Honey market commentary and Brinker's stock market advice update:
The S&P 500 ended this week at 2718.37....it is up 1.67 YTD (but still about 5% below its record close).
The Dow ended the week at 24,271.41.
The Nasdaq ended the week at 7501.30
The U.S. Treasury closing yield on the 10-year note @ 2.86%.
The U.S. Treasury closing yield on the 10-year note @ 2.86%.
The all-time closing high for the S&P 500 Index was 2872.87. The closing low for 2018 was on February 8th at 2581 - that was a 10.16% correction.
Brinker remained fully invested, and did not issue a buy signal - for new money. However he continues to watch for a retest of that February low before he calls a buy signal. Right now, he recommends dollar-cost-averaging.
Brinker views off-presidential election-year corrections as possible buying opportunities. He has his Marketimer subscribers and Moneytalk listeners standing by for a "special bulletin" that the correction is over and all (spare) equity money should be invested.
In the meantime, his Marketimer model portfolios are fully invested.
Is the correction over? Did he miss an opportunity? It's still six months until the end of the year.
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49 comments:
First call: Dominic from Florida, this call isn't even that old.
I think Brinker mentioned during the monologue that we are now in July 2018, so if he's not live then he's really getting sophisticated at deception. He must have recorded the monologue off the the air a few days ago and then broadcast it today to make it appear he's live.
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Jim...I have heard Brinker insert comments like that before. I'm sure Jr has the skills to do most anything he wants for Dad.
It only makes it more sad to me that Brinker is willing to go to those lengths in deceiving the audience.
He is definitely not live today. As Frankj said, some of the calls (so far) are not very old.
But the Ginnie Mae call was fairly old because it's been awhile since the subject was allowed on air.
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Bob Brinker's Moneytalk:
May 13: Reruns
May 27: Reruns
June 17: Reruns
July 1: Reruns
If it is true that the day is full of old calls, and had an opening regarding the current date, shame on the captain of the Starship Moneybags.
I like ideas such as; Integrity, genuine, straight shooters, no BS, trustworthy, etc....
This radio program lacks these more, and more. Some of these B.B. uberfans have their heads in the sand.
Thanks for your effort to “tell it like it is”, as Howard Cossell would say.
Rice D doesn’t sound as bad as he used to compared to what this program provides these days.
Seems to me $185 is for a potential “special bulletin”. Not much more from Bob than you cannot get elsewhere.
Pavlov’s Cat
Pavlov's Cat: Amen.
If anyone is interested, I read an interesting article on what to do with your portfolio ahead of cognitive impairment. (Not that any of us are going to be there anytime soon). If anyone here is interested, I'll try and summarize the main points and forward to HB.
frankj asked, on last week's page: "Who was complaining that most sites do not tell you if dividends have been re-invested?"
Frank, read back several posts to get the context of my comment which was: when looking up what "the market" has returned over some time frame you will get different numbers. Some websites include re-invested divvies, some do not and MOST SITES DO NOT MENTION which number they are posting.
Also, read "Trees" comment following mine on that page.
Pavlov: You hit the nail on the head. I also agree that Rice has been better lately, especially by not shouting constantly. But his comments on future technology in recent months goes a bit overboard, IMO, and is a bit beyond what I'm interested in.
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WHOOHOOO, WHOOHOOO, WHOOHOOO, WHOOHOOO, WHOOHOOO, WHOOHOOO, WHOOHOOO, WHOOHOOO!!!!!!
I THINK that Google has finally fixed the issue of not sending out email notifications when comments arrive for the blog.
The line of complainers was really piling up, not that I ever thought they cared. :(
For over a month now, I've had to go into blog settings and look for comments to publish them.
Keep all fingers crossed. :)
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Frankj….I'm certainly interested - and I'm sure many will be who are not necessarily around this afternoon.
Honey: Good! Hope it sticks! Even liberals can be right twice a day.
Blogger Bluce said...
Frank, read back several posts to get the context of my comment which was: when looking up what "the market" has returned over some time frame you will get different numbers. Some websites include re-invested divvies, some do not and MOST SITES DO NOT MENTION which number they are posting.
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Bluce,
That's an excellent point.
I'm pretty sure that Morningstar uses total return data, meaning that dividends are always included in the performance figures.
