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Thursday, July 31, 2008

Bob Brinker's TEFQX Buy-Recommendation

Bob Brinker's off-the-official-record but very real stock and fund buy-recommendations between 2000-2003. What happened to them? (I will discuss TEFQX for now.)
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Pen-name Pig's amusing comments reminded me about Brinker's TEFQX and QQQQ buy-recommendations in 2000, and the fact that they are both still on "hold."
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Here are some excerpts from what Pig posted in the comments section of my previous article:
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"Since 2003 , the Guru, Bob Brinker has been right 1 out of 3 calls.
The 2003 was a gem, the last two buys were a horrendous flop.

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So I ask, why pay $185 for somebody that calls 33% of the time
correct?

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All you need is a dirty old penny, and the experts will tell you that
you will be right 50% of the time, over a long span of time.

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Now, some uppity shill is going to ask me, how would you know to buy
in 2003 on the exact day. So dopey me will answer, "Did you flip a
coin that day?" Of course they will tell me how stooopid I
am........but it will ring hollow, since the answer is no, and they
will never know the TRUTH.

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They will then counter with "How does a coin tell you what to buy?"

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And dopey me will answer "What did your Guru tell you to
buy? Doesn't he tell you to do your own due diligence and make your
own decisions?" Geesh..........that's the same advice that my penny
gives me.

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I KNOW for a FACT that my penny will NEVER tell me to buy
TEFQX...........will never tell me to do a short term counter trend
rally trade (QQQQ 10 years??), nor tell me to buy some overpriced, now
defunct Montgomery Fund."

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In the February 2000 Marketimer, Brinker devoted a full page to touting the Firsthand e-Commerce Fund.
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  • From Paragraph 2: "...............Marketimer views Firsthand e-Commerce Fund as an excellent vehicle for the B2B investment. We expect the fund to maintain significant exposure to business-to-business related companies going forward."
  • From Paragraph 4: "We believe e-Commerce fund manager Kevin Landis brings a high level of stock selection talent to the fund. .........We expect this fund to be in a position to exploit the explosive growth in the B2B area........"
  • From Paragraph 8: "..........Due to our current risk adverse stock market stance, we are not placing this fund in any of our Model Portfolios at this time. Also, we would regard a five percent exposure to this fund as the maximum we would be willing to accept in the current difficult stock market environment................."

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Brinker put TEFQX on HOLD in the March 2001 issue at $3.93 (a year after touting it), and has never mentioned it again.
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TEFQX lost almost 90% of its value...see the graph below.
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Wednesday, July 30, 2008

Stock Market VS Price of Oil

(Edited Friday at 2pm): Friday, the S&P closed almost flat at 1260.31; a loss of about 0.56%. The price of Oil also closed almost flat at 124.98; a 0.73% increase.
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Bob Brinker has been saying since the first week in July that the stock market and the price of oil are "directly correlated." Is the stock market reacting to the price of oil exclusively as Brinker seems to be claiming? When you look at the statistics for the past month, the answer is no, when you look at the statistics for this week, the answer is maybe. 8~).
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Monday, the S&P closed at 1234.37..........Crude Oil closed at 124.73
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Tuesday, the S&P closed at 1263.20..........Crude Oil closed at 121.78
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Wednesday, the S&P closed at 1284.26.....Crude Oil closed at 126.92
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Thursday, the S&P closed at 1267.38.........Crude Oil closed at 124.18
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Friday, the S&P closed at 1260.31........Crude Oil Closed at 124.98
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  • For the month of July, the S&P declined 1%
  • For the month of July, the price of Oil declined about 12%
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(From July 1st to July 31st, the price of Oil dropped $17 -- from $141.43 to $124.18.)

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My sister-in-law, who lives in Idaho, took these beautiful pictures north of McCall:
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Tuesday, July 29, 2008

Comments You Won't Hear on Moneytalk

Bob Brinker, host of Moneytalk: Interesting feedback and discussion about his lastest prognostications.
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Loren xxxx replied to your poston Jul 28, 2008 at 2:53 PM
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"Honey, have not listened to Bob since he cancelled my subscription. I must admit that I have not read many of your posts since I no longer trust what he says. I did, however, began to wonder If his news letter has continued to tout that the high price of oil has not effected the economy as he did for so many months as the price went up. Something about the increase in fuel had not effected consumer spending if I remember correctly. As I filled my car with gas today, I wondered if he is still delusional. A trip to the grocery store or a restaurant or anyplace else one goes may enlighten him. On the other hand, he probably uses those multiple $185 per year that he screws people out of to hire someone to do all his shopping and he doesn't even know what prices are."
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Honeybee replied to Loren's post2 hours ago
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Hi Loren,
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I sure understand your feelings. If one isn't entertained by Bob Brinker and if one already knows all the good basics that he teaches (and repeats almost every weekend), then there isn't much reason to waste 6 hours on the weekends. 8~)
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You make some excellent points about Brinker, the price oil and inflation. I totally agree with you.
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After avoiding all mention of the fact that the stock market went firmly into bear market territory, Brinker changed his focus the first week in July when he talked about the price of oil. He made the declaration that oil has become the "wild card" and that there is a "DIRECT CORRELATION" between the price of oil and the stock market.
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You see, at all costs, he has to find a way to explain why his "timing model" missed this bear market entirely. Not only did he miss it, but he had his subscribers 100% invested all the way down. He even made sure that anyone who was following his advice, had all their new money in the market at S&P 500 Index mid-1400's between August, 2007 and January 20th, 2008.
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In February 2008, he LOWERED his buy signal to "low-1300's" -- and the market dropped another 100 points. All this time he has continued to recommend dollar-cost averaging new money into the market. So there is no way any subscriber, who actually takes the advice they pay him for, to have avoided ANY of this bear market.
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Best regards,
Honeybee
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James xxxxxx (Fort Lauderdale, FL) replied to Thomas's poston Jul 28, 2008 at 10:47 AM
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"The problem with the sound investment advice Brinker gives is that it is easily had for free on the internet in discussion groups like this or perhaps for about $20 if you want to buy a book on investing for dummies. It does not take a genius to figure out that investing no-load mutual funds with low fees makes more sense than investing in those with fees once you know the data shows the funds with the load or sales charge don't perform any better than those that don't charge the load. And most mutual funds that are managed cannot consistently beat a comparable index fund (or ETF) because the managed fund incurs fees and if held in a taxable account generally more taxes too. Of course, those simple facts make it tough to sell a newsletter promoting even no-load mutual funds. I believe Brinker's mutual fund picks have underperformed the total stock market index.
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So the dilemma for Brinker (and all other investment advisors) is how to sell a newsletter or investment advice that tells people to buy a bunch of mutual funds that in the long run will likley underperform say the VTI or VTSMX? Brinker's solution is to pretend he can time the market. Problem is if you've followed his timing advice (including the QQQ trade) over the last 5, 10 or 15 years you'd likely have ended up no better or [possibly worse off than if you just put your money in VTSMX and a low cost GNMA fund and rebalanced to maintain a 50-50 or 60-40 ratio over the same time frame."

