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Sunday, December 16, 2007

Moneytalk Summary December 15, 2007

Brief Summary, Commentary and Moneytalk Excerpts, December 15, 2007
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Most of the program was devoted to talking about how the United States struggles with the need to import oil. Brinker thinks it’s ridiculous, and that it didn’t have to happen. He talked about the oil embargo that happened 33 years ago and how we are in the same “pickle” we were in back then – thanks to politicians and radical environmentalists who have successfully blocked us from using nuclear. He thinks it’s shameful that we have to use coal. He thinks it’s ridiculous that we don’t have an energy policy like France does – mostly nuclear.

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Stock Market: Bob Brinker made no comments about stock market activity.
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Federal Reserve: FOMC meeting (December 11th) lowered the Federal Funds target rate by 25 basis points, down to 4 1/4%. They will re-convene on January 29th and 30th. Ben Bernanke is “the most powerful man on Earth.”
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Economy: Slowing--as expected because of energy prices and housing market. Expect slow growth rate in 2008.
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Inflation: The key rate of inflation is the core rate of inflation, and continues to “behave remarkably well.” The Personal Consumption Expenditure Core Index, which is “the most important” has risen 1.9% --YOY. . Energy Prices and Headline Numbers: Up over 21% over the last year – gasoline prices up 37% over the last year. Fed focus is on the core rate: "as they should, to find out what kind of leaking or seepage is occurring from the energy complex into the core complex, and so far it’s been very little – 2.3 year over year on the CPI; 1.9 year over-year on the Personal Consumption Expenditure Index. The headline numbers are higher than anybody wants to see them. But they are driven directly by what’s going on in the energy complex because they are in the energy complex. So if energy goes up 21% YOY, you are going to see that in the headline – and you do, because the headline is up 4.3 on a YOY basis.”
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Interesting Caller and Reply: I found this caller's point (he didn't ask a question), and Brinker's reply to be the only interesting call of the day. There isn't any way to know for sure what this caller was referring to, but it was not necessarily what Brinker seemed to think it was.
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All of Darryl's words are here, so judge for yourself. I think it's very possible that he was talking about trying to time the market. Or was he talking about penny stocks as Brinker so conveniently jumped on the band-wagon about? The caller certainly never mentioned penny stocks or even individual stocks. Instead he referred to the "long haul."
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And who was Brinker preaching to when he said that "betting on horses" would take a "documented certified genius"? Living there near Las Vegas, has Brinker seen some horse players "die broke"?
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Darryl from Chico said: “Well, to avoid digressing the conversation from what I was originally going to call in for –we are kind of going in a different direction. Let me just make a comment about investing. If you’re not in it for the long haul, then what you are doing is, you keep becoming more and more aggressive in your investment. And instead of it being an investment, it really does turn into gambling. Now the investors, they call it a risk. Well, this is risk, but it’s gambling. And you reach a point to where, you know what’s the difference between going to the race track and taking all of these gambles with all the money you’ve earned in your life trying to make something out of it right now. It’s no different than pulling the handle on slot machine or buying a ticket at the race track.”
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Bob Brinker's reply: “Darryl, I think you’re absolutely correct about this, and we’ve tried to warn people on this program about the penny stock hucksters out there that will drag you down – sooner or later, you’re going over the wall with penny stocks. We’ve talked about this. Sooner or later, they’re going to come back and they’re going to get you. That’s the way it works. We’ve talked about it. I mean that’s a perfect example right there of how hucksters get their way with your money, by talking you into speculating in bizarre ideas like penny stocks. And I think that it’s very, very clear what happens in that case. And you’re also correct when it comes to speculation in general. People are just out there taking speculative, risky positions. You’re absolutely right. Eventually, the market is going to come back and it will drag them down. It’s certainly no place to be doing that, and it is similar to playing a slot machine which is a losing game, big time losing game. Or for that matter, like you say, betting on horses – there’s another one. By the time you are finished with the state and the track take-out, you would have to be a documented, certified genius to overcome the drain on the pool at any racetrack. It’s ridiculous. There’s that old saying in Saratoga, New York – they still say it, all..horse…players…die broke."

12 comments:

Wejomerv said...

Thanks for the summary.

Note: The S&P500 closed today at 1455.90, a price Brinker finds attractive for purchase.

What does Brinker propose to do with nuclear waste? He mentioned France as a model. What do they do with their nuclear waste?

Honeybee said...

Hi Wejomerv,

You are correct, the S&P has been at or below Brinker's last "buy signal" for several months now.

I don't recall what Brinker said, if anything, about taking care of nuclear waste in the U.S. or in France. It may have been addressed by one of his guests, but I don't usually listen to his guests.
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Your question about France is interesting. I found a few websites that talk about how France takes care of nuclear waste.
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http://www.ocrwm.doe.gov/factsheets/doeymp0411.shtml
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This would be the "anti-nuclear" view:
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http://ipsnews.net/news.asp?idnews=31466
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Another "anti" view:
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http://www.ieer.org/comments/waste/chen-prl.html

C said...

Thanks for the update, Honey. Really helps out when I miss part or all of the show!

Maybe we can hope to glean something about the market on next week's Moneytalk.

jeffchristie said...

While Brinker is advocating the use of nuclear power he has done nothing about telling his subscriber how to invest in it and profit from it. I OTOH have been establishing positions to take advantage of the global tend to build more nuclear power plants. I have bought stock in USEC corp. (USU) at $8.75 and have purchased a Canadian fund that is a pure play on the price of uranium. It is called the Uranium participation fund (u.to) trading in Toronto. I purchased some yesterday at $9.98. Uranium is trading towards the low end of last years price range. When I talked to Paul Kangas about Brinker a few years ago he told me he liked Cameco (CCJ). It is a uranium producer. It looks like a great company but the PE has been too high to interest me. My thinking is that new plants will be coming on line leading to a shortage in the fuel needed to run them. I think plant are being built faster than we are increasing uranium mining capacity. As Brinker would say we will find out in the fullness of time.

Kirk said...

jeffchristie said...

"While Brinker is advocating the use of nuclear power he has done nothing about telling his subscriber how to invest in it and profit from it. I OTOH have been establishing positions to take advantage of the global tend to build more nuclear power plants. I have bought stock in USEC corp. (USU) at $8.75 and have purchased a Canadian fund that is a pure play on the price of uranium. It is called the Uranium participation fund (u.to) trading in Toronto. I purchased some yesterday at $9.98. "

Thanks for the stock and fund tips. I recall you gave some exceptional advice in the past on energy stocks that worked out very well. Congratulations.

Honeybee said...

Hi C,
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Glad that you enjoy the updates.
8^)
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Yes, perhaps Brinker will talk about the stock market again next week. In the meantime:
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Mark Hulbert wrote the following about Brinker's bullishness, and he included quotes from the December, 2007 issue of Marketimer. Here is an excerpt from Mark Hulbert's Marketwatch column:
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"Bob Brinker's Marketimer. Editor Bob Brinker has been bullish since March 2003, and his model portfolios remain fully invested. Brinker regards the stock market's recent correction as good news for the bulls: "The short term correction that began in October and continued into November has served as a health restoring pullback," Brinker wrote in the early-December issue of his newsletter, "and has paved
the way for new record highs in the S&P 500 index.""

Honeybee said...

Hi Jeffchristie...good to hear from you again. 8^)
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You are correct that Brinker has not told either subscribers or Moneytalk listener about any possible way to invest in nuclear energy.
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Thank you for sharing your ideas with us here.

Have you looked into any investments that would profit from the use of solar?

Wejomerv said...

Jeff, excellent post. It is so obvious but I didn’t think about trying to use a little money to speculate and try to make some money with the trend towards nuclear energy. I am ignorant in what will increase in demand if there is increased global demand for nuclear energy. Will all plants use uranium? Is plutonium used in some designs? What else would be in high demand?

Are there any mutual funds or ETF with a strategy to profit with more nuclear plants going online? If not specific to nuclear power are there funds or an ETF that specializes in holding uranium-mining companies and other companies that might profit with more nuclear power plants going online?

jeffchristie said...

wejomerv

Nuclear power plants run off of processed uranium. Uranium is mined. Then it must be processed into fuel that powers the nuclear reactors. USEC corp. (USU) is one company that does the processing. The Uranium Participation corp. is a fund that trades in Toronto. It is a pure play on the price of uranium. You can get all the information you need to understand what I am doing by using several Google searches. Search on: "uranium shortage" and "Uranium participation corporation". Jim Dines has a newsletter and if you go to his web page you can see on of his thinking on uranium.

Judy said...

There is an ETF, Market Vectors Nuclear Energy , NLR. Started in August 2007.

Kirk said...

"There is an ETF, Market Vectors Nuclear Energy , NLR. Started in August 2007.

Thanks for the great info Judy.

Here is more info on NLR from my favorite ETF resource.

Bid 36.18
Ask 36.25

$0.07/$36.18 x 100% = 0.19%

"The Funds investment objective is to replicate as closely as possible, before fees and expenses, the price and yield performance of the DAXglobal Nuclear Energy Index. The Fund may invest at least 80% of its total assets in equity securities of U.S. and foreign companies primarily engaged in various aspects of the nuclear energy business, The Funds investment policy is to utilizing a passive or indexing investment approach, attempts to approximate the investment performance of the Nuclear Energy Index by investing in a portfolio of securities that generally replicate the Nuclear Energy Index."

Honeybee said...

Hi Judy,

Welcome to my Blog and thank you for the information.