Robert Drach - Nightly Business Report Market Monitor

» Rande - Robert Drach pre-1995

The Nightly Business Report November 25, 1994

DRACH: I'm 75 percent cash. I want the Dow Industrial to crack because if the Dow Industrial cracks, the Fed, I doubt, will raise rates again. There'd be too much...they're going to be the whipping boy. If rates invert, the public's mad because their perception's...

KANGAS: And what's your guess? Will the Dow crack? Will it really get hit further?

DRACH: Yeah.

The Nightly Business Report July 1, 1994

KANGAS: You have been one of our biggest bears. It's coming up on two years and actually you started shorting the market back in the early part of '93 when the Dow was 3310. And we've seen it go to 3978. Do you feel like you missed out on 600 points?

DRACH: No. No, not really.

The Nightly Business Report April 30, 1993

DRACH: But in the stock market there is no question, statistically that it's fundamentally overvalued by 20 percent. Even adjusting for lower rates. We've had this massive inflow from the public that by massive record-breaking selling supply from the corporation sector.

The Nightly Business Report January 29, 1993

ROBERT DRACH (Publisher, "Drach Weekly Research Report"): Good to see you again, Paul.

KANGAS: You know, I've really been looking forward to this interview with you, because whereas practically everybody in recent times, that I've interviewed, has been super bullish. The market's been doing, I guess, okay. You have been decidedly bearish, actually since late '91. On this program in January of '92 you recommended shorting the big drug stocks like Merck. You got profits on those. Your last visit with us July 17th, you said short Disney, Kellogg, Coca-Cola and Wal-Mart. There were times when you have profits on all those on the short side, but now you've got losses. What are you doing about this?

DRACH: We have losses in some of them. One thing, I guess, we should mention is we're covering the drug stocks…. But the one thing that's changed since we met in July is that the speculative excesses, the standard measurements are growing dramatically. For example, the margin debt. At this point, the level of margin debt is only second to what it was in its record period in September of '87. So, a lot of people borrowed money to buy stock at inflated prices. Heavy volume, especially on the NASDAQ, these are classic warnings signals. I don't know how long it's going to last, actually, because this frenzy could just feed off itself for a while, but eventually it will break, because it never has not broken.

-- posted by Rande

» Kirk - Re: Robert Drach pre-1995

Good find Rande. So he was shorting in 1993 and 1994 and lost money so he is only now making it back up.

I guess it shows how different styles come and go in and out of favor and most every style or market timing will look brilliant for some periods and terrible over other periods.

What would really be interesting is to see a long term model portfolio for him.

Some guys might have wretched years followed by great years where they make it back... of course, the boat anchor of taxes and transaction fees should be examined. Drach seems to have a high turnover where he rides his losers down then back up and then takes profits or sells. It is an interesting strategy but I'd want to look further into it for any more than "fun money"... With the large amount of stocks he uses, you need to have a fairly large portfolio just to overcome transaction costs.

-- posted by Kirk

» Kirk - Positive Mention of Drach

http://www.thestreet.com/comment/techtak...

ExcerptItem #1: Gurus, Part I
As a few long-time readers know, I follow exactly zero market sages religiously. Mainly because I think forecasting the market is silly. In effect, "gurus" just don't exist.

That said, I do think there are some folks who have credible insights into the market, and I do read -- although not necessarily follow -- what they have to say.

In that vein, I subscribe to only one newsletter, and that's the one put out by Robert Drach, which I've discussed in a previous column.

-- posted by Kirk

» Slick - Re: Re: Robert Drach pre-1995

the boat anchor of taxes and transaction fees should be examined. Drach seems to have a high turnover where he rides his losers down then back up and then takes profits or sells

This was a very good point , Kirk, so I took the initiative , and wrote Mr. Drach:

Mr. Drach:

I am wondering if this type of strategy is worth it. Seems like it would generate a great deal of Capital gains tax unless you traded in an IRA account? Can you help me out by telling just how much capital gains you incurred last year ?

and his not unexpected response this AM was :

There is no way any duplicated publication can fully serve individual goals, resources, objectives.

Tax considerations deferred/exempt/full/to offset previous losses/etc. would involve thousands of permutations and according script.

If you would like a complimentary package bringing you to date on the current analysis and background information please provide a regular mailing address. It is too bulky for email.

Bob Drach ....His email address is:
DrachMkt@aol.com

Slick

-- posted by Slick

» Joey86 - Drach's latest call?

-- posted by Joey86

» Kirk - Complete Trading History of All Concluded Positions

http://www.nbr.com/drach/drach2.html

Anyone see where to get his open positions?
I don't even see where to subscribe.
strange.

