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Tuesday, November 11, 2008

Bob Brinker Failed to Call Market Downturn

Bob Brinker was a roaring bull as 2008 began -- predicting new highs. (Brinker has not issued a sell signal in 2008.)

Marketimer, January 4, 2008 (S&P: 1468.36) Bob Brinker said: "We continue to rate the market attractive for purchase on any weakness into the S&P 500 Index mid-1400's range........We expect the S&P 500 Index to achieve new record highs this year and to reach the 1600's range in the process."

By the 20th of January, Brinker admitted on Moneytalk that he had not expected the market downturn, and he dropped his "mid-1400's" new-money buy-signal. His Model Portfolios remained fully invested.

In February, Brinker issued a lower buy-signal in the "low-1300's." He talked about this call on Moneytalk in May. He claimed that he had made the call based on the March lows, but he actually made it on February 10th.

By April, when the S&P was well above his low-1300's buy-level, Brinker was extremely bullish again -- predicting new highs, as he had done in October, November and December, 2007 and January, 2008.

April 19, 2008 Moneytalk (S&P 1390.33) Bob Brinker said: "...........if you are looking for the market into 2009, then obviously, you should be feeling pretty good about your stock market portfolio. Because not only has it shown a very nice advance since the correction lows in March...............but in addition to that, I think it has a lot further to go. And I continue to expect, as I have said, that we will see new all-time-historic-record highs in the S&P 500 Index."

In May, Brinker was still very bullish:

Moneytalk, (May 10, 2008) Bob Brinker said: "I mentioned last week we had a recent guest on the program back when the market was at the lows – when the market was down around 1300 in the S&P……..he was bearish as a (unintelligible) bears. And I remember telling the audience, I said look, it’s a free and open exchange of ideas. This is not my view. I happened to be very bullish at that time.......In fact, at that time, I happened to have a buy signal on the market when the market was down around 1300. But he was coming with his bearish views………”

By May 31st, Brinker was bashing "bad news bears" on Moneytalk, and calling them "cassandras":

CORRECTION LOW AND TESTS.... 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."

STOCK MARKET BEARS.... 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………It’s just amazing and yet these people are out there, and these people are not happy, I’m sure, to find themselves out of a rising market since March. To find themselves looking for ever lower prices when in fact we’ve had the opposite."

Then June hit -- one of the worst ever for the stock market. By July all the indexes had dropped firmly into bear market territory (even by Brinker's own definition).

Brinker then began to blame the market declines on the rise in the price of oil -- calling oil a "wild card" and saying it had an "inverse correlation" to the stock market. However, by the time October rolled around, he had ended that tactic because the price of oil was dropping faster than the stock market.

After the market hit bear territory, Brinker issued the following buy levels and subsequently removed them:

* Aug 5, 2008 @ 1285: 1240 or less
* Sept 2, 2008 @ 1282: Low-to-mid 1200's
* September 16th -- rescinded low-to-mid 1200's (recommends dollar cost-average only)

As of right now, Brinker is telling listeners to continue to dollar-cost-average new money into the market while he looks for a new buying-opportunity. MOABO? Oops!

Moneytalk, November 8-9, 2008, Bob Brinker said: ".......But I have not yet reached a point right now where I have been willing to upgrade the recommendation on the stock market right now from dollar-cost-average to buy. I do anticipate as we move forward that there will be an opportunity to upgrade the stock market recommendation, which is currently for new money -- we are talking new money -- as you have, which is currently dollar-cost-average, I do expect there's going to be an opportunity to upgrade that to buy a recommendation. But until those conditions fall into place, I would remain on a dollar-cost-average approach........"

This has been an awful year for all investors, but it must be especially sad for those who trusted Brinker to get them out of the stock market before a bear arrived -- especially one of this magnitude -- almost a 50% decline.

I know that there are many Marketimer subscribers who subscribed solely because they believed that Brinker's Timing Model would issue warnings in advance of a bear market decline like this one. Brinker's Model Portfolios are still fully invested as they have been all year.

I'd love to give credit for this adorable picture, but the author is unknown:

Taxman sent a link where you can see all of this cute "cat and parakeet" photo story in one place: "I am the masta of the putty tat"


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