Moneytalk Bob Brinker Summaries - Information ONLY

Brinker MT Act Immediately Bulletin
BJ Group Nasdaq100 Memo

Top 637. Dec 19, 2002 7:12 AM

» Kirk - QQQ Poll Results

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This is a QQQ poll we took here last year:

Do you Follow Bob Brinker?"
We have a diverse mix of people on our site and they seem to delight in discussing ABC Radio's Bob Brinker. I'm curious just how many follow his advice and to what extent. Please answer this question:__________________________________ "On Jan. 2000 Brinker said to raise 60% cash, later he upped it to 65% cash. On the week of 10/16/00 with QQQ in the
$80's Brinker subscribers received a special bulletin which said to put 20% to 50% of that cash into QQQ IMMEDIATELY. QQQ hit $27 on 9/21/01. As a measure of how many follow him, complete the sentence with the best answer: I ...

didn't follow any of Brinker's advice. (104 votes, 21.58%)
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lightened up in Jan 2000 and I put a small amounts into QQQ (58 votes, 12.03%)
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went to 65% (or more) cash then put 0 to 20% into QQQ (160 votes, 33.20%)
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went to roughly 65% cash then put 21 to 50% into QQQ (91 votes, 18.88%)
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went to roughly 65% cash then put 51% or more into QQQ (69 votes, 14.32%)
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Brinker MT Act Immediately Bulletin
BJ Group Nasdaq100 Memo

I find it significant that of Brinker's followers, more felt inclined to put more than the 50% recommended (69 people) into QQQ than those that just lightened up in January 2000 and applied a small dose (under 20%) of QQQs (58 people)

-- posted by Kirk

Top 638. Jan 3, 2003 5:39 PM

» David_Korn - Bob Brinker Commentary

Excerpt from David Korn's Stock Market Commentary, Interpretation of Moneytalk (Bob Brinker Host), Financial Education, Helpful Links, Guest Editorials and Special Alert E-mail Service.
Website: http://www.begininvesting.com/
GETTING READY FOR MOABO

Caller: In 2000, this caller sold his stocks but decided to get a little greedy and invested the proceeds in Ginnie Maes, rather than simply leaving the money in a money market fund as Bob recommended. The caller said after reading Bob's Marketimer newsletter, and in listening to the radio show, he gets the sense that Bob believes the market may be turning up in the near future. He wants to know if he should sell his Ginnie Mae investment, and convert it to cash so that he is ready to deploy that cash into stocks once Bob issues the buy signal. Bob said he has no problem with this strategy because it will enable the caller to realize profits from the Ginnie Maes, and he then will have the money in cash ready to invest. Bob suggested the caller wait until after January 1st in order to defer the capital gains to 2003. Bob concluded this call by stating as follows:

"Sooner or later, we will see the end of this cyclical bear market because cyclical bear markets do not last forever, and this one won't either. Sooner or later that will happen and at that time hopefully we will issue a stock market buy signal down the road and you will be set!"

EC: Listening to Bob talk like that gives me goose bumps. Either that, or I got a rash from cleaning out my son's Diaper Genie.

EC#2: In all seriousness, Bob's statement here shows that he is not ready to issue the buy signal in the imminent future. "Down the road" is the expression Bob used to characterize when he thinks the cyclical bear market will end. In the past, Bob has said that his model only projects 2-3 months into the future, so it looks like 2003 will be the year of MOABO (or VEBO). Note that Bob had no problem with the last caller taking profits in the bonds that he has held his stock market cash reserves in. With the net asset value of Bob's favorite Ginnie Mae Fund (Ticker: VFIIX) trading near an all-time high, this seems to be a great time to take profits in that fund if you had invested your stock market cash reserves in it.

IS IT TIME TO DOLLAR COST AVERAGE INTO THE MARKET?

