- Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early June, editor Bob Brinker wrote that his market timing model "remains in favorable territory as we approach the start of the summer season. We continue to expect stock prices to work higher and to achieve new historic highs in the market indexes." Brinker's model portfolios are fully invested.
[Kirk Comment: Brinker's model portfolios have been fully invested since March 11, 2003. See Bob Brinker's Asset Allocation History. ]
For a good summary of what Bob Brinker said on "Moneytalk" last weekend, see: Summary: Bob Brinker's Moneytalk, May 31, 2008. Here are some key excerpts:
- RECESSION CASSANDRAS.... Brinker said: “What we have right in here now is evidence that the Cassandras, who earlier this year, were telling us we were in recession – right now they’ve basically – well I’ll be kind, basically, they look like fools right now. Because all that they’ve accomplished with their talk about recession…………all that they have to show for their efforts is that they scared the people who listened to them out of the stock market this past winter……….”
[Kirk Comment: See Bob Brinker and NBER Recession Definitions ]
- CORRECTION LOW AND TESTS.... Brinker said: “……..And probably a lot of those people got scared out near the correction lows. The initial correction low in January, which was successfully tested in mid-March, before the market reversed and resumed its uptrend. And basically, if you were to total up all of the accomplishments of the Cassandras, that would be it – that they scared people out of the market during a stock market correction in the first quarter………..Because they have been unable to present any evidence of a recession."
- STOCK MARKET BEARS.... Brinker said: “So what we have here basically, is an example of false prophets and it’s sad. And the reason it’s sad is the damage done. Think of the people that are looking today at the market, S&P at 1400 and they’ve been scared out of the market in the first quarter by these bears………It’s just amazing and yet these people are out there, and these people are not happy, I’m sure, to find themselves out of a rising market since March. To find themselves looking for ever lower prices when in fact we’ve had the opposite.
So it’s fair for you to say to the Cassandras, where is that recession, where are those millions of lost jobs, where are the two quarters of negative real GDP growth? Where’s the bear market? …………The answer is, they blew it! That is the answer, they blew it. They got caught up in their own negativity and they pronounced that it was all over, it was going to spiral downward and there was no end in sight – and they got it completely backwards.
- More at Summary: Bob Brinker's Moneytalk, May 31, 2008
Kirk's Commentary: I am not a bear but I hate to break the news to Brinker that the S&P500 with dividends reinvested is still down 5.4% YTD as of 6/3/08. It seems a little early to be bashing the bears who may have been in gold, oil and other commodities all this time. The bears didn't suddenly turn bearish at the very bottom either. Most have been making money in other investments all this time and did not suffer the double digit decline in their portfolios like Brinker did on this recent correction.
- Brinker P1 on 10/31/07 = $302,561
- Brinker P1 on 3/31/08 = $252,199
down $50,362 or down 16.6%
- Brinker P1 on 5/31/08 = $274,501
down $28,060 or down 9.3%
- Gain required from 3/31/08 to "break-even" with 10/31/07 is $50,362. $50,362 / $252,199 x 100% = 20.0 %