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Tuesday, December 29, 2009

Doug Fabian ETF Trader Leads List of Worst Newsletters

I want to warn people about the dangers of "Market Timing Newsletter Performance Chasing." Bob Brinker completely missed the 2007-2008 bear market but if you stuck with him, you've made a good deal of what you lost back this year.

Brinker P1 as of 10/31/07 $302,561
Brinker P1 as of 2/28/09 $143,938 (52.4%)
Brinker P1 as of 11/30/09 $222,660 (26.4%)

Gain required from 11/30/09 to "break-even" with 10/31/07 = 35.9%

I've read stories on other message boards of people who abandoned Bob Brinker's market timing strategy near the bottom then switched to a newsletter that was correctly bearish in 2008 but lost money in 2009!

Can you imagine losing over 50% from the top following Brinker's Marketimer in 2008 and early 2009, reading in Hulbert that Doug Fabian had a good 2008 so you switched to Fabian's newsletter at the bottom only to lose more money in 2009 ? Someone who did that could have lost over 75% and now have only about a third of what buy and holders would have. They now need a TRIPLE to get back to even!!

Reminder: My advice for the past decade plus has been and remains IGNORE the market timers for all but a tiny fraction of your "mad money" and go with "Core and explore" for your total investment portfolio.

Peter Brimelow of MarketWatch wrote another great article about the worst investment newsletters for 2009. For the 2009 YTD period covered by Brimelow, the Wilshire 5000 Total Stock Market Index (VTSMX Charts and Quote) gained 27.10% with dividends reinvested.
  1. Crawford Perspectives -7.2%
    Crawford was #1 last year so Brimelow included him this year by expanding the bottom 10 to a bottom-11 article.
  2. Investment Models Newsletter -9.4%
  3. Almanac Investor Newsletter -12.1%
  4. Sy Harding's Street Smart Report -12.5%
  5. Peter Eliades Stock Market Cycles -12.5%
  6. Coolcat Total Stock Market Report -19.1%
  7. Nasdaq Wizard Mid-Term Model -20.1%
  8. Carnegie Management Group -24.4%
  9. Nasdaq Wizard Long-Term Model -30.7%
  10. Bernie Schaeffer's Option Advisor -33.09%
  11. Doug Fabian's ETF Trader -49.2%
As of December 28, 2009, "Kirk's Newsletter Explore Portfolio" is up 34.3% YTD vs. DJIA up 20.2% YTD

It is too bad Brimelow doesn't include the 10 year performance for the top and bottom lists. I'd like to see how many beat the markets over 10 years or more. Brimelow uses Mark Hulbert's data but Hulbert admits he doesn't include Bob Brinker's QQQ advice in his returns.
"Please note: In late 2000, Brinker forecasted a several-month bear market rally and recommended an investment in the NASDAQ 100 Index—a trade that turned out quite unprofitably. However, because Brinker at the time of making this forecast chose not to make this trade part of his model portfolios, his HFD record has not suffered as a result."
__ March 2009 by Mark Hulbert on Pg 4 of the April 2009 issue of "The Hulbert Financial Digest"
=> Bob Brinker's QQQ Advice
=> Effect of QQQ advice on reported results

Mark Hulbert lists 10-year performance numbers for the large, popular newsletters he follows but he admits his results don't match what the newsletter writers publish so I'm not sure how useful his numbers are.

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 161% (a double plus another 61%!!) vs. the S&P500 UP at tiny 9.8% vs. NASDAQ UP at tiny 4.8% (All through 12/28/09) (More info - FREE Sample Issue)

Subscribe NOW and get the December 2009 Issue for FREE!
(Your 1 year, 12 issue subscription will start with next month's issue.)

Saturday, December 26, 2009

Reviewing Bob Brinker's Two-year Market-Timing Record, Part I

Posted December 26, 2009...Today, I will review Bob Brinker's 2008 market-timing record. As the year ends next week, I will post a review of Bob Brinker's 2009 market-timing record.

It's important to remember that in spite of all of Brinker's market forecasts and off-the-books advice, he has not raised any cash reserves from his model portfolios since March 2003 when he returned to fully invested. I made this statement in January, 2008: "I do not believe that Bob Brinker will ever again issue another sell signal--not even a partial one like he did in January, 2000." I'm not usually that prescient. 8^) [LINK]

BOB BRINKER 2008 YEAR IN REVIEW (The S&P 500 Index topped at 1565 in October 2007.)

January 2008 Marketimer (S&P 1468.36), Brinker said the stock market conditions were "favorable as we enter 2008” and he took a whack at the “bad news bears.” He repeated his prediction of new highs reaching into the “1600’s range.”

January 19, 2008 (S&P 1325.19), Moneytalk, Brinker said that the correction was more than he "expected," ".....but it has not been my view that we would be looking to run for the hills and expecting the stock market to go down 50%. That has not been my view, and that is what it went down earlier in the decade. The S&P closed down 49.1% from closing high to closing low. Right now, we are looking at a 15% correction in the market as we speak. So to compare the two, at this point, is to compare apples and oranges....."

January 20, 2008 (S&P 1325.19), Brinker issued a special Marketimer bulletin retracting his “mid-1400’s” buy-in level and replacing it with dollar-cost-average ONLY.

New and lower buy-signal (S&P 1331.29)....February, 2008 Marketwatch column, Peter Brimelow quoted the February special bulletin and Marketimer. Brimelow published:

"Brinker said recently: "Marketimer views the establishment of a correction bottom as a process which unfolds over a given period of time. This process involves the initial establishment of a closing S&P 500 Index low, followed by a short rally, followed by a test of the area of the previously established low on reduced trading volume. The initial closing low in the current stock market correction process occurred on Jan. 22, when the S&P 500 Index closed at 1310.50. The market subsequently rallied for eight days, at which point it began the process of testing the area of the Jan. 22 closing low.....

.....In our view, the correction bottoming process has proceeded with a high degree of historical consistency to date. We have witnessed a decided reduction in selling pressure during the testing process, which is essential to a successful outcome. We now rate the stock market attractive for purchase on any weakness that occurs in the current area of the S&P 500 Index low 1,300s, or any minor weakness that occurs below that level....

....Market timer's summary: "As has been the case with every correction since August of 2007, several stock market pundits are claiming that a bear market is underway. We do not believe this is the case. We expect the S$P 500 Index to work its way into record new high ground by late this year or in 2009." [LINK to Brimelow Column]

Says Market Bottoming...March 4, 2008 (S&P 1326.75), Marketimer, Brinker said: "The process of establishing a stock market correction bottom has unfolded in text-book fashion over the past two months. This process involves the establishment of an initial closing low, followed by a short-term rally, followed by testing of the area of the prior established closing low on reduced trading volume ... The correction bottoming process (over the past few weeks) has seen a significant reduction in selling pressure in the vicinity of the Jan. 22 closing low. This is a very important aspect of any successful test."

