December 27, 2011, Bob Brinker's Current Market Views and 2012 Forecast

December 27, 2011...Bob Brinker's Moneytalk was not broadcast on  Christmas, so here is a review of his latest stand on the various markets and his predictions for 2012:

STOCK MARKET:  As 2011 comes to a close,  Bob Brinker's Moneytalk and Marketimer views continue to be very bullish going forward into 2012.  His portfolios remain fully invested, and he recommends dollar-cost-averaging for new stock market money.  These quotes are from  a recent Barron's article (LINK):

– Bob Brinker (Bob Brinker’s Marketimer) — Brinker writes: “In our view, the S&P 500 index (SPY) has the potential to trade into the low-to-mid 1400s range in 2012. On a valuation basis, using our conservative operating earnings estimate of $101 for next year, a price/earnings multiple of 14 would enable the S&P 500 index to reach the low-to-mid 1400s level.”

Brinker adds:

“We continue to rate the market attractive for purchase in the event the index returns to the area of the correction lows in the low-1100s. Above that range we suggest a dollar-cost-average approach for new stock market money.”

BEWARE:  Be aware that according to a Forbes article (LINK), Bob Brinker couldn't have been more wrong going into the 2008 bear market. He could be wrong again.  Excerpts:


"Finally, index investors were saved from countless terrible market calls made by so-called experts. Here is a sample of bad advice that torpedoed the savings of many people:

• Bob Brinker couldn’t have been more off the mark with his market prediction in late 2007.  “The short-term correction that began in October and continued into November has served as a health-restoring pullback and has paved the way for new record highs in the S&P 500 index.” The S&P 500 collapsed 37 percent in 2008."

INTEREST RATES/BOND INVESTING: Brinker's advice is to stay short-term when buying bond funds.   He is still  recommending the Vanguard Ginnie Mae Fund (VFIIX) and  Vanguard High-Yield Fund (VWEHX) on Moneytalk and includes both funds in his Marketimer income portfolio.

GOLD AND SILVER: Even though Brinker calls gold a "speculative metal," he recommends GLD (a gold bullion ETF) for those who want to own precious metals as a hedge against the dollar. This year on Moneytalk, he also stated that silver could also be used as a hedge. He is emphatically against buying numismatic coins.   Brinker added GLD to his Marketimer off-the-books recommended issue list in May, 2009. He has never given any price guidance.

OIL: Brinker has made  one recommendation for an oil stock on Moneytalk and that is the Canadian Company, Suncor (SU).   In May, 2009, he added SU to his  Marketimer off-the-books list of individual stock recommendations.

TREASURYS: Moneytalk in November, Bob said: "I think if you're going to be invested in Treasurys at this juncture, you have to have a hold-to-maturity approach....If you go out and buy a Treasury today at these historically low yields....If you buy a ten year Treasury at 2.06 and at any point down the line, rates normally, then rates would not be 2%....If you were to see higher yields you would see a reduction in the value of the principal that you paid for the Treasury....I think you do run the risk of seeing these securities go under water sometime in the next ten years."

NO RECESSION: Moneytalk  in November,  Bob said: ""My estimate is that we will see growth again in the fourth quarter, which means, where's the recession? ........One of things that amazes me about the private firms that are forecasting a  recession in here is their conviction. I mean they talk about it like it's a fait accompli. They talk about it like it's for sure -- take it to the bank. Well I'm not taking it to the bank. What do you think about that? I think these forecasters are wrong, but I'll look forward to their apology....this is Moneytalk." 

POST AND READ COMMENTS

December 27, 2011, QQQ: Bob Brinker's Worst Stock Market-Timing Call

December 27, 2011......................................................(comments welcome)

Bob Brinker's Moneytalk was not broadcast this Sunday,  so this is an opportunity to post a complete review of Bob Brinker's most devastating market-timing blunder.

You may find it difficult to believe that someone with Bob Brinker's reputation would do something like what I'm going to tell you.  But the facts are indisputably well-documented in Marketimer, and the actual "special" bulletins from Brinker. I also have a lengthy file of first-person testimonies from people who were seriously damaged because they trusted Brinker.

At best, this was a tragedy, but the cover-up and lies were inexcusable. And to this day, he announces himself on Moneytalk as "America's Most Trusted Financial Advisor" and warns of sharks.  Many people were financially hurt by this,  and current subscribers and Moneytalk listeners are in the dark  because it was buried.

For those who wonder why it is still important, here are the reasons:

*Brinker never took responsibility for the trade in his own model portfolios, even though he advised subscribers to use a percentage model portfolio cash reserves previously raised from theirs.

* Brinker never closed the trade and actually covered it up by repurchasing the same investment after a 70%+ drop and THEN adding it to his model portfolios

* Brinker's Marketimer official performance record is skewed in his favor to this day, because the trade was never accounted for. It has been estimated that if this trade was included in his model portfolios, it would have dropped his performance numbers by 2% a year.

* Mark Hulbert knows this but has never accounted for it in Hulbert Financial Digest, so his Marketimer performance ranking is exaggerated. (Hulbert recently added Marketimer to his Honor Roll, in spite of the fact that he uses a footnote to explain HIS reason for not accounting for the QQQ  trade in HFD).

 Here is what happened:

 In January, 2000,  Brinker moved 60% of his equity portfolios to cash. In  August 2000, he moved another 5% to cash for a total of 65% in cash  reserves. He told subscribers to wait for instructions on how to use these cash reserves. If he had stayed there, this move would have looked brilliant. But the story is only beginning.

October 16, 2000, Brinker issued a special bulletin advising subscribers to  "Act Immediately" and buy QQQ in anticipation of a 2 to 4 months "counter-trend rally"  -- for a 20% or more gain. Callers to the office were told "Bob is comfortable with QQQ at $86." The advice in the  bulletin was:  Aggressive investors told to put 30 to 50% of cash reserves into QQQ.  Conservative investors recommended to put 20 to 30% of cash reserves  into QQQ.

Here is the bulletin:

November 6, 2000, Marketimer (QQQ=$81.00) Page one: Brinker said: "Marketimer subscribers with aggressive objectives can invest up to 30% to 50% of cash reserves in either the QQQ shares or Rydex OTC Fund in order to participate in this recommendations. That translates into potential exposure of 19.5% to 32.5% of a TOTAL AGGRESSIVE PORTFOLIO. (30% of 65% CASH RESERVES equals 19.5%. 50% of 65% cash reserves equals 32.4%). The balance of reserves remain in money market funds.

Conservative subscribers can invest up to 20% to 30% of cash reserves in this recommendation, using either QQQ shares or Rydex OTC Fund shares. That translates into potential exposure of 6.5% to 9.75% of a total BALANCE PORTFOLIO. (20% of 32.5% cash reserves equals 6.5%, 30% of 32.5% CASH RESERVES equals 9.75% of a BALANCED PORTFOLIO. The balance of reserves remain in money market funds."

November 6, 2000, Marketimer, Page two, Brinker said: "In sum, Subscribers can us a portion of their 65% stock market cash reserve position in order to purchase QQQ shares or Rydex OTC Fund....within our page one percentage guidelines."

 Brinker said he would give follow-up guidance. Marketimer November, 2000, he said: "During the life of this recommendation, we will provide regular followup guidance in each monthly edition of Marketimer."  

He kept his word for 30 months while QQQ crashed over 70%. Then he buried the trade by putting it on hold for the last time and buying news shares of RYOCX and adding it to  his model portfolios. Of course, subscribers didn't have the option of buying "new" shares for their portfolios with the cash reserves they had already spent.  ONLY BOB BRINKER GOT A QQQ MULLIGAN  (and Mark Hulbert helped enable him).

