STOCKS...BB comments: The market has been favorable for a long time....BB told John from Chicago that he thought it was fine at age 61 with 5 years to retirement to have 80% invested in the stock market. He told John from Ohio (age 47) and Brittany from Conn (age 54) that 70% in stocks was okay for them.
Honey EC:These comments that arrived after today's show may speak for a lot of listeners:
Irishcajun said:
Thanks again for hosting this site. I miss the old days of BB where he actually talked about current economic data and its effect on the markets. We heard very little today that would actually help steer economic decisions related to current markets until the very end of the show. Unfortunately, this was only a passing reference to the S&P being at 2,441 close to its all time high of 2480, and an offhand comment about world politics - not very helpful.BONDS..... BB is still recommending short duration bond mutual funds. No changes in his bond fund holdings in Marketimer.
/INTEREST RATES....Interestingly, today I heard Brinker use the word "if" when he referred to the Federal Reserve raising interest rates.
INFLATION....BB pointed out that according to the Rule of 72, inflation at 2% will cut the value of money in half in 36 years. He also reported this news: The Producer Price Index for final demand declined 0.1 percent in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today....For the 12 months ended in July, prices for final demand less foods, energy, and trade services rose 1.9 percent.
==> Thanks to dRahme, audio clip: Hour 1 - Interest Rates, GDP, Inflation
WHAT PERCENTAGE SHOULD YOU BET ON ANY ONE COMPANY.....Caller Ron from San Jose had 25% of his portfolio invested in his company stock and asked for Brinker's opinion about buying more because the company was giving him large discoutns.. After lengthy questioning, Brinker said that the question was "not answerable" - that he simply could not give John an answer to his question. NVIDIA STOCK NVIDIA Market's Hottest Stock Plunges
==> Thanks to dRahme audio clip: Hour 2 - Jamie Dimon, Wells Fargo, Caller Ron on Nvidia.
REITS AND SHOPPING MALLS.... BB said to be careful about owning REITS that invest in shopping malls. The future of walk-in shopping malls is not looking good.
Honey EC: I wonder why - NOT. Free delivery is becoming quite common and some places even offer free returns. I used to spend time each week browsing through malls with a group of "shopping buddies." But as time went on, the malls and most of the stores, seemed to cater to teens with the noise that they call music at deafening volume. This soon made the malls lose appeal for women who want to talk about bargains and gossip over lunch.
WHO CARES WHAT JAMIE DIMON SAYS ABOUT POLITICS? Brinker talked at length about how Dimon has traveled across the country and world using vulgar language to trash the United States and WashDC. Does he have any reason to complain - ya think? "Dimon is one of the few bank chief executives to become a billionaire, thanks in part to a $485 million USD stake in JPMorgan Chase. He received a $23 million pay package for fiscal year 2011, more than any other bank CEO in the United States.Dimon received $20 million in compensation for his work in fiscal year 2013. He earned $28.2 million in 2016."
NORTH KOREA....KIM JUNG UN....BB comments: I don't think he has any thoughts of longevity....because if he attacks anyone, how many days will he have left? "It's a single digit number that starts with one." So if he uses any of that stuff he's crazier than we think. I'm not ruling it out, but he's crazier than we think.
FRANKJ'S MONEYTALK GUEST SUMMARY
COMPARE DATA FROM PRIOR MAXWELL MONEYTALK INTERVIEWS BELOW
COMPARE DATA FROM PRIOR MAXWELL MONEYTALK INTERVIEWS BELOW
The venerable Charlie Maxwell was Bob’s third hour guest on the August 13, 2017 MoneyTalk broadcast. Mr. Maxwell is a global energy expert and he has been on the show often enough to have earned the complete suite of Starship regalia: coffee mug, baseball cap, money clip, briefcase, gold wings and genuine MoneyTalk Starship leather flight jacket.
Bob said that oil prices are affected by two forces: increased fracking in the US (making more available) and OPEC’s supply reductions, (decreasing the quantity). Mr. Maxwell said that was a precise description of the situation. The economics of the US oil industry used to require $80 to $100 per barrel, but American know how concerning shale oil has brought us less expensive oil. The economy has benefitted from these low energy costs.
The Keystone XL pipeline has been approved. This is the best alternative to the other ways of getting Canadian oil to the Gulf Coast where the refineries are. Charlie recounted:
- · Moving the oil from Canada to the Gulf Coast by truck. Forget about it. Not enough trucks and not the highway infrastructure.
- 20 or so smaller existing pipelines: not practical.
- By train: risky – given accidents that have taken place with spilled crude catching on fire.
Will there be a rebirth of coal?
Charlie indicated here in the US – not so much. He named all the health hazards. We are fortunate to have natural gas that will help us bridge the transition from coal to cleaner energy. Countries like India, China and Russia don’t have much choice, they will continue to use coal. Global consumption of coal will continue to increase even though it will decline here in the US. Charlie channeled Bob Brinker saying, “We’re in the catbird seat.”
Nuclear
The accident at Fukushima, Japan will continue to hurt nuclear energy development for the next 10 years. However, nuclear produces about 25% of global energy and Mr. Maxwell sees it as a “bridge source” of energy in the future. (Work stopped recently on two nuke plants in South Carolina but I think it was a due to costs).
Solar and Wind
All the best wind locations have been developed. Much of the energy produced by windfarms is lost if it needs to transported for long distances over transmission lines. He sees a brighter future for solar energy (sorry).
Global sources of energy:
Oil 32%, coal 29%, natural gas 25%, nuclear 7%, hydro 3%, all others including wood, biomass, solar and wind: 4%.
Bob asked what Charlie thought about Saudi Aramco. The guest said that Saudi Arabia dominated worldwide oil production for years, but the “end of the rainbow” is now in sight. (Editorial comment: this reminded me of the book by Matthew R. Simmons titled, “Twilight in the Desert,” and examination of the outlook for Saudi oil production, published in 2006. An interesting book.)
Caller Tom from WI wanted to know if fracking creates the possibility of earthquakes. Charlie answered that it does but he pointed out they have not produced serious damage.
