STOCK MARKET: Brinker did not talk specifically about the stock market, but he was very enthused and optimistic about all of the economic reports he gave today. He said nothing about a possible end to the cyclical bull market even though the S&P 500 Index is only 3.3% below its October 2007 all-time-high. It is very apparent that he expects the stock market to keep climbing.
Honey EC: Several times on Moneytalk, Brinker has talked about selling all of Marketimer's Nasdaq holdings, including QQQ. If the Nasdaq continues to climb, I doubt you will hear him mention it again. October 9, 2012 was the effective date for that sale. The Nasdaq closed that day at 3065 and closed last Friday at 3179. (The QQQ is about 40 cents higher than it was on October 9th -- probably because Apple has taken a beating.)
It is important, and perhaps fortunate for Brinker, that the money from the sale of Nasdaq holdings was all put directly into the Vanguard Total Stock Market Index (VTSMX) -- so his asset allocation remains at 100% fully invested.
NEW JOBS ADDED...Brinker said: "Just on Friday of this week the jobs report came out for the month of January.....Payroll rising by 157,000 new jobs and the revisions were gonzo.....Because the previous month was revised upward to 196,000 new jobs. And the month of November was revise upward to 247,000 new jobs. As a result of these revisions an additional 127,000 new jobs added to the employment count in the months of November and December. And that's on top of the new report for January."
JOBLESS RATES UP.....Brinker continued: "Now as does happen from time to time when there is an improvement in the economy, we see more people enter the workforce....As a result, the jobless rate ticked up to 7.9, it had been at 7.8.... Obviously 7.9% unemployment is too high. It's unacceptable."
FEDERAL RESERVE.....Brinker continued: "And for that reason, at this week's meeting of the Federal Open Market Committee, we saw no change in policy, with the Federal Funds overnight lending rate remaining at the same level it's been at since 2008, which is between zero and 1/4 of 1%.
ECONOMY/RECESSION...Brinker said:"We had a advanced GDP number for the fourth quarter which was minus zero point one. There will be two revisions to that number. Let's see how that number comes out....On a year-over-year basis, we saw the economy actually increase its rate of growth. The year-over-year rate of growth for Gross Domestic Product for 2012 was 2.2%....Economy continues it this gradual expansion that we have seen."
BRINKER THROWS THUNDERDOME PUNCH... Brinker said: "Remember we talked during the year about the estimate that I had made at the early part of the year, that the economy in 2012 would grow between 1.5 and 2.5%....That projection that we gave on the program was made at a time when there were those out there talking about going into recession in 2012. Well, obviously, we did not have a recession in 2012. That forecast looks kinda silly now, doesn't it......Turns out that real GDP year-over-year grew 2.2% based on this latest report. And that was up from 1.8% for 2011."
Honey EC: I laughed out loud when I heard Brinker slam "those out there talking about a recession" while he was predicting growth. It's been awhile since he mentioned the subject -- guess it couldn't have anything to do with my previous article. Nahhh.... :)
CONSTRUCTION PROJECTS UP: Went up almost 1%...up to $885 billion annual rate...best since summer 2009.
HOMEBUILDING UP: Continues to improve....outlays up 2.2% to an annual rate of $308 billion....best since end of 2008.
HOUSING: Housing investment in 4th quarter up over 15% annually.
BRINKER LIKES BERNANKE'S ONGOING STIMULUS.....Brinker said: "I support Fed Chair Ben Bernanke in his continuing effort to stimulate economic growth. And that's exactly what he is doing coming out of FOMC meeting this week. There was essentially no change in the easy money, accommadative, stimulative, Federal Reserve policy. In my opinion, if it were not for the actions of the Federal Reserve in recent years, we would not be looking at the situation we are looking at right now."
JOBS RECOVERED....Brinker said: "First of all, we have recovered over 5 million of the over 8 millions jobs that were lost during bad times...."
GOVERNMENT DEFENSE SPENDING SLASHED....Brinker said: "Government defense spending dropped 22% at an annual rate....It is so big that it is the largest in 40 years. This happened back in 1972 during the Vietnam withdrawal process.....We are talking about programs here. We're not talking about personnel....Defense spending literally fell out of bed in the fourth quarter....It took 1.3% off of GDP....for that one item."
CALLER MADE MILLIONS ON BRINKER'S ADVICE: Caller Joe from Missouri started with $75,000 in 1991, followed Brinker's advice and now in 2013 it's worth $2.7 million. Joe said he bought and paid off a home and put a child through college.
Honey EC: Any mathematicians out there who can figure what Joe's income had to be, and how much he would have had to save, to do that in 21 years?
GOLD: Caller Ann wanted to know if she should take $5,000 out of a $500,000 net worth and invest in gold.
