Thursday, January 12, 2012

January 12, 2012, Bob Brinker's New Marketimer Fund: Akre Focus Retail Fund

January 12, 2012....As of  the market close yesterday, Bob Brinker added the Akre Focus Retail Fund (AKREX) to his Marketimer Model Portfolios I, II and III. 

Bob Brinker broke some of his own long-standing  rules with these changes and has added risk to all of his model portfolios.  He sold all of Barons Partners  (BPTRX) in model portfolio I, and percentages of Vanguard Total Stock Market Fund in  model portfolio II and III, in order to purchase the Akre Focus Fund.  That lowers each Marketimer portfolio diversification by a huge factor. There are only 25 stocks in the Akre Fund and 3344 stocks in the VanguardTotal Stock Market Fund.

Akre Focus is a mid-cap growth fund and is only 2 1/2 years old. It has less than $450 million in assets and a 25% turnover.

Even though Bob has always taught listeners to keep expenses down to a minimum, and recommended Vanguard Funds for that reason, AKREX has  a very high expense ratio (1.45%) and a 12b1 fee.

Also, Bob has always recommended limiting exposure in any one stock to only 4%  of one's total investment portfolio. However, Akre Focus Fund's top ten holdings are all much more than that -- and the top two holdings are almost 12% each:
Mastercard Incorporated Common [11.77%]
Dollar Tree, Inc. [11.66%]
It looks like Brinker is hoping to "beat the market" with these moves. But why did he wait until now to jump on the Akre Focus Fund band-wagon? There was lots of publicity about it BEFORE it gained 25% in the past couple of years. AKREX was up 11.9% in 2011:




In recent years, Bob Brinker has made several moves that are not typical of his advice over the years of Money Talk. Things like adding  GLD to his list of recommended stocks and recommending a high-yield fund or adding stock to his fixed-income portfolio. One might even question whether the Bob Brinker who is now making decisions for Market Timer is the same man who has been on the air for over 26 years.

Bob's son began publishing a fixed-income newsletter about six years ago. Since then, most people get him confused with the talk show host because he makes no effort to distinguish himself on the internet now that he is in the same business as his father. He is known as "Bob Brinker" too.

28 comments:

Pig said...

Mmmm?

Dropping low cost index funds for high cost funds with 12b1 fees?

Chasing past performance?

Ignoring the 4% rule?

Adding gold and oil stocks?

Something doesn't smell right. It smells like a failed clown that buys stocks in a fixed income fund.

I don't think this is going to end very well.

Anonymous said...

"He sold all of Barons Partners (BPTRX) in model portfolio I, and percentages of Vanguard Total Stock Market Fund in model portfolio II and III, in order to purchase the Akre Focus Fund."

When Brinker sells these investments obviously there must be a profit or loss. Just like his subscribers would have.

How did he account for these losses/profits?

CPA

MikieE said...

Call him Sunday and ask him.
MikeE

Honeybee said...

Am I the only one that sees this a bizarre and almost unnatural?

Bob Brinker
BobBrinker Bob Brinker
KABC/790 AM has brought back one of its most popular weekend shows, "Bob Brinker's MoneyTalk. -- http://bit.ly/yF4Ewy"


BobBrinker@ twitter

MikeE said...

I listen to Brinker on WTMA through the internet.
MikeE

Anonymous said...

What's wrong with the tweet?

aede

Honeybee said...

aede wanted to know what I think is "wrong with the tweet."

It has to do with how a man can lose his integrity over money. This was what he said back when he had no intention of going into the investment letter business:

To: Greg Luke who wrote (2188)11/30/1997 4:08:00 PM
From: Bob Brinker, Jr. of 42807 Greg -

I truly apologize for the confusion. I am not Bob Sr. I am Bob Jr. This has happened on occasion before and I NEVER attempt to misrepresent myself as Bob Sr. From now on, I will always sign my name as bob jr. in hopes of avoiding future confusion. FWIW (For what its worth) I would not be surprised if Bob Sr. read your note to me anyway!

thanks -
bob jr!

............