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Phil xxxxxx (Inland xxxxCA) replied to your post45 seconds ago
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Honeybee is absolutely correct in this post; Brinker can not/will not admit his failures. It must be a DNA thing that prevents candor INMO.
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Honeybee here: The following post will make sense to some, but many will not know what it is about. I can tell you this much: It has to do with mass censorship of free discussion of a program that is on the national airwaves, and the possible life-changing information that is dispensed on it. I think it needs to be said, and Bld xxxxx said it perfectly:
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Bld xxxxx (Silicon Valley, CA) replied to Ivan's poston Jul 26, 2008 at 12:46 PM
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As long as the members of the group do not publish proprietary content from Bob, I think it is fine to discuss him - analyze his calls, praise him, or bash him. What Bob is saying on his radio show is public material and can be discussed as freely as we want. Even Bob's position on market timing is openly disclosed by Mark Hulbert etc. So what is Bob going to do? Shutdown Marketwatch as well? Will he shutdown cxoadvisory? Back in 2007 when his record on cxoadvisory was pretty good (I believe he was in the top 5 or so), why did he not complain and shut them down as well at that time?
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Last time I checked, at least for us living in America, we still had the freedom of speech. Barring any IP violations, we are free to discuss anything we want and criticize public personalities. Having a 6 hour nationwide show certainly makes him a public figure. I do not want to turn this into a political argument, but if Bob is so hyper sensitive to his criticism, he is in the wrong job."___Bld xxxx

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Saturday, July 26, 2008

Summary: Bob Brinker's Moneytalk, July 26, 2008

Summary, Commentary and Moneytalk Excerpts, July 26, 2008
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Bob Brinker’s Moneytalk opening monologue covered a lot of subjects. Brinker announced that there was breaking news out of Washington: Congress has passed housing legislation package. Brinker expects President Bush to sign it soon. Here are the details of the Bill:

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Give the Federal Housing Administration $300 billion in new lending authority and relax standards to provide affordable, fixed-rate mortgages to debt-ridden homeowners. Any losses would be covered by an affordable-housing fund financed by Fannie Mae and Freddie Mac, the government-sponsored companies that finance mortgages.

Allow the Treasury Department temporary authority to lend money to Fannie and Freddie or buy their stock to avert a collapse of one or both of the mortgage giants. The authority expires on Dec. 31, 2009.

Create a new regulator and tighten controls on Fannie and Freddie, including power for the regulator to approve pay packages for company executives. Create a new affordable-housing fund drawn from their profits. Permanently raise the limit on the loans they may buy -- set to revert to $417,000 by the end of the year -- to $625,000 in the highest-cost areas. Allow them to buy loans 15 percent higher than the median home price in certain cities.

Provide $3.9 billion in grants to the hardest-hit communities for buying and fixing up foreclosed property.

Modernize the FHA and allow it to back loans for riskier borrowers. Permanently increase the size of loans the agency may insure -- currently set to revert to $362,790 by the end of the year -- to $625,000 in the highest-cost areas. The agency could buy loans 15 percent higher than the median home price in certain cities.

Bar the FHA from insuring mortgages in which the borrower's down payment is paid by the seller, beginning on Oct. 1, 2008. Place a one-year moratorium to bar the agency from charging premiums based on the riskiness of the homeowner, until Oct. 1, 2009.

Provide $15 billion in housing tax breaks, including for low-income housing. Give a credit of up to $7,500 for first-time home buyers who purchase residences between April 9, 2008, and July 1, 2009. Allows people who don't itemize their taxes to claim a $500-$1,000 deduction on their 2008 property taxes.

Give states an additional $11 billion in tax-free municipal bond authority for low-interest loans to first-time home buyers, construction of low-income rental housing and refinancing subprime mortgages.

Offer protection from investor lawsuits for mortgage holders that modify loans to borrowers who are in default or about to default.

Provide $180 million for pre-foreclosure counseling and legal services for distressed borrowers.

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Brinker Comments: This comes at the same time that the Standard and Poor’s is possibly going to downgrade the subordinated debt and the preferred shares of both Fannie Mae and Freddie Mac -- which would result in a decline in the value of the securities -- to the dismay of those who hold the paper. Common stock shares of Fannie Mae and Freddie Mac have already been decimated. Now the question is how much federal support will be there for the fixed income side. Unlike Fannie Mae and Freddie Mac, GNMAs are guaranteed by the full faith and credit of the Treasury.

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Brinker’s next topic was the soon-to-be vacationing congress. He commented that congress had done nothing about the energy crisis. Just the opposite, they have blocked every reasonable solution. They demonize the big oil companies, demonize nuclear power, and demonize drilling in ANWR, while ignoring the success that we've had drilling at Prudhoe Bay. The Sheiks in the Middle East must be “lovin’ it," but don’t hold your breath for congress to change anything.

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Caller: Asked about online banking. Brinker comment: Be sure you have FDIC coverage -- online banking is okay if you are comfortable dealing in “cyberspace," but he personally prefers “brick and mortar.” (More on this subject later.)

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Brinker Heads-up: GMAC is expected to have write-downs on the value of its vehicle loans. Ford Motor Credit (auto loans) has already taken substantial write-downs on their portfolios. This has to do with the declining resale value of pickups and SUVs.

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Caller: Asked about the safety of her credit union which was part of a “state agency” guarantee. Brinker said that he would not trust it – that he would only trust a credit union that was NCUA insured.

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Caller: Subscriber who wanted to know what Brinker thinks about GNMAs. Brinker commented that he had been recommending VFIIX for a long, long time. He said that there is no credit risk with government-guaranteed GNMAs, but the NAV will fluctuate in a narrow range. Over the past couple of decades VFIIX has usually fluctuated between 9.50-10.50, and is a reasonable expectation to stay the same. Yield right now is 5.1%.

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Gary: “I was just wondering what your opinion was on the market returning to its previous highs?” Brinker replied: Well, I would say that uhhhhh….what kind of a time frame do you have in mind, that’s the key? It’s not going to happen this week, you know we’ve got to get up 300 points in the S&P – 300 points in the S&P to get to new highs. What kind of a time-frame were you thinking about?”

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Gary: “Well, I don’t know –1 to 3 three years. What kind of a time-frame would you………” Brinker replied: “Oh, I would say within your time-frame of 1 to 3 years, would the market get to new all-time-highs in the S&P 500. For me I think the answer would be without question – that would be my opinion. Would the market get to new all-time-highs within your time-frame of 1 to 3 years? Yeah. For me, my opinion on that would be -- without question."

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Caller who was a subscriber asked Brinker what to do with his 10% holding in Treasury Inflation Protected Securities. Brinker said he would leave it where it is.

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Caller: Had leased an SUV and he was very happy that he had leased rather than buy. Brinker said that he had “won with that deal. Caller explained that leases are negotiable. Brinker pointed out that when buying a car for cash, you may not want to have them usher you into a little room and try to talk you into leasing.

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Brinker Heads up: What do you do if you have recently purchased a gas-guzzling vehicle -- perhaps borrowed money to buy it? Brinker explained that there is a school of thought that says you are better off just buying the gasoline now because of the loss in trade-in value. You might get “reverse sticker shock” if you ask a dealer how much they will give you on a trade-in of your SUV or pickup -- there is a glut of those vehicles on the market that people don’t want anymore.

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Caller Mary said she was due to retire and her 401K was 60% in the S&P 500 asked: “….you were talking about your horizon for the revival here within the 1 to 3 years. I…..”