-- posted by Kirk

» Q_out - Re: Complete Trading History of All Concluded Positions

His open positions are listed in the middle of that big long page. Here they are:

Current Open Positions (by purchase date)
                                          Purchase        Current
Date        Shares   Corporation            Price           Price
7/10/98    2,587    ConAgra Inc.             25 7/8         26.16         
1/8/99     3,992    ServiceMaster            20 7/16        11.00    
4/20/00    1,991    Gap                      38 3/4         15.82
8/18/00    1,625    Home Depot               51 3/8         21.47  
11/10/00   2,209    Hewlett-Compaq           39.125         20.48
12/8/00    2,463    Paychex Inc.             46.875         29.06
1/5/01       949    America Intl. Group      87.875         62.40
2/2/01     3,336    McDonald's Corp          29.43          16.87
2/16/01    2,380    Schering-Plough          41.25          23.06
2/23/01    4,858    Schwab(Charles)Corp.     20.32          12.10
7/20/01    1,993    General Electric         46.63          25.90
7/27/01    3,816    Hewlett-Compaq           24.36          20.48
1/4/02     1,694    Merck & Co.              58.89          59.78
3/8/02     7,949    Casey's General Stores   13.09          12.40
3/15/02    7,715    Casey's General Stores   13.19          12.40
4/5/02     1,782    Emerson Electric         57.08          51.97
4/12/02    1,496    General Electric         33.55          25.90
5/10/02    3,629    Synovus Financial        25.91          20.73
5/10/02    2,022    State Street             46.50          40.19
8/9/02     6,835    Total Systems Svcs.      16.10          14.97
12/13/02   7,347    Dollar General           12.49          12.65

For contact information take a look at http://www.nbr.com/drach/default.htm

<img src="/files/mysites/qout/bhoestarts.gif" width=53 height=34 align="left">
Q_out
DISCLAIMER: My words and observations are general in nature, and are not meant as specific investment advice. Individuals should consult with their own advisors for specific investment advice.

-- posted by Q_out

» Kirk - Re: Complete Trading History of All Concluded Positions

Thanks
I recoded for size=3

Current Open Positions (by purchase date)
                                          Purchase   Current
Date        Shares   Corporation            Price     Price
7/10/98    2,587    ConAgra Inc.             25 7/8   26.16         
1/8/99     3,992    ServiceMaster            20 7/16  11.00    
4/20/00    1,991    Gap                      38 3/4   15.82
8/18/00    1,625    Home Depot               51 3/8   21.47  
11/10/00   2,209    Hewlett-Compaq           39.125   20.48
12/8/00    2,463    Paychex Inc.             46.875   29.06
1/5/01       949    America Intl. Group      87.875   62.40
2/2/01     3,336    McDonald's Corp          29.43    16.87
2/16/01    2,380    Schering-Plough          41.25    23.06
2/23/01    4,858    Schwab(Charles)Corp.     20.32    12.10
7/20/01    1,993    General Electric         46.63    25.90
7/27/01    3,816    Hewlett-Compaq           24.36    20.48
1/4/02     1,694    Merck & Co.              58.89    59.78
3/8/02     7,949    Casey's General Stores   13.09    12.40
3/15/02    7,715    Casey's General Stores   13.19     2.40
4/5/02     1,782    Emerson Electric         57.08     1.97
4/12/02    1,496    General Electric         33.55    25.90
5/10/02    3,629    Synovus Financial        25.91    20.73
5/10/02    2,022    State Street             46.50    40.19
8/9/02     6,835    Total Systems Svcs.      16.10    14.97
12/13/02   7,347    Dollar General           12.49    12.65

Stranage system. He says he usually sells when he gets 10 or 20% gains, but he sure isn't opposed to holding for a 50% or more drop. I guess he figures his research for the companies is good and so he'll buy more much like I do. He's worth following if you can figure him out as he has impressive results but he'll never be known as a great communicator. Maybe he is shy on TV?

  Date       Kirk    S&P500   Delta
2003 YTD    +23.5%    10.2%   13.3%  as of 5/31/2003 
 
                              Kirk   S&P500+   NASDAQ 
4+ Yrs 12/31/98 to 05/31/03   89.4%  (17.3%)   (27.2%)
+with dividends reinvested.

-- posted by Kirk

» Q_out - 75% Invested Position

A recent sale has been Casey Stores (CASY) which he rode through a 26% drop to finally sell for an 11% gain. Trading with this guy requires a tolerance for risk. http://www.nbr.com/drach/drach2.html

<img src="/files/mysites/qout/bhoestarts.gif" width=53 height=34 align="left">
Q_out
DISCLAIMER: My words and observations are general in nature, and are not meant as specific investment advice. Individuals should consult with their own advisors for specific investment advice.

-- posted by Q_out

» SteveT - NBR

Total Positions 261 Average Position
Profit 243 (93.10%) Percentage + 10.01%
Loss 18 ( 6.90%) Days Held 151
Even 0 ( 0.00%) Annualized + 24.20%

Relative performance since portfolio initiation (5/5/95)

This model portfolio + 198%
Dow Industrial + 109%
Nasdaq Composite + 93%
S&P 500 + 89%
http://www.nightlybusiness.org/

His interview with Paul

06/27/03:"Market Monitor" - Robert Drach, Editor & Publisher of the "Drach Weekly Research Report"

PAUL KANGAS: My guest "Market Monitor" this week is Robert Drach, editor and publisher of the "Drach Weekly Research Report." Welcome back to NIGHTLY BUSINESS REPORT, Bob.

ROBERT DRACH, EDITOR, "DRACH WEEKLY RESEARCH REPORT": Thank you, Paul.

KANGAS: I see by your latest weekly report that you have a negative rating on the current U.S. stock market. Does that mean we're still in a bear market?

DRACH: Not necessarily. But let’s briefly back up to the first of the year when we spoke. The January rally was not sustainable. And the easy entry points statistically were early to mid-February. And the subsequent rally since then has very likely run its course which means the focus needs to change to individual stocks rather than thinking the popular averages are going to salvage it.

KANGAS: Well, back in early January, when you were last with us as a "Market Monitor," you gave us seven recommendations: Home Depot (HD), GE (GE), McDonald’s (MCD), Automatic Data (ADP), Total System Services (TSS), UST (UST) and Philip Morris (MO). Six out of these seven are higher. The only one lower, Automatic Data, only by 3 points. Some great calls there, do you still own them or have you taken some money off the table?

DRACH: We move them around like on the side – but yes, we’ve taken money off the table in the overall hardcore timing. But we move them around. If they get overly overpriced, we’ll take them out and switch to something more discounted.

KANGAS: Well, you know, you have been managing our basic timing model portfolio on the NBR Web site since May of 1995. And we have a graphic showing how successful you have been in your management of that little basic timing portfolio. Your Drach portfolio is up 198 percent compared to the Dow, 109 and then smaller gains by NASDAQ and the S&P 500. And then let's look at the number of stocks that you have owned during that time. You have taken 261 positions, 243 have been profitable and only 18, and none even. That's a great record, Bob, I congratulate you.

DRACH: Well, keeping at a higher win ratio is very important because it helps maintain your capital base. So that's the first thing we look for. And then to do that the easiest way is to stay with high quality discounted stocks, a very basic, simple approach but it does quite well.

KANGAS: It certainly seems that way. Now are you looking to buy any stocks now that are different from the ones I just mentioned or do you still like all of those?

DRACH: No. We'll switch a bit. And it's always updated on the site which is archived daily, most of it. But now, you know, they hate new ones now. They hate Freddie Mac (FRE), for example. So we’d go there, Federal Home Loan, FRE, known as Freddie Mac. Avery Dennison (AVY) is certainly hated now.

KANGAS: Yes, that was under pressure earlier in the week.

DRACH: So, yes, we took them…

KANGAS: Well, you – just as an example, the last you were with us in January, McDonald’s was on everybody's sell list and said, that’s good enough for me, buy it.

DRACH: Yes. That was on everybody's hate list. Mad cows and everything else. But you understand the higher quality ones and really looking for market dysfunctions. There is not as many now because the market is elevated.

KANGAS: Right.

DRACH: But you could go a little bit deeper, maybe State Street (STT), Synovus Financial (SNV), and I think GE is still discounted.

KANGAS: OK. Now do you or your interests own all of these stocks that you mentioned or no?

DRACH: No, we use this as a modeling. There is far more refined analysis we use for other things.

KANGAS: OK. So you just stay in those stocks that have been overly discounted but they have to be high-quality companies?

DRACH: Oh, absolutely. But then when they become – when they elevate, something else can take their place. It’s a rotational process.

KANGAS: Well, how do you determine – what are the criteria for – which ones do you select?

DRACH: Well, we want to stay with the higher quality stocks, A…

KANGAS: Yes, but what is high quality to you?

DRACH: Well, you can stay with, I would say, anything A or A-plus with Standard & Poor and probably in the upper 15 percent of ValueLine, with earnings predictability. That can give you kind of a measure. But they rotate constantly. So the advantage is taking advantage of rotation. When they’re down, they go up, something else will come down. You just move them back and forth.

KANGAS: So when they get a little overpriced, out you go, and then you look for those that have been discounted.

DRACH: The whole concept is wholesale to retail, using stock as inventory, very simple.

KANGAS: All right. So there's still money to be made in this market, just don't pay attention to the basic averages.

DRACH: Yes. I would say with the caveat that – well, they are selected. If they watch the site, we may have to switch position more rapidly now.

KANGAS: OK. All right. Bob, thanks very much for being with us.

DRACH: Thank you very much, Paul.

KANGAS: My guest "Market Monitor," Robert Drach, editor and publisher of "Drach Weekly Research Report."

-- posted by SteveT