Search Bob Brinker Blogs

Sunday, November 2, 2008

Bob Brinker's Moneytalk: Sunday, November 2, 2008 Update

Bob Brinker's November 2, 2008, Moneytalk program could more accurately have been billed as "Politicaltalk on Wheels." Brinker spent most of the program covering the polls, politics and upcoming election predictions.

However, Bob Brinker did make some comments about the stock market. At the beginning of hour-two, he gave some stock market statistics. Brinker pointed out that the market was "very depressed," but had "bounced off its lows." He said that the S&P 500 Index and the Wilshire 5000 are both down 34% year-to-date.

Bob in Maui, who said he is a Marketimer subscriber and Moneytalk on demand user, asked Brinker: "You say that this financial crisis we are in really began when, and maybe was partly the result of Lehman being allowed to go bankrupt, why was it that nobody in the financial community could make a call at that time, when that occurred, that could have given people the alert to maybe bail out of the market for awhile?"

Brinker told Bob that he thought what happened "there" was exactly what he had talked about with Joseph Stiglitz yesterday -- the trigger point that happened in mid-September. He said that Stiglitz had agreed that what happened was that when the decision was made to allow Lehman Brothers to go bankrupt, that had triggered a series of events that happened in very rapid fashion.

Brinker then said: "......And that's when we saw the market really enter into a free-fall period that carried the S&P 500 into the 800's range during the month of October. And I think it was very much related to what was happening at Lehman Brothers in terms of that bankruptcy. But hey, we also have to remember that at the time that the Lehman Brothers bankruptcy occurred, the market had already taken a precipitous fall at that point -- had fallen very greatly down at that point -- very large percentage losses.....

....... Yes, I do believe the Lehman Brothers bankruptcy was a trigger to additional declines in the market. But I think at the time that the Lehman Brothers bankruptcy was announced, I think it was already too late in the game to be making those kinds of judgments, so I think that's probably what happened there."

Honeybee EC: Huh? LOL!
.....It's a matter of opinion whether or not it would have been worthwhile to sell stocks on September 15th if one believed that the Lehman Brothers bankruptcy was going to cause the market to go into a "free-fall period" as Brinker is very close to claiming that he saw coming. How did he know it would stop falling when it did? Has it stopped falling? We sure hope so, but is he now saying the bottom is in? He hasn't issued any new "attractive for purchase" buy-levels.

Brinker is right that the market had already fallen "precipitously" into bear territory several months before the Lehman Brothers bankruptcy. However, Brinker didn't see the correction coming in January, and certainly didn't forecast, or raise cash for, the full-blown bear market that first hit in June/July.

Some are very disappointed in the way that Brinker has dealt with his obvious market-timing mistakes this year -- both on Moneytalk and in Marketimer. Up to this point, he has tried to put the blame on what he used to call "exogenous events." Firstly, he blamed the rapid rise in oil prices -- that certainly didn't pan out. And now that the market has done a "free-fall" into an almost 50% decline, he places the blame on one event -- the bankruptcy of Lehman Brothers.

If I could ever get on the air to ask it (I've tried many times, all I ever get is busy signals), my question for Mr. Brinker would be, if you couldn't recognize this kind of bear market coming and get your followers out of it, what should we expect you to recognize?

Brinker seems to have joined the "church of buy and hold." Perhaps he should just say so and stop with the excuse making.

Brinker's Sunday guest-speaker was pollster John Zogby.

This is Dolly checking out the beautiful crocheted afghan that my daughter made for me -- notice the kitties and hearts in the afghan.


Top Rated Newsletter

Timer Digest Features
Kirk Lindstrom's Investment Letter
on its Cover

Cick to read the full page article!