Caller: In advance of the "buy signal" do you think now is the time to begin dollar cost averaging into the market? Bob pointed out that in his model portfolios, he has kept a small percentages in the stock market via equity mutual funds. If you are below those percentage weightings, Bob said he would have no problem dollar cost averaging into the market up to those percentage levels.

EC#1: Bob didn't specify to this caller what percentage of his model portfolios remain in stocks. If you go by what he has formally recommended, you would assume a 65% stock market cash reserve weighting, and 35% equities. However, Bob has never indicated that he has rebalanced his portfolios, and the bear market has taken its toll on the equity portion of Bob's portfolio, while the money market funds have increased that position. As a result, the allocation in Bob's model portfolio is closer to 80% cash and 20% equities.

EC#2: Bob's advice here is the standard advice he was giving throughout the bear market; namely, if you want to dollar cost back into the market, up to the percentage of equities that he has in his model portfolio, he would have no problem with that. More recently, Bob hadn't taken any calls on this issue, and I wondered whether it was because he felt "MOABO" (or "VEBO") was right around the corner. Clearly, Bob doesn't think this is the time to be dollar cost averaging your entire equity allocation back into the market. This suggests that Bob still has the confidence that he will be able to call an entry point back into the market at a lower level than the market stands today. I detailed the pros and cons of this strategy in my November 27, 2002 Special Alert.

TYPE OF INVESTMENT WHEN THE BUY SIGNAL COMES

Caller: This caller wanted to know if Bob stands by his recommendation to invest existing cash reserves into a total stock market index fund when the next buying opportunity comes. Bob pointed out that he has recommended many funds, and investing the money in a total stock market index fund, is but one of his recommendations.

EC: The caller was probably thinking of the "Active/Passive" portfolio where in the past, Bob has recommended the U.S. equity exposure be relegated to the Vanguard Total Stock Market Index. This recommendation contrasts with Bob's "Model Portfolios" where Bob selects a variety of managed no-load mutual funds which comprise the portfolio.

INDEX FUNDS STILL RULE

Caller: This caller has noticed an increase in the number of financial "gurus" who are recommending that investors avoid index funds going forward, and that the way to play the market over the coming years, is to invest in a managed mutual fund to take advantage of the fund manager's ability to select specific stocks. Bob said he has been hearing that recommendation all of his life. Bob pointed that it is in the best interest of stock pickers to recommend that type of strategy, but that studies show for long periods of time, index investing has outperformed managed funds most of the time.

EC: One of the primary reasons that index funds do better over managed funds over time, are the transactional costs associated with managed funds. Such costs include the expenses paid to the fund manager that are passed on to the investor in the form of loads and expense ratios. There are also the tax consequences associated with the trading that goes on in a managed fund. Although these costs may be relatively insignificant in the short term, over the long term, these costs add up. That's why index funds have done so well compared to managed funds over the very long term.

Caller: Another caller said he was reading one of the books on Bob's recommended reading list which said that index funds are a "fad" right now and that investors are more likely to get burned in index funds versus managed mutual funds. The caller said the author referred to the last secular bear market from 1966 to 1982, where index funds underperformed managed mutual funds. Bob asked the caller how much better index funds did, but the caller said he didn't recall a statistic. Bob got a little perturbed, and said he didn't agree with the author's view point.

EC: If we are in a secular bear market (which I do believe we are), one of the advantages that managed funds (such as hedge funds) do have over index funds, is the ability of the fund manager to short the market, or keep a large percentage of money in cash during bear markets. Of course, the benefits of that strategy will only be seen if the fund manager is correct in his/her timing. Index funds like the S&P 500 Index and Wilshire 5000 stay fully invested through thick and thin, and don't have the ability to allocate between cash and equities, or go short.

