August 10, 2012, What Will Bob Brinker Do If the Cyclical Bull Market Gets Long-in-the-Tooth?

August 10, 2012....Bob Brinker's Moneytalk has been on the air over 26 years. During that time, Brinker's shtick has always been "stock market-timing," both on the air and in his newsletter -- Bob Brinker's Marketimer.

So how many times has he actually timed the stock market by raising cash as opposed to remaining fully invested and simply riding the market up and down like a buy-and-holder?

Surprisingly, the answer is twice.   The first time resulted in his subscribers losing out on a lot of stock market gains. A complete documentation of Brinker's timing history is posted HERE.  Brinker talked about what was actually the second and last time (year-2000)  he raised cash on the  August 5 Moneytalk show. 

In July 2012, Brinker reviewed his four timing model indicators and concluded that they were all in favorable territory.  (Brinker's four timing model indicators are: 1. Economic Outlook; 2. Monetary Policy; 3. Investor Sentiment; 4. Equity Valuations.)

As of August 2012, Brinker's Marketimer S&P target range is still "upper-1400s to lower 1500s," where he raised it to in April -- the time frame was "this year." In May, 2012, he extended the time-frame to "within the next 12 months." Now it is simply "going forward." 

So the question is, will Brinker call an end to this cyclical bull, declare a cyclical bear and raise cash?  In the August issue of Marketimer, he dropped a couple of hints that he might. He commented: "We remain concerned that the 2012 S&P 500 Index correction of 9.9% did not produce the level of health restoration that we saw in July 2010 and September 2011." Then he recommended dollar-cost-averaging only during periods of weakness and said: "All Marketimer model portfolios remain fully invested for now." 

Here's my answer to the question above: Nope, I predict that Brinker will never again call a bear market and raise cash from his fully invested model portfolios.  Why? Because he never raises cash for 10-20% corrections and he always says never sells into weakness. So by the time the market has dropped 20%, following his own rule, it's too late to sell stock. 

Is it possible that the S&P could hit his target range and he would decide to sell all or part of his equity holdings? Yep, but consider this, when the market was near its all-time-highs of 1565 in 2007, he began predicting it would reach the mid-1600s.  And we know he raised his target range twice already this year, he could easily just raise it again if it continues to climb.  As Brinker says: "We shall know in the fullness of time." :)

FrankJ sent this picture of Hobbes before he lost two pounds. He sure looks happy to me.  Later, I will post a picture of Hobbes enjoying his svelte outdoor lifestyle along with his comments. :)

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