October 12, 2012: Bob Brinker Closes Twelve-Year Trade

October 12, 2012....Exactly twelve years ago, Bob Brinker told subscribers (and recommended on Moneytalk) using a large portion of previously raised cash reserves to buy QQQ.  (At the time of this first trade in October 2000, QQQ was trading in the low-to-mid $80 range.)

He repeated these buy-QQQ trades two more times, once in January 2001, and again in March 2001.  Commentary that I wrote several years ago:

The March 2001 Marketimer begins with Bob Brinker admitting that "we were wrong in our earlier expectations that a countertrend rally would develop late last year...." He then admitted that his call for a new bear-market rally beginning on January 3, "was unable to sustain upward progress in February."  In spite of these admissions of being "wrong," in the same issue of Marketimer, Bob Brinker again made the following recommendation to subscribers: "In our view, the probabilities favor a three to six month bear market rally phase beginning shortly. Such a rally has the potential to carry the Nasdaq composite Index above the 3000 level by spring or summer as measured from the closing lows." (March 1, 2001, QQQQ closed at $39.15)

Brinker gave followup guidance to hold in each of the next  Marketimers until May 2001 when he actually predicted a rally in the Nasdaq -- even if the stock market,  which was crashing, didn't rally:

• Month 7) April 6, 2001, Marketimer, Page 2; Paragraph 5: Bob Brinker said, "Recent weakness in the Nasdaq 100 Index (QQQ) shares has far exceeded our expectations. However, we believe subscribers holding a position in these shares will eventually be rewarded, although this holding will require both time and patience. With or without a buy signal from our long-term model, we expect the Nasdaq Composite and Nasdaq 100 Index to stage a significant recovery over the next several months." (April 1, 2001, QQQQ closed at $46.15)

• Month 8) May 7, 2001, Marketimer: Bob Brinker said, "As we stated last month, 'with or without a buy signal from our long-term model, we expect the Nasdaq Composite and Nasdaq 100 Index to stage a significant recovery over the next several months.'" (May 1, 2001, QQQQ closed at $44.73)

• Month 9) June 2001, Marketimer,  Bob Brinker said: "....we recommend holding these shares for future recovery within our earlier percentage guidelines." (June 1, 2001, QQQQ closed at $45.70)

Brinker repeated the advice to "hold for recovery" each month for the next two years.  However, when September 2001 arrived, Brinker recommended exchanging QQQ for XLK as a way  to take tax losses and continue to hold the trades. That was another bad move because right now, XLK has greatly under-performed QQQ.

March 2003 was the final time that Brinker mentioned the trade. That was just  four days before his "famous" buy-signal:

March 2003, Marketimer, Bob Brinker said: "For subscribers holding Nasdaq 100 (QQQ) shares, we recommend holding for a significant recovery in the shares in the next cyclical bull market." (October 15, 2000, a few days after Brinker's "Act Immediately" Bulletin, QQQ closed at $81.70; March 7, 2003--after 30 months of "guidance" to "hold", QQQ closed at $24.54)

The next month, April 2003, Brinker effectively covered up the trade forever when he added RYOCX  (a proxy for QQQ)  to  model portfolios I and II. Of course, this was after the QQQs had declined over 70%.

So for twelve years there was no mention of the trades in Marketimer or on Moneytalk -- until October 2012, when he COMPLETELY removed all trace of QQQ and RYOCX from Marketimer.

Here is the cryptic and cold way that Brinker closed these twelve year trades that cost so many followers so much money.

October 3, 2012, Marketimer, Bob Brinker said: "In addition to our recommendation to eliminate Rydex Nasdaq-100 Fund from model portfolios I and II, we also recommend the sale of any QQQ shares that are held by subscribers...." (October 9, 2000, QQQ $82.62 -- October 9, 2012, QQQ $67.26)

Go here to read the special bulletin that Brinker sent out to make the original QQQ-trade and brief excerpts of thirty months of follow-up guidance -- before the big disguise.

I did not believe that Brinker would ever close these trades. "We were wrong" because I failed to consider that he might actually get complaints from old-time subscribers. Easy way to get an answer for any questions -- although, the timing seems  really ironic, doesn't it?

This is what QQQ has done over the past twelve years:

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