NOTE: This is merely an excerpt from my one of my newsletters. If you would like to read the rest of this newsletter, or would like to know how to subscribe to my service, just e-mail me:

mailto:davidk555@earthlink.net

DISCLAIMER: I am not associated with ABC Radio Networks, Moneytalk or Bob Brinker and this service is neither sanctioned by, nor written under the auspices of ABC Radio Networks, Moneytalk or Bob Brinker. This e-mail is not a substitute for listening to Moneytalk. It is only my interpretation and commentary of some of what is discussed on Moneytalk, along with additional educational information that I include, editorial comments about the market, helpful financial links, guest contributors and even humorous remarks. I also provide Special Alerts to my subscribers as part of my e-mail service and give them access to my web site, www.BeginInvesting.com. If you want to know what was actually said verbatim on Moneytalk, listen to the show live. You can even subscribe to "Moneytalk on Demand" which allows you to listen to the show in case you missed it live. The web site www.bobbrinker.com has all the links to the ABC Radio Network Stations that broadcast the show live and a link on how to subscribe to Moneytalk on Demand. The information contained in this e-mail is not intended to constitute financial advice and is not a recommendation or solicitation to buy, sell or hold any security. This article is strictly informational and educational and is not to be construed as any kind of financial advice, investment advice or legal advice. Copyright 2002 David Korn, L.L.C.

-- posted by David_Korn

Top 639. Jan 5, 2003 6:19 PM

» Kirk - Update: Brinker's QQQ Counter trend Rally Advice

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Brinker's QQQ Counter trend Rally Advice
Anyone interested in the ability to gain from "counter trend" cyclical bull market calls in a "Secular bear market" should study this summary.

ACousins wrote a summary of what Bob has been saying by month. http://www.suite101.com/discussion.cfm/i... I saved this recap in my files:

In Jan 2000 Brinker moved 60% of his equity portfolios to cash. In August 2000 he moved another 5% to cash for a total of 65% in cash reserves. He told subscribers to wait for instructions on how to use these cash reserves. If he had stayed there, this move would have looked brilliant. But, the story is only beginning.

October 16, 2000 subscribers got a special bulletin 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. Callers to the office were told "Bob is comfortable with QQQ at $86." The advice in the bulletin was:

Aggressive investors told to put 30 to 50% of cash reserves into QQQ.

Conservative investors recommended to put 20 to 30% of cash reserves into QQQ.

The Bulletin: http://www.%73u%69t%65101.com/files/topi...

November 6, 2000 MT: QQQ=$81.00
"Subscribers seeking to establish positions at optimum price levels [editor highlight] should, if possible, accumulate QQQ shares at prices in the range between the low-70's and mid-70's as opportunities arise in the near-term. In our view, gains off the closing Nasdaq lowpoint have the potential to exceed 20% by a wide margin. This is especially true if recent Nasdaq lows are retested during the month of November.

December 3, 2000 MT: QQQ=$64.00 Talks about 1990 and how Nasdaq bottomed, then went 9.7% lower before a big rally. Says "In our view, the exceptional oversold [I thought he didn't use TA?] readings registered in the Nasdaq indexes in late-November are a very positive development. … the counter trend rally phase has the potential to carry the Nasdaq indexes as much as 40% to 50% above their late-November closing levels over the next three to six months. This rally has the potential to extend well into the first quarter, and possibly the second quarter of 2001. [snip] Short-term price weakness in the Nasdaq-100... in the 2800's or lower is viewed as an attractive buying opportunity…

January's 2001 MT; QQQ=$62.44; "We continue to view short-term price weakness in Nasdaq 100 shares...Clearly, the Nasdaq indexes have moved lower than we anticipated in recent weeks. However, this has not altered our expectation that a major bear market rally will develop going forward....gains for Nasdaq100 index of up to 50% or more measured from Jan 2 low. Recommended within guidelines listed on pages one and two (20 to 50% of cash reserves)."

February 2001 MT; QQQ=$61.55; The timeline for the Nasdaq led countertrend rally remains three to six months as measured from the starting point on January 3.

March2001 MT; QQQ=$46.70; In our view, the probabilities favor a three to six month bear market rally phase beginning shortly.

