For old-time subscribers still holding QQQ from October 2000 -- Brinker's all-time-worst Nasdaq blunder -- Brinker finally ended that disastrous trade too. (Note that the last time that Marketimer mentioned this trade was in March 2003.) But sadly, after holding for 12 years, he had subscribers sell too early to even recoup all of their losses.
October 2012 Marketimer, Page 3 Paragraphs 6, Bob Brinker wrote: In addition to our recommendation to eliminate Rydex Nasdaq 100 Fund from our model portfolios, we also recommend the sale of any QQQ shares that are held by subscribers, with reinvestment of the proceeds in either the Vanguard Total Stock Market Index (VTSMX), or the corresponding exchange traded fund (VTI).On Moneytalk the following month, Brinker talked extensively about making these changes. Here are excerpts from my November 18, 2012 Moneytalk summary:
ALL NASDAQ SOLD FROM MARKETIMER: Caller John from San Diego said: "I've been a subscriber of yours for almost as long as you've been on the air.....Recently, I noticed that you made some changes in your I and II portfolios.... (Brinker interrupted and asked what's your question).....It has to do with exposure the Nasdaq and I understand you...."
Brinker interrupted and replied: "We don't have it anymore, John. In early October, we sold all of our Nasdaq direct exposure. So that meant that we sold our mutual fund that was invested in the Nasdaq 100....That came out of model I and model II and we also extended that to QQQ shares, which are also invested in the Nasdaq 100. We also sold any QQQ shares that subscribers held. All of those share in the Nasdaq 100, whether they be in the mutual fund or in the Exchange Traded Fund were sold in early October. So they're out of there. There's no more direct Nasdaq exposure anywhere in model I or in model II or anywhere within newsletter subscriber positions. We sold them out in early October. I felt at that time, based on all that I had seen in the Nasdaq that that was an opportunity to sell that index and that's what we did."Since Brinker made those changes, the Nasdaq Index has outperformed the Total Stock Market Fund by about 15%. I don't pretend to be a mathematician, so that is my guestimate based on comparing charts. If anyone wants to do the exact math, that would be great!
RYOCX sold at $17.87....now at $26.10
QQQ sold at $64.79.....now $108.69.
VTSMX sold at $34.21........now $53.25
4 comments:
The speech that Bob Brinker gave on November 12, 2012 about "selling QQQ's that subscribers held" was a way for him to establish that he had finally closed out the QQQ trade of 2000 that lost about 70% of value.
In March 2003, he stopped giving monthly advice to "hold for recovery" and buried the trade for all these years beneath a new buy of RYOCX.
That buy, he added to his model portfolios -- something he NEVER did with the original QQQ buy even though he had used model portfolio cash reserves (which he had raised in January 2000).
Therefore, he never accounted for this in his official performance record (and Hulbert gives him a footnote about it, but he doesn't account for it either).
If this sounds a bit complicated, it is, and that is why he was so successful at hiding this scam from new listeners and subscribers.
The people he couldn't hide it from are the many who took his advice to "Act Immediately" to buy QQQ because he thought there was going to be a "countertrend rally." Instead, there was a major bear market.
Read my more complete summary of this trade
I was never involved in any of this, and I guess that's a good thing.
Bobby is shamelessly ignorant (IMO) if he urged people to "act immediately."
To my way of thinking, as a long-term investor, "acting immediately" with a large sum of money is a fool's game -- one better suited to speculators and gamblers (sorry for the redundancy).
It is just more proof that Bob Brinker is a failure as a market timer.
But then that should be no surprise. Paid subscription market timing remains 100% bullshit, without one single documented successful market timer emerging.
Sometime in 2011 I started buying QQQ and continued through 2013. Price from 55 to 75 as I recall. Glad I did as it's now at 109. I don't understand why anyone would sell out of this bull market when Brinker's own bag of indices are showing an upward trend. Sometimes I think that Bobs advice is influenced by 'exogenous' events, the root of which we can only guess.
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