March 27, 2011, Bob Brinker's Moneytalk: Summary, Excerpts and Commentary

March 27, 2011....Bob Brinker hosted Moneytalk today....

Bob Brinker’s comments paraphrased, summarized or excerpted:

STOCK MARKET….Had a very good week. The S&P 500 Index was up almost 35 points to 1313.80, bringing calendar year 2011 returns to almost 5%. That is within 2% of its 2011 closing high. Other indexes following along.... A minor correction because of what happened in Japan, but has almost completely recovered.

OIL PRICES....The Middle East is in turmoil and instability continues.....Syria is not a major oil-producing nation. Iran is a big deal when it comes to oil.

Brinker said: "Why did the United States smoke the peace pipe with a tyrant like Maummar Gaddafi a few years ago. Well he's still a tyrant. Now he's not smoking the peace pipe. Instead we are dropping artillery over there.....This is very bad news for Israel, by the way.....The big oil is in Saudi Arabia.....And it doesn't appear likely that it will end soon in terms of middle east unrest, and that has pushed oil up to $105 a barrel, and $115 a barrel for Brent, crude that is used for most of Europe and Asia."

Honey EC: I'm not sure when the United States smoked the peace pipe with Gaddafi -- anybody remember?

HOUSING INDUSTRY....is in the "dumpster."

JOBS REPORTS..... Comes out next Friday....median private payrolls forecasted to go up 222,000.....expect to lose 27,000 more government jobs and that would bring net non-farm payroll gain to 195,000....very similar to the prior month.

Brinker said: "We are seeing much better new jobs growth. Really a remarkable turn-about when you consider the 8 million jobs that were lost in the financial debacle of 2008 and the period around there."

UNEMPLOYMENT RATE.....Projected to stay close to 8.9, where it is right now.

BEN BERNANKE….The Fed Chair will now have quarterly press conferences. It’s a good idea, because there is a great deal of misunderstanding and misinterpretation in the media about what the Federal Reserve is doing as they try to create an atmosphere for better jobs growth.

TREASURY RATES....exceptionally low.

NATIONAL DEBT AND DEFICIT: Brinker said: "They are fighting in Washington over minuscule spending cuts relative to the budget. I don't see anything in Washington today that would bring austerity. How are you going to get austerity out of a senate that's controlled by the Democrats? How are you going get austerity out of a White House that has been proposing trillion dollar plus annual deficits......It's not going to happen.....My opinion is that this president will not endorse an austerity program. And under the current make-up of the Senate, I don't think that they will endorse an austerity program. So I don't think it's going to happen in the foreseeable future with the current make-up of those governing bodies."

Honey EC: Brinker is clearly correct about that, but I was surprised to hear him be so candid about it.

LAS VEGAS REAL ESTATE HIT HARD: Brinker said: "I'm in Las Vegas, Nevada. And here in Las Vegas, Nevada, real estate has been his as hard as anywhere in the country. In the State of Nevada, it's estimated that 65% of the mortgages are underwater, negative equity in about 65% of the mortgages. As well as 1 out of 7 properties setting unoccupied. It's been one of the worst real estate downturns, and we're not alone, California has seen it, Phoenix has seen it, South Florida has seen it......"

Honey EC: Brinker, like most everyone else, got hit hard by the drop in value of his million dollar penthouse condo in Lake Las Vegas. Some that are adjoining or nearby him are selling for under $200,000.

CALLERS

John from Fairbanks, Alaska, told Brinker that he was moving from Alaska to Washington and asked Brinker which he would recommend -- a 15-year or a 30-year loan on a new home. Brinker said that since John qualified for a 4 1/2% loan, he would call that free money and take the 30-year "free ride." Brinker also pointed out that John was moving from one no-state tax state to another no-state tax, but that he would no longer get the nice check for oil that Alaskans get every year. Brinker said that the people in Alaska are "absolutely wonderful people. We hear from them all the time."

Keith from California asked Brinker to explain the difference between a short-term correction and a minor pullback.

Brinker replied: The generally accepted language for a correction is that the market is down over 10% but less than 20%.....I think anything in the single digits is a minor pullbacks. Some people would call it noise. That's really what we've had here.....And my forecast, as I've given it on this broadcast has been very consistent on this point......And that is, and we started saying this earlier this year, and that was that we thought that pullbacks would be in the single digit category..... So you can always see short-term corrections in a cyclical bull market, which is what I believe we are in right now.......From my point of view, it's just provided those looking for an opportunity to dollar-cost new money into the market, to do so......

......Now we've had outright buy signals on the market over the past couple of years for those sitting with some money to invest. We have had a buy signal that we gave in the beginning of July last year when the S&P was around 1030........ And we upgraded the market at the beginning of July last year to attractive for purchase and we're glad that we did it.....And then prior to that in mid-January of 2009, we went out and said that we thought the market was attractive, and it was in the low-to-mid 800's at the time, by the way. Now it's at 1313, so that's a pretty big gain from back then....And the rest is history."