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Brinker interrupted Mary and said: “Mary, you are stating things that I didn’t say. Someone is just going to have tuned in and they are going to think that I said something that you said I said which I didn’t say. What happened was the caller gave a time-frame. It was the caller’s time-frame of 1 to 3 years. And it was the caller’s time-frame that I was responding to.”

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Mary responded: “Well I appreciate that. Now my next question, now that you have cleared that up for me. I was going to leave it like it is because I won’t have a choice. I didn’t want to move it right away from the S&P 500 and lock in any losses. So you think I’ll be safe to leave it there for some future time – a year out perhaps so that I’ll recoup some of this past few months that we’ve been…..”

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Brinker then asked Mary how long she had been investing. She replied that she had been investing for about 10 years. Brinker said: “I think within the context of a balanced portfolio….I think that certainly it makes sense to be there. I don’t have any criticism of being in a balanced asset-allocation at the point in your situation. I would say that the answer is yes……….I would rather be patient in here, and certainly patience can be part of investing. Investing is not all happy hour……….Patience can be part of the equation and I think it is right in here. If I were in your position, yes, my opinion is, I would be inclined to be patient in reference to your time line.”

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Mary reminded Brinker of her age. Brinker in response, reminded her that she told him she had a balanced portfolio, therefore he recommended a “patient approach.”

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Caller said he had bought a CD at IndyMac for $200,000 just days before it folded. He was certain that it was all covered by FDIC insurance since his wife was also named on it. But....when he tried to get his money back, he called FDIC, he called IndyMac Bank, he sent them two faxes, two certified letters starting on July15th. The phone calls have never been answered, nothing from the faxes or letters have been answered. He explained that he had invested via the internet. He asked Brinker what he should expect from the FDIC insurance.

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Brinker told him that if he had the insurance he should be covered. When the caller pressed Brinker for the time-frame that the FDIC was obligated to act on their “quote, unquote, insurance,” Brinker said that he didn’t think they were going to give him a “number of hours answer” such as 72 hours, 96 hours or 24 hours. Brinker then reminded the caller that part of his problem was that he “couldn’t walk into the bank” and then Brinker said that was the reason why he prefers not to do that kind of banking on the internet.

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Which prompted the caller to ask Brinker if he thought FDIC was sitting in the lobby of IndyMac? Brinker replied: “I can’t answer that question because I haven’t been in the IndyMac lobby in Pasadena and I have no plans to go there.” (Honeybee EC: What a joker Brinker is sometimes….I’m sure the caller with $200,000 on the line, was highly amused.) Brinker said that he did not understand why the caller was dealing with IndyMac since the FDIC took over the operation of the bank last Monday. The caller ended his part of the conversation by saying that they were claiming that “each other was at fault,” and that he “questioned this FDIC insurance” and would let Brinker know when he gets his money.

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After the caller hung up, Brinker said he couldn’t do anything for the caller except maybe walk into IndyMac bank with him and ask to see a high-up manager. He went on to hammer his point about investing online rather than at a “bricks and mortar” bank. He said, “Suppose there isn’t anything on the other end when it really matters?” (Honeybee EC: for several weeks now, Brinker has been reassuring Moneytalk listeners that FDIC could be counted on to address their problems in a "timely manner." For Brinker to now put the blame on the fact that the caller bought the FDIC insured CD on the internet seems ever-so-slightly disingenuous to me. Please note tongue firmly planted in cheek.)

Hour Three Monologue

Brinker Stock Market and Oil Price Comments: Brinker arbitrarily chose a time-frame between July 15 and July 26 (10 days), to compare the price of oil, which went from $148 per barrel to the mid-$120’s, and the S&P 500 Index, which rose 42 points from its July 15th close of 1215, up to its present level of 1258. Brinker said that this was during a period when there was no good news from the housing or banking sectors, and posed the question: why would the market rise? He answered his own question by saying it's obvious -- that it is because of the linkage between the price of a barrel of oil and the price of the S&P 500. (Honeybee EC: One could pick out many dates and make comparisons between the price of oil and the S&P which would prove just the opposite.)

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Brinker Political Comments: Brinker opined that it would be a “stroke of genius” for McCain to choose Michael Bloomberg as his running mate because he could write a check for $billions if he wanted. The tracking polls are showing very close race between Obama and McCain.

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Brinker’s Saturday guest-speaker was Thomas Mackell who wrote: When Good Pensions Go Away: Why America Needs a New Deal for Pension and Healthcare Reform

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Blogger Dan said.....

We interrupt this program to bring you an important announcement! Bob Brinker answered a stock market question at 1:48PM PDT!

When asked if he thought the market would reach all time highs within a time frame of 1-3 years, he unflinchingly answered...YES!

And now back to regular programming.

-Dan G

July 26, 2008 2:02 PM

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Thursday, July 24, 2008

Bob Brinker's S&P and Oil Price Direct Correlation

Bob Brinker's latest tactical maneuver is to claim that the stock market has developed a "direct correlation" to the price of oil -- and that only a "fool" would try to predict the future price of oil.
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This maneuver seems to be a response to the fact that his "timing model" missed this 20%+ BEAR market -- he has raised no cash reserves and his Model Portfolios are 100% invested.
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On Moneytalk July 19th said (S&P at 1260.68): "The price of oil went down and the stock market went up. Oil prices taking their biggest tumble since 2004 – lost about $16 a barrel, but still trading at the ridiculously high price of $128.88 per barrel."
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  • Today, the S&P 500 Index closed at: 1252.54
  • Today, Oil closed at: 125.46
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Moneytalk Excerpts, May 31, 2008 (Oil was at $127.56; S&P at 1400) Bob Brinker said:
“So what we have here basically, is an example of false prophets and it’s sad. And the reason it’s sad is the damage done. Think of the people that are looking today at the market, S&P at 1400 and they’ve been scared out of the market in the first quarter by these bears……… “What we have right in here now is evidence that the Cassandras, who earlier this year, were telling us we were in recession – right now they’ve basically – well I’ll be kind, basically, they look like fools right now.......“……..And probably a lot of those people got scared out near the correction lows. The initial correction low in January, which was successfully tested in mid-March, before the market reversed and resumed its uptrend. And basically, if you were to total up all of the accomplishments of the Cassandras, that would be it – that they scared people out of the market during a stock market correction in the first quarter......."
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So oil is now selling lower than when Brinker was ridiculing the "Cassandras" and the "False prophets" for "scaring people out of the market at 1400" -- which was just a couple of days before the start of the worst June in over 50 years and the arrival of a bear market (even by Brinker's own definition).
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But no matter what, if you are reading this, you haven't been eaten by this bear like a couple of Russian men were: =8~0

Now this is a BEAR!


Saturday, July 19, 2008

Summary: Bob Brinker's Moneytalk July 19, 2008

Summary, Commentary and Moneytalk Excerpts, July 19, 2008

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Hour One Monologue Excerpts:

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Bob Brinker said: “Another interesting week in Wall Street. And of course, one thing came as no surprise. The price of oil went down and the stock market went up. Oil prices taking their biggest tumble since 2004 – lost about $16 a barrel, but still trading at the ridiculously high price of $128.88 per barrel. (Honeybee EC: Oil closed at $128.02 per barrel for the FIRST TIME on May 20, 2008. The S&P closed at 1413.40 the SAME DAY. Last Friday, the S&P closed at 1260.68....oops!) Stock market scoring some nice gains for the week -- S&P 500 chalking up a 1.7% gain. For the month of July amidst a great deal of volatility related to what’s been going on with oil prices, for the month of July the S&P has lost 1½% not counting cash dividend income that accrues each month.…………The Nasdaq had a very good week – gaining close to 2% for the week just past.........(Honeybee EC: Brinker has never talked about the fact that June was the worst month for the S&P in 50+ years. It dropped 9% in that one month alone, taking it firmly into the bear market territory that Brinker's timing model is supposed to predict, and almost 100 points below Brinker's most recent all-money-in buy-signal of "low-1300's"...oops!)

