May 2008 be a wonderful, blessed year for our nation, our families, and each reader is my prayer.
___Honeybee
Monday, December 31, 2007
Saturday, December 29, 2007
Bob Brinker and Bill Flanagan Market Commentary
Bill Flanagan filled in for Brinker on Moneytalk today, so it will be next year before we get an opportunity to hear Bob Brinker's 2007 stock market wrap-up -- if he decides to give one.
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Here is an excerpt from Bill Flanagan's opening monologue today:
“Although it doesn’t look like the biggest cloud on Wall Street is about to dissipate easily or quickly. That being of course the biggest credit crisis brought on by the sub-prime mess. Nonetheless, here we are at the end of the year and it wasn’t all that bad all things considered. The Dow Jones Industrials with Monday left, year to date change, 7.24% to the good; S&P 500 4.24%; Nasdaq 100 19.93%; Russell 2000 off 2%; Dow Jones Wilshire 5000 up 4.59%.
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With all the hand-wringing and all the headlines and all the scrambling and all of the worrying -- and let’s face it, the exposure of an extraordinary lack of very simple research on the part of a whole bunch of people, and an indifference I guess to what must have seemed at least to some folks as inevitable, the financials took it on the chin. And along with them an awful lot of homeowners who got sucked into mortgages that should never have been written in the first place. And we’ll have to deal with that mess for quite some time.” ___Bill Flanagan
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Between March, 2003 and June, 2007, Brinker was short-term bullish, intermediate-term bullish, (1-3 years) and long-term (3-20 years) bearish. Reference:
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July 4, 2003 Marketimer, Bob Brinker wrote: "We believe that the U.S. stock market entered into a new secular bear market megatrend based on the March 24, 2000 Standard and Poor's 500 Index close of 1527.46. If past history is any guide investors will have to wait a very long time before they see that level materially exceeded. However a series of cyclical bear markets and cyclical bull markets appears inevitable within the secular bear market megatrend." (May, 2006, Brinker wrote: "We estimate the likely duration of this secular bear megatrend within a broad range of eight to twenty years, and we are now into year seven." )
Now it looks like Brinker is short-term bullish, intermediate-term bullish, (1-3 years) and long-term bullish (3-20 years): Reference:
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June 2007 Marketimer, Bob Brinker wrote "In our view, the valuation based secular bear market that was established following the March, 2000 closing high for the S&P500 Index(1527.46) and following the January, 2000 closing high for the DJIA (11723), reached its conclusion on June 13, 2006.........."
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Since August, 2007, Bob Brinker has been saying that he rates the S&P 500 Index attractive for purchase in the mid-1400’s range, and that he expects the S&P 500 Index to trade in the 1600’s as we move forward.
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And in September, 2007, Bob Brinker said that he expects the S&P 500 Index to register a series of new historic highs into next year.
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Several times, on Moneytalk, Brinker has said that he sees no recesson "on the radar," and that he thinks the bad news bears are totally wrong.
Last time he was on Moneytalk, Brinker also said that he did not see a recession ahead, but rather slow economic growth.
·
Here is an excerpt from Bill Flanagan's opening monologue today:
“Although it doesn’t look like the biggest cloud on Wall Street is about to dissipate easily or quickly. That being of course the biggest credit crisis brought on by the sub-prime mess. Nonetheless, here we are at the end of the year and it wasn’t all that bad all things considered. The Dow Jones Industrials with Monday left, year to date change, 7.24% to the good; S&P 500 4.24%; Nasdaq 100 19.93%; Russell 2000 off 2%; Dow Jones Wilshire 5000 up 4.59%.
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With all the hand-wringing and all the headlines and all the scrambling and all of the worrying -- and let’s face it, the exposure of an extraordinary lack of very simple research on the part of a whole bunch of people, and an indifference I guess to what must have seemed at least to some folks as inevitable, the financials took it on the chin. And along with them an awful lot of homeowners who got sucked into mortgages that should never have been written in the first place. And we’ll have to deal with that mess for quite some time.” ___Bill Flanagan
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Between March, 2003 and June, 2007, Brinker was short-term bullish, intermediate-term bullish, (1-3 years) and long-term (3-20 years) bearish. Reference:
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July 4, 2003 Marketimer, Bob Brinker wrote: "We believe that the U.S. stock market entered into a new secular bear market megatrend based on the March 24, 2000 Standard and Poor's 500 Index close of 1527.46. If past history is any guide investors will have to wait a very long time before they see that level materially exceeded. However a series of cyclical bear markets and cyclical bull markets appears inevitable within the secular bear market megatrend." (May, 2006, Brinker wrote: "We estimate the likely duration of this secular bear megatrend within a broad range of eight to twenty years, and we are now into year seven." )
Now it looks like Brinker is short-term bullish, intermediate-term bullish, (1-3 years) and long-term bullish (3-20 years): Reference:
.
June 2007 Marketimer, Bob Brinker wrote "In our view, the valuation based secular bear market that was established following the March, 2000 closing high for the S&P500 Index(1527.46) and following the January, 2000 closing high for the DJIA (11723), reached its conclusion on June 13, 2006.........."
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Since August, 2007, Bob Brinker has been saying that he rates the S&P 500 Index attractive for purchase in the mid-1400’s range, and that he expects the S&P 500 Index to trade in the 1600’s as we move forward.
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And in September, 2007, Bob Brinker said that he expects the S&P 500 Index to register a series of new historic highs into next year.
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Several times, on Moneytalk, Brinker has said that he sees no recesson "on the radar," and that he thinks the bad news bears are totally wrong.
Last time he was on Moneytalk, Brinker also said that he did not see a recession ahead, but rather slow economic growth.
Sunday, December 23, 2007
Merry Christmas and Happy Holidays
Bill Flanagan is filling in for Bob Brinker this weekend, so I will not be doing a summary of the program.
Merry Christmas and Happy Holidays to all. I wish you all health, happiness and love.
___Honeybee
Merry Christmas and Happy Holidays to all. I wish you all health, happiness and love.
___Honeybee
Friday, December 21, 2007
Brinker's Inconsistent Market Analysis
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It is wise to be careful about trusting Bob Brinker to be consistent or to maintain continuity in his stock market timing prognostications. He can change on a dime, and never look back -- leaving his listeners and subscribers holding the bag..
June, 2007, Marketimer, Bob Brinker said: "In our view, the valuation based secular bear market that was established following the March, 2000 closing high for the S&P500 index (1527.46) and following the January, 2000 closing high for the DJIA (11723), reached its conclusion on June 13, 2006 at the bottom of the mid-term off- presidential election year correction."
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Here is what Bob Brinker said just the month before he now claims the "secular bear megatrend" ended:
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May 2006, Marketimer, Bob Brinker said, "The current cyclical bull market, which in our view is unusual in terms of its length, has had to battle the headwinds of the secular bear megatrend that began in the first quarter of Year 2000. ...........by definition, the secular bear megatrend will continue as long as the S&P 500 Index is unable to achieve a significant breakthrough of its March, 2000 historic high. We estimate the likely duration of this secular bear megatrend within a broad range of eight to twenty years, and we are now into year seven."
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Please note that Brinker is documented as saying that the secular bear would not end until the S&P 500 Index had gone above the March 2000 closing high by at least 5 to 10%.
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Here is an excerpt from Moneytalk. Bob Brinker told a caller this in February, 2007:
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"....But what we do know is within secular trends there are no cases where a secular trend has gone beyond the previous peak by more than, by more than 10%. It's never happened, so I think it's fair to say that until that happens, the secular trend is intact.........Now the secular trend that began in year 2000 when the S&P was up in the 1500s, awww, that remains intact. The S&P 500 Index - and this is measured by the Index itself - has not gone above the prior high of 1527 close. In fact, in remains in the mid-1400s at this point. In order for it to move beyond an existing secular trend, such as the one we've had the past seven years, you would have to exceed it, I would think, by at least 10%........."
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What scared Brinker off of the secular bear scenario? It's likely that it was when the Dow and S&P broke though the old highs by a few percentage points. Brinker probably thought the indexes would continue to make gains faster than they have in the remainder of this year.
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But one has to wonder why he has never told Moneytalk listeners about this change in his stock market analysis....
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Wednesday, December 19, 2007
Brinker's Long-in-the-Tooth Buying Opportunity
So far, Brinker has been correct that a 20% bear market has not happened. However, those who bought into the stock market last August when he issued his "mid-1400's" buy signal have needed great patience if they are waiting for his July prediction of 1600's range to develop.
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In July, 2007 Marketimer, Bob Brinker predicted a "move into the S&P 500 Index 1600's range as we move forward....."
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In August, 2007 Bob Brinker said: "We rate the stock market as attractive for purchase on weakness that occurs in the area of the S&P 500 Index mid-1400's. Above that level, we recommend a dollar-cost- average approach."
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Brinker repeated the "mid-1400's" buy signal in September, October, November and December.
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In July, 2007 Marketimer, Bob Brinker predicted a "move into the S&P 500 Index 1600's range as we move forward....."
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In August, 2007 Bob Brinker said: "We rate the stock market as attractive for purchase on weakness that occurs in the area of the S&P 500 Index mid-1400's. Above that level, we recommend a dollar-cost- average approach."
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Brinker repeated the "mid-1400's" buy signal in September, October, November and December.
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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."
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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."
Saturday, December 15, 2007
What Bob Brinker Doesn't Say About Buy Signal
Bob Brinker talks about his March 2003 buy signal on almost every Moneytalk program--sometimes more than once. That was a good call, and one can hardly blame him for spinning it to his best advantage. However, in the interest of being honest and trustworthy, if he is going to tout this good call, he should talk about his prior calls that played an integral part in how much subscribers could benefit from it.
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Moneytalk, December 1, 2007, Bob Brinker said: "As a matter of fact, the S&P 500 – if you go back to our major buy signal, March 11, 2003, which was a couple of days prior to the start of this great bull market run – the S&P at that time was sitting in at around 800, now sitting in about 1481, and adding in the cash dividends paid over that period, the total return now, during that period, is in excess of 90%.”
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On December 8, 2007, during Sunday’s opening monologue Bob Brinker re-iterated his "March 11, 2003 buy signal.” He said that he recommended the return of “all available stock market cash reserves” to the market.
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Unfortunately, Bob Brinker has never told listeners that subscribers who followed his model portfolio recommendations from January 2000 had only a portion (perhaps as little as 50%) of their equity cash reserves available to return to the stock market.
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Additionally, there were subscribers who did not return to the market because they either missed Brinker's bulletin or simply waited for “weakness” according to Brinker’s follow-up advice. In April and May, 2003, Brinker advised those who missed the buy-signal bulletin to wait for WEAKNESS below 810 on the S&P 500 Index before dollar-cost-averaging into the market.
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May, 2003, Marketimer: “……we recommend against chasing rallies in order to invest new money. In the event another test of the area of the bear market lows occurs below the 810 level for the Standard and Poor’s 500 Index, we would regard such weakness as an additional buying opportunity.”
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Beginning about the same time and continuing for the next six years, Brinker told both subscribers and listeners that the market had entered a “secular bear megatrend” as of March, 2000. He maintained this belief and touted it at length in several Marketimers and on Moneytalk.
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In the April 2003 issue, Brinker stated unequivocally that Marketimer “believes that the secular bear megatrend that started in early 2000 will last for 8 to 20 years, and will include a series of cyclical bear and cyclical bull markets.”
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Here is what Brinker told a Moneytalk caller in February, 2007:
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“……..But what we do know is within secular trends there are no cases where a secular trend has gone beyond the previous peak by more than, by more than 10%. It's never happened, so I think it's fair to say that until that happens, the secular trend is intact.".Now the secular trend that began in year 2000 when the S&P was up in the 1500s, awww, that remains intact. The S&P 500 Index - and this is measured by the Index itself - has not gone above the prior high of 1527 close. In fact, in remains in the mid-1400s at this point. In order for it to move beyond an existing secular trend, such as the one we've had the past seven years, you would have to exceed it, I would think, by at least 10%.......”
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Obviously, the market has proven that Brinker was completely mistaken about the “cyclical bull market" running simultaneously with a “secular bear market." It never happened. A look at market history from March, 2000 to October, 2002 will show that the market simply entered and exited a cyclical bear; and that the secular bull market which started in 1982 never ended.
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However, Brinker milked this premise as long as he could; and probably sold a lot of newsletters to those who were fearful and believed Brinker could save them from the bear when it returned. This is how he did it:
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Finally, as the Dow and S&P broke through prior closing highs, it must have become apparent to Brinker that he had been mistaken all along. He put a short notice in the June, 2007 issue of Marketimer stating that the secular bear megatrend which had begun in March, 2000, had ended the previous year (in June 2006). One can only speculate as to how many investors stayed out of the stock market all of those years because of Brinker’s dire secular bear market warnings.
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Even though what Brinker says about the buy signal, the S&P gains, and returning “all available cash reserves” to the stock market on March 11, 2003, is technically true, the way he says it is very misleading and deceptive. He leaves out some very important facts that have a direct bearing on how profitable the “buy signal” really was to subscribers.
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So let’s take a look at what Brinker doesn't say about those “available cash reserves." He doesn't say that subscribers (who followed his advice as given in Marketimer since January 2000) had only a fraction of their cash reserves available to put into equities in March, 2003.
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Here is how it happened:
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January 2000, Brinker recommended selling 60% of model portfolio equity holdings. August 2000, Brinker raised that percentage to 65%. He Reflected these changes in his Model Porfolios, as the August 2000 issue of Marketimer shows:
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• Model Portfolio I: "Money Market @ 65%."
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• Model Portfolio II: "Money Market @ 65%."
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In October 2000, he sent a special bulletin to subscribers recommending that they use 20-50% of the 65% “available cash reserves” to buy QQQ.
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http://honeysbobbrinkerbeehivebuzz.blogspot.com/search?updated-min=2000-01-01T00%3A00%3A00-08%3A00&updated-max=2001-01-01T00%3A00%3A00-08%3A00&max-results=2
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The following instructions were included in several issues of Marketimer:
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November 6, 2000, Bob Brinker said: "Marketimer subscribers with aggressive objectives can invest up to 30% to 50% of cash reserves in either the QQQ shares or Rydex OTC Fund in order to participate in this recommendations. That translates into potential exposure of 19.5% to 32.5% of a TOTAL AGGRESSIVE PORTFOLIO. (30% of 65% CASH RESERVES equals 19.5%. 50% of 65% cash reserves equals 32.4%). The balance of reserves remain in money market funds..
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Conservative subscribers can invest up to 20% to 30% of cash reserves in this recommendation, using either QQQ shares or Rydex OTC Fund shares. That translates into potential exposure of 6.5% to 9.75% of a total BALANCE PORTFOLIO. (20% of 32.5% cash reserves equals 6.5%, 30% of 32.5% CASH RESERVES equals 9.75% of a BALANCED PORTFOLIO. The balance of reserves remain in money market funds."
