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Saturday, December 4, 2010

Three of Bob Brinker's Most Devastating Stock Picks

Bob Brinker's worst off-the-books Marketimer stock recommendations:


Marketimer February, 2000, Bob Brinker said:
"Firsthand e-Commerce fund is the newest addition to the marketimer No-Load Fund Recommended List on page four...............Marketimer views Firsthand e-Commerce Fund as an excellent vehicle for the B2B investment..........Due to our current risk adverse stock market stance, we are not placing this fund in any of our Model Portfolios at this time. Also, we would regard a five percent exposure to this fund as the maximum we would be willing to accept in the current difficult stock market environment................."

[After TEFQX lost almost 90%, Brinker put it on HOLD in the March, 2001, Marketimer (at $3.93) and never mentioned it again.]

Chart courtesy of Kirk Lindstrom:

2. DVY

Brinker first added DVY to the Marketimer Individual Issues list in January, 2005 when the price was $60.70 (it is still on the list). Like Brinker did when he added GLD in May, 2009, he gave no advice about it or any price range. Theoretically, there are no limits on DVY or GLD since Brinker regularly says this: "Marketimer recommends managing specific stock risk by holding individual stock positions to a weighting of four percent or less of equities. This does not apply to the exchange-traded funds listed in the table. MSFT and VOD are rated "hold"."

Chart courtesy of Kirk Lindstrom:


November 6, 2000 Marketimer Brinker said: "Marketimer subscribers with aggressive objectives can invest up to 30% to 50% of cash reserves in either the QQQ shares or Rydex OTC Fund in order to participate in this recommendations. That translates into potential exposure of 19.5% to 32.5% of a TOTAL AGGRESSIVE PORTFOLIO. (30% of 65% CASH RESERVES equals 19.5%. 50% of 65% cash reserves equals 32.4%). The balance of reserves remain in money market funds.

Conservative subscribers can invest up to 20% to 30% of cash reserves in this recommendation, using either QQQ shares or Rydex OTC Fund shares. That translates into potential exposure of 6.5% to 9.75% of a total BALANCE PORTFOLIO. (20% of 32.5% cash reserves equals 6.5%, 30% of 32.5% CASH RESERVES equals 9.75% of a BALANCED PORTFOLIO. The balance of reserves remain in money market funds." (October 15, 2000 when Brinker sent this advice in a special bulletin, QQQ closed at $81.70.)

The cash reserves that Brinker is referring to is the 65% he had raised from his model portfolios in January/August 2000. In other words, he advised both conservative and aggressive investors to put 30-50% of model portfolio cash reserves into QQQQ where they lost over 70% of their money. Brinker kept this out of the model portfolio official record, so all of his performance rankings for them are grossly over-stated TO THIS DAY.

Brinker offered follow up guidance for "those holding QQQ shares" in the next THIRTY issues of Marketimer. Here are a couple of samples from 2001:

January 2001, Marketimer: Bob Brinker said: "We continue to emphasize the guidelines we have recommended with regard to the exposure in the Nasdaq 100 Index for the countertrend rally phase we expect.......we are expecting potential gains for the Nasdaq 100 Index of up to 50% or more as measured from the January 2 closing low....." (January 1, 2001, QQQQ closed at $64.30)

November 2001, Marketimer: Bob Brinker said: ".....we recommend subscribers with a position in Nasdaq 100 (QQQ) shares hold these shares as we expect them to trade at much higher levels during the next cyclical bull market." (November 1, 2001, QQQQ closed at $39.65)

September 2002, Marketimer: Bob Brinker said:
"We are maintaining our hold rating on Nasdaq 100 (QQQ) shares in anticipation of much higher prices for the shares in the next cyclical bull market." (October 7, 2002 QQQ closed at $20.16)

That last sample from 2002 is indicative of what was in every issue of Marketimer from November, 2000 to March, 2003, when Brinker suddenly "forgot" all about it and actually issued a new buy on QQQQ in the low $20 range. And as Gomer Pyle always said, "Surprise, surprise, surprise"! Brinker ADDED THIS $20 BUY to his model portfolios. Shocking? Yes! Did he get away with it? You betcha! Even Mark Hulbert gave him a mulligan on it. (The original $82 trade was never closed.)

So there you have three examples of Brinker's stock picks that went south and left trusting followers hanging out to dry. He never discusses these fiascoes, and he never allows calls about them on Moneytalk. They disappeared entirely from Marketimer, so new subscribers have no way of knowing about them. Indeed, Brinker pretends they never happened.

Chart courtesy of Kirk Lindstrom:

My Idaho sister-in-law has a lot more snow now and the quail families are enjoying it a lot -- not sure my brother is enjoying shoveling the snow. :) Enlarge to fully appreciate the cute baby quail. Two of them are trying to fly:

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