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Friday, October 3, 2008

Bob Brinker Missed Another 30% Bear Market

Bob Brinker says that "right now" is not a good time to sell stock. Actually, Brinker said that last Saturday on Moneytalk: "I don't have a recommendation to sell stock right now. And if I did have a recommendation to sell stock right now, you would know about it."

Now here we are with another major down week in the rear view mirror.

This week:

  • Dow declined 7%
  • S&P 500 Index declined 9.4%
  • Nasdaq declined 10.8%

Brinker no longer says his forecasts depend on the price of oil like he did back in June and July. Obviously, the reason he no longer claims an "inverse correlation" between oil and the stock market is because only a "fool" would say that now.

Last week, oil declined almost 14%.

Brinker completely missed this bear market, has never acknowledged that it is a bear market and has recommended 100% invested with all equity allocations. Brinker is once again looking for a bottom in the market and has thrown out all prior all-new-money-in buy levels.

* Aug 16, 2007 - January 4, 2008 @ 1411: Mid-1400's
* January 20th -- rescinded mid-1400's (recommended dollar-cost-average only)
* Feb 10, 2008 @ 1331: Low-1300's
* Aug 5, 2008 @ 1285: 1240 or less
* Sept 2, 2008 @ 1282: Low-to-mid 1200's
* September 16th -- rescinded low-to-mid 1200's

* October 3 -- recommends dollar cost-average only

Now that Brinker can no longer blame the market "situation" on the rise in oil prices, what will be his next "exogenous event" (excuse)? In his latest newsletter David Korn commented on Brinker's "black swan" and "crystal ball" rhetoric from last weekend. Posted with permission from David Korn:

Brinker Comment: On Sunday, Bob was talking to another caller and Bob seemed to want to address the previous call but not directly. Bob said he wished he had a crystal ball and was some sort of god who could forecast with complete accuracy, but he wasn't. Then, Bob said he thought that 2008 was a "black swan" in terms of what has happened in the financial markets.

EC: The "black swan" comment is a reference to the theory described by Nassim Taleb in his book of the same title, and refers to an event that is without precedent. Taleb refers to the rise of the Internet, the first world war, the personal computer and the September 11, 2001 terrorist attacks as examples of black swan events. The fact that Bob is referring to 2008 events as a "black swan" I think sets the stage for him to later claim that no timing model, can predict such events; hence, his excuse for not calling a bear market and riding this decline down in a fully invested

Seabiscuit's Brinker-Shave contribution:

Last weekend he said

It's too late to sell

The bear simply smirked

And gave him more hell

Brinker Shave!

I took this photo from the Santa Cruz Wharf one evening just as the sun was setting.


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