Sunday, March 11, 2018

March 11, 2018, Bob Brinker's Moneytalk: Review Fixed Income Advice

March 11, 2018.....Bob Brinker  was NOT LIVE on Moneytalk today....(comments welcome)

Bob Brinker's Fixed Income Advice

Brinker's bond/fixed income holdings in Marketimer are now down to two bond mutual funds and one money market fund in both his fixed income portfolio and balanced model portfolio III.

Brinker recommends Vanguard Prime Money Market, but has said on Moneytalk that he has no problem with Schwab or Fidelity Money Market Funds.

In 2013 Brinker made changes that lowered the duration of his bond fund holdings significantly. This has caused a lot of lost opportunity costs for his followers - that fact has been documented on this blog over the past three years.

As history shows, the interest rate increases that he expected to be imminent in 2013 only began to appear last year, and so far, have been very small.

However, the economy began to roar back in 2017 and will likely continue. So Brinker has once again lowered the duration in his bond holdings by actually selling one of his bond fund holdings on February 12th and moving that money into Vanguard Prime Money Market Fund. 

This move brings his fixed income portfolio to 35% cash (money market) and two bond funds (OSTIX and DLSNX).  And at the same time, brings the fixed income portion of the balanced model portfolio III to 20% cash and the same two bond funds.  

So to more easily understand Brinker's balance fund that he recommends so highly and so often on Moneytalk - especially to retirees - here is how it breaks down: 

If you are setting it up and making the purchases, you would aim for  50% in stocks and 50% in fixed income. In addition to the 2% in money market, you would have 10% in OSTIX and 20% in DLSNX. 

The stock 50% would be largely in the fund that Brinker is always touting, the Vanguard Total Stock Market Fund. The other holdings are so tiny that they hardly seem worth the trouble - especially since the Akre Fund takes you outside of Vanguard for a puny 5%.

(To sum up: Brinker is still fully invested in the equity portfolios and holdings. He recommends dollar-cost-averaging new money into the market.) 

Listen Live: 710Knus

Sunday, March 4, 2018

March 4, 2018, Bob Brinker's Moneytalk, Stocks, Bonds, Economy and Investing

March 4, 2018....Bob Brinker hosted Moneytalk live today....(comments welcome)

IN EDIT: BRINKER GOES FULL ON POLITICAL HATE SPEECH ON MONEYTALKThanks to dRahme for providing this audio (Tuesday) ==> dRahme Audio Clip: Laurence Kotlikoff  and Bob Brinker.  (See Frankj's summary of hour three below.)

STOCK MARKET.....Brinker said: "We live in volatile times. We've had volatile markets now for several weeks. Volatility can help you understand your tolerance for risk. Obviously there is a lot of volatility with the possibility that a trade war could be on the way......"  

The only other reference to the stock market that Brinker made today was to repeat his long-time advice to those in or near retirement - he recommends an asset allocation of 50% stock and 50% bonds/fixed income.  dRahme's Audio Clip = Market volatility and tariffs. 

Honey EC: It looks like the market has re-trenched about half of the 10% correction decline. According to Brinker's February 12th special bulletin, he's "waiting" for it to retest the lows. If it does, he plans to go from dollar-cost-averaging on weakness to an all-in buy-signal. He has his followers fully invested, so this would theoretically be for any new "windfall-money" that some lucky people may have. 

==>dRahme: Audio Clip... Risks to Market/Vegas "World of Outlaws" Sprint Car Racing

MARKETIMER'S THREE MODEL PORTFOLIOS.....Several of today's callers said they were in Marketimer model portfolios.  Don't be confused by all the "jabberfesting" about them. It's very simple. Brinker has only three model portfolios. Portfolio I and II are 100% equity, with the lion's share in Vanguard Total Stock Market. Portfolio III that you often hear him call the "balanced" portfolio is about 50% stocks and 50% bonds. That is the one he recommends for retirees. 

For years, he has an "active/passive" portfolio that is simply 80% Vanguard Total Stock Market and 20% in a Vanguard "all-world" mutual fund. Additionally, he has a fixed income portfolio that I have discussed several times in the past. 

BOND MARKET...Brinker expects headwinds against longer-dated bonds if rates go up. He says that the duration of Marketimer bonds is less than one year in his model portfolio III and fixed income portfolio.

FOMC AND EXPECTED RATE HIKES....BB expect the next Federal Reserve rate hike of 0.25% at the March 21st meeting. ==> dRahme Audio clip:  Risks to Market - FOMC and Expected Rate Hikes. 

PROPOSED TARIFFS....BB spent a lot of the program talking about President Trump's proposed tariffs on steel and aluminum.  To his credit, Brinker did say that so far it's just a "jabberfest" - that nothing has really been done yet.  (see the audio clips above for more information.) 

EXCHANGING METROWEST UNCONSTRAINED BOND FUND FOR VANGUARD PRIME MONEY MARKET.....Caller John from Chicago said he had followed Brinker's advice to sell bond mutual fund MWCRX,  and needed some help deciding whether to put that cash into a CD ladder or a bond ladder.  BB said either would be fine.

