Sunday, April 12, 2015

April 12, 2015, Bob Brinker's Moneytalk: Stocks, Bonds, Economic and Investing Summary

April 12, 2015....Bob Brinker was not live on the air, but he tried real hard to make us think he was -- twice, today's date was spliced in to the old recorded monologues. All the callers were from various old shows. (comments welcome)

THREE CALLS FROM TODAY THAT WERE FIRST BROADCAST OVER A YEAR AGO

1. Crack Blog-Researcher (CBR), Chris from ATL, said:   "I think the "Jerry from Binghamton" call was first broadcast on March 30, 2014." 

Sure enough, here is the transcription of this call from over a year ago. Note that it gives out information that is no longer true. Brinker sold all FFRHX in January 2015:
FIDELITY FLOATING RATE HIGH INCOME (FFRHX) VS VANGUARD GINNIE MAE FUND (VFIIX)... Caller Jerry from Binghamton (?) said: I'm a long time listener and a market time (SIC) subscriber. My wife and are retired and we pretty much have critical mass. Question for you is, our portfolio is -- the money is between model portfolio two and three. I kind of have a combination of both..... That leaves us with 20% in the Floating Rate Fund. Is that is conservative as the Ginnie Mae – over all these years we followed you on Ginnie Maes. I know I got weak there (non-discernable)..... but the Floating Rate, as I understand it, is a high-yield but is tied into the market rate. As interest rate goes up that fund should increase to have a high-yield. Is that correct?

Brinker replied: "I think that that would be accurate. And by the way as I said many times, we prefer credit risk at this time over interest rate risk. And that is the reason that we prefer not to be in Ginnie Maes at this time because we don't want that extended maturity that is generally found in a Ginnie Mae Fund. We like short-term maturities much much better. And the fund that you are talking about in that portfolio has a duration of only an average of three months. So that is extraordinarily low even though our overall duration is closer to one year. And we do prefer to control the duration aspect of the portfolio to minimize interest rate risk, but were perfectly comfortable with accepting some credit market risk in an expanding economy. So basically I would say yes, as rates go up the rate on the fund would go up. And this is what's most important, the net asset value of rates going up should be minimized in a fund of that nature because of the very low average duration in that fund. So that fund is giving us everything that we want in an income security at this time. A short duration, a reasonable yield, and certainly some credit risk in a portfolio, which again, in an expanding economy, I think that's the best place to be."
2. CBR Chris from ATL found a second call that was covered by this blog. He said:  "The current "Doris from Williamsburg" call was first broadcast on the Apr 20, 2014 show"   (Jeffchristie wrote the summary of this original call in April 2014)
 "Doris in Williamsburg ask about critical mass.  Bob told her that if you have assets that generate enough income to live the way you want you have reached it."
3. CBR Jeffchristie remembered caller Abraham from Albany who mentioned the "$16 trillion national debt. Take a look in the right hand column of this page and you will see that we are now well over $18 trillion national debt -- in one year! Now that is skeery!  Here is the original coverage of Abraham from Albany written in April 2014 by Jeffchristie:
 "Abraham from Albany said he attended a presentation where the speaker said the dollar was worthless.  Bob told him that was nonsense."
BRINKER'S LATEST ANALYSIS OF FIVE ROOT CAUSES OF A BEAR MARKET

Bob Brinker analyzed the five primary (root) causes of a bear market in the April issue of Marketimer.

1. Tight Money: Brinker has talked about rate normalization for over a year now. He likes to point out that the end of quantitative easing did not damage the stock market. He has said that the Fed is now interested in ZIRP (zero interest rate policy), but lately, he seems to be backing off a bit on his predictions for rising rates. He predicted that the Fed will remain accommodative "at least into 2016."

2. Rising Rates: Based on very low PCE and core inflation rates, Brinker said: "We expect any short-term interest rate increases this year to be minor.  Small rate increases would not impede the current economic expansion in our view."

3. High Inflation: Brinker said: "The incoming data continues to show a benign inflation pattern.…  As long as all of the major inflation indexes remain below the Federal Reserve inflation target of 2%, there is no pressure on the Fed to tighten monetary policy to any significant degree."

