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Thanks for confirming the facts and providing that bit of history.
Are you still expecting a recession in 2005, and if so, what would be the event that would have the best chance of heading it off?
Maybe by dangerous weekend he meant the possibility of a terrorist attack on the Fourth of July.
Since you followed him up to 2001, you probably know about the attempted QQQ trade that went bust. He never did take that one off of hold status.
Other than that he went fully invested in March of last year. It was a good buying opportunity, but I certainly wouldn't call it the "Mother of All Buying Opportunities," given that he keeps saying on the radio that this is just a cyclical bull market within a secular bear market.
Out of courtesy to Mr. Brinker, I prefer that people not quote current Marketimer content in this thread.
When you talk about short term sentiment being more bearish than bullish, and vice versa, is that before or after applying the fact that it is a contrary indicator?
Uh oh! The Abbie Indicator just lit up on CNBC! <G>
Thanks for your commentary and the links.
I don't think any theory is 100%, and I am pretty sure there is no single indicator that always works. Seems to me there will always be missed opportunities. The important question is does the "no triple bottoms" theory work often enough so that a person can make money out of it in the long run.
I see one at 35.50 on May 17th. I guess 41 cents is close enough to define a double bottom?
Where do you see a double bottom on SMH? The last bottom I see is mid-May, considerably lower.
On a one-year chart, the NDX "looks" like it's not done bouncing off last week's high.
http://bigcharts.marketwatch.com/intchart/frames/frames.asp?symb=ndx&time=8&freq=1
That could be the way he sees it, but if so, I disagree with that line of thinking. In the long run it's better to build customer loyalty by being straight with people.
What you say is true, and yet Bob seems to have this irrational fear of talking about his mistakes and what he has learned from them. Here's something I would like to see in the newsletter:
"At the request of subscribers who participated in our QQQ buy recommendation in October of 2000, beginning with this issue we are adding a version of Portfolio I which includes the effect of placing 50% of cash reserves in QQQ at $xx.xx, which was the average price of QQQ for the week of October 15, 2000."
He also never removed his hold rating on TEFQX, as far as I know, and I think he should include that in his list of securities on hold until he issues a sell recommendation on it.
More and more people are getting their information from the Internet, and when they find out about these things through someone other than him, I think it makes him look worse than if he had just been upfront about it.
Here's how I identified changes in status of the model:
The earliest date for which I was able to make this determination was January 1991, when he went 100% invested. If he was fully invested, then his model must have been favorable. Unfortunately, we are not able to make that determination prior to that, as he was only partially invested, and if he made any statements on whether the model was favorable or unfavorable, I don't have that information. On the other hand, in January of 2000, even though he only went 60% to cash, he explicitly stated "the model has turned unfavorable."
In October of 2000 he spoke of a "countertrend rally." By definition a countertrend rally cannot exist unless the trend is down, so it is evident that his model must still have been unfavorable. This is confirmed by the fact that in subsequent issues he made it clear by his explanations that the methodology he was using in attempting to identify a countertrend rally was different from the methodology of his model as he had previously explained it on many occasions.
In March of 2003 he again went fully invested, leaving no doubt about the status of the model.
Here's another way of looking at it: A coin flip would have given a 50% chance of heads in any given month, so the probability was 1/2 for each month. The probability of its coming up heads two months in a row is 1/2 x 1/2 = (1/2)^2, i.e., one-half squared. The probability of its coming up heads 108 months in a row would be (1/2)^108 = 3.08 x 10^-33. The probability of it then coming up tails in the next month was 1/2, so the chance of the model staying favorable for 108 months by random chance and then switching to favorable was the product, or 3.08 x 10^-33 x 1/2 = 1.54 x 10^-33.
The probability of its staying unfavorable for the following 38 months (I already counted the first of the 39 months in the preceding paragraph) is (1/2)^38 = 3.6 x 10^-12. Then there is a 50% chance of it switching to favorable the next month, for a total probability of 3.6 x 10^-12 x 1/2 = 1.8 x 10^-12.
The combined probability for both periods is again the product, or 1.54 x 10^-33 x 1.8 x 10^-12 = 2.77 x 10^-45. Thus, the probability that the model would have stayed favorable for nine years, gone unfavorable for three years, and then gone favorable again, all by random chance, is exceedingly small.
Fascinating.
I've been thinking about the issue of statistical significance. This has been brought up on another site where it was pointed out that one needs to analyze the statistics to determine the likelihood that a given performance record is not due to random chance.
So what I've been thinking is this: Nine years elapsed from when Bob went fully invested until his model turned "unfavorable." Once he had gone fully invested in January of 1991, what is the probability of the next call occurring within two-and-a-half months of the top, as it did?
I figure that with one newsletter a month, he had to consult his model at least once a month to determine whether it was still favorable, or if it had turned unfavorable, so a call based on random chance had as much chance of happening in any month as in any other month. January 1991 through January 2000 was a period of 108 months, so that call had one chance in 108 of occurring in any one month, for a probability of 1/108. The chance of it happening within +/-2.5 months of the top, which is roughly the five month period from January 2000 through May 2000 is five time that, or 5/108 = 4.6%.
