 4 or 5 times gain, but this is still HALF of what the fools provided for their followers!

Can you live without this book?

The Motley Fool's Rule Breakers, Rule Makers : A Foolish Guide to Picking Stocks By David Gardner & Tom Gardner

Read more about it, or even buy it, here: http://www.amazon.com/exec/obidos/ASIN/0... (this gives me the commission rather than them but they still get royalties)

I just got email from them today announcing it. As foolish as they seem, their portfolio in 1998 CREAMED the stock market and their picks like AOL and Yahoo sure creamed our favorite stepper company. Interesting comparison, really. You have good advisors saying to stick to good asset allocation while the "new fangled kids" come up with portfolios that make tons of money for people that follow them. Until the market for internuts crashes, as we all think it will, these types of people will take clients away from good advisors.

Ask yourself, would you rather pay $185 for portfolio 3 which did about 10% last year for follow these guys for the cost of a book and surfing their website?

From their email: "The Rule Breaker Portfolio finished 1998 up 199% versus S&P 500 gains of 29%, and has turned an initial $50,000 investment in 1994 into more than $580,000 today. It and the Rule Maker portfolio make common stock investing a heckuva lot more rewarding than buying a mutual fund."

We all have to admitt, they really did well.

By comparison, Portfolio #1 of BB's was worth $44,803 on Dec 31, 1993 and is worth $77,195 as of Nov 28, 1998 (I don't have the latest numbers.....) Lets see 10x gains vs 1.7x.... tough choice for most.

Maybe this explains the market blowout as many are converting to portfolios that don't make good investment sense? Who knows?

http://www.fool.com/portfolios.htm shows their portfolio for 1999 is up 27% already!

For the record, I plan to stick to my portfolio, but maybe the Fools should make their own mutual fund?

-- posted by Kirk

Top 60. Jan 12, 1999 11:01 AM

» Kirk - The Fools Great Stock Picks:

Exerpt from Chapter 1: of The Motley Fool's Rule Breakers, Rule Makers : A Foolish Guide to Picking Stocks By David Gardner & Tom Gardner

While not every Rule Breaker will beat the market, most (in my experience) do, and they often do so magnificently. Look at the early stock performance of these classic Rule Breakers (all of which we'll be learning more about) and you'll see what I mean: America Online, Amazon.com, Amgen, Apple Computer, Cisco Systems, Iomega, McAfee, Microsoft, Nucor, Starbucks, Wal-Mart, Whole Foods Market, and Yahoo!. Ten-baggers all (these are stocks that have risen in value at least ten times), and some of them--the ones that have gone on to become Rule Makers--have made more than several hundred times one's initial investment.

To close, it's not surprising that the stocks we bought despite their breaking of our previously published dicta have wound up being our best ones. That's really the way it should be. If you're going to break your own rules, you better be justified in doing so! We thought then, and know now, that we were. But it's been very valuable to reexamine these various companies and identify the six attributes they all share, attributes which have contributed directly to their success on the public markets, and the riches they have created for their shareholders. I hope that in conceiving of this model, I have helped readers think in original and profitable ways, and contributed something new to investment literature.

Hmmmmmm. Maybe this is the next book I'll read. I've added it to my booklist in case others want to buy it.

-- posted by Kirk