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Sunday, June 27, 2010

June 27, 2010, Bob Brinker's Moneytalk: Summary, Excerpts and Commentary

Bob Brinker hosted Moneytalk today. Bob Brinker's Moneytalk has been canceled on Saturdays -- it is only broadcast on Sundays.

STOCK MARKET: Brinker recited the closing stock market numbers and pointed out that the S&P 500 Index is now 1077, just 11 1/2% below its April 23rd closing high.

June 6, 2010 Moneytalk, Bob Brinker said:
"Suffice to say this. I think that we're in a correction. I think that when all is said and done, it will amount to less than 20% on a closing basis from the 1217.....April 23rd high....So far, we're at 12 1/2%.....I've seen some things develop on the sentiment side that are definitely going in the right direction. There are some other things that I'd like to see fall in place and sometimes it takes some time for these things to fall in place.....We're in a dollar-cost-average mode at this juncture.....

......To answer your question very specifically, I think the market is driven by earnings. And I think corporate earnings are looking very, very good in 2010. And I think the outlook for 2011 is encouraging as we look forward.....I actually think when correction runs out of gas -- and I believe it will run out of gas, that we're going to see a market that is not only going back to the 1217 level of late April, but will rise above that level quite significantly, frankly. And I think those that go with that market are going to be happy campers....I can't join those who think it just gets worse and worse from here."

[Honey EC: Brinker's stock market roller-coaster ride rivals the Giant Dipper at the Santa Cruz Boardwalk. I Hope you have been buckled up for the last seven years that Brinker has had his followers and Model Portfolios fully invested for this ride. In my opinion, the ride will continue forever. I do not believe that Brinker will ever again issue a "sell signal" to raise cash. I have discussed the reasons why I think that, but would be happy to answer any questions about how I arrived at that conclusion.

However, Brinker has again begun to dangle that rubbery maybe-there-will-be-a-buy-signal carrot. No matter that it would be pointless if you are currently all-in and dollar-cost-averaging, as he advises -- unless you won a lottery or Aunt Tillie left you a bundle.
] 8)

* Here we go....All Aboard!
Bob Brinker returned 65% cash reserves (not counting what was already invested in his QQQQ trade of 2000-2001) to fully invested March, 2003, when the S&P 500 Index was at 811.

* Going up:
The S&P 500 Index all-time-high was 1565 on October 9, 2007.

* Going down: [Honey sez, Yeeeooowww! 8)]
The S&P 500 Index bear market low was 677 on March 9, 2009.

* Going up:
The S&P 500 Index cyclical bull market high was 1217 on April 23, 2010.

* Going down:
[So far] The S&P 500 Index maximum "cyclical bull market" correction number is 12 1/2% -- according to Bob Brinker.

According to the latest Hulbert Financial Digest, Bob Brinker is no longer one of the "Top 5 Performers" during the past 5, 10, or 15 years of all the newsletters that Mark Hulbert ranks.

While Bob Brinker steadfastly stays bullish, Mark Hulbert has written a Marketwatch article (July 10, 2009) saying that his top-performing adviser is now back in cash.

ANNANDALE, Va. (MarketWatch) -- Dan Sullivan has thrown in the towel on the stock market's four-month-old rally.

That's bad news, since Sullivan is not just any adviser.

His stock newsletter, entitled The Chartist, is in first place for stock market timing over the last three decades among those newsletters the Hulbert Financial Digest has tracked over this period. And though his mutual-fund newsletter -- The Chartist Mutual Fund Letter -- hasn't been published for all three of those decades, it also is one of the top performers over the years it has existed.

So the bull market has lost a formidable ally......" Read more

Last month, Brinker itemized what he believes are the "5 root causes of a bear market" and stated that there were none of them visible at the present time (these are all available in my May 22nd Summary) [LINK] and Brinker added this: "....So from my point of view, I think it's a correction. I don't think we are going into a bear market, defined as a decline of more than 20% of the S&P 500 Index. And I also believe that when the correction is over, we are going to see new recovery highs in the S&P 500 Index. That's what I think. I'm Bob Brinker."

INTEREST RATES: No changes....Fed indicated that interest rates will remain low for an "extended period of time."

MAY DEFICIT: $136Billion....Revenue (mostly tax income) of $147Billion collected in May. Outgo at $283Billion in May -- almost two dollars going out for every one coming in.

PRESIDENT IS EMBARRASSMENT TO THE UNITED STATES: Bob Brinker said: "Until someone in Washington takes the bull by the horns, or until the voters make enough changes in Washington to change the policy, we are stuck with this government......One good thing has happened on the global stage....There are some leaders out there who are out there right now talking about getting their budget deficits down in their particular countries.....

......Let me mention three of these to you.....One of them would be the Chancellor of Germany, Angela Merkel. I have a lot of respect for her, she's very much out front on this issue.....David Cameron, the new Prime Minister of Great Britain, very much out front on this issue. And third and not least, Nicholas Sarkozy, the President of France.....These are three European leaders out there going in the right directions.....

......At this G-20 Summit this weekend, our president is out there trying to tell these people to spend more money. It's ludicrous. It's an embarrassment! (caller interjected: "It's humiliating.") I think we have to give kudos to those three leaders for trying to get a hold on spending instead of going on this runaway freight train spending spree that the United States continues on as we speak.....I'm Bob Brinker. This is America's money program."

Brinker's guest speaker today was William Isaac:

This picture shows the exact opposite of TFB's careful gardening and wrapped apples. This tree is totally neglected -- no water, no pruning, no fertilizer. But it is so determined to live that it grows from many feet below my deck on the side of the hill and hangs over and produces fruit every year. If you look closely, you will see it is loaded with small green apples. The wild life usually enjoys them long before they are sweet enough for me. I took this picture this afternoon:


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