Bob Brinker recited the following statistics:
* Three-month T-bill yield at 0.16%.Bob Brinker continued: "And by the way, I mentioned the performance of the total stock market index and the S&P 500 Index, total stock market up 14 3/4, S&P up 13 -- that's total return. And happily our investment letter model portfolios are having a truly outstanding year. And that's good to see because everybody knows 2008 was a difficult year. So it's very, very gratifying to see 2009, at least through the first 33 weeks of the calendar year, turning out to be a very rewarding place to be. And of course, the key to making these profits is a fully invested position. And as you know, I've recommended a fully invested position throughout calendar year 2009 and as a result, we've been able to exploit what's been going on in the marketplace and it certainly has been a profitable year to date in the stock market......There is no reason for me to change the view as I stated in January, in my opinion, 2009 is going to be a significant, positive year for the stock market."
* Six-month T-bills yield at 0.25%.
* One-year Treasury = 0.4%
* Two-year Treasury = 1.05%
* Five-year = 2 1/2%
* Ten-year = 3.56%
* Thirty-year = 4.4%
* Ten- year TIPS = 1.82%
* Implied annual inflation rate = 1.74%
* Ten-year AAA General Obligation Bonds, Muncipal GO's, fully federal-backed = 3.3%
Mike from Kansas City, said he had money from the sale of a home that he wanted to invest in the stock market. Brinker told him: "I would dollar-cost-average. That would be my approach. Now if you go back to January, at the very same time that I stated that I thought that 2009 would be a significant, positive year for the stock market -- which I think was a very important thing to state coming off of a difficult 2008 -- I also said at that time, that I thought the market was attractive for outright purchase in the low-to-mid 800's of the S&P. We're over 1000 now. We're way higher than we were when that buy recommendation was issued."
Honey EC: SHARK ALERT! I'd like to parse some of what Bob Brinker said today and add some facts and perspective. Draw your own conclusions about Brinker's honesty and trustworthiness. What he said is in blue, my comments are in red:
Today, Brinker said: "....back in January when I stated that calendar 2009 is expected to be a significant, positive year for the stock market." Yes, he did say that, but he also said the same thing in January 2008: Marketimer (S&P at 1468.36) Bob Brinker said: "....conditions are favorable for the market as we enter 2008."
Today, Bob Brinker said: "I will admit to you that I was going out on a limb because there was so much pessimism back at the start of 2009 after that rough year in 2008." Yes, it was, but Brinker went out on that same limb many times during 2008 and it was sawed off each time!
For example, here is what Brinker said on Moneytalk in May 2008:
RECESSION CASSANDRAS.... Brinker said: “What we have right in here now is evidence that the Cassandras, who earlier this year, were telling us we were in recession – right now they’ve basically – well I’ll be kind, basically, they look like fools right now. Because all that they’ve accomplished with their talk about recession…………all that they have to show for their efforts is that they scared the people who listened to them out of the stock market this past winter……….”Of course, the "mid-March" rise that Brinker was talking about was in 2008 and the S&P was at 1400!! In mid-March of 2009, the S&P bottomed at 677!!
CORRECTION LOW AND TESTS.... Brinker said: “……..And probably a lot of those people got scared out near the correction lows....... The initial correction low in January, which was successfully tested in mid-March, before the market reversed and resumed its uptrend. And basically, if you were to total up all of the accomplishments of the Cassandras, that would be it – that they scared people out of the market during a stock market correction in the first quarter………..Because they have been unable to present any evidence of a recession."
LOST JOBS.... Brinker said: “And your questions to the Cassandras should be where are the millions of lost jobs that we would expect to see in a recession? In fact, in this economic slowdown, so far, we’ve only lost a few hundred thousand jobs total – dating back to the beginning of this year…………”
STOCK MARKET BEARS.... Brinker said: “So what we have here basically, is an example of false prophets and it’s sad. And the reason it’s sad is the damage done. Think of the people that are looking today at the market, S&P at 1400 and they’ve been scared out of the market in the first quarter by these bears………It’s just amazing and yet these people are out there, and these people are not happy, I’m sure, to find themselves out of a rising market since March. To find themselves looking for ever lower prices when in fact we’ve had the opposite."