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Brinker actually made this same “countertrend rally” prediction two more times over the following months.
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In the January 2001, Marketimer: Bob Brinker said, "We continue to emphasize the guidelines we have recommended with regard to the exposure in the Nasdaq 100 Index for the countertrend rally phase we expect.......we are expecting potential gains for the Nasdaq 100 Index of up to 50% or more as measured from the January 2 closing low....." (January 1, 2001, QQQQ closed at $64.30).
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March, 2001, Marketimer begins with Bob Brinker admitting that "we were wrong in our earlier expectations that a countertrend rally would develop late last year...." He then admits that even his call for a new bear market rally beginning on January 3 "was unable to sustain" upward progress in February. In spite of these admissions of being "wrong," in the same issue of Marketimer, Bob Brinker made the following recommendation to subscribers: "In our view, the probabilities favor a three to six month bear market rally phase beginning shortly. Such a rally has the potential to carry the Nasdaq composite Index above the 3000 level by spring or summer as measured from the closing lows." (March 1, 2001, QQQQ closed at $39.15)"
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April 6, 2001, Marketimer, Bob Brinker said, "Recent weakness in the Nasdaq 100 Index (QQQ) shares has far exceeded our expectations. However, we believe subscribers holding a position in these shares will eventually be rewarded, although this holding will require both time and patience. With or without a buy signal from our long-term model, we expect the Nasdaq Composite and Nasdaq 100 Index to stage a significant recovery over the next several months."
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May 7, 2001 Marketimer: Bob Brinker said, "As we stated last month, with or without a buy signal from our long-term model, we expect the Nasdaq Composite and Nasdaq 100 Index to stage a significant recovery over the next several months."
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For the next (almost) two years, the only “guidance” that Marketimer offered subscribers was to simply “hold for recovery” all existing positions in shares of Nasdaq 100 Index.
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The following is Brinker’s final guidance on these shares—just FOUR DAYS before he issued his March 11, 2003, buy signal:
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March 7, 2003, Marketimer, Bob Brinker said: "For subscribers holding Nasdaq 100 (QQQ) shares, we recommend holding for a significant recovery in the shares in the next cyclical bull market."
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March 11, 2003, with no mention of the prior QQQ-purchases, Brinker added RYOCX to his model portfolios in the mid-$20 range. He never again mentioned “those holding Nasdaq 100 (QQQ) shares." (RYOCX is a Nasdaq 100 Index fund, equivalent to QQQQ.)
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Brinker never added any the QQQ-trades to his model portfolios performance record and has never recognized that they happened or accounted for them in any way. The trades were NEVER closed and all follow-up guidance ended in March 2003 when he issued a new buy signal after QQQ lost over 70% of its value.
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Bob Brinker uses Mark Hulbert’s performance ranking in his newsletter advertising. Mark Hulbert rates Brinker on an average of his model portfolios. Hulbert initially added the October 2000 trade to Brinker's model portfolios, but soon took it out when he realized that Brinker was not going to account for the trade in his model portfolios.
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With some pressure from his subscribers, Mark Hulbert decided to use a footnote in Hulbert’s Financial Digest to justify giving Bob Brinker’s model portfolios a “mulligan” on the double-use of model portfolio cash reserves. Hulbert asserts that Brinker announced at the time of the “forecast” that he was not including the trade in his model portfolios--that is blatantly FALSE as Brinker’s bulletin clearly shows. But it is certainly true that Brinker recommended using MODEL PORTFOLIO CASH RESERVES for the trade.
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Mark Hulbert’s HFD footnote:
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"PLEASE NOTE: In late 2000, Brinker forecasted a several-month bear market rally and recommended an investment in the NASDAQ 100-Index--a trade that turned out quite unprofitably. However, because Brinker, at the time of making this forecast, chose not to make this trade part of his model portfolios, his HFD record has not suffered as a result.”
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Brinker uses Hulbert’s Financial Digest rankings as a source in his advertising, but never mentions that Hulbert uses the footnote about his trade. So it seems like a rather circular way of advertising with misleading information.
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The bottom line is that Bob Brinker’s “official performance record” is approximately 30% higher than it would be if he had not "chosen" to keep this unique and disastrous trade “off the books.”
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Kirk Lindstrom said: “Thus, anyone who followed Brinker's advice with 50% of cash reserves that was also in his "model portfolio for aggressive investors" saw their totals reduced 29.5% from what Brinker reports in his advertising………………… Conclusion: I calculate the QQQQ advice caused Brinker's reported total to drop by 29% and his APR to drop 2.0% a year such that his portfolio under performs the buy and holders of the Wilshire 5000 by 1.3% per year since the inception of P1.” To see Kirk’s complete analysis and how he arrived at his conclusion go here:
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http://home.netcom.com/~fanclubs/BobBrinker/Kirk/QQQQEffectOnPortfolios.html
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Many people were damaged financially by taking Brinker’s advice on the QQQ trade and holding while they dropped from $87 to below $20. Some even had to postpone retirement. There was talk about possible lawsuits. Brinker shut down his message boards because of all the complaints. Brinker stopped all libraries from offering Marketimers shortly after the QQQ-Bulletin was issued.
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There has been no information in Marketimers since March 2003, and guidance was never offered on Moneytalk. It defies logic to believe that people who were “holding” those shares of QQQ would not call Moneytalk and ask for help.
.
Here are some samples of what people were writing on message boards at the time:
.
April, 2001: In response to message posted by ectopia:
.
"I just received my Market Slimer. The "Brilliant One" doesn't even mention the Qube "trade" until the middle of page two. He spends the first page and a half reviewing his January 2000 Bear Market call and then stating his belief that the Market internals are improving. He states that if they keep heading in the same direction the "model" could signal a long term buy sometime this spring. That's right folks, just as Will predicted the QQQ "trade" is now an investment in which we will "be amply rewarded if we show patience." Yeah, like about sometime in 2010. Remember all that garbage he was spewing about "capital preservation" being preeminent all last year prior to his CTR call? Why in God's name didn't he take his own advice??? Does he realize how his hubris and arrogance has cost so much financial and emotional pain? Mr. Brinker, sir, you are one world-class unprincipled jerk. You have no conscience because if you had even a trace of one, you'd slink away never to be heard from again. We've been the prey of one of the greatest shark attacks of all times. What a piece of work you are! -- .
.
posted by MichaelJohn64 507.
.
I really think we should organize a class action law suit against the SOB for misrepresentation and fraud. I think the suit would be valid because he censored contrary posts from his Web discussion, causing the unsuspecting viewer to believe that his record and tactics were widely supported. Similarly, he culls the talk show participants and misleads the listening public into believing that his record, views, etc. are widely supported. I know this has been brought up here before; most have said that we wouldn't get anywhere with this sort of thing but I don't understand why this couldn't be a valid case.
.
-- posted by ectopia
.
In response to Bob Brinker posted by skeptic101:Skeptic101 said "I thought your retirement was ruined in Oct. 2000??????"
.
For those who don't follow my life as closely as Skeptic101 apparantly does, he is referring to the several hundred thousand dollar loss we suffered by following Bob Brinkers ill fated QQQ call shortly after we retired in 2000. Well, Skeptic101, the answer is that we went back to work part time for 5 yrs (consulting)and drastically cut our budget while saving and investing to make back the defecit. NOW we are fully retired again and my comments about spending 4% inflation adjusted per year stand... So, YES, my original retirement plans and budget were ruined by Brinker but after 7 years we have recovered on our own. Now go question someone elses veracity...:) ""
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"» retiredinprescot -
.
.
Moneytalk, December 1, 2007, Bob Brinker said: "As a matter of fact, the S&P 500 – if you go back to our major buy signal, March 11, 2003, which was a couple of days prior to the start of this great bull market run – the S&P at that time was sitting in at around 800, now sitting in about 1481, and adding in the cash dividends paid over that period, the total return now, during that period, is in excess of 90%.”
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On December 8, 2007, during Sunday’s opening monologue Bob Brinker re-iterated his "March 11, 2003 buy signal.” He said that he recommended the return of “all available stock market cash reserves” to the market.
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Unfortunately, Bob Brinker has never told listeners that subscribers who followed his model portfolio recommendations from January 2000 had only a portion (perhaps as little as 50%) of their equity cash reserves available to return to the stock market.
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Additionally, there were subscribers who did not return to the market because they either missed Brinker's bulletin or simply waited for “weakness” according to Brinker’s follow-up advice. In April and May, 2003, Brinker advised those who missed the buy-signal bulletin to wait for WEAKNESS below 810 on the S&P 500 Index before dollar-cost-averaging into the market.
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May, 2003, Marketimer: “……we recommend against chasing rallies in order to invest new money. In the event another test of the area of the bear market lows occurs below the 810 level for the Standard and Poor’s 500 Index, we would regard such weakness as an additional buying opportunity.”
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Beginning about the same time and continuing for the next six years, Brinker told both subscribers and listeners that the market had entered a “secular bear megatrend” as of March, 2000. He maintained this belief and touted it at length in several Marketimers and on Moneytalk.
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In the April 2003 issue, Brinker stated unequivocally that Marketimer “believes that the secular bear megatrend that started in early 2000 will last for 8 to 20 years, and will include a series of cyclical bear and cyclical bull markets.”
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Here is what Brinker told a Moneytalk caller in February, 2007:
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“……..But what we do know is within secular trends there are no cases where a secular trend has gone beyond the previous peak by more than, by more than 10%. It's never happened, so I think it's fair to say that until that happens, the secular trend is intact.".Now the secular trend that began in year 2000 when the S&P was up in the 1500s, awww, that remains intact. The S&P 500 Index - and this is measured by the Index itself - has not gone above the prior high of 1527 close. In fact, in remains in the mid-1400s at this point. In order for it to move beyond an existing secular trend, such as the one we've had the past seven years, you would have to exceed it, I would think, by at least 10%.......”
.
Obviously, the market has proven that Brinker was completely mistaken about the “cyclical bull market" running simultaneously with a “secular bear market." It never happened. A look at market history from March, 2000 to October, 2002 will show that the market simply entered and exited a cyclical bear; and that the secular bull market which started in 1982 never ended.
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However, Brinker milked this premise as long as he could; and probably sold a lot of newsletters to those who were fearful and believed Brinker could save them from the bear when it returned. This is how he did it:
.
- He originally claimed the bear would return in 1 to 2 years.
- .
- Then he extended the time frame to 1 to 3 years.
- .
- Then he called it an “outlier.”
Finally, as the Dow and S&P broke through prior closing highs, it must have become apparent to Brinker that he had been mistaken all along. He put a short notice in the June, 2007 issue of Marketimer stating that the secular bear megatrend which had begun in March, 2000, had ended the previous year (in June 2006). One can only speculate as to how many investors stayed out of the stock market all of those years because of Brinker’s dire secular bear market warnings.
.
Even though what Brinker says about the buy signal, the S&P gains, and returning “all available cash reserves” to the stock market on March 11, 2003, is technically true, the way he says it is very misleading and deceptive. He leaves out some very important facts that have a direct bearing on how profitable the “buy signal” really was to subscribers.
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So let’s take a look at what Brinker doesn't say about those “available cash reserves." He doesn't say that subscribers (who followed his advice as given in Marketimer since January 2000) had only a fraction of their cash reserves available to put into equities in March, 2003.
.
Here is how it happened:
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January 2000, Brinker recommended selling 60% of model portfolio equity holdings. August 2000, Brinker raised that percentage to 65%. He Reflected these changes in his Model Porfolios, as the August 2000 issue of Marketimer shows:
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• Model Portfolio I: "Money Market @ 65%."
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• Model Portfolio II: "Money Market @ 65%."
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In October 2000, he sent a special bulletin to subscribers recommending that they use 20-50% of the 65% “available cash reserves” to buy QQQ.
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http://honeysbobbrinkerbeehivebuzz.blogspot.com/search?updated-min=2000-01-01T00%3A00%3A00-08%3A00&updated-max=2001-01-01T00%3A00%3A00-08%3A00&max-results=2
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The following instructions were included in several issues of Marketimer:
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November 6, 2000, Bob Brinker said: "Marketimer subscribers with aggressive objectives can invest up to 30% to 50% of cash reserves in either the QQQ shares or Rydex OTC Fund in order to participate in this recommendations. That translates into potential exposure of 19.5% to 32.5% of a TOTAL AGGRESSIVE PORTFOLIO. (30% of 65% CASH RESERVES equals 19.5%. 50% of 65% cash reserves equals 32.4%). The balance of reserves remain in money market funds..
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Conservative subscribers can invest up to 20% to 30% of cash reserves in this recommendation, using either QQQ shares or Rydex OTC Fund shares. That translates into potential exposure of 6.5% to 9.75% of a total BALANCE PORTFOLIO. (20% of 32.5% cash reserves equals 6.5%, 30% of 32.5% CASH RESERVES equals 9.75% of a BALANCED PORTFOLIO. The balance of reserves remain in money market funds."
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Brinker actually made this same “countertrend rally” prediction two more times over the following months.
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In the January 2001, Marketimer: Bob Brinker said, "We continue to emphasize the guidelines we have recommended with regard to the exposure in the Nasdaq 100 Index for the countertrend rally phase we expect.......we are expecting potential gains for the Nasdaq 100 Index of up to 50% or more as measured from the January 2 closing low....." (January 1, 2001, QQQQ closed at $64.30).
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March, 2001, Marketimer begins with Bob Brinker admitting that "we were wrong in our earlier expectations that a countertrend rally would develop late last year...." He then admits that even his call for a new bear market rally beginning on January 3 "was unable to sustain" upward progress in February. In spite of these admissions of being "wrong," in the same issue of Marketimer, Bob Brinker made the following recommendation to subscribers: "In our view, the probabilities favor a three to six month bear market rally phase beginning shortly. Such a rally has the potential to carry the Nasdaq composite Index above the 3000 level by spring or summer as measured from the closing lows." (March 1, 2001, QQQQ closed at $39.15)"
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April 6, 2001, Marketimer, Bob Brinker said, "Recent weakness in the Nasdaq 100 Index (QQQ) shares has far exceeded our expectations. However, we believe subscribers holding a position in these shares will eventually be rewarded, although this holding will require both time and patience. With or without a buy signal from our long-term model, we expect the Nasdaq Composite and Nasdaq 100 Index to stage a significant recovery over the next several months."
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May 7, 2001 Marketimer: Bob Brinker said, "As we stated last month, with or without a buy signal from our long-term model, we expect the Nasdaq Composite and Nasdaq 100 Index to stage a significant recovery over the next several months."
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For the next (almost) two years, the only “guidance” that Marketimer offered subscribers was to simply “hold for recovery” all existing positions in shares of Nasdaq 100 Index.
.