Honey EC: Remember that this was March 2008. Brinker said almost the identical things in March 2009. I'll post the 2009 review next week.

Brinker says he bought at S&P low-1300's (S&P 1390.33), Moneytalk, April 19, 2008, Brinker said:

“Those who are out there with the bear stories now are making fools of themselves because it just doesn’t compute does it? When you have a market that’s seen this kind of buying it just doesn’t compute……. that America is spiraling downward – doesn’t make any sense...."

“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 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.
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.
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……”

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.”
Brinker replied: "And just for the record, I’m right with John. I was doing 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." (S&P 1390.33) Honey EC: Since the S&P was close to 1400 again, Brinker was probably confident that he could safely brag about buying at low-1300's and make the audience regret not having been apprised of his buy signal if they weren't subscribers. He's done that sort of thing many times. By July, he might have been embarrassed -- if that was a possibility. It's not....

Moneytalk, May 31, 2008 (S&P 1400.38) Brinker said: “What we have right in here now is evidence that the Cassandras, who earlier this year, were telling us we were in recession – right now they’ve basically – well I’ll be kind, basically, they look like fools right now. Because all that they’ve accomplished with their talk about recession…………all that they have to show for their efforts is that they scared the people who listened to them out of the stock market this past winter………."

June 2 2008 (S&P 1385.67) Marketwatch, Mark Hulbert wrote:

"Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early June, editor Bob Brinker wrote that his market timing model "remains in favorable territory as we approach the start of the summer season. We continue to expect stock prices to work higher and to achieve new historic highs in the market indexes." Brinker's model portfolios are fully invested." [Link to Hulbert Column]

July 9, 2008 (S&P1244.69) Mark Hulbert wrote a column for Barron's online. Hulbert published:

"Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early July, Editor Bob Brinker reported that his stock-market timing model remains in favorable territory. However, he cautioned that oil's price constitutes a "wild card." "In the event oil prices continue to rise, consumers and the stock market will be held hostage to the cost of energy. This would provide a strong headwind against the economic recovery process. If oil prices stabilize or decline from current levels, we believe stock prices can make progress into 2009.." Brinker is recommending that subscribers' stock portfolios be fully invested." [Link to Barron's column]
July 26, 2008, Moneytalk (S&P 1257.76), Bob Brinker replied to a caller: "Would the market get to new all-time-highs within your time-frame of 1 to 3 years? Yeah. For me, my opinion on that would be -- without question."

Late June/July/August 2008 Brinker blamed the market drop on the price of oil -- until it became painfully obvious, he was totally wrong. June 28, 2008, Moneytalk, Bob Brinker said: "--we see it with a direct correlation. We saw just this week between rising oil prices and the stock market..."

Kirk Lindstrom posted a chart [LINK] and said: "The market seems to "correlate" much better to what is happening with the banks than with oil. Funny Brinker fails to notice this."

David from "The Shark Report Blog" published:

"According to Bob, oil is the key to the markets and not the financials- I definitely do not agree- guess I have facts on my side now as oil has fallen from $147 to $112 and the markets have barely moved off the 1216 closing low in mid July.
Bob says the following in his (August, 2008) letter:
"In summary, we continue to regard oil prices as the key variable for stock prices. Lower oil prices combined with low interest rates would provide the basis for an improving economy next year. We believe such a scenario would be embraced enthusiastically by investors. We rate the market attractive for purchase on any weakness below the SPX 1240 level. Above that level we recommend a dollar cost average approach for new stock market money." [LINK to Shark Report]

Honey EC: It's astonishing to me how Brinker completely switched horses so smoothly and and now blames the whole economic and market meltdown on the repeal of Glass Steagall.

New lower new-money buy signal, August, 2008 (S&P 1284.88) Marketimer, Brinker wrote: "We rate the market attractive for purchase on any weakness below the S&P 500 Index 1240 level. Above that level we recommend a dollar-cost-average approach for new stock market money." (September 16, 2008, Brinker rescinded this buy signal.)

Moneytalk, September 27, 2008 (S&P 1213.27) Bob Brinker's advises a caller not to sell:

Caller Ken from Times River, New Jersey said: "Hi Bob, it's certainly a pleasure speaking with you. I've been a subscriber and a faithful listener for at least 20 years, and I have only the utmost regard for your market timing philosophy, and I think you did a beautiful, beautiful job when the stock market collapsed when the dot-com bubble bursted in the early 2000, but I've seen some precipitous declines in the market since that time -- stocks going down 20-25%, and at no time have I heard you say anything other than become fully invested, and I wonder, did you miss the boat or am I mistaken?"

Bob Brinker said: "Mistaken about what, Ken?"

Ken replied: "About the fact that you still have everybody fully invested in the market after it has taken such precipitous losses. Do you think, is this still is the time to be invested? Is it the time to sell and get out of the market?"

Brinker said: "Actually Ken, it's not my opinion that you should be selling stocks right now. I don't have a recommendation to sell stock right now. And if I did have a recommendation to sell stock right now, you would know about it. No, I do not have that recommendation. And really, that's all I can say. We have not, we have not issued a sell signal on this market. And in fact, as things stand right now, I think that we are in a scenario right now -- this is just my opinion -- I think selling stocks here is a mistake. 1-800-xxx-xxxx. Linda in Thousand Oaks, you're on Moneytalk..... "

Moneytalk, October 12, 2008 (S&P 899.22) Brinker admits his timing model did not "forecast" the bear decline that had been happening for almost a year. Again, he says don't sell stock: “I want to make a comment about what we have seen recently which is unprecedented. Without question, this is the most difficult market environment I’ve seen, and my work did not forecast this bear market decline. I had no way of forecasting a global banking crisis. If I had, that would have been a huge forecast to make. And yes, it would have caused a lot of disbelief but I would have made that forecast if I had been convinced it was going to happen." [October, 2008 was the last time that Brinker ever mentioned the "Marketimer Timing Model©" in his newsletter. On a later Moneytalk program, he claimed that he was referring to his timing model here when he said "my work".]

November 2, 2008 (S&P 968.75) Moneytalk, Brinker is starting to look to Lehman Brothers to explain market drop, still says don't sell: Brinker then said: "......And that's when we saw the market really enter into a free-fall period that carried the S&P 500 into the 800's range during the month of October....And I think it was very much related to what was happening at Lehman Brothers in terms of that bankruptcy.....

.....In reference to your investment portfolio, as regards the stock market, what I would be doing right here would be taking a dollar-cost-average approach at this time especially during periods of weakness and there's been no shortage, no shortage of periods of weakness the last several weeks. Especially during periods of weakness I would be willing to dollar-cost average money to add that to your stock market portfolio within the context of your tolerance for risk and your asset allocation......

