As Brinker has repeatedly said on Moneytalk, he expects GDP growth between 1.5 and 2.5% this year.
Bob Brinker is closely monitoring his "timing indicators" which includes the five root causes of a bear market. Most of those indicators have been covered extensively on Moneytalk as recently as last week.
Brinker repeatedly points out that the Fed is expansive (no tight money) and determined to keep rates low indefinitely (no high interest). He says there is no inflation, and growth is slow. So that leaves valuation to take a look at:
Brinker's earning projections remain at $105, which provides for a forward P/E ratio of 14.4 based on the closing price in February. Based on those facts and projections, Brinker's S&P 500 Index target range is still at mid-1500s. The S&P closed today at 1551.18.
Here are my questions and they may be yours:
* Will Brinker now raise that forecast since it has been reached?Brinker gave a clue to his outlook in the latest issue of Marketimer with this warning to subscribers:
* Or will he call a top and raise cash?
* Will he flip-flop again on his secular bear in a cyclical bull stance?
* Or will he simply wait for another 20% correction and ride it out like he did in 2010, 2011 (and 19.5 in 2012)?
* Will his timing model entirely miss the next mega-bear market like it did in 2008-9?
Page 2, Brinker said: "We encourage subscribers to remain objective about the stock market and to be wary of those who become overly enthusiastic about the stock prices after the S&P 500 Index has more than doubled in the past 48 months."
9 comments:
It is obvious that zero responses to this blog entry in over 24 hrs. seems to tell the story about what people think of Brinker's advice.!! :)
ie. - it is not worthy of response!!
Former Brinkerite - long, long, long ago...
I think it is good that Brinker is not as bullish now as he was the last time the S&P500 was in the mid 1500s. Recall back then he issued a "gift horse buy" if the market corrected to the mid 1400s.
FWIW, the DOW made record all time highs last week. I posted this with two charts showing intraday and closing values on my blog.
The first shows the DOW back to 1998. It is amazing to me how much bigger the bear market for the DOW was in 2008/2009 than it was in 2000/2003.
The second chart clearly shows the DOW made three major corrections in the last two years. The first correction Brinker liked, but the second and third were not enough for him to call "health restoring." My chart shows a test from above of a breakout which COULD indicate the sum of the second and third corrections about equaled the 20% correction (mini bear) in 2011 and may have restored health....
As the man behind the curtain is fond of saying “we shall know in the fullness of time” if those two corrections were enough to “restore health” and allow the market to continue to more new highs.
FWIW2, I’ve posted many charts on Seeking Alpha showing that with dividends reinvested using SPY, the exchange traded fund for the S&P500, that this is well above past highs too. See chart 1 at SPY And ECRI's WLI Move Lower Again While Q4-2012 GDP Revised To Positive 0.1% to see SPY with dividends from last week.
Former Brinkerite,
You cannot always gauge the level of interest by the number of comments. The popularity of this blog speaks loud and clear. And I'm convinced that would continue even if I didn't allow comments.
That said, Bob Brinker is not nearly as popular as he was in his hay-days, but he is still on national radio a couple of hours a week.
He also has a lot of "former" fans who still are curious about what he is saying about the stock market. :)
ras here: Honey, that was a pretty good summary of things as they stand and yes...the fullness of time.
Thanks Ras....Glad you liked it.
Yep, we shall know in the "fullness of time" if Bob Brinker is going to miss the next bear. We already know there will be one some day. :)
Bob takes more time off than Obama.
Nice blog here. Just discovered it and as a long time Brinker fan, I appreciate it. As I'm sure you all know, he has been spot on at times over the last several years, which along with his strong understanding of macro-econ and financial markets that he clearly possesses, has earned a certain degree of my trust. But let's face it, he's missed some major moves as well, just like he may miss the next downturn. That said, I'm tuned in. Thanks for providing this blog!
My guess is that he will take some cash off the table.
When the Shiller PE ratio for the S&P 500 hits 25, then it is time to stop buying or to start unloading.
Reference: http://www.multpl.com/shiller-pe/
Signed, the Honey Badger
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