The following is Brinker’s final guidance on these shares—just FOUR DAYS before he issued his March 11, 2003, buy signal:
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March 7, 2003, Marketimer, Bob Brinker said: "For subscribers holding Nasdaq 100 (QQQ) shares, we recommend holding for a significant recovery in the shares in the next cyclical bull market."
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March 11, 2003, with no mention of the prior QQQ-purchases, Brinker added RYOCX to his model portfolios in the mid-$20 range. He never again mentioned “those holding Nasdaq 100 (QQQ) shares." (RYOCX is a Nasdaq 100 Index fund, equivalent to QQQQ.)
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Brinker never added any the QQQ-trades to his model portfolios performance record and has never recognized that they happened or accounted for them in any way. The trades were NEVER closed and all follow-up guidance ended in March 2003 when he issued a new buy signal after QQQ lost over 70% of its value.
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Bob Brinker uses Mark Hulbert’s performance ranking in his newsletter advertising. Mark Hulbert rates Brinker on an average of his model portfolios. Hulbert initially added the October 2000 trade to Brinker's model portfolios, but soon took it out when he realized that Brinker was not going to account for the trade in his model portfolios.
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With some pressure from his subscribers, Mark Hulbert decided to use a footnote in Hulbert’s Financial Digest to justify giving Bob Brinker’s model portfolios a “mulligan” on the double-use of model portfolio cash reserves. Hulbert asserts that Brinker announced at the time of the “forecast” that he was not including the trade in his model portfolios--that is blatantly FALSE as Brinker’s bulletin clearly shows. But it is certainly true that Brinker recommended using MODEL PORTFOLIO CASH RESERVES for the trade.
.
Mark Hulbert’s HFD footnote:
.
"PLEASE NOTE: In late 2000, Brinker forecasted a several-month bear market rally and recommended an investment in the NASDAQ 100-Index--a trade that turned out quite unprofitably. However, because Brinker, at the time of making this forecast, chose not to make this trade part of his model portfolios, his HFD record has not suffered as a result.”
.
Brinker uses Hulbert’s Financial Digest rankings as a source in his advertising, but never mentions that Hulbert uses the footnote about his trade. So it seems like a rather circular way of advertising with misleading information.
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The bottom line is that Bob Brinker’s “official performance record” is approximately 30% higher than it would be if he had not "chosen" to keep this unique and disastrous trade “off the books.”
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Kirk Lindstrom said: “Thus, anyone who followed Brinker's advice with 50% of cash reserves that was also in his "model portfolio for aggressive investors" saw their totals reduced 29.5% from what Brinker reports in his advertising………………… Conclusion: I calculate the QQQQ advice caused Brinker's reported total to drop by 29% and his APR to drop 2.0% a year such that his portfolio under performs the buy and holders of the Wilshire 5000 by 1.3% per year since the inception of P1.” To see Kirk’s complete analysis and how he arrived at his conclusion go here:
.
http://home.netcom.com/~fanclubs/BobBrinker/Kirk/QQQQEffectOnPortfolios.html
.
Many people were damaged financially by taking Brinker’s advice on the QQQ trade and holding while they dropped from $87 to below $20. Some even had to postpone retirement. There was talk about possible lawsuits. Brinker shut down his message boards because of all the complaints. Brinker stopped all libraries from offering Marketimers shortly after the QQQ-Bulletin was issued.
.
There has been no information in Marketimers since March 2003, and guidance was never offered on Moneytalk. It defies logic to believe that people who were “holding” those shares of QQQ would not call Moneytalk and ask for help.
.
Here are some samples of what people were writing on message boards at the time:
.
April, 2001: In response to message posted by ectopia:
.
"I just received my Market Slimer. The "Brilliant One" doesn't even mention the Qube "trade" until the middle of page two. He spends the first page and a half reviewing his January 2000 Bear Market call and then stating his belief that the Market internals are improving. He states that if they keep heading in the same direction the "model" could signal a long term buy sometime this spring. That's right folks, just as Will predicted the QQQ "trade" is now an investment in which we will "be amply rewarded if we show patience." Yeah, like about sometime in 2010. Remember all that garbage he was spewing about "capital preservation" being preeminent all last year prior to his CTR call? Why in God's name didn't he take his own advice??? Does he realize how his hubris and arrogance has cost so much financial and emotional pain? Mr. Brinker, sir, you are one world-class unprincipled jerk. You have no conscience because if you had even a trace of one, you'd slink away never to be heard from again. We've been the prey of one of the greatest shark attacks of all times. What a piece of work you are! -- .
.
posted by MichaelJohn64 507.
.
I really think we should organize a class action law suit against the SOB for misrepresentation and fraud. I think the suit would be valid because he censored contrary posts from his Web discussion, causing the unsuspecting viewer to believe that his record and tactics were widely supported. Similarly, he culls the talk show participants and misleads the listening public into believing that his record, views, etc. are widely supported. I know this has been brought up here before; most have said that we wouldn't get anywhere with this sort of thing but I don't understand why this couldn't be a valid case.
.
-- posted by ectopia
.
In response to Bob Brinker posted by skeptic101:Skeptic101 said "I thought your retirement was ruined in Oct. 2000??????"
.
For those who don't follow my life as closely as Skeptic101 apparantly does, he is referring to the several hundred thousand dollar loss we suffered by following Bob Brinkers ill fated QQQ call shortly after we retired in 2000. Well, Skeptic101, the answer is that we went back to work part time for 5 yrs (consulting)and drastically cut our budget while saving and investing to make back the defecit. NOW we are fully retired again and my comments about spending 4% inflation adjusted per year stand... So, YES, my original retirement plans and budget were ruined by Brinker but after 7 years we have recovered on our own. Now go question someone elses veracity...:) ""
.
"» retiredinprescot -
.
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Sunday, December 9, 2007
SUMMARY BOB BRINKER'S MONEYTALK DECEMBER 8-9, 2007
Brief Summary, Commentary and Bob Brinker Excerpts From Moneytalk, December 8-9, 2007:
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OPENING MONOLOGUE EXCERPTS Bob Brinker said: “The big story as we get this weekend underway is the George W. Bush presidential bailout plan for the sub-prime mortgage set. Not everybody will be helped by this, but a lot of people will – kind of an ironic thing. Only a few weeks ago the leader for the democratic (sic) presidential nomination, Hilary Diane Evita Christina Rodham Clinton urged the president to take some action.
.
Well I don’t know whether he even knows about Hilary’s imploring him to take action…...but he sure took action, as he has announced a plan to bailout sub-prime mortgage holders up to 1,200,000 such troubled mortgage holders could be helped by this plan.......people in the industry say less – maybe a quarter million, maybe ¾ million that could be helped by this. How many sub-prime borrowers are out there? About 6 ½ million in total.......This plan will allegedly not cost taxpayers any money, we shall see about that…….basically consists of three prongs. The first is a freeze on adjustable rates of sub-prime mortgages for a period of five years. It goes back to January 1, 2005 and extends out to July 2010......Then it consists of a re-financing program for some of these mortgage holders into fixed rate mortgages.......FHA insured loans....... So there you have it.
.
The eligibility rules are fairly defined. Firstly, the beneficiaries have to live in their homes and secondly, they have to be current on their payments, or not have missed more than one payment in the previous twelve months. So there you have it.
.
Now these adjustable rate sub-prime mortgages are very, very rough once they re-set, and that is what this is all about – grabbing the re-set problem going forward. Usually these sub-prime ARMS start in the 7,8,9% range, but when they are normalized, they get up into the 11, 12, 13% range. Well, the ones that come under this program would be frozen at that lower rate for the five periods under discussion…for the loans falling within that five year period. Now there are a tremendous number of these adjustable rate sub-prime mortgages that are due within the next year or so.
.
You ask, why now? Why President Bush to the microphone now to announce this program. It’s a very easy question to answer.......We are going into a general election in early November of next year.......It is true the President of the United States had the wrong phone number when he had his press conference announcing how to get help with this plan. So let me give you the right phone number: 888-995-4673 (HOPE). That’s the Home Ownership Preservation Foundation, a non-profit group offering free housing counseling.......
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We’re told by the Treasury Secretary it won’t cost taxpayers a dime. That means it would cost those who invested in these ill-advised mortgages. And for the most part, that would be institutions around the world that bought packages of these mortgages as they are securitized into packages for investment purposes. And based on what we know, that is what happened. A lot of these mortgages have been packaged, securitized, purchased by investors around the world, many of those by institutional investors.”
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STOCK MARKET HINDSIGHT Excerpt of Brinker's comments: "Another good week for the financial markets. The S&P 500 Index now back over the 1500 mark. It’s just a little over 3 ½% under its all-time-historic high. And the S&P 500 having another very, very good week…….. If you go back to March 11, 2003, when we issued our major buy signal on the stock, the S&P 500 was around 800 then, now it’s over 1500. That gives you a total return, so far, including the cash dividends, well in excess of 90% -- or as they say, how sweet it is."
.
MARCH 2003 BUY SIGNAL During Sunday’s opening monologue Bob Brinker re-iterated his "March 11, 2003 buy signal.” He said that he recommended the return of “all available stock market cash reserves” to the market.
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LIAR LOANS Bob Brinker excerpt: “A liar loan is a loan where the borrower provides little or no documentation of their income stream. Therefore, they can lie as much as they want since there’s no verification of the information. One thing we don’t know is how many of the loans are liar loans. But there’s no question that over 50% of the borrowers who have sub-prime adjustable rate mortgages for 2006, the ones that got them last year, and they’re in this group that is eligible for help – over 50% of them provided basically liar loan backgrounds. So if you’re saying that this is a moral hazard – we are rewarding the liars –you’re absolutely right.”
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CNBC “YELL-FEST” A caller asked if Brinker had noticed that the financial shows have become mostly a “yell-fest” by the reporters who think the world is “hanging on their every word.” Brinker said that he had moved “away from financial TV largely” but likes Joe Kernen and David Faber.
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POLITICAL COMMENTS Bob Brinker paraphrase: President Bush took action on the sub prime mortgage problem because he realized a Republican candidate could not be elected with it hanging over his head –IOW, it’s “all politics.” Brinker also commented on how frustrated Hillary is because after she called for President Bush to take action on sub-prime mortgage problems -- he did just that and will get the credit for it. This is a “colossal gaff going into an election year,” so she has tried to throw in a “new wrinkle” –the 90 day moratorium on foreclosure— which is “ridiculous” but “it’s not going to happen.” Bush “stole the thunder” from democrat candidates.
.
Over this weekend, Brinker left no politician unscathed except Barack Hussein Obama whom he said is “flying like an eagle.” Brinker bashed President Bush for not giving the correct phone number to get help on mortgages—three different times. He also bashed the “irresponsible” congress and he bashed some of the leading presidential candidates. Ron Paul was subjected to a real dose of Brinker’s ridicule. Brinker said Ron Paul had as much chance of being elected president as there is a chance that Elvis will come back and win the presidency. Brinker repeated his contempt for a “country”that fights wars and “asks sacrifice only of its military personnel and nobody else.”
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FAIRTAX Bob Brinker excerpt: “We’ve all been exposed to this fraud known as the FairTax. It’s the unfair tax, in reality. And this is the kind of propaganda that’s out there……but I’m going to speak out against it because I think it’s wrong.”
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AMT Bob Brinker excerpt: “They are working on adopting a patch to delay for another year this Alternative Minimum Tax becoming even more of a nightmare than it already is. It is amazing to watch in Washington the way Congress will fiddle and diddle with something that they screwed up to begin with. You know the big mistake they made with the AMT back in 1969, believe it or not. The big mistake that they made is that they failed to index it to inflation. Now my pet theory is they did it on purpose because they knew it would generate higher revenue projections and that’s exactly what it did. But of course, they don’t collect the revenue because they come up with an annual patch, which is what they’re in the process of doing right now even though it’s the end of the year here in December. ……..and yet even though they know they’re not going to collect the AMT from every Tom, Dick and Harry that’s getting hit by it, they still continue........ It’s still in the 10-year revenue projections, even though they know they won’t collect it. That means that the revenue projections – the budget deficit projections are bogus. They’re silly putty – they don’t mean anything because they are including tremendous amounts of money from and AMT that they’re not going to collect anyway. This is the way that they conduct fiscal policy in Washington. It is a disgrace. I know you think it’s a disgrace – the way they over spend, but it’s also a disgrace the way they handle fiscal policy in general with this kind of bogus fiscal policy.”
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THIS JUST IN “The democrats are now pressing forward to give judges the (unilateral) power to change the terms of mortgage contracts.” Caller reply: “unbelievable.”
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I-BONDS Brinker not real excited about buying new ones, but would hold on to the ones that he has.
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BUYING BONDS Keep duration low, or ladder maturities– don’t go out long term.
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AFTER HOURS MARKET The caller asked where the actually trading occurred. Brinker said it was “over the counter.” Brinker said that they are “negotiated trades between traders usually based at brokerage houses.” But it’s a thin and volatile market. Brinker said if he needed to “characterize it,” he would call it the “under the counter, over the counter market.” But one of the places where you might see some volume is if “some guru gets on television…..and touts some stock.” Brinker said there have been some cases recently where some “tout” goes on TV and “touts” some stock which causes the stock to go up “30, 40, 50% in aftermarket trading” and usually give it all back in a couple of days.
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GNMA “…...gilt-edged securities” not affected by sub-prime problems. The fund that Brinker recommends (Vanguard GNMA Fund) is fine for those who have “tolerance for asset value fluctuations”.
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RECESSION Bob Brinker excerpt: “With the financial media in a frenzy, telling everyone we are going into recession, people have panicked and are actually are wondering whether the financial media is getting it right. Of course, they are not getting it right, in my opinion – they are completely wrong. But the fact of the matter is some people worry that financial media creating this panic about a recession – they are starting to believe it.”
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JOBS REPORT Brinker's statistics: First Friday of the month –November new jobs up 94,000; October revised upward very slightly at 170,000; September positive 144,000; three month moving average 100,000; 30,00 of the 94,000 November new jobs were government jobs; 38,000 of the October new jobs were government jobs; Construction jobs dropped 24,000 in November; Bigger paying manufacturing jobs lost 11,000—15,000 in October.
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FOMC MEETING It will take place on Tuesday. Bob Brinker predicts (with certainty) a cut of at least 25 basis points, which will take it to 4 ¼. The only reason he thinks that they might take it to a 50 basis point cut would be to “compliment the president’s sub-prime mortgage bailout program.” The interest rate markets have already anticipated the cut….
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OIL PRICES AND INFLATION Bob Brinker excerpt: “Although people feared that rising oil prices would drive core inflation, we told you they were wrong. Right here on Moneytalk, we told you that the people who said rising oil prices would push core inflation were wrong. And the reason they were wrong is because when you have rising oil prices you tax consumers. You tax them on their energy bills including at the pump. And that takes money out of their pocket and they go with emptier prices to the Mall and they can’t push prices higher. That’s why it acts as a tax. And that’s why like all taxes, it is counter-economic growth. It counters economic growth. That is exactly, exactly what we have seen. And it’s good to see some of the Federal Reserve Open Market Committee members are now agreeing with our view that has been expressed for the past year here on Moneytalk – that rising oil prices act as a tax on the economy and like all taxes they serve to slow down economic development. But we also told you that for that reason, they would not spill over materially into core inflation, and they have not…………….core inflation, year over year right now on the key personal consumption expenditure gauge is up only 1.9%........”