Here's the total sum of the guidance Brinker gave each month until he cleverly covered it up and never mentioned it again in Marketimer or on Moneytalk. 

* #3) December 2000, Marketimer: Bob Brinker said that a "countertrend rally"...."has the potential to carry the Nasdaq indexes as much as 40% to 50% above their late-November closing levels over the next three to six months." (Brinker's target price was $90--December 1, 2000, QQQQ closed at $58.38)

* #4) January 2001 Marketimer: Bob Brinker said, "We continue to emphasize the guidelines we have recommended with regard to the exposure in the Nasdaq 100 Index for the countertrend rally phase we expect.......we are expecting potential gains for the Nasdaq 100 Index of up to 50% or more as measured from the January 2 closing low....." (January 1, 2001, QQQQ closed at $64.30)
.
* #5) February 2001, Marketimer: Bob Brinker stated that the "bear market rally" had commenced and he expected the timeline to be "three to six months as measured from the starting point Jan 3." Brinker added: "In terms of Nasdaq 100 shares, our expectation of a target range in the 80 to 90 range remains intact. We believe this remains an achievable objective into the second quarter." (February 1, 2001, QQQQ closed at $47.45)
.
* #6) March 7, 2001, Marketimer: begins with Bob Brinker admitting that "we were wrong in our earlier expectations that a countertrend rally would develop late last year...." He then admits that even his call for a new bear market rally beginning on January 3 "was unable to sustain upward progress in February. In spite of these admissions of being "wrong," in the same issue of Marketimer, Bob Brinker again made the following recommendation to subscribers: "In our view, the probabilities favor a three to six month bear market rally phase beginning shortly. Such a rally has the potential to carry the Nasdaq composite Index above the 3000 level by spring or summer as measured from the closing lows." (March 1, 2001, QQQQ closed at $39.15)"
.
* #7) April 6, 2001 Marketimer, Page 2; Paragraph 5: Bob Brinker said, "Recent weakness in the Nasdaq 100 Index (QQQ) shares has far exceeded our expectations. However, we believe subscribers holding a position in these shares will eventually be rewarded, although this holding will require both time and patience. With or without a buy signal from our long-term model, we expect the Nasdaq Composite and Nasdaq 100 Index to stage a significant recovery over the next several months." (April 1, 2001, QQQQ closed at $46.15)
.
* #8) May 7, 2001 Marketimer: Bob Brinker said, "As we stated last month, 'with or without a buy signal from our long-term model, we expect the Nasdaq Composite and Nasdaq 100 Index to stage a significant recovery over the next several months.'" (May 1, 2001, QQQQ closed at $44.73)
.
* #9) June 2001, Marketimer: About the Nasdaq 100 Index (QQQ) shares, Bob Brinker said: "....we recommend holding these shares for future recovery within our earlier percentage guidelines." (June 1, 2001, QQQQ closed at $45.70)
.
* #10) July 2001, Marketimer: Bob Brinker said, "We also recommend subscribers with a position in Nasdaq 100 (QQQ) shares hold for price recovery within our earlier percentage guidelines." (July 1, 2001, QQQQ closed at $41.76)
.
* #11) August 2001, Marketimer: Bob Brinker now recommended that subscribers with a "position in Nasdaq 100 (QQQ) shares hold for recovery, although patience will continue to be required in the difficult market environment we are experiencing...." (August 1, 2001, QQQQ closed at $36.63)
.
* #12) September 2001, Marketimer: Bob Brinker said the following on Page Two: "Subscribers who own Nasdaq 100 Index (QQQ) shares purchased at higher prices in the taxable accounts since the fourth quarter of last year can realize short-term losses for current and future use by switching to......XLK.......the differences are sufficient to avoid the wash-sale rule as long as you wait at least 31-days before switching back into the QQQ shares."....."Making this transaction in taxable accounts for tax purposes is consistent with our recommendation to hold QQQ shares for price recovery over time." (September 1, 2001, QQQQ closed at $28.98)
.
* #13) October 2001, Marketimer: Bob Brinker said, "....we recommend holding existing cash reserves. We also recommend subscribers with a position in Nasdaq 100 (QQQ) shares hold for recovery within our earlier percentage guidelines." (October 1, 2001, QQQQ closed at $33.90)
.
* #14) November 2001, Marketimer: Bob Brinker said, ".....we recommend subscribers with a position in Nasdaq 100 (QQQ) shares hold these shares as we expect them to trade at much higher levels during the next cyclical bull market." (November 1, 2001 QQQQ closed at $39.65)
.
* #15) December 2001, Marketimer: Bob Brinker said: "....For subscribers with a position in the Nasdaq 100 (QQQ) shares, we recommend holding in anticipation of higher price levels during the next cyclical bull market." December 1, 2001 QQQQ closed at $38.91--QQQQ closed at $38.73 today, August 17, 2006)
.
* #16) January 2002, Marketimer, Bob Brinker said: "In the case of Nasdaq 100 (QQQ) shares, we prefer to hold existing positions in the expectation that the next cyclical bull market will provide a much better price level for the Nasdaq 100 Index." (January 2, 2002, QQQQ closed at $40.11)
.
* #17) February 8, 2002, Marketimer: Page 1; Paragraph 4; "We remain concerned that a secular bear market, based on declining valuations, began in March of 2000......The most difficult money making strategy in such a market environment is the buy and hold approach. This strategy has led to large losses since early in 2000, and in our view buy and hold investing is likely to prove disappointing in the stock market environment we anticipate within a secular bear trend. ......We recommend subscribers with a holding in the Nasdaq 100 Index (QQQ) shares hold these shares for recovery during the next cyclical bull market."(QQQ closed February, 8, 2002 at 36.17 and closed today at 38.48.)
.
* #18) March 8, 2002, Marketimer, Bob Brinker said: "Subscribers holding Nasdaq 100 (QQQ) shares can hold these shares in anticipation of much higher prices in the next cyclical bull market in our view." (March 8, 2002, QQQQ closed at $38.67--today it closed at $38.72)
.
* #19) April, 5, 2002, Marketimer, Bob Brinker said: " ..... We are also retaining our hold rating on Nasdaq 100 (QQQ) shares, as we expect these shares to rebound during the next cyclical bull market." (April 12, 2002, QQQ closed at $33.52. Right now, QQQQ is at $39.83)
.
* #20) May 8, 2002 Marketimer, Bob Brinker said: "We are also retaining our hold rating on Nasdaq 100 (QQQ) shares. Although the shares remain weak, we expect them to trade well above current levels during the next cyclical bull market." (May 9, 2002 QQQQ closed at $30.95. Today it closed at $39.99)
.
* #21) June 7, 2002 Marketimer, Bob Brinker said: "We continue to suggest a patient approach, which includes holding on to your stock market cash reserves. We are maintaining a hold rating on Nasdaq 100 (QQQ) shares, which have the potential to trade at much higher levels during the next cyclical bull market, in our view." (June 7, 2002, QQQ closed at $28.30-today it is about $40)
.
* #22) July 5, 2002 Marketimer, Bob Brinker said: "We continue our policy of not selling into weakness, and recommend those with a position in Nasdaq 100 (QQQ) shares hold for higher prices during the next cyclical bull market." (October 15, 2000, QQQ closed at $81.70; July 5, 2002, QQQ closed at $26.34; September 29, 2006, QQQQ closed at $40.65)
.
* #23) August 8, 2002 Marketimer, Bob Brinker said: "We are maintaining our hold rating on Nasdaq 100 (QQQ) shares, as we believe they can trade at much higher levels during the next cyclical bull market." (October 15, 2000, QQQ closed at $81.70; August 8, 2002, QQQ closed at $23.57; October 12, 2006, QQQQ closed at $42.23)
.
* #24) September 7, 2002 Marketimer, Bob Brinker said: "We are maintaining our hold rating on Nasdaq 100 (QQQ) shares in anticipation of much higher prices for the shares in the next cyclical bull market." (October 15, 2000, QQQ closed at $81.70; September 7, 2002, QQQQ closed at $22.85; October 18, 2006, QQQQ mid-day at $41.83)
.
October 2002 was the actual bottom of the market decline that began in 2000. Bob Brinker, however did not recommend any changes at that time.
.
* #25) October 5, 2002 Marketimer, Bob Brinker said: "We are now in the 31st month of one of the worst cyclical bears since the 1930's. We recommend continuing to hold stock market cash reserves at this time. We also recommend retaining existing stock market holdings, as we do not view the current period as a propitious time to be a seller of equities." (October 15, 2000 QQQ closed at $81.70; October 7, 2002 QQQ closed at $20.16)
.
* #26) November 8, 2002, Marketimer, Bob Brinker said: "As we continue the process of monitoring our stock market timing indicators, we recommend retaining stock market cash reserves until our model returns to bullish territory. We also recommend holding existing stock market positions at current levels, along with holdings of Nasdaq 100 (QQQ) shares." (October 15, 2000, QQQ closed at $81.70; November 8, 2002 QQQQ closed at $25.07)
.
* #27) December 5, 2002, Marketimer, Bob Brinker said: "Marketimer recommends retaining existing equity market holdings at this time. This includes existing positions in the Nasdaq 100 (QQQ) shares." (October 15, 2000, QQQ closed at $81.70; December 5, 2002 QQQQ closed at $26.20)
.
* #28) January 9, 2003, Marketimer, Bob Brinker said: "We also recommend holding existing positions at the current levels, along with holdings of Nasdaq 100 (QQQ) shares." (October 15, 2000, QQQ closed at $81.70; January 9, 2003, QQQ closed at $26.70)
.
* #29) February 7, 2003, Marketimer, Bob Brinker said: "We also suggest holding existing positions in the Nasdaq 100 Index (QQQ) shares, which have recently shown a measure of resilience relative to the broad market indexes. We expect the Nasdaq indexes to post gains well in excess of the broad market indexes during the next cyclical bull market." (October 15, 2000, QQQ closed at $81.70; February 7, 2003, QQQ closed at $23.81; November 27, 2006, $43.68)
.
* #30) March 7, 2003 (four days before Brinker's "buy" signal) Marketimer, Bob Brinker said: "For subscribers holding Nasdaq 100 (QQQ) shares, we recommend holding for a significant recovery in the shares in the next cyclical bull market." (October 15, 2000, a few days after Brinker's "Act Immediately" Bulletin, QQQ closed at $81.70; March 7, 2003--after 30 months of "guidance" to "hold", QQQ closed at $24.54)
.
That was the final time that Marketimer ever mentioned "those holding Nasdaq 100 (QQQ) shares" and the trades were never closed.