4. Rapid Growth: Brinker defines rapid growth as a rate of real gross domestic product (GDP) expansion above the historical average of 3% to 3 1/2%.  As he has said on Moneytalk, the impact of harsh winter weather is expected to dampen first-quarter activity.  He expects the full year of 2015 real GDP to be within a range of 2 to 3%.  However, he still expects the first quarter to be soft.

5. Overvaluation:  Brinker said; "Operating earnings estimates for the S&P 500 index extended $128 for 2015 and a preliminary figure of $135 for 2016"   Brinker agrees with the Federal Reserve 2016 real GDP forecast of 2.3% to 2.7%.

He concluded that the S&P 500 index has the potential to "Trade into the upper 2100s range going forward."    Brinker is maintaining his favorable stock market view, but is aware that there has not been a correction of 10% or more since the autumn of 2011.  He would regard such a correction as a "health-restoring event based on the current Marketimer stock market timing model outlook."  He still recommends dollar-cost-averaging for investing new money -- and he recommends taking advantage of short-term market weakness to dollar cost average.  Brinker's model portfolios remain fully invested as they have been since 2003.

Jeffchristie's Moneytalk Final Exam Question

Since today's Moneytalk was a repeat the final exam question will also be a repeat.

Bob Brinker calls Presidential candidate Hillary Clinton:

A) The Wicked Witch of the West Wing.
B) Evita
C) Madona
D) The Queen of Mean

ANSWER

                                                  Summary posted at 6:45pm PDT

57 comments:

Chris in ATL said...

If Bob's producers really want to mess with us today, they'll replay some of Bob's old comments about Evita...

Honeybee said...
This comment has been removed by the author.
Bluce said...

LOL @ the worthless dollar:

Hey Bob, explain it like this, which is much simpler and easier to understand than your explanation:

If "Joe" told me the dollar is worthless, I would then ask him, "Okay, give me all the dollars in your wallet and bank accounts."

frankj said...

Yeah, Chris, I was going to say if he is live then seems like he'd mention Evita's announcement today.

Honeybee said...

I won't put this in the summary, but for those of you who read comments, let me be perfectly candid. I think this is one of the dishonest things Brinker could do -- deliberately mention today's date to deceive listeners.

Just plain disgusting!

Chris in ATL said...

I think the "Jerry from Binghamton" call was first broadcast on March 30, 2014.

Jim said...

Brinker probably took the day off to watch the final round of The Masters golf tournament.

JayCeezy said...

When I'm wrong, I'm wrong! Color me humbled! Feel free to take a whack, you know you want to and you know I deserve it! No excuses, no explanations, no "but...but...buts!" I'm wrong!:-)

Anonymous said...

Hello Bob, I have a $7M portfolio and I don't know what to do with it. I don't understand a thing about finances. I've been a Market Tomer suuscriber for since the super bowl 1962 when you started. Do you have any suggestions on how to invest my 410K plan that has an additional $26M in it?

Honeybee said...

Jim....I think he has every right to take time off, but I think to deliberately take steps to perpetrate a lie (that he is live)is dishonest and contemptible.

MikeE said...

Definitely not live as I called the number and it rang for two minutes and never was answered.
MikeE

Honeybee said...

Chris....BINGO! You are so right. I went back to the summary for that date and found Jerry from Binghamton's call and Brinker's answer posted there.

Big problem is that Brinker has now SOLD all FFRHX!

FIDELITY FLOATING RATE HIGH INCOME (FFRHX) VS VANGUARD GINNIE MAE FUND (VFIIX)... Caller Jerry from Binghamton (?) said: I'm a long time listener and a market time (SIC) subscriber. My wife and are retired and we pretty much have critical mass. Question for you is, our portfolio is -- the money is between model portfolio two and three. I kind of have a combination of both..... That leaves us with 20% in the Floating Rate Fund. Is that is conservative as the Ginnie Mae – over all these years we followed you on Ginnie Maes. I know I got weak there (non-discernable)..... but the Floating Rate, as I understand it, is a high-yield but is tied into the market rate. As interest rate goes up that fund should increase to have a high-yield. Is that correct?