Brinker replied: "Firstly, let me tell you, I don't have any money in gold. I don't have investments in gold, so you know that from the get-go. Secondly, at this time, I have no recommended weighting in gold in my investment letter. I'm not recommending in my investment letter that anybody in my model portfolios own gold. What I am saying is, which what I've said for years which is, if an investor has a desire to have a small hedge in gold, what I would do is use the Exchange-Traded-Fund, GLD as my vehicle. I would not do it in an IRA."
Honey EC: What a fine line Brinker often walks between truth and deception. He said that he has no "recommended weighting" for GLD in Marketimer, and that he has no model portfolio recommendations in Marketimer.
Here's the whole truth: Even though he implied differently, he did indeed add GLD to Marketimer's recommended "individual issues" list in May 2009, but has never offered any guidance as to weighting or the price (and it's still there in the February 2013 issue).
As he said, he has not added GLD to his model portfolios. Here's why: if he did, it would become part of his official performance record -- out there for all to see, and for Mark Hulbert to rank in Hulbert's Financial Digest. The "individual Issues" list is off-the-books." Winners are mentioned, losers are not....
In my opinion, Brinker is either not reading his own newsletter, not remembering what's in it, or deliberately misleading the audience.
USE SILVER IN PLACE OF GOLD: Caller Ron asked Brinker about buying silver in place of gold.
Brinker replied: "I think that silver could be considered as an alternative form of hedging in a portfolio. There is a preferred way and that would be the Exchange-Traded-Fund that holds the silver bullion, and that trades under the symbol, SLV. It's known as the Ishares Silver Trust. There is a derivatives investment under the ticker symbol DBS....holds futures contracts on silver....If I was going to consider owning a silver hedge, I think I would be looking at owning the bullion as opposed to the futures."
USES FOR SILVER: Brinker continued: "Silver has a variety of industrial uses .....About 40% of silver production is used for industrial reasons. It's used in photography, batteries, CDs, plasma TVs and also some of the emerging technologies are starting to use silver as well...silver embedded bandages, another example, water purification."
DOES BOND DURATION EQUAL STOCK BETA?.....Caller Jay from Illinois asked if it bond duration was the same as stock beta.
Brinker replied: "I think to the degree that the the beta-coefficient of a stock or a fund, measures the volatility of the fund, relative to a benchmark such as the S&P 500.....Moving over to the bond market, we measure the volatility of a bond price or portfolio of bonds by the duration. I think in that sense they can be viewed that way."
NO MARKETIMER CHANGES: Caller Jay started to ask a follow up question. He said: "You have made several changes to your fixed-income portfolio in your newsletter."
Brinker interrupted and said: "Jay, wait a minute. I don't want to mislead anybody. In the February investment letter which has just been published, we have not made changes to our income portfolio. Any changes were made in prior issues. I don't want you to mislead any listeners. This is very important."
Honey EC: Yes, Brinker is correct. He made no asset allocation or fund changes in his February Marketimer.
SOME OF BRINKER'S PERSONAL HISTORY: About 45 minutes into the first hour, Brinker talked about how he had won a spelling bee in the 7th grade and the prize paid half of the tuition for him to attend a special high school. But his parents couldn't afford the second half.
He had an aunt and uncle who had set up trust funds for all of the cousins in the Brinker family at that time -- all 15 of them. This gift was enough to pay the other half of the tuition he needed to attend the special school. Brinker encouraged the audience to "be one of those wonderful, thoughtful, generous people and do good things that will always be remembered" like his aunt did for him.
BRINKER'S SUPER BOWL PICK....In the first hour, Brinker promised to give his "major Super Bowl pick" at the end of the second hour. Did anyone hear it? I didn't....
Jeffchristie's Moneytalk Final Exam Question:
Today Bob Brinker talked about the high school he attended. Bob won a 50%scholarship by winning a county wide spelling Bee. The remaining 50% of his tuition was paid from a trust fund that his aunt and uncle set up to cover education expenses for Bob and 15 other young sprouts in the extended Brinker family. This high school was run by which notorious organization?
A) The Muslim Brotherhood
B) SEIU
C) The Christian Brothers
D) The Communist Party
Answer:San Francisco, Ca. KSFO 560: 1-4pm (KSFO archives Moneytalk Free on Demand for seven days after broadcast. You can download and listen on the go.)
Bob Brinker graduated in 1959 from LaSalle college high school which was run by the Christian brothers.
64 comments:
Super Bowl Sunday, 2013 and Bob Brinker is on the air.
However, last year, he took the third hour off and played rerun calls.
We shall know if he does that again in the fullness of time. :)
Bob loves to hear himself talk. His radio show could be a half hour if he didn't repeat himself so much.
So, it sounds like Bob is oh-so optimistic. Very favorable interpretation of the jobs numbers. Hmmm. And he's good with Bernanke's approach.
Not sure what this means, but market sentiment is euphoric:
The Short Side of Long
Shrinking government? Sounds like a great idea to me. I'll wait at the BMV a little longer. No problem.
(Sorry, rasputin here. And the previous post)
I like when he repeats himself -- makes it easier to transcribe. :)
And I do enjoy his voice. It certainly is one of the most pleasant on radio.