Beginning in the April, 2003 issue of Marketimer, Bob Brinker added RYOCX (proxy for QQQQ) to all of his model portfolios at the closing price on March 11, 2003 -- down over 70% since his "Act Immediately Bulletin."  That was a very effective way to forever cover up his most costly-to-subscribers stock market-timing blunder of all time.

Anyone who wants a photocopy of anything I have quoted can write an email and I will send it to you.

POST AND READ COMMENTS

December 24, 2011: Merry Christmas and Happy Hanukkah

I'm sure you all enjoyed the Calvin and Hobbes comic strip back when it was very popular. It ended in 1995, but now we have our own Bob and Hobbes. I hope you enjoy this as much as I did when it came via email this morning:

"Here I sit, high on a branch in an ancient tree ..."
"... you're sitting on the hood of the car, Hobbes"

"I scan the Serengeti Plain, stretched out below me." 
"Uh, that would be the driveway, Hobbes."

"Soon the wildebeest will come to the watering hole."
" ...do you really think a mouse is just going to walk out in front of you?"

"I am Master of all I survey, the most feared predator of the plain."
"...yeah, until a blue jay decides to dive bomb you!" 

"It is time to climb down and begin the hunt."
"Come in the house, you can have some kibbles, then a nap."

Best wishes for a wonderful Christmas, HB.   
Bob & Hobbes.

Honey here: I wanted my cat, Lama, to show some Christmas cheer and wear a Santa hat. At first, he glared at me, then glare at it and batted it a couple of times. And finally, tolerated it long enough for a picture -- well sort of...LOL!

My prayer for each of you is that you will have love and peace this Christmas.

POST AND READ COMMENTS

December 23, 2011, Bob Brinker's Moneytalk: Lastest Forecasts

December 23, 2011...Where does Bob Brinker stand on the markets and the economy right now?

STOCK MARKET: As 2011 comes to a close with only four more days of stock market trading, Bob Brinker's Moneytalk and Marketimer views continue to be very bullish going forward into 2012.  His portfolios remain fully invested, and he recommends dollar-cost-averaging for new stock market money.

 October 4, 2011,  Marketimer, Page 3; Paragraph 4; Bob Brinker said: "In our view, the S&P 500 Index has the potential to trade into the low-to-mid 1400s range in 2012. Our Marketimer model portfolios are fully invested."

 
INTEREST RATES/BOND INVESTING: Brinker's advice is to stay short-term when buying bond funds.   He is still  recommending the Vanguard Ginnie Mae Fund (VFIIX) and  Vanguard High-Yield Fund (VWEHX) on Moneytalk and includes both funds in his Marketimer income portfolio.

GOLD AND SILVER: Even though Brinker calls gold a "speculative metal," he recommends GLD (a gold bullion ETF) for those who want to own precious metals as a hedge against the dollar. This year on Moneytalk, he also stated that silver could also be used as a hedge. He is emphatically against buying numismatic coins.   Brinker added GLD to his Marketimer off-the-books recommended issue list in May, 2009. He has never given any price guidance.

OIL: Brinker has made  one recommendation for an oil stock on Moneytalk and that is the Canadian Company, Suncor (SU).   In May, 2009, he added SU to his  Marketimer off-the-books list of individual stock recommendations.

TREASURYS: Moneytalk in November, Bob said: "I think if you're going to be invested in Treasurys at this juncture, you have to have a hold-to-maturity approach....If you go out and buy a Treasury today at these historically low yields....If you buy a ten year Treasury at 2.06 and at any point down the line, rates normally, then rates would not be 2%....If you were to see higher yields you would see a reduction in the value of the principal that you paid for the Treasury....I think you do run the risk of seeing these securities go under water sometime in the next ten years."

NO RECESSION: Moneytalk  in November,  Bob said: ""My estimate is that we will see growth again in the fourth quarter, which means, where's the recession? ........One of things that amazes me about the private firms that are forecasting a  recession in here is their conviction. I mean they talk about it like it's a fait accompli. They talk about it like it's for sure -- take it to the bank. Well I'm not taking it to the bank. What do you think about that? I think these forecasters are wrong, but I'll look forward to their apology....this is Moneytalk." 

POST AND READ COMMENTS

December 21, 2011, Mark Hulbert Said: "Honor Pays" But is the "Honor Roll" Honorable?