Then we heard from a repeat caller, Keith who calls in from New York. Keith always seems to have an axe to grind and his tone was aggressive as usual. He ranted some about the health problems people living near windfarms experience from the low frequency vibrations of the turning rotors. He said something about the crony capitalism of solar energy projects (I agree wholeheartedly with him on this). Charlie reiterated that wind power expansion will slow down then there will be no more expansion. It will peak at 3% of worldwide energy production.
Bob queried Charlie on the prices for West Texas Intermediate. Charlie said it is now at $45-46 per barrel and should range from $38 to 50 for the rest of the year. Prices in 2018: $49, and in 2019 and 2020, $54 and $57 respectively. These higher prices reflect a lack of investment over the last few years.
Bob wrapped up at 3:52 pm.
Data from previous Charlie Maxwell interviews:
The interview got underway at about 3:18 pm but some connection problems at first had Bob filling in a little time until Charlie came on the line. The interview topics included natural gas and the interplay between it and oil here in the US, the Keystone Pipeline, the price differential between West Texas Crude and Brent Crude and Charlie’s outlook for energy in the US.
Charlie started off with a quick review of our energy use here in the US.
• We consume 16-17 million barrels a day here.
• This is down from a peak of 20 million.
• We produce between 5.5 and 7.5 million barrels a day.
• We import about 9, down from 11.5 million.
• Charlie thinks imports will drop to about 6 million barrels in the future and this would strengthen the dollar.
Bob and Charlie revisited the price difference between West Texas crude oil and Brent crude. The world price is based on Brent crude, and West Texas prices have been lower. Apparently this gap closed as Charlie predicted it would, but it has now opened up again. As Charlie pointed out on his prior ride on the Starship Moneytalk, a distribution bottleneck created a surplus of West Texas crude so this is the reason for the lower price. Charlie sees additional pipeline capacity as the way to get this oil to market.
Thomas from Birmingham boarded the Starship at its next stop and asked about the long term price outlook for oil – relating the price to something he read about the increase in the world’s population. Charlie’s answer was that most analysts (including him) who forecast future prices are wrong, but he did posit that the price of natural gas is low and that oil is 3.5 times more expensive in terms of its thermal equivalent. He said that this is a ratio that cannot exist for very much longer.
In closing, Bob and Charlie revisited the price spread of Brent vs. West Texas and Charlie said the premium (on Brent) should disappear as the pipeline is built.
From the June 2015 interview:
Charlie said the Saudis are going to allow the price to fall, i.e., not cut their production to encourage a rise in the world price. His forecast is that prices will gradually rise and there will be equilibrium 2017 to 2018. (He also said, when forecasting, it is important to do so often.) He thinks the price of oil will be at $80 to $100 per barrel by 2020.
The “rig count” is down but the new drilling rigs are so productive that the industry has been able to maintain high levels of production. It takes about 5 years to bring a new field on-stream so it is hard for the industry to know what demand levels will be that far ahead. Charlie said we need to produce an additional 7.5% (of oil) each year to keep up with the increase in use.
Some data points from the Sept. 7 2016 interview.
• In 1970 we produced 12 million barrels per day in the US.
• We will produce 10-11 million in 5-6 years (with the new technology and finds).
• Our production will flatten and then decline.
• Canada peaked in the late 60’s early 70’s.
• Even with the non-conventional oil they’re producing now, they won’t break through their previous peak.
Bill from Alaska wanted to know how the North Slope figured in. Charlie was almost melancholy in his description of how North Slope oil production is in the “depletion” stage. There are a few fields yet to be opened but production peaked at 1.7 to 1.8 million barrels per day and is now down to 900,000.
Radio Station
KKOB770
85 comments:
How do you know it is live? I am listening and he began with the normal feedin and then went into a discussion about inflation. Is there something in the details of his comments that tell he is talking about this past week's activity?
wow all that is going on and Bob is discussing cpi and inflation... comeon BB
smile
If he gives out the toll free number it is live. He does not give it out on repeat programs.
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Smile...The market took a dip last week - granted, very small, but his listeners would have sure enjoyed some comments on that a lot more than all that inflation minutia that makes no difference whatsoever - o.1%? Sheesh!
@ frankj, Thank you.
I don't think it's live today. No number was given out.
The first "caller" asked a straight-forward question and didn't get a simple, accurate answer.
Q Are the figures in your newsletter the return on the investment or are they annualized?
A He said they are total return. He did not address 'annualized rate of return' which is the preferred "Apples To Apples" comparison most investors care about.
Example: if it is June 30th and the total return was 6.00 % YTD, that's what Brinker places in his newsletter.
However, 6% for one-half year is 12% annualized. Many who read this blog understand that .... others looking for help may be confused ... today, they're still confused.
.
NOTE TO ALL WHO ARE NOT SIGNING YOUR POSTS: Please either establish and account or create a pseudonym for your posts.
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Honey and Frankj both believe this show is live and both heard the phone numbers.
Anon: In general, actual returns are given for less than 12 months. Returns for 1+ years are usually annualized -- and noted as such. Dunno what Brinker is doing, I'm not a 'scriber.
Comparing historical productivity is a fruitless comparison. We did have historical gangbuster improvements, but that can't be sustained within our current service economy. We have a affluent economy that make it possible to avoid work or work just a minimal time before retirement. We have artisan economy, a buy local supplier movement and youth that see little rewards for delayed gratification. Also, we have a Japanese stagnation economy wherein the older generation have savings and investments but out of the productive economy. The Baby Boomer generation wealth makes it possible to afford an easy path forward for their children. Meaning the fire in the belly to get wealth is a missing. Many retirees are financing their children's easy life. Not good.
Personally, my career as an Industrial Engineer was productivity. I've lots of experience within the bare knuckles push to make it happen. Great success, but this environment was industrial. My wife works at a hospital and when visiting or learning of the operations I automatically calculate the potential improvements. Funny, that this economic sector is about 1/3 of our economy and horribly expensive. Riddled with incompetence, union mentality, and low productivity. They are working on quality, but are outdated and suffer from guaranteed proceeds. We really should bust this service economy to the halls of capitalist competition. Open market solutions even to international. Our public servants should just award info to the best quality and lowest cost. Problem solved. Within this environment the truly inventive will succeed and profit. The Walmarts, Amazons, or cooperatives. Who knows?
