STOCK MARKET: Brinker reported the latest stock market numbers. Year-to-date total return on the S&P 500 Index = 7%.
INTEREST RATES: Brinker said: "Rates are way, way, way down." He recited all of the current Treasury rates.
Honey EC: Another Bob Brinker stock and bond market Ground-Hog Day. :) Brinker is still fully invested and recommending dollar-cost-averaging new money into the market. He predicts that the S&P 500 Index will reach the low-to-mid 1400's range over the next 12 months. (See the right hand column of this blog for a link to all the latest Treasury yields.)
TREASURY IMPLIED INFLATION: Brinker pointed out that the Treasury market is predicting an annual expected inflation rate of 2.45%.
HBO FILM BASED ON "TOO BIG TO FAIL" by Andrew Ross Sorkin: Brinker reported that the film will premier on Monday, May 23rd -- the "all-star cast" includes William Hurt playing Hank Paulsen; Warren Buffet will be played by Edward Asner; and Ben Bernanke will be played by Paul Giamatti. Brinker calls this book the "definitive work on what went on in the great financial blow-up of 2008."
WHAT IS QE2? Brinker said: "QE2 is not going out and spending money which then vanishes. QE2 is the purchase of securities which are then held on the balance sheet of the Federal Reserve and collecting interest, and then maturing so that they are fully re-paid....So that is an investment activity....not a spending activity."
HOW THE FED CREATES MONEY: Brinker said: "The Central Bank, in Quantitative Easing, which is put in when they've run rates to zero and they can't do anymore rate reductions. What they have to do if they want to do further stimulus, and they did....they have to come up with other ways.....What they do to create that money, they create it electronically through the Federal Reserve's own bank account. And then with the money they create electronically, that's the money they deposit into brokerage accounts when they make the purchases of Treasuries. Then that money is used to buy government bonds and other financial assets....They buy these assets with the newly created money. That's how it works.....The Treasury sells new debt.....The Federal Reserve will go out and buy those outstanding issues in the open market.....They buy them from financial institutions, including commercial banks.....To pay for them, they deposit the money into the accounts of the financial institutions that they are making the purchases from. This is all electronically created new money."
WHAT IF THERE IS A GOVERNMENT SHUT-DOWN: Brinker told a caller that he couldn't comment about how long the government might delay before making a decision about raising the debt ceiling. But he reminded the caller that there was actually very little reaction when the government did shut down in 1994. Brinker said: "If they are going to default on the government debt, at that point, it's all over.....Then the government of the United States is at that point, it's at the bottom of the heap in terms of credit quality. It's junk. Now do you think they'll do that?.......
BRINKER OWNS NO TREASURIES: Brinker said: "I personally don't own any Treasuries. But if I did own Treasuries, I would not make any changes based on the raising of the debt ceiling issue. I think it's a circus.....How could you as a member of congress say that you are not going to vote in favor of raising the debt ceiling when your record is full of votes that you have cast to spend money that raise the deficit. If you do that, as a politician. If you do that, you are a hypocrite."
MEDICARE 800 pound budget elephant: Brinker said: "I had hoped that we would see the political will in Washington to tackle the 800 pound parakeet sitting over in the corner watching all this. It's called Medicare. Seventy percent of the 110 trillion dollars of unfunded government liabilities are lodged in the Medicare program. Money going out versus money coming in is so overwhelming in favor of the beneficiaries that it is mind-boggling.....I was very disappointed this week. Some of the top politicians that had been driving very hard for cutting spending, have backed off their pledge to do something about Medicare...... If you are a Medicare beneficiary, you are getting way more in government benefit than you're paying into the system.....So the majority of people on Medicare don't want any changes.....And they all vote, so they have tremendous power....We are looking at gigantic government deficits as far as the eye can see."
BRINKER SAID EVERYONE GOT A TAX CUT, DID THEY? Caller Marlene from Virginia Beach said she disagreed with Brinker. (Honey EC: That's a no-no, Marlene, which I think you may now know.) She said that the government must stop spending. When Brinker told her that the issue was to balance spending with the revenue. Marlene said that they can't just keep raising taxes. Brinker replied: "No, they've been cutting taxes, Marlene...." Marlene told Brinker that the taxes in her family have been going up.
Brinker replied: "That's amazing, Marlene, because my taxes went down. The government just gave me a 2% reduction in my 2011 payroll tax.....You didn't get the 2% reduction in the payroll tax? You're the only person in the country, Marlene.....Here's what the government did, at the beginning of the year, they gave all workers a 2% reduction in their share of the payroll tax. Now if you did not get that reduction, you're are the only person in the country that didn't get it......It was given to all workers in the United States in 2011."
Honey EC: On the next call, Brinker found an opportunity to bash Marlene two more times -- once at the beginning of the call, and once at the end of the call. However, at the the very end of hour one, as he was leaving the air, Brinker corrected himself. He admitted that not "everyone" had received the payroll tax reduction.
