Sunday, July 5, 2015

July 5, 2015.....Bob Brinker's Moneytalk: Stocks, Bonds, Economic and Investing Summary

July 5, 2015 Bob Brinker did NOT host Moneytalk live today. The broadcast was repeat monologues and spliced old calls. (comments welcome)

   
REVIEW AND UPDATE
The following is recent blog summary excerpts from prior Moneytalk broadcasts.  However, my editorial comments are all original, live and up to the minute. I have reviewed the July issue of Marketimer and everything I have excerpted here from Moneytalk is in agreement with it:
STOCK MARKET....Based on adjusted-up 2016 operating earnings of $13O  -- because of the current economic growth expectations for the year (he sees zero recession risk) --  Brinker's  Marketimer S&P 500 Index target range is now in the "low-2200s."  

He remains fully invested, even though he expects a correction in the 10-15% range this year -- which he expects to  present a good "buying opportunity."  Brinker considers declines under 20% on a closing basis a correction -- under 10% is "noise."
 
GREECE WILL AFFECT US STOCK MARKET....So far, Brinker has been right on target. He said this last week:  "I think with this development this weekend, this is a financial shock in Greece for sure and I think it's going to be accompanied by some selling of investments by people who are scared.  Some people are going to look at this and say it's the end of the world you know, like that gentleman in the bar in The Birds – it's the end of the world don't you know....... So I think you will see some selling, some volatility in the market as a result of it.  I think it's inevitable.  How much remains to be seen.  The question I ask is the same question I asked earlier.  How does this affect the US economy..... I don't think it will affect the US economy -- so whether people seller they don't sell, I don't think it will affect the US economy."

GREECE WON'T AFFECT US ECONOMY....Brinker clearly does not believe the Greek Drama will affect our economy. Last week, he said: "The question I ask is the same question I asked earlier.  How does this affect the US economy..... I don't think it will affect the US economy -- so whether people seller they don't sell, I don't think it will affect the US economy."

BOND MARKET....Brinker continues to tout low-duration bond funds to avoid interest rate risk,  but says he is willing to take credit risk because he believes that the economy will continue to grow moderately.

JEFFCHRISTIE'S MONEYTALK FINAL EXAM QUESTION

Today's final exam question is a repeat. Who is the woman Wall Street professional that Bob Brinker calls "Her Ladyship"?

A) Maria Bartaromo
B) Abby Joseph Cohen
C) Elaine Garzarell
D) Gail Dudack
ANSWER

Honey EC:  Jeff, thanks for telling us the Final Exam Question is a re-run!  :)  It's important to read what it says under the picture of the correct answer. This woman was one of very few who called the crash of October 1987. Brinker did not.  Since then he always showed contempt for this woman. When he was posting as "mistertopes" on Silicon Investor, he actually called this woman "the princess of wink." Sadly, she has an uncontrollable ailment that causes her to "wink" while she is talking.
If  Bob Brinker ever writes a book, Bluce has a title ready for it: "Bob Brinker's Morality and Integrity Handbook" with the "New, expanded edition including 'How to Run a Phony Radio Show'.
==> PODCASTING:
Los Angeles. KABC 790. Moneytalk plays two hours later in the evening. They podcast and ARCHIVE podcasts for free downloading.

Moneytalk Hour Two_ June 28, 2015
Moneytalk Hour One_ June 21, 2015
Moneytalk Hour Two_June 21, 2015
Moneytalk Hour Three_June 21, 2015

Sunday, June 28, 2015

June 28, 2015....Bob Brinker's Moneytalk: Stocks, Bonds, Economic and Investing Summary

June 28, 2015....Bob Brinker hosted Moneytalk live today. (comments welcome)

BOND MARKET/INTEREST RATES....Brinker's only comment about the subject was that the 10-year Treasury is now up to 2.5%.

 NEW MONEY INTO STOCK MARKET AT THIS TIME.... Caller Leo from Hartford wanted to know if the problem in Greece might create a good time to add new money to the market.

