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Monday, May 18, 2009

Market Timer Bob Brinker Remains Bullish on Stocks

Bob Brinker said on Moneytalk last weekend twice that he expects 2009 to be a significantly positive year for the stock markets.

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Charts of US Market Indexes:
DJIA - S&P500 - NASDAQ - NYSE Composite - QQQQ - Russell 2000 - Russell 3000 - Wilshire 5000
Honeybee reported in "Bob Brinker's Moneytalk: Excerpts, Summary and Commentary, May 16, 2009" [link] the details. Excerpt:
* For the week, the Dow (Charts) declined 3.6%, closing at 8268.64
* For the week, the S&P 500 (Charts) Index declined 5%, closing at 882.88
* The Nasdaq (Charts) declined 3.4%, closing at 1680
* GOLD closed at $931.30
* OIL closed at $57

This was a down week for the market. It's worth noting that last weekend Bob Brinker said this:

"You know, I published a statement in January that I thought that 2009 could be a good year for the stock market – and that was back in January……A lot of people thought basically I had gone insane to make a comment like that. Look, it’s only May and we’re already in positive territory. Certainly we can slip back into negative territory for a period. Nobody can rule that out because we are only in minor positive territory using the S&P 500…..I still think 2009 is going to be a significant positive year for the stock market. I’m on record back in January having said that and I’m not changing anything about that forecast. I think that 2009 will be a significant up year for the stock market."
Of course Bob Brinker thought at the start of 2008 that the market would reach 1600s in 2008 and it didn't.
January 2008 Marketimer with S&P500 @ 1468.36 : Dollar Cost Average. Lump sum mid 1400's
Pg 3: “In summary, the Marketimer stock market timing model indicates that conditions are favorable for the market as we enter 2008. We expect the S&P Index to achieve new record highs this year and to reach the 1600’s range in the process. We continue to rate the market attractive for purchase on any weakness into the S&P 500 Index mid-1400’s range. Above this range we prefer a dollar-cost-average approach for new purchases. All Marketimer model portfolios remain fully invested as we enter 2008."
I don't see how anyone who was 100% invested and so bullish at the top could think he can time the stock market after missing a 57% bear market decline THEN becoming more bearish at the very bottom.

I hope the bears are wrong, but the market had rallied back to its 200-day-moving-average (DMA) when Brinker started to brag again about being bullish. This 200-dma is where Bob Brinker got wildly bullish last year (green circle on the graph below) as he claimed victory and bashed the Cassandras. (See => 5/31/08: Cassandra Bashing)

I'd think he would be embarrassed that he took the DCA and gift horse buy OFF just days before the market bottomed at 676 and only got bullish for "buy on weakness" after a significant recovery.

Click chart courtesy of stockcharts.com for full size image

Brinker's Advice Summary for January 2008 until now:

  • Mid 1400 he called it a "gift horse buying opportunity"
  • Market rallies back to 1400s in 2008 and he bashes the Cassandras
  • Market bottoms in 2009 at 676 and he has no buy or advice to DCA in his newsletter just days before.
  • Market rallies significantly and he is a buyer on "weakness"
Bob Brinker was more bullish above 1400 than in the 600s to 800s.

What sort of "market timing" is that?

I really appreciate how Bob Brinker teaches his audience to ask questions and know what they buy to become their own financial advisor. But this idea he can time the stock markets goes against the books on his recommended reading list and his own lack of success proves just how difficult, if not impossible market timing is.

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