*Caller Nancy from New York asked about the safety of Vanguard Selective Value Fund (VASVX) which she had been holding for many years. Brinker responded that it has been a good fund. He recommended that she monitor the fund, but said he had no problem with her continuing to hold it.
Honey here: I have several editorial comments to make on this subject. The symbol for Double Line Total Return Fund, managed by Jeffrey Gundlach, is (DLTNX).BRINKER'S NEW BOND FUND RECOMMENDATION
* Caller Bill from Wisconsin said: "In your last issue of Marketimer, you made a change in the income portfolio, going to a brand new fund. Double Line Total Return and it looks to me like....."
Brinker interrupted: "Bill did you read page 3 of that issue? ....I've explained in there why I selected that fund. It's right there."
Bill continued: "Yes, I have it right it front of me. Let me ask a couple of questions that aren't there. One, it's a very short life fund. It's only been around a year or less, and it has a higher expense ratio. And I assume the rating isn't as good as the funds that it replaces. And I question what the duration would be on that fund."
Brinker replied: "Now this is a change that was made in the income portfolio. Now if you check that data that I published in the letter, you will see that I published the duration. Did you see that?"
Bill: "I looked for it."
Brinker: "No, it's published....it's published in the eh, eh, eh..."
Bill: "On page three?"
Brinker: "You don't see any information on the duration?"
Bill: "No sir."
(Honey EC: Apparently, someone quickly got this information to Brinker, as his prior questions clearly show that he believed the duration rate was in the newsletter Bill was reading from.) Brinker said: "That's because it was effective on the 10th of May. Let me explain why you didn't find the duration, and you will find the duration. The duration is in the table on page 7, but that table does not include the fund because the change wasn't made on April 30th. Everything in the newsletter for May is as of April 30. So what I've done is, I've stated in that recommendation to make those changes in the income portfolio in page 7 ..... that those changes take place on the close May 10th. So they happened last Tuesday....We implemented those changes..... for performance purposes......So when we publish the June investment letter, on page 7, you will see the duration of that fund in there........
Now as to why I selected that fund. I selected that fund because I really like that manager. I think that manager has really outstanding talent. Actually, I stipulate that on page 3 of the newsletter, that I like the manager. And that was the reason that I selected that fund. Now although what you said is true that it's a relatively new fund. It started in the spring of 2010, its done very well its first year out there. Now here's the thing, that manager had a long-term track record at his prior fund. A record of over ten years of excellence in income management at his prior fund. I looked at that record, looked at what he's done the first year in his new fund since he's gone out on his own, and was very pleased at the data I was looking at. And that was the reason that I selected it.....Remember though, if you see a recommendation that doesn't work with you investment, don't buy it...... But I have to go with what I believe in the investment letter because of performance tracking.....and that was the analysis that I based that recommendation on. Good call, Bill. I appreciate it. This is Moneytalk."
[In edit: This fund was not added to any of Brinker's Marketimer model portfolios. It was only added to what was formerly known as the "fixed-income portfolio."]
Firstly:
[In edit 5/17/11: It has been brought to my attention that the Yahoo Finance duration figure of 2.6 is WRONG. At the DoubleLine Funds website, it says that the duration is 3.79. That's a big difference!]The funds that Bill mentioned which Brinker replaced with Double Line Total Return Fund were Vanguard Ginnie Mae Fund (VFIIX) and Vanguard Short-term Investment Grade Fund (VFSTX). Brinker sold 10% of each, bringing each weighting down to 15%. He took that 20% and put it into Double Line Total Return Fund.
Second: why didn't Brinker KNOW whether or not the duration was in the May newsletter? Doesn't he write, edit and publish Marketimer? Or, is someone else doing it for him?
Third: Why would Brinker issue a buy date on a bond fund and NOT publish the duration rate until the next month -- weeks after subscribers have already bought it if they followed his advice?
Fourth: Brinker says he chose Double-Line Total Return Fund because he "liked the manager." Beware, this has happened before and was very costly to those who bought TEFQX because Brinker "liked" a fund manager.
Marketimer, February 2000, Bob Brinker said: "We believe e-commerce fund manager Kevin landis brings a high level of stock selection talent to the fund."Fifth: Be aware that in spite of what he said about "performance tracking" the Marketimer "income portfolio" is off-the-books, and he does not include that portfolio's performance in his official record. Additionally, Mark Hulbert's Hulbert Financial Digest uses only the three Marketimer model portfolios for ranking Brinker's performance against other newsletters -- not the "income portfolio."
Brinker's guest-speaker was Henry Nothhaft:
Moneytalk on demand and to go with Bob Brinker, is available for FREE audio/podcasting at KGO810 radio for seven days after broadcast. I download and save all three hours, including the third hour guest-speaker. (The program is archived in the 1-4pm time-slots.) If you don't download it from KGO within seven day, it's available at bobbrinker.com by paid subscription. KGO Radio Sunday Archives
Dixiegeezer took this awesome picture of a Pink Spoonbill this morning:
57 comments:
Hi Honey Bee
Thanks for all the information you give out.As far as DLTNX as of May 13,2011 it is ranked 12th out of 392 on Bloomberg's U.S. Fund Rankings Gov/Corp Intermediate:
From the interview I saw on M* of the manager,he seemed real aggressive about his way of investing as far as the yield goes.I think thats a gutsy move on Bob Brinker's part.
I was wondering what you thought about the new Focus Morningstar US Market index ETF (FMU:US) no commision through Scottrade and low expense ratio?Its getting very competitive out there in the way how to invest.
Also I was reading about SmartMoney magazine's topped ranked discount and full-service brokers for 2011.The list went like this.1.Fidelity2.TD Ameritrade3.Scottrade4.TradeKing5.Charles Schwab6.E-Trade7.Vanguard8.Merrill Edge9.OptionXpress10.ShareBuilder
I guess you get what you pay for.
Have a good day Honey Bee
"The funds that Bill mentioned which Brinker replaced with Double Line Total Return Fund were Vanguard Ginnie Mae Fund (VFIIX) and Vanguard Short-term Investment Grade Fund (VFSTX). Brinker sold 10% of each, bringing each weighting down to 15%. He took that 20% and put it into Double Line Total Return Fund."
So Brinker went from a Government guaranteed mortgage back fund [VFIIX] to a MBS fund that holds a big chunk of sub-prime, low ranked, non agency MBS.
Brinker is chasing yield through lower quality assets.
...Double Line Total Return Bond Fund came to market in April and so far has rewarded early adopters, up 11% since the launch. The outsized return is indicative of Gundlach's boldness. Unlike most of its rivals, which lean to pools of top-rated mortgages backed by government agencies Ginnie Mae, Fannie Mae and Freddie Mac, the DoubleLine fund adds a thick layer of low-ranked non-agency MBS.
About 55% of the portfolio, Gundlach said, is in these riskier plays, including subprime and so-called Alt-A mortgages, which are more illiquid than government-backed debt. As a result, the non-agency MBS portion presents significantly higher income potential...
I forgot the linke to the DLTNX fund:
http://www.marketwatch.com/story/five-mortgage-funds-for-yield-hungry-buyers-2010-08-13?siteID=mktw
Bob Brinker said on Moneytalk:
MEDICARE 800 pound budget elephant: Brinker said: "I had hoped that we would see the political will in Washington to tackle the 800 pound parakeet sitting over in the corner watching all this. It's called Medicare. Seventy percent of the 110 trillion dollars of unfunded government liabilities are lodged in the Medicare program. Money going out versus money coming in is so overwhelming in favor of the beneficiaries that it is mind-boggling.....I was very disappointed this week. Some of the top politicians that had been driving very hard for cutting spending, have backed off their pledge to do something about Medicare......
------------
The house of representatives passed the 2012 budget proposed by Paul Ryan in the middle of April. It included changes for people under 55 when they become eligible for Medicare at age 65. I don't expect the senate to pass this and even if they do the president would probably veto it. The house republicans have passed legislation to address the Medicare problem. Since the democrats don't like this approach, it is now up to them to propose an alternative.
"Since the democrats don't like this approach, it is now up to them to propose an alternative."
Not necessarily. They can do nothing and the debt ceiling will be increased anyway.
Business as usual despite Ryan's attempts to scrap Medicare as we know it.
Angie Q.
AP-Even though the government has reached its official borrowing limit, Geithner said unexpected revenue and bookkeeping maneuvers will allow the Treasury to continue auctioning debt for another 11 weeks.
Why is Sec Geithner kicking the debt ceiling can down the road for almost three more months? Aside from Paul Ryan and too few others in Congress, no one else will risk the ire of voters by reforming current entitlements which left unchanged are headed straight to insolvency.
Hi Dav,
Thank you for the info about the broker rankings. How interesting that Vanguard comes in down the list as number seven.
Actually, I didn't give out any information. Bob Brinker gave it out on Moneytalk yesterday. I simply reported and documented it.
I suspect that he, or one of his minions, was so anxious to get the information on this blog that they sent it to us a few days ago. I simply didn't take the bait, except I did discuss the fund and Gundlach.
As for Brinker being gutsy going for yield, he has been doing that for years now with the Vanguard High-Yield Fund, which he added to the fixed-income portfolio in April, 2003.
BTW: I looked at FMU, and as you said, it is very new. There is very little information about it out there yet. And I have to admit that I know absolutely nothing about the "Morningstar US Market Index."
.
Angie Q said: "Business as usual despite Ryan's attempts to scrap Medicare as we know it."
Angie,
In my opinion, that is a false statement.
.
Birdbrain,
You are correct. It seems hopeless, doesn't it?
.
Jeffchristie,
Please don't hold your bref and wait for the Democrat-controlled Senate to do anything except more giveaways.
.
"As part of a Republican spending proposal for 2012 and beyond, the House Budget Committee chairman wants to scrap Medicare as we know it and have seniors buy private insurance, beginning with new retirees in 2022.