Today, he sounds euphoric and almost sexy. What's with that. :)
Hahaha. You like that "throaty" sound? Probably the flu or something. Calm yourself, honey. He could still be contagious. (ras)
Voice lessons from Neale.
-- Frankj
A little walk down memory lane with the spelling bee/high school scholarship story. I'm about to weep with the sentimentality and nostalgia. Bob, the trust funnd baby. So, I wonder where the school was.
I also wonder what the winning spelling word was. But that's just me. (ras)
You guys are too funny. LOL!
Well, Ras, since I have to listen to him now and later when I write the summary, I may as well enjoy it. :)
So honey, ya' gonna' watch the Superbowl?
I made some great chili for later. Come on over!
Followed this recipe by the way. Hey, the recipe includes beer and bacon. What could be bad?
http://www.foodnetwork.com/recipes/food-network-kitchens/chili-con-carne-recipe6/index.html
Honey, take care. Gonna' sign off for awhile. Got a little paperwork to do. Nice hanging out with you today.
Yum...Beam me over some of that chili. Here's the link hot:
Chili Con Carne Recipe
No, I don't want to disappoint all my friends, but I am not a football fan.
I guess I'm supposed to root for the 49ers though, since I live in California, so here it is:
Go Niners!
2:59 pm, sounds to me like he bailed!
-- Frankj
FrankJ,
He certainly DID bail.
And how nice of him to inform the listeners that he was playing an old re-run the third hour.
Just plain rude in my opinion.
Bob Brinker promised to give us his Super Bowl prediction at the end of the second hour, but I don't think he ever did. Did I miss it?
Hi Jim,
I don't think he gave any predictions, but when I do the summary, I will listen again to the end of the second hour and see if he did.
Regarding Little Bobby's SB predictions: I hope he's more accurate than predicting bear markets.
Keep yer fingers crossed: he's got a 50/50 chance of being right on the SB.
Bob was totally soporific today with more filler than I can ever remember. I used to listen carefully, but there is less and less to listen to. The days when he used to help beginning investors are long gone. And don't get me started about Neale's voice and self promotion. Rrrrr.
Investing is not an exact science the only person I have seen in my investing years that comes close to being exact is Don Yacktman of the Yacktman funds. Even Don had some problems along the way but he does have a knack of analyzing and picking the right stocks and holdings and his turn over is one of the lowest in the mutual fund industry. Bob Brinker on the other hand either hits or misses on his calls and he back tracks to cover his miss calls. Overall though his advice is helpful and it is always helpful when you put it in perspective. I am surprised he has not said we are entering a bull market as this bear is getting old..Thanks Honey for the update
"Well, obviously, we did not have a recession in 2012. That forecast looks kinda silly now, doesn't it."
It looks like Brinker was right about no recession in 2012 but ECRI says that we are in a recession right NOW! Does anybody think we are in a recession?
Well, Bob Brinker has gotten a lot of mileage out of adding GLD to his Individual Issues list.
When gold was hot, he infered that he had recommended it in Marketimer.
Now that gold is correcting a bit, he has flat out said that he has no recommendations in Marketimer and stated that it was not part of his model portfolios.
I think it is very clever of him, but I do have a problem with the dishonesty of it.
But I betcha it sells newsletters.
Honey, any insite on the latest "Brinker Letter " ?
and no super bowl pick go figure.
thanks from Vallejo, Ca.
Hi from Vallejo,
Yes, here it is from my summary:
Brinker interrupted and said: "Jay, wait a minute. I don't want to mislead anybody. In the February investment letter which has just been published, we have not made changes to our income portfolio. Any changes were made in prior issues. I don't want you to mislead any listeners. This is very important."
Honey EC: Yes, Brinker is correct. He made no asset allocation or fund changes in his February Marketimer.
People who call Moneytalk need to realize that they will get cut off every time if they try to ask Bob about what's in his newsletter. Jay was the classic example. After interrupting Jay and telling him that the fixed-income changes took place prior to February he never did give Jay a chance to ask his question. Brinker simply moved on to the next caller. Brinker will only mention specifics of the newsletter if he thinks it will improve future sales, such as if he makes an accurate prediction, or if a fund has stellar performance.
Jim,
You are exactly right. Brinker willingly talks about his newsletter when he feels he can say something that will sell some to the uninformed.
But do not ask him a question that, 1. gives away too much info; 2. exposes contradictory or damaging infor; 3. shows how much is cut and paste each month; 4; shows how much of the letter is just data-mined from the internet.
I did some Jethro ciphering and came up with a 17.7% rate of return for the guy who grew $75,000 into $2.7 million over a 22 year period, following BB's advice.
But that assumes no additional investments to the portfolio and no withdrawals. So, his actual rate of return is going to be different because he said they paid for college didn't he? And he probably contributed yearly, too.
-- Frankj
Shows how much is data-mined from the Internet. Yeap that is about 90% of it.
