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Friday, July 24, 2009

Bob Brinker Says Secular Bear Market Remains Intact

Posted July 24, 2009....Bob Brinker has flip-flopped about secular market trends three times over the past nine years. In 2000, Bob Brinker said that a "secular bear megatrend" had begun in March 2000.

In June, 2007, just months before the market reached it all-time-high in October, Brinker said that the "secular bear megatrend" ended in June, 2006.

This year, in the May, 2009 issue of Marketimer, Bob Brinker said: "Although it appeared to us that the secular bear megatrend that began in year-2000 had reached its conclusion, there is no question that the secular bear megatrend remains intact...."

Pen-name Perma-Bear wrote some interesting Bob Brinker commentary and posted it on Kirk Lindstrom's Facebook forums:

Perma Bear wrote:

"I don't listen to Brinker 24/7 so I miss much of what he is saying. But what I have listened to and reviewed in Honey's reviews indicates to me that Brinker has completely forgotten one of his central beliefs in the first half of the 2000 decade. And that is the belief in secular bull and bear markets. Brinker's central view of the stock market for most of the first half of the decade was that the stock market was in a secular bear market, following the long and prosperous secular bull market that lasted from 1982 to 2000. Brinker's great bull market call in March 2003 emphasized the cyclical nature of the bull. And up until this point in time, (with the exception of his QQQ trade) Brinker was the hero to his followers.

But as the "cyclical" bull approached the all-time 2000 highs, Brinker got cold feet on his secular bear market thesis. He talked about it less and less, eventually to the point where you never heard him mention it on his radio program. Then out of the blue, he retroactively said the secular bear market ended I believe some time in 2006 and he jumped on the bull market going forward bandwagon, all the way through the October 2007 highs. This whole time I don't recall him mentioning secular markets hardly at all. It's as if a central stock market cycle philosophy that he bought into was completely thrown away. And as I've said many times over the months and years, this was Bob Brinker's greatest mistake.

Now briefly applying the secular market theories to gold really briefly. When I hear Brinker go on about how terrible gold has been since the 1980 highs of $850, I just go back to the old secular market theories he was so fond of earlier in his career. While the stock market roared between 1982 and 2000, gold floundered, going from the $850 high to a 1999 low of around $270. But since then, if you buy into secular market cycle theories, gold has been one of the best investments to own since 2000, rising from that $270 low to what is now $940. While $1000 has indeed been a major resistance point for gold, again if you buy into the secular market thesis in which most secular markets last from 10 to 20 years, gold may only be around half way through its secular bull market move.

So I remain in the camp that says stocks remain stuck in a longterm secular bear market while gold remains in a longterm secular bull market. And when we see the final frenzied manic phase of the gold bull market, as we saw in the stock market in 1999/2000, I believe that gold is going to be trading much higher than it is today. If only Bob Brinker could go back in time and revive his old secular market theories. He might also see what I see."

Perma Bear wrote

"Many folks here understand Brinker's indicators a lot better than I do. Perhaps he was just following his indicators. He stuck with the secular bear market thesis for quite a while. But as the indices approached the 2000 highs, his definition of secular bear market began to be put to the test. That is Brinker's definition was that in a secular bear market the old highs could not be superceded by more than 5 percent for the secular bear market to be violated. I think the DOW easily exceeded the 5 percent level. I don't believe the S&P ever did. It was at that point that I personally shorted the market, because I followed Brinker's old thesis."

Honey here: After I told Perma-Bear that indeed, in May, 2009, Bob Brinker returned to his original "secular bear-megatrend" forecast, Perma-Bear replied to me.

Perma Bear replied:

"I'm surprised to hear that. It's the first time I've heard it. And I give Brinker credit for acknowledging it. He isn't known for acknowledging past errors.

Feel free to use anything I post here as you please."

Dixiegeezer took this great picture:


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