.......But I have not yet reached a point right now where I have been willing to upgrade the recommendation on the stock market right now from dollar-cost-average to buy. I do anticipate as we move forward that there will be an opportunity to upgrade the stock market recommendation, which is currently for new money -- we are talking new money -- as you have, which is currently dollar-cost-average, I do expect there's going to be an opportunity to upgrade that to buy a recommendation. But until those conditions fall into place, I would remain on a dollar-cost-average approach........"

November 19, 2008 (S&P 806.58) The S&P closed below Brinker's S&P 807 March 11, 2003 buy signal -- a complete round trip up to a high of 1565 and back down again -- fully invested all the way.

The last Moneytalk program that Brinker did in 2008, he didn't actually talk about his own market views, he spent a lot of time talking about the "Mad Dog." He said: "....we'd have to nominate The Mad Dog as one of the great, and the great is meant in a pejorative sense, one of the great Ponzi schemes of all time.....This is Moneytalk."

In the December 2008 issue of Marketimer (S&P 816.21) Bob Brinker explained that even though there is widespread fear of "financial Armageddon," he takes the opposite view and was "focusing" on the "ongoing bottoming process that we regard as essential to establishing the level from which a sustainable market uptrend can occur."

The S&P began 2008 at 1468.36 and closed on December 31, 2008 at 903.25.....and the bottom was still to be 25% lower -- but Brinker never wavered in 2008. He always recommended investors dollar-cost-average or lump sum (at various levels) all new stock money into the market.


December 26-27 2009, Bob Brinker's Moneytalk: Summary, Discussion and Excerpts December 26, 2009

This weekend, Bob Brinker's Moneytalk programs were pre-recorded monologues with calls from previous programs spliced together. Neither Bob Brinker nor KGO announced that it is not a live program.

Saturday, Brinker replayed the interview of guest speaker Duff McDonald:

Sunday, Brinker replayed the interview of guest speaker Leander Kahney:

Honey's Market Report, December 18, 2009:
* Dow: 10,520
* Nasdaq Composite Index: 2286
* S&P 500 Index: 1126

Download Moneytalk programs free at KGO810 radio for seven days after broadcast.
The three hours of the programs are archived Saturday and Sunday 1-4pm. To download the programs and listen later, just choose the day, right click on each hour that you want and use "Save Link as." KGO Moneytalk Archives [Link]

Wednesday, December 23, 2009

Merry Christmas

Merry Christmas to all!!

BloggerChristmas Lights Gone Wild

jeffchristie said...

Throughout the years Bob Brinker has received Christmas cards from people he has helped. Here are just some of them.

1. In the 60's he got a cards from Ho Chi Minh and Jane Fonda thanking him for his outspoken opposition to American involvement in the Viet Nam war. They gave him a bumper sticker that read "Support our troops. GO NVA".

2. A card from George W Bush in 2003 thanking Bob for his enthusiastic support of the Iraq war.

3. A card from Cindy Sheehan thanking Bob for his opposition to Bush and the Iraq war in 2008.

4. Cards from Barney Frank and Chris Dodd thanking Bob for down playing the role that they had in the demise of Fannie Mae and Freddie Mac and placing the blame for the entire financial crisis on Phil Graham and Bill Clinton for repealing the Glass Steagall act.

5. A card from former treasury secretary Robert Rubin thanking Bob for not mentioning the role he played in brokering the merger of Travelers and Citicorp. And also for not talking about the pay off he received being named vice-chairman of Citicorp after he left the Treasury.

6. A card from Al Gore thanking Bob for being a willing accomplice (or was it a useful idiot) in promoting the global warming movement.

7. A card from Sen. John Kerry thanking Bob for having Zoqby as his guest the weekend before the 2004 presidential election. Zogby predicted a Kerry victory right here on Moneytalk.

8. A card from Zogby in 2008 thanking Bob for having him back on Moneytalk in spite of the fact that he completely blew the 2004 election.

9. A card from Tim Geitner this year thanking Bob for recommending I-bonds to his listeners and subscribers. This allowed the US to borrow millions of dollars interest free for the last six months.

10. A card this year from the head of OPEC thanking Bob for saying that there is no inflation while the price of a barrel of crude oil has nearly doubled in the last 12 months.

11 A card from the fund manager of the Vanguard Ginne Mae fund thanking Bob for all the business he sent his way.

12. A card from ACORN thanking Bob for have Lynn Jimenez as a guest host. She recommended their services to a caller.

December 25, 2009 7:08 AM


For those who are trying to figure out what they would like to give to Bob Brinker for Christmas, here is a nice list that many have compiled for you:

Jeffchristie sent this comprehensive and totally suitable 8^) list of his own:

Here are my top 10 ideas for Christmas gifts to Bob Brinker.

1. A carton of cigarettes (Non filtered).

2. A box of cigars.

3. A subscription to the Limbaugh letter and Rush 24/7.

4. An autographed copy of Sarah Paylin's book (Going Rogue).

5. A copy of Jim Cramers latest Book (Getting back to even).

6. A don't blame me. I voted for Ron Paul T-shirt.

7. Hire Elaine Garzarelli to fill in the next time Bob wants to take the weekend off.

8. A replica of Bernie Madoff's Mets Jacket.

9. An autographed photo of George W. Bush.

10 One of the pens Bill Clinton used to sign the repeal of the Glass Steagall act.

Merry Christmas to all.

PS. I am sure Mr. Pig would feel that "A lump of coal" is too good of a brew to waste on Brinker as a Christmas gift.

December 24, 2009 5:59 AM

DanG: New Crystal Ball

Honey: New Timing Model (the old one evaporated in October 2008).

East Coast:

A new real estate broker in Las Vegas

Interesting guests for the last hour who will not contradict his ideas

Guest hosts who will give qualified advice

Guest hosts who will not contradict Brinker's ideas

How about a "gift horse buying opportunity" when cash is actually held on the sidelines!

Frank J: Crystal ball, Ouija board, dice, a coin to flip for yes/no decisions, a couple of new independent variables for the timing model.

Mr Pig (possibles): A clue (Santa notice: not coal)

Digital camera (need current picture, not one from the 80's. Please wear clown outfit.)


How about a company stock plan that doesn't go bankrupt making your shares and options worthless?

Honey here:

Mr. Pig pointed out that Santa may need assistance so that he can tell which Bob Brinker he is giving gifts to, so I would like to tell Santa to bring (the Jr) Bob Brinker a pair of round-nosed children scissors. Jr might want to cut the apron strings sometime before he's fifty -- which is coming very soon. Just kidding, Bob Jr. err, I mean Bob Brinker....Merry Christmas! 8^)

The always helpful Mr. Pig, found this very apropos Moneytalk Tree:

BobR spotted a couple of Santa's deer resting up in a secret location for the arrival of the big evening tomorrow.

