Friday, October 19, 2007

Bob Brinker on Black Monday, October 19, 1987

Is history repeating itself? Will Bob Brinker miss another "Black Monday"


This is the twentieth anniversary of Black Monday, October 1987, when the Dow lost over 22% of its value in one day. I recall that day very well. I had been listening to Bob Brinker's Moneytalk long enough to believe that he was absolutely trustworthy and capable of predicting what the stock market would do in the future. I was "WRONG."


Bob Brinker was just as bullish the weekend before that huge market drop as he is right now. As the market was tumbling in a very alarming manner that Monday, KGO radio did a guest spot with Bob Brinker during a financial report. Brinker was very reassuring--as only he can be with his velvet voice. He said not to sell. He was "WRONG." I could have saved myself some big losses by selling even during the middle of the day.


Of course, Bob Brinker historians know that Brinker sold all equity allocations and went to 100% cash just a couple of months later--locking in large losses. And he remained in cash until early 1991--missing a lot of market gains.


Last weekend, Bob Brinker could not have sounded more bullish on the stock market. He spent a lot of time hammering the "bad news bears," and saying how they talked "nonsense." Brinker poked a little fun at a caller who asked about the upcoming "Black Monday" anniversary and reminded the caller of other anniversaries--mentioning the 1929 market crash and the national tragedy that happened on 9/11/01. I guess some might have thought it amusing--I didn't...


So today, October 19, 2007, the S&P 500 Index has lost over 4.2% of it's value since October 9th--down over 3.5% for this week alone. The Dow dropped 366 points today.


Here are my comments about what Brinker said last Saturday:


"STOCK MARKET: Five weeks in a row on the upside. This week the stock market made another historic record high — has been “acting beautifully” and “celebrating.” The “backdrop has been positive for the stock market” because retails sales increased by 6/10 of 1% -- way more than the pundits, guru and experts said it would."


Very recently, Mark Hulbert reported on Bob
Brinker's Marketimer as follows:

"Bob Brinker's Marketimer:  Bullish.  In his most
recent issue, published
in early October, editor Bob
Brinker wrote: "We expect significant additional

stock market progress into next year as investors
discount growing corporate
earnings in an environment
of low inflation and benign interest rates."
portfolios are fully invested."



customeryacht said...

Like you, I remember Brinker in 1987. It's too bad that his radio screener only allows fawning listeners on to speak to him. He has demonstrated that he is quite jealous of Rush Limbaugh's radio audience. He should learn that what makes Rush so popular is that he allows liberals or naysayers on to speak to him. This is one of the elements that makes his show so interesting. On the other hand, Brinker will tolerate no dissent or worse, those that bring up the unfortunate past. He is really a
flim-flam man who has nothing more than the most basic market timing model. Worse yet, he has become very boring, discussing far ranging subjects that are often related to his liberal political philosophy;e.g., Robert B. Reichhhhhhhhhhuhh.
Keep up your good work!

Honeybee said...

Hi Customeryacht,
Thanks for the encouragement.
I have a good friend in Florida who said he was in the market for a yacht--that wouldn't be you, would it? 8^)
I totally agree on all points and feel a little sad to see Brinker continue to go down the path he seems to have been on for several years now.
His obvious "flim-flam" to sell his "secret" market-timing prophecies, and his efforts to be a political "mover and a shaker," are boring and repetitive.

Anonymous said...

Bob is far from perfect, but he's the first one to tell you he does not pick short term moves. if you lost money, it's because you sold at a low, if you stayed with Bob's advice you would be a winner.

there is an old saying on wall street if you buy at the lows and sell at the highs you are a liar.