Search Bob Brinker Blogs

Thursday, October 29, 2009

Bob Brinker's Market Forecasts Discussed on Radio Program with Paul Merriman

Posted October 29, 2009.....Bob Brinker's dismal market-timing record was exposed on Seattle radio program and internet podcast in a "Sound Investing" interview with David Korn. From the FundAdvice website:
"Sound Investing is a weekly radio program hosted by financial educators Tom Cock, Paul Merriman and Don McDonald. The program has been on the air for 8 years in Seattle."

I have transcribed the first few minutes of the interview:

Tom said: “David, I think you do a wonderful job of educating investors. And your newsletter, I’ve read it for many years now. I know that you are not only an expert on just the investing process, but you do a lot of work on timing. And one of the major timers in the country is a guy named Bob Brinker. And you do something that I think is marvelous because if we’re not careful, people don’t represent their past as accurately as they might. And what you’ve done, is you’ve actually tracked Bob Brinker for how long?”

David Korn
said, “Well, about eleven to twelve years now.”

Tom: “And what have you learned about information on the radio that our listeners maybe should be careful about and make sure they are able to dig into the real results of something?”

“I think you said it best. It’s important to look at real results and not just look at what someone says they did lately, for example. It’s easy to say hey I’ve been invested this year in a great bull market. But if you say that, you might not be disclosing the fact that you missed the brutal bear that started in October 2007 and really went to March of 09 of this year, which we’ve all seen really decimate many portfolios.”

Tom: “So let me understand. This is the guy who is being paid, or people are listening to him as to when to be in and out of the market. And his primary job, because he can’t make money on the way up – the market makes money on the way up – his job is to protect people on the way down, and what you are saying is he didn’t protect investors at all on the way down.”

David: “I can tell you that in tracking him, his Model Portfolios went fully invested in March of ’03. He had taken some out of the market in 2000, not all of it – some of it. And then he had gone back 100% in March ’03, and basically has stayed 100% invested from March ’03 to now.”

Tom: “Wait a minute, just to interrupt you here, so he’s a market-timer but he never made any move in that huge downturn.”

David: “Not from March ’03 to now. His Model Portfolios have been a 100% invested.”

Tom: “Now aren’t there really though two Bob Brinker’s? Isn’t there the radio show Bob Brinker and the newsletter Bob Brinker, and aren’t they very different from one another?”

David: “Well I think that his newsletter publishes these Model Portfolios, which you can look at the performance and you can see how they perform relative to the market. The radio, I think is frankly a pulpit for him to educate, but also to attract new subscribers. And I think if he can attract subscribers any way he can, he will. That seems to be the nature of it. But certainly, he has not made any timing move to allocate more toward cash since March of ’03. And we went through that 50%+ bear market from October ’07 to March ’09."

Tom: “That seems a bit odd, doesn’t it Paul?”

Paul Merriman:
“One of the tricky parts of market-timing is to know whether your timing system has a fail-safe. When something can go down 50%, there’s not a fail-safe built into the timing system. Ken Fisher, people thought he would get them out and he didn’t.”

Honey here: Bob Brinker's Model Portfolio I lost over 50% from the market high to the March 2009 low. Brinker claims that his "timing model" totally missed the worst bear market since the depression because of "exogenous events" that he could not have predicted. Well, no matter what, as Paul Merriman said, there was NO FAIL-SAFE built into Brinker's timing system!

As my readers know, I also track Bob Brinker -- just as David does. However, there are a few differences between us. The most important one is that I do not charge for my work and David does. (Although, I am the first to say that David's newsletters have MUCH more in them than his Moneytalk summaries and are well worth the price of the subscription.)

David's Moneytalk summaries contain more detail than mine, but I feel that mine are sometimes more accurate because I transcribe many excerpts from the program so that I can present exact words and not just my interpretation. David only does interpretation. You can read some of David Korn's writings here on my blog and get the link to order a complimentary issue of David's OUTSTANDING newsletters. [LINK]

* You can listen to the complete interview at [LINK]

Chart Courtesy of Kirk Lindstrom [LINK]:


Top Rated Newsletter

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

Cick to read the full page article!