Tuesday, March 13, 2012

March 13, 2012....Bob Brinker's Fixed Income Advisor, Summary and Commentary

 March 13, 2012...Bob Brinker, the host of Moneytalk, has a son who uses the same name when he posts on the internet.  The Jr-Brinker publishes The Brinker Fixed Income Advisor.  Many times, Moneytalk callers have indicated that they mistakenly assume that the editor of this newsletter is the famous talk show host.

Jr-Brinker's  educational background was in the computer and internet-technology field.  At one time, he said he was not interested in following in his famous father's footprints. However, in 2005, that changed and he began to publish the Brinker Fixed Income Advisor.  Jr-Brinker's wife, Lisa Brinker, is also an editor of this newsletter.  Her degrees are in English, German and Linguistics.

There is a new complimentary issue of the Brinker Fixed Income Advisor on the website. It is the November 2011 issue, only four moths ago.  Let's review it:
Page one...Summary titled Federal Reserve that includes the November FOMC meeting, the Beige Book Report, and some "incoming economic data."  Column two contains comments about the TED Spread, LIBOR and the "width" of bond spreads.
Page two...  A photocopy  of the "Public Debt" clock (available online) followed by more discussion of how High-Yield bonds rallied in October and some EU discussion.  Next comes a whole column about U.S. Treasury yields.
Page three.... Several lists:  Treasury auctions, Series I/EE bonds, Exchange Traded Funds (DVY; MBB; HYG; LOD; EMB; IGOV; CWB, and a list of CD, Money Market and Savings rates.
Page four....Six graphs that show Federal Funds Rate; Consumer Price Inflation; PCE Price Index; Real Gross Domestic Product; Unemployment Rate; Nonfarm Payrolls.
Page 5....Muni-Bond calendar.
And finally, Page 6,  Model Portfolios.
I very carefully compared the three Fixed Income Advisor portfolios.

* Firstly, I was struck by the fact that uninformed investors might mistakenly believe that the portfolios only contain fixed income since that is the name of the newsletter.  That is not true. The three portfolios all contain a percentage of stock in the Wellesley Income Fund (VWINX).

* Also,  I was surprised to see that the "Conservative Portfolio" contains Vanguard High Yield Corporate Fund (VWEHX), Loomis Sayles Bond Fund (LSBRX), a very volatile fund,  and DoubleLine Total Return Bond Fund (DLTNX, which is largely high-yield bonds, -- and it has a high expense ratio). 

Here is the Conservative Portfolio. The other portfolios are made up of the same funds in SLIGHTLY  different proportions.  Note that investors are told that the portfolio is "safe." In 2008, it lost 5.2%.  Click to enlarge: 



FrankC said...
Honey, I never knew that there were two Bob Brinkers, father and son. Thank you so much for shedding light on this sham of a newsletter. Back when I was a subscriber (sucker) to his father’s Marketimer, I received several solicitations for this Fixed Income Advisor in the mail. I always thought that they were part of the senior Brinker’s newsletter because they both listed similar Colorado addresses. The formatting of the pages was nearly identical to make it appear to have come from the same organization. Now I’m wondering how the junior Brinker obtained my mailing address to solicit this rag of a newsletter? Perhaps his father gave him the addresses of Marketimer subscribers? Or did he blatantly steal the addresses from his father? Either scenario speaks volumes for the unethical business practices of the Brinker clan!
 The address for both newsletter is exactly the same: 10789 Bradford Rd., Suite 210, Littleton, CO 80127. The radio talks show host, Bob Brinker does not live in Colorado.
READ AND POST COMMENTS

24 comments:

dav said...

Hi Ms.H.B.
Thanx for all your hard work.
Did ya no that ticker DBL is now being offered by DoubleLine.I don't own it,however,I wonder if it will do as good as his other
open end funds he manages.Have a good day.Ms. H. B.

birdbrain said...

The following figures are from Yahoo Finance as of 12/31/11.

Junk bond % (rating of BB or lower)

VWEHX 92%
LSBRX 30%
DLTNX 35%

Multiplying each funds weighting by its junk bond holdings, I come up with roughly 22% of the Conservative Portfolio contains non-investment grade debt from these three funds, which represent 40% of the portfolio. Perhaps not the "safest investment vehicles" but in this interest rate environment one does need to reach for higher returns.

Interesting that Junior's letter is six pages in length. Papa is Mr Page Seven.

Jim said...

If we compare the duration of this portfolio(4.99) to the "income" portfolio in Marketimer (3.6), we find that there is more risk in this one while there is very little difference in yield(4.43 vs 4.3). He should not really call this a "Conservative" portfolio.

FrankC said...

Honey, I never knew that there were two Bob Brinkers, father and son. Thank you so much for shedding light on this sham of a newsletter. Back when I was a subscriber (sucker) to his father’s Marketimer, I received several solicitations for this Fixed Income Advisor in the mail. I always thought that they were part of the senior Brinker’s newsletter because they both listed similar Colorado addresses. The formatting of the pages was nearly identical to make it appear to have come from the same organization. Now I’m wondering how the junior Brinker obtained my mailing address to solicit this rag of a newsletter? Perhaps his father gave him the addresses of Marketimer subscribers? Or did he blatantly steal the addresses from his father? Either scenario speaks volumes for the unethical business practices of the Brinker clan!

