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Friday, October 10, 2008

Bob Brinker: Market-Timer Who Became a "Buy-and-Holder"

Will this bear take out Brinker's 2003 buy-signal?

Friday stock market update

The Dow Jones Industrial Average suffered its worst-ever weekly loss in percentage terms. The Dow swung in a 1,000-point range for the first time in its history. It closed at 8451...

The S&P 500 Index dropped about 23% this week, closing at 899.22. It's now less than 100 points above Brinker's famous buy signal of March 11, 2003 -- at S&P 807.

The price of oil has dropped below where it was a year ago. The closing price is showing at $80.69, but Fox News Channel is reporting that it has dropped to $77.


Bob Brinker has always presented himself as market-timer. He has always claimed he would not be invested when they "carried out the piano player," and has ridiculed the "church of buy-and-hold" many times.

In 2000 Brinker sold 65% of his model portfolios stocks before the 2000-2002 bear market. He issued an all-in buy signal in March 2003. However, he raised no cash before or during the 2008 bear market, so has given back most of the gains since 2003...

That seems to put Brinker now in the camp of a professed market-timer who simply buys and holds -- which makes all of his ongoing new market bottom-calls totally irrelevant.

Mark Hulbert said the following about Bob Brinker in his June 2, 2008 Marketwatch column:

"Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early June, editor Bob Brinker wrote that his market timing model "remains in favorable territory as we approach the start of the summer season. We continue to expect stock prices to work higher and to achieve new historic highs in the market indexes." Brinker's model portfolios are fully invested."

In Mark Hulbert's column this morning he claims that the market bottom will not be in until the buy-and-hold market advisors become "market-timers." He doesn't mention market-timers who have become "buy-and-holders." 8)

Here are some excerpts from Mark Hulbert's column this morning:

Commentary: Market Timing Popularity Indicator says bottom not yet at hand

By Mark Hulbert, MarketWatch
Last update: 12:01 a.m. EDT Oct. 10, 2008
ANNANDALE, Va. (MarketWatch) -- Earlier this week, in reporting that contrarians did not believe the market had bottomed, I suggested that "When genuine capitulation finally takes place, few will recognize it as such at the time."
I also wrote that "an eagerness to declare that capitulation has occurred probably means that it hasn't."

In today's column, I want to focus on a related way of assessing whether a major bear market is nearing its final low: A gauge I first introduced more than 15 years ago that I call the "Market Timing Popularity Indicator."

This indicator measures where the average adviser lies between the extremes of buy-and-hold and market timing. Historically, buy-and-hold tends to reach its peak of popularity at market tops, just as market timing becomes most out of favor. The inverse tends to be the case at market bottoms.

For example, that means that, as a bear market approaches its final low, at least a few die-hard believers in long-term buy-and-hold throw in the towel and become latter-day converts to market timing.

That has yet to happen, however, at least as judged by my reading of the 200 newsletters monitored by the Hulbert Financial Digest.........."

SeaBiscuit is feeling sorry for Bob:

On seeing a battered Bob

I've decided to switch

I'm now telling the bear,

"Stop it! You son of a bi**h!"

Brinker Shave!


Honeybee PS: Will Bob Brinker host Moneytalk this weekend? Some are saying no way, it will be Flanagan. We shall see.

It would be wonderful and show real integrity if Brinker would do something for his subscribers and listeners other than (as Will L said) "Let them eat cake."


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