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Saturday, March 28, 2009

Summary: Bob Brinker's Moneytalk March 28, 2009

Bob Brinker's Moneytalk: Excerpts, Summary and Commentary, March 28, 2009. [Sunday update added below.]

Bob Brinker had nothing to say about the stock market today and there were no callers who mentioned it or said anything about it.

All stock market indexes rose for the week -- three weeks in a row of gains. The Dow closed at 7,776.18, up 6.8% for the week. The Nasdaq closed at 1,545.20, up 6% for the week. The S&P 500 Index closed at 815.94 on Friday, a 6.2% gain for the week. In the past 13 trading sessions the market is up over 20% -- 11% gain for the month (with 2 days to go).

Brinker talked at length in his opening monologue about mortgage rates. He said that the 30-year national average is now 4 5/8%, which is bringing out the "bargain hunters." The problem is, to get a loan, you need to "prove you don't need it."

Brinker said that there will be an extra $13 in 95% of American's pockets beginning on April 1st. [Honeybee EC: Why did I laugh out loud when I typed that sentence?]

Some paraphrased Brinker comments:

* The economy will come back.
* Ford = speculation.
* If you are in or near retirement, you should be invested 50% fixed income, 50% equities "at least at the start."
* Over the long-term taxes will go up.
* The national debt will be $20Trillion in a decade.
* Diversification is most important.
* Obama keeps getting bad advice about natural gas and nuclear power usage. [Honeybee EC: How generous of Brinker to put the blame on Obama's advisors. Seems odd to me that the "smartest president in 50 years" (according to Brinker) wouldn't do some simple reading and research, then make up his own mind.]
* It looks like more tax money is going to go to GM and Chrysler even though they do not have a viable business model. [Link to article]

A caller asked Brinker about the safety of having 70% of his assets with Vanguard. Brinker said he had no problem with "mega-mutual fund families" like Vanguard or Fidelity. He said that having various investments with them is not the same thing as it was with Bernard Maddoff or Sir Allen Stanford. "It's an entirely different thing."

In Brinker's second monologue, he talked about the European banks. He said that they were hit by fall-out from the United States because they bought toxic securitized packaged mortgages. Brinker said that taxpayers in Great Britain now own 95% of the Royal Bank of Scotland.

Brinker also talked about the German "bank rescues." He specifically mentioned HYPO Real Estate, which has lost 93% in a year -- $7.3Billion. Brinker said that the German government has taken it's "first step to nationalization" by taking an 8.7% stake in the company. [link to story]

A woman called who said she had over $2million with an insurance company, which was most of her net worth. Brinker urgently reminded her that she was at risk because of lack of diversification.

A caller told Brinker that using natural gas in vehicles was impractical and that the storage was the problem. Brinker said that was not true and told him that there is a Honda Civic that uses natural gas and will go about 200 miles on the freeway and gets about 34 MPG.

A woman, who said she was a rather recent widow, asked if she should pay off her 30-year $170,000 loan (5.25% interest). She has enough money invested at money market rates to pay the loan.

Brinker told the caller that it was a matter of liquidity. In other words, if she paid off the loan, she would not have any liquid assets. He said that he came down on the side of having the liquidity, rather than being "penniless." Brinker suggested that she could move her money into Ginnie Maes to help close the gap between what she earns and what she is paying in interest. (Brinker recommends the Vanguard GNMA Fund VFIIX.)

Caller Thomas, who said he was in a high tax bracket, asked Brinker to explain why he had said that converting a traditional IRA to a Roth Ira was not a good idea unless you are in a low bracket.

Brinker said:
"The whole idea here is that as a general rule, we're not looking for opportunities to pre-pay taxes. And what you are doing in the situation.......especially in high bracket, in any bracket....what you are doing is you're prepaying your taxes. Like take the top bracket -- you are living in the Garden State......when you take a look at the Federal and the State top brackets in New Jersey, you are in the 40's.....Take a 40% slice out of your IRA account and see how that feels. All of a sudden $50,000 becomes $30,000 overnight when you pay the tax......When you are in a zero or very low tax bracket, at least the hit is small."

Thomas asked: "But then doesn't the Roth IRA then grow tax-deferred and then I don't have to pay taxes on it at all when I withdraw?"

Brinker said:
"Yeah, that's right. So you have an easy question to answer. How much money do you have in this account?"

Thomas answered:
"Let's say $20,000."

Brinker said:
"So would you rather have $20,000 to invest all the way out to retirement and then deal with the taxes as you take withdrawals on an annual basis. Or would you rather see that $20,000 turn in overnight to, let's say $12,000? Wow, I tell you, that's murderous hitting the top bracket........Look this is your decision. I tell you what I would do. Obviously, it's totally your money, but if it were my money, I would not do a conversion in that tax bracket. I would rather invest the entire amount tax and then go out to retirement and then take annual withdrawals at that point."

