Bob Brinker Free Discussion Site 59,820+

Top 889. Jan 2, 2006 6:24 PM

» bamala - Re: Sheldon Jacobs on Market Timing

In response to Sheldon Jacobs on Market Timing posted by Kirk:

I don't get it. He says that we are in a secular bull market..."We've been in a cyclical bull market for three years..."
Why are you saying he doesn't think we have been in a secular bull market? Your NYSE chart supports his statement. Am I missing something?

-- posted by bamala

Top 890. Jan 2, 2006 9:23 PM

» rv23 - Re: Re: Sheldon Jacobs on Market Timing

In response to Re: Sheldon Jacobs on Market Timing posted by bob90245:

You can see Sheldon Jacobs' recommended portfolio (as of a month ago) at http://www.noloadfundinvestor.com/highli...

Looks pretty diversified to me, no?
(Though I'd personnaly put more foreign equities)

-- posted by rv23

Top 891. Jan 3, 2006 7:24 AM

» bob90245 - Re: Re: Re: Sheldon Jacobs on Market Timing

In response to Re: Re: Sheldon Jacobs on Market Timing posted by rv23:

Apparently, I mis-interpreted Jacob's views. Even though he is forecasting a bear market, he is not acting on that information. According to the link that rv23 provided, Jacobs is still recommending a fully invested position in his model portfolio. Here is his portfolio recommendation:

10% Vanguard Primecap Core
10% Baron Fifth Ave
20% Vangd Total Stock Market Idx
10% Janus MidCap Value
10% Artisan Mid Cap Value
5% Schwab Hedged Equity Inv
5% Price New ERA
5% Price Emerg Euro & Med
10% Fidelity Int'l Discovery
5% Fidelity New Markets Inc. bond
5% Vanguard Short-Term Invest Grd
5% Vanguard Prime Money Market money mkt

-- posted by bob90245

Top 892. Jan 3, 2006 10:08 AM

» bbaddict - Re: Re: Cyclical/Secular Smoke

In response to Re: Cyclical/Secular Smoke posted by Kirk:

Great post, Kirk! I think I can explain the 1995-1998-2000 part of the $NYAD. Not sure about the rest.

95-98 was a dot-com IPO period, where people were throwing money at everything that had .com in the name, like webvan.com. Around 1998, people were getting shellacked, and losing their entire investments in those. So, there was a migration to large cap stocks. This explains why, while the S&P500 was climbing to its high in 2000, many small caps were going down.

From 2000-2003, the S&P went down, while the advance-decline line went up. This means that people were moving from large cap back to small. Perhaps they saw some of the dot-com survivors, and decided they were here to stay? Perhaps they were moving their money into commodity stocks (gold), energy, real estate, etc? Not sure.

But since Bob's buy signal in 2003, the market has gone up in a broad manner.

Now, which will foretell the next sell signal?

-- posted by bbaddict

Top 893. Jan 3, 2006 10:31 AM

» bob90245 - Re: Re: Cyclical/Secular Smoke

In response to Re: Cyclical/Secular Smoke posted by Kirk:

Kirk,

Excellent analysis. I think you're on to something here. If you pursued more research, it seems like you can blow the whole notion of "secular bear market" right out of the water.

Remember the 1966-1982 period? I believe a similar thing (large cap bubble versus small cap non-bubble) happened then. It would be interesting to show a chart comparing the NYSE to the S&P 500 from that period.

-- posted by bob90245

Top 894. Jan 3, 2006 7:47 PM

» SteveT - Model Update

Once again I will give my opinion on how I believe bob brinker is interpreting his model.

Using bob’s estimate of $79 for 2006 S&P 500 earnings and a 1248.29 close for 2005 we get a P/E of 15.8. Considering interest rates and inflation a P/E of more than 22 could be considered fairly valued. So unless earnings drop dramatically or Long-term rates sky rocket upward valuations appear very attractive. In fact using $79 earnings and a P/E slightly more than the mid point between the fairly valued FED model and current P/E we could see the S&P making a new all time high! We have room for some earnings growth, bob often ups his earnings estimates later in the year plus the potential for P/E multiple expansion. In the past bob has said a P/E of 18 or 19 is reasonable in this environment.

