THREAD IS CLOSED! --- Bob Brinker Free Discussion Site 11K+

Top 5094. Jan 2, 2001 10:43 AM

» Kirk - Re: Not the same

In response to message posted by ACousins:

Firestone is liable if they KNOWINGLY kept dangerous products on the market. Brinker gave the best advice he thought possible at the time it was given (I hope for his sake!)... He would ONLY be in big trouble if he shorted QQQ and then told you to buy.

So, why don't you sue Mary Meeker, Henry Blodget and CNBC for saying PCLN, EBAY and Yahoo! were great buys when they were much higher? I own MANY stocks that were getting upgrades from analysts when they were twice as high or even more. They didn't put a gun to my head and make me buy.

-- posted by Kirk

Top 5095. Jan 2, 2001 10:46 AM

» Rande - Re: Re: Not the same

In response to message posted by Kirk:

Actually, I think Firestone would be liable whether they knew or not. Negligence in producing defective merchandise that turned out to be the proximate cause of harm or damages would probably do it. Now, throw in "knowingly," and you probably have yourself a case of gross or criminal negligence per se. If you could prove it.

-- posted by Rande

Top 5096. Jan 2, 2001 10:46 AM

» Mark_J - Doing the math

What is 30% of dry powder? And how has the QQQ loss affected you?

For a $100,000 portfolio split 70-30 between equities and fixed income, $70,000 would be in the equity portion, and $30,000 in the fixed portion (ie, GNMA).

Of the $70,000 in equities, 65% would be in "dry powder" money market funds or $45,500. The other $25,000 would be in a broad index like the Wilshire 5000 and a little international.

The 30% of "dry powder" for QQQ would be equal to $13,650. The remaining $31,350 would be in money market funds.

Lets recap the current situation for this conservative investor:

- $30,000 in GNMA
- $25,000 in Wilshire 5000 and international
- $31,350 in "dry powder" money market funds
- $13,650 in QQQ

The QQQ is down roughly 30% from the buy point for most folks. That represents a loss of $4095, rougly 4% of one's total portfolio. The other equity portion in the W5000 and international also lost money in 2000. But the GNMA and money market funds made money.

If the goal in Year 2000 was to "preserve capital" certainly this allocation mix did the trick.

This was for an investor with a 70-30 split. Those with more conservative bents preserved more capital then those who were more aggressive in 2000. No doubt about it.

No spin in these numbers. No hero worship. No arguments whether it was right or wrong to attempt to time the market in January, May or October. Also, not reflected are any tax consequences from the January sale or the summer QQQ profit; or any tax selling/rotation done in December.

I hope all preserved their capital in 2000 and are ready for whatever comes our way in 2001.

Happy New Year!!!

-- posted by Mark_J

Top 5097. Jan 2, 2001 10:48 AM

» Mark_J - another thought

So, with that $4095 loss as detailed above, in a $100,000 portfolio, if you want to take Brinker to court to recoup your loss in a year when the Nasdaq was down over 30% and the SP500 over 10%... Good luck!!!

-- posted by Mark_J

Top 5098. Jan 2, 2001 11:01 AM

» ACousins - Re: Re: Not the same

In response to message posted by Kirk:

Sorry, Kirk I still have to disagree with you on this point. I don't think Firestone had to be deliberate in order to be found liable. Negligence (failure to have good QA, design flaws, etc.) to produce a reliable product is also an issue.

You could have the best of intentions but still mess up and cause harm.

Say that I wanted to go into the business of making ladders out of popsicle sticks. I'm not too bright but I have a 100% conviction that this is a great idea. I've made a ladder out of popsicle sticks, stood on it for a minute and it didn't collapse.

I'm not too bright but I'm rich and I spend a lot of money on ads. I sell 100 popsicle stick ladders at $10 each today. Tomorrow, 100 of my ladders collapse causing great injury.

I didn't sell those ladders knowing they were dangerous. I'm not liable right?

-- posted by ACousins

Top 5099. Jan 2, 2001 11:03 AM

» DanG_6 - Re: BLASPHEMY !

In response to message posted by Centigrade233:

That's MUCH better, Centigrade233! I KNEW you could do it! :-)

-- posted by DanG_6

Top 5100. Jan 2, 2001 11:07 AM

» SLO219 - Hi all

Heh Gang,

I'm a refugee from the Brinker board and a victim of the QQQ fiasco. I'm happy to get into this board. I trust that it will be less vitriolic then the BB board.

Many BB adherents need help in recovering from this disaster. This would be a very useful function for this board. The Brinker board was full of postings from seniors who had faith in BB and put a significant portion of their assets in the trade. Assuming a $500K portfolio with at least a $200K to $300K cash position, many are in for over $100K. I'm sure that many seniors did not really understand their own risk tolerance or the nature of the Qs and they can't take a loss of $20K to $40K hit without a lot of angst. Of course, the loss is dependent on how they took the "immediately" message.

On the Brinker board, I posted my strategy. It consists of the following-

1. Use RYVYX (Ryder Velocity) to average down the position. This fund is designed to reflect 2X the performance of the Qs (DCA into this)
2. Use RYVYX (Ryder Venture) to protect against further downside. This fund is designed to reflect 2X the inverse performance of the Qs. (DCA into this)
3. Short selected tech high flyers (those with particularly egregious P/Es). I use RIMM, CHKP, BRCD, and others for this purpose.

I do think that we're overdue for a bounce in the Qs and if averaged down enough, I may be able to escape relatively unscathed. I think that the Nikkei in the early 90s is the best model for the NAZ. Thus, we're headed even lower in the future. BB got this part right. If we do not have a significant bounce from these levels, it will be a major departure from historical norms. Bear markets of the past have always had significant bounces on their way down. BB seems to be betting subscribers money on this phenomenon.

Friendly comments only?

-Slo219

-- posted by SLO219

Top 5101. Jan 2, 2001 11:11 AM

» Will_L - Re: Re: Re: Not the same

In response to message posted by ACousins:

I'm of the mind that anyone believing that some joker that sends you an unpriced, undated bulletin saying to get in the most volatile segment of the market "immediately" deserves what they get from that advice. However with 3 million dollar coffee spill etc. I would not be surprised at anything. I have a good friend who is an attorney--they hired a photagrapher to take some pictures of a machine in a product liablity suit. They needed the pictures blown up for a court appearance. The photographer had not done so and was on vacation. No one at his establishment could do the enlargements, so the attorney had the pics picked up from his studio and taken to another place for enlargement. Photographer got back from his cruise and sued the attorney under copyright laws. He ended up settling the case for 5 grand. Strange things happen when you get near a courthouse.

-- posted by Will_L

Top 5102. Jan 2, 2001 11:18 AM

» DanG_6 - Re: Re: Re: Why would you care what he thinks?

In response to message posted by Erik75:

Erik, I think that if every advisor who gave inappropriate advice were to be sued, we'd actually create a shortage of lawyers. I believe if you are managing someone's money for a fee, or are a broker and you talk someone into an inappropriate investment for a commission, then you could possibly be sued successfully (or perhaps win in arbitration). But newsletter writers?--I doubt it. Granville and Prechter have been putting out losing advice for years now, but I haven't heard of any successful lawsuits against them (though that's not to say someone hasn't tried).

-- posted by DanG_6