Bob Brinker Data

[Davidk555]

Hi Larry. Bob Brinker has said the cyclical bull could last 1-3 years; however, I think he likes measuring it from his buy signal for "advertising" purposes, rather than the bear market bottom from which most market historians measure bear/bull markets. Here is an excerpt from my newsletter where Bob Brinker discussed this:

Excerpt from David Korn's Stock Market Commentary, Interpretation of Moneytalk (Bob Brinker Host), Financial Education, Helpful Links, Guest Editorials and Special Alert E-mail Service. Excerpt from June 1st Newsletter

HOW HIGH WILL THIS CYCLICAL BULL MARKET TAKE US?

Caller: This caller missed Bob Brinker's initial buy signal at around 800 in the S&P 500, but he did buy into the market when the S&P 500 was trading around 840. He heard someone say that the market might rise 25% from that the 800 level, and based on that, he is considering selling when the S&P 500 reaches 1000 because he thinks that is as high as this cyclical bull market might go. What do you think of that strategy? Bob said he will exit the market when his long term stock market timing model issues a sell signal. Bob said he estimates that a cyclical bull market has the potential to last 12 to 36 months. We are only 2-1/2 months into that time frame, so we have a ways to go. Sure, there will be pullbacks along the way, but Bob expects this cyclical bull market to last at least anywhere from 1 year up to 3 years. As the Moneytalk bumper music came on, Bob added a nugget that had Trekkies salivating across the country. Specifically, Bob said that he expects to see gains for this cyclical bull market "in excess" of 25%, with the possibility that those gains in excess of 25% could be "substantial."

EC: Ok, a few things here. First, Bob's comments indicate that Bob is not about to sell anytime soon, despite these dramatic gains. It looks like he is going to let the historical time frame for a cyclical bull market play out, before he decides to sell. That means, we have at least 7-1/2 months to go if it is a short cyclical bull market and up to 2 years and 7-1/2 months if it is a long cyclical bull market.

EC#2: Bob specifically mentioned to his audience to expect "pull backs." I try to stress that the market does not move in a straight line at least once a month in my newsletters, because when you follow the market day-to-day, or even week-by-week as you all do, you can easily get caught up in the momentum of the market and think the market will only keep going down, or as of late, that it will only keep going up. That has never been the case.

EC#3: One thing that I find very interesting about Bob's estimation of the time frame for the cyclical bull, is that he choose the closing level of 800 for the S&P 500 which occurred on May 11th as the beginning point for his 1-3 year estimation of how long it would last. Why did he choose this date, other than it was the day that he recommended becoming fully invested? It would seem that a market historian like daBrink would choose the ultimate bear market low which occurred on October 9, 2002 when the S&P 500 at 776.76 to measure the cyclical bull market.

EC#4: Consider this. Bob Brinker (and many others) have often referred to a bull market as lasting a minimum of 6 months which produced gains in excess of 20%. If you start from the all-time bear market closing lows, then we are already in the midst of a cyclical bear market that began almost 8 months ago. I am not making this up. All three indices have produced gains in excess of 20% during a period of time in excess of 6 months. I hand crunched the numbers myself tonight. Check it out:

Dow Jones Industrial Average:

October 9, 2002: 7,286.27
May 30, 2003: 8,850.26
Percentage Gain: Up 21.46%

S&P 500 Index:

October 9, 2002: 776.76
May 30, 2003: 963.59
Percentage Gain: Up 24.05%

Nasdaq Comp:

October 9, 2002: 1,114.11
May 30, 2003: 1,595.91
Percentage Gain: Up 43.24%

What's the importance of my data? Frankly, I am not sure yet. As you know, I don't always see eye-to-eye with daBrink, and I am pondering whether he is letting his ego get in the way of using the ultimate bear market bottom as the measuring point for the cyclical bull market, rather than the point in time that he chose to become fully invested. I will have to study this issue a little more. In the meantime, I at least wanted to provide you with the data.

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