Even more so with educati0n. Not a good time to be sentimental and traditionalists. We need to remove sports loyalty from public ed pollution. Same for the minorities that are suffering from bias or the handicapped that offer a handy excuse to continue the problem. Both groups would benefit the most with inventive solutions.
Bob is referencing Jamie Dimon rant from last month. Wonder if this is a recorded portion now.
Doodle: I hope you were listening at 2:15 pm to Paul's call on rollover vs. take the monthly pension payments. Taking the lump sum increased Paul's net worth by 45% and that seemed to do it for Bob. Paul had $1.3 million in assets, plus $400K in paid-for real estate.
Honeybee and Frankj, thank you both for your explanation. I was thrown off by his choice of topics considering what was in the financial news this week. But it is his show, so....
Honeybee hopefully this pseudonym meets your needs. If so, I will not use the 'anonymous' tag in the future.
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Irishcajun....As long as the handles are rated "family channel," anything is okay with me.
I will have to think abut that one for awhile to make sense of it. :)
Our education system within history is laudable. Within modern history laughable. Most public institutions are polluted with politics. The public is still thinking "Little House on the Prairie" modesty. They're thinking public ed is virtuous. That the school is supported on donations. The truth is usually far from this. But, we need to understand every school is different. The public should be better informed of the truth. They may be outraged or sympathetic. Not that the employees are evil, far from that, if their is felon and their usually is the "system" is evil and evolved to a very corrosive solution to education. What to do? Form a panel, write your politician. run for public ed, or just pull the plug and send your kids upon different path. I think we should some of the above and to direct inheritance away from public institutions that only work to cement the problem. Instead, direct your wealth and talent to competitive solutions. Capisce.
Did the current caller not just ask a question paraphrased to be 'How can we know the actual rate of current GDP growth when the government essentially plays fast and loose with the figures and calculations ?' ? Then Bob said he agreed with the caller's query basis and proceeded to answer another different question (his own question) which was, Why do government officials tout now unreachable levels of GDP ? . Unreachable that is due to low population growth and the other factors Bob then recounted
BB refers to the clowns in DC that claim the economy can grow more than 2%. BB has no clue on the caustic effect of onerous regs. The caustic effect of federal income tax avoidance, employment risk, environment regs, health care costs, and retirement funding. These are the major risks to competitiveness. These laws work to thwart common sense decision making. If ever our politicians would truly work behest the benefit of the working we would experience a catapult effect. We would be advertising for Green Card employees to propel the economy. Notice, these Green Card people are foreigners and care not for the U.S. I salute them and thank them for their hard work. Notice these stupid regs are promulgated by lawyers living upon DC government wealth. Need I say more?
The current caller with the very annoying sounding voice is a regular, conspiracy theory, radio show caller, at least in the Chicago area.. I believe he and his other theories have been stepped on by Brinker in some of his earlier shows. Bob courteously though bowed to his guest on this call.
Charlie Maxwell was on Bob's show about 2 years ago and went on about running out of oil, crude prices were going to go up, oil company prices going up. Those who invest in sectors and acted on his comments are regretting it. He missed the impact of fracking and today is on again talking about the decline of oil prices due to fracking. I missed some of interview but didn't hear anybody - particularly Bob- call him out on his completely wrong forecast not so long ago. Bob has a responsibility to his listeners to do so. Tell me if I missed something.
Dr. Bob
Honeybee,
Thanks again for hosting this site. I miss the old days of BB where he actually talked about current economic data and its effect on the markets. We heard very little today that would actually help steer economic decisions related to current markets until the very end of the show. Unfortunately, this was only a passing reference to the S&P being at 2,441 close to its all time high of 2480, and an offhand comment about world politics - not very helpful.
There used to be discussion that was, it seemed to me, largely based on data from his newsletter that referenced what was actually happening in economic markets. It was timely and relevant. Maybe one day this will return to the show. Until then, I will have to pass.
However, I will check your site. Hopefully this helps you in some way. I appreciate your work.
Irishcajun
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Irishcajun...Thank you for your excellent comments. You put into words exactly what I am thinking as i go back through my notes and the tapes, looking for anything interesting or educational enough to spend time writing about.
I will be adding your first paragraph to the Summary. I think there are many readers who can relate to it.
Dr. Bob:
I've saved my interview summaries and maybe this week I'll go back thru the previous Maxwell interviews to see what he predicted in the past.
Somewhat anonymous: That caller you mentioned is "Keith," who is from Rochester NY (nearby) and sounds like he is constipated. I've heard him for years (20+) on various talk shows, and he still seems to have "issues." Calling talk shows and speaking with his teeth clenched seems to consume his entire life.
Dr. Bob: Yes, Charlie Maxwell -- a disciple of Algore -- one of Bob's perennial favorites. He's about as good at predicting oil prices as Bob is at predicting stock prices or interest rates. I believe I heard him say that oil was going to start running out (or prices would skyrocket) "in the twenties." Did I hear that correctly?
And the circus continues . . .
For the most part, I try to adhere to the 4% guideline with respect to ownership of individual company stocks. However, I remain steadfast with two (2) issues AMZN and MSFT where my percentage is 6.5% and 8% respectively.
Gabe
Thanks for the input . I intentionally make it a point to not remember the names of callers, especially the ones that grate on my eardrums. Probably a fake name anyway.. I have heard this Keith person repeatedly over the many years in the Chicago area. If memory serves me, he was also a regular annoyer on the Alan Colmes Radio Show...That voice and his odd comments could have in no way helped Alan's prematurely shortened lifespan.
Thank goodness nobody ever married an industrial engineer because BB's "over-vs-under" compulsive-wagering tease would've ruined their marriage.
To wit, the wife loves the true odds (she's a gambler) such as America-20, North Korea-0.
So if BB loves gambling as much as he says, his fantasy over-under number seems to be much less than "one", and he's placing all of his free-play coupons at Texas Station upon it, for a one-roll bet. That's how they do it in Philly.
