Search Bob Brinker Blogs

Sunday, October 10, 2010

October 10, 2010, Bob Brinker's Moneytalk: Summary, Excerpts and Commentary

October 10, 2010....Bob Brinker hosted Moneytalk "Land of Critical Mass" today....(No Jackie Gleason in the opening. LOL!)

At the beginning of the program, Bob Brinker excitedly announced that MONEYTALK is now being broadcast on Talk Radio KABC 790. Brinker said he was delighted to welcome KABC as his "southern California flagship station." ( If I recall correctly, Rob from southern California, said that Talk Radio KABC790 had dropped Moneytalk last year. Other stations also dropped it -- so did Sirius Satellite Radio.)

Update Oct 13, 2010: I learned today from a comment on
The Brinker Fan Club blog that Brinker's new "California flagship station" KABC will carry Moneytalk on tape delay from 5 to 8pm. Yep, that's right, TAPE DELAY. 8)

Bob Brinker's comments summarized, paraphrased or excerpted:


This is the final jobs report before the November elections. Private payrolls for September 64,000 positive; August was revised to 93,000; July revised to 117,000; Moving average over three months=91,000 per month. Because of reduced taxes local governments are strained for cash, so in September, local government jobs declined at the fastest rate in three decades. Last year the $787 billion stimulus bill allowed municipalities to retain workers, but that money is almost used up, so these workers are being let go.

: Now at 9.6%.

: Now at 17.1% - one out of every six. Each month, 100,000 to 150,000 new jobs are required just to absorb new entrants into the labor force.

NEW JOBS.....Brinker said:
"You take a look at the three components of the jobs report from Friday, take a look at the private payroll number, the hours worked number, and the hourly wages number, and you see an employment picture that is flat out lackluster.....

.....There were some bright spots in certain sectors in September. Food services and drinking establishments up 33,900 new jobs. So perhaps a few people are tying one on to help them to forget the reality of the employment market. Health care added 23,900 jobs in September.....

.....But those government jobs continuing to vanish rapidly. Local governments last month slashed 76,000 jobs; state governments cut another 7,000 jobs...."

Are now available in some sectors of the unemployed for as long as 99 weeks.

Annual rate for the next ten years: 2%

VANGUARD GNMA FUND [VFIIX].....Bob Brinker said:
"The reason that we have recommended Ginnie Maes, and that recommendation has been a grand slam home run for anybody that's on them, is because they have a direct Treasury guarantee. It is the Treasury guarantee that stands behind the repayment of principal and interest on Ginnie Mae mortgages that really is the key to their triple-A rating. So I don't have any credit concerns. You always have interest rate consideration with any fixed income obligation......" (Brinker advises using mental stops for those that care about fluctuations in net-asset-value due to interest rate risk in Ginnie Mae Funds.)


Bob Brinker said: "That's a good thing. A positive yield curve is conducive to economic growth."


Bob Brinker said: "We are seeing slow economic growth, but we are still seeing economic growth."


The jobs situation has encouraged the Federal Reserve to continue their effort to stimulate the economy through every monetary tool they can find.

: Brinker said that by the end of this week, there should be an official announcement that there will be no cost of living adjustments -- this will be the second year in a row. Brinker said there are over 58 million Social Security recipients - close to 20% of all the people in the United States....


.....(Referring to no Social Security COLA change) Brinker said: "With year-over-year inflation of only 1.1%, it is really no big deal, one way or the other."


Brinker said: "As many of you know, it's my opinion we are now in the second phase of the cyclical bull market. The first phase took us from spring of 2009 until spring of 2010. Actually, toward the end of April, we tacked 80% on the S&P 500.....Counting cash dividends made it up to about 82% total return. Then we had the mid-term correction that took the S&P down 16%, but only took the DOW down 13 1/2%. And that mid-term correction ended in early July.....

.....You might remember that right on the first of July, I had upgraded the market to attractive for purchase, recommending buying the market on the thought that we were at the bottom. Well guess what happened. We were at the bottom. The S&P 500 closed on June 30th at 1030. The upgrade to buy was made in my investment letter on July 1st and the market closed between 1022 and 1028 on the first, second, then after the holiday before resuming the cyclical bull market now in its second phase......

.....Remember last year it had a terrific year coming off the 2008 debacle, and here we have additional gains on the books as of now in 2010. And it's my opinion that as we move forward, we will add to those gains if I am correct."