Some Brinker quotes:

* "Government gone wild....they are throwing money like confetti."
* "The president has his head in the sand." [regarding natural gas in vehicles]

Brinker's guest-speaker on Saturday was Robert F. Bruner: "The Panic of 1907: Lessons Learned from the Market's Perfect Storm" The Robert Bruner interview is now available for free download in the Saturday 3-4 hour at the KGO link below.


In my opinion, there was not much that I heard on Moneytalk today that was new or interesting enough to report on it. There was no stock market talk. There was more complaining about the previous administration's Medicare drug plan -- more talk about TIPS, GNMAs, budget deficit, IRAs, and "balanced portfolios are good for retirees."

Brinker repeated what he said last week about the Fed needing to remove liquidity to avoid inflation when the economy turns. Today, he said if that doesn't happen, it's "KATY BAR THE DOOR."
Here is what Brinker said last week:

Caller three also asked Brinker about "scary inflation." Brinker told the caller that first you would need an economic recovery and he "doesn't see that right now." He added that year-over-year inflation right now is 0.2 -- because of the economy. Brinker said: "But if you were to have an economic recovery and if the Federal Reserve failed to withdraw the excess liquidity that they are providing in an orderly fashion -- if those two things happened, then inflation would be inevitable."

It seemed like most of the calls today dealt with personal and very esoteric subjects. Brinker is very accommodating to those "special" situations that his callers ask him about concerning what to do with their IRA's and re-financing their loans. He seems to always allows them all the time they want on the air.

At one point, Brinker was talking about Secretary of State Hilary Clinton and rather than call her by name, he referred to her as "Evita." In light of Brinker's immensely respectful attitude, and his total lack of pejorative nicknames for Obama, I found that VERY OFFENSIVE.

Brinker's Sunday guest-speaker was Steven Axilrod: "Inside the Fed: Moneytary Policy and its Management, Martin Through Greenspan to Bernanke." [LINK]

Perhaps Bob Brinker is not aware of the true reason for the toxic asset catastrophe and Fannie Mae/Freddie Mac's downfall. There were some who tried to prevent it from happening but were thwarted by the very people now in charge of fixing it.

Caller Jerry said to Steven Axilrod:
"You mentioned Barney Frank. Wasn't he the one with Maxine Waters that said that Fannie Mae and Freddie Mac was in very good shape and there was no concern with any kind of problem with them."

Brinker replied:
"IF he said it, it sure didn't hold up."

Honeybee: No "ifs" about it, Mr. Brinker. Perhaps it would be very helpful in disseminating information on your program, if you take a look at this absolute proof of what actually caused this financial "catastrophe":

Maxine Waters/Barney Frank blocking Republican requests to fix Fannie Mae: Youtube video [LINK]

Steven Axilrod's interview is now available at KGO. Click on the Sunday page and download the 3-4pm hour.
No need to pay to have downloaded copies of Bob Brinker's Moneytalk programs. They are archived for FREE downloading at KGO810 radio for a full 7 days after broadcast! Download and save them and listen whenever you like. [Saturday's program is available now: Download hours 1-4pm] Moneytalk: Download it for FREE at KGO810 (link)

Friday, March 27, 2009

Bob Brinker's Hulbert Financial Digest Performance Ranking

Posted March 27, 2009: Bob Brinker's Land of Critical Mass Marketimer is nowhere to be found in the March 2009 issue of Hulbert Financial Digest performance rankings. It has dropped off the "Top 5 Performers" in all time-frames and in all categories -- including Hulbert's rankings exclusively for mutual fund newsletters.

Peter Brimelow and Mark Hulbert have not included Bob Brinker's newsletter in their columns for some time now. I think the reason is rather apparent. It would look foolish for them to write that Brinker has turned bullish because Brinker has never said he was bearish during this mega-bear -- and he never raised cash.

Brinker did just the opposite. While maintaining fully invested portfolios, he continued to recommend investing all new money throughout the market decline in 2008 and 2009. He advised either dollar-cost averaging or investing lump sums at various levels.

Yesterday on Marketwatch, Peter Brimelow wrote about two "top performer newsletters" which have turned bullish. Of course, Bob Brinker's Marketimer was not one of them.

Ironically, in the March 5, 2009, Marketimer, Brinker did not recommend dollar-cost-averaging and he did not mention his latest "low-to-mid 800's" lump-sum buy level. Instead, Brinker said he was looking for a "sequence of events" to "set the stage" for a sustainable market advance, consisting of: "(a) the establishment of an initial closing low; (b) a short-term rally; (c) a test of the area of the initial closing low on reduced selling pressure." In other words, Brinker said he was looking for a NEW MARKET BOTTOM.

It has been three weeks since the last issue of Marketimer was published. The stock market has had 3 straight weeks of gains. The Dow is up about 17%, and the S&P 500 Index is up about 21%.

For many years, Brinker considered anything over 20% a major market move. Perhaps this weekend, we will hear what Brinker has to say (if anything) about this major rally off the lows.