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…….And of course one of the big stories this week came out of Pasadena, California……..and that was the story of Indy Mac. We said last weekend that the FDIC would open Indy Mac on Monday under FDIC Deposit Insurance rules, and guess what, they did.”

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Brinker went on to say that he was “amused,” or rather, “surprised,” when he saw the picture on the front page of the NYT of all the people lining up at IndyMac to get their money.

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Brinker explained: “The reason I say that is because FDIC insurance is solid. We don’t worry about FDIC insurance. We know insured accounts will be dollar-good………..Now it’s true that not all of the money on deposit at IndyMac was insured. In fact, it turns out that of the $19billion on deposit, about $1billion was not insured. Now why would anybody put money in a bank today without full FDIC insurance? I think you would have to direct that question to a fortune teller. I have no idea why somebody would do something like that. But evidently about 10,000 depositors at that bank had money that was not insured. Now how sad is that? You know what happens to that money that’s not insured – that $billion or so? It goes to the receiver and gets jumbled in with all the other obligations that the receiver will have to make a decision about…….Your money should be fully, completely, 100% FDIC insured."

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Brinker pointed out that if you deposit a full $100,000, your interest is not going to be insured. It's a good idea to keep deposits a bit less than that so interest can be added and still remain under the $100,000 umbrella.

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Brinker announced that there is another program out that that may be of interest to those who would like to qualify for FDIC Insurance up to $50million – the CDARS (Certificate of Deposit Account Registry Service) program. This is a deposit placement agreement that you can sign with a member bank. To learn more about it go to CDARS.com

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Brinker said:
“Now look, you never know about your bank. You’ve seen the write-offs…….a huge embarrassment to these companies writing off 10’s of $billions. In fact, the level of management incompetence that’s been brought into play and has been exposed through these write-offs is probably greater than anybody in the country imagined was possible – let alone the analytical community that covers these companies ………This IndyMac situation never even made the watch list…………You never know about your bank, so don’t have any money that is not covered fully, principle and interest by FDIC. And if you have more than $100,000, check out the CDRS program."

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Caller One asked about the government's policy of tracking movement of money over $10,000. Brinker said this did not bother him because it helped them to track the flow of terrorist money. (Honeybee EC: Brinker said this tracking policy started after 9/11/01. I believe that it was in place before then. Anyone know?) Thanks to Jumpnjoey, I have an answer to my question. Brinker was mistaken when he said the government policy of tracking transactions over $10,000 was instituted after the 9/11/01 terrorist attacks:

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Congress passed the Bank Secrecy Act in 1970 as the first laws to fight money laundering in the United States.........The general rule is that you must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if your business receives more than $10,000 in cash from one buyer as a result of a single transaction or two or more related transactions.

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Caller two said that he had heard that it could take up to 99 years for FDIC to pay off. Brinker said: “Whether it’s true or not, my personal opinion is it’s irrelevant. And the reason I say that is because the FDIC has a history of doing a very good job of coming in and making whole depositors. There might be a slight delay, but I don’t think it would be more than slight. And I think the people that are walking around saying it’s going to take you close to a hundred years -- at which point, most depositors would have long since met their Maker – I think that's the kind of scare rhetoric out there that I would disregard. My opinion is that the FDIC is solid as a rock…….."
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Caller three wanted to talk about the GSE bailout. Brinker commented that we don’t yet know how this will eventually play out. Several ideas are being bandied about, and it may end up not even being tax-payer money. They are talking about Fannie Mae and Freddie Mac selling preferred shares to the public to raise money. Another idea that Paulsen put forth was for the U.S. government to have the ability to buy preferred shares in order to provide capital. Brinker explained that some government bailouts have been resounding successes in the past, such as Chrysler and Lockheed. Brinker said: “Here’s the reason they are doing it, seven out of every ten mortgages in the country today involve Fannie Mae and Freddie Mac. And they believe that they have to have a viable Fannie Mae and Freddie Mac structure in order to provide the necessary liquidity to the housing market.”

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Caller four said: “This is the “real Carl” from California. I wanted to ask your thoughts about GNMAS. We uh…." Brinker said: “I think here you have GNMAS, here you have the Government National Mortgage Association, and this is an organization and its securities carry a direct guarantee of the U. S. Treasury. That makes it an exceptional organization because that means that the principle and interest on the mortgages in the portfolio are fully guaranteed by the United States Treasury. This is the security that we have recommended on our Moneytalk program many times and the performance of the GNMA Fund at Vanguard has been excellent – it’s been outstanding. It has a very, very low expense ratio of 21 basis points. Has a great performance record. I was just looking at the 10-year annual compound rate of return on that fund of 5.56%. When you consider that’s a triple-A investment, it’s pretty great. Over the last year through today, the total return on the fund is just a little under 8% which makes it an exceptional return."

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Caller five asked about liquidating a portfolio of oil company common stocks. He wanted to know if he should try to time the price of oil as he sold the shares. Brinker said: “If it turns out that the rise in oil prices was an aberration up to $147 – we don’t know this yet, unless you have a crystal ball and then you can tell me. But if it turns out that was a parabolic rise and an aberration, then obviously, sitting on that portfolio heavy in energy stocks having to sell within the next few months, well you are going to be on pins and needles on that deal……You have no idea what’s going to happen between now and the end of the year to the price of oil………And by the way, trying to predict oil prices – if you say you know what’s going to happen to the price of oil in the next few months, you are a stand-up comic at that point………"

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Caller six: More FDIC talk.

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Caller seven asked if Vanguard Prime Money Market Fund is insured. Brinker told him that money market funds are not insured. However, they are very, very short term. Therefore, money fund managers have had plenty of time to be sure they are invested in quality instruments that are dollar good. Brinker suggested that the caller go to Vanguard.com, locate the Vanguard Prime Money Market and read the holdings in the fund in terms of its quality ratings.

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Hour Two Monologue Excerpts:
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Brinker said: “There is a bizarre falsehood that is being promoted around the country by a number of politicians. They seem to be at the same party…….Something they are trying to get past you – don’t let it happen. They are telling you that oil company have leases -- that is hold on public lands in the United States that they are not exploring, that they are not developing. This is completely a fabrication…………..Now let me ask you. We have politicians running around the country telling people that oil companies are sitting on all these leases and they are not exploring. Well let me ask you a question, does that make any sense to you that an oil company would report to its shareholders that well we out and paid all this money for a lease but we’re not going to bother with it – we just bought it for wallpaper, we have it up in the CEO’s office as wallpaper…….

