Moneytalk Bob Brinker Summaries - Information ONLY

Top 660. Mar 29, 2003 1:43 PM

» Kirk - Re: Zero Messages?

.
In response to message posted by ktymrk:

We are always looking for volunteers to listen and post free summaries.

We do have a Brinker Discussion Forum here that most talk about the daily ins and outs. Here is a URL
http://www.suite101.com/discussion.cfm/i...

It actually fell off the top 20!

-- posted by Kirk

http://www.chartoftheday.com/20030129.ht...

Top 661. Mar 30, 2003 5:23 PM

» David_Korn - Re: Summary and commentary of Bob Brinker on Moneytalk

In response to message posted by David_Korn:

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. March 22-23, 2003 Edition

THE BRINKER EFFECT?

Caller: This caller noted that the talking heads attribute the stock market's rise to the war with Iraq, but he thinks its due to the "Brinker effect." Bob down played the effect his buy signal had on the market, noting that he issued the buy signal after the close on March 10, 2003. The next day, the market declined and the market stayed in a relatively narrow range even through the remainder of the week.

EC: If I was to play devil's advocate, I would argue that the market really took off after the weekend Bob first announced his change in asset allocation on the radio which was to a much larger audience than his newsletter base. However, I don't believe there is a "Brinker effect." Now, there might be a cumulative effect if a number of advisors turn bullish at the same time. And indeed, several financial "gurus" turned bullish on the same date as Brinker. In addition, many of the momentum players, and other talking heads were jumping on the bandwagon as the war got started. Even my favorite contrarian, James Cramer, seemed to be calling for a bottom, when he opined that an "exquisite" opportunity presented itself around S&P 500 823. (Of course, he has been calling for a bottom a fair amount lately). There is simply too many participants for one person, such as Brinker, to have that great an impact on the stock market, even though he has a significant following. After all, when Bob gave his sell signal in January of 2000, the market rallied significantly to all-time new highs two months later. Similarly, the QQQs crumbled even after Bob issued his buy on the QQQs in October, 2000 and January, 2001. The point I am trying to make, is that I agree with Bob that I don't think he can have a very significant effect on the market. There were many advisors who were calling for a bullish move in the market. Moreover, even in the absence of all of these buy recommendations, the market was already in an oversold position and the resolution of the uncertainty surrounding the war would have probably also have kicked the market into high gear. Speaking of which...

IS THE WAR CAUSING THIS RALLY?

Caller: How much of this rally is directly related to the war? Bob asked rhetorically if anyone didn't know that this war was going to happen, or believed Iraq had a chance of winning? Of course not. Every investor in the world knew exactly what was going to happen. What investors have reacted to this week, is that oil prices collapsed, and the dollar firmed up.

EC: I think Bob's answer was a little simplistic. I think that the resolution of the uncertainties surrounding the pre-war negotiations, followed by the reports all week that the military action was moving smoothly helped boost equities. Moreover, there is historical precedent showing that markets react favorably in the wake of war. Check out this chart showing the performance of the Dow 60 trading days before and after the Korean, Vietnam War and Gulf War:

DID THE MEDIA CAUSE THIS RALLY?

Caller: This caller read an article by Peter Brimelow on Thursday on CBS Marketwatch that Bob and two other individuals had become bullish on Tuesday and wondered if that helped get the rally off to a start. Bob said he didn't know how much of a following Peter Brimelow has, but Bob said he did not speak with Brimelow, and in fact had instituted a 72-hour media blackout, and did not speak with anyone in the media during the entire week the buy signal was issued.

EC: Peter Brimelow reported on Bob Brinker's bullish call, as well as the bullish calls on March 12th by Richard Band, of "Profitable Investing" and Index RX's Dr. Lawrence Czelusta at this link:

http://tinyurl.com/7ds8

EC#2: Even though Mr. Brinker didn't speak with anyone in the media, in addition to Peter Brimelow, both Aaron Task and Mark Hulbert reported on Bob Brinker's buy signal within 24 hours after it occurred. I referenced those articles in my Special Alert e-mails on the days they went out. If you would like me to resend you the links, just let me know.