Mark
Thanks FrankJ....Yes, he said they paid for college and paid off a home, so could amount to another million depending on costs for both.
So looks like it might be safe to say that, not counting any money he added along the way, that $75K would have had to earned almost 20% a year.
Did the planted caller say he was the CEO or CFO of GE making $4M a year average salary over that time period?
I know people making that sort of money who are terrible savers so only having $2.7M is not that unexpected. And I know people making far, far less who are good savers who invest in a mixture of diversified mutual funds and individual stocks who have that sort of money saved and they don't listen to Brinker.
JamesT, regarding your recession question. You are right.
If we have a second quarter of negative GDP, then we are in a recession and would have been since the 4th quarter of 2012. I'm thinking there's a good chance we are. I'm not so enamored by the so-called positive news we're supposedly hearing.
(rasputin)
re: Joe from Missouri, at $75K in 1991, following da Brink's advice and worth $2.7mm today
This is pretty close to my wife and myself for that same period. I started listening in 1988 with a NW of $30K, maxed out my 401k and other savings, while paying on a home. By 1991 I was married with a combined NW of $80K. Over the 21 years from 1991 through 2012, our income averaged $117K and we saved an average of 1/3 of that. Our big years were 1995-9 when the S&P 500 increased >20% all five years; our NW went from $260K to $760K. Today, we have a paid-off home and total NW of $2.4mm. The average return was @ 7.1%.
Yes, we have taken our lumps, but are much better off for having followed Bob Brinker's simple advice to persistently save, get rich slowly, and subscribing 18 years at $3,330 was a pretty good deal. Just his one call in 2000, which we only partially acted on, saved us from huge losses. We did not sidestep the 2007-9 implosion, but have been made more than whole now.
So, there is the math and a real example. It doesn't seem far-fetched, or insurmountable.
Honey, still enjoying your summaries. OK Honey fans, flame away!:-)
Re JayCeezy: Avg Return 7.1%
First of all, congrats for successfully navigating your way to a $2.4 mil net worth. Impressive!
I would point out, however, that the avg annual dividend reinvested total return of the SP500 was over 11% from 1988 to 2012.
You could argue that the education Brinker provided may have been worth the $3K, but the market timing advice didn't seem to add value in your case.
--Abacus
"$3,330 was a pretty good deal."
Compared to what, a visit to the proctologist? Why pay anything?
I am pretty sure buy and hold with regular contributions of 33% of your salary to a simple, diversified basket of index funds at Vanguard would have outperformed Brinker's portfolios that started out mostly in expensive managed funds in the 1990s and led him to significant under performance, EVEN BEFORE YOU ADD THE TAXES you had to pay each year for those funds.
He started to switch to Vanguard funds in the 2000s after making several attempts to time the market that were quite costly, especially with your taxable funds which you would have used with a 33% savings rate.
The only reason he beats the market in his published returns and at Dilbert is Brinker and Dilbert ignore the QQQ fiasco.
The whole supplement industry is full of "satisfied customers" but it doesn't convince me they or Brinker add ANY value.
"I would point out, however, that the avg annual dividend reinvested total return of the SP500 was over 11% from 1988 to 2012."
That seems a little high to me. We've just had a decade of zero returns. Can you point me to a source?
TXW
@abacus, actually the S&P500 reinvested dividend return for the period you noted is 9.6%, which you can see for yourself right here. And you can also see that the return from 1/00 through 12/12 is 1.9%.
Yes. 13 years of 1.9% compounded. Out of the 21 years we are discussing. I assume you point out an 11% figure to somehow compare it to my 7%? You would be correct, if you are assuming $1 left in an S&P500 index fund for that period. But as you can imagine, my greatest earnings and savings years have been in that 13 year period, of the 21 years. As it would have been for the vast majority of investors. Your 11% figure is useless for comparison.
An easy mistake to make, I'm pointing it out so you don't make it again.
Seriously, this caller was pointed out in this thread, as if his income, savings and returns were somehow unbelievable, like it was too good to be true and way above average. Now I show how I did it myself with diligence and real numbers, and now you imply my 7% is below average? You are just like the Wall Street hucksters, trying to have it both ways with the numbers!:-)
@abacus, actually the S&P500 reinvested dividend return for the period you noted is 9.6%, which you can see for yourself right here. And you can also see that the return from 1/00 through 12/12 is 1.9%.
Yes. 13 years of 1.9% compounded. Out of the 21 years we are discussing. I assume you point out an 11% figure to somehow compare it to my 7%? You would be correct, if you are assuming $1 left in an S&P500 index fund for that period. But as you can imagine, my greatest earnings and savings years have been in that 13 year period, of the 21 years. As it would have been for the vast majority of investors. Your 11% figure is useless for comparison.
An easy mistake to make, I'm pointing it out so you don't make it again.