Brinker replied: "I think that that would be accurate. And by the way as I said many times, we prefer credit risk at this time over interest rate risk. And that is the reason that we prefer not to be in Ginnie Maes at this time because we don't want that extended maturity that is generally found in a Ginnie Mae Fund. We like short-term maturities much much better. And the fund that you are talking about in that portfolio has a duration of only an average of three months. So that is extraordinarily low even though our overall duration is closer to one year. And we do prefer to control the duration aspect of the portfolio to minimize interest rate risk, but were perfectly comfortable with accepting some credit market risk in an expanding economy. So basically I would say yes, as rates go up the rate on the fund would go up. And this is what's most important, the net asset value of rates going up should be minimized in a fund of that nature because of the very low average duration in that fund. So that fund is giving us everything that we want in an income security at this time. A short duration, a reasonable yield, and certainly some credit risk in a portfolio, which again, in an expanding economy, I think that's the best place to be."

Honey EC: Brinker sold all Marketimer Ginnie Mae holdings last July and in its place added the Floating Rate Fund. I think it's safe to assume that all of the bad publicity this Fidelity Floating Rate Fund has gotten recently has given Brinker a few headaches and he had to set the record straight about why he made that change -- especially since the Ginnie Mae Fund is up since he sold it.

Honeybee said...

If Brinker retires, I'll start a blog: "Comics for Gurus."

You guys are really great -- and hilarious -- and it feels good to laugh today. :)

Wayne from Alabama said...

Bob and his team's splicing abilities have definitely improved. Used to be, his pre-recorded shows had obvious differences in call volume and quality, background noise, etc. Today's program is of much higher technical quality. If I was uninformed, I might think it is live. The one tell tale sign is the lack of mention of the toll free number.

Honeybee said...

Wayne...I think the quality is a little better, but if you listen with it loud -- like I do in order to record it on to a tape machine -- there are definite changes.

And you are right. He never give out the numbers. Guess he doesn't care about all the people that have it written down and waste their time trying to call.

CMB said...

I'm glad Bob Brinker is a rerun today. I'm too busy doing my taxes. In fact, I've got Tim Geithner on the line right now walking me through Turbo Tax. Thought I'd sneak this one in while he's making a sammich.

jm

Wil said...

Was hoping bob would talk about GE today...

frankj said...

jm: LOL.

CMB said...

Did you know Tim Geithner likes sardines and pickled onions on rye? Reminds me of Belker on Hill Street Blues.

jm

Chris in ATL said...

The current "Doris from Williamsburg" call was first broadcast on the Apr 20, 2014 show.

Bluce said...

I'm not paying attention too much today, so I might not have noticed that this whole show was an oldie -- but thanks to Honey and this blog I now know.

And no 3rd hour guest? C'mon Bobby, even those of us who weren't paying that much attention would have noticed THAT as a tipoff.

What a shameless huckster.

Pig said...

I personally think brinker took the day off because he's still passed out on the floor at the Green Valley casino in Henderson where I've been told that he was spotted last night pontificating and sucking up the hard stuff.

My uneducated guess is that Juni spliced those bits together (such a web wizard, I might add) to trick and fool the Goobers and Geezers and Grubers. Gotta keep those subscriptions coming in, doncha know it.

You can't be out of this MOABO market for one day without Bobby's advice. (nor will you be out of it, come hell or high water, if you take his advice)

Anonymous said...


John in SFO said...

Perhaps Brinker can record some generic comments with calendar dates well into the future and his edited programs and reruns can survive long after he passes away.

Jim said...

It would have been fun to count how many times Brinker mentioned Moneytalk on Demand today.

Honeybee said...

Jim...That's probably why Bob Brinker wants the audience not to know they are listening to reruns of old spliced monologues (he spliced in today's date twice) and spliced calls.

How many Moneytalk on Demand subscriptions can you sell when the audience knows they are buying years-old calls

Honeybee said...

Pigyah....Yep, Juni managed to get his newsletter mentioned once today -- free advertising, doncha know.

Never mind the caller thought it was his daddy's newsletter.

Honeybee said...

Chris....Thanks!

Here is where that call was originally posted.

Jeffchristie wrote the summary:

Doris in Williamsburg ask about critical mass. Bob told her that if you have assets that generate enough income to live the way you want you have reached it.

birdbrain said...

I did listen during the second hour on KSFO and the first two callers were from the Bay Area. How could that be when the first hour of Moneytalk is no longer aired locally? Listening on line and calling in? Calling early and hearing the broadcast on the phone while on hold?

You can bet that Cap'n Starship reads this blog when airing repeat calls to see the feedback from his deception. Correction. Mr B is one of Honey's most avid readers every week. Even during his time off.