Honey EC: There are some problems with Brinker's latest "upgrade to buy" signal and his latest market-timing schtick. Drum roll please:

* He hasn't had his followers raise a dime in cash since August, 2000 -- and all of his model portfolios have been fully invested since March, 2003. He wrote this the same month he now brags he recommended "buy the market"
Marketimer, July 1, 2010, Bob Brinker wrote: "All Marketimer model portfolios remain fully invested." Oops, how does that work when all stock market money is already invested, Mr. Brinker? Oh, maybe for those who inherited all that tax-free money or miraculously sold a house? LOL!

* Also, he mentioned the 2008 debacle, but he forgot to tell you that this last "buy signal" was just the latest in a long string of failed buy signals in 2008:
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
Of course, the market looked like it had bottomed in November, 2008, but actually hit bottom in March, 2009 at S&P 676.

* Another problem that Brinker never tells his audience -- and certainly doesn't tell new Marketimer subscribers, is that he has changed his secular/cyclical market-timing hocus-pocus at least twice over the past 4 years. First it was a secular bear, then it wasn't, and then it was again. It looks to me like he had to resurrect the secular bear so that he could prognosticate about the "cyclical bull" cycles.

As my dear Aunt Tillie use to always say, "Oh what a tangled web we weave, when first we practice to decieve." Too bad that Mr. Brinker never met my Aunt Tillie.


In the second hour, Sharon from Fairfield told Brinker that she owned some stocks that have lost 30-60 percent of their value. Brinker told her: "That's really a shame to hear that, Sharon. Because even today, the S&P Index is only 25% below its all-time-high. And when you count in the cash dividends over the last 2 or 3 years, actually the Index is only about 20% on a total return basis below it's all-time-high. So it's very unfortunate to be sitting on those kind of losses......" (Brinker repeated this "nice market come-back - it's only 20% of its all-time-high" to Tony from Lodi about 15 minutes later.)

Honey EC:
All Marketimer subscribers and Moneytalk listeners know, Brinker has ALWAYS said that a 20%+ market drop was a bear market. Now he's telling us that the S&P 500 Index is ONLY 25% below its all-time high and it's doing great. You can't make this stuff up, nobody would believe it. LOL!

JT from Oregon said
that he has been following one of Brinker's model portfolios, but that over the past couple of years, he had not made the changes to his portfolio that Brinker made to the model portfolio. He wanted to know how to make those changes now.

Brinker replied:
"Which model portfolio are you in, JT? (JT replied, "The middle one.") The long-term growth portfolio two. Well, let me give you the good news. That portfolio is having a great year. It is doing better than the S&P 500 and the Wilshire 5000, as it did in 2009. As you know, that portfolio posted huge gains in 2009.....What I would do to get up to speed with any changes that you have not implemented, I would implement them. .....We don't make a lot of changes, we try to minimize them. But when we do make a decision to make a change, it's always based on strong feelings on my part. For that reason, I would simply implement the changes......I would use the percentage column, there on page 8, you will see the percentage column for each holding and that is the percentage I would use to put that in the portfolio."

Honey EC:
In the past couple of years, there has only been one change to Brinker's model portfolio II (the portfolio that he and the caller talked about for so long), and that was in the January, 2010 issue of Marketimer, Brinker wrote: "Model Two: Sell: 10% of the holding in the Vanguard Total Stock Market Index (VTSMX), reducing this position to 40% of the portfolio. Buy: 10% position in Vangurard FTSE All-World ex-U.S. Index Fund (VFWIX, thereby establishing a new position in the portfolio."

Bob Brinker, deceptively bragged that his portfolio is "having a great year" and did well in 2009. Why is that deceptive? Because he has made no change to his asset allocation since 2003, AND, his portfolios got CREAMED in 2008.

He deceptively refrained from posting his 2008 numbers on his website and almost never mentioned the stock market on the air in 2008 and for the first 4 months of 2009. Now, he picks out this latest S&P short-term high as a reference point to play his market-timing game. Apparently designed to sell newsletters by telling half-truths.

Because Brinker has been fully invested since 2003, let's see how his model portfolio II has done since the October, 2007 S&P 500 all-time-high -- which is actually the high that counts, rather than the one in July, 2010:

October, 2007: Portfolio II = $241,994
October, 2010: Portfolio II = $206,871
October, 2007 to October, 2010: Portfolio II - DOWN 14.5%

Moneytalk To Go is Available on Demand Totally Free at KGO810 radio for seven days after broadcast. Moneytalk has been canceled on all Saturdays. The Sunday program is archived in the 1-4pm time-slots. To download and listen later, right click on each hour that you want and use "Save Link as." KGO: Download Moneytalk Here

Brinker's guest-speaker was John Norris:

Dixiegeezer sent this beautiful Florida sunset:


Top Rated Newsletter

Timer Digest Features
Kirk Lindstrom's Investment Letter
on its Cover

Cick to read the full page article!