Brinker replied: New money going into the stock market at this time, in my opinion, would be dollar cost averaging especially on periods of weakness.  That would be the approach that I would take at this time… I would not be chasing rallies.…  A little bit at a time over a period of time that you are satisfied with.  Also you have to recognize something.  You have a market that has tripled… Since 2009.  You have a market that is valued at a fair price earnings ratio but it's no longer a cheap market.  You have a market that has nearly doubled… Since the autumn of 2011.  So you have a market that is way, way, way up and far higher than a was just in recent years.  So you have to be aware of all of that and for that reason I went to be suggesting a dollar cost average approach at this point.  I don't think this is some huge bargain opportunity for new money in the market.

HEADS UP STOCK MARKET INVESTORS:

Honey EC: I have excerpted ALL of Brinker's comments regarding how he thinks the stock markets will react to Greece throughout the show today, and compiled them in the following paragraphs:

 => "I think it would be reasonable to expect some reaction in  the stock markets tomorrow,  because the reality is, this (Greece) is  a mess."

=> What impact does it have regardless of the outcome in Greece on the US economy?  I would suggest negligible is the answer.  Greece is 2% of total goods and services in the European Union, and a fraction of 1% of total goods and services globally.  Greece is not a huge import nation.  I just don't see the outcome – regardless of how the market wishes to react to it – initially, I don't see any outcome in Greece that affects the US economy.

=> There are questions now as to whether the Athens Stock exchange will even open on Monday – that is unknown at this point.…  This is an outcome that investors are going to be nervous about.  I expect to see some reaction in the stock market on Monday because as of right now, it's starting to look like it's going in the direction of a worst-case outcome.

=> We'll also be getting the ISM manufacturing index, estimated at 53.2 – readings above 50 are expansionary.…  All of this will be overshadowed by Greece.  Financial markets can be rattled very easily.  They certainly may be rattled by the closing of the banks in Greece --by the possibility of Greece leaving the euro as a result of this fiasco.

=> Some people are going to look at this and say it's the end of the world you know, like that gentleman in the bar in The Birds – it's the end of the world don't you know....... So I think you will see some selling, some volatility in the market as a result of it.  I think it's inevitable.  How much remains to be seen.  The question I ask is the same question I asked earlier.  How does this affect the US economy..... I don't think it will affect the US economy -- so whether people seller they don't sell, I don't think it will affect the US economy.
HOUSING MARKET....Brinker said: We've had a gradual improvement in the housing market, which is expected to continue. 

EMPLOYMENT REPORT....Brinker said: On Thursday will get the employment report from the Labor Department – it's estimated to show a gain of 230,000 new jobs for the month of June and an unemployment rate of 5.4%, average hourly earnings gain of 2/10 of 1%, and an average work week of 34 1/2 hours.

ECONOMY EXPANSIONARY BUT GREECE MAY OVERSHADOW....Brinker comments: We'll also be getting the ISM manufacturing index, estimated at 53.2 – readings above 50 are expansionary.…  All of this will be overshadowed by Greece.

REAL GROSS DOMESTIC PRODUCT... Brinker comments: In the first quarter real GDP -- total goods and services -- declined at an annual rate of 0.2% -- close to flat line.....because of bad weather in New England and an Long Beach port strike....Last year, for the full year, GDP grew at 2%

 REITS...First caller of the day, Thomas from Birmingham asked about REITS. Brinker repeated what he said at least twice last week, that the Vanguard REIT had underperformed the S&P 500 Index by a large margin over the past 2 1/2 years. Brinker doesn't like REITS because they are not diversified and he thinks they will suffer when interest rates rise -- however, some are looking for dividends and don't care about net-asset-value.

GOLD LAST FOR IRA....Brinker told a caller that the last thing anyone should put in their retirement accounts is gold.