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.......When I see politicians trying to spread this falsehood, it really is troubling. Of course, this is all part of the demonization of the oil industry. We’ve seen it from Barack Obama. I’ve seen it in his stump speeches on a number of occasions where he’s demonized the Exxon Mobil Corp, which as we’ve said before is simply the demonization of the shareholders and the workers at the company at the company………By the way, almost no shares are held by the managers of Exxon Mobil – they are almost all held by individuals and institutions, like pension companies, charitable organization and other institution. Here’s the question, why would an oil company executive refuse to drill on a valuable drilling lease – what would the motive be for not exploring such a valuable asset? Especially with oil prices at $128.88………and the moment that would be uncovered by the auditors, the CEO would be fired. This is absurd nonsense that these people are spreading out there. Why are they spreading it? I’ll tell you why, because they oppose additional drilling for oil and natural gas………..”

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Brinker opined that the fact that we import 12 million barrels of oil a day – much of it from countries that hate us, is undermining the United States. He repeated his recommended energy policy plans that he believes would help the United States to become energy independent. (Honeybee EC: I have posted Brinker's energy plan in previous Summaries.)

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The calls in the second hour were almost exclusively about GNMA’s, banking and FDIC insurance. Most of Brinker’s replies were just repeats of what he had said in the first hour. One caller was worried that there might be more bank closings than the FDIC could cover. Brinker simply said that in his opinion, “….the FDIC will live up to its agreements."

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Sunday, Brinker commented that he thinks that the FDIC may have difficulty paying off all of the claims based on the insurance premiums that they are collecting from the FDIC membership. He said that there is a possibility that the FDIC will have to get money from the Federal coffers -- the taxpayers. (FDIC website list of failed banks.)

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Sunday caller Helen in Peoria said: "Bob, thank you for the program. Would you also tell me your phone number for your two newsletters. You have only two, right?"

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Brinker replied: "Uhhhh...for the Marketimer letter the number is 1.800.700.xxxx, in answer to your question. You can also get information online at Bob Brinker dot com."

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Helen asked: "And the income, the bonds, you have another letter?"

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Brinker replied: "You will see a logo at Bob Brinker dot com which would connect to that as well."

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Honeybee EC: Why does Bob Brinker refuse to tell the Moneytalk audience that his son, Robert M. Brinker, is the publisher and editor of the so-called "bond" newsletter that several callers have asked him about -- and is often advertised on Moneytalk with only the name "Brinker" -- which gives the impression that it is the talk show host's newsletter? Why be so deceptive?

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The newsletter that Brinker's son and daughter-in-law edit, publish and allow their famous father to promote on his radio program is, in my opinion, very inferior to the Retirement Advisor -- and the Retirement Advisor is advertised in an honest manner. Get a free sample issue.

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Brinker's Saturday guest speaker was Andrew Yarrow, author of: Forgive Us Our Debts: The Intergeneration Dangers of Fiscal Irresponsibility

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Brinker's Sunday guest speaker was Christopher Helman, who wrote an article for Forbes.com: Inside T. Boone Pickens' Brain ("T. Boone Pickens gets a brain scan, and we tag along to find out how a billionaire really thinks").


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Friday, July 18, 2008

Bob Brinker's Exogenous (?) Event

Bob Brinker went into this bear market as bullish as he was back in the 1990's. He was predicting new highs into the mid-1600's and recommending mid-1400's as "gift-horse" buying opportunities -- beginning in August 2007 and continuing through the January 2008 issue of Marketimer, when he said:
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"As Marketimer begins its 23rd year, the Marketimer stock market timing model stand in positive territory. This suggests that the risk of a cyclical bear market decline in excess of 20% is not likely to materialize anytime soon......the S&P 500 Index should be able to achieve a price level into the 1600's range this year.......We continue to rate the market attractive for purchase on any weakness into the S&P 500 Index mid-1400's range."

After the stock market headed south about a week after Brinker wrote those quotes, he basically said, oops, I didn't expect that, and discarded the mid-1400's gift horse.
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However, he soon found a new bottom and issued a new "attractive for purchase" buy level of "low-1300's" in February, 2008, and he's been bullish ever since -- believing that the market successfully tested the January lows in March and was on an uptrend.
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On Moneytalk, May 31, 2008, Bob Brinker said: “……..And probably a lot of those people got scared out near the correction lows. The initial correction low in January, which was successfully tested in mid-March, before the market reversed and resumed its uptrend. And basically, if you were to total up all of the accomplishments of the Cassandras, that would be it – that they scared people out of the market during a stock market correction in the first quarter………..Because they have been unable to present any evidence of a recession."

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During this whole downward slide into bear market territory, Brinker talked about the price of oil, but only from the standpoint of it being deflationary rather than inflationary. He never once made any claim that the increases in oil price would directly affect the stock market until the first week in June when the market slide continued and appeared very likely headed for bear territory. That amounts to a big "oops" for Bob Brinker because he has repeatedly said that his timing model saw no 20% bear market declines "on the radar" in future months and his Model Portfolios have remained fully invested.
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So what has Brinker done about this "oops"? On Moneytalk, beginning the first week in June, Brinker began laying the foundation for his port-of-last-resort -- the famous "exogenous event" that he has always had in place for a time when all of his market-timing parameters failed and the goal-post couldn't be moved any further out. The "exogenous event" is that he claims there is NOW a "direct correlation" between the stock market and the price of oil. And astonishingly, he said that "only a fool" would try to predict the future price of oil.
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On Moneytalk last Saturday, Brinker claimed that he had been talking about this "direct correlation" and "wildcard" for some time. That is blatantly misleading. He only began talking about it after he realized the stock market was headed down instead of up again -- as he has been claiming it would since the so-called "successful test" in March 2008.
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The record is there in my Moneytalk Summaries. Brinker never once connected the price of oil with the stock market before the first week in June, as he is now claiming he did. The Summaries include many of his quotes on the subject of energy prices -- and it just isn't there. If it had been said, I certainly would have reported it. I try to report everything that he says about the stock market -- and even when he says nothing about it. (Note: The first time Brinker mentioned the oil "wildcard" in Marketimer was in the July issue.)
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Here's a great chart that shows the S&P 500 Index compared to the price of oil. It's fascinating to see that oil prices have grown steadily since Brinker's March 2003 all-in buy signal.
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Tuesday, July 15, 2008

Did Bob Brinker Give Up On Market-Timing?