While these beauties may not be part of Santa's actual reindeer team, word has it they are valued assistants in charge of seeing that Rudolph's nose is shining brightly and that Dasher, Dancer, Prancer, Vixen, Comet, Cupid, Donner and Blitzen are all brushed down, horns polished, and ready to fly.


Tuesday, December 22, 2009

Bob Brinker -- and Mark Hulbert's "Honor Roll"

December 22, 2009.... This morning, in his Marketwatch article, Mark Hulbert reported that once again he has added Bob Brinker to the Hulbert Financial Digest "2010 Honor Roll" -- saying that Brinker is bullish. This is the third year in a row that Hulbert has written almost identical comments about Bob Brinker. Please note that only in 2007 (at the market top) did Hulbert mention that Brinker's model portfolios have been fully invested since 2003, even though Brinker also remained fully invested during the 2008-2009 megabear market.

Dec. 14, 2007, 12:01 a.m. EST
Honor Roll inductees are bullish
Commentary: Best newsletters forecast a higher stock market next year
By Mark Hulbert, MarketWatch

ANNANDALE, Va. (MarketWatch) -- I normally don't put too much weight in the year-ahead forecasts that advisers circulate every December.

But I will make an exception when it comes to the forecasts of the seven newsletters that made it onto the Newsletter Honor Roll for 2008.......So it behooves us to pay attention to what they are saying.......

Bob Brinker's Marketimer. Editor Bob Brinker has been bullish since March 2003, and his model portfolios remain fully invested. Brinker regards the stock market's recent correction as good news for the bulls: "The short-term correction that began in October and continued into November has served as a health-restoring pullback," Brinker wrote in the early-December issue of his newsletter, "and has paved the way for new record highs in the S&P 500 index in our view."

Dec. 18, 2008, 11:05 p.m. EST
Bruised but bullish
Commentary: Four of five newsletters on Honor Roll are bullish
By Mark Hulbert, MarketWatch

ANNANDALE, Va. (MarketWatch) -- I normally don't put too much weight in the year-ahead forecasts that advisers circulate every December.

But I will make an exception when it comes to the forecasts of the five newsletters that made it onto the Hulbert Financial Digest's Newsletter Honor Roll for 2009.....

..... Bob Brinker's Marketimer. This newsletter makes it onto this year's honor roll even though editor Brinker last year did not expect the stock market to decline more than 20%. That he nevertheless remains on the Honor Roll is testament both to how good his market calls have been on other occasions over the past 18 years, as well as to the failure of most other newsletters to also anticipate the severity of the market's decline. He was in good company, in other words, and the Honor Roll is graded on the curve.

Brinker currently believes the stock market is in a perhaps extended bottoming process, and he therefore recommends that subscribers invest in the stock market on a dollar-cost-averaging basis. "We are aware that there is widespread fear that financial Armageddon is the likely outcome of the global financial crisis. We take the opposite view, and expect the stock market to record significant gains during the next major market uptrend. We continue to focus our efforts on the ongoing bottoming process that we regard as essential to establishing the level from which a sustainable market uptrend can occur. When we reach the point at which we can upgrade our current stock market view from dollar-cost-average to a renewed buy recommendation, we will do so."

Dec. 22, 2009, 12:01 a.m. EST
Upbeat for 2010
Commentary: Most newsletters on Honor Roll are bullish for new year
By Mark Hulbert, MarketWatch

ANNANDALE, Va. (MarketWatch) -- I normally don't put too much weight in the year-ahead forecasts that investment advisers circulate every December.

But I make an exception when it comes to the newsletters on the Hulbert Financial Digest's Newsletter Honor Roll for 2010. Making it onto that Honor Roll requires jumping over a number of demanding hurdles; merely beating the market won't do. Instead, to make it onto the Honor Roll, a newsletter had to have above-average performance both in up and down markets.

Bob Brinker's Marketimer. Brinker in his most recent issue wrote: "Based on our earnings estimate for next year and our fair value price/earnings ratio of 16 to 17 times operating earnings, we estimate upside potential for the S&P 500 index (INDEX:SPX) into next year in the 1170 to 1240 range." That upside potential represents a gain from current levels of between 6% and 13%; his model portfolios are fully invested."

Honey here:

Hulbert claims that Bob Brinker's Marketimer has "above-average performance in both up and down markets," but offers NO REASON WHATSOEVER to back up his claim. This seems very odd to me since Brinker's Marketimer is nowhere to be found on Hulbert's December 2009 list of top-5 timing newsletters that HFD "follows" over the past 5, 10 or 15 years. And this is in spite of the fact that Hulbert ignores Brinker's October 2000 QQQQ-trade where Brinker recommended using model portfolio cash reserves.

Hulbert knew at the time of the trade that Brinker recommended subscribers use model portfolio cash reserves. According to Peter Brimelow, Hulbert originally added the trade to Brinker's Hulbert Financial Digest record. However, in the November 2000 issue of Marketimer (after it was clear the trade was losing money), Brinker announced that he would not add the trade to his record. Mark Hulbert then removed it from HFD record and thereafter, used a footnote/asterisk to assuage outraged subscribers.

How do I know this? Peter Brimelow spelled it out in this 2002 Marketwatch article, "Bugging Bob Brinker." [LINK] He expertly spun his article in order to make it look like dishonest deception is the acceptable norm, but he did include this bit of TRUTH.

Peter Brimelow wrote:
"This is the problem: Later in 2000, Brinker was trying to catch a rally in what he still regarded as a primary bear market.

In a special bulletin, he suggested Nasdaq 100 Trust , the Nasdaq 100 exchange-trade fund on the American Stock Exchange.

But it did not appear in the detailed model portfolio published, as always, in the next month's letter. So Mark promptly sold out the QQQ position and no longer counted it.

Which was just as well, because QQQ fell from above 80 to a recent 24. Brinker is still sweet on it, in this peculiar, extra-marital sort of way. But if it does rebound, Mark won't count that either -- unless Brinker explicitly puts it in his model portfolio."
Honey here:

Mark Hulbert claims in his HFD Brinker-asterisk/footnote that Brinker said up front that he would not include the trade in his portfolios. Hulbert uses this footnote each time he writes about Marketimer: "Please note: In late 2000, Brinker forecasted a several-month bear market rally and recommended an investment in the NASDAQ 100 Index—a trade that turned out quite unprofitably. However, because Brinker at the time of making this forecast chose not to make this trade part of his model portfolios, his HFD record has not suffered as a result."

Hulbert knows that footnote is false. I wrote a personal email to him with the facts, but he stuck to his story that Brinker had said it up front....

Please enlarge and read the photocopy image below. You will see that Brinker recommends using cash reserves equivalent to what he had raised from model portfolios earlier in the year (2000). Brinker did not say that he would keep the trade off the books. If he had, it's likely that many would have been more cautious and would have been saved from losing over 70% of their money on QQQQ. (BTW: The trade was never closed.)