Gotta shake his hand, 75 years young, pissing people off and not afraid, I'll buy the next round.
Judd
We need to view public comments from the perspective of PC popularity. Business has learned to salute the PC culture for the bottom line. This phenomenon occurred maybe over a decade ago, per a change in Left strategy. Millennials are big on this and may provide the juice to contaminate society thinking skills. No public figure will tell the truth anymore. I was reading a Tesla review of future sales penetration of the battery car. Only glowing reports within media as the activists demand this news version. Off the record CEO's are projecting and aligning investments with out such hype. They are quietly placing capital to the best low risk use for the future of company.
So, BB guest is just spouting or reflecting back what the activist whom run the PC culture want to hear. The guest will not get in trouble for poor performance and with poor performance will be invited back often. Notice that Buffet does likewise and will attempts to appease the activist anger as well. He will follow the PC lead and tell them what they want to hear. Thank goodness we have some that will bear the anger and inform the public of a different version. They pay a high price for alternative speak. Jamie is one that speaks up. What he speaks of is obvious to most that know better, but lack the courage to fight back our corrosive PC culture.
I went to a Fidelity advisor meeting last year per wifes employment at the local hospital. Not much to learn, actually turned into a mutual discussion of investment strategy. Funny, he said that I would not believe how naive and incompetent almost all of his clients were. Sad to hear that most citizens are just floating about and work hard on facebook popularity. We have created a environment within the country where most think they have no responsibility for wealth/income, retirement, and health costs. Our education system and information pathways are just so inept; a disgrace. The most important skill development for clear thinking missing. The ability to rationalize and scrutinize. Objective thinking, wealth generation, healthy living, and moral code to enrich life, all gone.
SpaceX is poised to launch an unmanned cargo ship toward the International Space Station Monday, including a super-computer that could direct astronauts on future deep-space missions.
The liftoff of the Falcon 9 rocket, carrying the Dragon cargo ship, is planned for 12:31 pm (1631 GMT) from Cape Canaveral, Florida.
The weather forecast is 70 percent favorable for launch.
The mission is the 12th official trip for SpaceX, which has a $1.6 billion contract with NASA to supply the astronauts living in orbit over 20 such back-and-forth journeys.
About 10 minutes after launch, the rocket will attempt to make a controlled landing back on solid ground at Cape Canaveral, as part of SpaceX's ongoing effort to re-use rocket components after each take-off.
If Monday's launch is delayed for any reason, the next attempt would have to wait until next week, due to a spacewalk planned for Thursday by Russian cosmonauts, who will deploy a series of satellites from the orbiting outpost.
- Complicated cargo -
The Dragon is packed with 6,400 pounds (2,900 kilograms) of supplies, including a sophisticated super-computer made by Hewlett Packard Enterprise (HPE), called The Spaceborne Computer.
The goal is to test the computer for one year to see if it can operate in the harsh conditions of space, about the same amount of time as it would take for astronauts to arrive at Mars.
As astronauts travel millions of miles away, communications will become increasingly delayed. Messages from Mars to Earth would be delayed from between four minutes to 24 minutes one-way, depending on the distance between the planets, according to the European Space Agency.
"Such a long communication lag would make any on-the-ground exploration challenging and potentially dangerous if astronauts are met with any mission critical scenarios that they're not able to solve themselves," said HPE senior vice president Alain Andreoli in a statement.
The new super-computer aims to provide "sophisticated onboard computing resources that are capable of extended periods of uptime," he added, describing the year-long effort as "the first step in that direction."
Another experiment on board is designed to help scientists study Parkinson's disease in greater detail in the hopes of finding better treatments for this degenerative disease.
Un-impeded by gravity, protein crystals can grow larger in space, and scientists hope to use this environment to help them understand an important protein in Parkinson’s disease, known as Leucine-rich repeat kinase 2 (LRRK2).
([url=http://www.zx-printing.com/prices/booklet-printing/]booklet printing[/url], [url=http://www.zxprinter.com]printing in China[/url]).
Until now, this protein has been difficult to study in Earth, according to researchers at the Michael J. Fox Foundation, which developed the research project.
Other experiments on board include a stem cell investigation for growing new lung tissue, and equipment for growing vegetables in space.
I thought Brinker's comfort limit for owning stock in the company you work for was 10%. Then he would talk about selling down until they got to 10%. I didn't listen to the call, but I don't understand why the question was "not answerable".
I would advise Ron to determine what % or $ amount he is comforable with, then sell down to reach that level. Continue to buy at the maximum allowed to take advantage of the discount, but also sell periodically to remain in his comfort zone.
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Les...I really recommend listening to the audio clip rather than speculating and reaching conclusions of your own instead of knowing exactly what was said.
I cannot do any more to bring total accuracy to you....
Could someone please post or point me to (other than MT on Demand) the audio clip of the entire call where Bob was discussing why GDP growth could not reach the goals touted by some in Washington? I am particularly interested in the caller's actual question and how (I believe) Bob , intentionally or not, misinterpreted that question into something that he would rather answer.....I think that call was near the end of the show's first hour.
I believe one should consider using Bob's advice merely as a guideline. Bob has made some solid recommendations over the years that I have followed, only after checking other sources, that have made me a bunch of bucks. I have followed him for about 30 years or so and credit him for reaching critical mass many years ago.
I own AMZN and MSFT well above 4% I attempt to sell small chunks into a rally if they go beyond 10%. or so. Same holds for AAPL. Too, I did not take his advice and buy QQQ....very lucky on my part. I will speculate on various stocks and funds just to make "investing" interesting. This goes contrary to his advice.
Just my thoughts.
Gabe
From Honeybee + Frank MT Summary:
INFLATION....BB pointed out that according to the Rule of 72, inflation at 2% will cut the value of money in half in 36 years.
I think BB may be confused about the Rule of 72 (or perhaps he is a financial calculations genius and re-engineered RO 72 to suit his purposes).
Instead of RO 72, it seems to me that he is using some modification of a FV (Future Value) calculation.
------------------------
The 'Rule of 72' is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors can get a rough estimate of how many years it will take for the initial investment to duplicate itself.
