Bob Brinker Stock Market Targets

This article compares Bob Brinker's S&P 500 earnings estimates for 2018 and 2019 with those of one of my favorite economists, Dr. Ed Yardeni. 

In almost every Marketimer Newsletter, editor Bob Brinker publishes his earnings estimate for the S&P 500, his estimate for a reasonable price to earnings (PE) ratio range, then a reasonable "potential" price for the S&P 500 index usually calculated by multiplying the two numbers then applying some spit-shine.

Brinker currently estimates the market "has the potential" to reach $2900 when it starts to discount 2019 earnings of $163 with a PE ratio of 17 to 18.  As my table below shows, this is about the highest PE ratio Brinker has thought acceptable since 2008 based on the Marketimer newsletters I surveyed to make the table below.

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Of course, you need to take this numerology with large grains of salt.  For example, ten years ago the market was at $1331 and about to crash to $666 while Brinker predicted new highs into the "$1600s range" as I highlight in this table.

I'll try to provide regular updates of that table here because it has some interesting calculations and it provides a good historical record.

 Here is an example from his May 3, 2017 Marketimer how he frames the data with words.

From over 20 years of following Brinker, I've noticed he usually starts his S&P 500 earnings estimates lower than the consensus of the average of most analysts tracked by tracking services. Then if the year goes well, Brinker raises his estimates such that by the end of the year they are close to consensus.  This also allows him to raise his estimates for the market price before it moves "closer to the period when investors will discount" the next year's earnings estimates.   

Dr. Ed Yardeni's Estimates: This is what one of my favorite economists, Dr. Ed Yardeni, publishes.

Note how Dr. Yardeni also has a below consensus forecast for 2018 and 2019 S&P 500 earnings of $155 and 166, respectively.

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Dr. Ed Yardeni is a regular guest on CNBC, the financial show that runs from "Squawk Box" starting at 3 AM PST to Jim Cramer's "Mad Money" ending at 4 PM PST.  See www.yardeni.com for more information about Dr. Ed.

Bob Brinker Moneytalk Podcasts October 2016

Bob Brinker Podcasts for October 2016

Bob Brinker's Moneytalk. 

Bob Brinker's:

•  => Advice for New Money   
•  => Asset Allocation History
• For questions and more:
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Market Outlook:  

In the October 2016 Marketimer, 

1. Bob Brinker remains bullish & fully invested.
2. Bob says dollar cost average new money into the market.

Since there is no real change, read Bob Brinker's Market Update for September 2016

Free On Demand podcasts for October 2016:

October 23, 2016:

• Hour 3 Bob's Guest: 
  
• Roger Lowenstein: America's Bank: The Epic Struggle to Create the Federal Reserve
  

October 16, 2016:

Hour 3 Bob's guest 

Sebastian Mallaby: The Man Who Knew: The Life and Times of Alan Greenspan

October 2, 2016: Repeats of old shows in a "best of Brinker" so very good calls and general advice.

• Hour 1
• Hour 3 Great advice from Harold Pollack, author of:
  "The Index Card: Why Personal Finance Doesn't Have to be Complicated" 

October 9, 2016: Tom Vacar guest host  New

• Hour 3 CalStart

October 16, 2016:

October 23, 2016:

October 30, 2016:

 For the latest news, read Bob Brinker's Advice for New Money and Market Outlook.

Kirk Lindstrom's Investment Letter:

• Subscribe NOW & get the October 2016 Issue for FREE!!!

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Mark Hubert: Bob Brinker Remains Bullish, Same as Last Year

According to newsletter tracker Mark Hulbert, Bob Brinker remains bullish for December 2008. In "Bruised but bullish" Mark writes:

Four of five newsletters on Honor Roll are bullish...

So it behooves us to pay attention to what they are saying.....

You might still object, on the grounds that this same exercise a year ago also reached a bullish conclusion, and yet the stock market is some 40% lower today.

It is a valid objection. Hulbert's methodology of following writers he thinks are the "best market timers" was 100% wrong this year.

See my discussion of Mark Hulbert's November 15, 2007 article: Bob Brinker Still Bullish According to Mark Hulbert where I reported:

"Bob Brinker remains bullish along with the other eight top market timers Mark tracks. The best news is the worst market timers are bearish."

and Mark reported:

"Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early November (2007), editor Bob Brinker writes: "We continued to believe that there is no risk of a cyclical bear market (a decline of 20% or more as measured by the S&P 500 index) in the months ahead ... We expect the stock market to set a series of new record highs into next year." His model portfolios are fully invested."

As you know, Brinker followed this forecast up with a "gift horse buying opportunity" in the mid 1400s.