For example, looking at Morningstar right now, to find out what "the market" has returned year to date:
VTSAX (Vanguard Total Stock Market Index Fund, Admiral Shares): 3.28% YTD
S&P 500 : 2.65% YTD
VFIAX (Vanguard S&P 500 Index Fund, Admiral Shares): 2.63% YTD
Robert
I don't think that we're being very fair to Bob with the compaints about reruns. While I would prefer more original content I can tell you that packaged call-in shows are not unique to Moneytalk or even new.
Currently Clark Howard makes extensive use and reuse of previously recorded content. Also, I'm not sure if there are reruns but I know for a fact that the Kim Komando show does not take calls live on the air. I think that the producers of these shows would argue that they are creating better shows by cleaning up dropped calls, bad connections and other things that happen with a live broadcast.
Years ago Bruce Williams had an airplane crash and needed to miss some shows. His producers sent out reruns to the network. After Bruce's return he bragged on air that they'd pulled off this subterfuge, apparently without informing the affiliates about the reruns.
I don't have Moneytalk ratings at my fingertips but I expect that they are down. I know that there are fewer high profile stations carrying the program. I am sure that the reruns are a factor in this decline.
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Unknown,
No one is complaining that Bob Brinker takes time off - certainly not me. Let me explain one more time:
We are all aware that Brinker is only continuing to do the program 3 times (or less) a month so that he can sell Marketimers and his son's useless fixed income rag - but we appreciate it when he actually teaches investment basics. This blog mostly focuses on presenting those lessons in our summaries of the programs.
However, Brinker is the one always warning about becoming shark-bait, and he is always blasting any real or perceived deception by his peers - on any level.
I consider deceptiveness the same as LYING. And selling reruns of his reruns without being transparent a shark attack. What to you call it?
As for what others do: Nope, they all announce (before, during or after) when a program is rerun.
Wonder why Bruce Williams "bragged on air" about pulling off a subterfuge if he didn't believe it was a subterfuge that he wanted to come clean about! THINK ABOUT IT.
OK Bluce, I get what was being said about the charts. Yeah, Robert said Morningstar puts up total returns which they do. They should announce it more plainly.
Honeybee, I tried posting on the July 1, 2018 blog, but all I could access was the previous weeks blog, so I posted there.
If possible, could you post it to the new blog?
Thanks! and sorry for the hassle.
JC
Dear Honey -
Thanks for maintaining this blog, and I'm sincere in my following question. I'm a bit confused about the participants' opinion of Bob Brinker. Seems more negative than anything, so I'm not sure why folks spend so much time on a figure they don't respect? That said, I come here to gain the perspective of folks that have a lot of investing experience, and I appreciate that, however the liberal bashing also doesn't make sense. Don't we all, despite politics, want to make a lot of dough?
Thanks again.
Simona
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Jerrod...I don't know what happened, but I published your comment as I received it, and it came here, as you can see above.
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Simona....There have been many comments that show appreciation for what Brinker teaches about investing. I have personally written about it ad nauseum.
I never censor ANY comments about Brinker - pro or con. Feel free to say whatever you want about him.
As for what you call "liberal bashing." If you have a complaint about politics, please be specific. Sometimes comments are made in response to Brinker's political preaching.
Few (if any) stock charts list total return. This is not an omission, it is because of the many dividend scenarios available.
For instance:
- Investor A wants dividends reinvested.
- Investor B wants to receive his dividends by check.
- Investor C initially wants dividends reinvested. He does so for the first two years, but then decides he could really use some additional income and thus switches to dividend by check.
- Investor D initially wants his dividends by check. He does so for the first 6 months, but then decides to switch to having dividends reinvested.
- Investor E wants his dividends by check for Q1 and Q2. For Q3 and Q3 he switches to having dividends reinvested.
There are literally millions of combinations and permutations of the above. That being the case, non-total return charts will tend to understate performance of dividend-paying stocks. As the months and years click away understated performance can increase significantly.
There are charts available that may represent total return and are labeled as such (usually with notes, disclaimers, etc.) These are most often seen on the company's website and/or on a Financial Company website. They usually take the form of a "Growth of $1,000 Invested" chart or something similar - again with notes, disclaimers, etc.