Honey EC: Brinker has a SELECTIVE memory, either that or he is DELIBERATELY misleading listeners into thinking he can accurately time the stock market. His January 2009, mid-800's buy signal was BEFORE the S&P dropped into the 600's in March, 2009, and AFTER he had issued multiple buy-signals in 2008 at much higher levels, including the mid-1400's (several times), the mid-1300's and the low-1200's.

And more importantly, in March 2009, he discarded the mid-800's buy signal and said he would have to look for a new market bottom. Here's what he said in the February and March 2009 Marketimers. Note the levels of the S&P:

Marketimer, February 2009 (S&P @ 825.88) Bob Brinker wrote: "....we recommend using periods of weakness in the low-to-mid 800's S&P 500 Index price range to add to positions. Our model portfolios remain fully invested."

Marketimer, March 2009 (S&P @696.33) Bob Brinker wrote: “Due to the fact that the November 20, 2008 S&P 500 Index closing low failed to hold during the testing process, we believe a new bottoming process will be necessary in order to put an end to the bear market.”

Christopher from "Hoosierland" asked Brinker what fundamentals to look for when choosing a trading stock. Brinker said there were three things to look for: know the company, a lot of volatility and liquidity. Brinker cautioned against incurring tax bites on short-term trades, and the tendency to buy high and sell low.

Anthony from Milwaukee asked: "In your model portfolios, you have several International Funds. Would they protect against hyper-inflation in the United States?"

Brinker replied: "Well they certainly provide a cushion against a falling dollar.....Which is one of the several reasons we have international holdings in our model portfolios. We actually have international holdings in model portfolio I, II, III and also active-passive portfolio......And no question about it, one of the cushions that you get with an international weighting is that if you have a weak dollar that is going to accrue to the benefit of those holdings."

Honey EC: Yes, Brinker is correct. He recommends Vanguard International Growth Fund (VWIGX) and Vanguard FTSE All-World (VFWIX) in all of his portfolios -- never more than a total of 20% international in any portfolio, and much less in the balanced portfolio.

Walt from Illinois asked: "What is your feeling about investing in silver bullion?"

Brinker replied: "I've made it very clear that I regard silver bullion as an alternate to using gold bullion for those that want to have a precious metals hedge. And I've said on this broadcast that I prefer the exchange-traded fund approach, rather than going out and buying severely marked up gold or silver coins. I think you should not be surprised if it turns out that what you've bought is only worth half of what you've paid for it if you turn around and sell it. I hope everybody heard what I just said....That's an incredible statement that I just made.....

.....But if you want to buy gold or silver, you do the exchange-traded fund. By doing that, you buy gold bullion backing the exchange-traded fund GLD for gold, or you buy silver bullion backing the exchange-traded fund SLV for silver. When I first mentioned the GLD shares on this broadcast years ago, they were trading in the 50's, believe it or not. I recommended that specifically for listeners that wanted to have a hedge on gold....I said that's the way to do it. Sometime ago, I also mentioned SLV when it was trading in the 20's for that same purpose - for those that want to have a hedge.

Honey EC: Don't be mislead. When GLD was down in the $50 range, Brinker was VERY negative on buying gold and used to go way back to the time when it was $800 an ounce and point out what a bad investment it was.


Bob Brinker quote of the day (about the 529 tax-advantaged plan): "I really don't understand congress, being so limiting in what they will allow you to put away in the education savings account......If there's anything more important to the future success of the United States in a global economy than education, I don't know what it is. And the government should be encouraging you to save for education, not discouraging you as they do with these tiny education limits."

Honey EC: Wonder why Brinker thinks that the only way for parents to save for college is on the backs of taxpayers? Wonder why Brinker never points out something that is not only possible, but often done -- young people actually WORK (Yikes! did I use that four-letter word?) their way through college or earn scholarships.

Bob Brinker's guest-speaker was John Mauldin, "End Game"

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Moneytalk on demand audio/podcasting available for FREE at KGO810 radio for up to seven days after broadcast. The program is archived in the 1-4pm time-slots. You can take it with you! I download and save all three hours, including the third hour guest-speaker, so that I can refer back to them in the future if Bob Brinker mentions something about them on the air. (Honey EC: The KGO link seems to be down right now. I will post the link as soon as it comes back up.)

Dixiegeezer took this picture in Costa Rica. Please enlarge and marvel at one of God's most amazing creature:


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Bob Brinker Does a 1am Guest Appearance on WABC

March 23, 2011....Yesterday, Rob from Pasadena informed us that Bob Brinker had made an hour-long guest appearance on a middle-of-the-night show on New York's WABC radio.

Bob Brinker talked about what caused the crash of 2008. Brinker never addressed the subject on Moneytalk at any time when it was happening, but he has talked about it a lot over the past year and half with the assistance of hindsight. In the wee hours of the morning on Tuesday he talked about whether it will or will not have any affect on the future.

