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Top 7012. Jan 13, 2001 12:19 PM

» David_Korn - Interpretation of Moneytalk Excerpt on QQQ

I plan on posting the entirety of the Interpretation I did a year ago - when Bob first announced on the radio that his timing model had changed. For now, let me wet your appetizer with a couple of comments about the QQQ comparing last year to the present. I think you will find it very interesting!

David K's Interpretation of Moneytalk, Financial Education, Helpful Links, Guest Editorials and Special Alerts. January 8, 2000 Edition

NOTE: THIS IS FROM ONE YEAR AGO!

BRINKER COMMENT: Bob noted that the Nasdaq 100 (QQQ) was up over 100% in 1999. Those stocks are trading in excess of 100 times earnings. What does that mean? Investors are paying in excess of 100 times estimated year 2000 earnings to own these shares. Is this reasonable under any scenario??? Bob decided to get a second opinion on the issue and went to a top investment analyst at one of the large brokerage houses (he didn't give the person's name). Bob asked this person what is a reasonable, acceptable price to earning multiple on a stock or index of stocks based on a sustainable growth rate of 30%--which is a very fast growth rate that very few companies maintain. Answer? 60 times Price to Earnings multiple which is two times the growth rate. Here is where it gets interesting. If you applied a 60 times PE to QQQ, it would be trading between 100 and 105. Where is QQQ trading now? It closed Friday about 180!!!

EC: Amazing when you think about it. Here is what Bob said on last weekend's broadcast

From January 6-7, 2001 Interpretation

NOTE THIS IS FROM LAST WEEK!

Caller: What is the price-to-earnings or p/e multiple of the Nasdaq 100 or QQQ shares and how do you calculate it? Bob said based on the QQQ's price today ($56-5/8), the p/e multiple is about 63. Bob noted that there are only 100 stocks in the Nasdaq 100 index and it is a market cap weighted index, so the bigger companies have a greater effect on the index than the smaller companies. Bob takes the largest 30 largest companies in the index that are profitable, and takes the consensus earnings estimates for this year (2001) and then takes the average of those multiples which gives him the average p/e multiple. Bob noted that last March, when the Nasdaq was on steroids, the 30 largest stocks had the highest p/e multiple Bob had ever seen at 133 times earnings. Thus, the multiple is down more than 50% since that time frame.

EC: I went back and looked at the historical charts of QQQ. On March 27, 2000, the QQQs reached their zenith on a closing basis, at $117 per share. Today, QQQ stands at almost exactly 1/2 that value - a 50% decline brings the QQQ to $58.5. Now that was one heck of a short!

Click on this link to send me an e-mail:

DISCLAIMER: Do not construe anything in my service as constituting financial advice. In addition, this post is not a substitute for listening to Moneytalk. It is only my interpretation of some of what is discussed on Moneytalk, along with additional educational information that I include, editorial comments about the market, helpful financial links, guest contributors and even humorous remarks. If you want to know what was actually said verbatim on Moneytalk, listen to the show live. You can even listen to a re-broadcast of past Moneytalk shows on the Internet via the archives. The web site bobbrinker.com has all the links to the ABC Radio Network Stations that broadcast the show live and via the Internet. I am just a listener to Moneytalk and provide this service on my own volition. I am not associated with ABC Radio Networks, Moneytalk or Bob Brinker and this service is neither sanctioned by, nor written under the auspices of ABC Radio Networks, Moneytalk or Bob Brinker. This e-mail is simply my own interpretation of some of what is discussed on the show, along with educational information I provide that I think is useful to help better understand financial issues. There are also editorial comments, useful links and contributing editors. I am also a frustrated writer and comic and try to weave humor throughout. You should not rely on any statement made in David K's Interpretation of Moneytalk, Educational Links and Other Financial Information as constituting financial advice.

-- posted by David_Korn

Top 7013. Jan 13, 2001 12:30 PM

» walkerman - Re: Re: Re: Re: Re: Re: Your comments to Rande

In response to message posted by Rande:
rande...character assasination, stalking, anonymous attacks, etc. etc. Yes, I see a lot of that here, and it's mostly directed at Brinker. Imagine, an entire thread dedicated to bashing Bob. What a concept. And, if one has the notion of sticking up for Bob, you are compared to a Jim Jones follower.

-- posted by walkerman

Top 7014. Jan 13, 2001 12:37 PM

» walkerman - Re: Re: Brinker's Record

In response to message posted by ACousins:
AC...are you still paying him for advice? If not, why not just drop the bashing and move on with your life. Or, is it that in reality, you have no real life aside from bashing Brinker? Or, could it possibly be that you believe that you know more than him, and can come here and give better advice? Do you think that you, by bashing Brinker, are saving some poor, unsuspecting souls, from ravaging their life's savings, by warning them about Brinker. God, that is pathetic. It's also a real hoot.

-- posted by walkerman

Top 7015. Jan 13, 2001 12:40 PM

» shallam - Thanks to David Korn

Thanks David that was a very interesting post. Interesting to note that BB often doesn't say things but implies them instead. He implies that a reasonable p/e is 60. Would have been more convincing if he directly said this is what I believe. Nevertheless, an interesting post.

-- posted by shallam

Top 7016. Jan 13, 2001 1:04 PM

» SteveT - Re: Interpretation of Moneytalk Excerpt on QQQ

In response to message posted by David_Korn:

I have one question, IF 60 was a reasonable P/E what would have been the P/E when the buy immediately was sent out? Around 94 or so give or take a little. So why didn't he wait to issue the buy call around $58.5 instead of $83??????

-- posted by SteveT

Top 7017. Jan 13, 2001 1:18 PM

» Trader4300 - Re: Re: Re: Brinker's Record

In response to message posted by walkerman:

W-man - You may be hurting ACousins feelings when you use the term "bash", as he has strong feelings against that term. Perhaps the term "Slam" might be better.

-- posted by Trader4300

Top 7018. Jan 13, 2001 1:34 PM

» Rande - Re: P.S.

In response to message posted by Centigrade233:

Centi,

You said,"He is only one very minor player in a very large network of data exchange among the professors and students. He should see what they are saying about him at the Wharton school if he really wants to be upset! Generally, the academic community is dominated by economists who laugh at market timers and write research papers on the subject of why market timing doesn't work."

Obviously, those Wharton guys are just jealous and have some bizarre kind of axe to grind with Brinker. Maybe they should just shut up and show us their portfolios instead of getting on the academic intranet and bashing poor Bob 24/7.

-- posted by Rande

Top 7019. Jan 13, 2001 1:36 PM

» Erik75 - Re: Re: Re: Brinker's Record

In response to message posted by walkerman:

AC...are you still paying him for advice? If not, why not just drop the bashing and move on with your life. Or, is it that in reality, you have no real life aside from bashing Brinker?

Walkerman, It looks like you're a more prolific poster than Acousins. You must have less of a life than he does.

At the least AC is objecting to a poor product with poor customer service, you're just objecting to people objecting about a poor product with poor customer service.

What you call Brinker Bashing serves a purpose, it warns others to look very carefully at Brinker's advice before the unwary follow it.

-- posted by Erik75

Top 7020. Jan 13, 2001 1:37 PM

» DanG_6 - Re: Re: Interpretation of Moneytalk Excerpt on QQQ

In response to message posted by SteveT:

Steve T,
Because his counter trend rally trades are based on technical conditions, not fundamentals.

-- posted by DanG_6