Like with lying, anytime it is proven that someone like Hulbert (whom you should be able to trust to be objective) will change facts to benefit any newsletter he covers, everything he ever says about that newsletter is suspect. I've given you two examples and offered proof to back them up.

1. I have shown that Hulbert realized that Brinker recommended using model portfolio money for the QQQQ trade, but decided to go along with Brinker's decision not to account for it in his official record. Thus, Brinker was given a mulligan (do over/used twice) on up to 50% of the 65% cash reserves he raised in Jan/Aug 2000.

2. In the images below, I show that Hulbert appears to have deliberately changed Bob Brinker's 2008 performance record for Portfolio III. Hulbert gave Brinker's Model Portfolio III a 5% mulligan on 2008 performance record. Brinker (correctly) reported a 23.9% loss for 2008 in Marketimer.

January 2009 Marketimer, Portfolio III lost 23.9% in 2008:

January 2009 Hulbert Financial Digest, Portfolio III lost 18.1% in 2008:

It's a very "convenient" circular-handshake between Brinker and Hulbert. Brinker hasn't made it into the HFD Top-5 Performers (over the past five years) for years, so he can't use that portion of HFD for advertising. No problem! Brinker's Marketimer always shows up on Hulbert's "Honor Roll," so Brinker uses that in his advertising (see his website). Of course, Brinker never mentions that pesky little "footnote" or where his performance ranks against other newsletters.

Saturday, December 19, 2009

December 19, 2009, Bob Brinker's Moneytalk: Summary, Commentary and Excerpts

Bob Brinker hosted Moneytalk this weekend. Bob Brinker opened the program with "bi-partisan congratulations" to Senators John McCain and Maria Cantwell for their "courageous stand this week" in proposing the reinstatement of the Glass-Steagall act.

Brinker said:
"This would prohibit the commercial banks from dealing in the risky gambling arena known as investment banking. The gambling arena that took down Bear Stearns. The gambling arena took away Lehman Brothers. And the gambling arena that forced Merrill Lynch into a shotgun wedding with Bank of America. This is a wonderful idea because it would force so called too-big-to-fail bank-holding companies to return to the business of conventional banking and leave the risky business to the gamblers at the investment banks.....Now the proposed Senate legislation gives companies one year to comply. I'm okay with that. The important thing is we get it done.....

.....It does have implications. J.P. Morgan would have to give up its trading operations acquired from Bear Stearns. Bank of America would have to disengage from Merrill Lynch.....Goldman Sachs would no longer be able to be a bank holding company, which currently provides Goldman Sachs with over $20 billion in FDIC insured capital as a result of bonds insured by the FDIC......Why is that FDIC insurance provided to Goldman Sachs? There's a tough question for somebody in Washington to answer. Obviously Citigroup would have to disengage its multiple non-commercial banking affiliates.....We'll talk more on Moneytalk."

Honey EC:
In my opinion, putting all the blame for the economic meltdown on the repeal of Glass-Steagall is a bit simplistic. Brinker seems to be ignoring the whole housing sub-prime loan fiasco. What about all the loans that a few in government forced "investment banks" to give to people who clearly could not pay them back, which basically brought down Freddie and Fannie and several banks.

Last year, Brinker said that his
"Timing Model©" (which disappeared from the radar in October, 2008) missed the 2007-2008 megabear market because he could not have "forecast the banking meltdown." Well, if it was all caused by the repeal of Glass-Steagall in 1999, why wouldn't he have been aware it could happen? He was bullish throughout all of 2008 as one bank after another folded. Brinker continued to remain fully invested, advised against selling stock all the way down from S&P 1565 to S&P 677. During 2008, Brinker issued several new money buy signals.

...Saturday, Brinker made no comments whatsoever about bond market activity.

...Saturday, Brinker made no comments whatsoever.

.Saturday, Brinker made no comments whatsoever about stock market activity. There was only one caller that even mentioned the stock market. Here is the exchange:

Caller Bob in Sunnyvale
(who sounded rather elderly), who wanted to make a "wash sale" asked: "Since there isn't much volatility in the market currently, would it be best for me to wait until next year and buy during a weakness in the market, I'm going to sell for my profit this year because under the current tax law, people in the 15% tax bracket do not have to pay capital gains tax....."

Bob Brinker said to Bob:
"Let me ask you a question and your answer will answer your question. Thirty-one days after you make your sale, do you think the price of what you are selling will be higher or lower? (caller: "I'm hoping to buy lower.") I'm not asking you what you are hoping for. I'm asking you, thirty-one days after you make your sale and then you turn around and buy what you sold will the price be higher or lower......? (caller: "Well I don't know what the price would be, Bob.") Then if you make the sale....Only in the case of a loss. In the case of a profit, you can buy and sell in the same minute.....and you will pay the taxes."

Caller Bob, not easily shut down, repeated his question:
"But Bob, would I be better to wait until next year and buy during a weak and get a lower....." Brinker interrupted: "That's an easy answer. That's an easy answer and it's very easy. If the price would be lower next year, it would better to wait. If the price would be higher next year, it would not be better to wait. That one is easy, that one is easy. (caller: "Thank you, Bob, I agree with you. I was thinking....") Brinker interrupted: "You're thinking exactly right. You're thinking right down the middle. If the price is going to be higher next year when you would make the buy, that would not be a good thing to wait, but if the price is going to be lower next year when you make the buy, I would agree with you, Bob, that that would certainly be a good transaction. Now all we have to figure out is, which is it going to be. This is Moneytalk...."

Honey EC: As I said, Brinker made no comments about the stock market today, but the arrogant run-around he gave this caller (who was clearly a fan) was enough to gaggamaggot. In one his political rants, Brinker said he wouldn't name a "pundit" who was on TV because he didn't want to "embarrass him further" (the pundit had been against reinstating Glass-Steagall). Well, I hate to embarrass you further Mr. Brinker, but you need to spend some of that TV time listening to Moneytalk. Your disrespect for some callers is appalling! You were certainly not that rude with the caller who had $3/4 million and wanted help deciding whether or not to roll it into a Roth IRA.

In the December, 2009 issue of Marketimer, Brinker said: "We recommend using periods of stock market weakness for investing new money into the market......we estimate upside potential for the S&P 500 Index into next year in the 1170 to 1240 range."

BEN BERNANKE/FED....Brinker made no comments whatsoever.


Brinker said:
"Now it is true that under President Obama, the Federal top bracket is going up to at least 39.6 starting in 2011. It's also true that we have a bunch of people in Congress right now who seem to think that the only solution to the fiscal train wreck is to tax high-earners more and more.....It's been within the last few weeks that the House -- it's not law yet, but the House passed a 5.4 surtax on high earners to pay for their health care version. Carl Levin came out last month with an idea to slap a big surtax on high earners to pay for the troop expansion in
Afghanistan. There's no limit......