Seriously, this caller was pointed out in this thread, as if his income, savings and returns were somehow unbelievable, like it was too good to be true and way above average. Now I show how I did it myself with diligence and real numbers, and now you imply my 7% is below average? You are just like the Wall Street hucksters, trying to have it both ways with the numbers!:-)
@skeptic, I used a modified Active/Passive portfolio, with 50% weighting on Extended Mkt Index (it is 25% of the Total Mkt). I also used an Intermediate Term Bond index, and dabbled in sector funds now and then. And sat in cash, when I didn't have the heart to wait for rationality to return. Today I am 80% in CDs, 12% US Total Mkt, 8% Stable Value (not Bonds).
I do my own due diligence. Brinker has opened my eyes, and speeded my learning curve. His newsletter was fun and entertaining, especially when markets were exploding. But there were many months I couldn't even open the envelope, too brutal.
I just showed you my results, and I'm not too proud to say I learned a lot from Brinker's show and newsletter. I give him credit for educating me; my teachers and parents haven't saved me from life's hard knocks either, I don't see why you all seem to think Brinker should. Anyway, I can pretty much guess at your results. Hope 2013 is a good year for you.
"yadda yadda yadda....
advertisement for spending over $3,000 on Marketimer..... yadda yadda yadda.....
Today I am 80% in CDs, 12% US Total Mkt, 8% Stable Value (not Bonds)
LOL
#1 Please tell me what Brinker model portfolio or fixed income newsletter recommended 80% in CDs and 12% in Stable Value funds. I did a search of my hard drive for 20 years of newsletters and could not find mention of either.
#2 I betcha everyone who was 100% invested in stocks who pay Brinker for timing advice wish to high hell they bought 5 and 10 year CDs back in 2008 when they were paying 4 or 5% and Brinker was screaming GIFT HORSE BUYING OPPORTUNITY.... rather than ride the market down only to now be back to even.
My conclusion: I guess you pay him for advice you ignored or did the opposite of!
The only reason he beats the market in his published returns and at Dilbert is Brinker and Dilbert ignore the QQQ fiasco.
The last time I looked, Brinker did not beat the market based on risk adjusted returns.
He gins the returns by using higher Beta funds, when you adjust for the risk exposure the return is/was below market performance for the risk ensued.
tfb
I just showed you my results, and I'm not too proud to say I learned a lot from Brinker's show and newsletter. I give him credit for educating me
What I don't get is what you are crediting Brinker with? It appears you ignored his advice, using sector funds and then went to cash which Brinker only did after the 1987 wipeout and did not return till after the market had risen substantially.
Despite attempts to rewrite history Brinker did not go to Cash in 2000, he merely reduced exposure.
I am glad you are happy, but I still don;t get what Brinker did to yo. It appears you profited by not following his advice.
tfb (who is slightly confused...)
@dancingbob, please show me where I said I followed a Brinker portfolio? My post states explicitly what I did. As for the CDs, Bob has always stated that once one achieves "Critical Mass" that it must be protected under all circumstances. You wouldn't do the same things in a bar at age 50 that you would at age 30. Why would you with your money? My wife is retired, and I want to, and if we are lucky we will have 50 years together without having to punch a timecard. I'm not putting that at risk for an extra 5% a year. But I hope you have good luck with your strategy.
Brinker explicitly advises a CD ladder for those moving out of equities, and advised against putting money into bonds. You must not have listened to the show in awhile.
@tfb, thank you for not calling me "Bob Jr." or a "child rapist" (or implying that they are the same thing). In gratitude, I will take your question at face value, and answer at face value.
Bob went 2/3 to cash in 2000. I remember quite well, after 5 years of >20% annual stock market increases. The subsequent 50% stock market slaughterhouse over the next 3 years (and 57% decline in just 15 months in 2007-09), really tempered my taste for risk. Bob talks about it on his show, and writes about it in his newsletter. Not a mystery, and there is no reason to be confused if you still listen to his show and read his newsletter.
Seriously, I did not hatch fully formed as an educated and seasoned investor. I had to learn, from academics and experiences. I will bet most of you on this board are probably the smartest investors in your personal circle; I am willing to give Brinker credit for bringing me out of ignorance, and teaching me some tools to make my own decisions.
If you are looking for a one-size-fits-all investment template, I wish you well in your quest. A 7% return over the next 5 years would put the S&P 500 at 2,100. Anybody see that in the future? What do you see? I never saw the following coming, and nobody did: 450 banks closing, AIG, Lehman, Bear Stearns, bailouts for USPS, Freddie and Fannie, GM, Solyndra, MF Global, subprime cronyism, unemployment doubling to 10% and stuck at 7%+, no Federal Budget passed for the past 3 years, the list goes on; Bob didn't see it, and why would he? I didn't see it, and none of you did either. I do not know what the future will bring and I find it scary. For the time being, I'm in cash instruments because there is no logner a correlation between the economy and equity markets, and bond money is waiting for the ax to fall. I don't know what I will do next year, or the year after.