Click chart courtesy of Stockcharts.com for full size image

This is what Hulbert says now:

Bob Brinker's Marketimer. This newsletter makes it onto this year's honor roll even though editor Brinker last year did not expect the stock market to decline more than 20%. That he nevertheless remains on the Honor Roll is testament both to how good his market calls have been on other occasions over the past 18 years, as well as to the failure of most other newsletters to also anticipate the severity of the market's decline. He was in good company, in other words, and the Honor Roll is graded on the curve.

Brinker currently believes the stock market is in a perhaps extended bottoming process, and he therefore recommends that subscribers invest in the stock market on a dollar-cost-averaging basis. "We are aware that there is widespread fear that financial Armageddon is the likely outcome of the global financial crisis. We take the opposite view, and expect the stock market to record significant gains during the next major market uptrend. We continue to focus our efforts on the ongoing bottoming process that we regard as essential to establishing the level from which a sustainable market uptrend can occur. When we reach the point at which we can upgrade our current stock market view from dollar-cost-average to a renewed buy recommendation, we will do so."

Brinker has had a lot of practice calling these bottoms! With the market reecently up 20% off the recent low on more than one day, he missed one.

Click chart courtesy of Stockcharts.com for full size image

Not to worry about missing bottoms, Bob Brinker has been fully invested since March 2003 . He recommended against taking profits at the top so he has taken a round trip. The other market timers Hulbert follows must be putrid if Brinker's results are the best of the lot.

Comment on this article here

Bob Brinker Sees New Market Highs

This weekend Bob Brinker told a caller to "Moneytalk" that he thought the S&P500 could make new highs in the next one to three years.

Click charts courtesy of stockcharts.com to see full size images

This is good news as the S&P500 is about 300 points away from "new highs." New highs would be a gain of 20%!

• [(1576-1261) /1576] x 100% = 19.99%
  

From Kirk's Market Update for July 26, 2008:

Index (1)	Started Week	Ended Week	Change	% Change	YTD
DJIA	11496.57	11370.69	-125.88	-1.1 %	-14.3 %
Nasdaq	2282.78	2310.53	27.75	1.2 %	-12.9 %
S&P 500	1260.68	1257.76	-2.92	-0.2 %	-14.3 %
Russell 2000	693.08	710.33	17.25	2.5 %	-7.3 %

Note 1: Index returns do not include dividends.

From Honeybee's Summary, Commentary and Moneytalk Excerpts, July 26, 2008:

Caller Gary: “I was just wondering what your opinion was on the market returning to its previous highs?”

Brinker replied: “Well, I would say that uhhhhh….what kind of a time frame do you have in mind, that’s the key? It’s not going to happen this week, you know we’ve got to get up 300 points in the S&P – 300 points in the S&P to get to new highs. What kind of a time-frame were you thinking about?” .

Gary: “Well, I don’t know –1 to 3 three years. What kind of a time-frame would you………”

Brinker replied: “Oh, I would say within your time-frame of 1 to 3 years, would the market get to new all-time-highs in the S&P 500. For me I think the answer would be without question – that would be my opinion. Would the market get to new all-time-highs within your time-frame of 1 to 3 years? Yeah. For me, my opinion on that would be -- without question."

Brinker sure sounds confident. Of course he was confident in new highs at much higher levels too so this is nothing new.

From Bob Brinker Timing Model Mauled By Bear Market:

Months into the bear market, Brinker thought we were still in a bull market. The bear market started at the high, in October 2007!

January 2008 with 100% invested & 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."
  

March 2008 with 100% invested & S&P500 @ 1330.63

• Dollar Cost Average. Lump sum low 1300's
• Marketimer Pg 1: "Based on the model’s current readings, we expect the area of the correction bottom established during recent weeks in the S&P500 Index low 1300’s to contain any further testing and probing that may occur."

May 2008 with the S&P500 back over 1400 he gave a bad news bashing on the radio that had their heads spinning. 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.

But it is good to know Brinker is still bullish. I look forward to new market highs when Brinker can bash the "bad news bears" yet again!

Bob Brinker's June Market Outook

According to newsletter tracker Mark Hulbert, Bob Brinker remains bullish for June 2008. In "Lion or lamb?" Mark wrote:

• 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. ]

What Mark wrote should be no surprise to anyone who listend to "Moneytalk" last weekend.

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 %

More information:

• Request Invitation to FREE facebook group "Investing for the Long Term" where you can participate in the "Bob Brinker Discussion Forum" and add your comments about this article or anything else related to Bob Brinker.
  .
• Bob Brinker and NBER Recession Definitions

Bob Brinker Likes Low 1300s According to Peter Brimelow

Yesterday Peter Brimelow reported that his "Bold Bulls are bloodied but unbowed." He says the bold bulls are all "shaken by the economy's deterioration, but still positive long-term."