For example, the rule of 72 states that $1 invested at 10% would take 7.2 years ((72/10) = 7.2) to turn into $2. In reality, a 10% investment will take 7.3 years to double ((1.10^7.3 = 2).
JC
Yes, I would have to agree with Honey in that it would be a good idea to listen to the audio before commenting. And for me, this is the first time in my life that I have ever used the word 'conundrum' in a sentence because I'm not sure what I would do either but....leaning towards selling a few of the most tax efficient lots to keep the percentage allocation down while buying the heck out of those opportunities which were at first glance a flat steal - be an idiot not to at least look at that.
What an opportunity and what a conundrum.
Oh, and I would also agree with Honey in that those who can't seem to get past the moniker 'anonymous', try growing a pair. Might just help with your self esteem.
Honeybee,
Thanks for your reply and sorry for not listening to the audio first.
It makes a lot more sense to me now, but I still don't see it as that complicated.
The nVidia ESPP is much more generous than what I had available, but he just needs to break it down into it's components.
The shares that have met the holding period requirements can be sold at any time without affecting future purchases.
These holdings can be considered like any other long/short term holdings of company stock with a known basis and tax consequences when selling.
He has already reaped the benefits from the plan and now he's just an investor with these shares.
These I would suggest he sell down to a comfortable level.
The shares that haven't meet the holding period are at risk until the end of the holding period.
That's just part if being a participant in the ESPP.
If he wants to lock in gains, he can try to lock in gains by buying puts or selling short in a separate account until the end of the holding period.
Just saw headline on fox business: "NOKO on standby to launch"
not seeing this at other cable news spots - yet so maybe "fake news" or maybe ahead of the game?
smile
Looks like fox business was ahead of the game other cable news orgs. are now reporting KJU has reviewed plans to hit Gaum. US defense secretary says game on if they launch against the US war will escalate quickly - if they launch against Gaum we will shoot the missiles down.
this scenario already spoke about in prior thread.
smile
This is purely gee-whiz intel for the Brinker geeks out there.
The Marketimer is delivered with the subscriber's account number displayed above the name. I started back in 2003, so my number is roughly 50,000.
The other day, my mailman put my neighbor's mail in my box by mistake which included my neighbor's Marketimer. His account number was higher than 100,000.
So, a few head-scratching questions were generated, such as: Did BB start the original subscriber numbers at 001 or did he juice them with a higher starting sequence to avoid being viewed as small time?
In 14 years, did he enjoy a doubling in the number of new subscribers, or did he boost the numbers by throwing a 100k digit in there just for fun? A dedicated self-promoter might want to invent some higher numbers just for the wow factor.
To gauge his windfall, one might be tempted to multiply the highest subscriber number by $185 yearly to determine the potential revenue stream, but that wouldn't be accurate because many original takers have probably dropped dead from old age, and the "over-under" in Vegas says that he's had a few subscriber cancelations over time, so don't get lulled into that fool's errand. Doing the simple math, 100,000 times $185 is $18,500,000.
Obviously, there's a million "what-ifs" brought forth by my mailman's error, but don't let it turn into a clown show and or he might suggest that you give yourself a pat on the butt. Can't have that.
Wayne, White Fish Bay WI
I keep hearing reports that North Korea has plans in place to attack Guam. Well. we have plans in place to attack North Korea. We probably have plans in place to attack Iran or even Russia if we would ever need to. Just having plans in place does not mean they will ever be carried out. KJU would be a fool to try it. I think any conflict with North Korea would only have a very short term effect on the stock market. As Bob Brinker hinted, KJU and his missiles could be totally neutralized in a day or two so I sense Brinker is not too concerned about any prolonged market decline due to war.
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Wayne, Really enjoyed your report on how Marketimers might be numbered.
I'd say that 100,000 number is probably closer to the real number than your 50,000 is - even back in 2003.
China has indicated that it will retaliate if the USA initiates attacks , especially nuclear attacks, against NK. Can't blame them when I look at the map of that area. This is yet another great reason for us not to militarily attack NK, unless they actually shoot off more than their big mouths at Americans . I do agree with Brinker though that the N Korean leadership, no matter how screwed up, is not suicidal.
I have had two separate Marketimer subscriptions over the years. The earlier account was numbered in the 400 thousands. The current account is in the 100 thousands. Those may be just be randomly generated six digit account numbers.
Regarding subscribers' account numbers:
I remember an Andy (Loony) Rooney bit about credit card numbers.
He went on an on about how the number of digits in your card number (16 on mine) is greater than earth's population (at 6-7B), which is only ten digits long. Even if everybody on the planet had the same brand of card, there would be no reason for any account number to be more than ten digits long. And then there is the 3-digit security code on the back of the card.
The takeaway is that account numbers don't necessarily mean anything to us, and probably aren't a simple sum of the number of customers.
Not that Brinker is incapable of sleight-of-hand tricks. We know better, lol.
That's my story and I'm sticking to it!
Wayne said:
The Marketimer is delivered with the subscriber's account number displayed above the name. I started back in 2003, so my number is roughly 50,000.
Wayne, That's just a subscriber number right? It isn't their actual account number is it? I thought that's supposed to be a secret. If that's an actual account number then any postal worker or anyone who sees the label can write down the account number and use it for free online access.
China will not attack the U.S. as were the hand that feeds them. Also, no need to nuke NK as the "country" is not the problem. Meaning it does come down to a fat boy whom inherited dictatorship. We would just go after him and maybe some command and control. Also, one has to be honest upon the consequences. One can't fake.
The last hour guess, Charlie, and his evaluation of our energy status. There is a few things he never brought up that play well into our future. Oil is not the sole energy source for transportation. Oil will not approach the monopoly status of yesteryear. We will not see outrageous spikes in cost and loss of supply. First the drilling technology will be exploited internationally. We continue to discover accessible reserves, improve alternative energy, and increasing efficiency. These events are pulling ahead of population growth consumption. For example biofuel continues to increase production, improve efficiency, and lower costs. These guys would love $100/barrel oil again as they would open the floodgates. We have 1-2 billion tons of cellulose feed material within U.S. and each ton equals about 100g ethanol. Think of the huge land mass that would benefit from active management around the world and the feed stock they could produce. Ethanol and biodiesel both are proving to be superior fuels for transportation needs.
