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Wednesday, March 23, 2011

Powershares QQQQ Reverts Back to QQQ

The NASDAQ just announced it was changing the trading symbol of QQQQ back to QQQ (QQQ charts and Quote) effective immediately.  Bob Brinker's long-term subscribers remember QQQ well.  In fact, if they followed his advice to the letter, then they are still holding a large percentage of their portfolios in this fund well below their purchase price over a decade ago!

The last time Bob Brinker raised cash and lowered his asset allocation from 100% in equities was in early 2000 when he went from 100% equities to 35% equities and 65% money market funds.
See => Bob Brinker's Asset Allocation History
Bob Brinker's advice to his newsletter subscribers in early 2000 was to keep the cash liquid and wait for instructions on how to deploy that cash for short term trading "opportunities.
Starting on October 16, 2000, Brinker’s subscribers started to get a special bulletin vial the US mail advising them to "Act Immediately" and buy QQQ in anticipation of a 2 to 4 months "counter trend rally" for a 20% or more gain.  The message boards related to "The Bob Brinker Fan Club" were on fire with activity because Brinker recommended even his most conservative subscribers put a large percentage in this risky asset class.  Confused subscribers who called the Marketimer office were told "Bob is comfortable with QQQ at $86" by office staff.
See => Bob Brinker's QQQ Advice
Many of the individual stocks inside QQQ rallied but the majority did not so QQQ continued its plunge.
Click for full size image
When it came time to publish his November 2000 Marketimer newsletter, Brinker decided to "hedge" by not including the QQQ trade in his measured results while using full pages to justify his belief in the rally with new recommendations to buy in latter Marketimer newsletters as QQQ fell to the $40s where he eventually said "hold for future recovery" and never mentioned the trade again.

I believe he dishonestly advertises his results because he does not include this QQQ trade in his performance numbers.  Several of us did a calculation to see what the overall effect of the advice on his results:
=> Effect of QQQ advice on reported results
With his partner Sheldon Jacobs, Bob Brinker used to manage money for a fee.  As the letter below shows, those people didn't have a choice to not include the QQQ trade in their results as the BJ Group made the trade for them.

PowerShares Symbol Changes

Please note that effective immediately, Nasdaq has implemented the following ETF symbol changes. Any open ETF or option orders for impacted symbols have been cancelled.

Please update your Watch Lists and Alerts for these new symbols as the old symbols will no longer be recognized.
ETF Symbol Changes Current Symbol New Symbol
PowerShares QQQ Trust, Series 1 QQQQ QQQ
PowerShares S&P SmallCap Materials Portfolio XLBS PSCM
PowerShares S&P SmallCap Energy Portfolio XLES PSCE
PowerShares S&P SmallCap Financials Portfolio XLFS PSCF
PowerShares S&P SmallCap Industrials XLIS PSCI
PowerShares S&P SmallCap Information Technology Portfolio XLKS PSCT
PowerShares S&P SmallCap Consumer Staples Portfolio XLPS PSCC
PowerShares S&P SmallCap Utilities Portfolio XLUS PSCU
PowerShares S&P SmallCap Health Care Portfolio XLVS PSCH
PowerShares S&P SmallCap Consumer Discretionary Portfolio XLYS PSCD

Copies of Bulletins sent in the mail
Copies of Bulletins sent in the mail
Click to View
Click to View
Click to View what Brinker sent in the US Mail

1 comment:

  1. With "fans" like you that tell others the truth about Bob's not-so-hot market calls cost hism followers mucho dinero he really does not need enemies. Sometimes the truth hurts so I guess pointing out Bob's less than excellent adventure with the QQQs could be considered tough love. A real friend would tell you you have a bogger hanging out of your nostril and that's pretty much what you've done for old Bob.

    ReplyDelete

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