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

Bob Brinker on Earthquake & Tsunami in Japan

Bob Brinker came to work today and started off talking about the disaster in Japan.  Bob said, 

"In our lifetimes, we have rarely seen anything of this magnitude."

Kirk Comment:   As earthquakes go, this magnitude 8.9 shaker was the biggest quake in Japan's history and rates as the fifth largest earthquake in the World since 1900.  

• See: World's Largest Earthquakes List

Economic Impact:
Brinker tried to get a handle on how this disaster affects the world of money.  He said, "In terms of trying to quantify the economic impact of this.... I don't like doing this....  On a global scale it is about seven tenths of one percent of global business activity."

Brinker explained, "Japan is 8.7% of Global GDP"  and explained about eight percent of Japanese GDP was "in the path of the destruction."  So, 8% of 8.7% gives you about 0.7%.  (0.08x8.87=0.70%)

After the break, Brinker talked about the important data that will be released this week.    Brinker didn't go out on a limb and make any predictions but here is the data and what the market expects:

Date	Statistic	For	Market Expects	Prior
Mar 15	Empire Manufacturing	Mar	17.0	15.43
Mar 15	Export Prices ex-ag.	Feb	NA	0.9%
Mar 15	Import Prices ex-oil	Feb	NA	0.8%
Mar 15	Net Long-Term TIC Flows	Jan	NA	$65.9B
Mar 15	NAHB Housing Market Index	Mar	17	16
Mar 15	FOMC Rate Decision	Mar	0.25%	0.25%
Mar 16	MBA Mortgage Index	03/11	NA	+15.5%
Mar 16	Housing Starts	Feb	570K	596K
Mar 16	Building Permits	Feb	573K	562K
Mar 16	PPI	Feb	0.6%	0.8%
Mar 16	Core PPI	Feb	0.2%	0.5%
Mar 16	Current Account Balance	Q4	-$110.0B	-$127.2B
Mar 16	Crude Inventories	03/12	NA	2.52M
Mar 17	Initial Claims	03/12	387K	397K
Mar 17	Continuing Claims	03/05	3750K	3771K
Mar 17	CPI	Feb	0.4%	0.4%
Mar 17	Core CPI	Feb	0.1%	0.2%
Mar 17	Industrial Production	Feb	0.6%	-0.1%
Mar 17	Capacity Utilization	Feb	76.5%	76.10%
Mar 17	Leading Indicators	Feb	0.9%	0.1%
Mar 17	Philadelphia Fed	Mar	28.0	35.9

Top CD Rates at Largest US Banks

Interest rates are starting to go up on the long end while the short term rates are terribly low. This week's survey or CD rates at the largest US banks shows BofA advertises 2.25% for a 5-year CD with Citibank paying the lowest for 5-years at 2.0%.    Historical CD Rate Graphs

When we did our last survey of rates at the largest banks, a 5-year CD at the largest US Bank, Bank of America, was only 1.40%.  Chase and Citi paid 2.5% and 1.50%, respectively.  

Unfortunately, short term rates remain extremely low.  Thus, I've kept most of my "cash reserves" in high rate savings accounts with the top rate now 1.30% at American Express. See  Best Savings Account Rate Survey 

A half hour into the show, Brinker took his first call.   

Darin from Rohnnert Park told Brinker he thinks the dollar could become worthless if they keep buying US Treasuries with quantitative easing programs because he doesn't believe they can cut it off in time.  Brinker agreed that this would happen if they don't end the easing as planned but he didn't seem compared that the US dollar will lose its status as the World's reserve currency with all the troubles the Euro faces.  Darin worried the US was already going down the tubes following Greece.  Bob said the reason California can not pay its debt is because "they have a dysfunctional government that thought they could borrow their way to prosperity."

1800-934-2221 "Ed's on the Line from the Show Me State of Missouri."  Ed raised a point I thought of last week when took major profits in my TIPS mutual funds on Friday.  Ed suggested the Japanese would use their major US Treasury holdings as a source of funds for rebuilding.  Bob said it would not be an ongoing issue but it would be a source of funds.   My fear is the Japanese will not roll-over their US Treasuries into new issues so they don't take a loss.  They can then use these funds to rebuild their infrastructure and make low cost loans to rebuild homes and small businesses.  This will have the effect of countering the Federal Reserve's QE2 policy which will push rates higher.

I sold the majority of my managed TIPS mutual funds at Fidelity for my own "core portfolio" and may sell more held at Vanguard this week.  See:

•  Fidelity Inflation-Protected Bond Fund (FINPX)
•  Vanguard Inflation-Protected Bond Fund (VIPSX)

I still hold some managed TIPS funds plus I have individual TIPS that I can hold to maturity and not lose money but I might sell those as they are in my "explore portfolio."

Check back later and I'll add more information as I have time to listen to more of the show I have recorded automatically on my PC with ReplayAV.