NOTE: If you would like to read the rest of this newsletter, and/or find out how to subscribe to my service, drop me a line at:

mailto:davidk555@earthlink.net

or visit my website:

http://www.BeginInvesting.com/

-- posted by David_Korn

Top 662. Apr 1, 2003 5:30 PM

» David_Korn - Summary and Commentary of Bob Brinker's Moneytalk

An 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. March 22-23, 2003 Edition

WHY DID THE TIMING MODEL TURN BULLISH?

Caller: What caused your stock market timing model indicators to turn bullish after the close of the market on Monday, March 10th? Bob said he didn't want to go into detail, but he did say that there had been some improvement in his timing model over a period of time. The things that Bob was looking for fell into place on the night of Monday, March 10th when the S&P500 Index closed at 807, which was within roughly 3% of the October, 2002 lows. The caller asked if it was possible that the sentiment indicator in Bob's timing model finally turned bullish, because the caller had read that on Monday there was significant disparity between the up volume and down volume of about 9-to-1. Bob choose not to address the caller's comment, and instead said that he tries to keep some of his indicators proprietary because he is convinced that once you put your indicators into the public domain, they don't work anymore. Bob said one of his "key sentiment" indicators that he doesn't see widely followed on Wall Street, was really giving off some dramatic readings and the prices after the close of Monday was a "gift."

EC: I am 90% sure that the "secret indicator" Bob is talking about was in fact the "90% downside day" which is characterized by 90% downside volume and 90% downside price action. This occurred on Monday, and if you notice, Bob didn't dispute the caller's suggestion that this was the indicator, and instead simply choose not to address it directly.

EC#2: I do believe, however, that there was a second reason his sentiment indicator turned bullish Monday night. On Monday, the market posted its third-highest ever recorded Arms Index of 5.92. The only other times the Arms Index exceeded that was during the panic of October 19, 1987 (13.89), and the Asian crises on October 27, 1997 (8.84). This incredibly high reading in the ARMS index, combined with the 90% downside day, I believe were two of the primary reasons Bob pulled the trigger. The final factor was that the market was close enough to the October 9, 2002 all-time bear market closing low, that Bob didn't want to miss another opportunity and potentially miss out on the next bull run.

HOW LOW WILL THE MARKET GO IF THERE IS A TERRORIST ATTACK?

Caller: If there was another terrorist attack on the United States on the magnitude of what happened on 9/11, how low could the QQQ shares and SPY shares go? Bob noted that the QQQs have gone as low as $20 per share, and the SPY shares fell into the $70s. Bob then said, however, that it is impossible to predict the scope of terrorist attacks. When you invest in the stock market, you automatically accept all of the risks inherent in the world today. To try and forecast the impact of terrorism is impossible. The important thing to remember, is that there is a risk premium to being in the market today because of the fact that the post 9/11 world is different than the pre-9/11 world for the time being.

EC: The all-time bear market closing lows of the QQQ occurred on October 9, 2002, when they closed at $20.06. The intra-day low occurred on October 8th, when they traded as low as $19.76. The all-time bear market closing lows of the SPY shares (which track the S&P500 Index) also occurred on October 9, 2002, when they closed at $78.10. The intra-day low occurred on October 10th, when they traded as low as $77.01.

NOTE: If you would like to read the rest of this newsletter, and/or find out how to subscribe to my service, drop me a line at:

mailto:davidk555@earthlink.net

or visit my website:

http://www.BeginInvesting.com/

-- posted by David_Korn

Top 663. Apr 7, 2003 8:49 PM

» David_Korn - Summary and Commentary of Bob Brinker's Moneytalk

In response to message posted by David_Korn:

Bob Brinker certainly has taken a firm position on his opinion that the economy is headed for a significant improvement during the next six months. Here is an excerpt from my newsletter:

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.

THE ECONOMIC FUNDAMENTALS ARE IMPROVING

Consumer Spending

Bob Brinker Comment: Bob noted that consumer spending was flat for the months of January and February holding at an annual rate of $7.49 trillion. Spending continues to "bounce along" with little change. Americans' income, on the other hand, rose 0.3% in February which would project to a 3.6% annual rate of increase (if it continued). Bob noted that the American consumer has done a great job of continuing to spend despite the geopolitical concerns and the layoffs. Consumers have also been "reliquifying" by paying down some of their debt and hesitant about taking on new debt. Bob noted that reliquification is one of the necessary precursors for a better economy. If you are looking for the economy to improve sometime within the next six months or so, you would want to see a reliquification of the American consumer. That would also show up in an improvement in the savings rate, which we have seen lately.

