April 6, 2011...Some of you have posted in the comments section, speculating about how many newsletter subscribers Bob Brinker might have had over the years -- and now. Having a radio talk show where one can give out only carefully selected information is certainly an great advantage when it comes to selling "investment letters."
A national radio show (even one day a week) gives one access to millions of new shark baits. Common sense says that turnover is critical with someone like Brinker because he's made some major market-timing blunders -- and market-timing is his "claim to fame."
How many bought the QQQ's on his advice in 2000 and lost 70% of their money, then continued to subscribe? How many rode the 2008 megabear market down 57% fully invested on his advice, then continued to subscribe? Nope, it's clear to me that new blood is critical, even just based what people say on this blog and personal emails that I get.
So I am going to report some facts, you make up your own mind what it all means. Here goes:
Bob Brinker is no longer affiliated with Genworth Financial (BJ Group). Apparently, he broke off with them just before the big class action suit against the company that had bought out his own BJ Group. (See link below for full story of lawsuit.)
Brinker and Jacobs' BJ Group charged clients a hefty fees for money management, and in 2000 sold it for a purported $25 million. After the sale, Brinker continued with Genworth. Here is an excerpt from a news article about the sale:
While Mr. Brinker and Mr. Jacobs no longer will run the company, they have signed multiyear contracts to continue providing asset allocation advice to BJ clients, says Mr. Duran.Here are more details about the sale from the same newspaper article:
"BJ Group's 2,247 accounts through December 1999 held an average of $273,000. The advisory requires at least $100,000 to open an account and allocates customer funds into no-load mutual funds available through Charles Schwab Corp.'s fund supermarket.Brinker continued to publish Marketimer. In October 2000, Bob Brinker made one of the most costly market-timing blunders of his career. He predicted a stock market "countertrend rally" that would be led by the Nasdaq. He sent a special bulletin to Marketimer subscribers instructing them to invest up to 50% of the 65% cash reserves raised in January, 2000.
Annual fees range from 1.5% of assets for accounts less than $500,000 to 0.6% for accounts under $4 million, generating an estimated $6 million annually."
Brinker never took responsibility for that trade in his model portfolios even though he instructed his followers to use cash raised from them. I personally know of innumerable people who were damaged by trusting Brinker on the trade.
Unbelievably, after almost 3 years of Marketimer instructions to "hold for recovery," the trade was made to disappear from the radar -- never to be heard of again.
But shockingly, Brinker also advised BJ Group/Genworth to put their clients into the trade. The same clients who were paying up to 2% fees for professional advice.
The BJ Group A Division of Centurion Capital Management's Private Client Group Robert J Brinker Sheldon Jacobs
October 19, 2000
Dear Client: I am pleased to inform you that the BJ Group has executed a significant trade for you under the guidance and supervision of Bob Brinker.
Bob Brinker advised us of a short-term trading opportunity (countertrend rally) in the Nasdaq 100 Index. In response, we have purchased for your BJ account(s) a position in the Rydex OTC fund--a proxy for the Nasdaq 100 Index.
Aggressive accounts will receive a more significant position; conservative acounts will have exposure to a lesser degree given the risk profile of the technology-laden Nasdaq 100.
It is important to note: we have not sold any existing funds. This purchase reduces your money market reserves or cash position for the duration of the trade. As of this writing, it does not imply a change in Bob's longer term outlook for the market.
We are committed to the Brinker investment strategy and look forward to the exciting prospects of this recent development. (LINK to photocopy of original)
The following writer summed it all up beautifully, and I suspect he spoke for many, he certainly spoke for me:
Will L. wrote:
“Kinds of puts the kabosh to that silliness of "Brinker is not being dishonest because the QQQs weren't in the model portfolios thus it shouldn't count in his record." That was said though Brinker didn't distinquish the money raised from the model portfolios from being designated "cash reserves" to purchase QQQs and anyone reading that ACT IMMEDIATELY bulletin had to come away thinking it was money that included model portfolios he was wanting them to use.
We know that Brinker, like a crafty fox, has lied by misdirection on his radio program about the QQQ trade. When a caller asked about the QQQs he had been holding since 2000, Brinker claimed that "we closed that position in our model portfolios for conservative investors....yada yada. He claimed he had bought them for 25.00 in 03 and sold them for a profit so that every goober and geezer listening to the guy's Question were misled.