Rob wrote:

Hi Kirk,

Doug's show airs from 10 p.m. (pacific) to 2 a.m. so I usually fall asleep long before that but I have never heard the word Bob Brinker uttered until last night. Doug used to have the KABC LA morning show here for several years then was canned about two years ago and then came back with his syndicated Red Eye Radio show. He broadcasts from the KABC LA studio five nights and "MR. KABC", does the show the other two nights. I just looked on the NY WABC and there is a place to listen to this mornings (East coast time) show with Bob. Click on Red Eye Radio: March 22nd, 2011 - 1am and you can hear the on air love affair Hahahhah.

Rob
Pasadena ....March 21, 2011 10:58 PM

Here is a brief summary and some excepts and commentary:

Doug introduced Bob Brinker: "Bob Brinker has been the host of Moneytalk for well over 20 years and actually syndicated since 1986, and at Bobbrinker. com all things Bob Brinker. And his newsletter, Marketimer, many of you have and don't make an investment move without consulting it......Bob, how are you?"

Honey EC: Perhaps Doug doesn't know that many have had Brinker's newsletter and made moves that they lived to bitterly regret because they lost money. Some have even had to postpone their retirements. Many of those "moves" are documented on this blog.

Brinker said: "Doing well, Doug, it's great to be with you on Redeye."

Doug said: "......Of course you're heard all over the country on fine radio stations, including KABC in Los Angeles and many other. We have so much to talk about. Where do we kick this off? We've got Libya, we've got Japan, we've got all the turmoil in the middle east, and gas prices. But I think that starting point I'd like to get to is the market crash of 'o8 that sort of became the game changer when the table got kicked over.....In your opinion, have we fundamentally learned anything."

Brinker said: "It may or may not matter in our lifetimes whether we did learn anything. I know that's a surprising answer, but if you really analyze, it may not matter. Here is why I say that Doug. What happened in 2008 was something of historic significance. That is, something under the surface that was very, very difficult for most to see, which was the sub-prime crisis that had been building for some time in a stealth manner..... undermining the financial and the banking system. And of course, it blew up in 2008 and the rest is history......The reason I say it may not matter how much we learned in our lifetimes from that event..... is because the chances of something exactly like that happening again.... in any reasonable time frame....even measured.....in decades are slim and none..... and slim just left the building.....

.....It was a particularly unique set of circumstances that brought this about. You know the drill. The government pushed to get everybody to own a house.....That never made any sense. But the government pushed to get banks to make loans to people that couldn't repay them. A mortgage industry...... which was basically running wild. And that DVD was X-rated because the things they were doing in the mortgage market were unseemly. .....Your listeners on Red Eye want to read a couple of books....It's like going to school.....One is by Andrew Ross Sorkin....His book is "Too Big to Fail." ....It's such a big hit, they are making it into an HBO film which will come on this summer. All-star Hollywood cast which will include the likes of William Hurt, and they will more or less re-live the events of 2008. Another book to go to school with....."All the Devil's are Here" by Bethany McClain.......

.......Did we learn anything? Very hard question to answer because....the regulations that have been put into place, well now there's a campaign to undo them and frankly, they're not that tight anyway. So it's highly questionable how much things have actually changed. The good news is that the real estate market is in the doldrums. It's going to take time for it to get out of the doldrums, so we're not going really have to worry about a new sub-prime crisis coming at us. It's not going to happen."

Here are Birdbrain's comments about what Brinker said:

birdbrain said...

Kudos to Rob in Pasadena for the link to Brinker's syndicated appearance. Some of his reasons for the 2008 crash were:

Government pushing everyone to own a house

Mortgage brokers running wild

Absurd lending practices

At the time Mr B was well aware of these conditions and still was frozen in the headlights, unwilling to change his bullish stance on the market. If you knew of him only from this interview you would be impressed with his overall perspective on financial matters.

Red eye radio? How about red ink?

March 22, 2011 7:39 PM

Doug and Brinker discussed the loose credit environment that preceded the crash. Brinker said that was the one thing that had changed, that the banks have become very reluctant to sign loans unless they are sure that it can be paid back.

Doug asked Brinker if the economy could recover without the housing market recovering.

Brinker said: "There is no question whatsoever that the United States economy is in a period of recovery, which is quite remarkable considering what we went through a couple of years ago. We have real..... GDP growth estimate is between 2 1/2 and 3 1/2 annual rate.....So we have what we call a slow to moderate growth in the economy track right now. And it is definitely happening without the help of the housing sector. The housing sector along the bottom.....It's unlikely to go anywhere this year because 2011 should be the peak year.... for foreclosure activity. After 2011, we should see dwindling foreclosure activity......"

Doug asked Brinker what other sectors are leading the recovery then.

Brinker said: "We have two sectors that are leading the recovery, they're very powerful. One of them is manufacturing........The reason that's doing so well is because United States exports are doing very well. Now part of the reason for that..... is because we have a weak dollar.....The price of our exported products on the shelves overseas becomes more competitive......We're actually seeing some good orders in the automobile industry, of all things......"

Doug asked Brinker what kinds of things is it that America is manufacturing that are success stories.

