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Friday, September 4, 2009

What Happened to Bob Brinker's Stock Market Timing Model©

September 5, 2009.....What happened to Bob Brinker's "Marketimer stock market timing model©"? The new and improved one that Bob Brinker said he had updated in 1987 because the old one missed the October, 1987 stock market crash, seems to have disappeared after having totally missed the worst bear market of our lifetimes (as he admitted on Moneytalk).

Going back years, Brinker has promoted and relied on this timing model to get him (and his subscribers) out of the stock market before a 20% bear market.

I checked back through year-2007 Marketimers. In every issue, Brinker wrote about what the "The Marketimer stock market timing model" was forecasting. It was very bullish, predicting new market highs and zero chance of a bear market. Many Marketimers began similar to these examples:
January 4, 2007, Marketimer: "As we enter our 22nd year publishing the Marketimer Investment Letter, the Marketimer stock market timing model...."

June 5, 2007: "The Marketimer stock market timing model indicates there is a very high probability that the ......"
In 2008, Brinker continued writing about the "Marketimer stock market timing model" each month until October. October, 2008 was the last time that Brinker ever mentioned the timing model in Marketimer. (And he has never written about it in 2009.)

Currently, Brinker uses new language when writing about his market-timing views. In the June, 2009 Marketimer, he used these words, "Our stock market indicators...." However, he has not identified what those "indicators" are.

In September, 2009, instead of writing about the "5 root causes for a bear market" like he has done for years, he used these words: "We are monitoring several key factors......"

Kirk Lindstrom wrote an article about Brinker's "5 root causes for a bear market" (which Brinker in now calling "key factors"). Here is an excerpt of Kirk's article that shows the 5 factors:
"The 5 root causes of a bear market, according to Bob Brinker, are:

Tight Money:
Rising Rates:
High Inflation:
Rapid Growth:
Over Valuation:"
So Brinker's new and improved 1987 timing model seems to have disappeared from his "investment letter" just like so many, many other things over the years. Will he bring it back? Is that why he hasn't said a word about it in the newsletter or on Moneytalk for ten months? We shall know in the fullness of time.

Another big change that Brinker made in April, 2009, is that he stopped issuing "buying opportunities" defined by S&P 500 Index levels. Since April, he simply says "buy on weakness." He has never defined what he means by "weakness." He must have decided it was just too embarrassing to continue giving actual numbers since he had said the market was "attractive for purchase" at four different levels in 2008, and the market continued to drop each time. Then almost unbelievably, he missed the real bottom.

Chart courtesy of Kirk Lindstrom:

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