Now we have proof that Brinker's expensive wrap fund (though he ridicules people paying other wrap fund fees) does the exact same hoodwinking deception. We have the record of them slamming everyone into the QQQs and now using the same cr*p "model portfolio" deceptive advertising to hide the abysmal failure on a large investment in the QQQs.
I don't know how you feel ok with yourself arguing to support ole Brinker when nearly every time you make great efforts to alibi for clearly less than honest practices, the truth shows that you were a dupe enabling his marketing dishonesty....ie your high horse claim about Brinker removing library subscriptions.
Now this advertising from the BJ group shows that he/they are hiding the QQQ call which was included in every portfolio during the time they are pimping their performance by the clairvoyant Bobby Brinker with the same hooey many of you use to dismiss the newsletter performance numbers lack of proper accounting for the QQQ event.”__Will L
Link to original Marketimer QQQ Special Bulletin
* Kirk Lindstrom's Summary of the BJ Group lawsuit.
An ad from Bobbrinker.com:
45 comments:
How interesting that several comments have been sent anonymously about this article. All slamming me and the article.
No comments about how many MILLIONS, if not BILLIONS of dollars Bob Brinker has taken in from newsletter sales and from being a partner in a company that charged 2% management fee for $100,000 accounts.
No comments about the slick-Willie methods of reporting model portfolio performance, or the cover ups that make even his performance records today FALSE!
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US to use Facebook, Twitter to issue terror alerts
WASHINGTON – The U.S. government's new system to replace the five color-coded terror alerts will have two levels of warnings — elevated and imminent — that will be relayed to the public only under certain circumstances for limited periods of time, sometimes using Facebook and Twitter, according to a draft Homeland Security Department plan obtained by The Associated Press.
Some terror warnings could be withheld from the public entirely if announcing a threat would risk exposing an intelligence operation or an ongoing investigation, according to the government's confidential plan.
Like a gallon of milk, the new terror warnings will each come with a stamped expiration date.
The key to Brinker's success is the radio program. It's doubtful that Brinker has the 200,000 subscribers that he had back before the QQQ days, but obviously he gets enough new subscribers to make it worth his while to continue doing the program at the age of 69.
At this time, we know he also stays on the radio for the sake of his "young sprout" (mid-40's) who conveniently started posting on the internet as "Bob Brinker" about the time he began writing a rag-newsletter of his own.
Here's an excerpt from the 2000 newspaper article when the BJ Group was sold. It shows Brinker's age in 2000 at 58 -- that make him 69 or 70 now, depending on when his birthday is:
"Mr. Brinker, 58, and Mr. Jacobs, 69, are the principal shareholders. Mr. Jacobs' two children...."
"No comments about how many MILLIONS, if not BILLIONS of dollars Bob Brinker has taken in from newsletter sales and from being a partner in a company that charged 2% management fee for $100,000 accounts."
Get a grip. More wild-assed guesses on your part. Try to report just the basic facts for ONCE.
Ten year old guesses. What a wonderful topic.
Anonymous,
Link please.
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"At this time, we know he also stays on the radio"
You don't know why Brinker does a goddamn thing. Just more wild ass guesses on your part.
Have you ever told just the truth?
Wrong. It's not a guess. I will post the proof for you in the article -- the BJGroup 1998 fee schedule.
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Anonymous, Link please.
I don't have a link. I recall reading that somewhere that somebody said that so it must be true.
Why would anybody want to lie about that?
You said that recollections are OK.
Anonymous said: "You don't know why Brinker does a goddamn thing. Just more wild ass guesses on your part."
Okay, that's a good point. I should have qualified that statement a bit. I should have said: It's almost a lead-pipe cinch that Brinker stays on the air to make more bucks for himself and for his failed computer technician son.
Like you said, who knows for certain anything about the man. He may well have a gambling problem that wiped out all of his millions. We don't know, do we?
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Anonymous,
Your silliness about the link is not helping your position here.
Why are you so mad at me this morning? Did I report on something that you don't like to be reminded of?
As for telling the truth. You of all people know I only tell the truth. There's an old saying about the "truth being a female dog" or something like that.
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It was reported in a newspaper article that the estimated value of the BJ Group when it was put up for sale was $25 million. I have it in black and white.
Now if you doubt that Brinker has made millions, perhaps billions, on newsletter and fees over the past 26 years, as I clearly speculated, then you don't know math.
Get a calculator!
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"Now if you doubt that Brinker has made millions, perhaps billions, on newsletter and fees over the past 26 years, as I clearly speculated, then you don't know math."