.....Of course there are not enough high earners out there to do all of this....Some people think they [already have killed the goose that laid the golden egg] in California. Look at their fiscal situation even with their top state bracket of 10 1/2%.....That top bracket in California -- as is the case in virtually every state tax -- it applies to capital gains. So you might do a federal capital gains tax of 15 today, but if you're a high earner in California, you might tack another 10 1/2 on to that.....

.....Where are these recommendations coming from when they're all aimed at the same very small group of people as a percentage of the population -- the high earners. And the answer is, they're like the driver who has driven the bus down into the ravine. He's so far off the road, that he has no hope of getting this thing back on the highway -- none. He's desperate. He'll do anything. Anything he can think of. That's what you're seeing here. There's no policy here. There's no strategy here. It's always the same end result --- awww, let's soak the rich. It's always the same."

Caller George in San Jose riled Brinker up a bit
by claiming that Brinker had said that there was never a budget surplus during the Clinton years.

After scolding the caller for "setting up paper tigers and knocking them over" Brinker said: "I don't appreciate your manufacturing my comments. I have never said that there was no budget surplus in the Clinton period.....I've many times pointed out we had a small period there toward the end of his second term where we did have a surplus. But in all fairness, we have to give credit to the fact that we had bi-partisan government at the time.....That's the reason we got the surplus.....

..... Now since that time, we've had a one-party, runaway freight train government. Government gone wild on spending. We've had that ever since the end of the Clinton Administration and you see what it's brought us. It's a fiasco in Washington.....
(caller mentioned the $1.3 trillion deficit)....Let me tell you something. This is just the beginning. The Congressional Budget Office is talking $20 trillion-plus within the next decade. If these people are allowed to remain in power past their current.....And I especially include congress in this, since they are the ones who appropriate all this's going to be a fiscal train wreck.....It seems to be a bi-partisan fiscal train wreck."

Honey EC:
I think Brinker deserves credit and an "E" for effort. LOL! Brinker seems desperate to spread the manure equally (that's an old farming term). He's doing his level best to ignore the fact that the National debt is up by $2 Trillion since Obama took office, and that Obama just signed another $1.1 Trillion spending bill.
WASHINGTON – President Barack Obama has signed into law a $1.1 trillion bill that increases the budgets in many areas of the government by about 10 percent, including health, law enforcement and veterans' programs.

Obama signed the bill privately at the White House on Wednesday after receiving the bill from Congress on Sunday. Read more [LINK]

FEDERAL TAX RATES... Brinker said:
"The Federal tax rates have nowhere to go but up....


* Caller Bob in San Francisco
asked about estate tax changes.

commented that under current law, anybody who dies during 2010 will pay zero federal estate tax. Brinker said: "The reason this is on the books is because the people who are running the country in Washington right now are is so incredibly incompetent. And I especially point my finger at Congress, they have responsibility for this type of legislation as well as appropriating all the money spent in this Federal Government. These people should be so ashamed. They are making the United States a laughingstock around the world......

.....It will end when you get these people out of office that don't belong in office. Right now that's the vast majority of U.S. Congress.
(Caller Bob wanted to know when it will end.)....The way this Congress operates, they're liable to pass something at 4 in the morning while the Nation sleeps. Don't be surprised. Nothing would surprise me with this group. It's way over the line at this point....

.....But they have a stealth plan. The way it works when we get into the new year, sometime in the first quarter, they'll pass a bill retroactive to January 1 for an estate tax in 2010. That's the stealth plan and that's why there's no sense of urgency. God help us all, I think would be appropriate.....

......I do feel sorry for the voting public. Because the voting public has continuously come against these Hobson Choice elections where if you vote for the one vote for the other, either way, basically you're screwed, frankly.....

....It's possible term limits will make a difference. One thing I know for sure, not having term limits is really damaging in terms of what comes out of Congress.....As far as whether we are going to get any change in the mentality of the people in Washington right now, I say no, I don't think that we will.....The United States voters, as a result of their ballots, starting nine years, they basically gave us a no checks and balances government. We've had a no checks and balances Congress for nine years. The Republicans had the run for six years. The Democrats have had the run the past three years. No checks and balances.....As a result the party in power can do basically whatever they want to do, and that is what they are doing."

Honey EC: Brinker sounded very bearish on the condition (and future) of the United States of America today -- more than I have ever heard before. I agree with much of what he said today, but I think the way he is handling the blame-game is very biased.

Brinker very seldom puts blame for anything on Obama. Since he became president, Brinker likes to generalize and blame both parties in Congress -- and frequently the "Bush Administration" gets thrown in for good measure. As Brinker has said in the past, he isn't a talk show host who will "bash" Obama. Brinker only used Obama's name a couple of times today.

In Brinker's second hour monologue, he again talked about how the repeal of Glass-Steagall caused the 2008 meltdown.

Brinker said: "It was a dreadful mistake and the entire country paid for it in 2008.....Think about it. You don't have to be a Rhodes Scholar to figure this out. We sale along for seven decades with no major financial calamity overtaking the entire system and then just a few years after the repeal of Glass-Steagall, the financial system goes into meltdown. This is not a coincidence. Without Glass-Steagall, the U.S. financial system remains at risk because there is no way to control out of control investment bankers and the damage that they can do when they're left to pursue their risky bets which all too frequently turn out to be a disaster.....

....Now I don't know where the president is on reinstatement of Glass-Steagall, but I'd sure like to find out. Should he be out front leading the charge on this proposal -- of course he should. And where's the Speaker of the House on this? And where's the Senate Majority Leader on this? Where are they? Alright, they're stuck in the snow in Washington DC.....

......I tell you I've seen enough. I've seeeeen the mountain top. And I'll tell you what, when I see these Wall Street muckity-mucks with there double-talk presentations about this issue, I've had enough. I'm totally convinced now, they're not that stupid. They have a vested interest in the repeal of Glass Steagall and that's why they're coming out with the doubletalk nonsense."

Honey EC: In my opinion, Brinker sounded a little panicked today. Some of his phrases surprised me and seemed a bit crass for Mr. Brinker, such as, "God help us" and "basically you're screwed" and "I've seeen the mountain top." But it's clear he is still spinning the whole "no checks and balances" thing (to put it kindly). Always before, he called it "checks and balances" when the President and Congress were different parties.
What is he afraid of now? He never before worked so hard to keep heat off of a president.

Brinker said he didn't know where the president stands on the reinstatement of Glass Steagall. Mr. Brinker, here is a Newsweek article titled:
"Spurning Obama, McCain and Cantwell Propose Resurrecting Glass-Steagall to break up Wall Street."

