April 9, 2015, Bob Brinker "2014 Bond Timer of the Year" According to Timer Digest

April 9, 2015....Beware! There are lots of sharks out there waiting to "shark" your wallet. They swim as phony rating services or phony fan clubs or fabricated Brinker Groups

If I told you that I had declared Bob Brinker Bond Timer of the Year for 2014, it's likely that you would think I had been drinking the cooking sherry -- and rightfully so! But that's what Timer Digest has done in spite of Brinker's sad-sack performance last year. 

ETF1-Robert, one of the crack blog research team, sent an email to let me know that Kirk Lindstrom has done an article about Timer Digest naming Bob Brinker and James Stack  2014 "top bond timers."

Kirk said: "Congratulations to Bob Brinker!!!  2014 Bond Timer of the Year! On January 2, 2015 the venerable Timer Digest named James Stack and Bob Brinker as "Bond Timers of the Year." They were bullish all year and matched the T-Bond index.

I have no idea what method  Timer Digest  used to conclude that Brinker's Marketimer bond holdings "matched the T-Bond index."  Let's take a look at what Brinker did last year besides stay fully invested -- as he has been since March 2003.

Firstly, Brinker's Marketimer only has a fixed income portfolio that consists of four bond funds, and  a balanced fund that is approximately 50% invested in three of the same bond funds -- that's it! There are no other bonds in his portfolios. (NOTE: Brinker's income fund is off-the books of his performance record.)   Jim, a member of the blog crack-research team, did an analysis and  reported that the income fund performance for 2014 was 1.1% and the balanced model portfolio III only made 6%.

It's important to know that in 2013, Brinker moved into all low-duration, high-credit risk funds. Jim researched how much these moves cost Brinker's followers in missed profits. Please carefully read Jim's numbers:

Jim said...

I've taken a look at Bob Brinker's final performance numbers for his fixed income portfolio. For calendar year 2014 his Income portfolio was +1.10%. If he had not made any changes from his prior holdings he would have been +6.11%. Here is the breakdown: DLTNX +6.47 vs. DLSNX +1.35, DODIX +5.48% vs. OSTIX +1.26%, MWTRX +5.83% vs. MWLDX +1.39%, and finally VFIIX +6.65% vs. FFRHX +0.41%. All this was calculated using the numbers from M*.

Using the numbers from Yahoo Finance I've come up with the performance from the point he made his changes. They are as follows: DLTNX +7.66% vs. DLSNX +2.02%, DODIX +6.99% vs. OSTIX 1.79%, MWTRX +6.54% vs. MWLDX +2.09%, and finally VFIIX +8.2% vs. FFRHX +2.23%. Overall that computes to an average of 7.35% vs. 2.23%.

Using either time frame Brinker's funds that he sold outperformed the funds he bought by 5+%. It's going to be difficult for his followers to ever make up the 5+% of additional gains that they missed by following his bond timing advice.

January 2, 2015 at 9:44 AM

Brinker made some bond fund changes, backing off of the low-duration in January 2015. Here are some excerpts from my January 18th summary of Moneytalk:

BRINKER'S JANUARY 2015 MARKETIMER BOND FUND CHANGES.... Caller Jackie in Las Vegas (39 minutes into the second hour) asked about the Fidelity Floating  Rate High Income (FFRHX) and the Metrowest Unconstrained Bond Fund (MWCRX).

Brinker replied:   "We don't own the Floating Rate Fund anymore, so it's out of the portfolio.…  The Floating Rate Fund that we sold was a different fund and it was a different fund company also.  As far as the Unconstrained is concerned, there are many unconstrained funds out there.  If you're not comfortable, you should not make the change.…  I do believe that those who are investing in unconstrained, I think it has a place in the portfolio at this point.  That doesn't mean you have to do it.…  Because what you're talking about with unconstrained funds – and there are many of them out there – what you are talking about is a fun that is going to invest in a highly diversified portfolio.  They are going to use varying maturities.  They are going to be unconstrained by managing against an index.  They are not going to be held to investing against an index.  The duration of the portfolio can vary substantially with the management opinion at the time… And all of those things come into play." 

Brinker continued: "Unconstrained also in the sense than you are giving the portfolio manager considerable leeway in terms of how he or she wishes to invest the portfolio.  That's really what it means… Now again, anytime you are uncomfortable with any type of fund, you shouldn't be in it – period.  From my point of view, and anybody obviously that subscribing to the newsletter is interested in my point of view, I'm sharing with them my opinion that within the context of a diversified income only portfolio – because that fund only appears in the income portfolio (3 unintelligible  words).  And I'm saying that within the context of that type of portfolio, I think there's room for a plum like that at this point.

Honey EC: As Brinker said, he sold all Fidelity Floating High Income Fund from his Marketimer off-the-books income portfolio (BrinkerJr sold it last month) and also from Marketimer model portfolio III -- as of January 9, 2015.  He replaced it with DoubleLine Total Return Bond Fund (DLTNX)  which he had sold in 2013. He also sold MetroWest Low Duration (MWLDX) in model portfolio III and replaced it with MetroWest Unconstained (MWCRX). Notice that he did a bit of a sales pitch on the Unconstrained Fund.

My conclusion is that Timer Digest's "timer of the year awards" are not to be trusted, much like Hulbert's silly "Honor Roll" awards.  They are similar to so many other shark attacks from phony Brinker groups and fan clubs, it's all about selling newsletters by any means possible -- in my opinion.

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