HB, to make even ONE BILLION Brinker would have to have averaged over $38,000,000 per year for the PAST TWENTY SIX YEARS!
Are you sure you want to stand by that wild SPECULATION?
Yes, I think it is POSSIBLE that Bob Brinker has made a billion dollars in the past 26 years.
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Excuse me for breaking into this scintillating exchange.
Does anyone know Brinker's compensation for hosting Moneytalk?
Even a guesstimate?
Since his three hour stint serves as an infomercial for his lucrative newsletter, just asking.
Carry on.
Birdbrain,
ROFLOL! Thanks for the pause that refreshed. I was starting to feel like a punching bag.
When he started to repeat himself for the third time, I had to cut it off.
Actually, I do not know how much Bob Brinker makes from Citadel for doing Moneytalk. And I don't know anyone that knows.
I do know this, whenever he mentions Marketimer on Moneytalk, he never refers to it by name. I have often wondered why.
But it sure isn't necessary for him to use the name of the newsletter. All one has to do to find it is to do a search using his name.
PS: I wish I knew how to tell you something in private that I can't post here. :)
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I think the question is one that Brinker asks his callers. What is your net worth? I suspect he would answer that about the same way he answered the guy who ask about his age.
Lets look at what we do know.
1. Bob Brinker has been selling his newsletter for over 23 years at $185 a year.
2. His radio program had an audience of over 1,250,000 and is heard on over 200 stations in all 50 states.
3. I tried to get an idea on how many subscribers there are in comparable newsletters. I was only able to get numbers for Louis Navellier's Blue Chip Growth fund. This is just one of four newsletters he offers. It had 22,297 active subscribers in 2010.
4. There was a report that Bob Brinker had 200,000 subscribers back in 2000. A person posting as Bob here bets that it is less than 100,000.
Let be try to answer the question. I think 25,000 subscribers is a conservative estimate. 25,000 equates to 125 per radio station or 2% of his listening audience of 1,250,000. 25,000 times $185 equals $4,625,000 a year. 23 years times $4,625,000 equals $106,375,000. Note this is gross revenue and there are expenses including income taxes that must be deducted. Next we have to add in the money he made running, selling and consulting for the B. J. group. Then there is his income for doing moneytalk since 1986. It looks like Bob should thank himself for reaching critical mass.
I don't think that ANON of multiple aliases, should be allowed to soil any new threads until he answers the questions on the previous thread.
Can't this joker hold a thought, let alone a decent job?
It's such a shame that he is not talented or funny like me, even though he tries like hell.
At least Jeff has some logic behind his numbers rather than saying that "somebody" said that "somebody" at Brinkers office said...
Jeff figures newsletter income to be around..." 23 years times $4,625,000 equals $106,375,000."
A little over $100 million GROSS over 23 years is still about $900 million SHORT of a billion bucks.
Does anybody beside HB really think Brinker has even grossed a BILLION bucks over the past 23 years?
A Bit Shy of A Billion
Mr Pig,
Your point about the unanswered questions is a good one.
I gave the poster (s) this morning some leeway to try to discredit my article and to make ad hominem attacks on me to show that there is really no way to dispute documented facts.
I have all the documentation to back up everything I wrote in the article, but only posted a few things to demonstrate that fact.
However, I am going to re-post your last questions that were unanswered. I'm suuure they were just missed. :)
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Pig said...
marcc ultra sound-a-like threatens "And I haven't even mentioned that the 200,000 claim and attendant story built on the claim come from a long-time would-be Brinker competitor."
You haven't mentioned that? Geesh, I must be losing my mind, as tiny as it it is. I could have sworn that I saw it somewhere.
Perhaps you can connect the dots for me, since I'm STOOPID. What does 200,000 have to do with a long time brinker competitor? Are they both going after the last live subscriber? Is there a contest for an all expense paid trip to Gary Indiana or somewhere?
What does this competitor have to gain by saying that brinker is hugely successful?
Me dont get it!
April 6, 2011 1:00 PM
Mr Pig,
I can't publish the response to your questions. It was just too full of lies and personal attacks on someone who doesn't deserve it just because the Brinker's hate him.
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Ms Honey, sadly types, "I can't publish the response to your questions. It was just too full of lies and personal attacks on someone who doesn't deserve it just because the Brinker's hate him.
"
I understand qqquite well. Was the post at least funny?
