Did Bob Brinker's Timing Model Predict The Bear Market?

This is an excerpt from David Korn’s November 22-23, 2008 weekly newsletter (Click for a FREE SAMPLE ) that comments on Bob Brinker’s Money Talk.

TIMING MODEL QUESTION

Caller: This caller slipped in the question of whether Bob's timing model (Marketimer Long Term Stock Market Timing Model) detect any of this chaos in the market?

Bob said it did not. Bob noted that earlier in October when he commented on it he was forthright in saying so on Moneytalk because he thought it was important to do at the time. After saying that, Bob immediately moved to the next caller.

David Korn: I thought that was kind of an odd response. Not the part about Bob saying that he commented on it in October, but that he thought it was important to be forthright about it at the time. Anyhow, if you are a new subscriber or missed it, on the October 11-12, 2008 weekend, Bob said this is the most difficult market environment he has seen and that "his work did not forecast this bear market decline, and he had no way of forecasting a global banking crises and if he had, that would have been a huge forecast and that would have caused a lot of disbelieve, but he would have made it if he had been convinced it would happen." Incidentally, during the show he also said that that he does not believe in selling into a panic atmosphere.

David Korn #2: With the S&P 500 at 800, Bob has basically done a round-trip. What I mean by that, is that his timing model last turned "favorable" in March 2003, when the S&P 500 was at 810. He stayed fully invested from 2003 to the present, thus his timing model completely failed. One would have thought that he might have made some asset allocation change in the last 5 years to protect some of the gains, but he did not.

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Bob Brinker's Market Timing Model Fails To Predict The Bear Market

David Korn just reported:

Bob Brinker's long term stock market timing model, unfortunately, has failed. According to Bob's own definition, the model (as revised after it failed in the late 1980s) was designed to help avoid a decline of 20% on a closing basis in the S&P 500. Will it be revised again?

See:

• >>Bob Brinker's Asset Allocation History <<


• >>Brinker's Bear Market Definition <<


• >>Official Bear Market <<
  
• >>David Korn's Post <<

In an article published yesterday in Barron's Online, Mark Hulbert wrote of Bob Brinker:

Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early July, Editor Bob Brinker reported that his stock-market timing model remains in favorable territory. However, he cautioned that oil's price constitutes a "wild card."

• "In the event oil prices continue to rise, consumers and the stock market will be held hostage to the cost of energy. This would provide a strong headwind against the economic recovery process. If oil prices stabilize or decline from current levels, we believe stock prices can make progress into 2009."

Brinker is recommending that subscribers' stock portfolios be fully invested.