JohnJ said...

Thank God he wasn't live today. He would have wasted half the show with his pointless Hillary / Evita tripe.

Anonymous said...

John in SFO said...

Does anyone have "Moneytalk on Demand" ? I'd be curious to know if his recorded shows show up on "Moneytalk on Demand" before they are aired. If he and his staff are taking the day off it would sort of make sense to put the show out there as well so they can enjoy their time off without interruption and kick back until the following Sunday.

seattledoc said...

I've always wondered why Bob never improved his newsletter. I look over my stack and each one pretty much reads the same with very little new info except his initial bit about the market. I've always wondered why he never writes even a short paragraph or two about one of his handpicked mutual funds or the manager or about the few individual stocks he highlights he has listed. Dude why are they on the list again? Why should I put any money into them?

His letter is boring and reads the same month after month. Why should I bother wasting my time reading after the first 2 pages? I use it for bathroom reading but find nothing of interest for more than one or two days.

Bobby I've been with you a long time but my 185 is better spent for something like Morningstar or any of the other financial services. While nearly every financial resource improves and changes you say the same and become more irrelevant each year. You are mailing it in and it shows.

frankj said...

seattledoc:

Morningstar is definitely more useful. Also take a look at SeekingAlpha.com.

Jerrod Clarkson said...

seattledoc:

You might also want to take a look at:

mutualfundinvestorguide.com

They have monthly guides for Fidelity funds, Vanguard funds, and ETF's.

You can request a sample (or view online). The various guides are available and priced accordingly for:
- Online only
- Online plus mail

The Mutual fund guides have a lot of meat in them and cover Vanguard and/or Fidelity, as well as their respective NTF offerings.

Currently they have some special pricing available.

Jerrod Clarkson

Bob (not THAT Bob) said...

Bob and/or his Production Assistant really need to come clean on these "Best? of Bob" shows.

In today's world you just can't be too careful. For instance, what if some ISIS / ISIL (whatever) guy got burned by the QQQ call and for retribution he decides to hack into a "Best? of Bob" replay with the complete audio portion of Bob's NBR interview with Paul Kangas?

tfb said...

I've always wondered why Bob never improved his newsletter.

Why would he. The reality is most of his subscribers are cognitive defects. Here is the proof. His RECOMMENDED reading list (last time I checked) did not contain a single entry that attempted to substantiate that anyone could successfully time the stock market.

So you have a situation where a newsletter writer implores you to become your own financial manger and suggests you study his recommended reading list (which says market timing is economic fool's gold). Yet people ignore his actual advice and subscribe to his stock market voodoo letter instead of what he told you to do.

If you ended up staying subscribed you must suffer from some sort of mental impairment. Sorry if that sounds insulting, but I really don't know anyway around the fact that Brinker's subscribers are not acting rationally.

So why would he adjust his methods, it is not like yo are going to go anywhere. You already fell for the hocus pocus hook, line, and sinker.

Market timing...yeah, he has been so succesful with that.

Burt said...

It seems Brinker has gotten pretty lazy, repeats etc. I wonder if he treats his $185 letter the same? Time NOT to renew? He is starting to remind me of Bernie Madoff light.

Bluce said...

tfb said: His RECOMMENDED reading list (last time I checked) did not contain a single entry that attempted to substantiate that anyone could successfully time the stock market.

He can't do it because there ARE NO successful market timers.

I get into online debates about timing and most people who believe in this all think short term. Sure, plenty of funds will beat an index for a quarter, a year, even a few years. Then they crash and burn and do worse than the index.

Five or ten years later, they're lucky if they match their index, MINUS expenses of course.

And the bigger problem is knowing which fund might beat the index in the future. For that you need a functioning crystal ball.

It isn't rocket science, but you have to think long term.

"Buy an index fund, preferably over time, so you end up owning good businesses at a reasonable average price," says Buffett. "And that is all you have to do."

That's it? It's that simple? Buffett says yes.

gabe said...

Volatility!

Gabe

CMB said...