To: Greg Luke who wrote (2188)11/30/1997 4:08:00 PM
From: Bob Brinker, Jr. of 42807 Greg -

I truly apologize for the confusion. I am not Bob Sr. I am Bob Jr. This has happened on occasion before and I NEVER attempt to misrepresent myself as Bob Sr. From now on, I will always sign my name as bob jr. in hopes of avoiding future confusion. FWIW (For what its worth) I would not be surprised if Bob Sr. read your note to me anyway!

thanks -
bob jr!


Silicon Investor

Honeybee said...

CPA asked: "How did he account for these losses/profits?"

He just keeps running totals of his portfolios no matter what is in them -- like this:

1 year ended 12-31-2011 for all Model Portfolios:
Portfolio I: (3%)
Portfolio II: (3%)
Portfolio III: 1% (balanced portfolio of equity and fixed-income securities)
Active/Passive: (2%)
MSCI Broad Market Index: 1% (VTSMX)


Bobbrinker's Land of Critical Mass

Honeybee said...

MikieE...Yes, you can also listen on KSFO560 on the internet.

birdbrain said...

Mr B values past performance of fund managers, and Charles Akre did have an impressive run at FBR Focus Fund. As far as lack of diversification with AKREX, true but it represents only a portion of his model portfolios.

This is a move of a desperate Starship pilot who can't face the possibility of back to back negative portfolio results, so he shuns the index fund for a more aggressive approach. Because he is bullish, this makes sense.

We will track the performance of AKREX vs the funds he sold (BPTRX/VTSMX).

I think this will prove to be yet another miscalculation by Bob Brinker, Sr.

Honeybee said...

I apologize for the repeat in my BobJr post above. This is the one I meant to include:

To: Bea Dinerman who wrote (3250)2/9/1998 9:38:00 AM

From: Bob Brinker, Jr. of 42807

First off, let me be very clear. I am not the host of the radio program. I am Bob Jr., Bob Sr. is the host. I apologize for any confusion.

Secondly, the simple answer is no! I don't know of any way to get a verbatim transcript of the radio show from the internet, or any other means for that matter. I would suggest you invest in a tape recorder and record the program and listen at later times.

good luck,
-bb jr.


Silicon Investor

Honeybee said...

Birdbrain,

As usual, you hit the nail on the head with your analysis. You said: "As far as lack of diversification with AKREX, true but it represents only a portion of his model portfolios.

This is a move of a desperate Starship pilot who can't face the possibility of back to back negative portfolio results, so he shuns the index fund for a more aggressive approach. Because he is bullish, this makes sense.

We will track the performance of AKREX vs the funds he sold (BPTRX/VTSMX)."


Yes, another down year would not be easily sluffed off like this year.

And as you said, AKREX is only a portion of his model portfolios. I suppose 15, 10 and 5% progressively from most aggressive to balanced, is enough to give him a better performance than the total stock market index -- IF the fund continues to perform like it did the last two year.

While at the same time, if it performs equal to or slightly less than the index, it will not damage his performance numbers very much.

BTW: Yes, let's keep track of AKREX compared to the funds that he sold. Remind me if I forget. :)

Honeybee said...

Mr Pig said: "Something doesn't smell right. It smells like a failed clown that buys stocks in a fixed income fund."

Yep, that clown had to find a way to fool Mark Hulbert's "algorithums" so Mark would have an excuse for ranking a fixed income newsletter in the stock newsletter kettle. :)

It would be funny if it wasn't so dishonest. Kirk Lindstrom and David Korn's Retirement Advisor does better than BBJr's Fixed Income Advisor, but Hulbert added Jr's letter to Hulbert Financial Advisor right from its beginning -- in 2005.

Guess Kirk and David should have called their letter the Brinker Retirement Advisor. LOL!!

Honeybee said...

Elaine Garzarelli was on Nightly Business Report yesterday. She is bullishly optimistic on the market. Here are some excerpts from the transcript:

HUDSON: You use a set of indicators to discern your market outlook. Why so optimistic?

GARZARELLI: Well, my indicators range from 0 to 100 percent. And currently they`re at 80 percent. They include fundamental indicators such as monetary indicators, economic cycle sentiment and valuation. And anything below 30 percent would suggest a major bear market; below 43 would be a 10 to 15 percent correction. So at 80 percent, that is very, very bullish.