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BOB BRINKER SATURDAY QUOTE OF THE DAY “Never underestimate the ability of a politician to postpone the inevitable.”
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BOB BRINKER SUNDAY QUOTE OF THE DAY “We can agree to disagree in Las Vegas, Nevada. There’s a lot of that going on every day.”
.
BOB BRINKER MOVIE RECOMMENDATION “No Country For Old Men” (contains violence)
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BOB BRINKER LIGHT-READING RECOMMENDATION Bob Newhart’s “ I Shouldn’t Even Be Doing This: And Other Things That Make Me Laugh”
BOB BRINKER’S NEWLY-CREATED FAVORITE JARGON “Mortgage brokers gone wild.”
.
OPENING MONOLOGUE EXCERPTS Bob Brinker said: “The big story as we get this weekend underway is the George W. Bush presidential bailout plan for the sub-prime mortgage set. Not everybody will be helped by this, but a lot of people will – kind of an ironic thing. Only a few weeks ago the leader for the democratic (sic) presidential nomination, Hilary Diane Evita Christina Rodham Clinton urged the president to take some action.
.
Well I don’t know whether he even knows about Hilary’s imploring him to take action…...but he sure took action, as he has announced a plan to bailout sub-prime mortgage holders up to 1,200,000 such troubled mortgage holders could be helped by this plan.......people in the industry say less – maybe a quarter million, maybe ¾ million that could be helped by this. How many sub-prime borrowers are out there? About 6 ½ million in total.......This plan will allegedly not cost taxpayers any money, we shall see about that…….basically consists of three prongs. The first is a freeze on adjustable rates of sub-prime mortgages for a period of five years. It goes back to January 1, 2005 and extends out to July 2010......Then it consists of a re-financing program for some of these mortgage holders into fixed rate mortgages.......FHA insured loans....... So there you have it.
.
The eligibility rules are fairly defined. Firstly, the beneficiaries have to live in their homes and secondly, they have to be current on their payments, or not have missed more than one payment in the previous twelve months. So there you have it.
.
Now these adjustable rate sub-prime mortgages are very, very rough once they re-set, and that is what this is all about – grabbing the re-set problem going forward. Usually these sub-prime ARMS start in the 7,8,9% range, but when they are normalized, they get up into the 11, 12, 13% range. Well, the ones that come under this program would be frozen at that lower rate for the five periods under discussion…for the loans falling within that five year period. Now there are a tremendous number of these adjustable rate sub-prime mortgages that are due within the next year or so.
.
You ask, why now? Why President Bush to the microphone now to announce this program. It’s a very easy question to answer.......We are going into a general election in early November of next year.......It is true the President of the United States had the wrong phone number when he had his press conference announcing how to get help with this plan. So let me give you the right phone number: 888-995-4673 (HOPE). That’s the Home Ownership Preservation Foundation, a non-profit group offering free housing counseling.......
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We’re told by the Treasury Secretary it won’t cost taxpayers a dime. That means it would cost those who invested in these ill-advised mortgages. And for the most part, that would be institutions around the world that bought packages of these mortgages as they are securitized into packages for investment purposes. And based on what we know, that is what happened. A lot of these mortgages have been packaged, securitized, purchased by investors around the world, many of those by institutional investors.”
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STOCK MARKET HINDSIGHT Excerpt of Brinker's comments: "Another good week for the financial markets. The S&P 500 Index now back over the 1500 mark. It’s just a little over 3 ½% under its all-time-historic high. And the S&P 500 having another very, very good week…….. If you go back to March 11, 2003, when we issued our major buy signal on the stock, the S&P 500 was around 800 then, now it’s over 1500. That gives you a total return, so far, including the cash dividends, well in excess of 90% -- or as they say, how sweet it is."
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MARCH 2003 BUY SIGNAL During Sunday’s opening monologue Bob Brinker re-iterated his "March 11, 2003 buy signal.” He said that he recommended the return of “all available stock market cash reserves” to the market.
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LIAR LOANS Bob Brinker excerpt: “A liar loan is a loan where the borrower provides little or no documentation of their income stream. Therefore, they can lie as much as they want since there’s no verification of the information. One thing we don’t know is how many of the loans are liar loans. But there’s no question that over 50% of the borrowers who have sub-prime adjustable rate mortgages for 2006, the ones that got them last year, and they’re in this group that is eligible for help – over 50% of them provided basically liar loan backgrounds. So if you’re saying that this is a moral hazard – we are rewarding the liars –you’re absolutely right.”
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CNBC “YELL-FEST” A caller asked if Brinker had noticed that the financial shows have become mostly a “yell-fest” by the reporters who think the world is “hanging on their every word.” Brinker said that he had moved “away from financial TV largely” but likes Joe Kernen and David Faber.
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POLITICAL COMMENTS Bob Brinker paraphrase: President Bush took action on the sub prime mortgage problem because he realized a Republican candidate could not be elected with it hanging over his head –IOW, it’s “all politics.” Brinker also commented on how frustrated Hillary is because after she called for President Bush to take action on sub-prime mortgage problems -- he did just that and will get the credit for it. This is a “colossal gaff going into an election year,” so she has tried to throw in a “new wrinkle” –the 90 day moratorium on foreclosure— which is “ridiculous” but “it’s not going to happen.” Bush “stole the thunder” from democrat candidates.
.
Over this weekend, Brinker left no politician unscathed except Barack Hussein Obama whom he said is “flying like an eagle.” Brinker bashed President Bush for not giving the correct phone number to get help on mortgages—three different times. He also bashed the “irresponsible” congress and he bashed some of the leading presidential candidates. Ron Paul was subjected to a real dose of Brinker’s ridicule. Brinker said Ron Paul had as much chance of being elected president as there is a chance that Elvis will come back and win the presidency. Brinker repeated his contempt for a “country”that fights wars and “asks sacrifice only of its military personnel and nobody else.”
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FAIRTAX Bob Brinker excerpt: “We’ve all been exposed to this fraud known as the FairTax. It’s the unfair tax, in reality. And this is the kind of propaganda that’s out there……but I’m going to speak out against it because I think it’s wrong.”
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AMT Bob Brinker excerpt: “They are working on adopting a patch to delay for another year this Alternative Minimum Tax becoming even more of a nightmare than it already is. It is amazing to watch in Washington the way Congress will fiddle and diddle with something that they screwed up to begin with. You know the big mistake they made with the AMT back in 1969, believe it or not. The big mistake that they made is that they failed to index it to inflation. Now my pet theory is they did it on purpose because they knew it would generate higher revenue projections and that’s exactly what it did. But of course, they don’t collect the revenue because they come up with an annual patch, which is what they’re in the process of doing right now even though it’s the end of the year here in December. ……..and yet even though they know they’re not going to collect the AMT from every Tom, Dick and Harry that’s getting hit by it, they still continue........ It’s still in the 10-year revenue projections, even though they know they won’t collect it. That means that the revenue projections – the budget deficit projections are bogus. They’re silly putty – they don’t mean anything because they are including tremendous amounts of money from and AMT that they’re not going to collect anyway. This is the way that they conduct fiscal policy in Washington. It is a disgrace. I know you think it’s a disgrace – the way they over spend, but it’s also a disgrace the way they handle fiscal policy in general with this kind of bogus fiscal policy.”
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THIS JUST IN “The democrats are now pressing forward to give judges the (unilateral) power to change the terms of mortgage contracts.” Caller reply: “unbelievable.”
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I-BONDS Brinker not real excited about buying new ones, but would hold on to the ones that he has.
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BUYING BONDS Keep duration low, or ladder maturities– don’t go out long term.
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AFTER HOURS MARKET The caller asked where the actually trading occurred. Brinker said it was “over the counter.” Brinker said that they are “negotiated trades between traders usually based at brokerage houses.” But it’s a thin and volatile market. Brinker said if he needed to “characterize it,” he would call it the “under the counter, over the counter market.” But one of the places where you might see some volume is if “some guru gets on television…..and touts some stock.” Brinker said there have been some cases recently where some “tout” goes on TV and “touts” some stock which causes the stock to go up “30, 40, 50% in aftermarket trading” and usually give it all back in a couple of days.
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GNMA “…...gilt-edged securities” not affected by sub-prime problems. The fund that Brinker recommends (Vanguard GNMA Fund) is fine for those who have “tolerance for asset value fluctuations”.
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RECESSION Bob Brinker excerpt: “With the financial media in a frenzy, telling everyone we are going into recession, people have panicked and are actually are wondering whether the financial media is getting it right. Of course, they are not getting it right, in my opinion – they are completely wrong. But the fact of the matter is some people worry that financial media creating this panic about a recession – they are starting to believe it.”
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JOBS REPORT Brinker's statistics: First Friday of the month –November new jobs up 94,000; October revised upward very slightly at 170,000; September positive 144,000; three month moving average 100,000; 30,00 of the 94,000 November new jobs were government jobs; 38,000 of the October new jobs were government jobs; Construction jobs dropped 24,000 in November; Bigger paying manufacturing jobs lost 11,000—15,000 in October.
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FOMC MEETING It will take place on Tuesday. Bob Brinker predicts (with certainty) a cut of at least 25 basis points, which will take it to 4 ¼. The only reason he thinks that they might take it to a 50 basis point cut would be to “compliment the president’s sub-prime mortgage bailout program.” The interest rate markets have already anticipated the cut….
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OIL PRICES AND INFLATION Bob Brinker excerpt: “Although people feared that rising oil prices would drive core inflation, we told you they were wrong. Right here on Moneytalk, we told you that the people who said rising oil prices would push core inflation were wrong. And the reason they were wrong is because when you have rising oil prices you tax consumers. You tax them on their energy bills including at the pump. And that takes money out of their pocket and they go with emptier prices to the Mall and they can’t push prices higher. That’s why it acts as a tax. And that’s why like all taxes, it is counter-economic growth. It counters economic growth. That is exactly, exactly what we have seen. And it’s good to see some of the Federal Reserve Open Market Committee members are now agreeing with our view that has been expressed for the past year here on Moneytalk – that rising oil prices act as a tax on the economy and like all taxes they serve to slow down economic development. But we also told you that for that reason, they would not spill over materially into core inflation, and they have not…………….core inflation, year over year right now on the key personal consumption expenditure gauge is up only 1.9%........”
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BOB BRINKER SATURDAY QUOTE OF THE DAY “Never underestimate the ability of a politician to postpone the inevitable.”
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BOB BRINKER SUNDAY QUOTE OF THE DAY “We can agree to disagree in Las Vegas, Nevada. There’s a lot of that going on every day.”
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BOB BRINKER MOVIE RECOMMENDATION “No Country For Old Men” (contains violence)
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BOB BRINKER LIGHT-READING RECOMMENDATION Bob Newhart’s “ I Shouldn’t Even Be Doing This: And Other Things That Make Me Laugh”
BOB BRINKER’S NEWLY-CREATED FAVORITE JARGON “Mortgage brokers gone wild.”
Bob Brinker's Stock Market Comments
Bob Brinker only talked about his market views one time on Saturday, December 8th. Unfortunately, it was all from a "rearview mirror" perspective -- as usual.
Bob Brinker said:
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STOCK MARKET: "Another good week for the financial markets. The S&P 500 Index now back over the 1500 mark. It’s just a little over 3 ½% under its all-time-historic high. And the S&P 500 having another very, very good week…….. If you go back to March 11, 2003, when we issued our major buy signal on the stock, the S&P 500 was around 800 then, now it’s over 1500. That gives you a total return, so far, including the cash dividends, well in excess of 90% -- or as they say, how sweet it is…."
.
My complete Moneytalk summary will be posted later today__Honeybee
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Bob Brinker said:
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STOCK MARKET: "Another good week for the financial markets. The S&P 500 Index now back over the 1500 mark. It’s just a little over 3 ½% under its all-time-historic high. And the S&P 500 having another very, very good week…….. If you go back to March 11, 2003, when we issued our major buy signal on the stock, the S&P 500 was around 800 then, now it’s over 1500. That gives you a total return, so far, including the cash dividends, well in excess of 90% -- or as they say, how sweet it is…."
.
My complete Moneytalk summary will be posted later today__Honeybee
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Survey of Highest Rate CDs
On Saturday Bob Brinker recommended a caller look at CDs rather than US Treasury Bonds or notes because CDs are paying better rates.
From the Highest CD Rates Survey at forbestadvice.com, the best CD rate is 5.45% at Countrywide Bank for 3 months.
The 3-month treasury bill currently pays 3.07%, the 5-yr treasury note pays 3.50%, the 10-year treasury bond pays 4.11% and the 30-year T-Bond pays 4.57%.
CDs are also paying better rates than iBonds which currently pay 4.28% (I-Bond Details)
Below are some more rates and terms.
6 Months
5.35% at Countrywide Bank
1 and 2 years
5.21% at Apple Bank for Savings (Scarsdale NY)
3 years
5.00% at Capital One Bank, Eastern Savings & Flagstar Bank
5 years
5.26% at Apple Bank for Savings
7 and 10 years
5.10% at Capital One Bank
From the Highest CD Rates Survey at forbestadvice.com, the best CD rate is 5.45% at Countrywide Bank for 3 months.
The 3-month treasury bill currently pays 3.07%, the 5-yr treasury note pays 3.50%, the 10-year treasury bond pays 4.11% and the 30-year T-Bond pays 4.57%.
CDs are also paying better rates than iBonds which currently pay 4.28% (I-Bond Details)
Below are some more rates and terms.
6 Months
5.35% at Countrywide Bank
1 and 2 years
5.21% at Apple Bank for Savings (Scarsdale NY)
3 years
5.00% at Capital One Bank, Eastern Savings & Flagstar Bank
5 years
5.26% at Apple Bank for Savings
7 and 10 years
5.10% at Capital One Bank
Monday, December 3, 2007
David Korn Summary of Moneytalk Guest Robyn Meredith
David Korn has generously granted me permission to share this outstanding excerpt from his newsletter. This is David’s summary and interpretation of the discussion with Bob Brinker’s Moneytalk guest on Saturday.
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"David Korn's Stock Market Commentary, Interpretation of Moneytalk (Bob Brinker Host), Financial Education, Helpful Links, Guest Editorials, andSpecial Alert E-Mail Service. Copyright David Korn, L.L.C. 2007 Web site: http://david-korn.blogspot.com/
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December 1-2, 2007 Newsletter
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MONEYTALK GUESTS
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On Saturday, Bob had on Robyn Meredith, a foreign correspondent for Forbes and author of the book, "The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us." Robyn lives in Hong Kong and said that based on her observations of what was going on in India and China, she felt that most people in the U.S. didn't really appreciate what was going on in those countries. I thought this was an important topic and an interesting discussion so I covered the interview below.