Anonymous said...

Frankj:

The previous thread had a little discussion of the 4% rule. It was suggested as a safe rate of withdrawal by William Bengen a financial planner from California. A search on his name will bring up all kinds of articles about it, some questioning whether it is still a valid rule of thumb.

Pig said...

Let me be sure that I understand this.
Bob Brinker is Bob Brinker, but he might not be Bob Brinker, or not the Bob Brinker that people think is the real Bob Brinker.

So both are really Bob Brinker, but one might not be the original and crispy Bob Brinker, but could be a junior Bob Brinker without the experience of the original Bob Brinker, but just as sneaky or snaky as Bob Brinker usually is.

Is that right?

Do you know if Bob Brinker helps Bob Brinker with the newsletter, or if Bob Brinker splits the subscriber dough with Bob Brinker?

Chuck said...

DoubleLine [DBL] currently expects the portfolio will initially be 100% invested in mortgage-backed securities, some or all of which may be rated below investment grade or unrated but judged by DoubleLine to be of comparable quality (although there can be no assurance whether or for how long the portfolio will be invested in that manner). Exposures to mortgage-backed securities through derivatives or other financial instruments may be considered investments in mortgage-backed securities for these purposes.

Twolake said...

Somebody said Brinker recommended Vanguard and Fidelity but never Schwab.

I see they often diverge like today. Schwab's Total Bond market etf is DOWN 2 cents while Vanguard's Total Bond market etf is UP 2 cents.

Why is that?

SCHZ - SCH US AGG BND
Change -0.02


BND - VANGUARD TOTAL BOND MKT
Change +0.02

Jim said...

twolake wrote:

Somebody said Brinker recommended Vanguard and Fidelity but never Schwab.

I see they often diverge like today. Schwab's Total Bond market etf is DOWN 2 cents while Vanguard's Total Bond market etf is UP 2 cents.

Why is that?


That is because the Vanguard ETF (BND) is tracking what's called a "float-adjusted" bond index. It excludes certain securities held by the Federal Reserve that might be included in the Schwab ETF. So that is why the two are not identical.

Butch said...

"That is because the Vanguard ETF (BND) is tracking what's called a "float-adjusted" bond index. It excludes certain securities held by the Federal Reserve that might be included in the Schwab ETF. So that is why the two are not identical."

Is that a good thing? I saw an article from Kirk Lindstrom today that said he would pick BND or AGG over the Schwab SCHZ but he's not very clear on why. He says it is more volatile.

Honeybee said...

Hi Dav,

No, I did not know that DoubleLine was offering DBL.

Here is some info on this NEW closed-end fund managed by Jeffrey Gundlach. The many Bob Brinker called the best "bond man" in the world:

LOS ANGELES, March 1, 2012 /PRNewswire/ -- The DoubleLine Opportunistic Credit Fund (the "Fund"), which is traded on the New York Stock Exchange under the symbol DBL, today declared its first monthly distribution of $0.167 per share, subject to the following ex-dividend, record and payment dates set by the Fund's Board of Trustees.

Declaration Thursday, March 1, 2012

Ex-Dividend Wednesday, March 14, 2012

Record Friday, March 16, 2012

Payment Friday, March 30, 2012

This first monthly distribution represents an approximate annualized distribution rate of 8%, based on the Fund's initial public offering price of $25.00 per share.

This press release is not for tax reporting purposes but has been issued to announce the amount and timing of the distributions declared by the Board of Trustees. Distributions may include ordinary income, long-term capital gains or return of capital. The amount of distributable income and the tax characteristics of the distributions are determined at the end of the taxable year. In early 2013, the Fund will send shareholders a Form 1099-DIV specifying how the distributions paid by the Fund during the prior calendar year should be characterized for purposes of reporting the distributions on a shareholder's tax return.

About DoubleLine Opportunistic Credit Fund

The DoubleLine Opportunistic Credit Fund (the "Fund") is a newly organized, non-diversified, closed-end management investment company. The Fund's investment objective is to seek high total investment return by providing a high level of current income and the potential for capital appreciation. There is no guarantee that the Fund will achieve its investment objective. Investing in the Fund involves the risk of principal loss.

About DoubleLine Capital LP

DoubleLine Capital LP, a registered investment adviser under the Investment Advisers Act of 1940, acts as the investment adviser for Fund. The firm is majority employee-owned with CEO Jeffrey Gundlach and President Philip Barach holding a combined controlling interest in the firm. DoubleLine's headquarters is in Los Angeles, CA. Its offices can be reached by telephone at (213) 633-8200 or by e-mail at info@doubleline.com.


Read more

Honeybee said...