HUDSON: You are looking at the fundamentals there. But what about the headline risk, especially all those concerns about Europe. You heard the reporting in the interview earlier in the program about governments getting their credit ratings cut overseas.

GARZARELLI: I think that is discounted. We have known about that since December. And you know, I think most of the countries should be double D anyway. So I don`t think that`s going to have much of an impact. I think the stock market today needed a little bit of a rest. It`s been rallying since October.

HUDSON: I am sure the European governments are glad you are not on the S&P credit committee. What about the sustainability of the U.S. economic environment? Last spring we saw some green shoots but they dissipated by the second and third quarter. Is this time lasting?

GARZARELLI: Well, we see real GDP growth this year of about 2 percent and about 2.5 percent next year. And the strongest sectors will be residential construction, equipment spending, technology, commuters, software and manufacturing structures.

HUDSON: You mentioned technology earlier as a place where there may be some economic growth. XLK is the technology fund here in the mid 20s. What do you anticipate this year in terms of a return?

GARZARELLI: Well, I think that the technology group could probably do twice as well as the S&P 500. And that XLK includes companies like Apple (NASDAQ:AAPL), IBM (NYSE:IBM), Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG), Intel (NASDAQ:INTC) and Cisco (NASDAQ:CSCO).

HUDSON: All certainly household names. How about industrials? They have been kind of the market leaders and the laggards as of late. We`ve seen a nice rally off that October low.

GARZARELLI: Right. And they were a bad performer last year during the correction phase and there the stocks would be GE, United Parcel (NYSE:UPS) , UTX, Cat, 3M (NYSE:MMM) and Deere (NYSE:DE).

HUDSON: You`re not afraid of international exposure there at all, are you?

GARZARELLI: No, not really because I think the group has corrected so much that it discounted a lot of that.

HUDSON: Finally here in fixed income, we talked about credit ratings but you are not afraid of bad credit ratings, junk, JNK the ETF that focuses on the high yield effort. Is this protected?

GARZARELLI: Yeah, high yield does well in an environment of 2 to 3 percent, real GDP growth which we foresee and I think the default rate will be low because we don`t see a recession for the next couple of years. And it`s yielding JNK about 7 percent now. Corrected quite a bit last year and that`s a very good yield.

HUDSON: Three times what the government bonds are yielding. Let`s
take a look at your last picks back in April, you were last with us. You
like the materials exchange-traded fund down 10 percent, financials down 16 percent. You also at that point liked energy down 13 percent and
Advantaged fixed income closed end fund down 2 percent. Do you still like
any of these?

GARZARELLI: I love them all. We had a signal last year of a 10 to 15 percent correction so hedged in May of last year. The groups have corrected quite a bit and they look absolutely fantastic now.

Watch the video here

Honeybee said...

I don't know if it's permanent, but Bob Brinker's Moneytalk has been dropped from WHAM1180 in Rochester, New York. Here is the current Sunday schedule from their website.

Note that there IS a "Money Talk Show," but it's not Brinker's:

Sunday 01.15.12

07:00am - 08:00am: The Money Doctors
08:00am - 09:00am: The Brenna Brenna and Boyce Law Forum
09:00am - 11:00am: WHAM Home Repair Clinic Sunday Edition With Jim Salmon
11:00am - 12:00pm: The Common Cents Money Talk Show With Ann Eisenhart
12:00pm - 12:30pm: Your Hometown With Bob Lonsberry
12:30pm - 04:30pm: Houston Texand at Baltimore Ravens
04:30pm - 08:00pm: New York Giants at Green Bay Packers
08:00pm - 09:00pm: Ask The Experts (NOCO)
09:00pm - 10:00pm: The WHAM Wine Show with Don Bombace
10:00pm - 01:00am: Bill Cunningham

WHAM Programming

(Brinker still has the station listed on his website.)

jeffchristie said...

Honey

Monday is a national holiday. M L King day and the NYSE will be closed. I wonder if Bob will off for this holiday on Sunday.

Honeybee said...

Jeff, since Bob Brinker has only worked a few Sundays since Thanksgiving, I think he will probably be on the air tomorrow.

But that's just a guess. Obviously Moneytalk's ratings are dropping. If they weren't, KGO would not have dumped it.

