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- 5 Root Causes of a Bear Market
Update
02/29/08|
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Bob Norton's Interpretation of Bob Brinker's 5 Root Causes of a Bear Market A Special Report by Bob Norton for the Bob Brinker Fan Club | Highest CD Rates |
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If you want updates on what Brinker is saying on Moneytalk delivered to your email box, often within 24 hours after Sunday's show, then send us a note at TalkAboutMoney@gmail.com and ask to get on our mailing list. ==> Highest Yield CDs with FDIC <== |
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February 29, 2008: Article by Bob Norton. ECs (Editor's Comments): by Kirk Lindstrom In addition to his Long Term Stock Market Timing Model, Bob Brinker also
examines the health of Mr. Market by way of the "Five Root Causes of a
Bear Market".
Kirk Lindstrom has pointed out many times (example Kirk's Interpretation of Bob Brinker's 5 Root Causes of a Bear Market ) that in 2000, Bob Brinker made his bear market or "unfavorable" call with not all five causes flashing BEAR. Bob's ultimate call was partly subjective. Of the "Five Causes", I prefer to change the title of "Rapid Growth" to "Growth/Too Rapid or Recession." My translation of the "5 Root Causes" is outlined below: #1 Tight Money = NEUTRAL, leaning BULLISH Continued Fed policy easing provides the prospect of better readings of M2 in the months ahead.
#2 Rising Rates = BULLISH Short rates heading lower and yield inversions are improving. #3 High Inflation = NEUTRAL Expected
to improve due to slowing economy. With the CPI now running at 4.3%, we
will need to see evidence of a slowing economy helping to tame the
inflation trend before raising this rating back to bullish.
#4 Over-Valuation = BULLISH The S&P p/e is quite reasonable.
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| #5 Growth/Rapid or recession = NEUTRAL. 2007 4th quarter GDP revision was 0.6% with no expectation of anything resembling runaway growth in the near future. Most sources I watch are united in their belief that anemic growth will pick up in the 2nd half of the year. Of the 3 neutral indicators, I am optimistic that two of them will improve as we move through the year. The inflation indicator is the one which is cause for the greatest concern. As always, comments are always appreciated. Comments are welcomed and always appreciated at our Bob Brinker Discussion Forum at Facebook's Investing for the long term group. Bob Norton If you want updates on what Brinker is saying on Moneytalk delivered to your email box, often within 24 hours after Sunday's show, then send us a note at TalkAboutMoney@gmail.com and ask to get on our mailing list.
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ABC's
Market Timer Bob Brinker helps Moneytalk listeners reach the "Land of
Critical Mass." This is the place for Information about Bob Brinker, Bob Brinker's Stock Market
Timing Model and Marketimer Newsletter. The photo of Bob Brinker is from a 2000 appearance at a charity event. |