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1. Bob first asked Robyn about China's imports and the recalls we are seeing in the headlines. Robyn said it was a wake up call for Chinese producers, as well as the American companies that purchase Chinese products and simply put their name on it. Robyn said there is probably a higher percentage of unsafe products coming out of China versus other countries because regulators there can easily be bought off. In fact, products that are sold in mainland China can even be more shoddy, to wit: an infant formula that the manufactures made which left out protein for economic reasons resulting in many babies getting very ill.
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2. Robyn said that products imported into Japan are very thoroughly checked, not only those that come in from China, but also imports from the U.S. As far as the contention that the U.S. doesn't do enough to check its imports, Robyn said that the volume of imports from China is so enormous, it is unrealistic to expect that we could check them all. The American multi-national companies such as Mattel are realizing that their own brand name is at risk if they don't put in procedures to ensure that the products they repackage are safe.
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3. America's competitive position in the world is changing, due in large part to the growth of the economies in China and India as well as technological advances and globalization. Americans, as a whole, have not really come to grips that we are competing for jobs on a worldwide basis now. Two giant nations, each with over one billion people, have embraced capitalism at the same time they are rejoining the global economy.
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4. Robyn said the Chinese communist party is running the country; however, their economic system is capitalism. There are still lots of remainders from the communist system and many of the large companies are still partially state owned. There are a lot of private companies, a stock market and a banking system that was not there too long ago. The communist party is there to preserve their party's grip on power and keep the country together. Overall, China is moving away from the communism and embracing capitalism.
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5. China has a giant pool of savings and spends most of that money purchasing U.S. Treasury securities. It threatens once in a while to use its trillions to purchase euros instead, although if it did that suddenly, it could disrupt the global economies, most of all the U.S. In that sense, China now has economic power over the U.S. China has almost as much power of Japan, but Japan is now a long term ally of the U.S. It is worrisome that they own such a large stake in our bond market, but if they dumped them, that would be tantamount to economic war. On the other hand, as long as Americans remain consumers to the world, China will be producer to the world, and India will be the back office of the world.
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6. Robyn thinks we are at a critical point in our history. There is a lot of talk about China and India reinventing themselves, but what about the United States? China is becoming a big export market for America and that presents opportunity for us. India's insertion into global economies has also provided opportunity for U.S. companies. Between India and China, over 200 million people have risen out of poverty due to their economic growth, which is something we as a country strived to do with our aid programs, but were not able to accomplish.
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7. People don't have to immigrate like they used to because now jobs can immigrate. America has benefited from immigrants and Robyn said that she was puzzled by how the immigration debate in the U.S. has headed. She noted that since 9/11, we have kept out many very smart people from immigrating to our country and we are helping foster a brain drain of people who love the U.S., but are now moving to India and China.
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Caller: This caller noted that China has the money to purchase American companies. Are there any checks on our transfer of military technology? Can we sell them any electronics or computers that could be used by China against us? Robyn said there are a number of checks for sensitive technology, but for dual use systems it is more problematic. There have been cases prosecuted were American companies sold a product to China for one purpose, but China used the product for military purposes. The U.S. does have on the books strong export control laws that are designed to prevent such a thing, not only for China, but for other countries as well.
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Caller: Why should China purchase anything from us when they can make it cheaper in their country? Robyn said that China can make most products that are labor intensive cheaper, but not everything. For example, China imports a lot of airplanes from our country. China cannot make an airplane of such high quality that Boeing makes. The complex advanced goods will be made in the West for the foreseeable future, although China is catching up in those areas.
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Caller: Why should we reduce our standard of living to accommodate other growing countries? Robyn said that she does not believe that we, as U.S. citizens, have any God-given right to earn 10-times more than anyone else in the world for the same work. As a nation, we have to recognize that there are now in excess of 1 billion people that are now going to be competing for a higher standard of living. This is a challenge, but also an opportunity. We have to understand and appreciate that reality which is not going away. If we want to keep our standard of living high, we are going to have to work and reinvent ourselves so that we are worth the higher standard of living.
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Caller: The governor of Minnesota has encouraged its schools to teach Mandarin Chinese. Is that the language of the future? Robyn said that it will be one language of the future, but not for another 10 years or more. It couldn't hurt to learn, and Robyn said her own son is learning it. However, English will remain the main language of the world because all of the European nations are using English as a de facto language and people from India speak English as well.
Caller: There has been a tremendous influx of Asians into Australia in recent years. Will Australia ultimately be a country of Asia, or will it remain a Western-type nation? Robyn said Australia will remain a Western ally for the forseeable future; however, Australia has seen its exports to China grow the most. Australia's mineral industry is sending a lot of those resources to customers in China. That is happening to many countries that produce such resources. This is shifting geopolitics around the world particularly in Africa. China is basically economically colonizing Africa as we speak because those countries have a lot of oil, natural gas and other resources which China needs because its economy is growing.
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Bob: How is the pollution in Hong Kong? Robyn said it is horrible and worse than many people in the U.S. even realize. Robyn said she keeps an air cleaner in every single room of her apartment so that at least at night when she is home the air will be clean. It is hard to conceive of how bad the pollution is in many mainland cities in China. Next time you see a picture from there, look at the background and you will think it is out of focus and grey, but in reality it is pollution that is preventing you from seeing the buildings in the background. The pollution is dramatic.
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Bob: How are China and India treating women? Robyn said that there remains a strong preference for boys over girls which results in many more boys being born then girls. Now that we have cheap ultra-sound machines, it makes it much easier for people to choose the sex of their babies. This is going to have significant sociological problems down the road when there is a huge imbalance of the number of available women to marry.
.
Caller: This caller said his entire life he has heard that communism is bad and yet here we are supporting their government through trade. Do you think that the Chinese government would treat us any better than they treat their own people? Before Robyn answered the question, the caller noted that he went to Barnes and Noble bookstore and it seemed that every single book on the shelf had been printed and made in China! Robyn said she looks at the situation a little differently. We are supporting the change in China. The communist party runs China but it is no longer communist in anything but name and China is transforming from a communist to a capitalistic economic system. It’s about half-way there toward a fully capitalistic system. That
said, China does not have a free press, it does not have fully free markets and there are still serious problems in the human rights area and that has been a much slower part of change.
.
Caller: What kind of religious freedom is there in China? Robyn said China does not respect religious freedom. You saw the huge reaction in China when President Bush honored the Dalai Lama. There has been a little movement in recent years, where China is more tolerant of churches, even Catholicism growing in the country; however, that change is very slow. China's philosophy toward religion has resulted in abuse toward its own citizens.
EC: Some interesting points in this interview. You can't ignore China Or India and there are investment opportunities in these countries. You Can find more about the book, "The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us"………………….."__David Korn.
.
To subscribe to David Korn’s newsletter go to his web site at: http://david-korn.blogspot.com/
.
"David Korn's Stock Market Commentary, Interpretation of Moneytalk (Bob Brinker Host), Financial Education, Helpful Links, Guest Editorials, andSpecial Alert E-Mail Service. Copyright David Korn, L.L.C. 2007 Web site: http://david-korn.blogspot.com/
.
December 1-2, 2007 Newsletter
.
MONEYTALK GUESTS
.
On Saturday, Bob had on Robyn Meredith, a foreign correspondent for Forbes and author of the book, "The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us." Robyn lives in Hong Kong and said that based on her observations of what was going on in India and China, she felt that most people in the U.S. didn't really appreciate what was going on in those countries. I thought this was an important topic and an interesting discussion so I covered the interview below.
.
1. Bob first asked Robyn about China's imports and the recalls we are seeing in the headlines. Robyn said it was a wake up call for Chinese producers, as well as the American companies that purchase Chinese products and simply put their name on it. Robyn said there is probably a higher percentage of unsafe products coming out of China versus other countries because regulators there can easily be bought off. In fact, products that are sold in mainland China can even be more shoddy, to wit: an infant formula that the manufactures made which left out protein for economic reasons resulting in many babies getting very ill.
.
2. Robyn said that products imported into Japan are very thoroughly checked, not only those that come in from China, but also imports from the U.S. As far as the contention that the U.S. doesn't do enough to check its imports, Robyn said that the volume of imports from China is so enormous, it is unrealistic to expect that we could check them all. The American multi-national companies such as Mattel are realizing that their own brand name is at risk if they don't put in procedures to ensure that the products they repackage are safe.
.
3. America's competitive position in the world is changing, due in large part to the growth of the economies in China and India as well as technological advances and globalization. Americans, as a whole, have not really come to grips that we are competing for jobs on a worldwide basis now. Two giant nations, each with over one billion people, have embraced capitalism at the same time they are rejoining the global economy.
.
4. Robyn said the Chinese communist party is running the country; however, their economic system is capitalism. There are still lots of remainders from the communist system and many of the large companies are still partially state owned. There are a lot of private companies, a stock market and a banking system that was not there too long ago. The communist party is there to preserve their party's grip on power and keep the country together. Overall, China is moving away from the communism and embracing capitalism.
.
5. China has a giant pool of savings and spends most of that money purchasing U.S. Treasury securities. It threatens once in a while to use its trillions to purchase euros instead, although if it did that suddenly, it could disrupt the global economies, most of all the U.S. In that sense, China now has economic power over the U.S. China has almost as much power of Japan, but Japan is now a long term ally of the U.S. It is worrisome that they own such a large stake in our bond market, but if they dumped them, that would be tantamount to economic war. On the other hand, as long as Americans remain consumers to the world, China will be producer to the world, and India will be the back office of the world.
.
6. Robyn thinks we are at a critical point in our history. There is a lot of talk about China and India reinventing themselves, but what about the United States? China is becoming a big export market for America and that presents opportunity for us. India's insertion into global economies has also provided opportunity for U.S. companies. Between India and China, over 200 million people have risen out of poverty due to their economic growth, which is something we as a country strived to do with our aid programs, but were not able to accomplish.
.
7. People don't have to immigrate like they used to because now jobs can immigrate. America has benefited from immigrants and Robyn said that she was puzzled by how the immigration debate in the U.S. has headed. She noted that since 9/11, we have kept out many very smart people from immigrating to our country and we are helping foster a brain drain of people who love the U.S., but are now moving to India and China.
.
Caller: This caller noted that China has the money to purchase American companies. Are there any checks on our transfer of military technology? Can we sell them any electronics or computers that could be used by China against us? Robyn said there are a number of checks for sensitive technology, but for dual use systems it is more problematic. There have been cases prosecuted were American companies sold a product to China for one purpose, but China used the product for military purposes. The U.S. does have on the books strong export control laws that are designed to prevent such a thing, not only for China, but for other countries as well.
.
Caller: Why should China purchase anything from us when they can make it cheaper in their country? Robyn said that China can make most products that are labor intensive cheaper, but not everything. For example, China imports a lot of airplanes from our country. China cannot make an airplane of such high quality that Boeing makes. The complex advanced goods will be made in the West for the foreseeable future, although China is catching up in those areas.
.
Caller: Why should we reduce our standard of living to accommodate other growing countries? Robyn said that she does not believe that we, as U.S. citizens, have any God-given right to earn 10-times more than anyone else in the world for the same work. As a nation, we have to recognize that there are now in excess of 1 billion people that are now going to be competing for a higher standard of living. This is a challenge, but also an opportunity. We have to understand and appreciate that reality which is not going away. If we want to keep our standard of living high, we are going to have to work and reinvent ourselves so that we are worth the higher standard of living.
.
Caller: The governor of Minnesota has encouraged its schools to teach Mandarin Chinese. Is that the language of the future? Robyn said that it will be one language of the future, but not for another 10 years or more. It couldn't hurt to learn, and Robyn said her own son is learning it. However, English will remain the main language of the world because all of the European nations are using English as a de facto language and people from India speak English as well.
Caller: There has been a tremendous influx of Asians into Australia in recent years. Will Australia ultimately be a country of Asia, or will it remain a Western-type nation? Robyn said Australia will remain a Western ally for the forseeable future; however, Australia has seen its exports to China grow the most. Australia's mineral industry is sending a lot of those resources to customers in China. That is happening to many countries that produce such resources. This is shifting geopolitics around the world particularly in Africa. China is basically economically colonizing Africa as we speak because those countries have a lot of oil, natural gas and other resources which China needs because its economy is growing.
.
Bob: How is the pollution in Hong Kong? Robyn said it is horrible and worse than many people in the U.S. even realize. Robyn said she keeps an air cleaner in every single room of her apartment so that at least at night when she is home the air will be clean. It is hard to conceive of how bad the pollution is in many mainland cities in China. Next time you see a picture from there, look at the background and you will think it is out of focus and grey, but in reality it is pollution that is preventing you from seeing the buildings in the background. The pollution is dramatic.
.
Bob: How are China and India treating women? Robyn said that there remains a strong preference for boys over girls which results in many more boys being born then girls. Now that we have cheap ultra-sound machines, it makes it much easier for people to choose the sex of their babies. This is going to have significant sociological problems down the road when there is a huge imbalance of the number of available women to marry.
.
Caller: This caller said his entire life he has heard that communism is bad and yet here we are supporting their government through trade. Do you think that the Chinese government would treat us any better than they treat their own people? Before Robyn answered the question, the caller noted that he went to Barnes and Noble bookstore and it seemed that every single book on the shelf had been printed and made in China! Robyn said she looks at the situation a little differently. We are supporting the change in China. The communist party runs China but it is no longer communist in anything but name and China is transforming from a communist to a capitalistic economic system. It’s about half-way there toward a fully capitalistic system. That
said, China does not have a free press, it does not have fully free markets and there are still serious problems in the human rights area and that has been a much slower part of change.
.
Caller: What kind of religious freedom is there in China? Robyn said China does not respect religious freedom. You saw the huge reaction in China when President Bush honored the Dalai Lama. There has been a little movement in recent years, where China is more tolerant of churches, even Catholicism growing in the country; however, that change is very slow. China's philosophy toward religion has resulted in abuse toward its own citizens.
EC: Some interesting points in this interview. You can't ignore China Or India and there are investment opportunities in these countries. You Can find more about the book, "The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us"………………….."__David Korn.
.
To subscribe to David Korn’s newsletter go to his web site at: http://david-korn.blogspot.com/
Sunday, December 2, 2007
Summary of Bob Brinker's Moneytalk, December 1-2, 2007
Brief Summary, Commentary and Bob Brinker Excerpts From Moneytalk, December 1-2, 2007.
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STOCK MARKET: Bob Brinker said, “A good week in the financial markets. The stock market recovering nicely this week--the S&P up close to 3%. In fact, right now the S&P 500 standing in at 1481 is just 5.4% below its all time historic record high recorded in early October. As a matter of fact, the S&P 500 – if you go back to our major buy signal, March 11, 2003, which was a couple of days prior to the start of this great bull market run – the S&P at that time was sitting in at around 800, now sitting in about 1481, and adding in the cash dividends paid over that period, the total return now, during that period, is in excess of 90%.”
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REAR-VIEW MIRROR STATISTIC: (Brinker comments paraphrased) Revision of the real Gross Domestic Product for the three months ending September 30th -- which came in at 4.9% is strictly a "rear-view mirror statistic." It tells us nothing about the future and the stock market is strictly a forward-looking vehicle.
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ECONOMIC GROWTH: (Brinker comments paraphrased) Don’t anticipate third quarter kind of growth for the coming year. Stock market is expecting a relatively slow growth track. Look for an economy that will grow at a slow pace.
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HOUSING RECESSION: (Brinker comments paraphrased) Turning into an impressive recession – will go down in history as a major recession. Serious markdowns….existing home prices: YOY, down 8.6%....new home sales have “fallen out of bed and hit the floor hard” -- down 16.5% YOY. People will eventually look for a recovery in the housing market and that will benefit housing companies “some day.” Available housing at close to an eleven month supply….. We are somewhere in the middle of the recession – not at the end and not at the beginning.
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BAILING OUT SUB-PRIME: (Brinker paraphrased) It’s important that the White House and the mortgage industry is working on a plan to temporarily freeze and re-set interest rates on some subprime home loans……. because we have over 2 million adjustable rate mortgages scheduled to re-set at higher rates over the next 24 months. This plan could have a stabilizing impact and appears that it may come to fruition because of some powerful names working on it -- like Henry Paulsen, who will speak at a housing conference this Monday. Brinker said: “We are talking a lot of homes here. About 100,000 loans are scheduled to re-set at a higher rate on a monthly basis over the next 2 years….it just keeps coming at you every month.” The delinquency is about 15% and still climbing.
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MORTGAGE BROKERS: Bob Brinker summed up his opinion of the sub-prime fiasco by saying this: “If I were to make a video about what happened, I know what my title would be -- and I’m sure it would be a best seller. It would be “Mortgage Brokers Gone Wild.”
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LONG-TERM CAPITAL GAINS RATE: A caller asked about the prospect of the capital gains rate going to zero in 2008 for those in the 15% bracket. Brinker pointed out that he is not a tax account, but said it sounded right to him.
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BUYING A CAR WITH HOME EQUITY LOAN: Bob in Chicago asked which would be a better way to buy a vehicle – taking money out of IRA or using money from a home equity loan. Brinker said he preferred the home equity line because of the deductibility, but cautioned against institutionalizing the loan, and suggested setting up a 5-year cap for paying it off. Also, taking money out an IRA is a taxable event.
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MODEL PORTFOLIO III: Brinker explained to a caller that Model Portfolio III is a balanced portfolio of “quality holdings.” (It is about 50% stock funds-- mostly VTSMX; and about 50% bond funds -- VFIIX, VIPSX, and VFSTX.)
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FAIRTAX: Bob Brinker said, “Let me tell you something. This is one of the greatest follies that I have ever seen in my life. To come forth with a de facto federal sales tax which would be at least 30% added on to the price of the goods, possibly could be much higher than that—creating a new federal bureaucracy, which would be a federal sales tax department; which would have to be created to oversee and collect this tax even if it came through the states –and how you would get the states to comply is a whole separate question -- there’d be nothing in for them. But to create a whole new bureaucracy – to create a de facto federal sales tax and to apply this sales tax to some goods which would make it an unthinkable, an unthinkable tax. For example, new houses – how would you like to buy a new house for $100,000 and pay a $30,000 sales tax on that property? How would you like to go to a doctor and pay a $100 fee plus a $30 so-called FairTax, sales tax on your doctor’s visit? How would that make you feel? Now I’ve been overly generous to this FairTax nonsense, by calling it a 30% add-on to the cost of goods. The Congressional Joint Taxation Committee, they say I’m wrong. They say it would be a 35% add-on tax on the sales price. So I come in with 30%, the Congressional Joint Taxation Committee says, Bob, you’re low, it would actually be 36%. So from my point of view, the so-called FairTax is one of the greatest tax follies that I’ve ever seen. I think it’s basically – knowingly or unknowingly – I don’t know, maybe these people actually believe this nonsense –we don’t know. But I can tell you that I think it’s an effort to distort the realities of the tax system. And by the way, most people have a 100% propensity to consume. They live paycheck to paycheck. …….. Now obviously for the rich, it’s a boondoggle because they are going to save tons of tax money on this because they can invest their money. They don’t have to tax it cause many of them have nowhere near a 100% propensity to consume, so what do they care about a sales. It doesn’t bother them when they’re making investments. I’ll tell you what, you are better off believing in the 22 lane Mexican to North Pole Superhighway than the fiasco known as the FairTax. In my opinion, this is complete nonsense.”
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FAIRTAX CALLS: A caller pointed out that the embedded tax on goods will no longer be there and the cost of goods would go down. Another caller poked several holes in Brinker’s arguments against the FairTax -- or so it seemed to me, but Brinker told him his was taking “nonsense,” talked over him, told him his arguments were “non-starters” and hung up on him—and then continued to explain his own viewpoints. (I hope that someone who understands this subject better than I do will bring balance to Brinker’s comments here. It’s not likely we will hear opposing viewpoints on Moneytalk.)
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UNCORRECTED MISLEADING COMMENT OF THE DAY: Caller, “Let me thank you for making me wise – out in January 2000, in in March 11, 2003.” Bob Brinker replied: “Congratulations, Carl.” (Brinker did not recommend “getting out” of the market in January, 2000. He recommended leaving 40% of equity allocation invested.)
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Sunday, Brinker’s opening monologue was mostly about how the presidential candidates rated in the recently released Iowa polls. And he repeated much of what he said yesterday about the sub-prime situation and Washington’s concern about it because of the upcoming elections. The remainder of the first two hours were (mostly) spent taking calls about the sub-prime situation. It was very repetitious....
____Honeybee
Wednesday, December 5th Update: Neal Boortz has written a column addressing some of the misinformation that Bob Brinker is disseminating about the FairTax. I have posted an except in "comments" and the link to the article.
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STOCK MARKET: Bob Brinker said, “A good week in the financial markets. The stock market recovering nicely this week--the S&P up close to 3%. In fact, right now the S&P 500 standing in at 1481 is just 5.4% below its all time historic record high recorded in early October. As a matter of fact, the S&P 500 – if you go back to our major buy signal, March 11, 2003, which was a couple of days prior to the start of this great bull market run – the S&P at that time was sitting in at around 800, now sitting in about 1481, and adding in the cash dividends paid over that period, the total return now, during that period, is in excess of 90%.”
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REAR-VIEW MIRROR STATISTIC: (Brinker comments paraphrased) Revision of the real Gross Domestic Product for the three months ending September 30th -- which came in at 4.9% is strictly a "rear-view mirror statistic." It tells us nothing about the future and the stock market is strictly a forward-looking vehicle.
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ECONOMIC GROWTH: (Brinker comments paraphrased) Don’t anticipate third quarter kind of growth for the coming year. Stock market is expecting a relatively slow growth track. Look for an economy that will grow at a slow pace.
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HOUSING RECESSION: (Brinker comments paraphrased) Turning into an impressive recession – will go down in history as a major recession. Serious markdowns….existing home prices: YOY, down 8.6%....new home sales have “fallen out of bed and hit the floor hard” -- down 16.5% YOY. People will eventually look for a recovery in the housing market and that will benefit housing companies “some day.” Available housing at close to an eleven month supply….. We are somewhere in the middle of the recession – not at the end and not at the beginning.
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BAILING OUT SUB-PRIME: (Brinker paraphrased) It’s important that the White House and the mortgage industry is working on a plan to temporarily freeze and re-set interest rates on some subprime home loans……. because we have over 2 million adjustable rate mortgages scheduled to re-set at higher rates over the next 24 months. This plan could have a stabilizing impact and appears that it may come to fruition because of some powerful names working on it -- like Henry Paulsen, who will speak at a housing conference this Monday. Brinker said: “We are talking a lot of homes here. About 100,000 loans are scheduled to re-set at a higher rate on a monthly basis over the next 2 years….it just keeps coming at you every month.” The delinquency is about 15% and still climbing.
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MORTGAGE BROKERS: Bob Brinker summed up his opinion of the sub-prime fiasco by saying this: “If I were to make a video about what happened, I know what my title would be -- and I’m sure it would be a best seller. It would be “Mortgage Brokers Gone Wild.”
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LONG-TERM CAPITAL GAINS RATE: A caller asked about the prospect of the capital gains rate going to zero in 2008 for those in the 15% bracket. Brinker pointed out that he is not a tax account, but said it sounded right to him.
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BUYING A CAR WITH HOME EQUITY LOAN: Bob in Chicago asked which would be a better way to buy a vehicle – taking money out of IRA or using money from a home equity loan. Brinker said he preferred the home equity line because of the deductibility, but cautioned against institutionalizing the loan, and suggested setting up a 5-year cap for paying it off. Also, taking money out an IRA is a taxable event.
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MODEL PORTFOLIO III: Brinker explained to a caller that Model Portfolio III is a balanced portfolio of “quality holdings.” (It is about 50% stock funds-- mostly VTSMX; and about 50% bond funds -- VFIIX, VIPSX, and VFSTX.)
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FAIRTAX: Bob Brinker said, “Let me tell you something. This is one of the greatest follies that I have ever seen in my life. To come forth with a de facto federal sales tax which would be at least 30% added on to the price of the goods, possibly could be much higher than that—creating a new federal bureaucracy, which would be a federal sales tax department; which would have to be created to oversee and collect this tax even if it came through the states –and how you would get the states to comply is a whole separate question -- there’d be nothing in for them. But to create a whole new bureaucracy – to create a de facto federal sales tax and to apply this sales tax to some goods which would make it an unthinkable, an unthinkable tax. For example, new houses – how would you like to buy a new house for $100,000 and pay a $30,000 sales tax on that property? How would you like to go to a doctor and pay a $100 fee plus a $30 so-called FairTax, sales tax on your doctor’s visit? How would that make you feel? Now I’ve been overly generous to this FairTax nonsense, by calling it a 30% add-on to the cost of goods. The Congressional Joint Taxation Committee, they say I’m wrong. They say it would be a 35% add-on tax on the sales price. So I come in with 30%, the Congressional Joint Taxation Committee says, Bob, you’re low, it would actually be 36%. So from my point of view, the so-called FairTax is one of the greatest tax follies that I’ve ever seen. I think it’s basically – knowingly or unknowingly – I don’t know, maybe these people actually believe this nonsense –we don’t know. But I can tell you that I think it’s an effort to distort the realities of the tax system. And by the way, most people have a 100% propensity to consume. They live paycheck to paycheck. …….. Now obviously for the rich, it’s a boondoggle because they are going to save tons of tax money on this because they can invest their money. They don’t have to tax it cause many of them have nowhere near a 100% propensity to consume, so what do they care about a sales. It doesn’t bother them when they’re making investments. I’ll tell you what, you are better off believing in the 22 lane Mexican to North Pole Superhighway than the fiasco known as the FairTax. In my opinion, this is complete nonsense.”
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FAIRTAX CALLS: A caller pointed out that the embedded tax on goods will no longer be there and the cost of goods would go down. Another caller poked several holes in Brinker’s arguments against the FairTax -- or so it seemed to me, but Brinker told him his was taking “nonsense,” talked over him, told him his arguments were “non-starters” and hung up on him—and then continued to explain his own viewpoints. (I hope that someone who understands this subject better than I do will bring balance to Brinker’s comments here. It’s not likely we will hear opposing viewpoints on Moneytalk.)
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UNCORRECTED MISLEADING COMMENT OF THE DAY: Caller, “Let me thank you for making me wise – out in January 2000, in in March 11, 2003.” Bob Brinker replied: “Congratulations, Carl.” (Brinker did not recommend “getting out” of the market in January, 2000. He recommended leaving 40% of equity allocation invested.)
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Sunday, Brinker’s opening monologue was mostly about how the presidential candidates rated in the recently released Iowa polls. And he repeated much of what he said yesterday about the sub-prime situation and Washington’s concern about it because of the upcoming elections. The remainder of the first two hours were (mostly) spent taking calls about the sub-prime situation. It was very repetitious....
____Honeybee
Wednesday, December 5th Update: Neal Boortz has written a column addressing some of the misinformation that Bob Brinker is disseminating about the FairTax. I have posted an except in "comments" and the link to the article.
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Tuesday, November 27, 2007
Bob Brinker, Neal Boortz and the FairTax
Bob Brinker pooh-poohed the FairTax as hardly worth mentioning. Neal Boortz called Bob Brinker a clown. But the truth is, there seems to be a lot of interest in it. Neal Boortz has a very interesting column about it this morning. Here are a couple of excerpts. Neal Boortz wrote:
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You can read Boortz' column here:
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(Link removed because it is no longer valid.)
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"Now to make this column worth reading for those of you who are not familiar with the FairTax, a very quick introduction is in order..
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Since Congressman John Linder, the author of H.R. 25, The FairTax Act, and I wrote “The FairTax Book” in 2005 we’ve seen an unprecedented and ever-growing nationwide interest in this tax reform idea. Let’s face it, you have to be doing something to capture the imagination of the American people to have a book on taxes debut No. 1 on The New York Times Bestsellers List.
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The FairTax eliminates all corporate, business and personal federal income taxes, all payroll taxes, capital gains taxes, dividend taxes and estate taxes, and replaces them all with one embedded sales tax on the sale of all goods and services at the retail level. Tens of millions of dollars in research show that the corporate and personal income and payroll taxes that will be eliminated by the FairTax end up being paid by consumers at the retail level. The average amount of embedded taxes in the cost of everything we buy at retail is approximately 22 percent. This would mean that we are replacing the embedded cost of our present tax system (22 percent) with the embedded FairTax (23 percent).
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You can read Boortz' column here:
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(Link removed because it is no longer valid.)
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Monday, November 26, 2007
Bob Brinker "Bold Bull"
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http://www.marketwatch.com/news/story/wild-ride----bold-bulls/story.aspx?guid=%7B07CF0C2B-5BA6-4E34-BBAF-442BFDEFF0E0%7D
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Honey here: In addition to what Peter Brimelow wrote about Brinker's market views, in the November issue of Marketimer, Page One; Paragraph One: Bob Brinker wrote the following:
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It is also worth noting that Bob Brinker has not once written about "secular trends" in Marketimer since the June, 2007 issue, where he tucked away a short notice that the secular bear market had ended as of a year ago.
