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 what Brinker sent in the US Mail

Dancing Bob Brinker

For anyone still holding TEFQX or QQQ per Bob Brinker's advice to purchase these securities in 2000 before the market melted down, this one is for you.

Personalize funny videos and birthday eCards at JibJab!

Bob Brinker's dancing is similar to his advice. He gave aggressive "off the books" advice to buy QQQQ and TEFQX back in 2000 that worked out poorly. Clients in his money management company, the BJ Group, had no choice and all portfolios were put into the NASDAQ100 before it crashed. Brinker likes to advertise his "model portfolio" results that stayed mostly in cash but we know better. Brinker has "danced" around questions about this advice ever since.

=> Bob Brinker's QQQ Advice

• We recommend Marketimer subscribers with aggressive objectives invest 30% to 50% of existing CASH RESERVES in QQQ shares in order to exploit this opportunity.
• Also we recommend subscribers with conservative objectives invest 20% to 30% of CASH RESERVES in the QQQ shares in order to take advantage of this opportunity.

=> Bob Brinker's TEFQX Advice

• Brinker, Feb 8, 2000 MT: TEFQX=$15.99; "Firsthand e-Commerce Fund is the newest addition to the Marketimer No-Load Fund Recommended List on Page four...... We have ALWAYS viewed books, toys and on-line auctions as the tip of the iceberg for electronic business. We believe business-to-business transactions will greatly surpass retail e-commerce including software development tools, database providers, hardware manufacturers and service providers.
  
  We are very positive on the potential for the internet growth track to carry forward through international penetration. We are hopeful the fund will be able to add many of the best positioned B2B companies going forward. Many of these companies are not yet publicly owned but will come to market in the future."

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QQQ Chart

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Bob Brinker, Hank Paulson and QQQQ

Regular readers here are aware of Bob Brinker's advice to buy the ETF for the NASDAQ100 (QQQQ) back in October 2000 with up to half the 65% cash reserves. (If you are new, then read Bob Brinker's QQQ Advice.) US Treasury Secretary Hank Paulson may have the solution to Brinker's problem of a poor investment still on the books for many of his subscribers. Let me first summarize the situation.

In the first half of 2000 when the S&P500 was about 1500, Bob Brinker recommended his subscribers raise 65% cash reserves and wait for instructions on how to deploy these cash reserves in cyclical bear market rallies in what he thought was going to be an 8 to 20 year secular bear market.

In October of 2000 when the QQQQ was about $83, Bob Brinker told his aggressive subscribers :

• We recommend Marketimer subscribers with aggressive objectives invest 30% to 50% of existing CASH RESERVES in QQQ shares in order to exploit this opportunity.

Conservative investors were told

• Also we recommend subscribers with conservative objectives invest 20% to 30% of CASH RESERVES in the QQQ shares in order to take advantage of this opportunity.

Brinker let this "short term trade" turn into a long term "investment" when they fell to $46 in June 2001 and he wrote:

• For subscribers with a position in Nasdaq 100 Index (QQQ) shares, we recommend holding these shares for future recovery.

His subscribers who follow his instructions have been holding these waiting for a recovery, for 8 years now!

I have the solution to Brinker's problem. Bob Brinker should tell his audience to send a note to Hank Paulson and ask the US Treasury to take these "troubled assets" called the QQQQ off their hands for 50 cents on the dollar, which would be a bit more than they are worth today!

If the economy recovers, then the QQQQs will go up in value and tax payers will make money!

More information:

• Bob Brinker's QQQ Advice
• Effect of QQQ advice on reported results
• Brinker's Asset Allocation History

BTW, last summer when the market was making new all time highs, Brinker abandoned his idea of an 8 to 20 year secular bear market. Unfortunately for him, that was very poor timing.

If you want updates on what Brinker is saying on Moneytalk delivered to your email box, often within 24 hours after Sunday's show, then send us a note at TalkAboutMoney@gmail.com and ask to get on our FREE mailing list.