The Mercenary Trader thinks Warren Buffett is a big fat hypocrite. An excerpt:

'So, if Buffett were really a friend to “the little guy” — a warm-hearted uncle telling it like it is — he would be out there warning people, or at least highlighting what he sees. Right? He would be saying, with his usual mix of witty metaphors and friendly uncle asides, something like: “Hey! Corporate profits to GDP, my long-time favorite measure, is telling us something is seriously out of whack here. I’m no forecaster of short-term movements, but I know when value is present and when it is not, and valuations under such conditions (based as they are off unsustainable profit margins) are a booby trap. Be careful.”'

http://www.mercenarytrader.com/2014/09/this-corporate-profits-to-gdp-chart-proves-that-warren-buffett-is-a-massive-hypocrite/

jm

gabe said...

Anyone who dares to speculate these days will undoubtedly get whipsawed!

Gabe

gabe said...

Another day of volatility!

Gabe

CMB said...

Gabe, what are you drinking?

There is no volatility. The whole economy is asleep. For two years in a row the S&P 500 VIX has averaged below 16, which is where it is today. In 2011 it was above 40. A few points of movement in the S&P 500 like today at these levels amounts to 0.3% change, that's all. All measures of money velocity are in the toilet and stand at historic lows, meaning money isn't changing hands like it used to. Real GDP hasn't been above 3% since 2005. Credit growth is at historic lows in the post-war.

If things get any slower we'll turn into a glacier.

jm

gabe said...

Jm: I was comparing it to the 52 week low of 10.28.

I believe we closed at 12.60. It was around 13 during the day.

Oh well, perhaps, I'm too "conservative.

Thanks,

Gabe

CMB said...

OK Gabe, I see your reasoning, I'd just look at volatility from a longer term perspective than one year, that's all, by looking at annual averages. (Your conservative touchstone around 10.28 for VIX reminds me of mine for VGPMX which is 5.05 or so. Some people think Vanguard's gold miners fund is a bargain right now in the range of 9.12, but not me. There's a 50% haircut lurking in there somewhere.) I think the relative absence of volatility from the longer term perspective is a sign of settled opinion about the market (in this case bullishness). It's the only game in town, except for the horses.

jm

Honeybee said...

D Short's market summary today:

"The pre-market new jobless claims came it a bit higher than expected and housing starts disappointed to the downside. The S&P 500 dropped at the open and hit its -0.31% intraday low an hour later. The index slowly rallied back into the green, and an early afternoon rally took it to its 0.22 intraday high in the early afternoon. But the rest of the day was dominated by selling, driving the 500 to a fractional close in the red at -0.08%.

Today the yield on the 10-year Note closed at 1.90%, down one bp from the previous close."

gabe said...

Macro concerns once again (China + Greece). Here we go again.

Gabe

Jim said...

There seems to be a lot of resistance around Nasdaq 5000. I believe this is the third time recently that the market has sold off after crossing that level.

gabe said...

Today's early sell off is due to macro concerns which I believe will dominate the market going forward.

Fundamentals play a secondary role.

My two cents.

Gabe

Jerrod Clarkson said...

My gift to Gabe

Jerrod Clarkson

gabe said...

Market plunge!

gabe said...

Jerrod: Thank you!

Gabe

carl said...

anyone know where seasonal mcad is?

CMB said...

VIX watchers may want to look at this up at CNBC from last Wednesday: "This obscure indicator is a 'significant concern'"

http://www.cnbc.com/id/102586951

"On Tuesday, the VXV closed at 15.85 while the VIX closed at 13.67, meaning the ratio is now at 1.16, which is firmly in the unfavorable zone."

The ratio evidently has more short term predictive power than long term, however, as the chart of this during the bull years from 2012 in the article shows.

jm

CMB said...

Carl,

If you are referring to macd I'm showing quite the hiccup on the 10yr chart of the S&P 500, indicating sell. MACD is diverting from the signal line -16.15. But both are trending up at the hiccup. The one month chart, however, shows MACD falling off quite a bit toward the signal, but still +1.15. As they say, wait a few trading days and look at these again.

jm

MisterJerry said...

@HoneyBee: Is it Bob Brinker today (19 APR) or is it Memorex? Ha ha. He‘s waiting on you to make the call. He’s getting into your head, I fear. If you say he’s live, he will do the opposite and go into record mode. Not sure why he doesn‘t say ‘this is an archive presentation‘ when he isn’t live. Maybe something to do with charging folks for his shows with Moneytalk on Demand? He did mention today breaking business news from China.

Bluce said...

Where is everyone today?

Honey, you okay?

Honeybee said...

Bluce and MisterJerry...I answered your posts here.