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Saturday, November 7, 2009

Bob Brinker's Latest Forecasts and Market-timing Advice

Posted November 7, 2009... Bob Brinker is on record saying that in his view, the recession ended in 2-Q of 2009 and the economy will do well in the third and fourth quarters of 2009 -- and in 2010.

Moneytalk, October 12, 2009 Bob Brinker said: ......In my opinion, the recession ended in the second calendar quarter of 2009. I believe that the recession ended during the April, May, June quarter. And my expectation is that we are going to see a positive number, could see a decent positive number here in the third quarter when they report it later this month. And I'm also expecting we are going to see a decent positive number in the fourth quarter when they report that number in January. I think we are going to see, and this is what I've been saying for quite a while in the investment letter, I think we a going to see a positive result from Gross Domestic Product in both the third quarter and the fourth quarter.....

.....And I also expect we are going to see a decent rate of real Gross Domestic Product growth in calendar 2010. I think this is one of the reasons that you've been seeing such a positive tone in the stock market. Because I think that investors are discounting the future."

In January, 2009, Bob Brinker said that 2009 would be a "significantly positive" year for the stock market (he made the same prediction in January, 2008). However, after he made that prediction, he may have had some doubts because the market kept declining precipitously -- actually another 25%! So in the March 5, 2009 issue of Marketimer, Bob Brinker said:

“Due to the fact that the
November 20, 2008 S&P 500 Index closing low failed to hold during the testing process, we believe a new bottoming process will be necessary in order to put an end to the bear market. This means that in order to set the stage for a sustainable market advance, we need to see a sequence of events consisting of (a) the establishment of an initial closing low; (b) a short-term rally; (c) a test of the area of the initial closing low on reduced selling pressure.” (Of course, the market bottomed four days later and never looked back.)

Here are three reasons why it's ridiculous for Brinker to continue to promote himself as a market-timer:

1. Brinker has been a buy-and-holder for years and has made no changes to any of his model portfolio asset allocations since March 2003 when he returned all available cash reserves to the stock market. All three of his model portfolios lost huge amounts of money because they were fully invested for the (more than) round trip from March 2003 at S&P 811, to October 2007 at S&P 1565, and back down again to March 2009 at S&P 677.

For example, here are the Marketimer Model PortfolioI losses: of 10/31/07 was $302,561 of 2/28/09 was $143,938 down $158,623 or (52.4%) of 10/31/09 was $212,009 down $90,552 or (29.9%)

2. Since October 2008, Brinker no longer uses his Marketimer Timing Model© in Marketimer and it has not been mentioned on Moneytalk since mid-2008.

3. Brinker no longer issues "attractive for purchase" buy-levels for "new money." His only advice is to "buy on weakness," but he has never defined weakness. (And it's been months since he recommended dollar-cost-averaging.)

I'm spider-phobic, but even I can see the beauty in this web that my daughter sent to me. Click on it to enlarge:

Dixiegeezer sent this gorgeous picture -- not sure what kind of bird it is:


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