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Wednesday, May 02, 2012

Two Bear Markets Missed in Half a Decade

You don't hear Bob Brinker talk about this much since he was fully invested for both bear markets (See Brinker Asset Allocation History for full details.) but this is data worth keeping track of.
Bear Market Missed #1 in 2007 to 2009
High = 1576.09 Low = 666.79
Decline = 909.30 or 57.7% !!!

Bear Market Missed #2 in 2011: 
High = 1370.58 - Low = 1074.77 
Decline = 295.81 or 21.6% 

 (Click this chart to see the highs and lows circled.)


You have to chuckle that he calls his newsletter "Marketimer" when he has been 100% in equities for the last nine years without raising any cash for the "Great Recession" that was a bear market over 50%.  He had another chance last year to raise cash before another bear market but he rode that one out too.

Brinker should change the name of his newsletter to "Buy_And_Holder."

To Bob Brinker's credit, the markets are not that far from their all time highs but how many stuck with him and his multiple "buy signals" as the market plunged between the top in 2007 and mid 2009 when he started to give buy signals again after stopping near the lows?

2 comments:

  1. Marketimer quotes (from a Google search of "Brinker asset allocation history" )

    October 2007 S&P500=1526.75
    "Although we do not believe further weakness into the mid-1400's range must occur, we remain comfortable with rating the market attractive for purchase should any such additional weakness occur. Above that price range, we prefer a dollar-cost-average approach for new stock market investing. All Marketimer® model portfolios remain fully invested.
    "

    January 2008 S&P500=1468.36
    “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 rang 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.""

    May 31, 2008 Moneytalk with S&P500 above 1400
    Bad News Bear Bashing" 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."

    ReplyDelete
  2. On October 16, 2000, Brinker’s subscribers got a special bulletin vial USPS mail advising the they could "Act Immediately" and buy QQQ (the exchange traded fund for the NASDAQ100 index) in anticipation of a 2 to 4 months "counter trend rally" for a 20% or more gain. Confused callers to the Marketimer office were told "Bob is comfortable with QQQ at $86" by office staff.

    May, 2001 Marketimer, Page3; Paragraph 4; Bob Brinker wrote: We continue to believe the Nasdaq has the potential to recover further in the months ahead. As we stated last month, "with or without a buy signal from our long-term model, we expect the Nasdaq composite and Nasdaq 100 Index to stage a significant recovery over the next several months."

    Subscribers with conservative objectives and a low-risk tolerance are limited to no more than 20% to 30% of cash reserves in these shares. this equates up to 6.5%, to 9.75% of a total balanced portfolio. The remaining 70% to 80% of a balanced cash reserves remain in quality money funds. Subscribers with aggressive objectives and a high-risk tolerance are limited to no more than 30% to 50% of cash reserves in these shares. This equals potential investment of 19.5% to 32.5% of a high-risk aggressive portfolio. the balance of 50% to 70% of reserves remains in money market funds."


    He advised putting up to a THIRD of a total portfolio into this investment and yet he doesn't include it in his official record.

    ReplyDelete

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