GREECE POLITICAL AND FINANCIAL MESS.....Brinker said: An opinion poll in Greece shows that the majority of the voters support retaining the euro – staying in the euro currency bloc.  Not the same time, that would also include, under the latest proposals which have subsequently been withdrawn.....so they may be voting on something that doesn't exist, but when they were there, the proposals included more tax increases – more spending cuts, and there is not a whole lot of support for that.  You have 25% unemployment in Greece.  In the United States, in the Great Depression of the 1930s, we had 25% unemployment.  That will give you some idea of the state of their economy.

GREECE POPULATION WANTS THE EURO....Brinker continued:  Since a majority of the Greek population wants to stay with the euro, but at the same time they don't want austerity, it's very hard to predict how that vote is going to come out.…  The euro has been a relatively stable currency when compared to the Drachma 2.0 – which is an unknown at this point.  There also could be a change in the government in Greece.   Obviously Alexis Tsipras is not delivering on his campaign platform of no more austerity.…  So the door remains open in to all possibilities, including the possibility that Greece winds up leaving the euro at some point.

GREECE WILL RIPPLE BUT SHOULD HAVE NEGLIGIBLE IMPACT ON US ECONOMY ....Brinker continued: So it's going to be a difficult week for the people of Greece, without any question it will have ripples around the world.  But ask yourself this, what impact does this have on the United States economy?  What impact does it have regardless of the outcome in Greece on the US economy?  I would suggest negligible is the answer.  Greece is 2% of total goods and services in the European Union, and a fraction of 1% of total goods and services globally.  Greece is not a huge import nation.  I just don't see the outcome – regardless of how the market wishes to react to it – initially, I don't see any outcome in Greece that affects the US economy.

GREECE IS LIMITING WITHDRAWALS AND CLOSING BANKS.... Brinker continued: One newspaper report has them closing for the week because of the scheduling of the  (unintelligible word) on July 5 – one week from today.  It's a rough weekend in Greece – citizens lining up at 7000 automated teller machine around the country, trying to get their money out.  They are having difficulty for a couple of reasons.  For one, there has been a limit placed on how much you can get out – it's not a huge number.  It might be a few thousand depending on the bank you're dealing in.  And the other problem is, a lot of them are closed,  if not all of them by now – because as I speak, it's late Sunday night in Greece, I would think they've run out of euros.  They were running out of euros as of Saturday morning on some of the ATMs.…  If you've been caught with your money in a Greek bank, you can't get at it because they are closed on Monday.…  That's not the definition of a banking system – we are closed, you can't have your money.…  That's a financial fiasco.

WILL ATHENS STOCK EXCHANGE OPEN TOMORROW.....Brinker said: There are questions now as to whether the Athens Stock exchange will even open on Monday – that is unknown at this point.…  This is an outcome that investors are going to be nervous about.  I expect to see some reaction in the stock market on Monday because, as of right now, it's starting to look like it's going in the direction of a worst-case outcome.

PEOPLE LEAVING GREECE - AND  CAN'T GET THEIR MONEY....Brinker continued: Greece has already suffered mightily – they've had the brain drain.  Now people can't get their money, which means they can't pay their bills.  This is a mess.  Also there are a lot of fears about people leaving Greece, going to other countries just to get out… Of the financial chaos.  How do you function without access to your money?  How does that work?  Most people don't even want to try.  So this is what Alexis Tsipras has brought to the people of Greece who elected him.

WHO BROUGHT GREECE DOWN AND WHO SAID ENOUGH IS ENOUGH....Brinker continued:  Financial markets can be rattled very easily.  They certainly may be rattled by the closing of the banks in Greece --by the possibility of Greece leaving the euro as a result of this fiasco.  And now I think it is there for all to see, Alexis Tsipras, the newly elected Prime Minister of Greece, has brought the country to this position of financial chaos.  Remember how they get there,.  Firstly, the voters elected him, secondly he was on a platform of no more austerity and let's renege on the deals made in the past.  He went to Europe with this, Christine Lagarde at the IMF, (super?) Mario Draghi at the ECB, Angela Merkel and others at the European union would not budge.  There were no buyers.  That's where Greece is today.