Birdbrain,

Thank you so much for the info on the three bond funds and how it applies to Bob Brinker and Bob Brinker's portfolios. They both have all three of those funds in their "income portfolios."

The difference is that the Jr-Bob Brinker calls his portfolio "Conservative."

Interesting point about the page numbers. :)

Now the Jr guru has all three of his portfolios on page six, but Bob Brinker, the original, has all of his model portfolios on page eight.

Anything in Marketimer on page 7 is totally off-the-books and therefore never part of his performance ranking.

Marketimer, page 7, contains the income portfolio, the Active-Passive portfolio (which beat the equity model portfolios last year) and the list he calls "INDIVIDUAL ISSUES."

That list is much like the THREE PAGES he repeats every month of "Bob Brinker's recommended no-load funds." It contains GLD, SU, MSFT and Vod and the rest are just index funds.....

BTW: Most of those three full pages of no-load funds are simply index funds by Vanguard -- or some funds that used to be in his model portfolios, but has been removed.

Honeybee said...

Jim said: "If we compare the duration of this portfolio(4.99) to the "income" portfolio in Marketimer (3.6), we find that there is more risk in this one while there is very little difference in yield(4.43 vs 4.3). He should not really call this a "Conservative" portfolio."

I strongly agree -- just as I think he should have something in the newsletter that warns subscribers that they own stock, even though it clearly states it is a "Fixed Income Advisor."

Honeybee said...

Hi FrankC!

Thank you so much for writing. I think your first hand experience with this deception is invaluable information. I am going to add it to the front page.

I have to say that over the years, I have always "misunderestimated" the depth of deception that both Bob Brinker's will go to deliver shark bites.

The deception is not illegal, but it should be. Marketimer uses the same address as the Brinker Fixed Income Advisor.

Honeybee said...

FrankJ,

Yes, that is an interesting discussion on the last thread about the 4% rule.

I have promised to listen carefully for Bob Brinker to address the subject again and report his exact words.

We shall see what happens. :)

Honeybee said...

Mr Pig asked: Is that right?

Do you know if Bob Brinker helps Bob Brinker with the newsletter, or if Bob Brinker splits the subscriber dough with Bob Brinker?


Yes, that is absolutely right, and I understood every word you said. LOL!

As for Bob Brinker helping Bob Brinker with the newsletter: I think that he does help some.

But on the other hand, I think that the Colorado Bob Brinker is calling the shots now on both newsletters because the Nevada Bob Brinker likes to play more golf now that he only works 9 hours a month on the radio.

He wouldn't even do nine hours, but the Colorado Bob Brinker doesn't have a voice for radio.

Honeybee said...

Chuck,

Thanks for the additional comments about DBL. I haven't been able to find it's holdings yet. Do you have a link?

Honeybee said...

Jim,

Thanks for answering Twolakes question about the difference between the Schwab and Vanguard Funds while I was away....

Honeybee said...

Butch asked: "Is that a good thing? I saw an article from Kirk Lindstrom today that said he would pick BND or AGG over the Schwab SCHZ but he's not very clear on why. He says it is more volatile."

Please give me a link to Kirk's article so I can read it and comment on it....

Butch said...

Lindstrom says...

Schwab's SCHZ appears to have higher volatility which may reflect lower liquidity. For now, I'd probably pick one of the other three. Fidelity gives you free trades with iShares and Schwab gives free trades with their funds in their accounts so you need to calculate the small commission into the total expenses.

http://kirklindstrom.com/Articles/2012/0316_Best_Bond_ETF_BND_SCHZ_AGG_LAG.html

Honeybee said...

Okay, thanks Butch. Now we know Kirk's opinion on those four bond funds.

Did you read what Jim wrote?

Jim said...

Butch said:

Lindstrom says...

Schwab's SCHZ appears to have higher volatility which may reflect lower liquidity.


Butch,
Kirk is absolutely right on this. When the Fed makes a huge bond purchase all those bonds are no longer available to investors, so it does indeed reduce liquidity and cause greater volatility. The bonds the Fed buys are included in the Schwab ETF but not in the Vanguard ETF. The "float-adjusted" ETF only reflects bonds that are available to investors.

Butch said...

"When the Fed makes a huge bond purchase all those bonds are no longer available to investors, so it does indeed reduce liquidity and cause greater volatility. The bonds the Fed buys are included in the Schwab ETF but not in the Vanguard ETF. The "float-adjusted" ETF only reflects bonds that are available to investors."

Thanks Jim. But I have a question. Since obviously none of the bond ETFs can own the entire bond index they use sampling techniques.

How can we be sure the Schwab ETF's variance from Vanguard's results from a "float adjustment" rather than sampling differences?

Thanks again.

Jim said...

Butch said:

How can we be sure the Schwab ETF's variance from Vanguard's results from a "float adjustment" rather than sampling differences?
You raise an important issue here that also can come into play.
Both BND and AGG track a much larger percentage of the index than the Schwab ETF.(BND tracks the most) This is another factor that could indeed cause more variance in SCHZ.