Posted May 28, 2008 Bob Brinker's Model Portfolio Performance Record
.
Octavian's comments (which are posted to the previous article):
.
honey said: "Please tell me how far back you want to know his long-term record and I will present it in a front page post for you. ASAP...."
.
Octavian replied: --OK. Please tell me the long-term record of P1 starting when I started listening to him on the radio, around Jan. 1, 1993.
.
I know you people like to make sure to include 1988-89, so you can make him look as bad as possible, and if it helps you, you like to use the average of all his portfolios,rather than P-1.
.
Why do I suspect that the brainwashed sycophants who post here don't know these things? -:)
.
Honeybee here: Octavian.....Thank you for your comments and question.
.
However, you are mistaken. Bob Brinker is the one who charts his Model Portfolios 1 and 2 from 1988 (1-1-88, to be exact). I cannot tell you the exact performance record of Brinker’s Portfolio 1 since 1993, but Mark Hulbert (Hulbert’s Financial Digest) tracked the performance of an average of Brinker’s three Model Portfolios over the past 15 years, which would take us back to 1993. Hopefully that will be close enough for you.
.
Here is Hulbert’s conclusion under this category: “Performance Scoreboard For Mutual Fund Letters: The Top 5 Performers Through 4/30/2008; Total Return Ranking (Not Adjusted for Risk)": Bob Brinker ranked number 5 over the past 15 years.
.
NOTE: Brinker did not make it into the top 5 performers for the past 5 years in any of Hulbert’s three different performance ranking categories.
.
Octavian continued: “In any event, when I mentioned his long-term record, I wasn't actually talking about P-1 or anything like that. As you know,I've never been a big fan of his mutual fund selection method. In all honesty, I have done MUCH, MUCH better with my own fund selections than he has.
.
I could write a major essay on the weaknesses of his fund selection methods.”
.
Honeybee here: You and Jeffchristie have both done much better than Bob Brinker – different investing approaches, of course.
.
Octavian continued: “When I said your people need to know his REAL long-term record, I was talking about how well his long-term timing model has done since he upgraded it around 1990.
.
He turned bullish around that time, and stayed that way until Jan. 2000.
.
I followed the market closely during those years, and the amount of outright bearishness among the "experts" was monumental. Hardly any of them stayed bullish the whole time!
.
People who weren't involved with the market during those years, or who get their info from anti-brinker propagandists do not understand what a monumental achievement that was.”
.
Honeybee here: It is ludicrous to pick a date out of thin air that even Brinker does not pick. it might make an interesting game, but it wouldn’t be much help in evaluating Brinker’s performance record, because everyone could pick a different date and it would mean nothing.
.
However, I think that most everyone agrees that the fact that Brinker was bullish throughout most of the 1990’s was an “achievement.” He actually returned to 100% invested in January 1991. Here are the FACTS (Thanks to Math Junkie, a long time Brinker fan.):
Feb 1990…. equities @ 40%..................Dow: 2559
Jan. 1991…. equities @ 100%..................Dow: 2550
.
Octavian continued: “Jimmy Rogers, a brilliant guy who helped George Soros run the Quantum Fund, was on TV all the time saying he was "net long," but issuing dire warnings about interest rates, inflation, and the coming crash.
.
I'm quite confident that there were only TWO OTHER reasonably well-known people who were bullish all those years--Joe Battapaglia and the woman whose name escapes me. But they turned out to be mere permabulls, whereas Brinker went correctly bearish (or "cautious," if you prefer) in 2000. He then turned strongly bullish near the bottom in March 2003. He is virtually THE ONLY ONE IN THE WORLD who got it completely right!!”
.
Honeybee here: Brinker raised 60% cash reserves in January, 2000, and another 5% in August 2000. The remaining 35% was in the market throughout the whole bear that began in January 2000. To categorize that as “completely right,” is a bit of a stretch.
.
Please check out this chart.
.
Octavian continued: “If it wasn't for the disastrous and inexplicable QQQ call (which had nothing to do with the long-term model), he would be hailed as a genius by the entire financial world.”
.
Honeybee here: You are correct that the QQQ-call was disastrous, but to say it had nothing to do with “the long-term model” is simply not true. Sure, he kept it “off the books,” and deceptively has not accounted for it in his officially reported performance results. But the fact is that he repeatedly recommended that his subscribers use 20-50% of the 65% cash reserves from their Model Portfolio Money Market holdings to purchase QQQ in October, 2000.