Brinker said: " I think one of our leading success stories has to be our technology industry. For example, the products that are being invented, improved and exported out of Silicon Valley, USA......particularly in Northern California......And I'll just give you one example of a company that's a leader in that area, which is clearly is Apple....."

Doug asked Brinker if those things were actually made here. Brinker replied that a lot of things were sent offshore because of the cheap labor -- lot of products are made in Asia.

Doug said that a lot of folks are hurting because of jobs being sent offshore. Brinker explained the "hubcap theory" and globalization to Doug, and said that we knew it was coming -- that he had talked about it for over 25 years on Moneytalk. Brinker is totally against protectionism, and said that America exported 1.3 Trillion dollars worth of goods around the world in 2010.

Doug asked Brinker several questions about China. In general, Brinker is all for trading with China in spite of the fact that they use child labor, etc.

Doug asked Brinker about oil prices. Brinker reminded Doug that "Beggars cannot be choosers."

Doug said: "Host of Moneytalk, heard all over the country on hundreds and hundreds of stations. His newsletter, Marketimer, is read by thousands and thousands of people who want to stay on top of their finances in these turbulent times and he's with us tonight to talk about all things economic."

Honey EC: I think Doug might have gotten carried away with his sales pitch for Brinker because I seriously doubt that Moneytalk is on "hundreds and hundreds" of radio stations. There are about 200 stations listed at Bobbrinker.com, but whether or not he is actually on all of those stations is questionable.

As for "thousands and thousands" of people reading Marketimer, if that is so, why does Brinker still work on Sundays well past retirement age? And why is he up in the middle of the night doing guest appearance on a program that runs from 1am to 4am?


Doug asked Brinker what he thought about the 14 Trillion dollar national debt and states that are in trouble. As usual, Brinker zeroed in on California. When he finally got back to the national debt, he said that when interest rates normalize, it will be very serious.

Brinker actually took several calls, but the subjects were on world events, etc. There was nothing that had anything to do with the stock market or the title of his newsletter. One caller said he heard it reported that someone in China said they planned to take over the United States and even commit genocide here. Brinker came a bit unglued, but Doug handled it very well.

Caller Richard asked Brinker how old he is. Brinker laughed and said he had "adopted the Jack Benny model and stopped at 39." LOL! I think Richard was offended at Brinker's cavalier attitude about the exporting of real American jobs. And he sounded a bit sarcastic when he told Brinker he was probably a smart man.

SOME COMMENTARY:

Jim said...

Honey,
I listened to the interview Brinker gave using the link provided. You are definitely right that his stock market advice during that time was "off limits". I'm sure he insisted on those terms before agreeing to do the interview.

It's good Brinker never became a politician. Imagine for a moment if he would have to go on "Meet the Press". Suppose the host of this radio program would have started off by saying: " Bob,in 2008 you predicted the stock market would go to record highs, but instead it dropped 57%. What went wrong?"

Bartee said...

all you guys are so sharp.. and thanks to HoneyBee with her freedom of speech site .. it shows how "ON" Brinker is and the listeners are on it .. BRING IT... I can't believe Brinkers place wouldn't let Honeybee get his newsletter.. afraid?? DUH .. I think the Russian may have been a "ILove you Brinker" plant ,, his call didnt make sense... I have only one word for you HoneyBee..WINNING.

March 23, 2011 12:58 AM

Listen to the hour here: News Talk Radio 77 WABC

Dixiegeezer sent this astonishing picture from Costa Rica (click to enlarge):


Here is Dixiegeezer's closeup of the moon in Cost Rica...wow:

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March 20, 2011, Bob Brinker's Moneytalk: Summary, Excerpts and Commentary

March 20, 2011, Bob Brinker hosted Moneytalk today.

Bob Brinker’s comments summarized, paraphrased or excerpted:

STOCK MARKET…Some volatility has come into the stock market in the month of March – not a lot – just a little. The S&P 500 is 1279, a year-to-date total return of 2% including cash dividends. Brinker said: “When we look at the correction, if you want to call it that. Some people call it noise and it certainly is noise at this point, the market is setting just 4 3/4% below the high year-to-date in 2011......

......When you look at what's going on around the world.....it's pretty amazing when you look at the resilience in this market.....We have war in Libya. We very high tension in the Mid-East. We have Saudi Arabian military forces moving into Bahrain to protect against protesters. We have protests going on at a number of other countries in the mid-east......We have the virtual elimination of oil supplies from Libya. We have the earthquake and tsunami in north eastern Japan, and the Fukushima nuclear situation......When you take a look at all of them, including the continuing sovereign wealth problems in Europe, you say how is it possible that the S&P 500 is only 4 3/4% below it's 2011 high mark. There is only one word and that is resilience."

Later in the first hour, Brinker told Jack from Peoria: "You need about 120 on the Dow to get up to 1%. You need 240 points on the Dow to get to 2%. 360 points on the Dow still only 3%. J. P. Morgan told us long ago that stocks tend to fluctuate.....So a move 100, 150 or 200 points doesn't really amount to a hill of beans.....as we speak the Dow is 11,858. By the way, I don't think the Dow is the best average to use when a gauging market activity. I think the best index to use when gauging day to day activity in the market is the S&P 500....it's currently at 1279. Now the index has been as high as 1343 on a closing basis back in February."

ATT WIRELESS TO ACQUIRE T-MOBILE....Subject to regulatory approval, but if the deal goes through, it will make ATT the largest wireless operator, ahead of Verizon.

Honey EC: Looks like there is a another telephone monopoly developing. I prefer Verizon and sure like to have a choice -- unlike what is available with my land line.

US MILLIONAIRE NUMBERS GROWING....Brinker reported on this resent study: "According to a recent Spectrum Group study, there are 7.8 million millionaire households in America as of 2009, up from a paltry 6.7 million millionaire households in 2008. That's a 16 percent increase. The number of households worth $500,000 and $5 million is also up significantly." Brinker explained that home equity is not included in the survey, but second homes can be included.

Brinker also said that millionaires "aren't too smart" because they only became really optimistic recently. Here is the link to the Fidelity article where Brinker got this information: "Fidelity Survey Finds Millionaires at Highest Level Since 2006."

REAL ESTATE.....The S&P Case Schiller Index of home values in 20 large cities is 31% lower now than it was at the July, 2006 peak.

ECONOMY/DEFICIT....Brinker said that there is no way in the world that the U.S. can keep running annual deficits of 9-10% of GDP over the long-term. The national debt will eventually choke the economy. The percentage of GDP should be 3% or less.

U.S. DOLLAR WILL REMAIN WORLD CURRENCY....Brinker told caller Karen that everyone knows the U.S. dollar is the world's currency, and gave her what he called "a tip." He said that whenever anyone tells you about secret meetings, tune out. (Brinker was referring to the other callers who talked about Russia, Japan and Germany meeting to discuss forming a new world currency.)

MARKETIMER PORTFOLIOS

VANGUARD GINNIE MAE FUND (VFIIX).....Caller Dean from Long Beach said: "I have the Ginnie Mae Fund, which is about 1/3 of my entire portfolio....I just subscribed to your newsletter in December and was looking at your fixed income portfolio.....I'm wondering if I should lower my risk by dividing it into the four funds that you suggest. Would that lower my risk in the Ginnie Mae even though I'm going to take a hit tax-wise?"

Honey EC: I was going to break up the following LONG Brinker speech to make it easier to read, but I want readers to get the full impact of how long he went on non-stop about the subject of his "income" portfolio.

This subject has been front-and-center on this blog for awhile now because some of us believe that it is not honest to call a portfolio "fixed-income" when it contains equity weightings. (In January 2011, Brinker added Wellesley Income Fund (VWINX) to his "fixed-income portfolio and sold a percentage of the Ginnie Mae Fund.)

With this speech, Brinker shows how cleverly he uses words to (can I say this?) cover his arse! Today, for the first time, he changed what he has always called his fixed-income portfolio to simply "income portfolio" that contains fixed-income. And amusingly, he used the term "income portfolio" over and over and over again. I lost count but I got his point on the first go-round. :)

Bob Brinker replied: "You are talking about the income portfolio ('right') which is on page seven of the investment letter, the income portfolio. And as you know, we made some adjustments in that in January, and the configuration of our income portfolio has changed as of early January versus the one you were referring back to in December of 2010. ('right') And your weighting in your Ginnie Maes is a little bit higher than the weighting we have. In the fixed-income, I'm sorry, yeah, in the fixed-income portion of the income portfolio, and, let's see, in the fixed income portion of the income portfolio which comprises about 90% of the income portfolio, as you know. About 90% of our income portfolio is in fixed income securities. So you're a little bit above our weighting, our 25% Ginnie Mae weighting in the income portfolio. We have a slightly lower weighting in our balanced portfolio. So you're a little bit above the 25% income portfolio weighting in the Ginnie Maes, but not by a lot --33 versus 25. What you need to decide is your comfort level with that income portfolio. Because in that income portfolio, we have roughly 90 to 90 1/2% is actually fixed income investment, and the rest is dividend-paying common stock -- and that comprises our income portfolio. So in the income portfolio, we've really gone for two things. We've gone for a very high level of diversification -- which we have......And we've also gone for a portfolio that we think has a chance to do reasonably well in 2011. 2011 has the potential to be a challenging year for interest rates. And even though the Fed is keeping rates down.....If that turns out to be true, it could be a challenging year for income portfolios. And as a consequence, we have put in a very small percentage, about 9 1/2%, of that portfolio into dividend paying shares held by one of the funds recommended in that portfolio and the rest is in fixed-income area. So I like the diversification in that portfolio and obviously since it was my idea, I like the portfolio. And so far, so good in 2011. We know that income portfolio returns in 2011 are certainly fighting a lot of headwinds with the economy recovering and with the interest rates as low as they were, there's no question your fighting headwinds in an income portfolio. But I am comfortable for those looking for an income with that portfolio. But whether you reduce your risk or not is a whole separate issue.....If what you seeking to do is eliminate any risk from your investment, you could consider introducing fully-insured certificates of deposit into the portfolio as a way to insure yourself that you are going to get our principle back...... So we don't want to confuse anybody. We really have two separate areas of the investment letter that include income recommendations. We have a balanced portfolio, which is known as model portfolio III and that has an income component to it and also has an equity component to it. Then separately, we have an income portfolio which I explained......"

