I would agree that the QQQQ recommendation made first in October 2000, repeated in November/December 2000, reset and recommended again in January 2001, was not catastrophic to someone following all of Bob Brinker's stock market timing advice to the letter. The reason is that it was recommended for all subscribers (conservative through aggressive) to purchase with the cash reserves they had raised from the January 2000 tactical asset allocation signal. And for someone following all of that advice, their portfolio would have been able to weather the QQQQ recommendation.
It was a horrible recommendation no doubt, but no advisor is perfect in terms of making recommendations on individual securities, funds or timing. That is not why the QQQQ caused such the controversy it has over the years in my opinion. The reason for that I believe is the way that it was handed, and evidenced (or made clear) some of Bob Brinker's flaws. This was the first bulletin issued which in and of itself was quite a remarkable and anticipated event following the QQQQ recommendation on Moneytalk a few months earlier. If you have ever seen the bulletin, there were two glaring things wrong with it in the first place. First, it was not dated anywhere! Second, there was no specific buy level on the recommendation. All it said was to Act Immediately. Whether the lack of date and buy level was purposefully done to give him wiggle room later, or simply something Brinker was negligent in forgetting to include, either way it looks bad. Of course, the lack of any stop loss also showed a bit of amateurness to the recommendation - especially given the amount of bragging Brinker had done over his supposed trading skills over the years.
Then there was the issue of the reset in January 2001 Marketimer which made it seem like Brinker was recommending it for the first time, after the QQQQs had already declined significantly. This lead to a journalist on theStreet.com even being critical of Brinker. And then finally, was the way Brinker avoided discussing it, or addressing which really angered many people, and continues to anger people today. I base this on first hand knowledge from subscribers to my newsletter who still own the QQQQ shares. (And there is still confusion among subscribers to Marketimer as to whether he ever recommended selling them). Brinker could have maintained his credibility, even with a bad recommendation, if he simply owned up to his mistakes in a credible manner. Unfortunately, this behavior has not changed in my opinion, as evidenced even this past weekend as Bob is now trying to spin his way out of the recommendation he made with regard to the DVY now that it has underperformed the market over the last year. Only a close listener might have picked up on that. - David Korn (see my profile on SI for more information about me). |