The next time his model had a change in position was March of 2003, whereas the bottom was in October of 2002, so he got that one within five months. January 2000 to March 2003 is a period of 39 months, so the call had a 1/39 chance of occurring in any given month. The chance of it occurring within a +/-5 month period of the top, i.e., a ten month period, is ten times that or 10/39 = 26%.
The probability of both those events occurring is the product, or 4.6% x 26% = 1.1% probability of those two calls coming as close to the actual top and bottom as they did by random chance.
Valid analysis or science fiction? You be the judge!
It sure does confirm my lack of interest in buying into the BJ Group! At least with the newsletter you have the option of picking a model portfolio and sticking with it. Even those who interpreted Brinker's first bulletin as applying to the model portfolios would have learned otherwise when the November issue came out, and they could then have gotten out before the losses became too bad, as Hulbert did, although those whose mail delivery was not lightning fast would have had a difficult decision to make.
It's a good thing that Brinker has since adopted a policy of explicitly stating in the bulletin how or whether the model portfolios are to participate, a promise that he has so far kept.
Not that I am not making any prediction on whether his model portfolios will continue to do as well as they have recently.
I presume you mean a lower high than in January?
Trouble is, you can't get everyone to agree on what is a fattening food anymore, what with Atkins and the other low carb diets out there.
If you are still expecting new highs in the Composite, $22 is a pretty conservative target for AMAT.
"The amount of Energy loss from a power grid stretching from SW Arizona to Nashua would lose much more energy than a H2 pipeline would."
I think we need to see the actual numbers here. What percentage of energy is lost in each method of transmission? What percentage is lost in the electrolysis? What percentage in the fuel cells?
And, BTW, how much energy does it take to make a solar cell, and how does that compare to its energy output over its lifetime? And what is the average lifetime of a solar cell, anyway?
The dollar costs would need to be quantified and compared, too.
These are questions that would need to be answered in order to determine if it would be a good idea.
Is it my imagination, or was there a triple bottom on NDX at the March low? If so, it seems likely we will do more than test it.
I have a hard time believing Zeev would ever have put it that harshly.
Sounds very plausible. Thanks.
I know Mosis = Joe Six Pack = J6P, but a long time ago I thought I saw a description over on SI of what the letters "M O S I S" stand for. Unfortunately, SI's debilitated search engine does not allow me to find it. Would you mind repeating it?
Thanks.
It's the end of an era!
I think Justa is saying that if today's rally continues, there's a good chance it will make a new top before it gets too far, i.e., it is suggestive that a sustained rally is doubtful right now.
Here's another article on the cold fusion review at DOE:
http://www.physicstoday.org/vol-57/iss-4/p27.html
So, what are the implications going forward of the fact that we closed on the highs?
Thanks for sharing your thoughts on the market and economy.
If you want to take a look at a stretch, saying that the example set by the top leaders is going to be ignored by the troops definitely qualifies.
Any reason, or should we just take your word for it?
Regarding setting an example of morality, I am wondering what the moral case was for the U.S. getting involved in WW I. Was it really a case of trying to make the world safe for democracy, or was it more a matter of helping our friends preserve their empires?
The Bush Administration set the tone for the prisoner abuses in Iraq by claiming that the Guantanamo prisoners were entitled to neither the protection of the Geneva Conventions nor U.S. due process guarantees.
I think Bush should put a sign on his desk saying "The buck stops somewhere else."
As a pilot, I can tell you that learning how to fly a plane into a building would be much easier than designing a system to do it remotely, and suicide attacks have been around since WW II and probably longer. I also don't know why they think anyone would have any difficulty navigating to as obvious a feature as the twin towers on such a clear day.
The thing that amazes me is the incredible complexity people are willing to entertain in order to support the idea of people doing things the hard way.
That is one conspiracy theory that is supported by snopes.com:
http://www.snopes.com/rumors/putcall.htm
The trouble with saying there could be some bit of truth in there somewhere is that the site is so full of easily discredited speculation that it is a waste of time trying to ferret out the hoped-for grain of truth. It is also very treacherous to accept anything from a source that has proven itself careless with the facts and not only ignorant of the science involved, but apparently unwilling to do the relatively minimal research that would be required to debunk their theories.
For example, anyone who has watched a documentary on intentional demolition of buildings knows that it requires painstaking and very extensive preparation, including drilling lots and lots of holes in the structure and putting explosives and a means of detonation in them. Do these people seriously believe that this could have been done to an occupied building without lots and lots of people noticing? Did the perpetrators of this site even bother to ask professionals in the building demolition industry if it could have been done this way, and what the chances of discovery would have been? I doubt it.
In science, one principle that lay persons would do well to adopt is that you shouldn't introduce more assumptions than necessary to explain a given phenomenon. These people seem determined to introduce as many assumptions as possible.
Regarding the WTC conspiracy theories, people forget that just because you can imagine something, that doesn't make it true. I wish people would at least take the trouble to try to acquaint themselves with the known facts, as you do, before propagating such nonsense. With the capabilities of the Internet, it's not hard to search for information from those who are well informed on the science involved.
I find myself wondering if refusing to apply either criminal justice standards or the Geneva Conventions to the Gitmo detainees influenced some of our people to think that prisoner abuse in Iraq was OK.
Perhaps people misunderstood what you meant by "line in the sand."