He tries so hard to be funny and witty like me, but fails miserably. It must be an acquired condition.
Can you send me the post? Clean up all of the filth and typos and poor grammar first..............THANKS.
Anonymous said: "At least Jeff has some logic behind his numbers rather than saying that "somebody" said that "somebody" at Brinkers office said..."
EXCUSE ME...you are perpetrating a lie, and I'm getting tired of it. Jeffchristie ALSO remembers that phone conversation that was posted at Suite 101, when the office person said they had 200,000 subscriptions to get out.
I know you feel safe disparaging it because the first-person testimony of the conversation was VAPORIZED along with hundreds of thousands of other posts where Brinker was the subject.
Anon continued: "Jeff figures newsletter income to be around..." 23 years times $4,625,000 equals $106,375,000.""
You have parsed what Jeff said. And Jeff indicated that he had taken "conservative" estimate.
Personally, I don't agree with the numbers Jeff chose. I think it's closer the the 200,000 Kirk reported than the 25,000 Jeff chose.
Here is what Jeff wrote, unparsed:
"4. There was a report that Bob Brinker had 200,000 subscribers back in 2000. A person posting as Bob here bets that it is less than 100,000.
Let be try to answer the question. I think 25,000 subscribers is a conservative estimate. 25,000 equates to 125 per radio station or 2% of his listening audience of 1,250,000. 25,000 times $185 equals $4,625,000 a year. 23 years times $4,625,000 equals $106,375,000. Note this is gross revenue and there are expenses including income taxes that must be deducted. Next we have to add in the money he made running, selling and consulting for the B. J. group. Then there is his income for doing moneytalk since 1986. It looks like Bob should thank himself for reaching critical mass."
Anon continued: "A little over $100 million GROSS over 23 years is still about $900 million SHORT of a billion bucks.
So Why did you ignore the other stuff that Jeff said needed to be added in? Why do ignore the fact that Brinker charged large fees for managing accounts at BJGroup.
And do you think he worked for free at Genworth? How much did Citadel pay Brinker over 26 years?
So try again and multiply Jeff's number by EIGHT and add in everything else. And tell me again how far that is from a possible $billion.
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Regarding this thread and the 200,000 subscriptions, I have one thing to say:
STAMPS.COM
Frankj
As I stated my analysis was based on what I felt was a conservative number of subscribers. If the reported number of 200,000 in the year 2000 is correct my final numbers are way low. Another issue I didn't address was Brinkers personal investments. Does he eat his own cooking? If he invested in one of his newsletter portfolios each year he would have way over that $100 million figure. Brinker seems to have no problem asking callers about their net worth. Maybe someone should call moneytalk and ask him what his is.
FrankJ,
LOL! Good one!
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Copied from other thread because it is pertinent to this subject:
Kirk Lindstrom wrote:
I see no reason to question a fairly precise number given by the Marketimer office. I can see how this is damaging to Brinker's image as it shows how very rich he is just from annual subscriptions in a country that loves to hate the rich and blame them for many of their problems. After running my tax example, I can understand why so many feel this way.. the very rich which includes Brinker don't pay the same percentage of income on taxes as the middle class.
But...
Back when I ran the investment discussion at another company, our discussion for "Bob Brinker" easily got 100 times more search hits than "Rukeyser"
I did a survey of a lunch table of older engineers at HP before I left in 1998 to see how many knew of Brinker. I was shocked so many subscribed to his newsletter... five or ten if I recall... they wanted to know what he was talking about on the radio since he was so vague with callers, liked his show and didn't see $185 a year as a big deal. I don't believe any of them subscribed to Rukeyser's newsletter.
I read in a press release some time ago Sheldon Jacobs had 18,000 subscribers to his newsletter. Jacobs didn't have a radio show on every weekend for six hours with the host using the airwaves to promote his newsletter by being vague and hinting the ONLY way you will get a straight answer out of Brinker was to pay. I know many, many who subscribed to Brinker's newsletter at one time or another but can't name a single one who paid for Rukeyser's. How many people listened to a 30 minute show on PBS that NEVER mentioned Rukeyser's newsletter compared to the millions who listen to Brinker for 6 hours every weekend around the country on AM radio? I'd be surprised if Rukeyser's subscription numbers came close to what Brinker had."
Originally posted here
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Copied from other thread:
jeffchristie said...
"Bob
I have found that trying to determine the number of Marketimer subscribers is almost as difficult as finding out what Brinkers track record was as a money manager for the guardian royal exchange. I remember someone posting at 101 who called the marketimer office and was told they had 200,000 notices to mail. It is too bad all of those posts at 101 were deleted or we could see who made the claim and try to ask them about it.
Bob Brinker was also a partner in the B. J. Group. I think it was sold around 2000 for a multimillion dollar price with Brinker staying on for several years being paid as a consultant. Maybe someone remembers the details.
Originally posted here
Honey here: I addressed Jeff's questions in the front page article.
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Copied from other thread:
Moron Detector said:
"Only a moron would be fooled by his attempts to say a direct quote from Bob Brinker's Marketimer Office is hearsay then he makes up statistics with no references to justify why he doesn't believe the people in Brinker's own office who would have no reason to lie about this number.
Why shouldn't Brinker have 200,000 subscribers? If he's making everyone rich with his advice, I would think everyone who is a regular listener would find $185 a pittance.
I'd expect him to have a million subscribers if he has a million listeners and his advice worked.
People wouldn't produce late night informercials with a room full of paid actors if that sort of advertising wasn't effective. Brinker is brilliant as he figured out how to do this on someone else's dime. A product that appears to be no more effective (compared to buy and hold VTSMX, FREE ADVICE) than the black hairspray sold to cover bald heads on late night TV."
Originally posted here
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Bob Brinker came up with an ingenuous business plan many years ago.
You have to give the man credit. He had experience behind a microphone and experience in "Wall Street." He combined the two, got his own radio show, and the rest is history.
Now you might think this is an American success story if you didn't know that the whole business plan would not work if he didn't practice deceit and shyster-like cover-ups -- both on the air and in the newsletter.
His Business Plan includes so-called timing models, model portfolios, gift-horse buys, cyclical/secular hocus-pocus.
All designed to sell newsletters with carefully chosen revelations made on the radio.
It's positively brilliant. He controls 99% of what gets on the air. He can pick and choose any market-timing starting point that will snag another sucker and totally BURY any advice that went sour.
And he does all this while belonging to the church of buy-and-hold through major bear markets, and STILL convince listeners that he is a market-timing genius.
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Copied from other thread:
Kirk Lindstrom wrote:
".....But, given Brinker with maybe $5M to $50M a year in newsletter sales doesn't have to pay the incremental SSDI taxes nor the CA taxes... it seems his incremental payment to government for an extra $10K is only the top US tax rate, or 35%. Hardly fair to me and it explains why so many in the middle are upset at the "Free loaders" at the bottom AND the free loaders at the very top who pay far less of their income to support our government...
I would not feel this way if SSDI payments were invested but last year Obama took my payments and sent them to the states to pay teachers and cops and other government worker benefits that are far, far better than us paying into SSDI get... so I'm pissed."
Originally posted here
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Kirk,
Hasn't it been many years since Bob Brinker lived in a state that has state income tax?
I often wonder why he seems to get in such a lather about California's budget problems.
Maybe he owns property here, or has a relative that lives here. Or maybe he knows if push comes to shove, he along with all other federal taxpayers, will get to feed the California trough.
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FINAL RESULTS:
Silly Imp=200,000 +/- 27
Ms Honey and Jeff = 101% FACTUAL
and the winners are............
Ms Honey and Jeff and Kirk, no contest.
Next.............
Yikes! Silver nipping at $40oz. Almost straight up:
Futures Silver Chart
AGQ, leveraged silver ETF is $257 right now. I bought it February 23, 2011 at $174.
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Mr Pig,
Thank you for that totally unbiased and accurate report. I'm sure that the loser will not complain about stolen elections. This is not Wisconsin. LOL!
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For those interested in what is happening in the gold and silver market, here is a great article from Zerohedge:
Perfect Storm For Gold & Silver - Silver Surges 6% In Week To $40.28 – GFMS Forecast $50/oz This Year
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Kirk Lindstrom's new Seeking Alpha article about the Dow-Gold Ratio
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So what is silver used for besides jewelry?
Excerpts:
(snip)
"On the industrial forefront, silver has unique properties including strength, sensitivity to light, malleability and ductility, electrical and thermal conductivity, reflectivity and the ability to endure extreme temperature changes. As a result, it is commonly used in the electronics space and can be found in plasma display panels and printed circuit boards, as well as in the lining of refrigerators, for food storage containers, and for water purification. Additionally, the metal can be used in the medical sector as an antimicrobial to fight bacteria and as an antiseptic to treat fungal infections. As economies in the developing parts of the world continue to expand and the purchasing power of individuals in these nations rise, demand for products that utilize silver will likely follow.