We’ve had the market rising since mid-March. It’s rather significant when you stop to think about it. If you go back to mid-March and you take a look at the S&P 500 Index since mid-March, right now you have a total return, including cash dividends of about 10 1/2%...........................So it’s fair for you to say to the Cassandras, where is that recession, where are those millions of lost jobs, where are the two quarters of negative real GDP growth? Where’s the bear market? …………The answer is, they blew it! That is the answer, they blew it. They got caught up in their own negativity and they pronounced that it was all over, it was going to spiral downward and there was no end in sight – and they got it completely backwards.. Truly amazing to see, and sad to see the people that are harmed by such unjustified negativity.” [LINK]
Today, Brinker said: "...And happily our investment letter model portfolios are having a truly outstanding year. And that's good to see because everybody knows 2008 was a difficult year." Right, Mr. Brinker....how nice it is for your model portfolio followers to regain some of the monumental losses they incurred as they stayed fully invested for the 50%+ mega-bear market. I would call that VERY "difficult" and VERY "rough." Here are the performance numbers on Brinker's "investment letter model portfolios" for 2008 (you won't find these numbers on his website -- first time ever that he didn't publish his one-year numbers):
Model Portfolio I = down 39.7%(The losses off the October 2007 highs to the March 2009 lows are even more horrendous, but that's a subject for another day.) Even though he didn't post 2008 returns on his website, Brinker has now posted his "first half" portfolio numbers, so let's take a look at them and see how much the portfolios have gained back from 2008 losses:
Model Portfolio II = down 37.4%
Model Portfolio III = down 23.9%
First Half 2009 performance for all Model Portfolios:Today, Brinker said: "I also said at that time, that I thought the market was attractive for outright purchase in the low-to-mid 800's of the S&P. We're over 1000 now. We're way higher than we were when that buy recommendation was issued." Firstly, let me say that no matter how "attractive" a market may look, if one has all his/her money already invested (as Brinker has recommended since March 2003), it means absolutely nothing. And secondly, Brinker must have conveniently forgotten that even though the market is higher today than it was in January, it dropped about 25% AFTER HE MADE THAT CALL! He has always claimed that market declines over 20% constitute a bear market.
Portfolio I: + 9.0%
Portfolio II: + 9.2%
Portfolio III: + 6.5%% (balanced portfolio with 50% fixed-income position)
Also, Mr. Brinker must have forgotten all about his other five higher "new-money" recommendations that the market dropped through like a rock -- almost immediately! So, what about those shark-bitten people who lump-summed new money into the market on the recommendations that he didn't mention today? How much did they lose on these "off-the-books" calls? Here they are, the "buy recommendations" that Brinker issued before the "low-to-mid 800's" that he bragged about today:
January 4, 2008, S&P @ 1411: Mid-1400's
Feb 10, 2008 S&P @ 1331: Low-1300's
Aug 5, 2008 S&P @ 1285: 1240 or less
Sept 2, 2008 S&P @ 1282: Low-to-mid 1200's
September 16th -- rescinded low-to-mid 1200's (recommended dollar cost-average only)
January 2009 S&P @ 931: “ bear market bottom range of 750 to 850.
February 2009: “low-to-mid 800’s.
And after all of that, Brinker MISSED the real bear market bottom. Marketimer, March 5, 2009, S&P @ 696.33, Brinker issued no buy-level and did not recommend dollar-cost averaging. He said: “Due to the fact that the November 20, 2008 S&P 500 Index closing low failed to hold during the testing process, we believe a new bottoming process will be necessary for a sustainable market advance, we need to see a sequence of events 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."
Most all of the calls today were in regard to the health care changes that the democrats and Obama want to make -- mostly as it pertains to costs and cuts in Medicare and Medical. I'm not going to waste my time or yours reporting all of the different opinions. There was the usual Ginnie Mae and gold calls. Brinker recommends VFIIX and GLD.
Brinker's Saturday guest-speaker was Michelene Maynard, "The End of Detroit: How the Big Three Lost Their Grip on the American Car Market." (This was written in 2003 and is now in paperback.)
Honey's Market Reports:
* Dow closed at 9321.40, losing 0.5% for the week.
* Nasdaq Composite Index closed at 1985.52, a loss of 0.7% for the week.
* S&P 500 Index closed at 1004.09, losing 0.6% for the week.
* GLD closed Friday at $93.00.
Moneytalk programs are available free on "demand" at KGO810 radio for seven days after broadcast. You can download and save Bob Brinker's Moneytalk programs (owned by ABC) and listen at your leisure -- with no cost whatsoever. To download the programs to your MP3 player or flash drive, just choose the day, then right click on the hour that you want and use "Save Link as." KGO Moneytalk Archives [Link] If you want to call KGO and complain about or praise Bob Brinker's Moneytalk, here are the numbers: Comments line: 415-216-1052....Listener services: 415-216-1050. Here is the KGO email address -- cut-and-paste it into your email address window: firstname.lastname@example.org
I took this picture of some "Naked Ladies" as I was out for my morning hike:
Dixiegeezer sent this picture of a beautiful black swan: