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Monday, March 04, 2013

Bob Brinker Buy Levels

This chart shows the most recent buy levels for the market from Bob Brinker.  Note he gave these "buy levels" despite being fully invested (model portfolios one and two 100% in equities since March 2003) so you would need to win the Lotto or inherit great sums of money to take advantage of buy levels, especially since his advice was to dollar cost average when he has not had a buy level.
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I believe Brinker had one or two more "buy the dips" since July 1, 2010 but I didn't record it/them.  As I wrote on the chart in 2010 after his "Market Attractive for Purchase" after missing the greatest bear market since the Great Depression, who cares?

From March 5, 2009 Marketimer:
The process of establishing a major bear market bottom can extend over a period of several months, as we saw in 2002-2003. Clearly, the process of registering the final bottom in this bear market has been relentless, which has rendered our efforts to date unsuccessful. This is, by far, the most difficult stock market we have ever seen. This is only the second time since the end of World War II that the year-over-year decline in the S&P 500 Index has exceeded 35%. The other occurrence, in the fourth quarter of 1974, was also accompanied by a very severe recession.  
Due to the fact that the November 20, 2008 S&P 500 Index closing low failed to hold during the testing process, we believe a new bottoming process will be necessary in order to put an end to the bear market. This means that in order to set the stage for a sustainable market advance, we need to see a sequence of events consisting of (a) the establishment of an initial closing low; (b) a short-term rally; (c) a test of the area of the initial closing low on reduced selling pressure. Going forward, we expect the combination of aggressive monetary and fiscal policy measures, and initiatives to improve the health of the banking system, to favorably effect the economy. 
Excerpt from March 2009 Marketimer
The key to me is he had no, zero, nada buys in the 600s and 700s.  When the market was making a final low, he didn't even have a dollar cost average in the newsletter.  Then when the market rallied in 2009, he gave a buy in his newsletter for a "test of the lows" that never came.  It was not until the market rose from 666 to 1031 that I believe he actually gave a new "buy signal."  Of course he was fully invested so it was only useful for lotto winners and those inheriting large sums of money who took his advice.




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