Silver’s industrial uses further span to the solar energy industry, as that silver paste is used in 90 percent of all crystalline silicon photovoltaic cells, which are the most common type of solar cells. Additionally, silver is used in another way to generate electricity by reflecting and concentrating solar energy onto collectors containing salts which are used to run generators. Furthermore, as nations around the world continue to seek cleaner energy standards the demand for solar energy will likely increase. In fact, the demand for solar energy has grown at nearly 30 percent per year over the past 15 years and is expected to sustain this growth in the near future.
On the supply side, it appears that a shortage in silver is on the horizon. In fact, the total annual world consumption of silver is greater than mine production and has been for nearly 20 years. As a result, inventories of the metal held by governments have started to dwindle away. Furthermore, a study conducted by the United States Geological Survey, indicates that silver is nearly twice as rare as gold in the long term because it's not recycled at the same rates as gold and at current consumption rates all of the silver that's in the Earth’s crust will diminish away in the next decade.
Further supply woes could potentially form from the fact that roughly 30-35 percent of global silver is produced through pure silver mines while the rest is produced through electrolytic copper refining, gold, nickel and zinc refining. As a result, a significant amount of silver cannot be produced without disruption to other mining activities leading to the overproduction in other metals, making silver supply from mining relatively inelastic and insensitive to price changes.
The last force that is boosting appeal of silver is its relative value, in historical terms, as compared to gold. Silver is cheap compared to gold. The current gold:silver ratio is about 65:1, significantly higher than the long-term ratio of 16:1, indicating that silver has tremendous upside potential.
As for inflation, historically speaking, gold has been the “go to” precious metal when it comes to a long-term hedge against rising prices; however, silver provides a similar protection mechanism enabling investors to safeguard their wealth in addition to the flexibility and multiple uses that is carries, making it a top choice."
Minyans: Five ETF's to Play Silvers Uptrend - Investing in Precious Metals
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The battle over the government shutdown is just going to be a tiny preview of what is to come in the coming months, first to raise the debt limit in May, and then dealing with the 2012 budget. Ryan will throw his plan out there which will be a nonstarter for the Democrats. The Democrats have yet to come out with a credible plan to deal with the spiraling debt. In the end, as has been the case for the past 30 years, some hodge podge of a deal will be negotiated which won't solve any problems. And Bernanke will keep on printing money to keep the U.S. economy from falling back into depression.
PB
In the past, Bob Brinker has displayed utter contempt for Elaine Garzarelli. On a Silicon Investor message board when he was posting there with an alias, he called her the "Princess of Wink" and demeaned her market-timing ability.
However, it appears that Elaine is in agreement with Brinker now. She is bullish:
TOM HUDSON: Not the threat of a government shut down, nor high energy prices will knock down the bull market in stocks. That`s the prediction at least from tonight`s "Market Monitor" guest. Elaine Garzarelli back with us, president of Garzarelli Capital. Elaine, welcome back, always nice to see you.
ELAINE GARZARELLI, PRESIDENT, GARZARELLI CAPITAL: Nice to be here.
HUDSON: What makes you so confident in higher stock prices with all the uncertainty that remains?
GARZARELLI: Well, basically, my indicators for the stock market are bullish. They`re at a 76 percent level. And they need to go down to 30 percent for a major bear market. We`re down below 43 percent for 10 to 15 percent correction. And basically there are economic cycle, monetary valuations and sentiment. And those are the four categories of my indicators. So it`s fundamental for the most part.
HUDSON: I want to ask you about oil in a moment. Last fall the last time you were on with us you were bullish and your indicators were as well. You were looking at the time for S&P 500 at 1300. We`re above that now. So do you have a price target in mind?
GARZARELLI: For earnings for this year and this is assuming that oil prices stay where they are now, which is pretty high, I have 94 for S&P earnings and for next year I have 102.50. So if you just multiply a 15 multiple by that, which is conservative, our models say 17 would be better based on the BAA bond rate. You get up to 1500 on next year`s earnings, 2012 earnings.
HUDSON: Give me real quick on oil, what price is going to start to concern you?
Continued next post.....
GARZARELLI: I would say $128, $130. We`d have to change our forecast for much slower growth.