IT'S THE END OF THE WORLD BUT IT WILL NOT AFFECT US ECONOMY.....Brinker comments:  I think with this development this weekend, this is a financial shock in Greece for sure and I think it's going to be accompanied by some selling of investments by people who are scared.  Some people are going to look at this and say it's the end of the world you know, like that gentleman in the bar in The Birds – it's the end of the world don't you know....... So I think you will see some selling, some volatility in the market as a result of it.  I think it's inevitable.  How much remains to be seen.  The question I ask is the same question I asked earlier.  How does this affect the US economy..... I don't think it will affect the US economy -- so whether people seller they don't sell, I don't think it will affect the US economy.

Honey EC: One of my favorite classic Alfred Hitchcock movies is "The Birds" filmed in Bodega Bay, north of San Francisco.  Perhaps Brinker and I have that in common.

FRANKJ'S SUMMARY OF THIRD HOUR GUEST-AUTHOR:

Today’s guest in the third hour was Martha T. S. Laham author of The Con Game: A Failure of Trust, a book about elder abuse in the financial area. (Note: Amazon shows her name only as T. S. Laham).

Cons, scams, theft, misappropriation and plain old chiseling can be perpetrated by friends, family members, church members, caregivers, in short, anyone who can inveigle themselves into an elder’s affairs. Those most vulnerable tend to be older white females according to the author. Women tend to outlive men and sometimes a widow is unfamiliar with finances and investments and unsure of what to do.

Seventy percent (70%) of US adults don’t have a will or a power-of-attorney (POA). Without a will a probate judge will parcel out your estate according to the laws of the state.

(For example, in the movie Gran Torino, if the character played by Clint Eastwood had died without a will, his snotty granddaughter would have probably gotten his mint condition Ford Gran Torino instead of the young Asian kid from next door who Clint willed it to.)

So what should people do?

Have a will and an estate plan. Have a power-of-attorney document naming someone you trust implicitly to look after your affairs when you are no longer capable. Have advance health care directives in place. Such a document takes the guesswork out of who should pull the plug…and when.

How can you protect yourself and what can someone do to protect an elder who is a friend or family member?

Isolation sets the stage for financial abuse. Being aware of this might prompt a friend or family member to want to look out for someone they know. Those who prey on the elderly may create a sense of urgency about something; they may make the target feel like they are part of a group; they may push for snap decisions. Sometimes the perpetrator lives with the person and is a relative of full-time caregiver. They may exert “undue influence”, which the guest said is a difficult thing to prove should things come to that.

The author says we need to be proactive about setting up the documents – once you are cognitively impaired it may be too late. And an older person needs a competent advisor.

The phone calls weren’t too interesting.

Peter from Albuquerque asked if reverse mortgages are a way elders can be taken advantage of. The guest said yes, but didn’t go into specifics.

Gordon from Florida whined about students being taken advantage of because they cannot declare bankruptcy and be released from what is owed on a student loan. It was hard to figure out what this had to do with seniors (i.e., other than college seniors). Maybe Gordon doesn’t plan to pay his college loan and doesn’t want this to mess up his retirement someday. The guest did a good job of winging it but failed in my opinion when she said “maybe it is something the government needs to address.”

Trisha from WLS country near Chicago was the last caller. Her very long soliloquy boiled down to this, “Our father is 86, physically healthy, but needs in home care. He wants to be in his own home. Are we doing the right thing by paying for this care using his assets? “ Answer was an emphatic YES.

JEFFCHRISTIE'S MONEYTALK FINAL EXAM QUESTION:

The earliest age you can retire in Greece is:
A) 45.
B) 50.
C) 52.
D) 55.
ANSWER

STOCK MARKET CLOSED ON FRIDAY...Brinker said:   Even though the banks are open, the stock market is closed on Friday, July third in commemoration of Independence Day, July 4.

PODCASTING:

Los Angeles. KABC 790. Moneytalk plays two hours later in the evening. They podcast and ARCHIVE podcasts.