Hydrogen continues to be the key to pollution free energy. Remote wind turbines become more efficient and cost effective with hydrogen production. Much R&D directed to the solution of hydrogen economy. Auto companies are getting excited of the spectrum of improvements. Nuclear, coal, biomass, and solar can all produce a percentage of hydrogen. These solutions are being pushed and researched, but will not become common until oil starts to shoot to $100/barrel.
Nuclear appears to think the SMR is the low cost solution for fail safe energy. This could replace most grid power generators. Hydro could easily double production if we needed. Many dams are constructed solely for recreation and go unpowered. Modern CAM turbine design can custom engineer for the low pressure. Dam siting software is light years ahead of the old way. The software minimizes disruption and maximizes usefulness of power generation.
Solar continues to improve on site power production. With low wattage devices, more powerful and long lasting batteries, and those that enjoy cheap natural gas; households are now capable of off grid power parity costs. Since many households invest in backup power, the off grid choice will only continue. CHP generation of power and heat actually currently cheaper than grid power. We have much technology directed to this and we will see clever solutions.
No time in my history has the U.S. been sitting on so much potential. I do think the one constraint of this bright future would be the Venezuela Hugo Chavez thinkers among us that want to bring the U.S. down. This is just more of the same social justice (Marxism) polluted thinking when one feels left out of achieving gains. This blends in with axing any attempt to improve our institutions that offer some benefits to the politically powerful i.e. education, healthcare, retirement investments, housing, and food. Big corps are attempting to milk the cow as well while the getting is good. Probably the best solution is term limits.
Good news on the retail front but the Market haas not reacted (so far).
Gabe
Yes, I stand corrected. Upon further review, my account number is roughly 500,000 and my neighbor's is more than 1,000,000. Just multiply everything I said by a factor of ten.
And yes, the number displayed on the envelope is the actual account number. Not very secret.
Wayne
Looks like we are headed towards a stalemate on N. Korea IMO. Back to KJU continuing to develop his nuclear arsenal and US via UN resolutions imposing sanctions, and China still on the one hand then the other publicaly against nuclear NoKo but behind the scenes double dealing. I heard NoKo is about a year out with reentry ICBM technology still to go and maybe further improvement on miniaturization. Preemptive strike is not rational on either side. If it was easy it would have been done on stopping NoKo nuclear. US would win any war w/ NoKo but not without major deaths in Seoul thus the stalemate. The war of words was a silly exercise since it comes down to real lives being at stake on many sides.
Guam as a targeted miss maybe off the table - it would only be a finger in the eye without a real point so rationally speaking would be missing the point. Wait to see if KJU is rational actor or lacks discipline towards his objective of being full fledged nuclear capable.
stock market implications of all this should be nil going forward.
smile
Wayne said:
"This is purely gee-whiz intel for the Brinker geeks out there."
Wayne/All:
The correct way to solve the BB subscriber problem (given the data that Wayne supplied) is to apply The Rule of 72.
This is the only way that one can arrive at an indisputable solution.
JC
PS: I think Bluce and Bacon Boy are cranking up their respective computers as I write this.
PPS: Bacon Boy, How are you coming along with your development of BaconBoyCoin? Do you have a launch date set? It sure would help us solve these complex math problems much faster - and make some money while doing so!
AAPL closed higher in a disappointing Market!
Gabe
Jerrod: Whoever told you I have a crank on my computer was lying to you.
I got rid of the crank last year.
But as for our Beloved Bacon Boy? Who knows . . . ?
The header on this web site says Brinker Fan and Critic Club. Ok, I'll take the bait.
I listen to the guy's radio show and enjoy it usually, especially when chopping through the homemaker's overgrown hobby jungle. The radio is a great escape mechanism.
But I'm always frustrated when Mr. Brinker talks so obtusely about the cause and effects within the bond market. Why won't he dumb it down a little for me so I can understand?
On Sunday in the first hour he said the Fed had a big drag on interest rates because they "bought a trillion and took them out of the market". What does that mean?
Do I need to hire a financial advisor just to explain what Brinker said? What is this, some sort of amusement park shell game?
Brinker was always so critical of Greenspan for talking in obscure riddles, but now he's doing the same thing. Can anyone please explain what the quote above means regarding the function of the bond market? And, should I buy some now or buy later?
Thank you,
Troy
Troy....The Fed was interested in keeping interest rates low. In Sept. the Fed will being to sell treasuries, albeit slowly, perhaps $10 billion a month or so in oder to raise interest rates to their target of 2%.
Gabe
Troy,
It is simply a matter of supply and demand. When the Fed buys a trillion in bonds there are fewer bonds available to regular investors so that keeps the price of bonds at higher than normal levels. When the Fed sells them then eventually there will be more bonds available than investors really want and thus prices of bonds will go down. It's sort of like Warren Buffett buying a huge number of shares of stock of a company. When he make a big purchase then fewer shares are available for regular investors which drives up the demand and price.
On a different matter it looks like Brinker made another indirect criticism of our President on Sunday. He started talking about GDP and he was saying how we need immigration to support a higher GDP. As many of you know President Trump has proposed curbing legal immigration and making it merit-based which seems to make a lot of sense to me. It seemed like Brinker does not want it that way however. It just seemed to me as though Brinker would like to see it kept at current levels along with the cheap unskilled workers.
