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Thursday, December 30, 2010

Best of Bob Brinker's Moneytalk in 2010 and 2011 Projections


[In edit, January 1, 2011] SJ_Al sent this picture and this message to Mr. Pig, but is of interest to anyone who likes to ski:

"Mr. Pig, there is plenty of snow this year, so hurry on out. On Tuesday, the snow pack at the ski lodge was a good 48”.

Then on Wednesday, this is what we woke up to at our cabin…. and it snowed more during the day. We got about 20” total, and that is less than half what they had higher, as we had hours of rain before it turned to snow. We are 18 miles from and 2500’ lower than the ski area."

BUYING GOLD FOR HEDGE AGAINST DECLINING DOLLAR...November 7, 2010, Moneytalk, Bob Brinker said: "Hedging the portfolio against decline in foreign exchange, and there is a way to do that. It is a speculation, but there is a way to do it. And that is to put some GLD, the Exchange Traded Fund for gold in your portfolio, a few percentage point perhaps, if you elect to do this. And that will give you a precious metal in the name of gold bullion-hedge in your portfolio against the dollar.

SILVER CAN SUBSTITUTE FOR GOLD AS HEDGE....November 7th, 2010, Moneytalk, Brinker said: "As far as silver is concerned, I think it could be considered as an alternative[to gold] form of hedging in a portfolio......The preferred way for those who wish to have a silver hedge in their portfolio would be the Exchange Traded Fund that holds the silver bullion -- that trades under the symbol SLV.....the Ishares Silver Trust."

BONDS, November 14, 2010, Moneytalk, Brinker said: "You want to keep the maturities toward the shorter end.....This is not a time when one should be looking to extend their durations and maturities."

November 21, 2010, Moneytalk, Brinker said: "My advice has been to stay away from long-term bonds right now. I don't think long-term bonds are a good place to invest right now. Short-term is another story....."

HIGH YIELD BOND FUND (VWEHX)...Moneytalk, August 29, 2010, Brinker said: "High yield bonds have been doing very well. We've included those in our Fixed Income only portfolio on Page 7 of the investment letter each month."

CALIFORNIA GENERAL OBLIGATION BONDS, Moneytalk, November 21, 2010, Bob Brinker said: "I don't think there is any financial stability at all in the State of California. I think that the state of California is as dysfunctional as you can possibly get.....And when I look at the results of this last election in California, I don't see any reason to change my view that California is fiscally unstable......They cannot continue to do what they have been doing without becoming insolvent...... you're buying the full faith and credit of the State of California when you buy one of these Build-America Bonds........

.....Yes, they get a 35% of the interest cost rebate from the Federal Government, but the principle is on the backs of the taxpayers of the State of California......
There is so much uncertainty about how in the world the state is going to meet all of the promises it has made to so many people over the years. Including those who have worked for the state and are eligible for benefit packages for many years to come. Who's going to pay for all that? Investors are worried about that, as they should be......The way people are looking at California right now is, it's basically a debt machine. As a matter of fact, this coming week, they are scheduled to sell another $billion of tax-exempt General Obligation Bonds. And another $100 million of taxable-lease revenue bonds......The investor has legitimate questions now about the long-term solvency of issuers like the State of California."

STOCK MARKET CORRECTION ENDED IN JULY.... Moneytalk, Bob Brinker said: "If you've been with us on the program, you are aware of my view that we had a correction in 2010. I know many were forecasting a bear market. I never believed that. We thought it was a correction, and the S&P 500 corrected 16% and the Dow corrected 13 1/2%.....And that correction ended July 6th and that is when the market was down in the 1030 area.....

Moneytalk, September 26, 2010, Brinker said: "I certainly underscored my bullishness on the market by upgrading the market to an outright-buy on the first of July.....I'm expecting to see a good stock market in the next year.

November 2, 2010 Marketimer, Page 3, Paragraph 2, Bob Brinker wrote: "Based on the excellent corporate earnings progress we are seeing and our estimate of real GDP growth in the 2% to 2.5% range next year, we are increasing our S&P 500 Operating earnings estimates to $78 in 2010 and $87 in 2011."

December 3, 2010, Marketimer, Bob Brinker said: "....we project a target range in the low-to-mid 1300's for the S&P 500 Index as we move forward in 2011."
BRINKER'S LATEST "ATTRACTIVE FOR PURCHASE" STOCK BUY....Bob Brinker said: "Anybody listening to this broadcast is already aware that I have been bullish on the market to the extent that in the early part of July in my investment letter, I upgraded the market at that time, down in the 1030 area of the S&P 500, to attractive for purchase. Now of course, we've gone back to dollar-cost-average with the tremendous run we've had since early July...."

BOB BRINKER IS FULLY INVESTED WHEN HE MAKES THOSE "LUMP SUM" BUYS.... Moneytalk, August 1, 2010, Brinker said: "Now there have been various levels along the way since that time where we have made lump sum recommendations, or in other words recommended the market attractive for purchase. We've done this at various level, but you have to understand, each time we did that, we were fully invested. Every single time we made a lump-sum recommendation since March 11, 2003 to the present, every time, we were already fully invested when we made the recommendation so it would only have applied to money that would have come in the interim."

STOCK MARKET OVER THE LAST DECADE.....December 12, 2010, Bob Brinker commented that the S&P 500 Index is "at about the same level it was 10 years ago."