This comes after two years of Republicans pillorying Democrats for seeking Medicare cuts of much smaller scale. But that's just politics. The real irony is this: The plan won't work unless joined with something much like the 2010 health care law Republicans want to repeal. That law, sometimes called ObamaCare by critics, creates regulated insurance markets with a variety of inducements, subsidies and requirements, to help the 51 million people who can't afford, or can't get, coverage."
Angie
http://www.usatoday.com/news/opinion/editorials/2011-04-11-editorial11_ST_N.htm
Trump says he's not running by the way. What a suprise.
I stand by my previous statement that the democrats must propose an alternative. The house bill that passed was "The 2012 federal budget". The senate which is controlled by the democrats need to act on this. They can't choose to do nothing unless they want a government shutdown. At a minimum they would be required to pass a continuing resolution to keep spending with borrowed money. The ball is in Harry Reid's court.
Great summary as usual!
Obviously the call about Bob Brinker's New Fund Recommendation was not a planted call! LOL
I wonder if Bobby Jr picked this fund?
Excerpts from Bob Brinker's New Fund Recommendation: DoubleLine Total Return Bond Fund - DLTNX
"The fund manager is Jeffrey Gundlach. Gundlach was Morningstar's bond fund manager of the year in 2006 when he oversaw about $65 billion of TCW's $110 billion of assets before he was fired."
and
Gundlach was fired in December 2009 by TCW and he sued TCW. TCW sued him, accusing him of "stealing confidential data, lying to potential clientes, and keeping drugs and pornographic materials in his office."
and
# Can Jeffrey Gundlach get the same results without the same research team and resources of TCW behind him while he has to managage his own, new investment firm? and deal with a law suit?
At least if true, he'll be too busy to miss his "alleged" porn collection. 8)
I can't believe anyone responsible would put "safe assets" into a fund managed by someone involved in this sort of mess. It reminds me of how he kept bragging about how good this fund manager at Montgomery was in the 1990s just before the guy got in trouble with the SEC and was fired...
Angie, the Anon-imp whimpers, ad-nauseum:
This comes after two years of Republicans pillorying Democrats...
Pillorying? PILLORYING
That's not a very good way to start a fair and balanced discussion now is it? DUH, DUH, and DOH.
Whatsamatta? Are you bored with your 45 id's at the sewer?
Kirk,
I don't agree that the call was not planted. I think that Bob Brinker is using this as a big marketing ploy.
I've seen this all before. He did the same thing with TEFQX and with QQQ, neither of which he took "official" responsibility for when they went south.
It will be the same thing with this fund. If it goes south, it will damage those who bought it, but it won't hurt Brinker's performance record.
.
Kirk,
I had forgotten about that Montgomery fund manager that Brinker touted for so long in the 1990's.
I know he touted Kevin Landis of Firsthand Funds. When his fund went south, Brinker said "hold," and never mentioned it again. I posted an excerpt from an old Marketimer in the summary.
Do you recall the name of the actual Montgomery Fund that Brinker was pushing on Moneytalk listeners until the fit hit the shan?
.
Kirk said: "I wonder if Bobby Jr picked this fund?"
I wonder why Brinker didn't know that the fund's duration was not in the same issue of Marketimer that "someone" made the recommendation (May 2011)?
I wonder if Robert M. Brinker is the "Editor: Bob Brinker" of 10789 Bradford Rd. Suite 210, Littleton, Colorado, 80127, where Marketimer is published, is writing Marketimer.
.
Here's the article from Kirk's article about Jeffrey Gundlach's past.
Ex-star manager Gundlach sued over stealing, drugs, porn
.
Kirk said:
"I can't believe anyone responsible would put "safe assets" into a fund managed by someone involved in this sort of mess. It reminds me of how he kept bragging about how good this fund manager at Montgomery was in the 1990s just before the guy got in trouble with the SEC and was fired..."
If this fund thing doesn't work out for Gundlach I hear there may be an opening over at the International Monetary Fund (IMF). If he can't get hired there he could run for president of France.
Jeff,
I doubt anyone can top that one. :)
.
May 16, 2011, 12:23 PM ET.
Bill Gross: Pimco Not ‘Short’ U.S. Government Bonds.
By Murray Coleman
Bill Gross, manager of the $240.7 billion Pimco Total Return Fund (PTTRX), is blaming a blogger for spreading the “misconception” that the firm has taken a net short position in U.S. government bonds.
In an interview on CNBC this morning, Gross said that Pimco is only “very underweight” Treasuries and that the firm is making money even though it has recently been on the wrong side of that trade.
Apparently, he was referring to another blogger. But I must admit, I’ve followed this story from the start for Focus On Funds readers. And I can say it didn’t start with a blog — my primary sources originally were wire reports from Reuters.
Not to point fingers. But it might’ve been helpful if CNBC’s reporters had nailed Gross down a little more on differences between PTTRX’s portfolio and Pimco’s funds as a whole. By saying the firm wasn’t net short really doesn’t get at the point — what’s he doing with the world’s biggest bond fund?
Gross also said during the talkfest that Pimco’s shifting to equities in some cases. Is that a pitch for their expansion into funds focusing on stocks … or, is he talking about PTTRX … or, Pimco as a whole?
“We were in-fact never short Treasuries,” Gross says in the interview, which you can hear here.
Whether you believe data from Pimco’s own Website or not — (it does seem to indicate that Gross added slightly to rather smallish short positions in U.S. debt) — PTTRX has a rather large cash position in PTTRX.
It’s interesting to note that his long-time rival Jeffrey Gundlach is playing these markets much closer to the vest. The former long-time TCW manager is holding close to the category average in his flagship DoubleLine Total Return Bond Fund (DLTNX).
The fund’s up 4.2% for the year heading into today’s session. By comparison, PTTRX was up 2.9% so far.
This whole episode reminds me of this weekend’s Fund of Information column in Barron’s (see “Bill Gross, Meet Bill Miller”).
Note: I heard this weekend that Bob Brinker’s popular Marketimer newsletter has switched to the DoubleLine fund as part of a larger, diversified bond portfolio
http://blogs.barrons.com/focusonfunds/2011/05/16/bill-gross-pimco-not-short-u-s-government-bonds/?mod=SmartMoney
Honeybee wrote:
Kirk, ...Do you recall the name of the actual Montgomery Fund that Brinker was pushing on Moneytalk listeners until the fit hit the shan?
One of the funds was the "Montgomery Micro Cap Fund" and the fund manager's name is "Roger Honor." I also believe he changed the name of the fund atleast once.
So Bailey,
How do you think this guy knows that Bob Brinker's Marketimer is "popular?"
And does he call four holdings, including equal portions Vanguard Wellesley and High-Yield Funds, "diversification" in an "bond" portfolio?
Guess he didn't do any fact checking before he wrote the Barron's article.
Bill Gross: Pimco Not 'Short' Government Bonds
.
Correction. His name is spelled "Roger W. Honour"
Finance Wizard Fined / Montgomery's Honour settles SEC case
September 30, 1995|By Arthur M. Louis, Chronicle Staff Writer
"The SEC fined Honour $275,000 and ordered him to disgorge $161,000 in trading profits and interest. In addition, Honour was banned from trading securities for his personal account as long as he works for an investment company."
Don't you love how Google saves so many trips to the library and hours of research!
Kirk asked "I wonder if Bobby Jr picked this fund (DLTNX)?"
May 10 from Junior's twitter account:
"Jeffrey Gundlach's new mutual fund is whipping Pimco's flagship in the short amount of time both have competed."
More than likely.
Frankj reporting:
OK, I will admit that the tiny portion of my portfolio that I devoted to SILVER is temporarily underwater. But when you get thrown from the horse, the advice is get right back up there again and ride, right?
So, gleaned from a link on Drudge, here is something -- perhaps the next bubble? maybe get in on the ground floor?
INCANDESCENT LIGHT BULBS.
My wife is ready to begin hoarding these, and I'm almost there, myself.
Hey, BB had a guy on the show who was buying the "forever" stamps, remember him? BB couldn't argue with his logic.
A quote from the article about light bulbs:
"To encourage energy efficiency, Congress passed a law in 2007 mandating that bulbs producing 100 watts worth of light meet certain efficiency goals, starting in 2012. Conventional light bulbs don't meet those goals, so the law will prohibit making or importing them. The same rule will start apply to remaining bulbs 40 watts and above in 2014. Since January, California has already banned stores from restocking 100-watt incandescent bulbs."
Homeowners and businesses begin hoarding.
The slickters move in and begin buying bulbs direct from the factory, and storing them.
The bigger fish move in and buy those inventories, setting up ETF's in incandescent bulbs, (symbol ICB ?).
Shills make phony trades designed to pump the price.
Debate rages on internet financial sites. Should one take possession of the actual bulb or investment in the manufacturing process?
Cassandras warn of the 16th century investment in bulbs, Tulipmania, which ended badly. They are drowned out.
China gets into the act.
Congress gets into the act with tariffs followed by an outright ban on production and sales.
... someone else please finish this thought ... I have to head out to Ace Hardware, Home Depot, Wal Mart, Lowes, K-mart ...
Bob Brinker said:
"How could you as a member of congress say that you are not going to vote in favor of raising the debt ceiling when your record is full of votes that you have cast to spend money that raise the deficit. If you do that, as a politician. If you do that, you are a hypocrite."
George called from Tennessse. He told Brinker that our current president and vice president voted against raising the debt ceiling when they were serving in the senate.
"How do you think this guy knows that Bob Brinker's Marketimer is "popular?"
Reminds me of the old story about the movie theater that advertised "popular prices"
A customer groused to the ticket seller, "You call these popular prices?"
"Well WE like them" she replied.
Personally I think Jeff Gundlach will beat Gross going forward as he has in the past.
Frankj:
Any relation to the Hunt brothers?
Wikipedia.org Silver Thursday.
I was wondering if anyone else here knew about the mess behind the fund manager's firing from his previous company and was glad to see that this has been bought up in this thread ... which makes me wonder, is Bob totally nuts in totally backing this guy? Did he not do his research and not have a clue?! I think he's lost it with this latest move.
-AB
Birdbrain,
I was going to post a hyperlink for your link, but it doesn't seem to go to anything. Did you post the right link?
.
Frankj here --
Birdbrain, no, I'm no relation to the Hunt brothers. Their story was covered recently in the WSJ in light of the recent silver ... oh, let's call it a hiccup shall we?
So back to this light bulb thing --I'm rethinking it. Garage and closet storage is limited here at Casa Frank, so I'm thinking yeah, fill the shelves, but the REAL MONEY is in ... advisory services.
I can get a newsletter going, but I need a title, let's see ... how about BulbTimer?
Bailey,
LOL...yes, your story probably fits very well when it comes to Bob Brinker's fan club.
You said: "Personally I think Jeff Gundlach will beat Gross going forward as he has in the past."
Well, I certainly have no clue, but please note that I made a correction in my summary.
I had gotten the DoubleLine Total Return Fund duration number (2.6) from Yahoo Finance and based on the DoubleLine Funds website, the duration is 3.79.
That's a HUGE difference....
.
AB wrote: "I was wondering if anyone else here knew about the mess behind the fund manager's firing from his previous company and was glad to see that this has been bought up in this thread ... which makes me wonder, is Bob totally nuts in totally backing this guy? Did he not do his research and not have a clue?! I think he's lost it with this latest move."
AB,
I'd guess that most of us have gone down the learning curve right here together. Be sure to read Kirk's post above, and check out the link to the article he wrote about Jeffrey Gundlach's very shady past.
As you pointed out, Bob Brinker doesn't seem to have any problem with anything that Gundlach has done. I guess Brinker really means it when he says, "It's all about the money."
On the other hand, it's possible that Bob Brinker, host of Moneytalk, didn't write the praises for Gundlach that were in the May issue of Marketimer.
When he was talking to the caller, he was certainly convinced that the duration of the fund was in the last issue of Marketimer, until someone obviously told him it wasn't and gave him a good excuse for why not.
Think about it? Why would he repeatedly argue with the caller that it was in the newsletter, and within 2 seconds, not only know it wasn't there, but emphatically know WHY IT WASN'T THERE????
Think about it...
.
When Google had it's nervous breakdown last week, some of the comments didn't get replaced. I think that it was Birdbrain (correct me if I'm wrong) that pointed out that Bob Brinker -- the junior, had twitted about the DoubleLine Bond Fund on May 10th.
Here it is:
Bob Brinker
BobBrinker Bob Brinker
"Jeffrey Gundlach’s new mutual fund is whipping Pimco’s flagship in the short amount of time both have competed." http://bit.ly/muOCcq
10 May Retweet Reply
BobBrinkertwitter
.
FrankJ wrote: "So back to this light bulb thing --I'm rethinking it. Garage and closet storage is limited here at Casa Frank, so I'm thinking yeah, fill the shelves, but the REAL MONEY is in ... advisory services.
I can get a newsletter going, but I need a title, let's see ... how about BulbTimer?
Hi Frank,
I wrote a real long reply about the light bulbs last night, and somehow pushed something on my keyboard that blew it to smithereens.
I was so disgusted with myself (I thought my post was pretty brilliant. LOL!), I just shut down and went to bed.
Anyway about the light bulbs. I've been hoarding them for quite awhile now. I should have enough to last for several years, unless big brother starts confiscating them.
There is some talk about confiscation. Additionally, here in California we have been invaded with something called a "Smart Meter" which PG&E has installed in our homes to keep track of our energy usage. Who knows? Perhaps these meters will be able to tell what kind of light bulbs we are using and shut them off?
Nothing would surprise me in this decline into totalitarianism.
They are going to outlaw even our grocery bags -- both paper and plastic. Foam cups fell some time ago.
The list of outrageous attacks on our freedom as Americans could go on for a long time.
I agree that there is "real money" in advisory services, especially if one has a national radio show and can hype it by dropping clumps of male-cow manure (is there such a thing?). LOL!
How about we go partners and start The Baggy-Bulb Advisor. :)
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Honey wrote:On the other hand, it's possible that Bob Brinker, host of Moneytalk, didn't write the praises for Gundlach that were in the May issue of Marketimer.
When he was talking to the caller, he was certainly convinced that the duration of the fund was in the last issue of Marketimer, until someone obviously told him it wasn't and gave him a good excuse for why not.
I heard this call also and wondered how he quickly realized his mistake. Only two possibilities. Either he had a copy of Marketimer nearby or Bob Jr. corrected him. He also had to correct the answer he gave Marlene about the 2% payroll tax. Again, either he realized his own mistake or perhaps Bob Jr. was listening and sent him a quick message. I doubt if his screener would have been sharp enough to catch both of those errors.
