2011 Intraday "Correction" Statistics 09/09/11

September 10, 2011.....Bob Brinker called the stock market correction "noise" when it was at 5%.  Perhaps tomorrow, we will find out what he has to say about an 18.3% decline.

July 31, 2011, Bob Brinker said:

"I know many of you also have been taking advantage of  the dollar-cost-averaging opportunities on short-term weakness - and certainly it's minor. I mean, 5% is really noise when you look at the market over time.......If you've been listening to this broadcast, we have not been part of the panic-brigade here on Moneytalk."

Thank you to  Kirk Lindstrom, who posted the following in the comments section of the previous article:

Kirk said...

Speaking of truth....

2011 Intraday "Correction" Statistics 09/09/11 


[Honey, in edit: Thanks SIVbum, here is an update with the corrected numbers]

S&P 500 Intraday Statistics

Date of last bull market high 05/02/11
Last Bull Market High: 1,370.58
Date of last low: 08/09/11
Intraday Low: 1,101.54
Decline in Pts: 269.04
Decline in %: 19.6%
S&P500 Chart
 
Kirk said: It reminds me of 1998 when Brinker called a bottom after a 10% correction then the market went down another 10%... all while fully invested. I think he used closing values to show he was just under 20.0% for the correction so he didn't miss a bear.

19.6% decline rounds up to 20%... so that could be low enough for many to call it a bear and a bottom. Interesting.

Today QQQ is $53.18 which is down 39.5% from $87.87, the highest QQQ was while Brinker was recommending it for up to 50% of cash reserves.

You can see an actual copy of the special bulletin advising purchase of the NASDAQ100 via QQQ HERE.

How would it have affected model portfolios? Glad you asked.  Effect of Bob Brinker's QQQQ advice on his Reported Model Portfolio Returns

[quote from Kirk's link above]  "Conclusion:  I calculate the QQQQ advice caused Brinker's reported total to drop by 29% and his APR to drop 2.0% a year such that his portfolio under performs the buy and holders of the Wilshire 5000 by 1.3% per year since the inception of P1."
 

Truth... best shark repellent ever!

Honey here: So if Brinker had not given himself a mulligan on those model portfolio cash reserves, his returns would be well below market returns. And the cost of paying for his advice since then would have added up to $1,850  big smackeroos!!

As of today,  it looks like Brinker is going down the same path he did in  2007.  At the beginning of the  megabear bear market, he was predicting S&P 500 Index of 1650.

In January, Brinker was predicting S&P 500 Index would reach "low-to-mid 1400's" in 2011.  Since then  we've had an 18% correction from the YTD top.... In September, without mentioning that he was making a  change, he extended that prediction to 2012. 

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