Honey EC: Brinker did not mention that John seemed to be ignoring that along with the sale of MWCRX,  he had advised putting that cash into Vanguard Prime Money Market Fund.

BITCOINS.... BB told caller Sean from Jackson that buying Bitcoins is sheer speculation. 

VTI vs SCHB.....BB continuously recommend VTI as an ETF equivalent to the Vanguard Total Stock Market mutual fund that he includes in his model portfolios (VTSMX). 

Honey EC: Even though Brinker sang the praises of "Chuck Schwab" today, he never points out that the Schwab total stock market ETF (SCHB) has lower expense charges than Vanguard. 

==> dRahme Audio Clip:  The Week Ahead 


On Sunday March 4, 2018 Bob’s guest was Professor Lawrence Kotlikoff, an economics professor at Boston University.  The professor ran as a write-in candidate for President of the United States in the November 8, 2016 election.   
Bob and the guest spent virtually the entire time talking about the steel and aluminum tariff announcement made by President Trump last week.   To say that he disagrees with the administration would be the understatement of a lifetime. 
Referring to the President he said, “we need to get him out of there” a few times and he called for impeachment no less than four times in the interview.   He also mentioned the 20th century dictators Hitler and Mussolini – indirectly comparing President Trump to them. 
At the beginning of the interview, Bob asked for his reaction to the tariff announcement.  The guest said “the President’s point of view has no real connection to the facts.”   He pointed out we only produce 5% of the steel consumed worldwide.  He mentioned clothing and furniture as two manufactured products that have given way to imports.   The tariff issue can put us into a long trade war, he said.  He went on to mention an article he just wrote for Forbes and said the title was something like “Can a Trade War Lead to Impeachment”? 
Bob waved a red flag at the guest, citing a tweet from the President, “Trade wars are good and easy to win.”   This prompted the guest to say the President is mentally ill and he’s making reckless and dangerous statements.  He referred to the possibility of countries putting tariffs on Boeing Aircraft produced here.   Bob brought up Wilbur Ross’ (Sec. of Commerce) and the Campbell’s soup can – it was apparently mentioned by a caller but I did not hear the call.  The guest made some disparaging comments about Mr. Ross.
The World Trade Organization is the proper place to lodge complaints about dumping of products and unfair trade.  The guest made this point a few times.  He speculated that these unilateral tariffs could lead to our expulsion.   Before the break, Bob said that China has been stealing intellectual property for quite a while but no one seems too concerned about it. 
After the break Bob asked the professor to comment on what happened after the 1930 Smoot-Hawley tariffs were put in place.  In the next 3 years both imports and exports declined about 60%.  Eventually, tariffs were slapped on 20,000 different products.  The depression was made worse by these retaliatory tariffs.  He predicted the financial fallout from the current tariffs will drive stocks down and interest rates up.  Protectionism might have sounded good as a campaign promise but it was “stupid.” 
Regarding steel production, Stan calling from Chicago said we overproduced here and China dumped steel.   The guest’s answer was “take it to the WTO.”  
 The guest said several times, he was concerned about how the tariff pronouncement was carried out.  He definitely did not like it that President Trump took action  – he would prefer it be handed off to the WTO.  
Bob, calling from Louisiana, said we are saddled with environmental costs that other countries don’t put on their industries.  We need to maintain a core of manufacturing skills including tool and die making.   (Bluce – weigh in!)  The guest brushed off the notion that we have overly restrictive environmental regs.   The guest said we cannot destroy the planet and let sea levels rise by three feet.  Then he segued into the recent Nor’easter storm that hit the Atlantic seaboard and mentioned the tidal flooding in Boston.   In wrapping up his answer to Bob in Louisiana he referred to the President as a “wild man,” and said, “let’s get rid of him – impeach him.”  This was the fourth time he called for impeachment.
The final caller was Karen from Albuquerque whose question had something to do with digital currency and “how soon will we begin using the hyperledger?”   I don’t think the professor had the first clue what the hyperledger is but he did a good job of faking it, talking about street vendors in China finding ways to accept payment without actually taking cash. 
Bob wrapped up at 3:52.   At the sign off, the guest thanked Bob and said “Anytime, I’m all yours.”   Jeez.  
Honey here: Thanks Frank....Many of Brinker's listeners were very upset by the all out political attacks by the guest-speaker. I recommend that all read the comments that came in during the program. 

Kotlikoff:  You have offended Jewish people (and all Americans who died in WWII) when you compared our Constitutionally elected, President Donald Trump, to Hitler - as well as Mussolini and Stalin. AND I NOTICE YOU DIDN'T FORGET TO INSULT TRMP VOTERS.   I shudder to think that you are "teaching" young students. 

Note to Bob Brinker:  Just a word to the wise  - this could cost you money. There have been many who are much "bigger" than you that have gone down in disgrace when people turn away because of the undeserved and vicious attacks on President Trump. 

==> dRahme Audio Clip of Kotlikoff and Brinker saying  President Trump the same Hitler, Mussolini, Stalin and Putin. 

Listen Live: 710Knus