Editorial Comment ("EC"): I think Bob is starting to lay down the case for his view that the economy is going to recover in the next six months which, in turn, supports his thesis that a new cyclical bull market has begun. Remember, the stock market is a discounting mechanism that historically reacts to what it perceives will occur six months down the road. Hence, I don't think it was any coincidence that Bob used that six month time frame when discussing the economic recovery. I suspect that in an upcoming Marketimer newsletter, and in the months ahead on the broadcast, Bob will become more specific in discussing the positive aspects of the economy, which would support the "Economic Indicator" of his timing model turning positive.

EC#2: The one thing that I think needs to be monitored, is whether Bob is looking for data to back up his position, rather than objectively analyzing the reality of the situation. Bob tends to focus on the data and news that supports his position, while ignoring the data that is contrary to what he has predicted. That can be very dangerous if you are in the prediction game. Part of my goal is to try and objectively analyze the data as well, and give you another perspective on investing-related matters.

Consumer Sentiment

Brinker Comment: Bob noted that the University of Michigan's sentiment index for March came in at 77.6 down from 79.9 in February. Bob downplayed the decline in March pointing out that you would expect a decline in consumer sentiment at the start of military operations.

EC: The March sentiment index of 77.6 was actually viewed positively as it was smaller than expected by economists, and smaller than indicated by the preliminary March figures reported two weeks ago. Still, this is the lowest level since September 1993 and the third month in a row that confidence sank, so there really is nothing to cheer about in this sentiment gauge.

Durable Goods

Brinker Comment: Sales of big ticket durable goods -- products defined as having a shelf life of 3 years or more -- declined 1.2% in February. In the non-durable area, sales of products such as food, clothing, etc., were unchanged. With respect to service spending (i.e. utilities, gas, etc.), that was up .5% in February, but some of that could be related to the weather.

Income

Brinker Comment: There was a 0.3% increase in American's disposable income for the month of February versus an increase of 0.4% for January. Income growth is outpacing spending. That means that the personal savings rate increased again, and is now up 4% from 3.8% in January. Last year, the savings rate was 0% which Bob said was not a favorable indicator for a possible economic recovery in the next six months.

Conclusion

Bob concluded this segment noting that if you are looking for the possibility of an economic recovery in the next six months, you need better savings rates (which we are seeing now), and you need reliquification (which we are seeing now). All of this is exactly what we want to see. Economic fundamentals always develop favorably in advance of any follow through in the actual economic data. You can have an extended period of lackluster economic data while the underlying conditions are improving. That is why it is so important to look beneath the surface of the reports in order to analyze the condition of the consumer to determine how it is changing.

EC: Bob's comments here confirm what I thought. Bob apparently sees an improvement in the underlying fundamentals of the consumer, and hence the prospects for a turn-around in the economy. Bob didn't address some of the negative economic reports last week, such as the decline in new and existing home sales in February. There was also some disheartening news that nondefense capital goods orders -- a barometer of capital spending -- fell 5.2% in February which wiped out the two previous months' gains and reversed an upward trend in total new orders. Still, the most important economic report is not due out until next Friday, when we get the employment report for March which will include data covering the average work week, hourly earnings, nonfarm payrolls and the unemployment rate. I will certainly cover this report in next weekend's newsletter.

If you would like to read the rest of this newsletter and/or learn how to subscribe to my service, drop me a line at:

mailto:davidk555@earthlink.net

or visit my website at

http://www.BeginInvesting.com

-- posted by David_Korn

Top 664. Apr 8, 2003 4:33 PM

» Katrina75 - Re: Summary and Commentary of Bob Brinker's Moneytalk

In response to message posted by David_Korn:

Does anyone remember the study that Brinker cited as compiled by a large Mutual Fund showing the results of 50% invested in the Index 500 and 50% in Treasuries as compared to an agressive portfolio over many years ? T. Rowe Price rings a bell. Bob has mentioned this study more than once in the past year and it was quite favorable for a low risk/reward portfolio

-- posted by Katrina75

Top 665. Apr 8, 2003 4:53 PM

» SteveT - Re: Re: Summary and Commentary of Bob Brinker's Moneytalk

In response to message posted by Katrina75:

I believe it was a study done by Neuberger & Berman. I got it some where if I can find it. smile Oh here it is.
http://www.suite101.com/discussion.cfm/i...