December 21, 2011...........................................................(comments welcome)

On Moneytalk last Sunday, Bob Brinker bragged about Marketimer newsletter being on the Hulbert Financial Digest "Honor Roll," and he advertises it on his website.  Are Bob Brinker and Mark Hulbert acting honorably, or is it all about the money? I report, you decide.

Once a year, Mark Hulbert creates a list of newsletter writers and calls it an  "Honor Roll."  However, these "Honor Roll" choices are based on Hulbert's own subjective criteria and have very little to do with actual performance of the newsletters.

One of Hulbert's criteria is his own created "categories" of up and down stock market periods. In the December 2011 issue of Hulbert Financial Digest titled "Honor Pays," Hulbert wrote:

 "Of the nine letters on last year’s Honor Roll, just six made it on to this year’s. It’s not that the remaining three did anything terrible over the last 12 months to cause them to come off this list. They continue to have excellent long-term returns. They instead were victims in part of my re-categorizing the last dozen years into different “up” and “down” periods, which I did in order to recognize the market’s decline that began this past spring as a separate “down” period."

 Hulbert doesn't base his "Honor Roll" on overall performance. Matter of fact, he clearly states that some of the best performing newsletters don't fit into his  subjective "criteria."  In the December issue, Hulbert continues:

 "Of the nine letters on last year’s Honor Roll, just six made it on to this year’s. It’s not that the remaining three did anything terrible over the last 12 months to cause them to come off this list. They continue to have excellent long-term returns. They instead were victims in part of my re-categorizing the last dozen years into different “up” and “down” periods, which I did in order to recognize the market’s decline that began this past spring as a separate “down” period."

 Hulbert further explains his criteria and says that many letters with as good or better returns don't make the list:

"The Hulbert Financial Digest’s Newsletter Honor Roll is loosely modeled on Forbes’ Mutual Fund Survey. However, the Newsletter Honor Roll that appears in this issue is entirely the work of the HFD and is not endorsed by, or in any way affiliated with, Forbes magazine."

"HFD has performance data extending back to August 31, 1998 (the beginning date for being eligible for this year’s Honor Roll). On those pages, you’ll find no fewer than 22 additional services whose overall returns are just as good, or better, than those that did make the Honor Roll—but which nevertheless did not meet the criteria for making it onto the Honor Roll."

Hulbert also explains that he uses arbitrary "up and down" market periods to grade newsletters for his Honor Roll.  Hulbert says the letters he grades have a "heavy US equity focus."  And importantly, he says if a newsletter has more than one portfolio, he uses an average of them. Bob Brinker's Marketimer has three portfolios, one of which is about 50% bonds  which over Hulbert's time span have done better than stocks.

How interesting that Bob Brinker has to rely on the Honor Roll portion of HFD to promote his own newsletter. Perhaps because he cannot use his HFD overall performance ranking. Here's why:  In the time frame nearest Hulbert's Honor roll criteria (ten years), Marketimer doesn't make it on the list. I dug a little deeper and found that Marketimer is number 20 in that time frame.  December 2011 Hulbert Financial Digest:

So in spite of Marketimer's lagging performance, Brinker always seems to make it on to  Hulbert's "Honor Roll" which he then uses for advertising Marketimer.  And on the other hand, Mark Hulbert uses Bob Brinker's Marketimer presence on the Honor Roll in his "for sale"  writings and newsletters.   Some examples: In addition to Hulbert Financial Digest, there are these examples of Hulbert writing about Bob Brinker for Barrons  and Marketwatch  "Hulbert on Markets"

And it doesn't end there. Take a look at this ridiculously slanted  Barron's article written about Mark Hulbert writing about Bob Brinker.

To sum it all up, this December 19, 2011 Forbes article tells it like it is. The author says "Thank Goodness for Index Funds" and compares Bernie Madoff type of fraud with bad investment advice, such as Bob Brinker's, as ways to lose money. Rick Ferri wrote:

"Finally, index investors were saved from countless terrible market calls made by so-called experts. Here is a sample of bad advice that torpedoed the savings of many people:

• Who can forget this famous book published in early 2000? Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market, was published by James K. Glassman and Kevin A. Hassett at the very peak of the market bubble. It was a period when people were mortgaging their homes to get into the stock market.

• Bob Brinker couldn’t have been more off the mark with his market prediction in late 2007.  “The short-term correction that began in October and continued into November has served as a health-restoring pullback and has paved the way for new record highs in the S&P 500 index.” The S&P 500 collapsed 37 percent in 2008.

Read more at Forbes: "Thank Goodness for Index Funds" by Rick Ferri (Please note that this Forbes article sources  Kirk Lindstrom, and my blog.) 

POST AND READ COMMENTS

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

December 14, 2011, Bob Brinker: Ongoing Cyclical Bull Market-Secular Bear Megatrend

December 14, 2011.................................................................(comments)

When will  Bob Brinker call the end of the cyclical bull market that he says is running concurrently with a secular bear megatrend?

 Marketimer, June, 2010, Bob Brinker said:  "Once the secular bull market peak was reached in early 2000, the current secular bear megatrend commenced......Based on the last two complete secular bear market, the duration of these long and frustrating period has  range from 16 to 20 years.....We are now in the eleventh year of the current secular megatrend and it appears to  us that this trend will not play itself out any time soon. We expect the next cyclical bear marker to occur within the context of the current secular  trend."

Brinker's stated goal is to identify when the cyclical bull market becomes a cyclical bear market within the secular bear megatrend. So far, there have been two cyclical bear markets since year-2000.  Brinker completely  failed to call the cyclical bear market that began on October 9, 2007 and ended on March 9, 2009, wherein the S&P 500 Index lost 57%. Just the opposite, he was calling bottoms all the way to the bottom and issuing repeated "all-in" buy signals.

Right now, Brinker believes that the current cyclical bull market that began in in March 2009 when the 2007-2009 cyclical bear ended, is still intact.

December 5, 2011, Marketimer, Brinker wrote: "If we are correct that the cyclical bull market trend remains intact and the stock market made a major correction bottom during the early autumn period, any weakness in the area of the August/September early October lows is viewed as an additional buying opportunity......"

So if the stock market has been in a secular bear megatrend for the past twelve years,  when is it likely to end? And how many cyclical bull markets will happen before it ends?  David Korn took a look at the cyclical trends during the worst secular bear megatrend of the 20th century. Notice that there were a total of six cyclical bears and five cyclical bulls in the 1929-1949 secular bear that David writes about. This is posted with the author's permission. David Korn wrote: 

"I have never wavered from my view that we have been in a secular bear market that began in the first quarter of 2000 when the stock market had become extremely over-valued.  Our current secular bear market in my opinion is based on a long-term reversion to the mean in price-to-earnings multiples.

The first bear market in our current secular bear was brutal as the tech bubble busted beyond belief.  (How¹s that for alliteration!).   Over the course of about 2-1/2 years, the S&P 500 declined 49.15%. What many investors forget is that the Nasdaq declined 78% from peak to trough.  You read that right ‹ 78%!  And back then, there were a lot of investors in tech stocks, tech mutual funds, indexes that tracked the Nasdaq or parts of the Nasdaq (i.e. QQQQ).

In the last bear market, we witnessed a 56.78% decline in the S&P 500 from the October 9, 2007 all time high to the closing low on March 9, 2009.  Long term subscribers of mine have seen my analysis of all the cyclical bull markets that occurred during the 1966-1982 secular bear market.  (If you are a new subscriber and would like a copy, just let me know).

This weekend, I want to do an overview of the 1929-1949 secular bear market. That was a whopper 20-year secular bear market and deserves particular attention as we are about to enter the 12th year of what I believe is the secular bear market that began in the first quarter of 2000.  I personally think we have a ways to go in this secular bear market.