Almost unbelievably, March 22nd on Moneytalk, Brinker described a 13.6% gain in the market as "fairly close." He said to a caller: ".....I mean, the market is actually fairly close to its closing low right now. The closing low on the S&P is 676. We’re looking at a market right now trading in the 768 area."

Kirk Lindstrom wrote these comments:

"What is 92 points between friends? Well:

92 / 676 x 100% = 13.6%!

If you got a 13.6% raise, would you call that "fairly close" to the same salary? That is why I think Brinker is such an entertainer..."

Today, Friday March 27th, the S&P closed at 816 -- up another 6.2% for this week. That brings the total for the past 13 trading sessions over 20% and equals an 11% gain for the month -- so far.

Steve T. sent this picture with some comments about how he took it. Steve said: "
It is an original I took last spring near Yellowstone. It was very rewarding since I saw a herd of bachelors and set up my camera & tripod and waited for them to graze my direction giving me the opportunity to observe behaviors. This photo is of the dominate Ram in the bunch. He paid me a very big compliment when he felt at ease enough to lay down and pose for this photo."

Dixiegeezer sent this rather amazing picture:

Tuesday, March 24, 2009

What did Brinker say six years ago when the S&P closed at 807, like it did today?

Posted March 24, 2009: First, what is Bob Brinker's latest advice?

Let's take a closer look at what Bob Brinker said to a caller about the stock market on Sunday -- the only time Brinker discussed the stock market this past weekend:

Caller Jim said: “I’m 46. I saw that the market was going up in 2006 and it wasn’t correcting. So I moved everything into fixed funds, guaranteed stuff. Is it time for me to get back into the stock market with my allocation?”
[Honeybee EC: This subscriber acted on his own. Brinker has not recommended moving ANY money out of stocks since Year-2000. It would have shown great honesty if Brinker would have told this caller his usual, "that was not my recommendation," but as you will see, he did not do that. Another noteworthy point, Brinker said that the "secular bear megatrend" ended in June 2006. However, he didn't make that pronouncement until June 2007.]

Brinker answered:
“Well, Jim, I think the first thing you have to ask yourself is what is your tolerance for risk. I mean do you have the tolerance for the volatility that occurs in the stock market?" [Honeybee EC: Whew, is Brinker right on this one. Following his recommendations to stay fully invested from S&P 1565 down to S&P 676 takes some high-powered risk tolerance.]

Jim said: “I probably don’t personality-wise, but I’m thinking this is a buying opportunity.”

Brinker said:
“Well, I think what you should do is you should definitely, if you feel as though you have room in your risk tolerance to have a portion of your portfolio in the equity market, then I certainly would get started on that. And you can certainly put money to work in here...."[Honeybee EC: Brinker's most recent new-money-in buy signal was at the low-to-mid 800's, but he said nothing as the market dropped through the 700's and into the mid-600's -- the intraday low was 666.]

Brinker continued: ".....I mean, the market is actually fairly close to its closing low right now. The closing low on the S&P is 676. We’re looking at a market right now trading in the 768 area. You’re looking at a market that has lost half of its value relative to where it was less than two years ago. So I mean in the broad context of accumulating an equity position, I certainly would not have a problem with that for you -- if you, again, if you feel you have the tolerance for risk to do so and that would be the key.”

Ironically, the S&P closed at 806.24 today -- EXACTLY where it was six years ago when Brinker returned all cash reserves to fully invested and said this:

April 5, 2003 Marketimer, Bob Brinker said: "On March 11 [2003], the Marketimer stock market timing model returned to bullish territory for the first time since January of Year 2000. In our view, on March 11 (DJIA 7568; S&P 500 Index 807), the market reached the vicinity of a major cyclical bear market bottom....."

For those who come into new money, here are Brinker's recommendations during this mega-bear market:

S&P 500 Index:

Mid-1400's -- Bob Brinker says buy.
Mid-1300's -- Bob Brinker says buy.
Mid-1200's -- Bob Brinker says buy.
Low-to-mid 800's -- Bob Brinker says buy.
All through the 700's -- Bob Brinker does not say buy.
Mid-600's -- Bob Brinker does not say buy.

The S&P has climbed over 23% since its low of 676 and is now back in the low-800's -- back up to Brinker's last buy zone. Better hurry. 8~)

Brinker's followers don't have to worry about Brinker's market-timing. For his model portfolios, he joined the "church of buy-and-hold" in 2003. LOL!

Chart courtesy of Kirk Lindstrom [LINK]:

Dixiegeezer sent this picture of a beautiful white robin. I have never seen one. I'm sure they are rare:


Saturday, March 21, 2009

Summary: Bob Brinker's Moneytalk March 21, 2009

Bob Brinker's Moneytalk: Excerpts, Summary and Commentary, March 21, 2009.

[Sunday March 22nd update added below]

Bob Brinker did not mention the stock market on Moneytalk today. And there were no callers who mentioned it or asked any questions about it.

For the week: The Dow closed up 0.8% at 7278.38; the Nasdaq closed up 1.8% at 1457.27; the S&P 500 Index up 1.6% closed at 768.54. Oil was up about 10% for the week, closing at $58.62.

In his opening monologue, Brinker talked about the National debt and deficit spending. Here is a [LINK] to a National Debt Clock.

Brinker comments paraphrased:
There is a tsunami of dollars being created in Washington these days. The government printing presses are working 24/7 in order to meet the Federal Reserve requirements as they "flood the system with greenbacks.".....

.....The national debt is a bit over $11Trillion -- that's up $1.65Trillion over the past year -- or over $100Billion monthly. It's not likely to end soon "with this recession in full swing." The current accumulated deficit in the history of this republic is $11Trillion, so if you add another $9Trillion over the next decade, you're looking at $20Trillion. If you paid 5% interest on $20Trillion, that would be $1Trillion interest per year. Politically speaking, Brinker blames "both sides of the aisle" equally, and "neither side has an ounce of credibility on the issue of fiscal responsibility."

Brinker said that in the soon-to-be-released rescue plan "Uncle Sam will purchase up to a $Trillion in troubled mortgages and other assets from banking institutions and other financial companies. The idea here is to remove toxic assets from the balance sheet and free up that money to go back into the lending system which is what has really been hurt......has hurt this economy and it's pretty much still in place."

CORRUPTION IN ILLINOIS: Caller one, who lives in Cook County Illinois, said he is worried that the state income tax might be raised. Brinker told the caller that his concerns were well-founded and reminded him that there has been a "good amount of corruption" in Illinois over the years......and that the citizens "will eventually pay the price" by face rising taxes. "Just to keep up with the burgeoning cost of retirement and health-care benefits that have been promised to the work force in Illinois at many levels."

NCUA FOR CREDIT UNIONS: Caller two asked Brinker about the safety of credit unions. Brinker told the caller that his call was very notable because he had heard just last night that two credit unions had been siezed by Federal authorities. (U.S. Central Corporate Federal Credit Union and Western Corporate Federal Credit Union and have a total $57 billion in assets.) Brinker told the caller to be certain that his credit union was covered by NCUA [LINK]

GM AND CHRYSLER: Caller three asked Brinker if he thought GM and Chrysler would go bankrupt. Brinker said that he considers them both "....wards of the state, or wards of the republic, if you wish......" and would "not be functioning today were it not for the fact that $billions have been handed over into their coffers to keep them in business.....This also applies to the auto parts companies."

[Honeybee EC: This was the second time today that Brinker emphatically called the U.S. a "republic." I suspect "someone" read my February 21st Summary where I corrected him for mistakenly saying the United States is a democracy. LOL!] [LINK]

INFLATION AND ECONOMY: Caller three also asked Brinker about "scary inflation." Brinker told the caller that first you would need an economic recovery and he "doesn't see that right now." He added that year-over-year inflation right now is 0.2 -- because of the economy. Brinker said: "But if you were to have an economic recovery and if the Federal Reserve failed to withdraw the excess liquidity that they are providing in an orderly fashion -- if those two things happened, then inflation would be inevitable."

Brinker said that he sees no reason to put annuities in tax-sheltered accounts. In general, Brinker is not for annuities, but for those who want to buy them, he recommends Vanguard Group.

Brinker commented that there were only two small banks that closed this week. He said that it is good they are small because that means the FDIC did not take much of a hit to its coffers. So far this year, there have been 20 bank closings. Brinker said that is really not very many, especially "when you look back to the 1930's, not many at all."

Brinker said that the FDIC had reserves of about $19Billion as of the end of 2008 -- and that Sheila Bair is trying to get more money into the FDIC safety net by raising bank fees and increased borrowing power for the Fed.

Brinker said that they are now actively considering making the temporary deposit insurance increase permanent at $250,000.

Brinker said that an exemption has been granted for 2009 -- none are required.

Caller Robert said:
"I was just Googling the company that owns Chrysler Corporation and the curious part was that Dan Quayle is the Chairman of the Board, and I thought that was really curious."

Bob Brinker said:
"Well, sometimes these private equity firms will go out and they'll write a contract for a famous person. In other words, they buy celebrity. Dan Quayle is a celebrity."

Robert said: "Well he's Chairman of the Board, wouldn't that make him more than just a celebrity?"

Brinker said: "No, I think he's a celebrity because he was the vice-president of the United States. He's a very popular guy. No, I would gauge him as a celebrity. Now I don't know what his role is. But Chairman of the Board? Look I'm not commenting on Dan Quayle, but Chairman of the Board of a company like that, it could be a celebrity appointment. I mean, it's possible. It opens a lot of doors. Well, if he is responsible, or has been responsible, for the management of that particular company -- I'm not talking about Chrysler --I'm talking about the capital management. If he has been responsible for the big decisions there, then perhaps he could explain why they paid as much money as they did for the Chrysler Corporation which has now gone to the government hat-in-hand."

Jeffchristie's said: "Now let me see if I understand what you are saying Robert. You seem to be claiming that Dan Quayle is Chairman of the Board of Cerberus which is the parent company of Chrysler. Well I am sorry but that isn't the case. Dan Quayle is chairman of one of Cerberus's overseas subsidiaries. The Chairman of the Board of Cerberus is someone who Brinker has praised several times right here on Moneytalk. I am referring to former Treasury Secretary John W. Snow. Brinker hasn't spoken favorably about many people but I believe he did so when Mr. Snow was at Treasury." Originally posted here [LINK]

March 22, 2009 8:00 AM

Brinker said: "You understand there is an irony in here. I really haven't heard much about this in the financial media. Sometimes I wonder whether the financial media pays any attention at all to what is going on. Sometimes I genuinely wonder that. And the reason I say that is there has been very little talk in the financial media this week about the irony of all ironies in Washington. Which is the Federal Reserve has gone out and said that they are going to purchase in the open market, Treasury Securities, while at the very same time in the very same city of Washington D.C., the Treasury is out there selling more Treasuries than the Fed is going to purchase......I mean if the Treasury is out there trying to fund a multi-trillion dollar deficit by printing money and bolstering the supply of Treasuries out there in order to raise money, in order to pay off the annual red ink for all of the stuff they are trying to do, some of which has nothing to do with an economic recovery -- which is very annoying -- but when the Treasury is out there raising all that money selling paper and the Fed jumps up and says, hey we'll buy some. Hey, it's one country."

The caller asked Brinker if that was just "straight printing of money."

Brinker said: "It has the same effect. It certainly is a debasement of the dollar when they flood the world with greenbacks.....Whether that shows up right in foreign exchange trading has to do with what people think of other currencies......Global currencies are a train wreck."

TAKING MONEY OUT OF HOUSE FOR INVESTING: Brinker thinks it's "totally irresponsible."

A caller asking about the historical highs and lows of the fund said: "Going back into the very high interest period, like in the 1980's......What was the range on that?"

Brinker said:
"Well it depends on what history you're looking at. If you go back to the late 1980's, when we had the double-digit inflation and the whole nine yards, you had a very short-term dip there down around the 9 areas, in the general area of 9 for a very short period of time. Now if you go back to, now remember, that was double-digit interest rates. I mean, I don't know how the government would be able to afford right now to pay double-digit interest rates on this massive debt. We didn't have much debt back then compared to now. We have $11Trillion now and it's going to $20Trillion according to the Congressional Budget Office in the next 10 years........Now back to the history of the fund, go all the way back to 1990, you'll see 9.50 - 10.50 approximately -- call it 9 1/2 to 10 1/2. Right now, you're at $10.67, so you definitely have the possibility that you could see this thing stay in that range, but I don't see it has to go below $9.50."
Honeybee EC: Jeffchristie has posted proof that Brinker is mistaken about the "late 1980's" being a time of "double-digit inflation." Read his comments here [LINK]
The caller followed up with a question about AAA rating. He asked if it had the same veracity it used to have years ago.

Brinker said: "No, it doesn't, but it does for government guaranteed, and that is a government guaranteed AAA Ginnie Mae......We are talking about a mortgage guarantee from the United States government. It's absolute. It's a government guaranteed and that is legitimate AAA rating."

Brinker's Saturday guest-speaker was William D. Cohan: "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street." [LINK]

[Honeybee EC:
Brinker bills himself as "America's most trusted financial advisor" on a national radio program titled "Moneytalk." Yet for the most part, during this whole Mega-Bear Market, he has offered almost no commentary about it -- and very seldom does a caller get on the air to ask questions about it. That seems rather shabby to me, but in a way, I understand. His market-timing has been so wrong for so long, and he has been so reluctant to admit it, that I can see why it would very difficult for him to suddenly become candid now and still hope to inspire "trust" as a "financial advisor." Most people, including myself, certainly understand being "wrong," but we hate it like the dickens when it is covered up.]

Sunday on Moneytalk

Most of the program was a continuation of the same subjects from yesterday. Brinker made a few comments that may be of interest:
* Brinker does not recommend converting traditional IRAs to Roth IRAs if you are over the 15% tax bracket.

* Brinker said the problem with the legislation that congress is working on is that it is not a good thing for companies to be penalized for paying bonuses for outstanding work coming out of people who are helping them get out of this mess.

* In Brinker's view, California Municipal General Obligation Bonds are safe because the Federal Government would not let the State of California go bankrupt.

* Consumer's Report has done a good job on their report card for cars. [LINK]

* When the government/Federal Reserve refused to bail out Lehman Brothers, the market started going down.

Honeybee EC: Evidently, Brinker is not aware of Ben Bernanke's speech at the time, where he explained that there were no choices made to let Lehman fail. There were no other options available. Read about it in this WSJ article. [LINK].....

....And as for the stock market going down AFTER Lehman Brothers failed, Brinker must be aware that they filed Chapter 11 on September 15, 2008. At that time, the S&P was at 1192, already down from its October 9, 2007 high of 1565 -- well INTO BEAR TERRITORY!

STOCK MARKET CALL: [EC: Considering my commentary yesterday, this call seems downright "notable." LOL!]

Caller Jim said: “I’m 46. I saw that the market was going up in 2006 and it wasn’t correcting. So I moved everything into fixed funds, guaranteed stuff. Is it time for me to get back into the stock market with my allocation?”

Brinker said: “Well, Jim, I think the first thing you have to ask yourself is what is your tolerance for risk. I mean do you have the tolerance for the volatility that occurs in the stock market?"

Jim said: “I probably don’t personality-wise, but I’m thinking this is a buying opportunity.”

Brinker said: “Well, I think what you should do is you should definitely, if you feel as though you have room in your risk tolerance to have a portion of your portfolio in the equity market, then I certainly would get started on that. And you can certainly put money to work in here. I mean, the market is actually fairly close to its closing low right now. The closing low on the S&P is 676. We’re looking at a market right now trading in the 768 area. You’re looking at a market that has lost half of its value relative to where it was less than two years ago. So I mean in the broad context of accumulating an equity position, I certainly would not have a problem with that for you -- if you, again, if you feel you have the tolerance for risk to do so and that would be the key.”

Brinker's Sunday guest-speaker was Peter Marber: "Seeing the Elephant: Understanding Globalization From Trunk to Tail"

No need to pay to have downloaded copies of Bob Brinker's Moneytalk programs. They are archived for FREE downloading at KGO810 radio for a full 7 days after broadcast! Download and save them and listen whenever you like. [Saturday/Sunday 1-4pm] Moneytalk: Download it for FREE at KGO810 (link)

I took these pictures this afternoon. The feeder hangs on my covered patio. Our hummingbirds come to visit even in the rain. Sometimes there are three eating at the same time and others scolding in the trees:


Friday, March 20, 2009

Bob Brinker's Two March Stock Market Forecasts

In March 2008, Bob Brinker predicted that the stock market was in a bottoming process, and (for new money) he recommended S&P 500 Index low 1300's as "attractive for purchase." [Brinker's model portfolios have remained fully invested since March 2003.]

In the March 2008 Marketimer, Page 3; Paragraph 3; Bob Brinker said: "This gives the S&P 500 Index the potential to trade into the 1600's range as we move closer to the time when investors will discount the 2009 earnings recovery."

Over the remainder of 2008, Brinker declared several market bottoms and "attractive for purchase" all-in buy-levels. Brinker ended 2008 still fully invested, and looking for ANOTHER new market bottom.

In January and February 2009, Brinker seemed quite sure that the market was bottoming in the 750 to 850 range, and he declared the low-to-mid 800's "attractive for purchase."

The S&P 500 bottomed out (as of now) on March 9th at 677....

As of March 5, 2009, Bob Brinker once again said he was looking for a new stock market bottom and was waiting for a "sequence of events" to take place. Without officially saying so in his March newsletter, he simply dropped the low-to-mid 800's buy-level and for the first time in years, did not recommend dollar-cost-averaging.

However please note that last Saturday, Brinker told a 32 year-old caller that "at his age," he had no problem with dollar-cost-averaging into the Total Stock Market Index -- Brinker recommends the Vanguard Fund. [Read what Brinker said to the caller in my Summary at this LINK.]

Now what has the market done over the past couple of weeks?

The stock market has had a sizable rally-- up 6 out of the last 9 sessions. And in spite of Friday's decline, the Dow, S&P and Nasdaq indexes were all up for the week -- they had their best 2-week gains since 1974. As usual over the past few months, oil traded in tandem with the stock market -- it closed up about 10% this week.

Thanks to Kirk Lindstrom for this chart [LINK]:

Dixiegeezer sent these beautiful pictures that he took near Mt. Rainier:


Tuesday, March 17, 2009

Will Bob Brinker Ever Again Get a Handle on the Stock Market?

Over this past weekend, Bob Brinker told a 32 year-old caller on Moneytalk that dollar-cost-averaging 100% of his investment money into the stock market is a "fine policy." However, in the March 5th issue of Marketimer, for the first time in years, Brinker did not recommend dollar-cost-averaging.

Basically it looks to me like "all bets are off" for now with Brinker's market-timing forecasts. Due to the fact that the November lows did not hold -- like he was convinced they would, he's returned to looking for a new market bottoming process.

Brinker said that a sequence of events will need to happen before a new bottom will be established, including an initial closing low, a short-term rally, then a test in the area of the initial closing low on reduced selling pressure.

So what has the S&P 500 Index done since Brinker said he was looking for another new bottom and removed his latest all-new-money-in buy-level (low-to-mid-800's)?



[Thursday: S&P dropped 10 points to 784.]

Dixiegeezer sent this beautiful picture of manatees swimming -- nope, not rocks.


Sunday, March 15, 2009

For Those Who Want Bob Brinker Taken Off the Air

For those who have asked for information about writing letters of complaint about Bob Brinker, this post may be helpful.

These letters were sent to me via email. To protect the author, I will not use his real name. I will call him JFHAAA. JFHAAA wrote all of the following. No further comment is needed, because he said it all!

JFHAAA Letter One:

"Hi Honeybee-
I am a long time lurker, and this is my first contact after several years of enjoying your website.

I am also unfortunately a former long-time Brinker subscriber (over 10 years), recently cancelled, who should have known better. I did start having serious misgiving about Brinker in 2007, especially when he unilaterally declared that the "Secular Bear Megatrend" that he had been yammering about for years had ended, one year previously. I remember thinking: "An honest, serious person doesn't pull something like this" That certainly wasn't the only jarring note from Brinker in recent years, but it was the one that finally convinced me (along with comments on this board) to be very, very leery of this man.

Still, I can't quite explain why I renewed my subscription in 2008, even though by then I was no longer following his "attractive for purchase" recommendations. Still, the damage has been done, and I have lost several hundred thousand dollars waiting for a sell signal that never came.

This is clearly a perceptive group of quality people at this forum, and I am sure it causes the Brinker clan some degree of discomfort, but my aim is to cause him and junior more than mere discomfort. After all, his wretched, indifferent, self-serving "guidance" has caused many people to lose many millions of dollars. Since he doesn't have the courage or integrity to address these people on the air, I believe the best way to hurt him is get him taken off that air, at least in "KGO Country," where I used to listen to his infomercial on a fairly regular basis.

To that end, I wrote Brinker a letter declining his offer of renewal, and also copied the President and General Manager of KGO, Mickey Luckoff. I think you and your readers might find it interesting reading, but since it is three pages long I thought I should ask permission before sending it. In any case, I appreciate your work here. If nothing else, I can keep tabs on that snake oil salesman without having to waste my time actually listening to him. I can let you do it! Sometimes, after a particularly eventful week in the stock market, it is amusing to see what lengths he will go to avoid the obvious elephant in the room. Thanks for your good work!"

JFHAAA Letter Two:

"When I sent this letter off last week I really didn’t hope to accomplish much other than personal catharsis, but I am wondering now if I might have also inadvertently tapped into a sweet spot in the zeitgeist. I figure my letter arrived on Mickey Luckoff’s desk at about the same time as Jon Stewart’s glorious smackdown of the laughable CNBC network. I am probably deluding myself that Luckoff will even read the thing, but is it possible that the palpable and growing anger of ordinary investors, combined with declining ratings (I hope), might contribute to getting Brinker and others like him yanked of the air? I suppose we shall see “In the fullness of time.”

Like Stewart and many others, I am sick and tired of these financial “experts” who make pronouncements one day and than ignore or disavow them the next. No one is perfect and I can deal with mistakes, what has become unacceptable is the complete lack of memory or accountability in these prognosticators. The ability to forget your miscues may be a valuable trait in a defensive back who has just been burned for a touchdown, but it sure stinks in a financial “expert.” Brinker is not the only one guilty of obscuring and evading his record, but he strikes me as the one of the worst and most blatant offenders in this area.

Anyway here is the Marketimer cancellation letter that I sent last week with a copy to Mickey Luckoff at KGO:

Bob Brinker’s Marketimer
10789 Bradford Road # 210
Littleton, CO 80127

Mr. Brinker:

Re your Markettimer renewal request: Surely you must be joking?

You promote yourself on your radio program as a “Marketimer” and yet it would be hard to imagine a worse market timing record.

You totally, utterly failed to call the current bear market, and mocked those that did on your radio program. In addition to not being forthright and courageous enough to face up to your (many) mistakes, either on the air or in your newsletter, you obstinately manage to ignore altogether the obvious, glaring disaster that is the stock market and your so-called “Market Timing Model.” This is unacceptable.

I am planning to copy the head of KGO radio with this letter, so just in case he is not familiar with your wretched track record, here are just the “high” points from the last twelve months:

Jan 2008 S&P 500 in the 1460’s
You begin the year predicting in Bob Brinker’s Marketimer Newsletter new highs for the S&P 500 into the 1600’s range. The market is falling rapidly. Jan 20 you issue a bulletin to paying subscribers retracting your mid-1400’s BUY recommendation.

Feb 2008 S&P 1378
You reiterate that you do NOT believe a bear market is underway, and predict again that the S&P will work its way into record new high ground by late this year (2008) or in 2009, and that the S&P is ATTRACTIVE FOR PURCHASE in the low 1300’s or lower. (emphasis mine)

March 2008 S&P 1330
You express confidence that a stock market BOTTOM (emphasis mine) is in place and has unfolded in “text-book fashion.” Again, the S&P is at 1330.

April 2008 S&P 1323
On the air you take a swipe at those who say we are in a bear market, but strangely there are no callers with contrary viewpoints. Or are they just screened out?