What to do? Risk evermore per overvalued equities until any hint of economic slowdown? Keep at least one foot in? I've read the biggest threat is over zealous fed, but I can say our nation is flaming with political threats, that most economist steer clear of as it is unmeasurable. We have a CIC that could do much good, but he is taking on the swamp and that may be a feat that is just out of bounds by the current powers on both sides of the aisle. The swamp may just prefer to bring the country down for their selfish interests. The attitude is to prefer and cheer on any opponent that can do harm. We know if this foments a serious economic setback, politics can seize the day and maybe rule for decades. The swamp doesn't lose. I see little light busting through the business as usual DC regime. Most are doubling down on proven pathways of political wealth. So, while short term this will do little per investors whom have grown callus to political antics, I do believe they might cause much harm and especially long term. If we can avoid such poison, the country should pull ahead and enjoy prosperity. Unfortunately, I've had many a discussion with the younger generation and feel a bit queasy about their solutions. Since I probably have 10 years of good retirement left and 20 for lifespan, I'm getting selfish and conservative. I do not want another 60% loss experience upon the markets. I don't want to experience a 20 year stagnation that a lot of economist think is in the horizon. I have more than enough $ for my retirement and enjoy equal wealth in real rental estate. No not riches, but better than I am accustomed to or need. So, I'm thinking what's the use to keep 83% in mutual funds? I have a Scott trade annual meeting and will discuss this. I thinking my financial acuity and crystal ball is not that great and looking at VWIAX to do the heavy lifting per retirement savings security along with a modest stable growth.
I think what Troy is asking about is how did the Fed's purchase of bonds result in a drag on interest rates. By calling it a drag I think Bob meant they kept interest rates artificially low. If they bought a trillion dollars worth of gov't bonds and took them out of the market it means they weren't available to trade.
No trading means no "price discovery," fancy term for the process of figuring out what something is worth when buyers and sellers agree on a price. So the bonds the Fed owned weren't going to go either up or down in price as a result of the market activity.
That's my understanding, if someone has more info, please jump in.
Trees: would you please use your "enter" key to create paragraphs? It makes for easier reading.
What frankj said about making paragraphs.
Also, trees: You should have an asset allocation that you are comfortable with no matter what the market does. There are online sites that can help you set it up.
If you have enough assets for life, then yes, a few balanced funds like VWIAX are a good choice -- pretty much set and forget. Or if you want to stay active, at least cut your equities back to 50% or even 40%, and put the rest in short and intermediate-term bond funds/ETFs, ideally spread out in Treasuries/corporates/gov't agencies/mortgages, and maybe some foreign bond holdings.
This is what I have done, and everybody/every website will have slightly different suggestions (because the future is unknown) but I think this is pretty much boiler-plate stuff.
Will probably not see another interest rate hike till 2018.
Gabe
Dr. Bob, glad someone else noticed. I still have that interview from 6/21 2015. I understand the market changes but he was way off. He predicted by 2017 2018 there would be more demand than supply, and by 2020, we'd be looking at $80 to $100 oil again.
Well, the Market died at the end! However, GOOGL was up 0.66% . Not too bad a showing.
Gabe
I wonder if Bob will say anything this weekend about the Henderson, Nevada American Legion Baseball Team winning the Legion World Series Tuesday night.
Thanks for the advice and I will split into paragraphs. I need to let the comment sit for a bit and edit. My thinking process flows while typing, but only in my mind.
The Scott Trade meeting was a dud. Any financial advice seems to be directed to asset allocation. Sure this has value, but I would not pay for it. The Lady wanted to sell a Scott Trade service to diversify holdings upon multiple funds. Basically, to cover every sector for max security. Since we have no certainty of which sector will preform or lose, cover them all. Scottrade can only subcontract the service. See was tight lipped on recommendations. Basically inferring this info was fee access. She didn't know much about taxes, the benefits of HSA, benefits of 1031 exchange. She explains the benefit of diversified fund, but could not explain why Fidelity Contra beat Dodge and Cox over the long run. She claimed D&C is better as they are better diversified. I explained I had both for 20 years and Contra was performing far better on the downside and upside. I said when you buy a fund, it is all about the manager's talent. She was totally lost on this point as the fact is not a saleable point for her. She was desperate to discuss the matter with my wife whom is retiring with 403b assets. This is always a red flag for both of us. When salesmen demand to sell to couples, they are planning on emotional force.
My strategy continues to convert 403 into IRA, go to Fidelity account, spend down IRA money before taking Social Security and since we have good genes and health habits to take SS at 70 since the delay is very attractive return. To continue with rental property operation since it has good return and valuable for income diversification compared to the selling with the incurred tax hit. But will sell the harder to mange property per 1031 exchange to one or two rental homes. Convert those to private household and vacation home after 2-3 years probably at age 70. Let these , eventually, go to inheritance. Keep the most lucrative and easy to manage property for income and personal interests as that it appears retirees like such activities. Cash out of personal home and locate to desired retirement seasonal locations per the 1031 exchange properties.
It does appear to me the secret to good investment growth is to minimize risk and ensuing loss in down turns. Just about every boat floats within a rising tide. True some much faster but the best funds and investors have the ability to change or get out within a little better time period than passive go for the ride long term investors. This is extremely hard to do and comes with much risk or luck.
Since I have no confidence to do such within the six year critical need I'm leaning on an active mutual within the best I can review/rate for my personal needs. The Wellesley fund still has a bright shine for my needs. I feel secure enough with this investment to keep the 2 year suggested cash on hand for retirement within the fund. This alone will help the return. It's a simple plan, but as all plans needs updated diligence/review.
Victor said...
Is it just a coincidence that Nvidia jumped on Monday after Sunday's Moneytalk? I think not.
Trees: If you read articles/books by Larry Swedroe, Burton Malkiel, Wm. Bernstein, etc. you will see that evidence shows that something like 80% (going from memory) of fund managers do WORSE THAN THE TOTAL MARKET.
And the next hurdle to jump is: You don't know ahead of time which of those 20% will beat the market. Only in the rearview mirror will you know. And then it is largely by luck -- they happened to be in the right stocks at the right time -- because after beating the broad market they often underperform the market for years afterwards.
In the long run (5-10+ years) timing in/out, sector picking, etc. have such a slim chance of beating the broad market that it carries more risk than just buying a total market index and letting it run.
All of the stuff your advisor is telling you about portfolio construction is available for FREE online. Index funds/ETFs can be bought with expense ratios of .1% or less. Anything about your tax situation, I would see a CPA -- who unlike a broker is not trying to earn a commission by selling you something.
Trees: interesting account of the Scott trade meeting. No question that advisors will home in on someone with a retirement account they think is ripe for roll over. Given the demographics this has been fertile ground for them and will probably continue to be.
