Thursday, January 31, 2008

Bob Brinker's Market-Timing Scenarios

I do not believe that Bob Brinker will ever again issue another sell signal--not even a partial one like he did in January, 2000. Why should he? He has all his bases covered so that he can claim he is "right," while he remains bullish and 100% invested--no matter what the stock market does. (Last June, he even dispensed with the so-called Secular Bear Megatrend that he touted for six years. He never mentioned that "little" detail on Moneytalk.) Here's how it works, IMO:

  • 1) The stock market keeps rising, he claims he is correct....but:
  • 2) The stock market can drop up to 20% and Brinker will remain fully invested while claiming he doesn't do short-term timing. (Those following his advice ride the market down.)
  • 3) Without previously raising any cash from equity allocations, he regularly declares all-in "buying opportunities."
  • 4) If the market corrects well below his latest buying opportunity, he will simply remove it. (Just a couple of weeks ago, he removed his mid-1400's buy level which had been in place since last August.)
  • 5) If the stock market should go into bear territory (20%+decline) or an unexpected 15% decline while he's predicting new highs into the mid-1600's (like he has been since last July), he will blame it on "exogenous events," the Fed, or even a French trader. 8^)
  • 6) When all else fails, and his subscribers have ridden the market down 15-20% (10% below buy signal), Brinker simply says he didn't expect it (Like he did on Moneytalk last Saturday) and that he will look for a bottom. (Mostly, he avoids the subject like he did last Sunday on Moneytalk--not one word about the stock market.)
  • 7) What will he do if he missed his buy signal bottom on this correction? I guess we'll all find out in the "fullness of time." To quote my favorite ski-guy, "You really can't make this stuff up."
Renowned and entertaining Brinker-commentator, Will L., sez this:
"I see some people jumping up and down claiming Brinker was "right" since we haven't had two quarters of negative growth and that makes him a great marketimer. Now that is funny.
Beyond the fact that a recession is usually well underway or almost over before anyone knows it and "NOONE" can predict whether that will be the case or not right now, Brinker claims to be a "marketimer".
He used to (though I think he even now finds talking about his "timing model" ludicrous) brag about his ability to use that great timing model with it's "hundreds of indicators" to see the future and indeed predict the markets with singular precision.

Bragging about being able to call bottoms of corrections within 3% (hardly more than a parlor trick if you call every sell off around 7-10% and you have a long period of sell offs not exceeding 10%. He could look at those schmindicators and make these confident pronouncements and then go on to rail against those who projected a different view.
Now Brinker just weeks ago when the market was at it's high of the year was very bullish. When others were getting nervous in October, Brinker began to make fun of them. He called for highs in 1600s in 08 and encouraged a huge "go all in" gamble at 1450 on the S&P. He was BULLISH to the max. And curiously he was nearly back to his old boisterous self, Yammering at the "bad news bears", ragging on anyone who disagreed with his very bullish stance.
Well how can anyone use the subsequent market/economy direction to claim Brinker was "right"???? A marketimer who could call the future of the stock market with unprecedented accuracy and bragged on himself profusely, seems to have been totally clueless in his bluster.
Now whether the market technically drops more than 20% from the October highs, we know that Brinker's bravado and confidence was unwarranted. His "go all in at 1450" was silly in hindsight. All of his claims for earnings were simply hogwash as an entire sector --the financials that were making up about 35% of the S&P came a cropper that is nearly unprecedented in underperformance.
Brinker in a "special bulletin" seemed to not want to mention a "gift horse buying opportunity" having thrown that out there with fanfare at 1450---the market trading down 10% below that "great call". Instead he yammered about being "foggy".
It is obvious to anyone with a modicum of sense that Brinker's game that he plays of yammering and hoping the market doesn't move much in the wrong direction and then spinning events to pretend he "called it"---came up short as the market made a fool out of him.
Now Brinker, his family minions and shills will likely jump up and down hollering "Who called this? Who called this? Show me a better marketimer". Of course, such a BS alibi, misses the point. Marketiming is impossible to do with enough certainty to be of financial benefit to an investor. It is a product made to sell, and depends on blarney of the seller to attract the goobers and geezers of the world to bite."___Will L.


yaetmo. said...

These three remind me of how some folks try to maintain an illusion as they cover-up of Bob's blunders.

steve said...

Gauge of economy falls, recession looms: ECRI
Fri Feb 1, 2008 10:44am EST

NEW YORK (Reuters) - A weekly gauge of future U.S. economic growth fell hard and its annualized growth rate plunged to a six-year low, a research group said on Friday, indicating the risk of recession is very high.

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index fell to 131.1 in the week to January 25 from 135.7 in the prior week, revised down from 135.8.

The WLI fell due to higher jobless claims, weaker housing activity and lower stock prices, said Lakshman Achuthan, managing director at ECRI.

The index's annualized growth rate plunged to minus 7.1 percent from minus 6.0 percent.

"WLI growth has dropped back to the six-year low seen in early January," Achuthan said.

"While the economy and employment did continue to grow through the end of 2007, the window of opportunity to avert a U.S. recession is about to slam shut."

Honeybee said... have copied a post from Kirk's Facebook ECRI Data Forum.

For those interested, Kirk posted this response:

"Thanks for posting that

I just posted a chart of that WLI growth data vs GDP growth here"


Honeybee said...

Note, if you want a free issue of Kirk Lindstrom and David Korn's Retirement Advisor Newsletter, go here: