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Monday, July 6, 2009

Bob Brinker's Current Stock and Bond Market Advice

Thursday: Marketwatch excerpt:

WASHINGTON (MarketWatch) -- First-time claims for state unemployment benefits fell in the latest weekly data, after seasonal adjustment, while continuing claims hit a record high, the Labor Department reported Thursday.

The number of initial claims in the week ending July 4 fell 52,000 to 565,000 - the lowest level since January - as the manufacturing layoffs, predominantly automotive, that had been expected have already occurred at some companies, according to the Labor Department. The department added that some seasonally expected layoffs may come later or not at all. Analysts expect several more weeks of volatility in the claims data due to layoff-timing issues.

Bob Brinker took the July 4th weekend as a holiday from Moneytalk and was replaced by Bill Flanagan. Here is a recap of Bob Brinker's most current advice...

Vanguard GNMA Fund [VFIIX]

Moneytalk, Bob Brinker said:
".....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." (Brinker told a caller that he would only buy the Vanguard Ginnie Mae Fund because it has the lowest expense ratio.)

California GO Bonds

Moneytalk, Bob Brinker said:
""There's no change in my view on California as I have expressed it recently. And that is, I would not have more than 1% in any one California issuer, including the state."

[Honeybee EC: Brinker did change his "view on California." This was Brinker's previous view, which he repeated on several programs:

Moneytalk, Bob Brinker said:
"I own California municipal bonds of general obligation of the state and I'm very happy with them. They've been very good to me. And of course they have been acting very nicely in the last couple of months especially they've started to act very nicely. And I think that people are beginning to realize that, hey, there's no rational way for state general obligations to default. They didn't default in any case in the great depression and they certainly haven't defaulted in this recession......I think when it comes to the State of California, I'm comfortable owning State of California bonds. I can't tell other people to do so because that's a decision they have to make for themselves, but I've made that decision for myself. In fact, I recently purchased additional general obligations of the State of California because I thought the yields were too high to pass up."

Gold [GLD]

Moneytalk, Bob Brinker said:
"I would say this, if you are looking at gold for any reason, my suggestion is that you try to keep your expenses really low. And outside of just buying the gold coins, which you can generally buy at a small premium over asset value. Aside from that.....the best vehicle I've seen out there is the Exchange Traded Fund, symbol GLD......very low expenses.....And basically you own gold bullion standing behind the shares

[Honeybee EC: Brinker added GLD to his Marketimer recommended "Individual Issues" list in May, 2009. However, he did not make any explanation as to why he now recommends gold for the first time ever. And he has not said what percentage he recommends. He recommends 4% maximum for "individual companies, but it's anyone's guess whether or not he views gold bullion as an individual company.]

Stock Market

Bob Brinker continues to be bullish on the market. Brinker recommended remaining fully invested throughout the 2008-2009 mega-bear market collapse. For new money, Brinker's latest advice is to "buy on weakness." He no longer defines a specific S&P level that he considers a market-bottom buy-level. Indeed, he gives no definition of "weakness."

In the June, 2009 Marketimer, he raised his S&P 500 Index prediction (and it remained the same in the July issue). Brinker said: "We expect the S&P 500 Index to make progress at least into the 1050 to 1150 range into next year."

Jeffchristie: Stock picking contest June results, including Brinker's two new picks. [LINK]

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