Why Listen to Bob Brinker

Moneytalk is great for discussion of investment ideas and concepts. Bob called his recent guests, Burton Malkiel and John Bogle, "legends in their own time."

In our Bob Brinker Discussion Forum, Oreo6363 asked:

• Hi Kirk - Why do you listen to BB - Why waste your time??

I replied:

Welcome to Suite101. I hope you stick around.

I don't know why some of Brinker's "Bob can do no wrong" supporters get so upset that Brinker's critics listen to his show. Bob is great for talking about events and ideas related to investing. It is best I don't agree with everything because that exercises my mind. Also, I like to hear the good ideas offered by his guests. It is great when the best of the best guests reinforce what I've been trying to teach here at Suite101 and in "My Newsletter "

For example, this weekend Burton G. Malkiel said quite clearly to a caller:

"I have been following markets for about 50 years, and I've never met anybody who could time the market correctly."

This is a guy Bob Brinker said was a "legend in his own time." What I loved is the legend said he invests his own money the exact same way I've been recommending since I started my newsletter back in 1998!

Burton Malkiel said on that same Moneytalk appearance that it is OK if you want to have a little fun buying a few individual stocks. However, if you are going to do it, you can do it with a lot less risk if the core of your investments are in good low cost index funds. (The "core and explore" approach I recommend!) Burton Malkiel said that is exactly what he does. If you think you know something about a certain biotech stock, for example, that will find the cure to cancer, go for it, provided the core of your portfolio is indexed.

I've heard Jack Bogle in interviews say he does the same thing as Dr. Malkiel and I except he uses some of Vanguard's managed mutual funds that are tax efficient and have low turnover.

The idea that a bell rings to signal when investors should get into or out of the stock market is simply not credible. After nearly fifty years in this business, I do not know of anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently. Yet market timing appears to be increasingly embraced by mutual fund investors and the professional managers of fund portfolios alike.

[John C. Bogle in Common Sense on Mutual Funds: , pg 20]

I feel great knowing that two "legends in their own time" recommend what I teach here and they share the same opinion of market timing. Where I differ is I think some small traders can make money trading on a daily basis, but it is not "investing" and you can't follow their calls with a newsletter because the markets move too fast to take advantage of the inefficiencies they exploit. When pressed, I bet Bogle and Malkiel would agree, but that is only my speculation.

You wrote: Folllow your own advice. Yes, he made a mistake in 2000, but who hasn't??? You have made mistakes - I'm sure of that.

I do follow my own advice. My complaint with Brinker is he doesn't account for his bad advice in his record. How do you feel about losing so much money in QQQQ following him but when he talks about his "major buys and sells" he doesn't mention telling subscribers like you to put 30 to 50% of cash reserves into the QQQQ?

See THE NEW QQQQ update to view the actual QQQQ mailings. (yes, there were two!)

Look for Oreo6363's reply in our "

Bob Brinker FREE Forum 63,586"