Here is a very thorough article from Barron's about manager Jeffrey Gundlach. Please note in the interview what Mr. Gundlach's outlook for the stock market is.
http://online.barrons.com/article/SB50001424052970204442204576144662301971254.html#articleTabs_panel_article%3D1
Honeybee, I also recall thinking how odd that Brinker got real defensive with that caller last Sunday about the duration, etc. I started wondering if he himself did not write his newsletters anymore, and hearing that others here might have the same thoughts have added to my suspicions. Scary thought that BB may no longer be in control.
-AB
HB: Happy to have you as a partner in a grocery bag/lightbulb enterprise! We might be able to recruit Birdbrain as the head of public relations with his sense of humor he'd be great.
Smartmeters: I listen to Bill Wattenberg on KGO archives and he mentions them often. Here in the Evergreen State, our utility installed one at my house. I don't know what all it is capable of, but I think one of the purposes was to monitor usage and report back.
-- Frankj
Great article Jim
Two things to note from it:
#1 Gundlach admits there were drugs and and porn in his office and of course claims "they represented "a closed chapter in my life"
#2 Interesting that Brinker would recommend a bond fund manager who thinks the muni bonds Brinker has been recommending on his show for years could collapse:
Gundlach's views on different bond sectors probably deserve more attention than his other pronouncements. He foresees a major collapse in the municipal-bond market, beyond the declines to date, given the parlous condition of both state and local government finances. He is preparing, he says, by having established a joint venture with the Chicago financial firm RiverNorth. Among other things, it expects to scoop up closed-end municipal-bond funds in the next year or so when the predicted apocalypse arrives, driving fund prices down, he says, to as little as 40% of net asset value.
I guess it is good to have all bases covered when you are in the entertainment business.
The Dow bounced off its uptrending 50-day moving average yesterday, is deeply oversold, and the rally is continuing today. Not a barn burner, but up and that's good for bulls.
Before the rally REALLY gets going, it could be time to put any spare cash to work. At least that's what I'm a-thinking!
- Dan G
Jim,
I agree that someone, probably BobJr, immediately took action when Brinker was stepping deeper and deeper into the "duration" doo-doo.
And as you said, he was also informed that he was coming across as a belligerent fool by hammering Marlene with that "everyone" got a payroll tax cut stupidity.
Does BobJr sit at a keyboard in Colorado as he listens to daddy do the Sunday program that sells newsletter for both of them?
Does Brinker have a computer in front of him, ready to receive instant messages from Bobby?
It's all about the money and the "young sprouts." Of course, this young sprout is in his 40's.
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Lottery Winner Continues To Use Food Stamps
By Phil Villarreal on May 18, 2011 11:49 AM
A Michigan man isn't letting something a lottery windfall stop him from using government assistance to buy food.
In an interview with WNEM Saginaw, the man says his $2 million winnings from last year didn't go as far as he would have liked. He said taxes swallowed up more than half the money, and he has no apologies for using his government-provided electronic card to buy food, saying "If you're going to ... try to make me feel bad, you aren't going to do it."
The man says he has permission from the Department of Human Services to continue using the card. Neighbors have spotted him driving an Audi convertible.
Lottoluck
Jim,
Here's a hyperlink to the Barron's article that you posted the link to, and a few excerpts -- his take on muni's and high yield.
"Gundlach's views on different bond sectors probably deserve more attention than his other pronouncements. He foresees a major collapse in the municipal-bond market, beyond the declines to date, given the parlous condition of both state and local government finances. He is preparing, he says, by having established a joint venture with the Chicago financial firm RiverNorth. Among other things, it expects to scoop up closed-end municipal-bond funds in the next year or so when the predicted apocalypse arrives, driving fund prices down, he says, to as little as 40% of net asset value.
What makes the $2.7 trillion muni market particularly vulnerable, Gundlach says, is its weak psychological underpinnings. Many investors in municipals are wealthy individuals who buy the securities purely because of their tax advantages and have little knowledge of the fundamentals of the paper they own. They tend to be "all-in" investors, owning little else, and thus will be prone to panic, he figures, in the face of surging defaults.
"Look, I don't know whether the market will suffer $10 billion or $30 billion in defaults, but the actual amount doesn't matter, Gundlach says. "There will be a panic at the margin, and muni bonds from the highest-rated on down will plummet, in part because other sorts of investors tend not to step in."
One of Gundlach's biggest regrets is not having had the mandate to buy high-yield corporate bonds in his TCW fund. Thus, he was unable to take advantage of the succulent values available in the high-yield market in late 2008, at the depths of the global financial crisis. His DoubleLine total-return fund can invest up to a third of its assets in high-yield debt, although he is hanging back from that market now, concerned that prices have rallied too much.
Gundlach's cautious take on high-yield is the result of an aperçu or intuitive flash he had several weeks ago, that the yield spread between high-yield and government bonds should be calculated using the 20-year government bond, rather than the entire Treasury yield curve. That's because high-yield paper, though maturing sooner than 20-year bonds, shares similar price volatility. The current 300 basis-point, or three percentage-point, spread between yields in the high-yield market and on 20-year bonds is as narrow as it has been at any time in the latest credit cycle, he notes."