Honey EC: There's still one little problem with your performance, Mr. Brinker: This is on Page 7 of the March 2011 issue of Marketimer (click to enlarge):

CALLERS

Caller Fred from Oregon asked if he should take a $500 million lump sum payment from the state or take annuity of about $36K per year. Brinker estimated that taking the annuity would give him about a 7% return on the half-million dollars. Based on numbers Fred supplied, Brinker explained that the amount of money that would be in Fred's estate in the event of his untimely demise would increase from $800,000 to $1.4 million if he took the lump sum. Brinker called that a "big deal," especially since there would be no federal estate tax on that money -- at least in 2011 and 2012.

Brinker continued replying to Fred: "Here's the problem. If the state of Oregon has a substantial unfunded liability for these programs that you are involved in that would result in either of these payments, then I will tell you one thing that they can do to ease their fiscal pain....It's already happened elsewhere. They can change the rules and eliminate the lump sum option....."

Caller Chad said he was a Marketimer subscriber and wanted to confirm that it was okay with Brinker to use an exchange-traded fund as a substitute for the Vanguard Total Stock Market Fund in Brinker's model portfolio I. Brinker told Chad that in his view VTI was "interchangeable" with VTSMX, which has a 35% weighting in portfolio I; a 40% weighting in portfolio II; and a 27.5% weighting in portfolio III.

Caller Jack from Peoria said he heard on the NBC news with Brian Williams that the Fed was buying stock. Brinker said he didn't want to pin this story on anyone in particular, but it is misinformation and he considers anyone saying it an "idiot." The Fed is buying Treasurys, which is keeping rates lower than they otherwise would be, but that has nothing to do with buying stock.

Caller Ed in San Rafael, said he was in the "millionaires' club" and thanked Bob for it. He asked about the possibility of leaders from Russia, Japan and Germany secretly meeting to discuss the formation of a new world currency -- and excluding the United States from the meetings. Brinker told him that it was interesting that he (Ed) would know about such a secret, and that there is no reality in that theory.

Caller Edward from Missouri who had a strong Russian accent, said: "I started listening to Moneytalk around June, 1986. I immigrated from Soviet Union about 1979 and did not have any knowledge about investing. You provided information that helped reach critical mass and I could retire easily ten years ago."

Honey EC: I was surprised that Brinker let this caller's claims go unchallenged. Surely, Brinker can't be that eager to accept caller kudos. Didn't Brinker wonder how a man could immigrate from the Soviet Union in 1979? How easy was it to get out of the Soviet Union in 1979? Was it possible for people to leave that Communist country with any kind of wealth back then? And if he did arrive here with no money and started listening to Brinker's Moneytalk in 1986, that means it took only 15 years to reach critical mass -- if what he claimed is true that he retired ten years ago (1986 to 2001 is 15 years). I submit that couldn't be done in an honest fashion unless his critical mass is might low.

Brinker, never one to let a good opportunity go to waste, immediately asked Edward what he thought about the callers who talked about the so-called secret meetings between Russia, Japan and Germany. Edward said it was nonsense because nothing is secret.

Best Bob Brinker quote of the day: "Lots of people have won a Nobel Prize, Luke. That doesn't necessarily mean what it used to mean."

Caller Michael from Chicago called and did a sales pitch for something called a "narrow car" which he said cost about $80K. Brinker said he was "skeptical" and told him it didn't sound safe to him. [EC: Perhaps Michael was talking about the Naro car.]


Bob Brinker's third-hour guest-speaker was Michael Hudson:



Moneytalk on demand audio/podcasting available for FREE at KGO810 radio for up to seven days after broadcast. The program is archived in the 1-4pm time-slots. I download and save all three hours, including the third hour guest-speaker, so that I can refer back to them in the future if Bob Brinker mentions something about them on the air. KGO: Moneytalk free on Demand

Dixiegeezer just sent this picture of a coffee plantation with banana trees from Costa Rica (click to enlarge):

Here is our friend and photographer, Dixiegeezer, with some local friends in Costa Rica. He said to tell you he is the one without the hat. LOL!


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Bob Brinker's Latest Stock Market Advice

March 16, 2011....Bob Brinker, the radio talk show host, has always promoted himself as a market-timing guru. What are his latest stock market timing updates?