SECULAR BEAR MARKET (September 1929 - June 1949)

Introduction

So, what were you doing 82 years ago?  Do you have parents or grandparents or great grandparents that remember it?  We were in the roaring 20s and the stock market had gained 497% over an 8-year time frame.  The Dow had risen from 63.90 on August 24, 1922, to 381.19 on September 3, 1929.  People were as excited about stocks as they were back in the bubblicious days of 1999.

Cyclical Bear Market Number 1

And then along came Mary.   A vicious bear market began.  It was downright ugly as investors witnessed record one-day losses of 13% on Black Monday, October 28, 1929, and another 12% loss on Black Tuesday, October 29, 1929. About two weeks later, the market bottomed (although not its ultimate bottom for this secular bear market).  On November 13, 1929, the Dow closed at 198.69.

Investors were despondent.  Their portfolios had been wiped in half in just over two months.  Things looked bleak, and investors were running scared. Quite simply, the stock market was considered a very unsafe place to be invested, just as it was at the end of 1929.

Cyclical Bull Market Number 1

Ok, we are back in November 1929, and the first cyclical bull market began on November 13, 1929, with the Dow trading at 198.69.  This bull market lasted about five months before reaching its cyclical bull market closing high on April 17, 1930, when the Dow closed at 294.07.  All in all, the Dow gained 48% during this cyclical bull market.  Investors were feeling good again.  Unfortunately, back in 1930, things took a dramatic turn for the worse.

Cyclical Bear Market Number 2.

After peaking on April 17, 1930 at Dow 294.07, the market took a nose dive. In just over two months, the Dow had declined almost 23% and closed at 211.84 on June 24, 1930.  Investors got a head fake over the next few months, as the Dow rose about 15% to 245.09 on September 10, 1930.  But the gains were short lived as the Dow crumbled to 121.70 on June 2, 1931.  One month later, the Dow went up to 155.26 (a gain of 27%), but it happened in 30 days, and was really just a temporary spike.  The market immediately resumed its bear market ways for another year, among what might well be the worse bear market our country will ever see again.  The carnage ended at Dow 41.22 on July 8, 1932.

Did you catch that?  From April 17, 1930 when the first cyclical bull market ended at Dow 294, to July 8, 1932 the Dow declined 86% over a 3-year and 3 month time frame! 
 
Cyclical Bull Market Number 2

The Dow began the second cyclical bull market of the 1929-1949 secular bear market at a price level of 41.22.  Hard to imagine now with the Dow about 2000 times greater than that.  Investors were totally beaten down from the last bear market.  Investing in the stock market was probably the last thing on many investors' minds.  Of course, hindsight is 20/20, but when nobody wants stocks, that has often been the time to buy them.  Investors who could stomach the action in July 1932 were quickly rewarded,  the Dow began its bull journey with a hefty 68.3% gain in just over a month!  The volatility, however, was extreme and it was commonplace to see corrections during this particular cyclical bull market in the magnitude of 15%, 17%, even 20% over a relatively brief period of time.  Sound familiar?   This bull market lasted until February 5, 1934, when the Dow closed at 110.74, reaching its cyclical bull market closing high.  All in all, this cyclical bull market lasted 19 months.  During that time frame, the Dow gained 168.6%!

Cyclical Bear Market Number 3

Some market historians suggest that the prior cyclical bull market continued for another three years until February, 1937.  However, this ignores the 5 month period between February-July, 1932.  The Dow started that bear at 110.74 on February 5, 1934 and declined to 85.51 by July 26, 1934.  That marked a decline of 22.79%.  I count that as cyclical bear market #3, although obviously these labels are open to interpretation.

Cyclical Bull Market Number 3

The third cyclical bull market began on July 26, 1934 with the Dow trading at 85.51.  The bull market lasted until the Dow topped out at 194.40 on March 10, 1937.  All in all this cyclical bull market lasted about two years and 8 months.  During that time frame, the Dow gained 127.36%!  This bull market had enormous gains.  During that time, the market had one correction of over 10%, with seven other corrections in the range of 3.11% to 9.7%.

Cyclical Bear Market Number 4

Following the Dow's rise to 194.40 on March 10, 1937, a very tough cyclical bear market ensued.  The Dow fell to 98.95 in just over a year when the bear market ended on March 31, 1938.  This marked a decline of 49.1% -- similar to the bear market we had from 2000-2002 in terms of the percentage decline. In fact, only 2% points less than the most recent bear as measured from October 9. 2007 to November 20, 2008.

Cyclical Bull Market Number 4

The fourth cyclical bull market began on March 31, 1938 with the Dow trading at 98.95.  This bull market lasted about a year and a half and brought the Dow up to 155.92 on September 12, 1939.  This came about 8 months after the bull market had reached its prior peak of 158.08.

Cyclical Bear Market Number 5

The fifth cyclical bull market was a brutal one.   A seriously brutal one. The Dow was at 155.92 on September 12, 1939.  Flash forward about 2-1/2 years and on April 28, 1942 and the Dow had fallen to 92.92.  That means the Dow was actually trading lower than where it had been four years earlier! Would you have wanted to stay in stocks?

Cyclical Bull Market Number 5

If you hadn't sold out at the bottom, you were in for a very long and very profitable cyclical bull market.  The Dow had fallen to 92.92 on April 28, 1942.  From there, the Dow had a wonderful 4-year run.  By May 29, 1946, the Dow had risen to 212.50 which marked a gain of 228.69%!  Simply amazing.

Cyclical Bear Market Number 6
 
The secular bear market of 1929-1949 began and ended with a cyclical bear market.  The last one began at the end of May 1946 and lasted until June 13, 1949.  Just a little over 3 years.  During that time, the Dow declined from 212.50 to 161.60 --  a decline of 23.9%.

CONCLUSION

That was a long 20 years.  The Dow started at 381.19 on September 3, 1929 and ended at 161.60 on June 13, 1949.  So as to not end on a depressing note, this 20 year secular bear market preceded a 16-year secular bull market during which the Dow generated annual returns of over 16-1/2%.

Studying past bull markets, can give you the ability to gain a perspective on how the market moves.  Too often, we are unable to see the forest through the trees; or, we follow so closely, that we only see the trees without being conscious of the forest.  I have always felt that the study of these market cycles can benefit my subscribers, and so I do a lot of research on them and hope they provide some perspective on the market for you."

David Korn's Stock Market Commentary, Interpretation of Moneytalk (Bob Brinker Host), Financial Education, Helpful Links, Guest Editorials, and Special Alert E-Mail Service.  Copyright David Korn, L.L.C. 2011

Honey here: You can get a complimentary issue of David Korn's weekly newsletter at this address: TalkAboutMoney@gmail.com/   David also co-edits The Retirement Advisor with Kirk Lindstrom. A complimentary issue is available at this LINK.
 

POST AND READ COMMENTS

December 11, 2011, Bob Brinker's Moneytalk: Summary, Excerpts, Commentary and Discussion

Bob Brinker took the day off. Neale Godfrey was his fill-in host..........(comments)

In the San Francisco bay area, after 26 years,  Moneytalk has been canceled from KGO 810 radio station. However, the show moved down the dial and down in transmission power to  KSFO560.  KSFO is a 5 kilowatt station. KGO is a 50 kilowatt station.

 I was away most of today, so guest-writer, JeffChristie, wrote a brief summary for us. 

Jeff wrote:

"Neale Godfrey  was filling in for Bob Brinker today.  She said Bob was on a well-deserved vacation.  She wanted callers to talk about unemployment, occupy wall street, the Arab spring, Europe and China.  She said contact her on Facebook or Twitter.  She said the price of real estate was going up in New York city.  There is a $100 million dollar apartment for sale. 