April 2001 MT; QQQ=$37.40; "We expect the Nasdaq Composite and Nasdaq 100 index to stage a significant recovery over the next several months."

May 2001 MT; QQQ=$48.05; "We continue to believe the Nasdaq has the potential to recover in the months ahead." This is the LAST TIME he said the Nasdaq would rally in the months ahead.

June 2001 MT; QQQ=$46.05; For subscribers with a position in Nasdaq 100 Index (QQQ) shares, we recommend holding these shares for future recovery... ... He NOW says to hold until the next cyclical bull market

July 2001 MT; QQQ=$46.00; We also recommend subscribers with a position in Nasdaq 100 Index (QQQ) shares hold for price recovery.

August 2001 MT; QQQ=$43; "We also recommend subscribers with a position in Nasdaq 100 Index (QQQ) shares hold for recovery...

September 2001 MT; QQQ=$35.47; XLK-QQQ Swap: "Making this transaction in taxable accounts for tax purposes is consistent with our recommendation to hold QQQ shares for price recovery over time...The switch into XLK...is solely for the purpose of realizing short-term tax losses for current or future use..."

October 2001 MT; QQQ=$28.82 "We continue our long-standing policy of not selling into weakness and we recommend subscribers with a position in Nasdaq 100 (QQQ) shares hold these shares as we expect them to trade at much higher levels..."

November 2001; QQQ=$35; "long standing policy of not selling into weakness… (QQQ) hold these shares as we expect them to trade at much higher levels during the next cyclical bull market.

December 01; QQQ=$40.83; "...we recommend holding in anticipation of higher price levels during the next cyclical bull market..."

January 02; QQQ=$41.67; "we prefer to hold existing positions in the expectation that the next cyclical bull..."
[Note that QQQs now up 44% from Oct. 2001 MT! We finally got a 4 month CT rally.]

February 02; QQQ=$36.92; "..hold these shares for recovery during the next cyclical bull..."

March 02; QQQ=$35.74; "...can hold these shares in anticipation of much higher prices in the next cyclical bull..."

April 02; QQQ=$36.06: "We are also retaining our hold rating..."

May '02; QQQ=$31.56: "We are also retaining our hold rating."

June '02; QQQ=$30.04: "We are maintaining a hold rating."

July 5, '02; QQQ=$26.34: "We continue our policy of not selling into weakness, and recommend those with a position in Nasdaq 100 (QQQ) shares hold for higher prices during the next cyclical bull market."

August 8, '02 QQQ=$22.25 : "We are maintaining our hold rating on Nasdaq 100 (QQQ) shares…"

September 2, '02; QQQ=$23.49; "We are maintaining our hold rating on Nasdaq 100 (QQQ) shares in anticipation of much higher prices for the shares in the next cyclical bull market.

October 5, '02; QQQ=20.75; hold. No commentary.
[A new low for QQQs, down 75% since first recommended for up to 1/3rd of the portfolio.]

Nov 2002 MT; QQQ=$25.90; hold. We recommend holding existing stock market positions at current levels, along with ... QQQ."

Dec 2002 MT; QQQ=$28.00; hold; " Marketimer recommends retaining existing equity market holdings at this time. This includes … QQQ."

So much for a 40% QQQ rally from $20 to $28.

-- posted by Kirk

Top 640. Jan 20, 2003 9:26 PM

» David_Korn - Bob Brinker on I-Bonds

Bob Brinker addressed I-Bonds with a caller this weekend. Here is an excerpt from my January 18-19, 2003 newsletter:

Excerpt from David Korn's Stock Market Commentary, Interpretation of Moneytalk, Financial Education, Helpful Links, Guest Editorials and Special Alert E-mail Service.

