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Friday, November 16, 2007

Bob Brinker’s HFD Performance Rankings

Bob Brinker's Marketimer Performance

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The following is excerpted from the November issue of Hulbert’s Financial Digest.
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Bob Brinker’s Marketimer Mutual Fund Performance"
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Mark Hulbert rates the performance of newsletter mutual funds. The top 5 are ranked over various time periods consisting of 15 years, 10 years, and 5 years—for both "Risk-Adjusted" and "Not Risk-Adjusted."
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Here are Bob Brinker's rankings for the "average" of his model portfolio mutual funds through 10/31/2007 according to HFD:
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“Total Return Ranking (Not adjusted for Risk)”
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15 Years: Bob Brinker = 3rd place
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10 Years: Bob Brinker = 5th place
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5 Years: Bob Brinker's Marketimer is not in the top five newsletters
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“Total Return Ranking (Risk-Adjusted Ranking)”
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15 Years: Bob Brinker = 3rd place
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10 Years: Bob Brinker = 2nd place
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5 Years: Bob Brinker's Marketimer is not in the top five newsletters
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Under HFD's category that ranks the TOTAL performance of the "average" of model portfolios, Bob Brinker did not make any of Hulbert’s "Performance Scoreboards" in the “Not adjusted for risk” column for the past 25, 20, 15, 10 or 5 years.
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However, Hulbert created a special “Risk-Adjusted" method for ranking performance. Bob Brinker's Marketimer shows up under that category. (One could question the objectivity of Hulbert’s “Risk-Adjusted Ranking” since he does not clearly explain exactly what the term means.)

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Marketimer Model Portfolio Average “Risk-Adjusted Ranking”:
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25 Years: Bob Brinker's Marketimer is not in the top five newsletters
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20 Years: Bob Brinker = 5th place
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15 Years: Bob Brinker = 3rd place
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10 Years: Bob Brinker = 2nd place

5 Years: Bob Brinker's Marketimer is not in the top five newsletters
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Additionally, in the November issue of HFD, Hulbert charts the top 5 newsletters for the past 10-year top performance and compares annual subscription prices then and now. Bob Brinker's Marketimer was not included in the top 5 newsletters and it was not included in the bottom 5 newsletters.

6 comments:

Joanne said...

Hi honeybee,

Thanks for this blog; you are doing a great job. However, I do have a bone to pick with you regarding your previous assertion that house prices in SJ will not go down. Please read this real estate report for Santa Clara county and keep in mind that it is published by a realtor (and realtors tend to be overly optimistic):

http://www.creeksiderealty.com/bay_area_real_estate/2007/summary/11nov.htm

One of the most interesting paragraphs:

"SMC set yet another new record high median Sold price in October 2007 $1,026,282. The recent price jump in large part is because of a significant change in the mix of what is selling because of the sub-prime loan situation. This is a 16% increase from last year but the square footage of this home increased 13% during the same period. Mt View, Los Altos, and Palo Alto normally represent 10% of the transactions. In February these areas represented 9% of all SCC transactions. By the end of March this had nearly tripled to 25% of all SCC transactions. These expensive areas are currently 17% of the market. The affordable areas: South, Central and East San Jose dropped from 16% to only 11% of all transactions. This has decreased even further in October to only 7.7% of the completed transactions. Both these shifts forces the median Sold price to increase even without any appreciation."

I assert that declining transaction invariably result in lower prices. People said "it won't happen here" in Miami, in Phoenix, in Las Vegas, but saying it won't happen doesn't prevent it. San Jose is next; the numbers make it inevitable.

Bobby said...

Does this mean Bob Brinker has lost his "mojo" lately?!!

Honeybee said...

Joanne said: "I assert that declining transaction invariably result in lower prices."
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Hi Joanne,
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I'm so glad that you find value in my blog. I welcome your "bone-picking" comments because that way we can both learn. 8^)
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I cannot disagree with your assertion at all. It makes sense that the balance between supply and demand in the housing market would bring the prices down eventually--even in Santa Clara County.
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If I recall correctly, I think my comment about what Bob Brinker said was mostly meant to point out that Brinker was was not really as familiar with the real estate market in the San Jose area as he professed to be.
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Honeybee said...

Bobby asked: "Does this mean Bob Brinker has lost his "mojo" lately?!!"
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Don't know "Bobby," why don't you tell me?

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Ambrose said...

I see Brinker shows risk-adjusted returns. What are they and who computes them? Please show me an example of how to compute risk adjusted returns.

Brinker was mostly out of the market during the recent bear market, does he count this as a zero risk period?

Honeybee said...

Ambrose asked: I see Brinker shows risk-adjusted returns. "What are they and who computes them? Please show me an example of how to compute risk adjusted returns.
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Brinker was mostly out of the market during the recent bear market, does he count this as a zero risk period?"

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Ambrose,

I assume that Mark Hulbert does it, or sees that it is done, and that he bases it on some kind of method whereby he calculates "volatility" compared to the Wilshire 5000.
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Here is an excerpt of some of the colunms from HFD's "Performance Scoreboard" page, explaining the terms that he has used to reach his conclusions.
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Mark Hulbert wrote:
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"The columns in these scoreboards are:

GAIN--The newsletter's total return (annualized).

RISK--The newsletter's risk level, as measured by volatility. All letters' risk level are then adjusted upwards so that the DJ Wilshire 5000's risk level becomes 100.........

RISK-ADJUSTED RATING--This reports monthly performance per unit of risk, calculated using the Sharpe Ratio.....

RISK-ADJUSTED RANK--This reports what the newsletter's rank would be if all newsletters were ranked on risk-adjusted basis.

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Is it much adieu about nothing? And why is it important? How come Bob Brinker has better results after Hulbert gets through with his "risk-adjusted" ranking? I sure don't know. What are your thoughts?
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____Honeybee

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