The first caller was Brian from Illinois.  He works in the construction industry.  He said illegals are taking jobs from Americans in the building trades.  Neale mentioned a name we seldom hear on Moneytalk: Obama. He is talking about unemployment dropping to 8% next year.

The next caller was Lee in Albuquerque.  He agreed with Brian on the problem of illegals taking jobs from Americans.  They can get a driver's license in New Mexico and then use that ID in applying for a job.  He was a Ron Paul supporter.

Wayne in Fort Meyers was next.  He works in the auto industry.  He is upset that most of the industry has gone to Japan.  This has cost many jobs at American parts providers.

Beryl from Albuquerque was next.  He said the solution to our financial problem was to end central planning and do away with the minimum wage.  Neale agreed to the minimum wage part.  

Neale started the next hour by wishing happy holidays.  I wondered what holiday she was celebrating?

Chris from New York wanted to know why gold keeps going up.  Neale said it was because countries are running huge deficits resulting in a great deal of uncertainty.

Ralph called.  He has been buying gold since 1972 and is sitting in the catbird seat.  He also said he likes many of Ron Paul's ideas.

Vick who was formerly from Egypt asked Neale about her experience there in January during the revolution.  She said there was a fire fight in front of her hotel and she saw hundreds of people being shot.  She was hunkered down in a room on the tenth floor of the hotel and was in fear for her life.  Vick was concerned that this may end badly with a Muslim government taking over.

Neale mentioned again that Bob was taking a well-deserved break.  Yes, he has had to work three hours in the last three weeks.  I don't know how he can keep up that pace.

Leon was another protectionist who wanted to put a 90% tax on foreign goods.  Neale didn't think that was a good idea.

The last caller was Maryann from Omaha.  She makes the invisible apron.  It sells for $40 and is made in the USA.  Her price seems a bit high to me but then I don't buy aprons.

Neale ended by asking listeners to contact her at Facebook or Twitter.  She did not say whether or not she would be the guest host in the future."   

Honey here: Thank you so much, Jeff Christie! A friend in need is a friend indeed. :)

I didn't hear Moneytalk today because I was doing a hand-bell choir performance (the third one this Christmas season -- one more to go).  But if I wanted to, or if you want to, you can go to  KSFO and listen to or download the program. Hours 1-3pm, at this   LINK.

POST AND READ COMMENTS

December 10, 2011, Bob Brinker's Moneytalk Tomorrow: Neale Godfrey Replacement Host

December 10, 2011....Tomorrow, in the San Francisco bay area, Bob Brinker will no longer be carried on KGO810 radio. He is moving down the dial to KSFO560.

Another change is, his replacement host will be Neale Godfrey -- at least tomorrow. I don't know if it's permanent like Lynn Jimenez was.  Neale Godfrey knows little about investing, but she's great on advice about raising children, the ecology  and promoting higher taxes.

Yep, that Bob Brinker knows how to pick women who are highly informed on investing as fill-in hosts for himself. I say kudos, Bob. It makes you look better. LOL! Here's a blast from the last time she was on Moneytalk -- my summary:

January 2, 2011, Bob Brinker's Moneytalk: Summary, Excerpts, and Commentary

January 2, 2011....Bob Brinker did not host Moneytalk today. Neale Godfrey was the guest host.

The major topic that Godfrey chose for Moneytalk was her proposal for a new Consumer tax -- in other words: A sales tax on everything we buy while doing away with the IRS.

Her plan would make sure that "poor people" are not hurt and would exclude those on food stamps from paying the sales tax -- at least on food and other necessities.

She would include the tax on homes, planes, boats and "large" cars. (Imagine a 20-30% tax added on to every home and car sale. Californians already pay almost 10% sales tax on cars!) Godfrey said she would exclude taxing "small cars."

She is for "really" taxing the upper income and actually said that the upper and middle incomes would be "picking up the whole tab for Social Security and Medicare."

In hour 3, Godfrey had a long discussion with caller Ron from Santa Cruz aboout politics. They both had a good time announcing that they were NOT for the Tea Party. Godfrey said: "I am not a "Teapartyist." Neither of them were specific in what they found objectionable about the Tea Party. Godfrey simply stated that she had "issues" with some of the things they advocate. (I'm quite sure that the Tea Party would have "issues" with some of the things Godfrey was advocating too.)

Caller Steve from El Paso pointed out how unfair a sales tax would be for those people who have worked and saved in IRAs, 401Ks etc. Godfrey replied by saying those kinds of accounts are "of course, sacred." (How's that going to work, ma'am? Are you saying the money that is taken out of IRA's won't be taxed? Or are you saying what is bought with money from IRA withdrawals will not be taxed?)

Caller Larry from Florida talked about the FAIR tax. Godfrey was aghast.

Caller Al asked Godfrey what were her "credentials" and had she "ever made any money." She explained that she is an "educator" who has written children's books.

Caller David from Iowa itemized his plans for creating income in his retirement. One of his plans was a first on Moneytalk. He said that he plans to donate blood plasma twice a week -- for which he will be paid $250 per month.

Godfrey sounds very surprised at first, but then made this comment: "If you could do this, it works." I wonder what Bob Brinker's response would have been. Just a guess, but I do not think he would have advised the caller to consider donating blood plasma as part of a retirement plan.

Most of the other callers were simply asking for sympathy and advice concerning dire real estate situations.

She pushed her website and is hoping to start a "grassroots blogging" movement to get her new tax plan rolling. But looking at the website, to me it appears to be mostly her views of the "ecology." Neale Godfrey echoaftereffect [link]

A quote from Godfrey's website: "Change a light and you help change the world." Honey replies: "You betcha." LOL!

POST OR READ COMMENTS

December 9, 2011, Bob Brinker and Lakshman Achuthan Headed for Recession Showdown

December 9, 2011.....................................................................(comments)

Bob Brinker has said that he's positive the economy is NOT  headed for another recession.  On Moneytalk, Brinker has repeatedly denigrated those who are predicting a recession and he's focused like a laser on ECRI's Lakshman Achuthan, who said in September that the economy is "tipping into recession." Now Achuthan says we won't know one way or the other until this time next year.

Yesterday, Achuthan made a guest appearance on Bloomberg. He has not changed his mind about his recession forecast and he explains why. He also talks about the stock market as a recession indicator.  Here is a summary and excerpts from the video interview:

Dec. 8 (Bloomberg) -- Lakshman Achuthan, chief operations officer of the Economic Cycle Research Institute, talks about the U.S. economy. He speaks with Tom Keene on Bloomberg Television's "Surveillance Midday."

Tom: "You had a recession call, what happened?

Achuthan: "It's happening."

Tom: "I saw too many economists talking 3% GDP."

Achuthan: "I talked to you  right here September 30th. That was two months ago. A lot of economists, as they always do, are focusing on incoming data, a lot of which is coincident or short-leading. And there is, indeed, has been stronger coincident and short-leading data over the last couple of months,  since I saw you. So we learn from that....the recession very likely did not begin in Q3. I don't know about Q4 or the next couple of quarters......Well, in late September, we thought we were tipping into recession. We just don't know when it started."

Tom: "Explain this, this is really important.....There are two ways you look at a call. You look at the vector of the call -- the direction of the call,  and you look at the timing of the call. Amateurs look at the timing of the call. Oh, Laksman, you are in the time-out chair. You got it wrong. Pros look at the vector, or direction of the call. So you maintain the direction of your call."

