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Saturday, March 13, 2010

Bob Brinker's Moneytalk, March 13, 2010

Posted March 13, 2010....Bob Brinker did not host Moneytalk Saturday. Bob Brinker's fill-in host is Lynn Jimenez. She is the business reporter for KGO 810 radio. I won't be writing a summary of Jimenez programs.

Since last week marked the one-year anniversary of the stock market's slide to a 12-year closing low, I'd like to very briefly review Bob Brinker's market-timing forecasts and allocations during that time-frame.

1998: Brinker, who had been fully invested during the 1990's, rode down a short bear market -- remaining fully invested.

2000: In January, raised 60% cash reserves -- August, increased to 65% cash reserves -- October, told subscribers to use 20-50% of the 65% cash reserves to buy QQQ because he expected the market to have a counter-trend rally led by the Nasdaq. This trade lost over 70% and was never closed. [See complete details here]

2003: March 11 at S&P 807, Brinker returned to 100% invested and has never changed that allocation.

2007: As the stock market topped at S&P 500 Index 1565, Brinker was expecting it to go to mid-1600's and was recommending mid-1400's as a gift-horse buying opportunity.

2008: January Marketimer, Brinker said: “In summary, the Marketimer stock market timing model indicates that conditions are favorable for the market as we enter 2008. We expect the S&P Index to achieve new record highs this year and to reach the 1600’s rang in the process. We continue to rate the market attractive for purchase on any weakness into the S&P 500 Index mid-1400’s range. Above this range we prefer a dollar-cost-average approach for new purchases. All Marketimer model portfolios remain fully invested as we enter 2008."

2008: As the market dropped to its November low, Brinker issued these "all new money in" recommendations
* January 20th -- rescinded mid-1400's (recommended dollar-cost-average only)
* Feb 10, 2008 @ 1331: Low-1300's
* Aug 5, 2008 @ 1285: 1240 or less
* Sept 2, 2008 @ 1282: Low-to-mid 1200's
* September 16th -- rescinded low-to-mid 1200's (recommends dollar cost-average only)

2009: Brinker issued his final "all new money in" recommendation in February at S&P 500 Index low-to-mid-800's. March: No buy level and no DCA recommendations. Later, he claimed to have predicted 2009 would be a positive year for the stock market.

2010: Brinker has now returned to using the term "cyclical bull market." His prior secular/cyclical forecasts were all proven incorrect. See my complete analysis here [LINK] In the January 2010 Marketimer, Brinker said that he did not foresee any cyclical bull market corrections in excess of 20% on the radar and regarded any pullbacks in the area of 5 to 10% to be health-restoring and should be regarded as buying opportunities.

Brinker's fully invested (from March, 2003) model portfolios lost over 50% from the market top in 2007 to the market bottom in March 2009. This seems to have caused him to change some of his "market-timing-speak." He no longer talks about his "timing model" and he no longer issues "all new money in" buying levels. Now he simply recommends "buy on weakness."


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