But the one thing I know I will not do is spend $185 for a newsletter, and then cry about it when my dreams don't come true.:-)
Thanks to R.P for sending a link to this cautionary article:
Insiders have been pulling out of stocks just as small investors are getting in.
Selling by corporate executives has surged recently as the Dow Jones Industrial Average (Dow Jones Global Indexes: .DJI) hit 14,000 and retail investors flooded into stocks. The amount of insider selling has usually preceded market selloffs.
"In almost perfect coordination with an equity market that was rushing toward new all-time highs, insider sentiment has weakened sharply - falling to its lowest level since late March 2012," wrote David Coleman of the Vickers Weekly Insider report, one of the longest researchers of executive buying and selling on Wall Street. "Insiders are waving the cautionary flag in an increasingly aggressive manner."
There have been more than nine insider sales for every one buy over the past week among NYSE stocks, according to Vickers. The last time executives sold their company's stock this aggressively was in early 2012, just before the S&P 500 (^GSPC) went on to correct by 10 percent to its low for the year.
"Insiders know more than the vast majority of market participants," said Enis Taner, global macro editor for RiskReversal.com. "And they're usually right over a long period of time."
The Dow Jones Industrial Average jumped above 14,000 last week, but has been stuck just below that level since then. Meanwhile, a record $77.4 billion poured into equity mutual funds and ETFs in January, according to TrimTabs Research.
Looking at a longer time frame paints a bearish picture as well. The eight week sell-buy ratio from Vickers stands at 5-to-1, also the most bearish since early 2012. What's more, the last time this ratio was at these levels was June 2011, just before another correction in the stock market took place.
"Insiders (are) showing a remarkable ability of late to identify both market peaks and troughs," states the Vickers report.
Coleman cited insider selling in specific companies such as Cintas (CTAS), Western Union (WU) and Davita (DVA) as a reason to take profits right now.
To be sure, many traders have their doubts about using insider data to try to time the market. They cite the prevalence of option grants and pre-arranged selling plans that may skew the data negative as stocks rise.
Still, for selling to be big enough that firms like Vickers raise a bearish flag, the bulls may want to take heed.
Sucker Alert: Insider Selling Surges After Dow 14,000
Thank you JayCeezy for relating your Brinker experiences. As you said, Brinker is a great educator and provides valuable insight on a broad basis.
You were right when you said the other posters would flame you but I don't know anybody who followed any newsletter to the letter. They would be fools if they did.
You gave facts, figures and your own opinions in a fair, impartial and balanced way.
Thank you.
JayCeezy,
I echo James Scott's sentiments. Due to never having take-home pay remotely in the range of yours, my portfolio is considerably smaller. Nevertheless, your self-description matches mine: "Seriously, I did not hatch fully formed as an educated and seasoned investor. I had to learn, from academics and experiences."
I interpreted at least some of the "negative" reactions to your original post as a sort of praise for you knowing when to go against Bob's advice. As for me, I let my subscription lapse several months ago but still catch parts of his radio program when convenient to further my general education on "subjects financial."
Congrats on hitting critical mass.
"Even though he implied differently, he did indeed add GLD to Marketimer's recommended "individual issues" list in May 2009, but has never offered any guidance as to weighting or the price (and it's still there in the February 2013 issue). "
Brinker gave plenty of advice on weighting. His recommended weighting is ZERO!
If he honestly felt gold would perform better than what he recommends in the portfolios, then he would add it to just model portfolios just like he added the NASDAQ100 fund to the portfolio AFTER it crashed 75% AFTER he added it to his recommended list.
I think the only logical reason he has "hot funds" on his "off the books list" is so if whatever is hot continues up, then he can say he added it to the list back when it was lower. If it crashes or goes nowhere, like most of the individual stocks for the past few years, then you never hear about it on the radio... and they don't hurt his performance record. It is sad he doesn't post returns that include his "explore" or "mad money" stocks like I do here but you know why he doesn't post those returns...... I give the answer in the table labeled "15 Year Growth of $156,820 rebalanced at the end of each year."
Too bad people who pay money for newsletters don't demand that from all newsletter writers....
BTW, I just realized I have 15 years of documented returns since I left HP in 1998 to write about investing and create content for the internet, something fairly new back then. Time sure flies!
thank you for not calling me "Bob Jr." or a "child rapist" (or implying that they are the same thing). In gratitude, I will take your question at face value, and answer at face value.
I do not believe I have ever displayed aggressive tendencies to anyone unless I had a reason. You are answering questions and attempting to create dialog which I enjoy.
Bob went 2/3 to cash in 2000
I agree that ultimately he did move a large portion of his equity allotments to cash, but it was very, very tepid in doing so. I remember him on the air trying “to sell” it in a non-committal away. It was something to the effect of how would you feel if the market went up 10% and your portfolio only went up 7%, conversely if it fell 10% you would only lose 7% (or whatever the numbers he used were). The point I am making was it was not a very clear sell and he displayed very little confidence in his prognostication at hat point in time, But to hear it retold he was a swashbuckling financial d'Artagnan swinging in on his chandelier to warn the masses of the ensuing correction. I wish I had that show recorded because it really was a very low key approach and he was clearly hedging and monitoring his every word.