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So, now that we have that problem "solved" what do we do about inflationary effects, corporate buyouts and spinoffs and a myriad of other issues?
JC
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JC...found it and posted it above.
Honeybee,
Thank you!
JC
The "divvy" debate: On the previous page, Honey posted what the S&P had done YTD and "Anonymous" posted a larger number with references.
All I did was make the point that MARKET RETURNS, which more often than not refer to the S&P, when posted may or may not include re-invested divvies -- with usually no notation of such.
That was my only point.
Bob mentioned the date,... July first 2018 in the monologue intro. How can this be a re-hash?
Hey Simona, to your point about Bob Brinker on this website...... "I'm not sure why folks spend so much time on a figure they don't respect?" This is the same question for liberals and leftest when it comes to Trump.....ever heard of Trump Derangement Syndrome? Certain media is 100% dedicated to anti-Trump propaganda. Let it go, you lost, move on, vote in the next election in two years.
And your other point about don't we all want to make a lot of dough. I agree 100%, most of us do. The problem is once again the leftest and liberals who are hoping the economy fails and doing everything in their power to make it happen...."must resist" like zombies. imagine if Trump had even a little help from the media and leftest to get his economic agenda through it would be taking off like a rocket ship. Instead all they talk about is impeachment for ridiculous reasons and grinding things to gridlock. Thanks for the flat returns in 2018 Libs!
It only makes it more sad to me that Brinker is willing to go to those lengths in deceiving the audience.
My dear, I know you like to think of men as gallant and your Christian faith makes you hopeful for redemption in every soul; in that way you are ever the optimist.
He is no good and rotten to the core. Brinker is as deceitful as they come. I know you hold out for his redemption but it won't ever come. Brinker is the type to rob and pillage and then hold out for deathbed absolution, just one last con with eternal damnation as the stakes. Brinker's ego is such he thinks he can pull it off, likely with some more chicanery, only then it will be directed at St. Peter at the Pearly Gates.
tfb
Honey - KC's response to my previous post is a case in point.
So, charting is of little use other than to stock traders given than the income portion is missing from the return. Total Return category does include reinvestment a bit better. Investor Return such as Morningstar can report seems to be a bit better given that this figure includes all of the funds expenses and reinvestments. This is a bit closer to the true value of fund's performance. The best level playing field benchmark that I'm coming up with is CAGR. This takes real money value of a account at the beginning and end of a specific time period. That's what we care about.
I took my five funds that I have invested over the years. Tabulated the Total Returns, Investor Returns, and CAGR for 10 and 15 year time periods. It appears the biggest winner held firm across all measures, but it was a winner with wide margin. When choosing 2rd place the winners jumped around by the various benchmarks (return indicator). So, it is just easier and more accurate to reach for CAGR measure on your portfolio. This will keep it apples to apples. Yes, this doesn't include tax consequences, but that is a far more complex and personnel problem of ranking returns. Also, ranking funds based on steady monthly additions or subtractions performance impact is another complex assessment that we do care about.
http://www.investinganswers.com/education/how-invest/cagr-vs-average-annual-return-why-your-advisor-quoting-wrong-number-1996
One trick pony
Brinker's solution to mitigate market risk is a balanced portfolio. I have never heard him say what the appropriate time interval is to re-balance. Does anyone have a notion as to whether this should be done Annually, Monthly, Weekly, Daily? I understand that re-balancing in a rising market takes the gains off the Casino Wall Street table. It seems to me that re-balancing in declining market scenario would leave you with even less cash value than if you left the equity portion alone until the market bottomed out but you would have more equity shares that are worth less.
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Radio Lab....Are you pulling our leg?
Diogene: As for rebalancing there is no pat answer. Pick a time interval or, as some do, ignore time and pick a percentage of how much your AA has shifted to make a rebalancing decision, regardless of time.
Here are two links that may be of interest, particularly if you study and/or invest in stock sectors. As I think I mentioned previously, there is a NEW sector (COMMUNICATIONS) coming up in September that will have stocks from several other sectors folded into it.
Trinity Asset Management - Fundamentalis:
https://goo.gl/9WcddT
JAG Capital Management: (click link on page to open PDF)
https://goo.gl/dTQgPL
JC
Trees,
Thanks for the www.investinganswers.com link. There are many useful tools there!