Jeffrey Gundlach is the King of Bonds
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Hi Honey,
I just realized that you had already mentioned that article in the comments to a previous summary from May 7. I'm getting old so I have a bad memory. Sorry!
Anyway I was surprised that someone who Brinker speaks so highly of thinks the S&P will go to 500 in the next couple of years.
I can't imagine Brinker thinking highly of him if he managed a stock mutual fund. He's one of the bears that Brinker is constantly bashing.
AB said: "Honeybee, I also recall thinking how odd that Brinker got real defensive with that caller last Sunday about the duration, etc. I started wondering if he himself did not write his newsletters anymore, and hearing that others here might have the same thoughts have added to my suspicions. Scary thought that BB may no longer be in control. -AB"
AB,
This is strictly my own opinion, but I think it's likely that the "Bob Brinker" listed on the bottom of page one of the newsletter with the address: 10789 Bradford Road, Suite 210, Littleton, Co 80127, may not be the radio talk show host.
If you go back a few years in Marketimer, the address listed was in New York, with Robert J. Brinker, editor.
Then for a couple of years that front page listing disappeared altogether, and the address on the last page showed a NY address and Robert J. Brinker Advisory Services.
Then in October 2004, just a few months before the Junior Bob Brinker began publishing the Brinker Fixed Income Advisor, on the bottom of the front page of Marketimer, the address reappeared with a Colorado address and listed the Editor simply as: Bob Brinker.
It was in the 2004, 2005 time frame that Junior began posting on the internet as "Bob Brinker."
Perfectly LEGAL, perfectly planned and perfectly executed switcheroo.
If that is what happened, it shows great cleverness and immense patience.
But, if that is what happened, you should have been "very afraid" for several years. Recall that Marketimer portfolios rode the 2008-2009 megabear market fully loaded.
.
To bond market experts:
When Brinker Jr remarked how DLTNX is whipping Pimco's flagship, I assume he means Total Return, which is also an intermediate-term fund. Yahoo Finance has both funds investing 60% of holdings in AAA or AA rated bonds yet when checking each company's website for current yield
DLTNX net 30 day yield 10.52%
PTTRX net 30 day yield 2.51%
Over four times the yield? Is this correct? Can someone explain this extraordinary figure outside of a junk bond fund? Am I asking too many questions?
Birdbrain,
You can ask as many questions as you like, but you will have to accept FrankJ's offer to be the Public Relations Manager for our new Bags-'n-Bulbs Financial Advisor. LOL!
The difference between the yield on those two funds is incredible.
At the website of Jeffrey Gundlach's DoubleLine Total Return Fund shows that 31% is invested "below investment grade."
Bill Gross' Pimco Total Return Fund has a minuscule amount in below investment grade.
.
Yahoo isn't the only site where the duration for DLTNX is listed at 2.6. Morningstar, Fidelity and MSNmoney also have it at that figure. This should add to the confusion.
http://portfolios.morningstar.com/fund/summary?t=dltnx®ion=USA&culture=en-US
http://fundresearch.fidelity.com/mutual-funds/composition/258620202
http://moneycentral.msn.com/investor/partsub/funds/portfolio.asp?Funds=1&symbol=DLTNX
I have no clue if anyone here owns GGR, but if so, a word of warning: Insiders are selling at a very fast clip.
Insider Transaction: $GGR Sale at $0.50 per share of 609 shares by Beneficial Owner (10% or more) Roy Jean Paul on 2011-04-18.
Yahoo finance market pulse
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Jeffchristie,
Thank you for that info and links that show 2.60 duration for DLTNX. Here are the hyperlinks:
Morningstar
Fidelity
Moneycentral.msn
And here is the DoubleLine Funds website number that shows 3.79
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Poor me...I didn't get even one share of LinkedIn at the IPO price. Obviously lots of money was made, but probably the "institutions" made most of it.
It's trading at about $105 right now.
CONGRATULATIONS, LINKEDIN! You Just Got Screwed Out Of $130 Million
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A miracle cat story. Warm your heart, spend a minute to watch the video:
Adorable Lady Finds Missing Cat During Interview Outside Tornado Ruined Home
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Jim Cramer didn't speak too kindly about LinkedIn IPO:
By 24/7 Wall St.
If anyone can cause a controversy or stir the hornet's nest on Wall Street it is Jim Cramer. In late-afternoon trading today Jim Cramer was blasting the LinkedIn Corporation (NYSE: LNKD) post-IPO trading as a sham. His thesis is the same as many that this offering would not have such a high premium value had the company actually unloaded more shares than this tiny float it sold today.
Marketwatch: JIm Cramer Calls LinkedIn IPO Action a Sham
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Lakshmann Achuthan predicts summer global economic slowdown, but no recession. QE3?:
"The world is headed for an economic slowdown, according to the Economic Cycle Research Institute's (ECRI) Long Leading Index of global industrial growth."
The Daily Ticker
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Jim Rogers predicts much higher oil prices -- $200 a barrel?:
Oil price to rise "beyond anybody's expectations
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