Monetary policy is being closely watch by all of us. The hope is the last increase in the FED Funds rate is coming at Alan Greenspan’s final meeting as FED chair on January 31st. After the minutes from the December meeting released today that seems even more likely. What will be important is the statement of the January 31, 2006 meeting. The other main component in monetary policy is real growth in the monetary base and M-2 money supply. A lower CPI going forward will hopefully alleviate this concern, as real growth is nil. Expectations are inflation will remain contained after a spike due to Hurricanes and energy prices. I would think bob is watching the monetary portion of the model closely and would consider it bullish until it surpasses what would be considered normalization of short-term rates.

The U.S. economy it seems is not getting the respect it deserves in the press. Final GDP for the third quarter came in at 4.1%, which is at the upper end of the area we like to see. The economy is adding jobs and wages are increasing at a modest pace. Productivity and unit labor costs are doing nicely helping in part to offset higher energy costs for consumers. Industrial Production and Capacity Utilization are even showing signs of an up tick. We are also seeing signals the housing market is cooling. This bodes well for the economy during the first half of the year at a minimum. If we see GDP cool off to a moderate 3% to 3.5% range this would make a strong case for sustainable growth and perhaps a decrease in short term rates. I would say bob is bullish on the U.S. economy.

Sentiment is for now in a cautionary state. The Investors Intelligence data suggests a good deal of optimism but not enough to cause any action. I would think bob would find nothing unusual about these numbers. Lately bob has been looking at the Put/Call ratio and that is showing a healthy amount of bearishness, which we like to see, as this is a contrarian indicator. For bob I would say this indicator looks to be neutral.

Giving all four major components a roughly equal weighting I would say bob is still firmly in the bullish camp for the U.S. stock market as we start 2006. We are only a few percentage points off the recovery highs at years end and the first trading day got the year off to a nice start. I would think bob is looking at any pullbacks as another health restoring correction. Remember bob is looking at a minimum S&P 500 target in the mid 1300s. Should we see the S&P 500 fall to 1180 I would say bob would consider it a buying opportunity.

This cyclical bull market is getting long in the tooth. The secular bear market of 1966 to 1982 did have four cyclical bulls. They averaged slightly more than 29 months and saw an average gain of more than 53%. Bob believes we are currently in a cyclical bull inside a secular bear market. This up trend started in October 2002 with the S&P 500 close of 776.76. Our 2005 close of 1248.29 yields us a nice 62% in 38 months. During the 66-82 bear market the longest bull market was 38 months from February of 1987 to April of 1991. The biggest gains came in the 21 month period of December 1984 to Sept. of 1976 recording a 75.7% gain as measured by the Dow. So you can see bob is no doubt looking for an opportune time to lower his asset allocation if history is any guide. I don’t think we are there yet. Keep in mind the economy had an unprecedented amount of stimulus with deep cuts in short-term rates and they were held down at extremely low levels for a year. Add to that the tax cuts passed by Congress and signed by President Bush. As I see it the outlook is bright and see no reason bob would exit the market in the near term. Keep in mind 2006 is a mid-term Presidential year. 2002, 1998 and 1994 all afford some great buying opportunities followed by strong stock market rallies.

-- posted by SteveT

Top 895. Jan 6, 2006 9:14 AM

» bbaddict - New Jobs Report

If ever there was a statistic that begged for a 3 or 4 month average, it is the New Jobs Report.

Bureau of Labor Statistics just released their December report. They say only 108000 new jobs were created.

However, last month they listed the November number at 215000. Today, they revised that November number to 305000.

It makes it difficult to interpret when they bounce you around like that. But if you average this mess out, the number is still near the 'sweet spot'.

-- posted by bbaddict

Top 896. Jan 6, 2006 2:14 PM

» RSREXX1 - Re: Re: New Jobs Report

In response to Re: New Jobs Report posted by Kirk:

New Brinker Newsletter: Timing model remains in favorable territory and we are still fully invested. Expects GDP growth 3 to 3.5%.
Inflation and Fed should be subdued.
Valuation reasonable and P/E 15.8 based on 2006 earnings is favorable.
He is most pleased with sentiment- 60 day put call ratio at a very bullish .89
Minimum price S&P 500 mid 1300's and possibly higher. Would be pleased if jobs report under 200,000. I guess its off to the races.Congrats to those who have been fully invested in 2006.
Hopefully Allen Coleman was able to get back into the market tuesday when the Fed minutes came out!Short term timing is quite difficult.

-- posted by RSREXX1

Top 897. Jan 7, 2006 10:47 PM

» gabbai - Bob's Saturday show

Did anyone out there listen to today's show? What did Bob say about the market? Are we off to the races?

-- posted by gabbai