March 10, 2012, Bob Brinker's Marketimer Does Not Make Mark Hulbert's New Market-Timing Honor Roll

March 10, 2012.....Yesterday the March issue of Hulbert Financial Digest was published.  Mark Hulbert did a study that  he called "An honor roll of stock market timers."  He based this study on the question: "Which is easier to pull off successfully -- security selection or market timing." 

Hulbert said that he compared the same newsletters that he used last December when he published his self-created  "Honor Roll" which Bob Brinker was on, of course. This time Hulbert focused entirely on market-timing with no regard for security selection. One would think that Bob Brinker's "Marketimer" would be at the head of the class based on that criteria. One would be wrong.

Hulbert wrote: "Just 2% made it onto this new Honor Roll....The two percent that made it onto the Honor Roll both came from the same letter: Timer Digest, edited by Jim Schmidt.....All of the other letters for which the HFD has timing-only performance data back to 1998 did not make the Honor Roll." 

Hulbert concludes: "If you thought picking stocks and funds was difficult, timing the market's gyrations is even more so." 

Hulbert also did his yearly summary of Marketimer performance. It's important to remember that Hulbert bases his numbers on an average of Brinker's three model portfolios -- two are equities and one is balanced.   Hulbert pointed out that he tracks the record of Marketimer income and active-passive index portfolios, but he does not use them in his performance calculations.

Hulbert described Bob Brinker as  a "Long Term Market Timer" and explained: "Though Brinker is a market timer, he typically focuses on longer-term trends rather than on shorter-term gyrations."   (That is a comical understatement. Brinker has made no timing moves in twelve years.)

However,  Hulbert went on to explain: Over the 25+ years that the HFD has tracked his newsletter, for example, only twice has he deviated from being fully invested. The was after the 1987 stock market crash, a move that ended up costing his portfolios. His second deviation lasted from January 2000 until March 2003, which was a profitable one."

I wrote to Mark Hulbert, so I know that he knows that his Marketimer performance numbers are much higher than they would be if Brinker had included the big-time losses from the QQQ trade in his model portfolios -- like he recommended for his subscribers.

Hulbert also knows that it was the following month that Brinker "chose" not to include the trade in his model portfolios.  See the proof here and read the bulletin.  Hulbert's only concession to these facts (after several wrote to him) was to include a  footnote about the trade and state that Brinker's "HFD record did not suffer as a result."  

And even with all of this, Bob Brinker's Marketimer, over the "lifetime" that Hulbert has ranked it (26 years), does not beat the Wilshire 5000. Here are the simple numbers according to Hulbert:

Letter's Average +881.2 (9.5) 
Wilshire 5000 +892.0 (9.5)

Here is Hulbert's  graph comparing Marketimer to the Wilshire 5000 Total Market Index since 1986: 

Bob Brinker's Land of Critical Mass Marketimer: $185 X 26 years = $4710.00
Total Stock Market (VTSMX or VTI) buy and hold = 00.00

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