Moneytalk, January 16, 2011, Bob Brinker said: "The S&P at 1293, actually with a 3% total return year-to-date in 2011....."Are there going to be short-term corrections in here? Of course there are. It's my guess that there are going to be single-digit corrections. That's my best guess right here. That if we get corrections in this market, and we're talking about a market that's been horrendously strong as it's reached its new recovery high in the S&P at 1293. But we're certainly in a position where we could easily see short-term corrections in this market because it's always been that way. There's nothing new about this. But my personal view would be that they would be single-digit corrections based on what I'm seeing."


Moneytalk, February 27, 2011 was the next time that Bob Brinker expressed his market-timing views. He said: "I have even made comments on the broadcast about this subject.... The market, and the areas of risk we could be seeing in the market from time to time that would be normal expectation.....As a matter of fact, last month right here on the broadcast, I pointed out that there are going to be along the way, and they might be small -- they might not be as small as what we've seen, which has been minuscule. Right now, we're 1.7% below the recovery high....it's almost nothing at all......

.....Of course there are going to be short-term corrections in the market. I also pointed out that my guess was that at this point, the likelihood would be that they would be single-digit percentage corrections. So far, that has been correct......I view it as a health-restoring event in a cyclical bull market, which is what I believe we're in. It's a heck of a one, but I think that's what it is -- a cyclical bull market. We've had ones greater than the one we're in right now and we certainly had a lot that were smaller than this. I just don't see any reason right now to sign on to the doomsday machine. If I did, I would tell you."

Bob Brinker believes that the stock market is in a cyclical bull, running concurrently with a secular bear.

As of the March, 2011 Marketimer, he does not see an end to the cyclical bull on the radar. Just the opposite, he raised his S&P 500 Index target to the "1400 to 1450 zone," depending on the "economic recovery and the ability of the Federal Reserve to effectively manage monetary policy." He also recommends a "dollar-cost-average approach for new investing."

Brinker's model portfolios are fully invested, as they have been since March, 2003. His latest in a long list of ever-lower buying-opportunities was in July, 2010 at S&P 1030 -- that is the one he talks about on Moneytalk now. He never mentioned mid-1400's, mid-1300's or low 1200's....

Dixiegeezer's red-headed woodpecker:


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March 13, 2011, Bob Brinker's Moneytalk: Summary

March 13, 2011....Bob Brinker hosted Moneytalk today. I had family commitments today so Jeffchristie has written a summary of the program for us:

Bob Brinker began today's show talking about the situation in Japan. It started with an earthquake then the tsunami and now they face a nuclear disaster. We don't know how the nuclear problem will work out. While he sees this as a dire problem for the poor people directly affected he does not see much impact on the global economy. He estimated that it may reduce it by 7/10's of 1%.

In the second segment he went through all of the economic data that is scheduled to come out next week. These include the empire manufacturing index, PPI, housing starts, CPI and industrial production.

The first caller was from KGO country. He was concerned about the dollar losing its value because of QE2. Bob said the Federal Reserve was walking a tight line and they would return to more normal interest rates when the economy improved. He felt that even with our problems other currencies face even bigger issues and the US dollar would remain the world's reserve currency. The caller said he was in Asia within the last year and there were banks that didn't want US dollars. Bob said he wasn't aware of that.

Ed called in from Missouri. He was concerned that the Japanese would liquidate all their US treasuries to get money to rebuild. Bob expected them to look upon these bonds as a source of funds but he didn't feel that selling them would have a significant impact on the bond market.

Allen from Pennsylvania was next. He thought that the nuclear problems in Japan would set back new construction of plants in the US by 25 years. He said that the event at Three Mile Island resulted in a 25 year set back. Bob mentioned that he was living just 90 miles away from Three Mile Island when that problem occurred. Bob seemed to agree that future plans for plants in the US could be delayed but he didn't think it would impact construction projects in other countries.

Andy called in from Redwood city. He said he didn't agree with Bob's position on nuclear power but he didn't want to go into it. Then he quoted some statistics on tax revenues and felt they justified increasing taxes. Bob didn't agree. He said that the problems caused by Sacramento were the result of run away spending and mismanagement. Andy went on to blame prop 13.

Bob started the second hour by quoting the current stock market numbers. Next he went through the rates on treasury notes and bonds.

Bob was the next caller. He had an idea to improve the economy. He wanted the banks to lower existing home loans by 1% for people who were up to date in their mortgage payments. Bob Brinker said it was an interesting theory but he didn't think the banks would go for it.

Bob spent an entire segment talking with Dr. Bill Wattenburg. Dr. Bill said that the nuclear plants in Japan survived the earthquake but were severely impacted by the tsunami. He felt that the nuclear regulatory commission would not allow plants to be built in the United States in areas subject to tsunamis. Dr. Bill also had some ideas for the relief efforts in Japan.

Bob's guest in the last hour was Barton Biggs. He wrote a novel about a hedge fund manager. The title is hedge fund tale of reach and grasp. Bob ask him about the government allowing Lehman Brothers to go under. Barton didn't give Bob the answer he was looking for. He felt Lehman was a big but not essential and the government can't bail everyone out.