About Bob Brinker, Brimelow wrote:

Brinker said recently: "Marketimer views the establishment of a correction bottom as a process which unfolds over a given period of time. This process involves the initial establishment of a closing S&P 500 Index low, followed by a short rally, followed by a test of the area of the previously established low on reduced trading volume. The initial closing low in the current stock market correction process occurred on Jan. 22, when the S&P 500 Index closed at 1310.50. The market subsequently rallied for eight days, at which point it began the process of testing the area of the Jan. 22 closing low."

"In our view, the correction bottoming process has proceeded with a high degree of historical consistency to date. We have witnessed a decided reduction in selling pressure during the testing process, which is essential to a successful outcome. We now rate the stock market attractive for purchase on any weakness that occurs in the current area of the S&P 500 Index low 1,300s, or any minor weakness that occurs below that level."

Market timer's summary: "As has been the case with every correction since August of 2007, several stock market pundits are claiming that a bear market is underway. We do not believe this is the case. We expect the S&P 500 Index to work its way into record new high ground by late this year or in 2009."

It should be noted that with the S&P500 at 1411, Bob Brinker sent out a bulletin to his subscribers on August 16, 2007 that said:

"Any further testing of the area of the correction lows, which we expect to be close to the current S&P 500 Index level (1411), is regarded as an additional buying opportunity for subscribers looking to add to stock market holdings."

and

"Marketimer expects the S&P 500 Index to register new historic record highs as we move forward into next year."

Click image courtesy of stockcharts.com to see it full sized

Bob Brinker has recommended a fully invested position all this time so it is good news for bullish investors that Bob Brinker is still bullish for the long term.

Of the other two "bold bulls" Index Rx remains bullish like Brinker:

• "Don't let the proclamations of experts frighten you into straying from your chosen strategies. Stay the course; we will be vindicated."

while Richard Band of "Profitable Investing" is defensive:

• "I continue to recommend a defensive posture for the model portfolio ... Buy gradually and cautiously, focusing on high quality blue-chip stocks (preferably those with the strongest earnings prospects for the year ahead).
  
  Currently, Band is 69% stocks, 31% fixed income. One stock recommendation is International Business Machines (IBM)
  
  Band writes: "Buy at $107 or less for a potential return of 20%-30% in the next 12 months."

Visit our Facebook Bob Brinker Discussion Forum at "Investing for the Long Term" to ask questions or discuss this article.

Disclaimer: I own IBM with huge gains from a big buy back in 1994 at about $11 a share when IBM was having major problems since its 1987 peak much like we are seeing today for the NASDAQ100 technology index (QQQ) that remains down over 60% from its 2000 peak. I also have shares from the 1980s via a DRIP (dividend reinvestment plan) that have done very well overall despite the bad times between 1987 and 1994.

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Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 159% (a double plus another 59%!!) vs. the S&P500 UP a tiny 8.6% vs. NASDAQ UP a tiny 3.5% (All through 12/31/09)

In 2009, "Kirk's Newsletter Explore Portfolio" gained 33.5% vs. the DJIA up 18.8%
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Bob Brinker Still Bullish According to Mark Hulbert

Mark Hulbert reported today that Bob Brinker remains bullish along with the other eight top market timers Mark tracks. The best news is the worst market timers are bearish.

In his article "The best vs. the worst: Best long-term market timers believe we're in a bull market," Mark writes of Bob Brinker:

Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early November, editor Bob Brinker writes: "We continued to believe that there is no risk of a cyclical bear market (a decline of 20% or more as measured by the S&P 500 index (S&P500 chart) in the months ahead ... We expect the stock market to set a series of new record highs into next year." His model portfolios are fully invested.

Mark covers nine of his top market timers and concludes Bob Brinker is not a "lone voice in the wilderness" with his bullishness.

"None of these nine top timers is bearish. The average equity allocation among all nine is 83%. This is down only slightly from where this average stood in recent months."

The best news is the worst market timers Mark Hulbert covers are quite bearish with an average recommended equity weighting of only 9%:

This 83% average is good news for the stock market in its own right, of course. But it's particularly bullish relative to the average forecast of the ten stock market timing newsletters with the very worst risk-adjusted performances over the last decade. The average recommended equity exposure among these worst performers right now is just 9%.

In other words, the worst market timers are quite bearish right now, while the best timers are quite bullish. Rarely are we presented with a contrast this stark.

Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.

Full article by Mark Hulbert: "The best vs. the worst: Best long-term market timers believe we're in a bull market"