Bob Brinker's Marketimer, November 5, 2007, Page one; Paragraph one: "We continue to believe that there is no risk of a cyclical bear market (a decline of 20% or more a measured by the S&P 500 Index) in the months ahead." (S&P: 1549)
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Moneytalk, April 19, 2008, Bob Brinker said: "
It’s my opinion that the March 10th low on the S&P 500 was the bottom for the correction. And I think that what happened was that was a very successful test of the initial low recorded January 22nd." (S&P: 1390)
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Has Bob Brinker now decided that timing the stock market is impossible, as John Bogle, Burton Malkiel and others have said all along? SHOULD HE?
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Bob Brinker's stock market comments on Moneytalk this weekend reflect what he said in the July Marketimer. Brinker said that the price of oil is the "wild card" and has a "direct correlation" to the stock market. He also said that only a "fool" would try to forecast the price of a barrel of oil.
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Last Saturday, Brinker said: "Now I wish I could tell you what the price of oil is going to be in a week, a month, a year. I don’t know. I have no way of knowing and I think only a fool would try to forecast the price of a barrel of oil in the world we live in…….”
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Even though the S&P was not in bear territory when the July Marketimer was issued, Brinker did not raise any cash from his Model Portfolios, and still recommends 100% of stock market allocations be fully invested. Brinker is still recommending dollar-cost-averaging new money into the stock market. So has Brinker given up on trying to time the market? Or is it simply that he missed the correction, missed the bear, and now can't recommend selling into weakness?
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In Marketwatch article last week, Mark Hulbert wrote an article titled: Where Do Stocks Go From Here? Here is an excerpt from Hulbert's article:
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"Bob Brinker's Marketimer:
Bullish. In his most recent issue, which was published in early July, Editor Bob Brinker reported that his stock-market timing model remains in favorable territory. However, he cautioned that oil's price constitutes a "wild card." "In the event oil prices continue to rise, consumers and the stock market will be held hostage to the cost of energy. This would provide a strong headwind against the economic recovery process. If oil prices stabilize or decline from current levels, we believe stock prices can make progress into 2009." Brinker is recommending that subscribers' stock portfolios be fully invested."
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David Korn, in his most recent newsletter from this past weekend, wrote some very interesting comments. (Posted with David Korn's permission):
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"EC:  A few comments here.  First, Bob is now basically
dismissing the predictions of energy expert Charlie Maxwell,
who had been a frequent gueston the program. During the
Moneytalk broadcasts in 2006-2007, Charlie was predicting
that the price of a barrel of oil would trade in the $50-$77
range. For a while, that prediction was spot on, so much
so that Bob would tell callers who asked him that he agreed with
Charlie's prediction. With the price of oil now double that, the
prediction clearly was way too low and Bob has now acknowledged
the inability to predict oil prices.
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This is not something new for Bob. He has previously changed
his opinion on whether interest rates can be predicted (now
opting for the view that they can't), and he seems to have
given up on picking any new individual stocks.

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The last refuge is the stock market in general. With his
position that you can't predict where oil prices are going,
given Bob's view that it the stock market is going to react
to oil prices, the logical conclusion is that you can't
predict where the stock market is going. But there was
no indication this weekend that Bob has given up on market
timing, or his model for that matter."
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David Korn's website

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Statistics provided by Kirk Lindstrom:
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2007-2008 Bear Market Statistics for 07/15/08
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S&P 500 Chart (Using Intraday prices): http://home.netcom.com/~kirklindstrom/Charts/SnP500.html
Last Market High 10/11/07 at 1,576.09
Last Market low 07/11/08 at 1,200.44
Current S&P500 Price 1,214.91
Decline in Pts 361.18
Decline in % 22.9%
Max Decline 23.8%
=>This means the decline from intraday high to intraday low is 23.8% and we are currently 22.9% off the peak.
=>The decline in the S&P500 from the closing high to the closing low was 22.4%

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Saturday, July 12, 2008

Summary: Bob Brinker's Moneytalk, July 12-13, 2008

Moneytalk Summary, Commentary and Excepts, July 12-13, 2008
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(Please note: Bob Brinker's Sunday stock market comments added at bottom of this Summary.)
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Saturday, Moneytalk opening monologue excerpts:
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Bob Brinker said: “One of the topics we’ve been talking about on Moneytalk is what has been going on in the stock market and how that has been related to the price of a barrel of oil and the correlation that we’ve been discussing on Moneytalk continues as we speak, as the stock market is not reacting well to rising price of oil. Here we see oil having closed the week at an all-time-record-high, close to $145 for a barrel of oil………..And there is an inverse relationship that has developed between upward spikes in oil prices and the stock market, and that inverse relationship has really been showing up now for some time. Oil prices have just gone out of control. They have doubled over the past year. They are up in the area of 50% for this year so far, and of course they feed through in the energy complex. Gasoline prices up so far on a year-over-year basis, close to 40%.
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Now why is there this correlation – we see the S&P 500 sitting in in the 1240 area. We see the Dow sitting in at 11,100 area. We see the Nasdaq Composite trading in the 2200’s. Why is there this correlation between the price of a barrel of oil and what goes on in the stock market? I think the answer to that question is easy, and that is consumers, wind up with less money to spend when they get pounded with these higher costs of energy, costs of gasoline, all the products in the energy complex. And that weakens the status of the consumer and also delays the potential for economic recovery.

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After all, the stock market is forward looking mechanism………..Stock market investors are looking out to the future……And what they want to see in the economy like the one we have now, which is a very, very slow growth economy, they want to see economic recovery. They want to see the economy grow close to or preferably right in the area of the long-term trend growth rate of the U.S. economy, which is in the neighborhood of 3 to 3 ½%. The way we measure that is real, inflation adjusted, Gross Domestic Product…….

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........We take a look at GDP and we see how slowly it’s been growing. In the fourth quarter of 2007, it grew at 0.6%. In the first quarter of 2008, it grew at 1% even. Take that six-month period ended March, you get an annualized inflation-adjusted growth rate of only 0.8% in real GDP………The best guess on the real GDP numbers, which will come out later this month in the preliminary estimate for the second quarter, they are expected to be slightly in the positive column. The general consensus of economists today calls for real GDP to be slightly in the positive column.

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Well, that’s all well and good, but we still have to look forward because that is what the stock market does……..When we look to the potential for recovery, we have to recognize the fact that the wild card factor that you’ve heard me describe is oil prices, because oil prices drain consumer spending power. And as long as oil prices are rising, and right now they are at their highest price in history………And as long as oil prices are making record highs, then they are continuing to drain discretionary income from the pockets of consumers. That pushes out the recovery time table and it makes it very, very difficult for the stock market to make any progress……..

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Now I have an opinion, not on oil prices because I think oil prices are well beyond the ability to predict, and I think they have proved that by proving those who have tried to predict them that it’s very, very difficult to do. Oil prices are the wild card factor in the stock market, in my opinion, and I think that is what you are seeing play out. Now I think if oil prices were to decline, and certainly you could make a case for oil prices declining from $145 a barrel…….you might be wrong, but I think that would be a positive for the stock market. If they continue to make new highs, they are going to continue to make it very, very difficult for the stock market because of the reasons I just described…….The stock market wants to see an economic recovery scenario. It does not want to see an increased oil price scenario, which is was it’s seeing right now. Now I wish I could tell you what the price of oil is going to be in a week, a month, a year. I don’t know. I have no way of knowing and I think only a fool would try to forecast the price of a barrel of oil in the world we live in…….”

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Brinker talked at great length about energy during his second and third monologues. Here is Brinker 's four-step energy plan that he has talked about several times in the past, and I have posted in prior Summaries:
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  • Step one: Manhattan Project for nuclear generation across America.
  • Step two: Coal-liquifaction program – to tap into our plentiful coal resources without burning it in electricity generating plants to a level that’s completely unacceptable.
  • Step Three: Raise fleet cafĂ©-standards/mileage.
  • Step Four: Immediately start drilling in Alaska National Wildlife Reserve.

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Brinker gave this breakdown of U.S oil imports: Canada = 21%; Africa = 25%; Middle East, including Saudi Arabia and Kuwait = 20%; Mexico = 12%.

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Saturday's calls were almost exclusively about oil and commodity trading, speculators, oil markets, ethanol, politicians and GNMA’S. There were no calls asking about the stock market. (Honeybee EC: I called repeatedly for the first two hours, and only got a busy signal. I had hoped to ask a question about the stock market.)