Moneytalk is FREE and available for downloading at KGO810 radio up to seven days after broadcast. The program is archived in the 1-4pm time-slots: KGO: Moneytalk free on Demand

Another picture I took at the Fort Mason Orchid Show last week (click to enlarge).

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March 6, 2011: Bob Brinker's Moneytalk: Summary, Commentary and Excerpts

March 6, 2011....Bob Brinker did not host Moneytalk today. Lynn Jimenez filled in for Bob Brinker. Lynn Jimenez works as a business reporter at KGO Radio 810.

This is the tenth week of the year and so far, Bob Brinker has been on the air a total of 7 days. It seems like since Moneytalk was cut to one day a week, Brinker's fill-in hosts are doing about 1/3 of the programs.

January 2, 2011: Neale Godfrey
February 6, 2011: Two hour program - third hour unannounced re-runs
February 13, 2011: Lynn Jimenez
March 6, 2011: Lynn Jimenez

I was in San Francisco today for an Orchid Show. Jeffchristie wrote a brief summary of Lynn Jimenez' program for us:

"Lynn was filling in for Bob Brinker today. She started out by cheerleading the improvement in the jobs market. Then said that the stock market was like a yoyo last week. The impact on oil from the trouble in Libya was mentioned along with the increase in price at the pump. She ended her monologue by saying the improvement in the economy was good news.

Ralph was the first caller. He said it was refreshing to hear her voice on the program. Ralph said he didn't see much improvement in the economy where he lived. Lynn responded by saying the figures were national and pockets of weakness remained in places.

Jim wanted to know if money he had at a credit union was properly insured. Lynn said that he was covered.

Jim in San Jose was next. He took issue with Lynn over the economy. We are printing too much money and jobs are going over seas.

Mark called from New Mexico. He was concerned about the increasing deficits and jobs going to China. Lynn said that wages were rising rapidly in china. She thinks the American economy has turned the corner.

Lynn's guest in the second hour was Ken Winans. http://www.winansintl.com/

They talked about where to get financial information for ETF's and individual stocks. She finished by mentioning various books on investing. She did not note that there is a list of books at Bob Brinker's website.

Lynn's guest in the last hour was John Silvia the chief economist at Wells Fargo. They talked about the housing market. There are bargains out there but it is harder to get a loan today. John said it will still take several years to clear out the inventory of homes for sale.

A caller brought up the problem of foreclosures and the issue of who actually owns the property since the mortgage was resold several times. John said it will just take time to sort out. When they rent some of the foreclosed properties, it is a problem to figure out who gets the rent check.

Lynn ended by saying this is a fine mess that we have gotten into."

The National Debt:

[Honey EC: Great summary. Thank you so much Jeff! Based on your guidance, I listened to a few segments of the program. How amusing that Lynn summarized Ken Winan's stock market advice like this: "We've got it now. Focus, keep things in context, take pundits with a grain of salt and learn a little history." Sounds good to me, Lynn. Especially the part about taking pundits with a grain of salt."]

PS: I have posted David Korn's stock market commentary from his newsletter in the comments section of this post.

Moneytalk is FREE and available for downloading at KGO810 radio up to seven days after broadcast. The program is archived in the 1-4pm time-slots: KGO: Moneytalk free on Demand

Lama:

I took this picture at the Fort Mason Orchid show Sunday. Please click to enlarge:

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March 6, 2011: Bob Brinker's Stock and Bond Market Advice

March 6, 2011....Last week on Moneytalk, Bob Brinker said that the stock market is now in a cyclical bull and expects any corrections to be limited to single digit.

He often talks about his July, 2010 buy-signal at S&P 500 Index 1030. What he never says is, that buy-signal was 353 points above the S&P low of 677 in March 2009. That's a miss of over 35%!

In January, Brinker made some changes to his fixed income allocations. He lowered weightings in Vanguard Ginnie Mae Fund and sold all Vanguard Inflation-Protected Securities (TIPS). At the same time, he increased holdings in Vanguard High-Yield Fund.

Brinker is now recommending a dollar-cost-average approach for putting new money into the stock market. He is projecting that the S&P will reach the "low-to-mid 1400's range within the next year."

How ironic. That was the exact level that he repeatedly called a "gift-horse buying opportunity" between August 2007 and January, 2008. If you bought then, take heart, we may get back to it if he is right this time. :)

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A Memorial for a Very Special Cat: My Dolly

March 4, 2011....At 5:30 this evening, Dolly had a final attack of kitty asthma that has been somewhat controlled with medication for several months now. I'm grateful that the vet could give me those extra months with her, but that doesn't ease the pain when the time comes to say good-bye to a cherished pet that has been a close friend for 13 years.

The word that describes Dolly best is "sweet." She always wanted to be held, cuddled and petted. And she returned affection by giving "nose kisses" and reaching out to hold "hands" with me.

Dolly never meowed out loud. She made the motion of meowing, but you had to be looking at her to know it. The only sound she ever made was when her brother, Lama, played too rough and then she would scream like a wildcat and come running to me for protection.

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