I-BONDS

Caller: This caller wanted to know if Bob was aware of any change in the interest rate base for the I-Bond when they reset the interest rates on May 1, 2003. Bob thinks its a little too early to know, since there is a lot of economic data that will come out between now and then. Bob noted that we had an increase in inflation from 1.6% in 2001 to 2.4% in 2002. Even though it is a 50% increase, inflation is still benign. Bob thinks the fact that the Fed is trying to reflate the economy would weigh in favor of leaving the base rate alone. That is Bob's best guess. Bob added that the important factor with the I-Bond or Treasury Inflation Protected Securities is that you have inflation protection. That protection is even more important when the Fed is trying to reflate the economy, as it is trying to do right now.

EC: Bob may not have read that the Treasury Department just announced that the minimum holding period that applies to United States Savings Bonds will be extended from six to twelve months with issues dated on and after February 1, 2003. That means that if you purchase a Series EE or I-Bond issued February 2003 or later, you must hold on to the bond for 12 months before you can cash it. Bonds issued January 2003 and earlier will continue to have a 6-month minimum holding period. Why is the Treasury doing this? Well, they make a good point noting that the new holding period will not impact long term investors. The 12 months holding period is designed to prevent purchasers from taking advantage of the current spread between savings bond returns and historically low short-term interest rates by cashing in bonds after six months. Given that savings bonds are designed to be a long-term savings vehicle, the Treasury is trying to discourage such type of behavior. If you want to read the official press release on this issue which came out on Wednesday, go to this link:

http://tinyurl.com/4mth

To learn how to subscribe to my service, just drop me a line at:

mailto:davidk555@earthlink.net

or visit my web site:

http://www.BeginInvesting.com/

-- posted by David_Korn

Top 641. Feb 3, 2003 7:21 AM

» Kirk - Bob adamant about not selling at these levels

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As I type:
DJIA = 8126
Nasdaq = 1328
SPX = 861

To:PETE from STAMFORD, CT who wrote (2223)
From: Lone Ranger Saturday, Feb 1, 2003 8:56 PM
View Replies (2) | Respond to of 2245
http://www.siliconinvestor.com/stocktalk...

P,
Amen to that. A terrible tragedy for our nation and especially to the families of the astronauts who lost their loved ones.

On another note. Listened to Brinker's show today and he still seems adamant about not selling at these levels, i.e. not selling into weakness. In general I agree with him,
but if we are to somehow get back to a buying opportunity as he sees it, market valuations will have to decline further or earnings will need to accelerate. The way I see it is if the markets have a further ten percent or so to decline why not sell a portion of equities and rebuy them ten percent or whatever lower when a buy signal arrives. Wonder if he might not be mistaken about the ability of the market to further deteriorate or maybe a retest of the October lows is all we need?

To:PETE from STAMFORD, CT who wrote (2243)
From: Lone Ranger Monday, Feb 3, 2003 9:19 AM
http://www.siliconinvestor.com/stocktalk...

P,
Interesting about show yesterday. A caller asked Brinker if he thought the Dow would retrace 50 per cent from its highs. Paraphrasing, Brinker said something like the bear market is a process and is still ongoing and you can't tell until the process finishes. But he didn't say no or yeah, and if its yeah, imo, all the reason for not to hold onto your total equity position but maybe have some stop losses along the way. Funny in recent advice to GMAE purchasers he states to have a stop loss if you're worried about volatility in these funds fwiw.

[Kirk Comment: So what happened to his model to predict counter trend rallies such as cyclical bulls or 20% down vs 5% up odds??? smile

Lets discuss it here: http://www.suite101.com/discussion.cfm/i... ]

-- posted by Kirk

Top 642. Feb 3, 2003 5:56 PM

» David_Korn - THE CYCLICAL BEAR MARKET ISN'T OVER YET

Excerpt from David Korn's Stock Market Commentary, Interpretation of Moneytalk (Bob Brinker Host), Financial Education, Helpful Links, Guest Editorials and Special Alert E-mail Service.