Brinker's Saturday guest speaker was Barbara Weltman, "J.K. Lasser's Your Income Tax 2010: For preparing Your 2009 Return"

Brinker's Sunday guest-speaker was Charles Gasparino, "The sellout: How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System."

Honey's Market Report, December 18, 2009:

* Dow closed at 10, 328.89 -- a 1.4% loss for the week.
* Nasdaq Composite Index closed at 2211.69 -- a 1% gain for the week.
* S&P 500 Index closed at 1102.39; losing 0.4%, the second weekly decline.
* Gold closed at $1112.70.
* Light Crude: $73.05
* U.S. Dollar $77.77 (Marketwatch): The dollar notched a new three-month high on Friday, heading toward the biggest weekly gain since April, as hints of geopolitical troubles gave traders more reasons to reverse so-called short trades that bet the greenback will fall further.
* Treasury Bond rates, TIPS, munis [LINK],
* Key Rates, Mortgage, CD rates [LINK]
* Daily Treasury Statement [LINK]

Moneytalk programs are available free at KGO810 radio for seven days after broadcast.
You can download and save Bob Brinker's Moneytalk programs (owned by ABC) and listen whenever you choose at no cost whatsoever. To download the programs, just choose the day, then right click on the hour that you want and use "Save Link as." KGO Moneytalk Archives [Link]

On the lighter side, Bluce sent this funny cartoon for us. 8^)

Wednesday, December 16, 2009

Bob Brinker and Bob Brinker

Bob Brinker and Bob Brinker. How can you tell which one is the talk show host now that the son no longer makes any effort to distinguish himself from the publisher of Marketimer -- host of Moneytalk? This problem did not exist when "Jr" was working as a computer technician and had no desire to follow in Daddy's footsteps. From my files (and there are more):

To: Greg Luke
who wrote ()11/30/1997
4:08:00 PM

From: Bob Brinker, Jr. of xxxxx

Greg -

I truly apologize for the confusion. I am not Bob Sr. I am Bob Jr. This has happened on occasion before and I NEVER attempt to misrepresent myself as Bob Sr. From now on, I will always sign my name as bob jr. in hopes of avoiding future confusion. FWIW (For what its worth) I would not be surprised if Bob Sr. read your note to me anyway!

thanks - bob jr!

My, my, my, what a difference a few years and a career change made with "Bob Jr." Now "misrepresenting" himself seems to be quite okay. He said it was something he'd never do before he started writing a newsletter. Now he posts on his fixed income website as simply Bob Brinker -- this from yesterday: ["Posted on December 15th, 2009 by Bob Brinker"]. And he posts on Twitter several times a day as "Bob Brinker." (The host of Moneytalk has a Twitter account as "Brinkerbob" but never posts!) Confused yet? Well, don't be fooled....

December 14th, Barron's published an article wherein the author talked about "Bob Brinker," but did not clarify which one she was talking about. This was called to my attention when these comments were sent to this blog here: [LINK]
DeleteAnonymous said...

there was an article mentioning Bob Brinker in the 14 December Barron's.
The article did not clarify which Bob Brinker.

December 14, 2009 2:02 PM

Later, "Anonymous" sent a link where the article is available to non-subscribers through a Google search. "Social Investing Doesn't Quite Click - Electronic Investor by Theresa W. Carey.

Here are some excerpts:

"It was on Twitter, where one of the people I follow helped me put it all together. Bob Brinker, author of The Brinker Fixed Income Advisor newsletter ( tweeted, "Both Covestor and kaChing are so close to a great product -- but just miss it. Wonder who gets it right first. Big market for the winner." I called Brinker and we talked over our issues with both sites.

Brinker is a potential genius on kaChing, but says he isn't likely to participate because he doesn't want all of his recommendations to be public. Brinker finds the idea of having Covestor or kaChing act as the custodian for his customers' funds very appealing for legal and regulatory reasons. Yet he'd prefer they were set up so that only people paying to invest with him could see what he's doing in real time. Brinker says, "I understand the need for the clarity, but I don't think someone who isn't paying me should know what I'm doing."

Did Theresa Carey, writing for Barrons, know that she was writing about the son of the Bob Brinker who hosts Moneytalk? She sure didn't make that clear one way or the other, just as neither one of the Bob Brinker's make that clear anymore.

A lot of Moneytalk callers indicate that they believe that the host publishes the fixed income newsletter as well as Marketimer. They thank him for "both" of his newsletters. Brinker has never explained that it is his son's newsletter, and ads are often run on the program immediately after Brinker speaks.

Theresa Carey said: "Brinker is a potential genius on kaChing, but says he isn't likely to participate because he doesn't want all of his recommendations to be public."

"Genius?" ROFLOL!
What kind of genius did it take to lose money in a fixed Income newsletter last year during a good bond market? What kind of genius did it take to under-perform a bond index fund? And more importantly, on what does she base her opinion of his "trading skills"? His name? Did she think she was talking to the host of Moneytalk-- publisher of Marketimer?

According to Hulbert Financial Digest:

Bob Brinker's (formerly known as Bob Brinker Jr) Fixed Income Advisor:
* model portfolio #1 lost 21.7% last year.
* model portfolio #2 lost 11.5% last year.
* model portfolio #3 lost 5.2% last year.
* Vanguard Total Bond Index Fund +5.1% last year.
* Vanguard Total Bond Market Fund [VBMFX] +5.05% last year

You will not find that (or any) one-year data on Bob Brinker's (Jr) newsletter website. Instead, you will find some very good numbers for this year that he now gives on a monthly basis -- returns that are largely due to a 25% weighting of Vanguard High Yield Fund (which has recovered a lot of 2008 losses this year) in two of his model portfolios.

One might easily conclude that if Bob Brinker (jr) revealed his 2007- 2008 performance returns on his website that it would not be so easy to deceive any shark bait in his father's large national radio audience into paying good money for a newsletter that underperformed GNMAs and Total Bond Market over the past 3 years. Kirk Lindstrom shows Bob Brinker's (jr) 3 year returns in this article on his Bob Brinker Fan Club Blog

In this excerpt from the January 2009 Hulbert Financial Digest you can see the returns that he quotes for both "Brinker" newsletters. You may wonder why Mark Hulbert immediately began coverage of
(the Jr) Bob Brinker's fixed income newsletter when it had no track record. I wondered for an instant and concluded that Mark Hulbert is in the tank for the Brinker name. Then I wondered why he was in the tank for the Brinker name.....

Also, Hulbert shows that the Marketimer balanced Model Portfolio III lost 18.1% in 2008. That is FALSE! That portfolio lost 23.9% in 2008. Hulbert was told about this error in an email and his reply was that he makes changes if he wants to.....Yep, that's it folks, believe it or not. Enlarge to read:

Saturday, December 12, 2009

December 12-13, 2009, Bob Brinker's Moneytalk: Summary, Excerpts and Commentary

Bob Brinker's Moneytalk was on this weekend, but Bob Brinker was not live on the air.