Alan Blinder who has been a guest in Bob's third hour is also a regular contributor to the Wall Street Journal's opinion pages.
In today's column he says this economic expansion which began in 2009 is almost 100 months old and is likely to continue. He says the most common cause of post WW2 recessions has been monetary tightening to fight inflation. With no inflation in sight, he says it is unlikely the Fed will over tighten.
Oil shocks have caused recessions, but neither the markets nor the experts expect one. This seems to jive with Charlie Maxwell's recent predictions for crude prices.
Stock market crash? He says it takes a heck-of-a crash to cause a lasting recession. The Great Depression had roots in the 1929 crash but the Fed's actions prolonged it.
Something that undermines consumer confidence and/or business confidence could torpedo the expansion and lead to a recession. "...expansions don't die of old age -- they go on until something kills them."
The Market is taking a drubbing!
Gabe
frankj: Good Blinder comments!
Bought the 1.50% dip!
Gabe
I think we will see more "sale prices" for the rest of this month and (intermittently) through September.
Historically (during the past 20 years), SPX's two worst performing months occur during August and September.
For the time being I am staying out of (possible) harm's way. I plan to get back into the market "bigly" during Q4 (if all of the stars are aligned correctly).
JC
Since 2009 there has been a 5% pullback every year sometime during the time period from May-October so I won't be surprised if it happens.
Jerrod: Not sure about the stars, but the moon and sun will be aligned correctly on Monday -- which is my birthday. How did they know?
I found the following short video timely and interesting:
http://www.pbs.org/newshour/bb/can-online-shopping-absorb-traditional-retail-workers/
Thoughts anyone?
September and October are down months for the Market. Maybe this time it will be different! Ha!
Gabe
Honeybee, at least we aren't last. Two other states and D.C are even worse!
Of course with all the taxes that kick in next year I am certain we will be #50.
Relative value of $100 in each state
https://goo.gl/JYDJxw
New competition for THAT Bob?
Tronc, IBD Partner On New Financial Newsletter
https://goo.gl/igyrVr
M@H & B(nTB): Hey guys, where ya been? Good to see y'all.
Cali's latest about getting out of USA.
If any of you leave, don't bother coming to NYS (not that I would mind having you for neighbors) -- but it won't be measurably better than CA.
Thanks for the sage advice on holding Mutual Funds. I have a new plan of action. I posted staying with Fidelity, I meant moving to IRA and to Vanguard. Also, may continue some with Scottrade as an option.
My plan is to move from large value and large cap mutual funds. They have preformed well and moved their average returns up to look quite good, but I have had them for an extended 20 history and know their ugly side. Wellesley fund is one of the few that behave and invest on a very good flight path. It's not comparable to the market stock indexes, but is comparable to bond funds. This will be my safe harbor fund. It preforms better than most bond funds and most balanced funds. I read where using bond indexing is not as potent as using stock market indexes for investment return. I believe that. A fund like Wellesley has latitude to invest in wide array of financial instruments.
The two "W" Vanguard funds were the beginning of Vanguard philosophy and early success. Bogle discusses the relationship and learning practice. The man had to sheppard the fund years back when they needed to change investment practices. The big question is how they preform after the bond bull end? This fund is not good for long term gain. One can't give up 2% returns for stability, at least for the long term. I think the fund is excellent investment as a replacement for holding cash, bonds, and short term needs.
My current benchmark for longer term investment is SDY. I'm thinking to invest in this from Scottrade per buy the drop income averaging. If we have a correction, I'm all in.
Mad as Hell map link. This is yet another factor on the control one has on wealth. We see distortions probably from the all the social services wherein the poor struggle to live in DC, New York, or San Francisco. We should provide tax money for their attempts to live in the most expensive places in the country?
The mrmoneymustach guy really hits the financial nail for youth and struggling. He calculates the financial cost to blow money vs save. It is amazing the wealth generation over time. This roi is more than one could hope from stock market return. Warren Buffet could never achieve such a return. The public at large loses so much upon wasted opportunities and has been trained to always appeal to politics for help. Anybody, even kids, would be placed on the top tier of financial independence if using their heads.
Trees: you mentioned moving from "large value and large cap funds." It is useful to know how much overlap you have in funds. That is, if you own multiple equity mutual funds, how many of them own the same stocks? For example, let's say someone owns one of the following, an SP 500 index fund or a total US stock market fund, AND they own other equity mutual funds. Overlap is almost guaranteed.
Overlap isn't necessarily bad if the overlapping stocks are all doing well. But if things turn south, then not so good. Stocks that overlap will tend to be the larger holdings in each fund.
I reviewed the cross over for first 50% of fund investments. Not many duplicates, but the sectors match up. Altogether 25% in financials, 12% health care, 33% tech.
The over 3% investments in descending order:
D&C stock fund- Schwab, BofA, Wells Fargo, Cap One, Charter, Novartis, Sanofi, Time Warner, Comcast, Goldman S.
2% 3 months and YTD 6% Morningstar Gold .52% gross expense
Fidelity Contra fund- Facebook, Berkshire, Amazon, Alpha, Apple
6% 3 moths and YTD - 20% Morningstar silver .68 gross expense
Morningstar likes the way D&C runs the stock evaluations and consistency in doing so, funny the bottom line per my experience they drop more in sell off and as a result lose to much to make up the difference. They are rated 4 on risk as opposed to Contra's 2 for good reason. D&C has always been into financial stocks and financials seem to take the biggest hit in stock corrections unless some sector like teck is overvalued which they probably are. D&C would be good to sell before market correction and buy after sell off, as the dream of all.
All indicators point to goldilocks economy with stable financials. I've read the hit to markets will be external. Some upheaval we have no control of. Since markets are dependant on global economy, very hard to access risk other than the upside of highly valued stock will continue to decrease and the downside risk increases.
Notice my major investments have no bonds. I never had bonds. I just held up that over the long haul things will get back to normal. Now, that I must rely on investment to reach the 70 year old mark for SS I'm thinking of Wellesley to manage the risk with decent returns. Also, will slowly invest in SDY per buying drops and especially a correction. Not worried of timing, just keep it simple.
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