February 1-2, 2003 Weekend Edition

THE CYCLICAL BEAR MARKET ISN'T OVER YET

Caller: This caller asked Bob if he thought the Dow Jones Industrial Average would retrace 50% off its highs before the next cyclical bull market begins. Bob seemed a bit caught off guard by the question, and responded by saying it is an "open question." Why is it an open question? Bob said in his opinion, we "have not completed the process of the cyclical bear market." Therefore, we don't know what the final low will be, or when it will occur. For that reason, Bob continues to recommend that investors be patient. Bob didn't wait for a follow up question, and ended the call rather abruptly.

EC: I think Bob was taken back by the directness of the question. When Bob responded by saying that it is an "open question," he avoided answering the question directly. What Bob's response does indicate, however, is that he doesn't think the climate is yet ready to go back into a fully invested position. It bears noting that many "gurus" are referring to the October 9th lows as the beginning of a new bull market. Given that Bob thinks we are still in a cyclical bear market, it would seem to suggest that Bob believes those October 9th lows will be tested, although I think he is too gun-shy to come right out and make an unequivocal prediction for fear of being wrong.

EC#2: The caller asked Bob if he thought the Dow would retrace 50% from its highs. The Dow reached its all-time closing high on January 28, 2000 when it closed at 11,738.90. If the Dow retraced 50%, that would bring it to 5869.45. I do not think that Bob believes the Dow will go that low. Why don't you believe that David? Well, since you are asking, I will tell you. If you look back at my newsletter from the September 28-29, 2002 weekend, Bob derided Bill Gross (the bond guru of Pimco) for predicting that the Dow would go to 5000. Actually, Bob poked fun at him for that prediction two weeks in a row. Given that 5869.45 is not that far off from 5000, I would think it is below where Bob expects the Dow to bottom out.

EC#3: You may be wondering why the caller choose 50% as the possible percentage decline in the Dow from its high. Of course, we don't know what was going on inside the caller's head; however, I would venture to guess that the caller may have been a proponent of Elliot Wave Theory which attempts to predict market direction through various cycles based on the Fibonacci sequence of numbers. Some of the Fibonacci retracement percentages that some traders use are 23.6%, 38.2%, 50.0% and 61.8%. Trust me, there is more than one trader out there who probably believes the Dow is going to 5869.45 based on that theory alone! Interested in learning a little more about Fibonacci Retracement Levels? You didn't think I would let you go to the next caller empty handed! Check out this article entitled, "How to Use Fibonacci Retracement Levels to Pick Stock Market Tops and Bottoms":

http://tinyurl.com/58uv

If you would like to read the rest of this newsletter, simply e-mail me at:

mailto:davidk555@earthlink.net

Or, visit my web site at:

http://www.BeginInvesting.com/

-- posted by David_Korn

Top 643. Feb 16, 2003 9:09 PM

» Socratesismyname - Re: THE CYCLICAL BEAR MARKET ISN'T OVER YET

In response to message posted by David_Korn:

Anything about the QQQs this weekend David? Seemed like it was mostly war talk which is boring to me.

-- posted by Socratesismyname

mailto:davidk555@earthlink.net

Top 644. Feb 22, 2003 2:55 PM

» David_Korn - QQQ

In response to message posted by Socratesismyname:

Socrates, there was no QQQ discussion during last weekend's broadcast, but on this Saturday's show, Bob got pretty animated with a caller who said she invested 50% of her cash reserves in the QQQ. I will detail it in my newsletter this weekend, but I will post an excerpt of that caller here next week. In the meantime, if you want to learn how to subscribe to my service, just e-mail me at:

or, visit my website: http://www.BeginInvesting.com/

- David

-- posted by David_Korn

Top 645. Mar 11, 2003 10:30 PM

» David_Korn - Bob Brinker's "Buy Signal" is interpreted!

In response to message posted by David_Korn:

Tonight Mark Hulbert "interprets" Bob Brinker's buy signal as well as his market timing efforts in the past! Mark Hulbert's article can be found at this web site:

http://tinyurl.com/7b86

To learn how to subscribe to my service, go to my website:

http://www.BeginInvesting.com/

- David

-- posted by David_Korn