Achuthan: "Yeah, we haven't switched  our call....If there's no recession in Q4 or the first half, then we're wrong. You're not going to know whether or not we're wrong until a year from now. Just to be very clear, jobs data comes in stronger...That means there's no recession, right? Wrong. In the last recession, which began in December of '07, jobs data didn't go negative for another couple of months. It was positive into the recession.  I'll give you an even freakier example, which is the 1973-75 recession. It took nine months inside the recession before jobs went negative....If you look at this kind of stuff....it's not a precise science."

Achuthan continues: "A recession is a contraction in production, employment....income and sales.....In the 2001 recession, we lost 3 million jobs.....Here, we've lost 8-something  million.....We've gained back 2-something....Here's the point, in the 2001 recession, for example, for those who were waiting for two negative quarters of GDP, you may not even get that.....In 2001, you never had two quarters straight of negative GDP, but yet you had 3 millions jobs lost.  So it was a real, bonafide, nasty recession. In the 2008 recession, all the way in August, a month before Lehman -- we were 8 months inside the recession. But if you're looking backwards, you don't see any negative GDP."

Achuthan said this about the following chart: "The downturn we have now is very different from the downturn in 2010 which did not persist. This downturn is persisting. That is a forward-looking indicator. So far, we've been talking about coincident data, production, jobs.... now casting backwards.....That forward looking data in the same period since I saw you two months is getting weaker. It's not turning up....

....So to my fellow forecasters out there. I'd say they're roughly in two camps. There are those that say the economy will continue to firm into next year. We reject that. There's nothing here that suggests that at all. I think there's a larger camp that says we are going to muddle through. We're going to get this kind of slow growth.....I'm going to point out that that has never happened. We never muddled through.... A market economy does not want to have a static state. It either accelerates or it decelerates, and these forward-looking cycle indicators say decelerates."

Tom:  "This chart shows personal disposable income -- inflation adjusted. Clearly an ugly chart that captures so much of our anxiety. What does the recent data show?"

Achuthan:   "There's the other half of the GDP report. Everybody got excited because GDP rose a couple of percent in Q3. Just before Thanksgiving, you got the other half of that report. A revision called the Gross Domestic Income.  Conceptually, it's the same thing. It just adds it up from the other side. It adds up all the income instead of all the purchases. In theory, they should match. They never do....

.....The problem here is that GDI tends to be the more accurate measure. GDP tends to get revised toward GDI, at least in recent years. The Fed has been focused on this. And GDI, in the last reading, was 0.3%....That's a far cry from two handle. That's a big gap......I read a Fed paper that suggests the revisions will go lower....The Fed points out, when you look at a two quarter annualized growth rate of GDI, if it gets to 2% or lower, that's a recessionary stall speed. Now that's been trending down for six quarters....The last reading is 0.28% on GDI."

Tom: "What does the ECRI work say about the stock market?" 

Achuthan: "Here's the one thing that I think a lot of  people sometimes forget, it's that the stock market is not the economy....We get caught up.....The stock market is a short leading indicator. It's imperfect. It makes mistakes on recession forecast......But if you look closer, the stock market gets the acceleration and deceleration of the economy pretty good....And I think if you step back from the last few weeks or couple of months and look at the big picture, the stock market has very clearly reacted to our growth rate slowdown call from last April."

Tom: "Here's a chart from the Congressional Budget Office.  It's on the edge of ECRI work....There's the current cycle, the white line, normalize to the middle of the chart. So you go past to the left, forward to the right. The yellow's normal. The glide path of that white line to the right ain't so pretty."

Achuthan: "There's a huge problem there.....Back in '08, in the middle of the last recession, we were able finally in hard data, not a forecast, present how the pace of each expansion since the 1970's has been getting lower and lower.....Plus I think we all agree the cycle of volatility has gone up. The economy hasn't gotten mellower......Volatility plus low trend equals more recessions. It's in that context that we are making this recession call."


Moneytalk, November 6th, Bob Brinker said: "My estimate is that we will see growth again in the fourth quarter, which means, where's the recession? You know, we have these private forecasters out there going around beating the drums of recession. Warning everybody that the US is going back into recession. Batten down the hatches and get in the bomb shelter because we are in a lot of economic trouble. That is what they say, but that's not what we see. So far, we see an economy that continues to grow slowly.......One of things that amazes me about the private firms that are forecasting a  recession in here is their conviction. I mean they talk about it like it's a fait accompli. They talk about it like it's for sure -- take it to the bank. Well I'm not taking it to the bank. What do you think about that? I think these forecasters are wrong, but I'll look forward to their apology....this is Moneytalk." 

So it looks like Bob Brinker and Lakshman Achuthan are headed for a showdown. Will Bob eat crow, or will Achuthan apologize? Please see my original coverage of this subject: October 20, 2011: "Lakshman and Bob in the Thunderdome. Two men enter, one man leaves"  LINK

POST AND READ COMMENTS

December 4, 2011, Bob Brinker's Moneytalk: Summary, Excerpts, Commentary and Discussion

December 4, 2011.....Bob Brinker hosted Moneytalk today.  It was his last day on KGO810 Radio. He's moving to KSFO 560 in the San Francisco Bay Area. See the link below.

JOBS REPORT...Bob said:  "How about that jobs report we just got at the end of the week. Good news on the jobs front and we like good news. And Wall Street likes good news too......In fact, it was really a good jobs report when you consider the fact  that jobs were being lost at the federal, state and local level, the government is continuing to shrink of course and as a result the private sector jobs have to overcome that in order to go into positive territory. And they did that so much so that 120,000 net new jobs were added in November......Twenty thousand more government jobs gone, good-bye....so private sector jobs up 140,000 for the month. That's a good number."

STOCK MARKET: Honey EC: Today, Bob didn't make any comments about what the stock market has been doing, except the one reference in the paragraph above.  However, he has made no changes in his bullish market outlook and is still forecasting S&P low-to-mid 1400s in 2012 -- as  he has for several months now. Bob believes the cyclical bull market that is running concurrently with a secular bear market is still intact, and recommends buying  on any weakness near the recent correction lows. 

 Here are the Marketimer stock portfolios year-to-date performance (thanks Jeffchristie):

Model Portfolio 1 as of December 31, 2010: $278,330
Model Portfolio 1 as of November 30, 2011:  $270,779
(Total: -$7,551/ -2.7%)

Model Portfolio II as of December 31, 2010: $230,317
Model Portfolio II as of November 30, 2011: $222,977
(Total: -$7,340/ -3.2%) 

INTEREST RATES...Bob said:  "If you are worried about the bond market, you can use fully-insured FDIC CDs until rates normalize in here and you won't have any principal risk that way."

WHEN FED NORMALIZES RATES EXPECT DECLINING VANGUARD GINNIE MAE FUND NAV (VFIIX)....Bob was speaking to caller Ken from Vancouver,  who asked about putting a large portion of his money into Ginnie Maes (which are near an all-time-high NAV) now.  Bob said:  "You have to determine how much interest rate risk you are willing to accept on the Ginnie Mae Fund. It's trading pretty close to its all-time-high, over $11 a share. The reason is because rates have stayed very low because the economy is growing slowly and the Fed has been trying to stimulate economic activity to get more jobs. Even though they've had some success at it, they'd like to have more success than they've already had.....If we get into a situation where the economic growth rate picks up in the future, the Fed decides we don't have to keep rates down near zero anymore, then you could see a normalization of interest rates. Right now they are not normal. If you see a normalization of interest rates, then I believe you would see depreciation in the shares of Ginnie Mae....You're looking at Ginnie Maes trading at $11 a share, you could easily be looking at Ginnie Mae shares trading at ten and a fraction -- easily."