All of Brinker's monologues this weekend were pre-recorded segments based on subjects he has previously discussed on other programs. The calls were spliced together from other programs -- carefully selected for their esoteric nature. At no time was there any announcement that this was not a live program.

David Korn, long-time Brinker historian, says this is not unprecedented. In his newsletter, David Korn commented:
"This weekend's Moneytalk Broadcasts were not live shows. Bob was the host, but what he did was basically use calls from previous shows that I covered in recent newsletters. This isn't unprecedented. The stuff this weekend was generic non-time sensitive stuff really such that if you were a casual listener, you might not realize it. Bob did this proably two-three times in the last decade I have been tracking him. In the ast, he has always returned live the following week usually with excellent broadcasts...."
Saturday, Brinker replayed his September 19, 2009 guest-speaker interview:

Sunday, Brinker replayed his October 20, 2009 Micheline Maynard interview: "The Selling of the American Economy: How Foreign Companies are Remaking the American Dream." I posted David Korn's summary of that interview. Here is the [LINK]

Honey's Market Report, December 12, 2009:

* Dow closed at 10,471.50 -- another gain of 0.8% for the week.
* Nasdaq Composite Index closed at 2190.31 -- losing 0.55% for the week.
* S&P 500 Index closed at 1106.41, a gain of 0.1% for the week.
* Gold closed at $1120.
* Light Crude: $69.56
* U.S. Dollar (Marketwatch): The dollar index (DXY 76.57, +0.53, +0.69%) , a measure of the U.S. currency against a trade-weighted basket of rivals, rose to 76.572, up from 75.996 on Thursday. It earlier touched 76.726, the highest on a closing basis since early October.
* Treasury Bond rates, TIPS, munis [LINK],
* Fed Funds, Mortgage, CD rates [LINK]
* Daily Treasury Statement [LINK]

Moneytalk programs are available free "on demand" at KGO810 radio for seven days after broadcast.
You can download and save Bob Brinker's Moneytalk programs (owned by ABC) and listen whenever you choose at no cost whatsoever. To download the programs, just choose the day, then right click on the hour that you want and use "Save Link as." KGO Moneytalk Archives [Link] If you want to call KGO and complain about or praise Bob Brinker's Moneytalk, here are the numbers: Comments line: 415-216-1052....Listener services: 415-216-1050. Here is the KGO email address -- cut-and-paste it into your email compose window:

My Idaho sister-in-law shows how global warming is affecting them in Idaho. LOL Click to enlarge. They are quite beautiful:

Friday, December 11, 2009

Bob Brinker's Rear-View Mirror Crystal Ball

December 11, 2009..... Bob Brinker is an outstanding stock market history REPORTER, but he is a sad-sack stock market forecaster. Lately on Moneytalk, he has been patting himself on the back for being fully invested in 2009, and claiming that he predicted a "significantly positive" year in 2009.

After being 100% on the wrong side of the fifteen-month megabear market, he has finally found an opportunity to play the market-timing guru again. Throughout all of 2008 and until April, 2009, months would go by where Brinker never mentioned the stock market. However, early on and at various times when the market seemed to be recovering a bit, Brinker would actually claim that he was the "lone voice" and time would prove him right, and the Casssandras and Bears wrong. That was just before the S&P 500 Index dropped 57%....

Last weekend Bob Brinker said that anyone who was fully invested in 2009 deserves the good returns because 2008 was a "rough year." When you consider how bullish Brinker was throughout 2008, it's almost laughable for him to now point out that it was a "rough year."

Let's take a look at what he was saying at the beginning of the "rough year."

Moneytalk, January 5, 2008, Brinker lectured a caller [LINK] “....maybe your risk tolerance just is not such that you can deal with the kind of fluctuation. You know my definition for a bear market is a decline in excess of 20%........So in order for us to be in bear market territory — by my definitions — we would have to see the stock market, the S&P trading below 1250.” [The market bottomed in March, 2009 at S&P 677]

And followed up with this prediction, January 5, 2008

Honey wrote: Several times on Sunday, Bob Brinker hammered the point that the market was "volatile," and probably would remain volatile for some time to come. After saying that he believed that we are in for a period of very, very slow economic growth in the first and second quarters, but expects a rebound in the second half of 2008, Brinker made these comments: “Now if you study the stock market you know the stock market discounts the future about six to seven months in advance. So if we were to see a recovery in the second half of 2008, following this slow period then the stock market would be in the process of having discounted that as we speak.”

That may have been the first time during the 2008-2009 megabear that Brinker said the market was discounting 6 months out, but it certainly was NOT the last. Recall that just last Friday, he called a 200 point move "volatility." While that seems correct this time, we know it was 100% wrong when he said it back in January 2008 -- and in the interim.

Going back into 2007 just before the bear market began, Brinker was a raging bull! He was predicting S&P 1650, and opined that the market had had a "health-restoring summer correction":

September, 2007, Marketimer, Brinker said:
"....highly favorable territory as the health restoring summer correction has significantly enhanced our market outlook into 2008." He added: "......anticipate significant stock market gains going forward."

The worst bear market since the 1930's began in October 2007, Brinker said this on November 18, 2007. [LINK] Bob Brinker said: “Well it’s been an interesting week in the stock market….remember last week the bad news bears were telling us, it’s all over now – we were in big trouble now. Well that’ what they were saying a week ago. Of course, it did not turn out that way. We talked about this last weekend. About those bad news bears and how wrong they have been for several years every year as they have been screaming fire in a crowded market only to find that their views were wrong again. This week the S&P 500 chalking up a gain to 1458.74 – a gain of about 1/3 of a percent. The Dow going up 1% to 13,176 and the Nasdaq gaining close to ½ percent, at the 2637 level…….”

Brinker was still in denial on January 19, 2008:

Caller: “Do you think we’re finally reaching a point where it’s time to maybe get out of the stock market like it was here a few years back and wait to see what’s going to happen?”
Brinker: “That’s not my opinion right now. I think there’s lots of fog out there right now. I think there’s very low visibility out there right now, and I think that low visibility has been caused by all of the things we’ve been seeing over the past several weeks—especially the last week……but it has not been my view that we would be looking to run for the hills and expecting the stock market to go down 50%. That has not been my view, and that is what it went down earlier in the decade. The S&P closed down 49.1% from closing high to closing low. Right now, we are looking at a 15% correction in the market as we speak. So to compare the two, at this point, is to compare apples and oranges."

It was just a few weeks ago that Brinker allowed callers on Moneytalk to talk about the bear market "earlier in the decade," but he has never allowed a caller to talk about the most recent and much more severe bear that happened in 2008-2009.

Chart courtesy of Kirk Lindstrom
[LINK] Please click to enlarge chart:


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