JC
When I saw that MoneyTalk was a rerun, I put on Rice Delman. At the beginning of each hour, this disclaimer is stated: "Calls are prescreened and the show was prerecorded earlier in the week." At least there is some disclosure, although his format is misleading. If you miss the disclaimer, you would think it was live. Mr Brinker needs one of these disclaimers to inform his listeners when he is not live.
I have heard Bob suggest quarterly and semiannual rebalancing. This is really a matter of personal preference.
Mr Brinker needs
Aw shucks, you have got to get his name right. He likes to be called "Da Brink". That was the little pet name he created for himself under one of his many fake identities in order to push his newsletter. I also was fond of Mr Topes (another one of his many aliases).
That side, given what I wrote above you really expect honesty or integrity from this flim-flam artist?
tfb
Whatever happened to Da Brink's fill in hosts. He use to have that reconquista chick, Jimenez who was always hawking her El Spaniel investment book and the the one always pushing her books, Neale Godfrey. They seem missing in action.
tfb
I once thought Elon Musk was a genius. But after billions of dollars of government support (i.e. gifts via taxpayer "contributions" each April) I think we must ask what the endgame is.
Tesla was founded 15 years ago. During those 15 years, Tesla achieved 2 (minimally) profitable quarters.
Tesla Stock Slide Continues After Model 3 Report Turns To Disappointment
https://goo.gl/Kf9Qou
JC
Bunny Boy: You've been gone too long -- Don Lane's fill-in feminist hosts haven't been seen for 2-3 years. Last I knew they were busy doing protest marches against border enforcement. No sign of fill-ins for the absent fill-ins in either.
It apparently is more lucrative to paste together a bunch of segments from old shows and pass them off, to the uninitiated,* as brand-new live shows -- with the side benefit of freeing his ex-hosts up to do left-wing activism. Crucial work, you know.
*People who either don't know about this blog, or do, but think Honey is lying.
I recall Bob saying that a balanced portfolio over time produces roughly 84% of what the market returns are.
Does anyone know what study he was referring to?
Pavlov’s Cat
Bluce writes:
People who either don't know about this blog, or do, but think Honey is lying.
I think there is more to it than that. Read FrankJ's thread about cognitive decline, only in relation to Da Brink.
My observation is people have a hard time accepting the realities of life. They make excuses for people they somehow develop an affinity for, I do it, we all do it. But what continues to amaze me is how steadfast many people remain steadfast in their misplaced belief in the face of mountains of evidence. Aging is one of those issues. It effects vary tremendously at the individual level but is readily apparent in large statistical samples.
People want to absolve themselves from responsibility so they are either willing to pay the pied piper of market timing B.S. or listen to him attentively. I have no doubt, that though they may say they make their own decisions, internally they excuse themselves from lapses in judgement because of the witting influence of outside sources they allowed to creep in. Thus the Brinker phenomena. The reality is you have a 77ish year old man, who has never demonstrated any prognosticate ability in the first place, who obviously has his focus elsewhere, simply running out the clock on his reputation while collecting wads of money from people who are desperate to offload psychic responsibility. The man has obviously not kept current, cognitive decline is a known issue and yet people are hanging on awaiting the signal from the pied piper of flim flam. And this is in spite of the evidence that in the past he lead people smack dab off the cliff. Somewhere in here is the material for a master thesis for a psychology doctoral candidate.
The lyrics of Crispian St Peters had it right it is if they knew of Bob Brinker and market timing:
You
With your masquerading
And you
Always contemplating
What to do
In case heaven has found you
Can't you see
That it's all around you
So follow me
Hey come on, babe
Follow me
I'm the Pied Piper
Follow me
I'm the Pied Piper
And I'll show you where it's at
Come on, babe
Can't you see
I'm the Pied Piper
Trust in me
I'm the Pied Piper
And I'll show you where it's at
tfb
I recall Bob saying that a balanced portfolio over time produces roughly 84% of what the market returns are.
Does anyone know what study he was referring to?
It may be from the numbers his own website.
http://www.bobbrinker.com/portfolio.asp
Take a look at the 10 year numbers for balanced vs total stock market. The 25 year belies that, but we all know Da Brink cherry picks his facts to suit his message at any given moment.