I am happy for you if you interpreted his message and acted on it in a way that beneficial to you. But he did not change allocation in a very emphatic way.
), really tempered my taste for risk.
Now that I fully understand…but…
there is no reason to be confused if you still listen to his show and read his newsletter.
Okay you use the word “and” and I fail that two headed test. I only listen to his show in occasion (usually in the summer when I am gardening) and I am not a newsletter subscriber.
I am willing to give Brinker credit for bringing me out of ignorance, and teaching me some tools to make my own decisions.
Okay, I think I get that – to an extent. So Bob educated you. Am I correct in assuming that his show provided the education and not the newsletter?
As I recall his newsletter has very little meat to it. Occasionally he will review his causes of a bear market which is useful, but once you have heard it, is there a need to repeat it? What I am trying to get at is, it occurs to me Bob could have written a book. Well more of a booklet. And summarized his thoughts – end of learning. I have seen his newsletter several times and there was no instruction on how to implement his portfolios and determine asset allocation etc, no guidance on rebalancing or tax considerations etc. There is no new learning in it. So I am wondering what the on going benefit of the newsletter is? It appears to me, you like Brinker, respect him, and I can get that. But you seem to ignore his specific advice and are your own man, so I am wondering what benefit there is to his newsletter for you?
Let me try it this way. When I got my Finance degree it worked like this. You took Principles of Finance, then you took macro and micro economics, and Money and Banking, Principles of Insurance then you took Principles of Investments, and Intermediate economics. Then you took advanced financial math and Portfolio Management and so on. What you did not do, is semester after semester and year after year is repeat Principles of Finance. I find the later approach essentially what Market Timer seems to be. You can contrast that with Barrington Asset Management (at least at one time as I no longer subscribe) which always was educational in terms of economic analysis, market commentary and expanding economic principles from several schools of economic thought. And I am not promoting this company, I am just differentiating the approach.
Well, nice chatting with you. As long as you are happy that is what is ultimately important. I just don’t see what you are getting year after year for your 185.
Take care…
tfb
Okay I am going to try this differently, because I still don't get it. Outwith violating copyright, can any Bob Brinker Market Timer tell me three substantive things Bob said in his newsletter over the last three months that you did not already know?
Ever curious,
tfb
Here's an idea for those brinker bots not yet at critical mass.
Write a book on when to ignore brinker's advice, or only take 23.784% of it. In the glossary, you can also tell people when to end the subscription and only listen to the radio, and when to re-subscribe.
You will then reach critical mass like these lucky people here posting on a nebulous, but popular blog like most other millionaires do. I'm not sure if we have an accurate count of all the millionaires here, because of brinker, or in spite of his LOSER advice.
GIVE ME A BREAK...............................
@JayCeezy said "An easy mistake to make, I'm pointing it out so you don't make it again"
First, you are correct that my 11% SP500 return is incorrect and the 9% number is closer to the mark; my apologies.
Other than that, what was my "easy mistake"? I compared your ROI to the SP500. Your "greatest earnings and savings years" will increase your balance faster, but a change in balance due to increased saving is not part of your ROI percentage.
I still think you did a great job; I just don't see how Brinker's market timing advice made much difference in your overall ROI.
-Abacus
@James Scott, thank you for your gracious reply, I think our experiences are not uncommon.
@Tex, my total income is a combination of my wife and myself, so you can divide it in two. Thanks for your comment.
@Kirk, congrats on your 15 years of documented results. I have subscribed to a number of newsletters over the years, and their utilty comes and goes as does my subscribership. Maybe I will give yours a try.
@tfb said "I agree that ultimately he did move a large portion of his equity allotments to cash, but it was very, very tepid in doing so. I remember him on the air trying “to sell” it in a non-committal away.
Not sure what that means. He made the move in his newsletter, and gave his subscribers an 'Alert'. Documented. He doesn't give away his newsletter info for free on the radio show, so if you heard his reasoning and considered it 'tepid', fine. When a caller calls with specific info contained in the newsletter, he does cut them off because they have no business discussing what his subscribers pay for on a free broadcast.
As far as "learning 3 things I did not know", what does mean? I read 10-15 PF books a year, and learn very little. Quite often it is reassuring to know that I am not missing anything, and the absence of news or change is useful, too.
You do not listen much or read the newsletter, if I read your self-description correctly. No problem, it is not of value to you. Got it. You can do the math with my own numbers above, but I've listened (and recently read the transcription here at Honey's blog) for 24 years and subscribed for 18 years in that time.
It is interesting when Bob makes an 'Alert', and interesting to read his basis for it. He doesn't always discuss it in detail on his show, and there would be no point at all in subscribing if he did. Doesn't seem hard to understand.