.
November 6, 2000 Marketimer, Bob 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."
.
Octavian continued: “During all the corrections of the big bull market,when so many smart people were urging caution or even suggesting bailing out (as many always do during corrections) he was always adamantly bullish.”
.
Honeybee here: Brinker was also “adamantly bullish” at the all-time-record-high last October, 2007, and kept his Model Portfolios fully invested for the whole 20% decline in the S&P and 25% decline in the Nasdaq that began in January, 2008.
.
Octavian continued: “Despite basher efforts to downplay his "gift-horse" call in 1998, it remains one of the best market calls in my lifetime.
Sure, he issued the gift-horse a little early--after the market had dropped 10%. But he not only stayed bullish, he also urged people near the bottom (a 20% drop) not to be "out of the market for a single day." A lot of people like me really benefitted from the strength of his conviction!!!”
.
Honeybee here: Let’s look a little closer than 10 years ago and talk about his “gift-horse” buying opportunities. First he said it was “mid-1400’s," then he said he was “looking for a new bottom,” then he said it was “low-1300.” Here’s the documentation:
.
August 3, 2007 Marketimer (S&P 1455) Bob Brinker said: “We rate the stock market as attractive for purchase on any weakness that occurs in the area of the S&P 500 Index mid-1400’s.”
.
January 4, 2008 Marketimer (S&P 1468) Bob Brinker said: “ We continue to rate the market attractive for purchase on any weakness into the S&P 500 Index mid-1400’s range."
.
January 20, 2008 (in a special bulletin) after the steep market decline, Brinker did away with the mid-1400 gift-horse, recommended ONLY dollar-cost-averaging for new money, and said he was "looking for a bottom."
.
February 10, 2008 (according to Hulbert's Marketwatch article) Bob Brinker said that the market had bottomed and he issued a buy signal in the low-1300's.
.
Octavian continued: “It defies belief that you bashers look for, and find, so many ways to knock that call. The real truth is, when he was saying not to be out of the market A SINGLE DAY, most advisors and assorted experts were scared out of their ever-loving minds!!! Why do you people conveniently "forget" that truth?
(Let me guess). -:)
.
In any event, the market proceeded to go up FIFTY PERCENT OVER THE NEXT SIX MONTHS!!!!! How often in the entire history of the stock market has it done that??? Who else besides Brinker was so ADAMANTLY BULLISH???”
.
Honeybee here: NOONE has forgotten anything. I have mentioned the “single day” thing many times, and you know it. However, just as you so correctly pointed out, the market dropped another 10% AFTER he issued the 1998 "gift-horse."
.
Octavian continued: “I haven't even mentioned his correct and strongly bullish positions on Asia and the emerging markets. Nor have I mentioned his continued pooh-poohing of inflation fears, when so many were predicting it because of our strong growth.”
.
Honeybee here: When was he "strongly bullish on Asia and the emerging markets"? Do you have some facts to back up your assertions – and maybe a time frame? As for his “pooh-poohing of inflation fears,” I would say that the jury is still out on that. Additionally, there are many better-known economists who think that there is good reason to fear inflation.
.
Octavian continued: “There is much more. If anyone is seriously seeking true information, they can e-mail me. They will never get the complete, unvarnished truth here. Everything will ALWAYS be slanted to make him look bad.”
.
Honeybee here: You are entitled to your opinion and have the right to say it, but I hate to see you make yourself look bad by making accusations that anyone who has read my Blog for any length of time knows are not true... Additionally, the proof that your accusations are false is staring readers in the face -- I accept all viewpoints about Brinker via comments, even yours. 8~)
.
Octavian continued: “The truth is that Brinker has done a great job. He made one huge mistake and covered it up. That was bad.”
.
Honeybee here: Octavian is referring to the cover up of the QQQ-trade.
.
Octavian continued: “Overall, he has been great, and many people, like me, have him to thank for our financial success!!”
.
Honeybee here: Somehow I do not think you give yourself enough credit where credit is due, and here's why: At the beginning of your comments you said, “As you know, I've never been a big fan of his mutual fund selection method. In all honesty, I have done MUCH, MUCH better with my own fund selections than he has.” Now that is very funny, Octavian….and thanks again for your comments. 8~)
.