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This morning, Peter Brimelow wrote a review titled "Wild ride -- but Bold Bulls aren't budging"
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Here is an excerpt about Bob Brinker:
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Commentary: Checking in with three letters during manic-market moment
By Peter Brimelow, MarketWatch
Last Update: 12:01 AM ET Nov 26, 2007
Commentary: Checking in with three letters during manic-market moment
By Peter Brimelow, MarketWatch
Last Update: 12:01 AM ET Nov 26, 2007
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"Marketimer doesn't seem to have bothered with a hot line at all recently. In its issue dated Nov. 5, Marketimer summarized: "We remain bullish as we move toward the winter season. We continue to rank the stock market as attractive for purchase on any weakness into the area of the S&P 500 Index mid-1400s, in the event such weakness occurs. In the absence of such weakness, we prefer a dollar-cost-average approach for investing new stock-market money. All Marketimer model portfolios remain fully invested.".
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Marketimer says flatly that it thinks the risk of a recession is low, although it expects housing difficulties to continue "well into next year." "
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http://www.marketwatch.com/news/story/wild-ride----bold-bulls/story.aspx?guid=%7B07CF0C2B-5BA6-4E34-BBAF-442BFDEFF0E0%7D
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Honey here: In addition to what Peter Brimelow wrote about Brinker's market views, in the November issue of Marketimer, Page One; Paragraph One: Bob Brinker wrote the following:
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"..........we expect that the cyclical bull market that began shortly after our major buy signal on March 11, 2003 ..............has further to go in terms of percentage gains and durations. We continue to believe that there is no risk of a cyclical bear market............."It is worth noting that Bob Brinker has never informed Moneytalk listeners that he no longer believes the cyclical bull market is running concurrently with a "secular bear megatrend." He never told his audience that in June, 2007, he declared an end to "a secular bear megatrend" retroactively, as of June, 2006. (Even though he had talked at length about it on Moneytalk.) Bob Brinker repeatedly predicted that this so-called secular bear which he claimed began in "March 2000," would run 8 - 20 years and would include several cyclical bull and cyclical bear markets.
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It is also worth noting that Bob Brinker has not once written about "secular trends" in Marketimer since the June, 2007 issue, where he tucked away a short notice that the secular bear market had ended as of a year ago.
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Sunday, November 25, 2007
Bob Brinker's Moneytalk Summary and Commentary, November 25-25, 2007
Bob Brinker's Guest Host for Thanksgiving Weekend: Bill Flanagan
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Here is an excerpt of Bill Flanagan's opening comments:.
“Well, not a lot of cheering on Wall Street this week as the bad news about the credit crunch crisis continues and some other nasty problems persist as the Dow slid below 13,000. Course, Friday was an encouraging half day – closing up 181 points for the day. In fact, since most recent sessions of the market day have started off very good, very strong, and then plunged in the later hours. Some have joked that we should only have half days of trading. I don’t know about that, but certainly anything to stop the carnage. So where do we stand? For the year, Dow Jones Industrials still up 4.15%; Standard and Poor’s 500 stocks up 1.58%; the Nasdaq 100 up 15.48% for the year, the Composite Index, 7.51% to the plus for the year; the Russell 2000, off 4.14%; and the Dow Jones Wilshire 5000, up 1.83. Those are not the greatest numbers on Earth and they were quite a bit better just a few months ago – before we started this plunge. But it’s hardly worth slashing your wrists over, folks.”.
Flanagan made some rather lengthy comments about Warren Buffett, labeling him "the $57billion man” (Honeybee sez: According to gurufocus.com that should be $65Billion). Flanagan went on to say that since Buffett and Bill Gates had gotten together it’s become "a bit too much.” That Buffett had gone from being the “sage of Omaha” to being the “Donald Trump of investing.” Flanagan said he wouldn’t be surprised to see Buffett pop up on Dancing with Stars one of these days since Buffett seems to be popping up everywhere else – even in TV ads. Even so, Flanagan says “good for Warren,” but thinks he might have recently gone a “bit strange” with all of his tax talk.
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(Honeybee sez: Many who left comments here last week about Warren Buffet feel a lot more strongly--both pro and con-- than Flanagan does.)
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Flanagan pointed out that if more tax increases are coming, they will no doubt be directed at “that big lump in the middle,” because that is where the most money can be raised. His reasoning goes like this: you can take everything away from the poor (1/3 pay no tax at all) and make nothing, while the top 50% of earners already pay 97% of Federal taxes, so raising taxes on the rich won’t generate that much income.
Here are some miscellaneous points Bill Flanagan made that might be of interest:
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* The AMT is going to hit millions more middle-income tax payers this year. - .
* Steve Forbes has written a book on the flat tax. Forbes' is similar to the FairTax, but Flanagan thinks it would be better. - .
* If elected, expect Democrats to change capital gains and dividend tax rates, which will “throw a monkey wrench in our economy.”
* Stockpickr.com was purchased in excess of $10million by thestreet.com, which means that Warren Buffett owns it now. (Correction: Jim Cramer owns "stockpickr.com." Please see Kirk's comments below.) However, it is a good site to view the portfolios of Buffett, Soros and others. Here is Buffett’s portfolio:
http://www.stockpickr.com/port/Warren-Buffett/
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* Another site that gives lots of stock picks and big guru portfolios:
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http://www.gurufocus.com/
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The subject of estate taxes came up a few times and every person that called had their own idea about what would be a fair level. It occurred to me that when it comes to taking money away from people in the form of taxes, that anything beyond what the Constitution allows is nothing but legalized theft—and opinions largely depend on whose ox is being gored—so to speak. It seems to boil down to a matter of degrees/amounts, and who has the POWER to make the choices.
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For the first 137 years the United States existed, the Constitution did not allow for the income tax. It began in 1913 with the passage of the 16th Amendment. Originally the income tax only affected a handful of people. (Take a look at what it has led to in the past 95 or so years -- it’s astounding.)
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http://caselaw.lp.findlaw.com/data/constitution/amendment16/01.html#2
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As Professor Walter Williams often points out (paraphrase): "When is it ever right to take money away from one person and give it to another?"
Most of Flanagan's Moneytalk calls this weekend were lengthy, repetitive and for the most part, so esoteric that they were of little interest to most people. Here are three that were somewhat fascinating--for various reasons. 8^)
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* A caller offered a definition of the “rich”: “If you are debt-free and you can write a check up to $20,000-$50,000, you are a rich person.”
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* A caller said that people should not be allowed to give their money to their own kids as an inheritance—that it should all have to be given away to charity or paid in taxes.
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*The very next caller disagreed and said that to be forced to give all of one's money to the government to spend was “absolutely ridiculous” and that it’s foolish to think the government can spend your money more wisely than your own children can spend it.
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Sunday, Flanagan talked about wanting a wireless reading device and he mentioned that Amazon offers one called an Amazon Kindle. It sells for about $400 now, and seems to have a lot of pros and cons according to some of the customer reviews. It looks like something I might like to own as soon as some bugs get worked out and maybe the price come down a bit. 8^) (Amazon Kindle is out of stock at the present time.)
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In hour-two on Sunday, Flanagan’s guest was Jason Swieg , author of “Your Money and Your Brain.” Way too far out to be of interest to me____Honeybee
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Kirk Lindstrom wrote:
(Honey here: Please click on "comments" to read all of Kirk's comments .)"James (Jim) Cramer owns TheStreet.com, not Warren Buffett.http://finance.yahoo.com/q/mh?s=TSCMJim has about 2M shares at $12.80"TheStreet.com's proprietary network includes RealMoney.com, Stockpickr.com, TheStreet.com Ratings, TheStreet.com TV, and Promotions.com."I heard a little bit of the show this weekend (while changing a fluorescent light in the garage) and I think I heard Bill say something like "and you know who owns that" for this call. Perhaps he was told to not discuss Jim Cramer on Bob's show so he didn't mention him by name. Bob has been "a bit sensitive" about his competition be it someone tiny like me with a competing newsletter and small but loyal subscriber base or a major media figure like Jim Cramer with far more popularity with the young demographic advertisers covet. Here is a link showing how many search for Cramer vs Brinker It is amazing how you only get Jim Cramer if you have cable yet his much smaller audience is much more active on the internet.... probably 30 years or more younger, thus the demographic advertisers want."
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Saturday, November 24, 2007
Bill Flanagan Does Moneytalk Thanksgiving Weekend
I said in my last post: "Only time will tell if Brinker will be on this weekend. My inside source has told me that he will not be--and the "source" is more often correct than not."
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Yep, my "source" was correct. 8^) I'll post a few of the high points of Flanagan's monologue, but most of the discussions in the first hour had to do with Warren Buffett and the estate tax.
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Sure sounds to me like Flanagan is a Buffett fan. But it also sounds like Flanagan doesn't have a clue what Buffett's agenda really is....
Friday, November 23, 2007
Bob Brinker: Stock Market Correction
Bob Brinker is 100% bullish and his model portfolios are 100% invested. Here are some of his comments that I have excerpted in my weekly summary/commentary of Moneytalk:
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October 28, 2007, Brinker was equating the market correction to "small potatoes." Of course that was before the S&P went flat for the year on Wednesday, November 21st--reaching a 10% correction decline.
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Excerpt from Bob Brinker's October 28th opening monologue:
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November 10-11, 2007 comments and some Brinker quotes:
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STOCK MARKET: Bob Brinker opened the program today by looking at the stock market in the rear view mirror. The S&P 500 Index is sitting very close to the 1450 level which is 7% below the all-time-historic record high from just a few weeks ago – which was 1565. Brinker explained that we have seen a number of similar corrections like this in recent years in terms of “magnitude.
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STOCK MARKET (November 10-11): Bob Brinker said: “Well it’s been an interesting week in the stock market….remember last week the bad news bears were telling us, it’s all over now – we were in big trouble now. Well that’ what they were saying a week ago. Of course, it did not turn out that way. We talked about this last weekend. About those bad news bears and how wrong they have been for several years every year as they have been screaming fire in a crowded market only to find that their views were wrong again. This week the S&P 500 chalking up a gain to 1458.74 – a gain of about 1/3 of a percent. The Dow going up 1% to 13,176 and the Nasdaq gaining close to ½ percent, at the 2637 level…….”
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So what does Bob Brinker expect the market to do in the remainder of this year and into next year?
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On Moneytalk and in Marketimer, he has said he rates the S&P 500 Index “attractive for purchase on any weakness that occurs in the area of mid-1400’s.” Above that level, he recommends a “dollar-cost-average approach.”
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In the August 2007 Marketimer, Brinker said he believed the S&P 500 Index would be trading in the “1600’s by next year.”
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In the September 2007 Marketimer, Bob
Brinker said that he expected “….the S&P 500 Index to
register a series of new historic highs into next year."
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Bob Brinker has recently stated that there is ZERO risk of a cyclical bear market (20% decline of the S&P 500 Index) in 2007, and “……in the months ahead.”
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Only time will tell if Brinker will be on this weekend. My inside source has told me that he will not be--and the "source" is more often correct than not. 8^) But if Brinker is on this weekend, what will he have to say about the market's "behavior"?
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October 28, 2007, Brinker was equating the market correction to "small potatoes." Of course that was before the S&P went flat for the year on Wednesday, November 21st--reaching a 10% correction decline.
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Excerpt from Bob Brinker's October 28th opening monologue:
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"Well, another good week in the stock market and S&P 500 trading just 1.9% below its all time historic record high. The S&P500 sitting in at the 1535 level as we speak and acting very, very nicely. We like to see the kind of a thing that we saw the week before last where we had just a momentary shake-out – one big down day. People running for the windows; running for the exits; panicking for a few hours – this is a wonderful sight for investors, because this is how you rid the market of people who should not be in the market -- people who don’t understand the words of J.P. Morgan. You remember the words of J.P., quote: ‘stocks tend to fluctuate’ unquote – the wise words of J. P. Morgan. And it’s true that stocks tend to fluctuate and so when you run into people who make a big deal out of small potatoes – short term fluctuations, well, they don’t belong in the market in the first place. They don’t understand what it means to invest in the stock market. After all if they did understand, they wouldn’t be making a big deal about a short-term market fluctuation.”
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November 10-11, 2007 comments and some Brinker quotes:
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STOCK MARKET: Bob Brinker opened the program today by looking at the stock market in the rear view mirror. The S&P 500 Index is sitting very close to the 1450 level which is 7% below the all-time-historic record high from just a few weeks ago – which was 1565. Brinker explained that we have seen a number of similar corrections like this in recent years in terms of “magnitude.
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BEAR MARKET: Bob Brinker said: “For those betting on a bear market right now, I’m taking the other side of that wager. I think the bad news bears are wrong again about their forecast out there of Armageddon right now."
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STOCK MARKET (November 10-11): Bob Brinker said: “Well it’s been an interesting week in the stock market….remember last week the bad news bears were telling us, it’s all over now – we were in big trouble now. Well that’ what they were saying a week ago. Of course, it did not turn out that way. We talked about this last weekend. About those bad news bears and how wrong they have been for several years every year as they have been screaming fire in a crowded market only to find that their views were wrong again. This week the S&P 500 chalking up a gain to 1458.74 – a gain of about 1/3 of a percent. The Dow going up 1% to 13,176 and the Nasdaq gaining close to ½ percent, at the 2637 level…….”
.
So what does Bob Brinker expect the market to do in the remainder of this year and into next year?
.
On Moneytalk and in Marketimer, he has said he rates the S&P 500 Index “attractive for purchase on any weakness that occurs in the area of mid-1400’s.” Above that level, he recommends a “dollar-cost-average approach.”
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In the August 2007 Marketimer, Brinker said he believed the S&P 500 Index would be trading in the “1600’s by next year.”
.
In the September 2007 Marketimer, Bob
Brinker said that he expected “….the S&P 500 Index to
register a series of new historic highs into next year."
.
Bob Brinker has recently stated that there is ZERO risk of a cyclical bear market (20% decline of the S&P 500 Index) in 2007, and “……in the months ahead.”
.
Only time will tell if Brinker will be on this weekend. My inside source has told me that he will not be--and the "source" is more often correct than not. 8^) But if Brinker is on this weekend, what will he have to say about the market's "behavior"?
.
Sunday, November 18, 2007
Bob Brinker's Moneytalk Summary, November 17-18, 2007
Brief Summary, Commentary and Bob Brinker Excerpts From Moneytalk, November 17-18, 2007.
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Bob Brinker began the Moneytalk monologue by saying that listening to the “Star Ship Moneytalk” is the way to learn how to become your own personal financial manager so that you can “take charge” and avoid becoming “shark bait,” and that this is one of the "greatest gifts" you can give yourself and "your loved ones."
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CRITICAL MASS: Brinker said that the smart way to get to the Land of Critical is get there slowly “.......using patience and discipline along the way. Leave the fast-buck artists aside. You don’t need that kind of an approach – doesn’t work anyway.”
.