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There were a couple of informative calls:
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  • A caller asked about a big bank ETF -- Brinker suggested these possibilities: XLF and KBE.
  • A woman called who said she had $100,000 on deposit with IndyMac. Brinker said that she should get her money because of FDIC Insurance.

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Brinker’s guest speaker today was Graham Summers, who wrote an article for Seeking Alpha titled: “Greenspan, Please Retire”

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Honeybee EC: Graham and Brinker got into rather heated debate Saturday because Graham said he did not believe that the Fed should be bailing out investment banks. Of course, Brinker believes that they should, and totally approves of the Bear Stearns bailout. In a significantly raised voice, Brinker indignantly interrupted Graham and demanded to know what Graham would have done if "he had been in the room." All in all, Brinker seemed quite piqued. I guess he has changed his mind about not arguing with guests while they are voicing opinions that he doesn’t agree with. 8~)

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Important Bob Brinker quote: “If you have any money, in any bank anywhere in the United States, then you need to make certain that your deposits, CD’S, whatever it is, is fully covered by FDIC Insurance. And if it is fully covered by the FDIC, guess what, even if your bank goes under, you are in line to get your money back and be made whole up to the insured limit.”

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Bob Brinker's stock market-timing analysis paraphrased from opening monologue:

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1) The stock market is directly correlated to the price of oil.
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2) No one can predict the future price of oil.
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3) Anyone who tries to predict the future price of oil is a "fool."

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Honeybee EC: So when you add that all up, does it mean that anyone who tries to predict the future price of the stock market is a "fool?"

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Sunday, July 13, 2008
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Sunday, Brinker made the following comments about the stock market. He said, "I'll tell you what. The reality of the situation is that in terms of the stock market right now in my opinion, that's all it is an opinion, that's all we have is opinions. I think the stock market really is marching to the drummer known as oil right now. I think oil prices are the ax right now in the stock market. And I think that's going to be the factor that will continue to be the wild card factor in the stock market.
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Stock market has not liked this run-up to record prices in oil. Oil now close to $1441/2 a barrel........... That's like double in the last year, and up close 50% so far this year. That's ridiculous. That's completely out of control. And so the stock market really is not in a mood to be looking at higher oil prices.
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Main topics on Sunday: Bear Stearns, politics, energy, Phil Gramm, Ben Bernanke, FDIC Insurance.
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Brinker talked at length about Fannie Mae, Freddie Mac and announced the breaking news that the government will come to their rescue.
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Brinker pointed out that GNMA'S are the only mortgage-backed security entity with full faith and credit U.S. Government guarantee for the full and timely payment of all principle and interest payments on the securities in their portfolio.

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Sunday, Brinker's guest speaker was Andrew Lo, who wrote: Hedge Funds: (Advances in Financial Engineering)



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Friday, July 11, 2008

Bob Brinker Bullish; S&P Bearish

Dow and S&P at Two-Year Lows
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Bob Brinker's stock market allocations and Model Portfolios have been 100% invested since March 2003. That was a great call until we reached the October 2007 all-time-record-high. At that time, Brinker was looking for MORE new highs and predicting the S&P 500 Index would trade into the mid-1600's. It's been a downhill trend ever since.
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Bob Brinker missed the January/February correction and he missed this bear market. I'm sorry to say it, but this past year, Brinker has actually been on the wrong side of the market more often than not.
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Where is the stock market now? Firmly in bear territory. The S&P 500 Index down another 1.9% this week -- the 6th weekly drop. The Dow and S&P 500 Index are both at two-year lows.
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Brinker's current stock market views:
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1. Long-term secular bull market as of June, 2006.
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2. Intermediate-term bull market -- lowered all-in buy-level to low-1300's in February 2008.
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3. Short-term bull market -- lows "successfully tested" in March 2008 -- recommends dollar-cost-averaging all new stock market money.

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How many people do you think will try to call Brinker's Moneytalk this weekend and ask about the stock market? How many do you think will actually get on the air? I will try again like I did last week (I didn't get through the busy signal).
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Some have suggested that Brinker will briefly state that the oil situation has caused the market's troubles and that he has been saying it was the wild card. Thus, not only excusing himself, but actually taking credit for "being right," -- and never mention it again until the market recovers. I have no clue how what he will say. We shall know in the fullness of time. 8~)

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On a note of peace and beauty: These are lotus that bloom in the lake I walk around each day. In the U.S., they are a relatively rare water-flower. I took the pictures this morning:
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Wednesday, July 9, 2008

S&P Closes in Bear Territory Again

Bob Brinker's market-timing recommendations are sadly looking more and more ridiculous as he remains fully invested throughout this decline into bear territory.
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At the S&P 500 Index all-time-record-high of last October, Brinker was looking for new highs and predicting it would trade in the mid-1600's range.
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May 31, 2008 he was bashing bad-news bears for "scaring people" out of the market and calling them "false prophets."
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As Jody commented about my last post: "So much for that idea. The S&P just closed at 1244, which is 20.5% lower than 1565."
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Thank you, Jody. It was a good idea, and I think we were all hoping Monday's low would hold even if it gave Bob Brinker a 1/100th% wiggle room.... 8~)
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So where are we now?
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The Dow is now down over 21% since the October high.
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The Nasdaq is now down over 21% since the October high.
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The S&P 500 Index is now down 20.5% since the October high.
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No matter what the stock market does, life goes on and is full of beauty. These are growing just outside my front door:



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Tuesday, July 8, 2008

Did the S&P Finally Hit Bottom at Exactly 20%?

No doubt Bob Brinker, and everyone who invests in the stock market, breathed a sigh of relief today. Let's hope the rally continues. I'd rather listen to Brinker bashing the bad news bears next weekend than hear him try to spin 1/100th of one percent -- which equals what, a few cents? 8~)
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Kirk Lindstrom posted on his Bob Brinker Facebook Forum:
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If the market goes up from here, does anyone want to bet that Bob Brinker will say the S&P500 "only" went down 19.99%, not 20%? (IF he talks about the size of the decline at all.....)

Nice rally today on the positive statements about the banking industry.
Correction Statistics for 07/08/08

S&P 500 Data using Closing Prices
Date of last high: 10/09/07
Last Market High: 1,565.15
Date of last low: 07/07/08
Correction Low: 1,252.29
Decline in Points: 312.86
Decline in %: 20.0%

S&P 500 Chart (Using Intraday prices): http://home.netcom.com/~kirklindstrom/Charts/SnP500.html
Last Market High 10/11/07 at 1,576.09
Last Market low 07/07/08 at 1,240.68
Current S&P500 Price 1,273.70
Decline in Pts 302.39
Decline in % 19.2%
Max Decline 21.3%
=>This means the correction from intraday high to intraday low is 21.3% and we are currently 19.2% off the peak.
=>The decline in the S&P500 from the closing high to the closing low was 20.0%

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People Are Talking About Bob Brinker's Missed Bear Market

First, Brinker was blindsided by the "correction" in January; now he has kept his subscribers (and encouraged Moneytalk listeners to do the same) fully invested all the way down through a full-blown 20% bear market decline. Many are not happy.