GOLDEN CROSS VS MARKET-TIMING.... Moneytalk, Bob Brinker said: "But from my point of view, I would rather use a market-timing approach to try to identify the bottom of a correction as I did at the beginning of July as opposed to the golden cross. The problem with the golden cross is, it's very, very late to the party. The S&P 500 is at 1183.....I would much prefer using a market-timing approach to identify areas of entry - you're not always going to be right, we know that. But that's not the point. The point is, you should be able to hit some very, very well. And as a result, you should be able to take positions as we were able to do at the beginning of July when the market was at its lows for 2010. And that's an example of using market-timing as opposed to using a technical tool like a golden cross."

QUANTITATIVE EASING.....Will it control inflation and help the economy? Moneytalk, November 21, 2010, Brinker said: "Well, I think it's an unknown. I don't think Ben Bernanke himself knows what the value of QE2 is -- buying Treasury securities and printing additional dollars to do so. I don't think Ben himself knows. I think he's functioning under the dual mandate."

RISING OIL PRICES DON'T CAUSE INFLATION.....Moneytalk, November 21, 2010, Brinker said: "Energy is way up in the past year. Energy, commodities up about 10%. Gasoline is up a big number. Fuel oil is up double-digit in the last year. But of course, rising energy prices alone don't produce inflation because they are weighted into the overall index."

DOUBLE-DIP RECESSION COMING? Moneytalk, September 26, 2010, Brinker said: "We have been very clear on this broadcast this year that there will not be, in my opinion, a double-dip recession. I've said it ad nauseam."

WHICH CURRENCY TO USE? Moneytalk, November 21, 2010, Bob Brinker said: "Well I'm a strong believer in having the main currency in your the country that you reside.....I like to match currencies in the currency that you are trading in... Firstly, keep in mind that unless you plan to spend your money in foreign currencies, then it should work for you here in the United States buying goods and services.....This would only be a major problem if your liabilities were in Euros, or Yens or some other currency. But if your liabilities are in dollars, then you are in the currency that will cover that....."


April 5, 2010, Marketimer, Brinker said: "The current secular bear megatrend began during the first quarter of Year 2000, and is now entering its eleventh year."
* [June, 2007 Marketimer, Brinker said: "In our view, the valuation based secular bear market that was established following the March, 2000 closing high reached its conclusion on June 13, 2006 ]

SECULAR DYNAMICS INTERESTING, BUT BRINKER LOOKS TO CYCLICAL TRENDS AND TIMING MODEL..... Marketimer, April 5, 2010, S&P 1169, Bob Brinker said: “While we have always taken an interest in the underlying secular market dynamics and market history, all Marketimer model portfolio asset allocation decisions are based on our cyclical stock market outlook and the Marketimer stock market timing model.”

FIVE ROOT CAUSES OF A BEAR MARKET.....Moneytalk, August 8, 2010, Brinker said: But you are right, we did write in the investment letter this month about several causes and one of those causes of a bear market is rapid growth. [Explained and itemized: LINK]

BOB BRINKER DID NOT AVOID 2008-2009 BEAR MARKET... Caller Frank from San Mateo asked: "As a market-timer, how successful were you in avoiding the horrific bear market of '08 - '09?" Bob Brinker replied: "I did not avoid it."

BRINKER STATES HOW HIS PERFORMANCE IS TRACKED.....Moneytalk, December 12, 2010, Brinker said: "All of my official portfolio recommendations that I make, on which I am tracked for performance purposes, are made within the context of the investment letter. And I publish a new letter every month toward the beginning of the month. And it is within the context of the investment letter that I make those kinds of specific recommendations......"

RADIO LISTENERS ARE "HORSES OF ANOTHER COLOR" (I just watched one of my favorites, "The Wizard of Oz")......Moneytalk, December 12, 2010, Brinker said: "Now in terms of radio listeners who happen to have bond funds, my recommendation has been very clear that if you have any concerns about net-asset-value volatility, net-asset-value deterioration.....then you need to protect yourself. And the way that I recommend you protect yourself is with what is called a mental stop. And a mental stop is very simple.....You come up with a price on each of your bond fund holdings below which you are not willing to maintain the position, and if that price is published on any given night..... If you see your price then at that point, the next day, you liquidate your position......

LOSSES ARE IDEAL WAY TO FINISH THE YEAR FOR TAX PURPOSES.... Moneytalk, December 19, 2010, Bob Brinker said: "If you are in the position to do so, if you're looking for the ultimate, ideal position to finish the year - not everybody can do this - some people have portfolios that are nothing but gains and that's wonderful too.....But the ideal position to get yourself in for tax purposes is to finish the year with a $3,000 loss. Anything more than that can be carried forward to future years.

BRINKER'S POLITICAL PERSPECTIVE....Caller Tom from Albany asked Brinker if his radio program is liberal or conservative. Brinker responded: "We're right down the middle, Tom."

Some of my favorite Brinker quotes from 2010:

* "Texting while driving is suicidal."__Bob Brinker

* "I am a Capitalist. I would not be promoting Socialist policies." __Bob Brinker

* "Now I don't believe in short-term or day-trader activity. I think it's a waste of time."__Bob Brinker

* "I would much prefer using a market-timing approach to identify areas of entry - you're not always going to be right, we know that. But that's not the point."__Bob Brinker

* "But if you can get some right, you can finish way ahead of the pack because the pack is buying and holding forever."__Bob Brinker

* "If you are not fully disclosing what's going on, you are in the snake oil business and not to be trusted." __Bob Brinker

* "It's all about the money."__Bob Brinker

[Please notice that I posted this review with no editorial comments, but it's very likely that I will have a few things to say in the comments section later.] :)

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