Replies to post #29037 on Value Microcaps Motherboard

[deathtotaxes]

lentinman: Brinker, If you just read his newsletter, you would think that you would have made a fortune following his advice in the past 8 months by buying every dip. But, if you are already fully invested - as he never said not to be, then how exactly did his average reader make a fortune in the past 8 months? They didn't - obviously.

I would suggest that the average reader has a continual trickle of money coming in for investment. Paychecks, social security, fixed income payments, rents etc. He is not about trading the market for short term gains. He is a long term timer, with a great track record. Not perfect, but a great timer for the average investor to follow. He never tells anyone that they will make a "fortune" in the short term. It is the people who have followed him for the long term who have done well.

I for one am very happy with the market beating returns for that portion of my portfolio which needs no research, attention or worry to any great degree. I like being able to buy 1,000 SPY without moving any bid's or offer's and then selling it 5 minutes or 5 months later without more than a 5 second delay.

I agree with your assessment of the markets future, just would rather get out closer to a top using very liquid stocks (etf's).

[RMIWA]

Len: Brinker

Interesting analysis, but you aren't giving him credit for the fact that he is assuming most investors have a steady stream of income to add to their position over time. I see his recommendations as "buying on dips" with new money and not necessarily dollar cost averaging all the time. As you know, he does not think highly of the "buy and hold" crowd. I expect the reason he doesn't call intermediate sell opportunities is because he knows that would completely confuse his audience, most of whom are not as knowledgable as the people who read this board. I think that is consistent with his mantra on not owning individual stocks, another thing most of us don't follow, and his contention that microcaps are pure speculation. Obviously, I do not follow his advice in most areas, but I find his analysis of the economy and direction of the market to be extremely useful. My perspective is that we are in for a small advance above the secular high and then I will start to re-weight my portfolio. If Brinker makes a call before that, I will re-evaluate.

Mat

[SSKILLZ1]

Len, this post is more of a cumulative of what you said yesterday.

1) First I hope we see Russell 700, by the end of the year, it has a chance of happening, but I wouldn't bet on either way right now to me it looks 50-50.

2) Now, Len in the context you were saying this I don't disagree, but if you actually believe this statement in our real life portfolios, not only would I disagree with you, but I would have evidence to back it up. "What is the point in being invested in a sideways market?" Now you know although I have not been as bearish as you, I've also had a significant amount of cash all year, and right now my cash level of 65%, is probably pretty close to my average cash position for the year if it was averaged out. Whether or not, the market makes new highs at this point is irrelvant in my opinion, me and you were both wrong for going this much cash at that time.
Now I'm up around 18% from March 7th, so I don't know about you but about 35% of my portfolio invested, and for my total portfolio to be up 18% in 8 months, I'm going to go out on a limb and say I would have been up significantly higher percentage if I was fully invested this year. Secondly why we were wrong is the Value Microcap index was only up around 20% in March, and now is currently up around 65%, heck I don't know about you but that sounds like making money to me. My point is me & you were both wrong on our calls, whether the markets make new highs or not, because we in all likelihood would have had significant higher portfolios sums if we stood fully invested. On the other hand I'm not regretting what I did, and if I had my decision to do over again, not knowing the answers to what happened I would probably do the same thing again, but it is clear to me that me & you, and anyone else who has been in big time cash positions all year, has been completely wrong, with our timing, because we probably left big percentages on the table. Just one mans humble opinion, but I Like to admit when I'm wrong, and it clear to me that our strategy failed to yield anywhere near the best returns, but I still rather be safe then sorry, so that's why I did what I did.