Long-time Bob Brinker expert, who posts as "InvesTing," speculates as to how Bob Brinker will handle the fact that his new and improved timing model completely missed the current bear market. InvesTing wrote:
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"We know that when Brinker was 100% wrong in going to 100% cash and then roaming around less than fully invested in the 1988-1991 time frame was quickly hidden after being blamed on a 'bad model'. He claimed he made a new and improved version.
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Originally he claimed he had backtested the model and it worked like a charm on the market he screwed up.
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Later when a caller asked about his backtesting Brinker claimed he never backtested the new model and to do so knowing the results would be foolish. This by the way was the first time I knew besides being arrogant; he made stuff up as he went along and then forgot the line of bull he had said ....or changed it in the name of expedience.
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So he didn't handle his screwup well--left subscribers with more BS rather than leveling with them.
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When he said to buy QQQs in the 80s and then hold hold hold all the way down below 20s, he finally gave up and pretty much left them and never leveled with them about the disaster he wrought in the still open trade.
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Now Brinker is claiming we are in a bull market and is on record for 1600s right around the corner. Just a couple shows ago he was blasting those who were cautious on the market as "false prophets and cassandras".
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Now we are in a bear market and Brinker has never sent a sell signal--just blasted the bears recently and then a week ago claimed that the oil market might have an effect on stock prices. Shaazaaam, I think the false prophets and cassandra's figured that out a while ago.
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Does anyone think Brinker will come clean and admit that his model missed the bear market? Will he call this a "Petroleum based bear market that my model is not designed to call?"
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Will he pretend it did not happen?
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Will he claim he has to change the model again?
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Will he keep calling out numbers like a bingo announcer as the market continues to slip making my point obvioius to everyone that all that "gifthorsecrap" was just a parlor game.
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Dija always said that it was terribly important to keep people in the market to have Brinker yell out his Bingo numbers. I'd guess that is pretty much no longer operative.
"
________
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Here "InvesTing" writes about other bear markets that Brinker has missed:
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"Neither has Brinker (predicted a single bear market).
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87, Bullish and wildly so right before the 30% sell off in October.
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88-went to 100% cash claiming for the only time while making an asset allocation claim that he was bearish. There was no bear and the market was up 30% before he became fully invested again. Oddly some goobers and geezers took Brinker's mantra--"bullish since 91" or "bullish since the early 90s" as exceptional performance when in fact it was political spin to leave out the only time in his career he went to 100% cash and said flat out he was bearish.
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2000-went to 60% cash and screamed "I AM NOT BEARISH"--hard to have "predicted" a bear market when you tell people flat out you are not bearish and if you were you would go to 100% cash.
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Then never going to 100% cash Brinker indeed kept piling high flying tech into the mix reducing cash positions foolishly to do so. TEFQX was followed with taking up to half the remaining reserves and in the most shoddy bulletin I've ever heard of urged subscribers to buy 80 $ QQQs. So those following all of his advice through the worst bear market not only had over 70% in the market but also badly skewed toward the worst sector that has yet to recover. Brinker's QQQs are still down 50%.
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2008--Brinker has been wildly bullish since June 2007 when he in bizzare fashion announced the end of the secular bear market on June 16, 2006--never to explain such a idiotic premise. Brinker was even more bullish in his secular bull market in October 2007 at the very highs and was calling for mid 1600s by now.

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Brinker was never as cautious as he should have been on the housing or credit problems. The oil prices have been on a striaght pathway up for the entire time. Indeed rather than alibi for Brinker concerning energy prices, it is obvious that he was dismissing them as late as June 2008 with oil in the 130s he called those who were bearish on this market "false prophets and "cassandras" and lambasted them in the most tiresome and typiccal belligerant Brinker style.

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Brinker talks a good game--but that's it. All this timing ability is based on crap and spin and of course short memories and new subscribers. Being a rather obscure financial advisor really helps. He would be simply another joke if he was seriously covered by the finanical news.
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So go ahead and give Brinker another mulligan, he never gets it right and there is always a tiny fraction that will give him a pass and hang on, claiming this or that could not have been foreseen.
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That's the point that many goobers and geezers don't understand. There is always something that fits the "nobody predicted that". That's why Malkiel said whatever you do don't try market timing.

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Indeed to Brinker's credit he is primarily a buy and holder and unwilling after 88 to ever again go to 100% cash. If he truly started to try to predict bear markets it would likely be even worse. He was simply a buy and hope raging bull since 2003. It made too good a story with his spin claiming by innuendo to have taken all money out of the market in 2000 and returned to the market with all that cash intact in 2003. I warned Math even when Brinker was still claiming we were in a secular bear market that Brinker would never go to 100% cash and be bearish because it would mean he had to give up that BS story. I wuz right.

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Now "Queen" has given you the marketing "hope" of the Brinker babbling. If the bear doesn't last very long and the market goes to new highs in the forseeable future, Brinker will be back to bashing the bad news bears though they were right and claim that "we don't call energy induced bear markets".

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So Brinker again is, just like 87, 98, and with the QQQ fiasco in a "hold and hope" position --not based on modeling, fundamentals or anything else. Simply based on the position he is in and where he needs to be to sell newsletters."
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InvesTing continued:
"Brinker saw the bear coming--knew he had not called it--had in fact made a totall a** out of himself just a week before with the "Cassandras" and "False Prophet" rant to bash the bears. So Brinker "took care of himself", began the "it's dependent upon oil" spin. It was too late for him to sell and of course he doesn't have a clue if the market will rebound like a coiled spring after he sells, so all he can do is "hang on", much like when the QQQs hit 50s, and hope.
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Indeed all that he cares about is how he can be absolved of blame for yet again missing with his marketiming hubris. None of this is to aid subscribers, only in his mind 'subscriptions'."

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Additional comments:
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Blogger jumpnjoey said...

"..........June was the worst month since 1929 - 79 years. Funny 1929 we were in a Depression but someone we are not even in a recession now.

July 7, 2008 5:04 AM

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Blogger Quis said...

"If the S&P 500 manages to stay above the 1262 level on a closing basis, I am sure Bob will crow again that his model worked as it should have. Personally, I think we will get the bear on a closing basis. Stay tuned."

Well, it happened today. So we can put this 20% nonsense of Blinkers to bed and Blinker can't say he dodged a bear market any longer according to his own definition. Blinker's "market timing" is costing his subscribers and listeners dearly.

But as Bill Flenkenstein said:

'Bear marketology

There is no credence to the notion that "down 20% equals a bear market." (This is an urban legend, which I believe began somewhere on Bubblevision.) A 20% decline does not imply that we had a bear market and now it's over. This is just an expression of the bulls' desire to find a magic number, prompting cries of goodbye to all that.

Bear markets are periods when most stocks decline -- whether 18% or 40% -- and folks lose money. The size of the decline is not the arbiter of whether a bear market is under way. Before this bear market is over, the decline will be far worse than most think possible.'

http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/GlobalEconomyWontBailOutTheUS.aspx

July 7, 2008 1:03 PM

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Blogger jumpnjoey said...

S&P 500 is down over 10% since Brinker bashed the bad news bears first week of June.

"If you can't take a 10% correction, you should not be in the stock market".

How about a 20 pounder?

July 7, 2008 1:18 PM


Blogger Jody said..

OK, I'm officially joining the "Brinker got it wrong" bandwagon. Today the S&P 500 closed 20.0% below the October 9 high (1252/1565), so there's no definition remaining for bulls to hide behind. It's a bear market, and Marketimer rode it down all the way.

The bull is dead. Long live the bear!

July 7, 2008 3:22 PM

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