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Friday, June 26, 2009

Bob Brinker's Latest Stock Market and California GO Bond Advice

Bob Brinker continues to be bullish on the market. Brinker's latest advice is to "buy on weakness" (for those who want to add to their stock market holdings).

In the June, 2009 Marketimer, he raised his projection for the S&P 500 Index slightly higher than his May forecast. Brinker said: "We expect the S&P 500 Index to make progress at least into the 1050 to 1150 range into next year."

However, Bob Brinker has been a bullish buy-and-holder since March 2003. On Moneytalk last year, he forecast "new all-time-highs as we get into 2009."

This is from my Moneytalk Summary of April 26, 2008 [LINK]

Caller John, in a follow-up question wanted to know why there are so many “perma-bears” out there saying we are headed for a doomsday.
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Brinker reminded him that he recently had a guest on the broadcast that was extremely bearish when the market was lower than it is now -- and that he had stated “on the broadcast” that he did not agree with the guest-speaker.
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Bob Brinker said: “You’ve heard me say on the broadcast, I think we are going to new all-time-historic-record stock market highs by 2009. I think by the time we get into 2009, we are going to be talking about all-time-historic record highs on the S&P 500 Index. But I know what you are talking about, I see it all the time.....in writings….in talking heads. They are talking down the United States of America. They are talking down our economy………(Caller: “Do you think people tend to focus too much on short-term?”) "Oh, absolutely, absolutely, I know this for a fact because when we have gone through this recent bottoming process, and certainly we have worked very, very hard to identify the bottom that I believe that we did accurately identify in the first quarter.
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It’s my opinion that the March 10th low on the S&P 500 was the bottom for the correction. And I think that what happened was that was a very successful test of the initial low recorded January 22nd. You might remember the S&P 500 closed on January 22nd in a very high volume panic-atmosphere at 1310. Well we knew, that despite the fact there’d be some short-term rally.......back then, we knew there was going to have to be a successful test of that low. And we knew what was required of that test before it occurred. Now that is exactly is what happened. And the closing test in March was, actually it was less than 3% below the initial low established on January 22nd. So we are talking about a text-book testing process in that correction low that we looked at.
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Unfortunately, unfortunately, and I’m sure you’ve heard this, there were a lot of people out there, and I mean a lot of people out there, who got it completely backwards off that correction low and that successful test……I’ve been telling people, going to, actually to February because we do this through the investment letter, of course, I’ve been telling people to actually use periods of weakness to buy into the market at specifically down in the low-1300’s or any minor weakness just below that level, which we got a little bit of there on March 10th and in mid-March, to take those opportunities to add to positions if you’re looking to add to positions – no mention, no thought of selling anything into this kind of weakness……”

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Caller John concluded by saying: “I took your recommendation, Bob. When it was below the 1300’s I added…….I’m just glad I got you, your son and the Marketimer on demand.”
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Brinker said: "And just for the record, I’m right with John. I was the exact same thing that John was doing. When we saw that weakness on the correction test into the low-1300’s and that very, very minor weakness that we had just below that level for a very short window of time, I was doing the same thing that John was doing – which was adding to positions."
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Brinker continued: “And if John is seeing people crying now about the fact that they sold out of the market at the bottom, how do you think those people are going to feel in 2009……if I am correct........and this market recovers to record highs in 2009, how is somebody is going to feel that sold out of the market at 1300?.......this is Moneytalk.” [Honeybee EC: The S&P 500 bottomed the following March at 677.]


Here is a chart that shows all of the buying-opportunities Brinker has issued since the mega-bear market began. Notice that Brinker was "looking for a bottom" again when the market turned up on March 10th. Courtesy of Kirk Lindstrom [LINK]:


CALIFORNIA GENERAL OBLIGATION BONDS

Bob Brinker's latest advice on California GO Bonds is to limit holdings to 1%. On Moneytalk last weekend, he said: "My view is that you limit your exposure to any one California issuer to no more than 1%. That includes the state of California."

Frank J wrote these comments:

DeleteAnonymous said:

Honey and others -- I commend you for the careful tracking you have done on BB shift with regard to Calif Muni Bonds.

There was a time when he routinely recommended them to higher bracket people in CA, seeking income. Now we are at the stage where they should only constitute 1%. I don't get the newsletter so I don't know if he has commented there on the subject.

With the favor he has shown toward CA muni bonds over the years, and the huge number of calls he's fielded on the topic, this change in his views should be worthy of an opening monologue. I don't think it has.

Instead, one would have to be a regular and careful listener to detect the shift to the 1% limit. Thank you Honeybee and others who have tracked this shift -- and I hope CA bond owners are paying attention.

ON ANOTHER TOPIC: the Cap and Trade bill is coming up for a vote tomorrow or Sat. in the House of Reps in Washington, DC. If you have not called your representative and told them to vote against it, better do so now. This bill has now expanded from 900+ pages to 1200+ pages.

June 25, 2009 2:44 PM.....I forgot to "sign" my post -- Frankj. [LINK]

Kirk Lindstrom wrote an informative article titled: "Bob Brinker's Evolving California GO Bond Advice Ignores What President Obama Did to Chrysler Bond "Speculators" [LINK]

This is Lama as a baby. See him with his sister Dolly in my profile picture:


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