HUDSON: You new picks, you like materials, we`ll begin with the XLB materials sector, exchange-traded funded. It clearly has been benefiting from the weak dollar, strong commodity. What do you see ahead?
GARZARELLI: Well, I think that the materials will outperform the stock market by about two times. So that`s a pretty good leverage. The stocks, some of them are Dupont, Freeport, Dow, Alcoa (NYSE: AA), Nucor (NYSE: NUE).
HUDSON: All real household names certainly in that kind of global industry. You also like financials, which is an interesting pick and clearly there`s been a lot of focus on the finance sector and banks especially. We`re ahead of earnings season, and the spider financial exchange-traded fund has yet to break out to post recession highs.
GARZARELLI: Yes, but I think it will. It was lagging a little bit. Now it`s starting to lead for the last couple of weeks and I think it`s the cheapest of all my sectors actually. The stocks in there would be JPMorgan, Wells Fargo (NYSE: WFC), B of A, Citi, U.S. Bancorp (NYSE: USB).
HUDSON: Kind of a valuation play as well. We`ve talked about oil a little bit and you do like the major integrated oils with the XLE, the energy exchange-traded fund. If oil prices don`t move up to your concern level of $128 or so, where do you go from here for the XLE?
GARZARELLI: Well, no, this is based on where oil prices are today. I would recommend XLE at current prices, which is about $113 but this one should outperform the market by two times. It`s been the best leader in the last six months of all the sectors and in there we`ve got Exxon, Chevron (NYSE: CVX), Schlumberger (NYSE: SLB), Conoco and Halliburton (NYSE: HAL) as the top ones.
HUDSON: You also liked some fixed income, but you`re going at it through a closed-end fund, the ticker here on this one, EAD. It`s a Wells Fargo (NYSE: WFC) advantaged income fund, focuses on junk bonds, so you`re getting a yield of almost 10 percent. Does that concern you though, as Europe is raising interest rates and elsewhere?
GARZARELLI: No. The junk bond market should do the same as the S&P 500 stocks. And the reason is because we`re in part of the economic cycle where the default rate is the lowest we`ve seen in many, many, many years. And it should continue unless we go into a recession. If oil prices go to $130, that could be a problem, because it could be recessionary.
HUDSON: As I mentioned September 17 was the last time you were here. Let`s go through your four picks back then, the performance also showing double digit returns, beginning with the industrials exchange-traded fund, up almost 22 percent, the consumer discretionary fund moving up nicely as well. Technology the laggard up only 15 percent Elaine, but the home builders, how about that, 23 percent. Do you still like this quartet?
GARZARELLI: Oh, yes, I still do.
HUDSON: Any disclosures, ownership of all these funds we mentioned?
GARZARELLI: I have a sector analysis fund that I run and I own all of these, all the ones I mentioned and all the ones from last time.
HUDSON: There we go, full disclosure, from our "Market Monitor" this Friday night, Elaine Garzarelli with Garzarelli Capital.
PBS: Bull Market is Fundamental
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IPhone users beware. You may be on your own Candid Camera. :)
iPhone 4 FaceTime Glitch Takes Secret Photos Of Users, Some Say
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Frankj:
The seeking alpha website has an interview with Larry Swedroe on his new book. seekingalpha.com
I wonder if we'll hear him as a guest sometime? The book favors indexing vs. active investing.
Will BB host tomorrow? I can't see him outsourcing the opportunity to pound on Congress to Lynn.
For several months now, Bob Brinker has been bragging about his July, 2010 "buy-signal" at S&P 1030.
Fortunately for him and for us, the market has gone up from that one.
But Brinker was also bragging about other buy-signals before that and the market kept going down.
Here's some comments on Brinker's 1300 buy signal from 2008 -- before the S&P dropped to 677:
Jim Firestone wrote:
" Very good summary Honey. Brinker finally discussed the market on the radio. I guess he felt it would be a good opportunity to attract new subscribers by bragging about his "low 1300's" buy call. Had the market gone down, he would not have even mentioned the market. He wants the uninformed to think "wow, this guy is really in touch with the market! I'd better subscribe".
Of course his current subscribers and readers of this forum and your site know the real story. If the market gets back to S&P 1565, Brinker will brag about all the money made since his low 1300's buy call, but in reality fully invested subscribers will simply have gotten back to even at that point."
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Moneytalk on demand fees at $4.95 a month is another income stream plus Amazon referrals from the recommended reading list.
Joey
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