@abacus, “average annual return” and “annual ROI” are not the same thing. If you are unclear to that difference, may I direct you to http://www.google.com. In example, if the ROI for the 21 year period is 9%, and I add nothing for 20 years and double the existing contribution in the 13th year (in which the S&P 500 returned 1.9% from then on), the ROI is not 9% annualized.
Try it another way: in Excel, make a column with years (1998 through 2012), with respective returns in the next column. Now add $100 a year, multiply by the S&P 500 return for the year, and each following year add $100 and multiply by the S&P return. You will see, it is not 9%, but 7% (that is coincidence, as I did not contribute the same amounts each year). But the fact that it is not 9% (ROI for $1 left in the S&P for the entire period), but 7% (equally distributed contributions by year for the period) should make the concept clear.
As I said, an easy mistake to make. Please don’t make it again, now that you have the knowledge available to you.
@tfb said: "What I am trying to get at is, it occurs to me Bob could have written a book.
Really? That occured to you?
Bob has discussed this numerous times on his show, usually when callers 'helpfully' present this idea to him as if he had never thought of it before. Hopefully you know the economics of book sales are not weighted in favor of authors. In the '90s, the hardback royalty rate was about 10% of the cover price ($2.50 for a $25 book).
Bob is not obligated to give away his opinion for free. His radio shows requires sitting through paid advertising, or paying for a monthly podcast. His newsletter requires payment, for his analysis in a dynamic and challenging environment. btw, every year one has to write a check or credit card number in the application; it isn't automatic. People have to make a conscious decision to part with the money.
You are right. I like and respect him. I don't see how he can be called a 'liar' and 'charlatan' and still be on the air decades after others come-and-go, unremembered.
Thanks for the opportunity to answer your questions, and provide a real-life example of somebody that has benefitted greatly from Brinker's show and newsletter. Please have the last word, if you so desire.
@Kirk, congrats on your 15 years of documented results. I have subscribed to a number of newsletters over the years, and their utilty comes and goes as does my subscribership. Maybe I will give yours a try.
Thanks. You can send me an email and get a free sample at the link in my signature. I just added some new testimonials.
I don't see how he can be called a 'liar' and 'charlatan' and still be on the air decades after others come-and-go, unremembered.
Do a Google search for "Thighmaster" and you will see they are still selling that product from spokeswoman Suzanne Somers that I remember hearing on TV before I heard of Brinker. My guess is the decline in sales for both their products pretty much follows their usefulness at delivering implied expectations. ( I think the pitchmen for BOTH products are very careful to not make claims that would get them in trouble with the law. )
I used to listen to Brinker's show. After a while it seemed if I learned anything new it was from good callers. Then Brinker got so careful to screen callers who would show him up or talk about him missing the biggest bear market since the great depression that I have pretty much stopped listening. I'd rather listen to music when driving to windsurf of chat with buddies on my hands-free cell phone than waste the time on his show. The crashing ratings and move to a tiny radio station in the Bay Area compared to KGO where he used to be says I am not alone in this belief.
I don't see how he can be called a 'liar' and 'charlatan' and still be on the air decades after others come-and-go, unremembered.
Rather easy. Those who speak the truth about Brinker are a very, very small minority and they are drowned by those who cover up his chicanery and dishonesty. Brinker screens his calls so only those who point him in a favorable light are allowed on the air, and when a guest challenges or disagrees with him, historically, he has responded to them only when they are safely off the air and unable to respond to his statements.
It is pretty easy to stay on the air when you have a microphone and no one else does.
Consider this forum has documented Brinker encouraging tax evasion and defrauding a financial institution. And yet the readership of this blog is small compared to the sea of listeners of the radio show. So I do not find it surprising at all.
tfb
Call me a skeptic, but I somehow doubt the guy who started out with 75K in 1991 and grew it 2.5+ million today, did it from Bob's market timing advice! ;-) He probably has a very nice salary and kept adding to the porfolio.
"I betcha everyone who was 100% invested in stocks who pay Brinker for timing advice wish to high hell they bought 5 and 10 year CDs back in 2008 when they were paying 4 or 5% and Brinker was screaming GIFT HORSE BUYING OPPORTUNITY.... rather than ride the market down only to now be back to even. "
Agreed! buying CDs at 4 or 5% would have been a much better gift horse (and stress-free) compared to buying stocks on a dip before the market totally fell apart!
I suspect that Bob's subscribers will get caught in the next bear market as well.
JReality,
LOL! I was waiting for someone to post my own opinion about how that caller pulled off that neat trick of turning 75K into $2.5 million (plus fully paid home and college for a kid) in 21 years because of Bob Brinker's market-timing.
Yep, I'm betting a big salary and possibly an inheritance. added to that $75K.
... pulled off that neat trick of turning 75K into $2.5 million (plus fully paid home and college for a kid) in 21 years because of Bob Brinker's market-timing.
Would selling a worthless newsletter to goobers and geezers help?
I hope the kid finished college and got a decent job rather than just living off of the old man.
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