STOCK MARKET: Bob Brinker said: “Well it’s been an interesting week in the stock market….remember last week the bad news bears were telling us, it’s all over now – we were in big trouble now. Well that’ what they were saying a week ago. Of course, it did not turn out that way. We talked about this last weekend. About those bad news bears and how wrong they have been for several years every year as they have been screaming fire in a crowded market only to find that their views were wrong again. This week the S&P 500 chalking up a gain to 1458.74 – a gain of about 1/3 of a percent. The Dow going up 1% to 13,176 and the Nasdaq gaining close to ½ percent, at the 2637 level…….”
.
QUALITY BONDS: Bob Brinker segued from the stock market to the bond market, saying, “.......quality bonds continue to lead the way.“ The GNMA Fund that Brinker recommends is trading within one penny of a 52 week high. And is "......acting in outstanding fashion for all GNMA investors.” The 3-month Treasury Bill Yield is at 3.3%; the 10-year note at 4.5%; the 30-year Treasury Bond at 4 1/2% -- creating a positive yield slope of 120 basis points. The low yield is partly due to “.......demand from foreign governments.....” but some of it is due the expectation of “.....lower inflation down the road.”
.
CORE INFLATION: Has held “relatively steady” despite the fact that the price of oil has risen into the mid-$90s. Brinker said: “Now of course, the inflation junkies told us – they were totally wrong about this, but they told us that rising oil prices would drive core inflation. It has not turned out that way.” Brinker believes that rising oil prices rob consumers of discretionary income and make it impossible for consumers to drive up other prices and thereby cause inflation. He says that high oil prices “....act like a de facto tax on consumers” -- and that is why the core inflation index has held relatively level. The housing “recession” has also been a contributing factor.
.
WHY SO MUCH PESSIMISM ABOUT THE ECONOMY: A caller pointed out that he didn’t understand why there is so much pessimism in the country in light of the fact that he has observed that there is often difficulty in hiring enough people because everyone is so busy. Brinker mentioned a guest that he had on Moneytalk a few weeks ago (the author of “Richestan”) and pointed out that if you are lucky enough to reside in Richestan with the extremely well off, then the caller would likely be correct. Bob Brinker said: "Things have never been better for the extremely well off, but if you are talking rank and file, you get a lot of disagreement about what you just said.” Brinker told the caller that he does not think that we are in an economic boom – and he added, “Thank goodness, we are not in a boom, because the worst thing that can happen is economic boom, because that’s always followed by intense pain.”.
WILL THE HOUSING DEPRESSION TURN INTO A GENERAL DEPRESSION? Brinker does not see that happening.
.
WHAT TO DO DURING THE HOUSING RECESSION: Brinker told the caller that all we can do is ride it out. He said that is what we have to do because, “It’s not going away and there is nothing to make it go away.” Brinker said that the best we can hope for is that the government will come up with some kind of a proposal to lessen the pain of all the foreclosures that are going to happen over the next year as mortgages reset. Sunday, Brinker said that the housing recession will last into 2008 and that housing starts are at a 14 year low.
.
GOLD: Bob Brinker said: “Now a long time ago, when these shares were trading in the low to mid-$50s, I gave that recommendation on this program. That for listeners who desire to have a hedge in the gold market that I thought the security to use was the shares that trade under the ticker symbol GLD. Those are the Exchange Traded Fund Gold Shares. And at the time I first gave that recommendation to listeners that were looking for a hedge in gold, those shares were trading in the low to mid-$50s. They are currently trading at $77.75. So obviously, anybody that chose to put on a hedge in the gold market has done very well.”
.
Barack Hussein Obama: Bob Brinker pointed out that at the most recent Democrat debate, Obama made a proposal to raise the income limit for paying Social Security taxes above $97,000 a year. Obama implied that his proposal would tax only the "upper class.” Here is an excerpt of what Obama said:
.
“Hillary Diane Evita Christine Rodham Clinton” (that is Brinker’s title for Hillary—I do not know where he gets the “Christine”) did not agree with Obama. 8^)
.
http://www.factcheck.org/clinton_vs_obama.html
.
ESTATE TAX: Over the weekend, there was a lot of talk about the estate tax and Warren Buffett’s comments to Congress. Warren Buffett said: "A meaningful estate tax is needed to prevent our democracy from becoming a dynastic plutocracy." As Brinker pointed out several times, the very fact that Buffet can fly to Washington D.C. and try to persuade congress to adopt his views on the estate tax proves that we are already in a plutocracy. Bob Brinker pointed out that Buffett has chosen to give a large percentage of his assets ($37BILLION at last count) to the Gates Foundation. (It was reported in 2006 that Bill Gates will retire from Microsoft in 2008 to “manage” the spending of his Foundation’s huge resources. I can’t find anything more recent about Gates plans.) A caller also pointed out that Buffett is giving huge amounts of money to his own family foundations.
.
.
ESTATE TAX EXEMPTIONS: Estates worth up to $2million are exempt in 2007 and 2008. The exemption slated for 2009 will rise to $3.5million, and by 2010 it will be repealed – but only for a year. Unless Congress acts, in 2011, the tax will roll back to $1million with a top tax rate of 55 percent. Brinker pointed out that there is a movement to abolish the estate tax completely, but it doesn’t sound like he would be for that happening. Bob Brinker said: “I’m comfortable with 3-$5 million as the cap on it.” But he believes if the democrats are in power, they will “......probably shoot lower than that."
.
REVERSE MORTGAGES: Brinker said it boils down to the terms--such as what value will be placed on the property, and what time line the payments cover. He recommends getting some comparables and then checking with a CPA or enrolled agent.
.
DATA FLOW COMING UP THIS WEEK: Market is open on Friday; expect light trading. Housing starts for October on Tuesday morning – estimated to be 1.17million. Leading indicators Wednesday morning – expected to be down “perhaps” 3/10 of 1%.
.
_____Honeybee
.
.
Bob Brinker began the Moneytalk monologue by saying that listening to the “Star Ship Moneytalk” is the way to learn how to become your own personal financial manager so that you can “take charge” and avoid becoming “shark bait,” and that this is one of the "greatest gifts" you can give yourself and "your loved ones."
.
CRITICAL MASS: Brinker said that the smart way to get to the Land of Critical is get there slowly “.......using patience and discipline along the way. Leave the fast-buck artists aside. You don’t need that kind of an approach – doesn’t work anyway.”
.
STOCK MARKET: Bob Brinker said: “Well it’s been an interesting week in the stock market….remember last week the bad news bears were telling us, it’s all over now – we were in big trouble now. Well that’ what they were saying a week ago. Of course, it did not turn out that way. We talked about this last weekend. About those bad news bears and how wrong they have been for several years every year as they have been screaming fire in a crowded market only to find that their views were wrong again. This week the S&P 500 chalking up a gain to 1458.74 – a gain of about 1/3 of a percent. The Dow going up 1% to 13,176 and the Nasdaq gaining close to ½ percent, at the 2637 level…….”
.
QUALITY BONDS: Bob Brinker segued from the stock market to the bond market, saying, “.......quality bonds continue to lead the way.“ The GNMA Fund that Brinker recommends is trading within one penny of a 52 week high. And is "......acting in outstanding fashion for all GNMA investors.” The 3-month Treasury Bill Yield is at 3.3%; the 10-year note at 4.5%; the 30-year Treasury Bond at 4 1/2% -- creating a positive yield slope of 120 basis points. The low yield is partly due to “.......demand from foreign governments.....” but some of it is due the expectation of “.....lower inflation down the road.”
.
CORE INFLATION: Has held “relatively steady” despite the fact that the price of oil has risen into the mid-$90s. Brinker said: “Now of course, the inflation junkies told us – they were totally wrong about this, but they told us that rising oil prices would drive core inflation. It has not turned out that way.” Brinker believes that rising oil prices rob consumers of discretionary income and make it impossible for consumers to drive up other prices and thereby cause inflation. He says that high oil prices “....act like a de facto tax on consumers” -- and that is why the core inflation index has held relatively level. The housing “recession” has also been a contributing factor.
.
WHY SO MUCH PESSIMISM ABOUT THE ECONOMY: A caller pointed out that he didn’t understand why there is so much pessimism in the country in light of the fact that he has observed that there is often difficulty in hiring enough people because everyone is so busy. Brinker mentioned a guest that he had on Moneytalk a few weeks ago (the author of “Richestan”) and pointed out that if you are lucky enough to reside in Richestan with the extremely well off, then the caller would likely be correct. Bob Brinker said: "Things have never been better for the extremely well off, but if you are talking rank and file, you get a lot of disagreement about what you just said.” Brinker told the caller that he does not think that we are in an economic boom – and he added, “Thank goodness, we are not in a boom, because the worst thing that can happen is economic boom, because that’s always followed by intense pain.”.
WILL THE HOUSING DEPRESSION TURN INTO A GENERAL DEPRESSION? Brinker does not see that happening.
.
WHAT TO DO DURING THE HOUSING RECESSION: Brinker told the caller that all we can do is ride it out. He said that is what we have to do because, “It’s not going away and there is nothing to make it go away.” Brinker said that the best we can hope for is that the government will come up with some kind of a proposal to lessen the pain of all the foreclosures that are going to happen over the next year as mortgages reset. Sunday, Brinker said that the housing recession will last into 2008 and that housing starts are at a 14 year low.
.
GOLD: Bob Brinker said: “Now a long time ago, when these shares were trading in the low to mid-$50s, I gave that recommendation on this program. That for listeners who desire to have a hedge in the gold market that I thought the security to use was the shares that trade under the ticker symbol GLD. Those are the Exchange Traded Fund Gold Shares. And at the time I first gave that recommendation to listeners that were looking for a hedge in gold, those shares were trading in the low to mid-$50s. They are currently trading at $77.75. So obviously, anybody that chose to put on a hedge in the gold market has done very well.”
.
Barack Hussein Obama: Bob Brinker pointed out that at the most recent Democrat debate, Obama made a proposal to raise the income limit for paying Social Security taxes above $97,000 a year. Obama implied that his proposal would tax only the "upper class.” Here is an excerpt of what Obama said:
“I've heard you say this is a trillion dollar tax cut on the middle class by adjusting the cap. Understand that only 6 percent of Americans make more than $97,000 — (cheers, applause) — so 6 percent is not the middle class — it's the upper class.”
.
“Hillary Diane Evita Christine Rodham Clinton” (that is Brinker’s title for Hillary—I do not know where he gets the “Christine”) did not agree with Obama. 8^)
.
http://www.factcheck.org/clinton_vs_obama.html
.
ESTATE TAX: Over the weekend, there was a lot of talk about the estate tax and Warren Buffett’s comments to Congress. Warren Buffett said: "A meaningful estate tax is needed to prevent our democracy from becoming a dynastic plutocracy." As Brinker pointed out several times, the very fact that Buffet can fly to Washington D.C. and try to persuade congress to adopt his views on the estate tax proves that we are already in a plutocracy. Bob Brinker pointed out that Buffett has chosen to give a large percentage of his assets ($37BILLION at last count) to the Gates Foundation. (It was reported in 2006 that Bill Gates will retire from Microsoft in 2008 to “manage” the spending of his Foundation’s huge resources. I can’t find anything more recent about Gates plans.) A caller also pointed out that Buffett is giving huge amounts of money to his own family foundations.
.
Honey comment…(sorry, can’t help myself): So while Buffett wants others to be taxed, he gets his choice about how to dispose of his own wealth. Many don’t get to make their own choices, especially if their assets are in family businesses or family farms. If Buffett wanted to be intellectually honest, he would simply put his money into the Federal coffers and let Congress choose who to pass it out to..... 8^) Instead, Buffett whines about others forming "dynasties" and then proceeds to give the Bill Gates dynasty (the largest in the U.S.??) the power to decide where the Buffett $billions will be spent. Personally, looking at some of Gate’s philanthropic choices, I think some are good, some not so good. I guess it’s not so different from government after all..
.
ESTATE TAX EXEMPTIONS: Estates worth up to $2million are exempt in 2007 and 2008. The exemption slated for 2009 will rise to $3.5million, and by 2010 it will be repealed – but only for a year. Unless Congress acts, in 2011, the tax will roll back to $1million with a top tax rate of 55 percent. Brinker pointed out that there is a movement to abolish the estate tax completely, but it doesn’t sound like he would be for that happening. Bob Brinker said: “I’m comfortable with 3-$5 million as the cap on it.” But he believes if the democrats are in power, they will “......probably shoot lower than that."
.
REVERSE MORTGAGES: Brinker said it boils down to the terms--such as what value will be placed on the property, and what time line the payments cover. He recommends getting some comparables and then checking with a CPA or enrolled agent.
.
DATA FLOW COMING UP THIS WEEK: Market is open on Friday; expect light trading. Housing starts for October on Tuesday morning – estimated to be 1.17million. Leading indicators Wednesday morning – expected to be down “perhaps” 3/10 of 1%.
.
_____Honeybee
.
Friday, November 16, 2007
Bob Brinker’s HFD Performance Rankings
Bob Brinker's Marketimer Performance
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The following is excerpted from the November issue of Hulbert’s Financial Digest.
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Bob Brinker’s Marketimer Mutual Fund Performance"
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Mark Hulbert rates the performance of newsletter mutual funds. The top 5 are ranked over various time periods consisting of 15 years, 10 years, and 5 years—for both "Risk-Adjusted" and "Not Risk-Adjusted."
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Here are Bob Brinker's rankings for the "average" of his model portfolio mutual funds through 10/31/2007 according to HFD:
.
“Total Return Ranking (Not adjusted for Risk)”
.
15 Years: Bob Brinker = 3rd place
.
10 Years: Bob Brinker = 5th place
.
5 Years: Bob Brinker's Marketimer is not in the top five newsletters
.
“Total Return Ranking (Risk-Adjusted Ranking)”
.
15 Years: Bob Brinker = 3rd place
.
10 Years: Bob Brinker = 2nd place
.
5 Years: Bob Brinker's Marketimer is not in the top five newsletters
.
Under HFD's category that ranks the TOTAL performance of the "average" of model portfolios, Bob Brinker did not make any of Hulbert’s "Performance Scoreboards" in the “Not adjusted for risk” column for the past 25, 20, 15, 10 or 5 years.
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However, Hulbert created a special “Risk-Adjusted" method for ranking performance. Bob Brinker's Marketimer shows up under that category. (One could question the objectivity of Hulbert’s “Risk-Adjusted Ranking” since he does not clearly explain exactly what the term means.)
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Marketimer Model Portfolio Average “Risk-Adjusted Ranking”:
.
25 Years: Bob Brinker's Marketimer is not in the top five newsletters
.
20 Years: Bob Brinker = 5th place
.
15 Years: Bob Brinker = 3rd place
,
10 Years: Bob Brinker = 2nd place
5 Years: Bob Brinker's Marketimer is not in the top five newsletters
.
Additionally, in the November issue of HFD, Hulbert charts the top 5 newsletters for the past 10-year top performance and compares annual subscription prices then and now. Bob Brinker's Marketimer was not included in the top 5 newsletters and it was not included in the bottom 5 newsletters.
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