December 18, 2011, Bob Brinker's Moneytalk: Summary, Excerpts, Commentary and Discussion

December 18, 2011.....Bob Brinker hosted Moneytalk today..................(comments)

BOB BRINKER WELCOMED KSFO LISTENERS.... Bob said: "We want to welcome our listeners on THE talk station in San Francisco and the bay area, and that of course is the great KSFO radio. The broadcast now heard on a regular basis on Sundays on KSFO,  bringing our message to all of the listenership throughout the bay area. And we are very excited about being part of the line-up at that GREAT kilocycle factory." 

Honey EC: Bob put a nice spin on this, but listeners shouldn't be deceived.  KGO did a big smack down on Mr. Brinker. After 26 years at KGO for him to be "let go"  and his time slot filled with other talk show hosts -- rather than the all-news format that the station is supposedly going to -- probably means that Bob's ratings were in the tank. 

Also, Bob mentioned KSFO being a "great kilocycle factory." Well not so much Bob. It's 1/10 the kilowatts of KGO. Matter of fact, I live less than 80 miles away in Santa Cruz County, and I often have to listen on the internet because my reception of KSFO is so bad --  KGO always comes in loud and clear.

DOLLAR-COST AVERAGE INTO BOB'S INCOME PORTFOLIO? ...Caller Paul from Missouri said: "I've been a Marketimer subscriber for a long time. I was there in January 2000 and I was there in the spring of 2003 and I followed those. I'm not at critical mass, but I'm very, very close."    Paul said he wanted to put $100K into Bob's Income Portfolio, and asked if he should dollar-cost-average.

Bob replied: "I don't have any problem being invested in the Marketimer Income Portfolio, which is the portfolio we publish on page 7....That portfolio is yielding close to 4 3/4%....It's having a great year. I just did the performance this weekend year-to-date, and the total return was  close to 6% -- just a little shy, like 5.8. Now in today's near-zero interest rate world, that's a tremendous return.....We only have five funds in that portfolio. Yeah, I think I'm comfortable being invested in that portfolio. And I don't really have a dollar-cost-average recommendation on the income portfolio....."

Honey EC: Bob has been touting that "income portfolio" (formerly fixed income portfolio) on page 7 for the past few months: Vanguard Ginnie Mae Fund, 15%; Vanguard Short-term Investment Grade, 15%; Vanguard High-yield Corporate, 25%; Vanguard Wellesley Income Fund, 25%; Double Line Total Return Bond, 20%.    This is the first year that Bob has touted that portfolio on Moneytalk.  Additionally, he has never tracked its performance before this year, and it has not been part of  the Marketimer official performance ranking in Hulbert Financial Digest.  So we might wonder why he's touting this formerly obscure portfolio until we take a look at his two Marketimer stock portfolios. Both are underwater year-to-date. 

* On December 30, 2010,  model portfolio one valued at:  $278,330. On November 30, 2011, it was $270,779 --  a loss of $7,551 year-to-date.

* On December 30, 2010, model portfolio two valued at: $230,317. On November 30, 2011, it was $222,977 -- a loss of $7,340 year-to-date.

Honey EC2: If caller  Paul from Missouri was there in 2000 and 2003 as he said,  he must have gotten extremely lucky and somehow sidestepped Bob Brinker's special subscriber bulletin that went out in October 2000. That special subscriber bulletin told subscribers to "act immediately" and put up to 50% of the  Marketimer model portfolio cash reserves  into a short term QQQ trade. Bob repeated that advice three more times, then put the trade on hold. The trade has never been closed, but it was cleverly hidden and never mentioned again.

POLITICS...Bob talked about John Boehner and the Republican call for extending the payroll tax cuts for a year rather than two months.  He said that just 13 days from today, the rate is set to  increase back to 6.2% which will take about 10 billion dollars a month out of the pockets of American consumers -- about $120 billion a year.  Here is an article that covers what Bob spent a lot of the program talking about: Payroll Tax Talk

Bob said: "I don't think there's any  question that you will see an extension of the 2% payroll tax cut for the employee portion in 2012. Being an election year as it is, regardless of the grandstanding and the posturing that you see, that you will see that payroll tax reduction. The question is how do we supposedly pay for it...Politically speaking, it is a lose-lose to stand in opposition of an extension, especially given the economy."

ECONOMIC GROWTH....Bob said: "We saw, in the third quarter, Real Gross Domestic Product, total goods and services grew at an annual rate of 2%, and that's okay, but it certainly isn't a robust economy.....In my opinion, we're going to put up a decent number in the fourth quarter. I would not at all  be surprised to see the fourth quarter Real Gross Domestic Product number exceed the 2% number we put up in the third quarter.....Still and all, the economy is below trend in its growth and that certainly justifies continuing economic stimulus, especially in its purest forms......The pure economic stimulus is payroll tax reduction  because it goes into the paychecks on a regular weekly basis..... and almost all of it is spent because it goes to the people who need the money to spend. Instead of going to some fat cat somewhere who is just park it somewhere."

UNEMPLOYMENT....Bob said: "We see 8.6% unemployment and we see decent jobs growth in the private sector, but continuing to lose jobs in government sector. The incredible shrinking government taking jobs away from that numbers."

SAFE MONEY MARKET FUNDS....Caller Chuck wanted to know what kind of Vanguard money market fund Bob recommends. Bob told him that in the Vanguard family, he should choose between the Prime Money Market and the Tax-exempt Money Market -- both are yielding close to zero, so it doesn't matter much which one he chooses. Both funds have $250 minimum check-writing.

EVALUATING A COUNTRY'S CREDIT OUTLOOK: Bob commented that all you need to do to figure out a country's credit outlook  is look at the interest rate it pays on sovereign debt. The U.S. 10-year Treasury is yielding 1.85%.... The S&P rating service should be embarrassed about the downgrade....Since they lowered the rating from AAA, the Treasury has gone up and the yield down.  Here's a website that lets you select a country and view their benchmark yields.

BOB BRINKER'S MYSTERIOUS COMMON SENSE ADVICE....Caller Frank from Richville said that he and his brother had used Bob's "common sense advice" to help start a successful business. Bob asked Frank to tell him about the "common sense advice" because is sounded interesting. Frank explained that they had built a "milling and marketing organization" and had  "worked very hard in it for fifty years."  Frank said that he and his brother were actually the second generation because his dad had started a farm, and that now the third and fourth generation is running the show now. Frank said he leaned on Bob's "common sense advice" to "keep them on track." Bob tried several times to get Frank to tell him what  advice, but Frank never did.

Honey EC: It was very amusing to listen to Bob so desperately try to get Frank to tell him what common sense advice he was referring to. But Frank wasn't listening. LOL! 

MONETARY SYSTEM SURVIVE?.....Frank went on to ask Bob if he thought our monetary system could survive "the abuse." Bob replied:  "Well Frank, one of the really strong suits of the USA is our monetary system. And  that is the reason that I cringe when the doctor from Texas starts bashing the Federal Reserve and telling his zealots that we should abolish the Federal Reserve. Now I carry no brief  against the doctor from Texas who preaches this everywhere he goes......The US monetary system is such a fantastic system that it is adopted by countries around the world that come to capitalism....Yet the doctor from Texas that happens to be a perennial candidate for president is out there spreading this unfortunate misinformation about our monetary system. Our monetary system is good. Ben Bernanke is a  very, very good Fed Chairman. Allan Greenspan was a grossly over-rated monetary master......So I have confidence in the Federal Reserve system. And those who trash it without coming up with anything better,  are doing a real disservice to the country. I won't name anybody....."

Honey EC: Obviously, Bob was talking about Ron Paul. I have never understood why Bob plays that silly game about using names -- but only with certain people.

MORE OF BOB'S POLITICS.....Frank continued, saying that "both sides of the aisle" and he wished that we had people in the middle of the political spectrum.  Bob said: "You took the words right out of my mouth.....76% of the electorate is not in the radical left and radical right.....The radical left and radical right are now controlling congress...."

Honey EC: Better look again, Bob.

STOCK MARKET....The only time the stock market was mentioned today was when Bob read the closing numbers:  Dow: 11,866.29; S&P 500 Index: 1219.66; Nasdaq: 2555.33.

WHAT ABOUT AMERICAN AIRLINES STOCK?   Bob commented that the stock is currently trading at 65 cents, and if he was a betting man, he would lay odds that American Airlines would ultimately go to zero. He cautioned that frequently  in the last days of a bankruptcy, speculators come in with a wave of hope. 

APPLE BEAT INFLATION OVER THE PAST 20 YEARS:  Caller Ralph told Bob that he had made about $100,000 over the past 20 years out of his gold mine in Montana. He said that his  gold  had outpaced inflation, but he wanted to know what Bob thought would outpace inflation going forward.  Bob said the question was unanswerable, but that Apple stock had made "much more money"  than gold.

Honey EC:  I laughed when I heard  Bob raving  about how much money Apple stock has made over the years. Bob has a long standing recommendation on three individual issues: Microsoft, Vodaphone and Suncor, but he has never recommended Apple.

TRADING DAYS UNTIL CHRISTMAS:   Bob said to expect an early flight from Wall Street next Friday,  and the market is closed the following Monday.  The following week on Friday the 30th, the market will be open all day and that will be the last trading day of the year. There are now just nine trading days left in 2011.

Bob's guest today was Barbara Weltman, who writes for J. K. Lasser

For those in the San Francisco bay area: Bob Brinker's Moneytalk is  now carried on KSFO 560. You can listen live here at this LINK  .... For those in southern California, Bob Brinker's Moneytalk is no longer carried on KABC 790. 

KSFO has the same hourly archives that you can download and listen on the go and on demand -- for seven days -- just like KGO did.  Go to this LINK and click on "listen" then "7-day archives."  From there, it will give you instructions for either listening or downloading each hour -- 1-4pm time slots.

* IN EDIT: Someone just sent a heads-up for those in the Santa Cruz area who have difficulty with KSFO reception. Bob Brinker's Moneytalk is also carried 1-4pm on 1460kion.com

POST AND READ COMMENTS