-- posted by SteveT

Top 666. Apr 8, 2003 5:14 PM

» Kirk - Re: Re: Summary and Commentary of Bob Brinker's Moneytalk

In response to message posted by Katrina75:

SteveT gave a link. I wrote an article on this as well here: http://www.suite101.com/article.cfm/inve...

It is interesting to compare the results for 1991 through Dec 1999 where the 100% VTSMX portfolio is ahead by about 50% but after 3 years of bear market, 2000 through Dec 2003, the 100% VTSMX portfolio is only ahead by 10%.

I view these articles as MUST READS:
Asset Allocation and Diversification http://www.suite101.com/article.cfm/inve...
Using Asset Allocation to make money in a Flat Market http://www.suite101.com/article.cfm/inve...
Asset Allocation Review http://www.suite101.com/article.cfm/inve... shows how asset allocation smoothes portfolio returns

-- posted by Kirk

Top 667. Apr 9, 2003 7:35 PM

» Katrina75 - Re: Re: Re: Summary and Commentary of Bob Brinker's Moneytalk

In response to message posted by SteveT:

Steve and Kirk, thanks for the info!!

-- posted by Katrina75

Top 668. Apr 20, 2003 10:56 AM

» Kirk - Detailed summary of the QQQ Advice

.
Below is a detailed summary of the QQQ controversy. What do you think? Discuss it HERE. Isn't it odd how he kept them out of the model portfolios on the way down and only added QQQs at the bottom? Some have said it is only because he recommends mutual funds for his accounts, but it is clear in his bulletin that you can use a Rydex OTC fund and QQQ interchangeably.

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.suite101.com/files/topics/270...

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."

Jan 2003 MT: QQQ=$25.68; hold. No commentary.

Feb 2003 MT: QQQ=$24.49; hold. No commentary.

March 2003 MT: QQQ=$24.49; hold. Showing good relative strength vs S&P500 so far this year.

March 11, 2003 Bulletin; QQQ=$24.06; BUY QQQ or ROYCX. Advises subscribers to become fully invested. Makes no mention of previous QQQ buys. Recommended increasing weighting of QQQ in P1 to 25%, P2 to xx% & P3 to yy%. Active/Passive portfolio doesn't get any QQQ??? NOW he puts QQQs into the model portfolios. Simply amazing that he gets away with advertising his performance without the QQQs included on the way down from $83 to $24.

Summary: Between 1/1/00 and April 20, 2003, Brinker's model portfolio #1 with QQQ applied lost 30.4% while the S&P500 lost 42.8% (not counting dividends). With dividends applied, I think Brinker's P1 beat the S&P500 by about 10% which is a good result but not what he advertises.

Click for a September 23, 2005 update of Bob Brinker and QQQQ History

I think my newsletter offers better value for those looking to get to critical mass. Of course, I am highly biased! smile

I recommend those who follow Brinker use his active passive, low cost portfolio or my even simpler Total Stock Market & Total Bond Portfolio I give for free here, then replace the percentage Brinker recommends for P1, P2 and P3 into QQQQ with my newsletter portfolio.

For 2005, "Kirk's Newsletter Portfolio" was Up 13.2% vs. QQQQ up 1.2% vs. DJIA down 0.6% vs. S&P500 Up 4.8%

As of 12/31/05 the Total Return for "Kirk's Newsletter Portfolio" since 12/31/98 is Up 197% while the S&P500 only up 12%!!! & NASDAQ only up 1%!!! (my portfolio beta is roughly equal to that of QQQQ.)

What should be quite clear is a “buy and forget” market strategy using the DOW, S&P500 or NASDAQ would have under performed holding money funds over the past seven years while my newsletter portfolio nearly tripled every dollar invested.

Even if you don’t market time or buy individual stocks, my newsletter offers quite a bit of useful information and tables (Discussion of interest rates, The Fed Model, etc.) which many say are worth the price of the subscription on its own. Show your support for my work at Suite101.com and become a subscriber today!

-- posted by Kirk