Just a (SWAG) guess.
tfb
Bunny Boy: Good points about the followers of "The Church of Market Timing."
Balanced funds: Much has been written about their return vs. straight equities. As I recall, the point was you can get very close to market returns (over the long run) with much less risk / volatility.
Take the classic Vanguard Wellesley* with an approximate mix of 40% stocks, 60% bonds. I couldn't find current data, but from 1970 at its inception until 2015, the annualized returns were around 10%, roughly the same as the S&P BUT with much less volatility.
*In full disclosure: Being a registered member of "The Society of Investment Porn Scribblers," I have about 12% of my holdings in VWIAX.
Total Return on $10,000 invested on 8/31/76 (which was when Vanguard's SP 500 fund started)
The vanguard SP 500 fund grew to $798,859.
The Vanguard Wellesley fund: $ 526,807. (40% stocks, 60% bonds.)
The Vanguard Wellington fund: $ 736,270 (60% stocks, 40% bonds).
Fed Expects to Keep Raising Rates
WASHINGTON-Federal Reserve officials at their meeting last month signaled they could raise interest rates over the next year to a level that no longer seeks to stimulate growth, formally ending a long post-crisis chapter in which the central bank unleashed unprecedented stimulus campaigns.
In a sign of the economy's shifting fortunes, officials intensified their discussions over how to manage rates if growth accelerates so rapidly that bubbles or unsustainable price pressures emerge, according to the minutes of the Fed's June 12-13 meeting, which were released Thursday.
"Some participants raised the concern that a prolonged period in which the economy operated beyond potential could give rise to heightened inflationary pressures or to financial imbalances that could lead eventually to a significant economy downturn," the minutes said.
The Fed raised its benchmark federal-funds rate at the June meeting by a quarter percentage point to a range between 1.75% and 2%, the second such rate increase this year. Most of the officials penciled in a total of at least four rate increases this year, up from three rate increases in forecasts released in March.
The discussions last month reflected how the economy's recent strength has moved the Fed to a point at which it could soon seek to cool growth.
"Participants generally judged that…it would likely to be appropriate to continue gradually raising the target rate for the federal-funds rate to a setting that was at or somewhat above their estimates of its longer-run level by 2019 or 2020," according to the minutes released Thursday.
The minutes framed the big questions shaping policy over the next few years: Officials must determine the neutral setting for the fed-funds rate--the level that neither spurs nor slows growth--now that officials expect the economy to grow faster than is sustainable over the long run. Then they must decide how much to push rates above neutral to slow growth and prevent the economy from overheating.
In June, officials dropped language from their postmeeting statement that for years signaled the Fed's view that rates would continue to remain below neutral. A number of Fed officials said that with future rate increases, it would soon be necessary to modify additional language in the statement that describes monetary policy as "accommodative," or stimulating growth, according to the minutes.
Some officials have said they aren't looking to increase rates to a level that would try to cool down the economy because they don't want to push short-term rates higher than long-term rates, a so-called inversion of the yield curve that has typically preceded a recession by a year or so.
But officials reviewed staff research at the June meeting that offered reasons why the shape of the yield curve might be less meaningful now. For example, long-term yields could be depressed by recent bond-buying campaigns unleashed by the Fed and other major central banks.
Source: Dow Jones Newswires
frank: Ha, okay, now I had to look it up.
Wellesley, since inception in July 1970, has returned 9.7%, annualized, with a current beta of .62.
Do you know what the S&P (or total market) has returned in the same time frame? (with divvies re-invested, of course).
Bluce: I got 10.94% annualized for the SP 500 w/ dividends re-invested. From July 1970 thru Jun 2018.
Using this calculator:
https://dqydj.com/sp-500-return-calculator/
frank: How did you ever find that page? Wow, great, I saved the link, it will come in handy.
It comes just in time, per my recent complaint on this blog about never knowing for sure if returns include re-invested divvies. At least that site understands the importance.
So, my post above is accurate: "As I recall, the point was you can get very close to market returns (over the long run) with much less risk / volatility."
For the past 47 years, VWINX returned 9.7% vs. 10.94% for the S&P -- but with 6/10ths of the volatility.
Bluce, I probably found it through comments made by someone in a financial website.
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