May 2008 S&P 1386
With the S&P at 1400, you clearly feel safe in your position so you really go off on the “Bear Market Cassandra’s”. “They blew it!” Of course you have not had the courage to revisit those sentiments since then, and anyone who would care to challenge you is clearly not allowed on the public airwaves.

June, July, August 2008 S&P 1400-1267
Still bullish, still fully invested. From August 08 Marketimer “If you have any new money, inheritance, retirement, lotto winnings or house-sale proceeds that you want to invest in equities, any weakness below the S&P 500 Index of 1240 is an ATTRACTIVE PURCHASE LEVEL.” (emphasis mine). As of this writing, the S&P is 43% BELOW this buy recommendation.

In July with oil trading in the $140.00 a barrel range, you begin attributing stock market declines to increasing oil prices, both on the air and in the Marketimer. Indeed you devote entire tedious shows to this false and simple-minded theme. Naturally, since you have become such a reliable contrary indicator, oil and stock prices begin moving in the same direction: DOWN!

Of course since you are Bob Brinker, once this theory blows up in your face you drop it, never to mention it again. But then this is your craven pattern, isn’t it? (see “Secular Bear Megatrend,” the disastrous QQQ call of 2000, and some others I could mention)

September S&P 1283
You issue a bulletin that advises nothing more than “dollar cost averaging” This is an obvious and dishonest marketing ploy to lure back former subscribers who were smart enough to drop you. I hope it failed.

Oct 12, 2008 S&P 1165
On the air, and obviously under pressure from somewhere, you make a mild and extremely unsatisfactory mea culpa without ever apologizing for your disastrous performance and without taking follow up calls on the subject. NOT GOOD ENOUGH!

Dec 2008 S & P 890’s- 800’s
I won’t even attempt to summarize your baffling and inexplicable prattle about “Treasury backed California general obligation bonds,” followed two weeks later by a complete flip-flop, and then silence.

As for the stock market, you are once again anticipating a “bottoming process;” this time in the 750-850 range. Jan-Feb 2009 newsletters suggest adding to positions when the S&P is in the low to mid 800’s


· Since your subscribers rode this terrible bear market all the way down, how exactly are we supposed to “add to positions” now that thanks to you, our portfolios (and retirement plans) have been decimated?

· After calling bottoms at mid-1400, low 1300’s, 1240’s and now 750-850, who in their right mind cares what you think anymore? ABOUT ANYTHING??

· Even if you didn’t before, you now have to KNOW that your timing model doesn’t work. Why are you still selling it?

In conclusion,
Eventually I expect that even you will get one of these sad, pitiful bottom calls right and then you will casually imply on the air that you were on top of the market all the time and that your subscribers are prospering thanks to your great insights. I won’t be around anymore for that nonsense, but I don’t want this ploy to succeed in luring in a new crop of paying newsletter suckers either. You are very, very good at that game (if nothing else), but I won’t stand for it anymore.

That is why if you are on the air when a new FCC commission convenes, I intend to make my views known to them, as well as the Citadel Broadcasting Corporation. Hopefully with a new administration we will eventually have a commission that will be as receptive to the needs of ordinary tax paying citizens as they are to major media conglomerates.

You advertise yourself as a successful market timer, yet in 2008 the S&P declined over 40% in a vicious bear market that you never saw coming and have seldom even acknowledged, either on the air or in the newsletter that you have advertised on the public airwaves. You can’t possibly believe in it anymore (if you ever did) and yet you are still selling it knowing full well that it doesn’t work. This makes you nothing more than a snake-oil salesman. (And taking a temporary hiatus from promoting your stupid newsletter on the air does not absolve you from past sins, nor will make it acceptable to promote it in the future.)

The fact that you are wrong (and wrong, and wrong, and wrong…) would be bad enough, but what is unacceptable is that you never admit it, obscure the truth, don’t allow contrary viewpoints, and do all of this is on the public airwaves. Enough is enough Brinker; you are a menace and need to be dismissed, and soon.

Sincerely, XXXXXX

PS- Actually, there is one useful service you could perform before you go away: Would you mind capitulating out of the market like you did way back in 1988 after the ’87 crash? It wouldn’t make up for your sins, but it would at least guarantee a market bottom.

cc Mickey Luckoff, President and General Manager, KGO, KSFO

Well, that was my letter, and I am certainly not asking for or expecting any support, but if anyone wants to write to Brinker’s enablers at KGO, the address is:

KGO 810
900 Front Street, 16th Floor
San Francisco, CA 94111

Citadel owns KGO (and KSFO) as well as many other stations. The holding company is located in Las Vegas:

Citadel Broadcasting Corp.
7201 West Lake Mead Blvd.
Suite 400
Las Vegas, NV 89121

Citadel Broadcasting Corp.
142 W 57th Street
New York, NY 10019

The Chairman and CEO of Citadel is Farid Suleman

(In the interest of full disclosure, I have not contacted Citadel yet myself. I am waiting to see if I at least receive some sort of pro-forma response from KGO.)"

Bob sent this beautiful picture taken in Palouse Park in eastern Washington:


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