WORKERS DROPPING OUT...Bob said: "Now of course when you get the unemployment we've had for as long as we've had it, you get workers dropping out -- 315,000 dropped out in the month of November and who can blame them. Some of them have been unemployed for a really long time."

ECONOMY/GROSS DOMESTIC PRODUCT GROWTH....Bob said:  "So the economic data continues to argue that that slow growth economy that we've been tracking is continuing.....The good news is that so far, the problems in Europe have not spread globally in a material way. Certainly haven't  had much impact here in the USA.....We had Gross Domestic Product growth in real terms in the third quarter of 2%. And I'm looking for another positive number in the fourth quarter. I believe the economy will grow again here in this quarter. And when all is said and done, I believe it will come in with a 2011 real growth rate between 1 and 2%. So far, it's about 1.2%, if you annualize the first three quarters."

WHY EUROPEAN UNION CURRENCY DIFFERENT FROM  THE USA: Bob said:  "There's one difference between the United States and European Union Euro currency 17 countries.....The United States has complete control over it's own currency....That is not the case for any of the 17 European countries that transact in the Euro currency. They have a common currency.....If anybody tells you that the situation in the U.S. is the same as in the European Union, they are pulling your leg.....We need a budget that is as close to balanced as we can get it and no more than 3% annual deficit relative to GDP."

EUROPEAN DEBT CREATES ECONOMIC HEADWINDS....Bob said: "Now there's no doubt about it, the economy still has to deal with the headwinds of the European debt situation that we've seen develop in Greece, Ireland, Portugal, Italy and Spain in particular."

UNEMPLOYMENT....Bob said: "As for the 8.6 unemployment number, it is the lowest figure since March of 2009. That's over 2 1/2 years ago. In fact, unemployment has been above 8% now for 33 months....We have 13 million workers unemployed, an average all-time-high of close to 41 weeks of unemployment. And that's an enormous unemployed labor pool that's out there for companies to interview. That holds down hourly earnings -- down 1/10th of 1% for the month. When you have that many people looking for jobs, you don't have any pressure on wages."

AREAS OF ECONOMIC IMPROVEMENT...Bob said:  "On the positive side, companies are taking on more temporary workers and that's usually a precursor for more hiring. We saw new jobs in retail, new jobs in leisure, we saw help-wanted advertising improving, retail sales have improved, auto advertising has risen. And certainly we're seeing some gradual improvement in the bank lending environment. We also have a recent survey of small business which finds hiring intentions at the best level since September of 2008. And that matters because small business employees 50% of the work force in the USA."

UNKNOWN TAX POLICIES.... Bob commented that there is talk in Washington about extending the payroll tax relief, and  opined about how  ridiculous it is  that just 27 days before the end of the year, we are being asked to guess  what our tax policies will be. He said, "only in the USA" and blamed it on  "dysfunctional congress."

WILL THE 2%  PAYROLL TAX RELIEF AFFECT SOCIAL SECURITY? Bob said: "In terms of putting the 110 billion dollars into the economy....the economic principle is sound....to put money into the pockets of consumers at a time when the economy is trying to get on a sustainable recovery.....In terms of taking it away from Social Security, that's not accurate because it will have no effect on Social Security payouts whatsoever. It's going to be made up from the general fund, which involves more borrowing....The government is in huge deficit mode....Because of unified budgeting that came in many moons ago, they can take money out of the general fund to make up any deficiencies in payroll tax collections." 

KEYSTONE XL PIPELINE....Again Bob discussed at length how ridiculous it is for the U.S. to import oil from countries that are unreliable and hate us. And he explained that he isn't against solar and wind, but that it only supplies 1% of our energy needs. He emphatically questioned the decision to delay the Keystone XL Pipeline to transport oil from Canada.

Bob said: "When U.S. policy is made in the name of all Americans, then it is the concern of all Americans. When I've looked at the stories in the last couple of weeks, since the president decided to postpone, well, the Interior Department is being credited with this unfortunate decision, but let's face it, this should not be done.....Why are we doing this.....When you look at the whole situation and realize that U.S. policy is discouraging the expansion of pipeline capacity to bring additional oil down from Canada, which instead will be sold to countries like China, you start to ask yourself which side are these people on that are making the decisions. Are they on the side of the USA? I'm not sure, because these decisions are so bizarre, I find them incomprehensible."

Honey EC: This is the first time that I've ever heard Bob bend so far over backwards to keep from saying anything negative about a president. He certainly has complained effusively about President Bush's policies that he didn't like. What's different now?

BE YOUR OWN FINANCIAL MANAGER: Bob Brinker commented that "someone in the family has to do it" and you "know you can trust yourself."   Bob said: "For close to 26 years, we have encouraged you to control investment expenses, diversify, allocate your assets properly, pay yourself first.....and empower yourself with the knowledge of investing. There are so many great investment vehicles out there today. Low-cost, no-load funds, exchange-traded-funds, tax privileged accounts, where you can put in pre-tax money for the future.....And how things have evolved since our broadcast commenced in 1986."

Honey EC: I certainly agree with Bob Brinker on that.  I know that he has been teaching those principles as long as I have been listening to him -- 1987.  It was then that I started down the learning curve and became my own financial manager, thanks to Bob. He made me aware that it's not rocket science and with due diligence anyone can learn the basics. At the time, I was in the grip of a big brokerage house shark. 

Bob also teaches how to avoid sharks. I learned that lesson well too.  Perhaps if you asked Bob, he would say I learned that lesson too well.  Here is a shark attack warning:  Be aware that Moneytalk - Marketimer  Bob Brinker is not the editor or publisher of the Brinker Fixed Income Advisor, even though the ad was placed to run so that the audience would get the impression that he is.

VARIOUS ESOTERIC CALLER SUBJECTS TODAY: Paying off car loans;  declaring bankruptcy; rolling over IRAs;  expecting "two young sprouts for the price of one" (twins) and saving for their college fund; getting a divorce and dividing the assets. 

Bob Brinker Political Quote of the Day regarding the occupy demonstrators: "I have a theory on the one percenters and the 99 percenters. Here's my theory. The one percenters are the ones squatting in the park. The 99 percenters are the ones going to work. That's the way I look at it, so I guess I'm on a different wave length than the demonstrators."

Honey EC: I laughed out loud at this. I don't think anyone can disagree with him. :) 

Bob Brinker Humor of the Day: "That first broadcast, Super Bowl Sunday was the one day to remember in Chicago-land. That was the day that daBears won the Super Bowl, just that one time,  and that was our first broadcast.  And I can still remember that day because our broadcast starts at 4 o'clock eastern,  and back then they started the Super Bowl at 4' o'clock eastern. Subsequently, they've moved it back. Now the Super Bowl kickoff is close to about 6:30 eastern. One story I'm told is that the owners got together in the National Football League and said, 'We can't possibly go up against Moneytalk,"  and they pushed  back the kickoff to the end of the broadcast. Which I think was a very smart idea on their part, but back then, they were right in sync with our program. 1-800-934-2221."

Bob's guest speaker today was Nicholas Wapshott, "Keynes Hayek: The Clash That Defined Modern Economics

BOB'S BIG ANNOUNCEMENT: Bob Brinker's Moneytalk will be moving down the dial next week to KSFO 560 radio station.  He will be on in the same time slot at 1-4pm  in the San Francisco Bay Area. Here is the link to KSFO560. It is a fabulous station. I listen to it all the time. You can also listen online and podcast...

POST AND READ COMMENTS