September 24, 2011, Bob Brinker's September 22nd Special Bulletin

September 24, 2011............................................................(comments)

Bob Brinker issued a special online bulletin September 22, 2011. Was it a sell-signal,  hold-signal or buy-signal?  I will use some known facts about Bob Brinker's market-timing history to do an analysis, and then make an educated guess.

WAS IT A SELL SIGNAL? 

Bob Brinker has never sold into weakness. Just the opposite, he has often recommended against selling into weakness. Based on most of his record, he'd rather ride the bears to the bottom fully invested than sell into weakness.

David Korn, an expert on Brinker's financial-advice history, wrote: 

"It bears noting that in the 22 years of Moneytalk, Bob has only issued a sell signal twice. Once following the crash of 1987 which turned out to be a very bad timing move and resulted in the subsequent modification of his timing model to include a sentiment indicator.

The second time was based on the market's close on January 8, 2000, where he reduced his stock market allocation from a fully invested position, to 60% cash (later increased to 65% cash). I would certainly not expect him to issue a sell signal at this juncture. 

AND: September 27, 2009 (after the S&P had dropped from 1565 to 1060) Brinker said: "Actually Ken, it's not my opinion that you should be selling stocks right now. I don't have a recommendation to sell stock right now. And if I did have a recommendation to sell stock right now, you would know about it. No, I do not have that recommendation. And really, that's all I can say. We have not, we have not issued a sell signal on this market." 

CONCLUSION:  Brinker did not issue a sell signal last Thursday with the market  down close to 15% when it closed Friday.

WAS IT A HOLD SIGNAL?

Brinker has never issued a special bulletin  just to say "hold."  Conclusion: Brinker's Thursday special online bulletin did not say "hold."

WAS IT A BUY SIGNAL? 

Brinker  has always promoted himself as a market-timer. His investment letter is even named Marketimer.  If he ever stopped issuing  so-called buy-signals for new money, it would soon become apparent to everyone that he has joined his often-denigrated "church of buy and hold" because it's been years since he has issued any sell-signals.  

So even though he advised his followers to remain fully invested,  and  his model portfolios are fully invested (since 2003), and he has not raised any cash,  he has continued to issue buy-signals over the years.

CONCLUSION:    When the market declines, like it has recently, Brinker issues buy-signals. When the market goes up, he picks the one of those buy-signals that is near the bottom and touts it repeatedly on Moneytalk.  Therefore,  I conclude that the September 22nd special bulletin, issued when the S&P was at 1129 (down from an April year-to-date high of 1363) was a buy-signal (for new money).  

Brinker's most recent "attractive for purchase buying opportunities." Count yourself very lucky if you did not take any in 2008 or early 2009 seriously!

• January 4, 2008, S&P @ 1411: "Mid-1400's"
• Feb 10, 2008 S&P @ 1331: "Low-1300's" (delivered via "special bulletin" - no mention of January Marketimer mid-1400's buying opportunity)
• Aug 5, 2008 S&P @ 1285: "1240 or less"
• Sept 2, 2008 S&P @ 1282: "Low-to-mid 1200's"
• September 16th -- rescinded low-to-mid 1200's (recommended dollar cost-average only)
• January 2009 S&P @ 931: “bear market bottom range of 750 to 850."
• Feb. 2009 S&P @ 826: “low-to-mid 800’s"
• March 5, 2009 S&P @ 696: waiting for a bottom and a test of that low. No DC or buy levels.
• April 3, 2009 S&P @ 798: 676 benchmark low in. Short-term weakness is buying opportunity. He gave up giving specifics. S&P500 Target: 1000s to 1100s in next 12 to 18 months. (we got there in 5 months!)
• July 1, 2010: S&P 1030: "attractive for purchase."

Out to lunch with a couple of friends last week and ran across these wonderful classic Chevys on display:

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