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Sunday, October 12, 2008

Bob Brinker's Moneytalk: Discussion, Commentary and Excerpts, October 12, 2008

Bob Brinker's Moneytalk Excerpts and Honeybee's Commentary, Updates and Discussion Sunday, October 12, 2008

Brinker's opening monologue was very close to a verbatim repeat from Saturday. Please see my previous post for excerpts of the transcript.

In David Korn's outstanding newsletter, he has written some extremely interesting and informative comments about Brinker's opening-monologue-stock-market-mea-culpa. With David's permission, I will share some of David's comments. David Korn wrote:

"EC: A few choice comments here if I might. This was Bob's first acknowledgment on Moneytalk that we have even been in a bear market, and that he didn't forecast the decline. Bob was facing a lot of pressure lately with criticism being lodged against him on the Internet and elsewhere. Subscribers of mine reported that they had e-mailed Marketimer and gotten a very curt response with basically the same info -- that Bob had not forecast this bear market. Bob basically had his back against the wall today and was forced to say something and I was expecting something along these lines. However, I don't think he went near far enough -- especially given that he had previously been bashing the advisors throughout the spring who were bearish, some of whom had been guests on Moneytalk over the last year. There was no discussion of his secular bull market forecast, which in my opinion is also clearly wrong, and there was further discussion of the nature of this bear market. I will be covering both of those topics in upcoming newsletters.

EC#2: Bob claims that he had no way of forecasting a global banking crises. But he didn't mention that when the market initially started its descent into bear market territory, he blamed it on the price of oil more than anything claiming that it was the "wild card" and that stocks were moving inverse to that index. With oil prices down to below $80 a barrel from their highs at $145, that theory is out the window. On a positive note, we are finally seeing some break in gasoline prices which is welcome sign to a consumer who is already in a depressed mood.

EC#3: Over the years, I think I have developed a pretty good idea of Bob's stock market timing model, which is heavily weighted toward a valuation gauge on the market which is what I think ultimately helped him take money off the table in his January 2000 newsletter. But Bob didn't seem to acknowledge, or perhaps just did not give enough weight to, the problems the subprime mess was having last year. In looking through my newsletters over the last 12 months, I saw that I had criticized Bob quite often for not acknowledging the problems with the subprime market and the impact it was having on the ratcheting down of financials and in hindsight I should have acted more upon that myself, instead of deferring. Elaine Garzarelli, for example, who has a timing model with similar elements to Bob's, issued a sell signal earlier this year. (Garzarelli is a corporate profit economist). When Bob started focusing on the price of oil and not talking about the bear market, that should have been the final tell in hindsight -- well before the global meltdown really was in full swing."

Complimentary issue of David Korn's newsletter

Honeybee here: Today, there were several calls about GNMA's, and several callers were concerned about the safety of their money market funds.

NOTE: Brinker suggested making a phone call to your investment company to see if they are participating in the Treasury Money Market Guarantee Program. Vanguard, Charles Schwab and Fidelity are participating.

Sunday, there was only one caller who asked Brinker about the stock market. The caller said: "You've spoken in the past about secular bears and bulls, cyclical bears and bulls, where are we in that cycle at the moment?"

Bob Brinker replied: "Well I think that right now, we are in a situation where we are attempting to analyze what's going on in the marketplace. And I realize there is always the desire for that instant analysis, that instant replay.........and I understand that curiosity........I think we are in an unprecedented situation right now which does require some time in order to analyze. Because what you've seen here in the last 5 to 10 trading sessions -- and it's been feeding off the credit market chaos -- has been a stock market that has trading really on fear. And I think that......if others want to go out with instant analysis, they're welcome to do it, but I prefer not to do it. 1-800-xxx-xxxx.

Honeybee EC: So once again, Brinker gave himself a mulligan on everything he has said in the past -- this time about secular trends -- and moves on. For years, he claimed that the market entered a "secular bear megatrend" in March 2000! Then in June, 2007, he retroactively claimed that it had ended the previous year -- in June, 2006. If you want to read a complete history of Brinker's secular trend market analysis go to Archive Honey's Bob Brinker Beehive Buzz.

Brinker's guest-speaker Sunday was Daniel R. Lee, author of Housetrap: Who Set It? And How to Escape From America's Mortgage and Housing Crisis.

If you missed the programs this weekend or want to download the Charles Ellis and Daniel Lee interviews, it is all available FOR FREE at KGO810 Archives for 7 days after the programs are broadcasted.

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