KGO has gone to a news format, but still has talk shows on the weekends. There was really no reason to drop Moneytalk if it was a money maker.

I think Moneytalk is a money maker, but the money made is going into the Brinker family coffers.

Jamesj24 said...

Maybe he thinks that since he's been so far off for the past 4 years, since the end of 2007, that he might as well go for it all and try to boost his flatering returns. Maybe this is his way of "going out with a bang." As for Bob Jr.'s not distinguishing himself from Bob Sr., I'm sure that is intentional. It is essentially free use of an established trademark, though there are probably dwindling numbers of buyers.

Honeybee said...

Jim said: "Maybe this is his way of "going out with a bang." As for Bob Jr.'s not distinguishing himself from Bob Sr., I'm sure that is intentional. It is essentially free use of an established trademark, though there are probably dwindling numbers of buyers."

Hi Jim,

Those are interesting takes on those two subjects. I wonder if Bob Jr had continued using the "Jr" how he would have done with his newsletter.

It's interesting to me that Bob Jr used the name "Brinker" when he named his newsletter and Bob Sr didn't do that. Sr chose to name his newsletter "Marketimer."

As you said, it could be viewed as using an "established trademark." But the trademark wasn't in the newsletter, it's the talk show that made it "established." Or so it seems to me. :)

Jim said...

Looks like we got a new Jim posting here. Welcome! This is the "old" Jim.

Brinker's choice of a concentrated fund is unusual but not unprecedented. I remember when I first started listening to Brinker many years ago he was recommending the Janus Twenty Fund.
I think the fund initally only had 20 stocks in the fund, thus the name. It started to lag and then Brinker sold it.

There are only two ways for Brinker to improve performance.
Either superior marketiming or superior fund selections. Since Brinker's marketiming (or lack of) has been dismal recently, trying to choose better funds is the only option. He might do well with this fund for a few years before it suffers the same fate as most managed funds. Either the fund manager loses his touch, or the fund becomes too big. Managed funds can never be bought and held forever, even for buy and hold investors.

Jamesj24 said...

Thanks for reporting Hudson's interview of Elaine Garzarelli. I would be very cautious of anything she recommends. She had her day in the sun as one of the few who predicted the 1987 crash, but then she gave a bad sell signal in the 90's, for which Brinker raked her over the coals for weeks on his program. He claimed that she made two huge mistakes: first, announcing her sell signal before her subscribers could benefit ahead of the public, and secondly, for giving a sell signal at the precise time before the market turned back up. Since then, Elaine claims to have revised her model to make it work better. I recall her saying she began to distinguish between different types of earnings (e.g., recurring and operating vs. other)and has since then, has been nothing but a perma-bull. She remained enthusiastically bullish with every recommendation I heard her make through the market selloff of 2008-2009, always saying that her model indicators were showing a "raging buy signal", typical of a true Perma-bull. Her advice is as unreliable and as dangerous Brinker's. Hillary Kramer was one analyst who remained firm during the 2008 selloff, warning that the intermittent rallies that occurred right after the presidential election through year end 2008 were only "headfakes" and that the worst was yet to come. Most analysts never stopped trying to talk up the market in 2008, Larry Kudlow being one of the loudest of these, as I recall. I think Suze Ormann is more reliable than Elaine Garzarelli!

MikeE said...

How do we know that is in fact Bob Brinker, Jr. making those post and not someone purporting to be him? I have my doubts.
MikeE

Anonymous said...

I don't know what the big deal is about Bob Brinker using his own name.

In the first place he is NOT a Junior and should NOT be using that title. He is just plain Bob Brinker with a different middle name.

Sure it could be misleading but so what? It's a father giving his son a leg up as he goes into the newletter business.

Nothing wrong with that at all. Do you think George W. Bush would have been elected president if his name was Herbie Schwartz?

Find something else to complain about.

Realjr.

Honeybee said...

The "old" Jim said: "Looks like we got a new Jim posting here. Welcome! This is the "old" Jim.

Brinker's choice of a concentrated fund is unusual but not unprecedented. I remember when I first started listening to Brinker many years ago he was recommending the Janus Twenty Fund.
I think the fund initally only had 20 stocks in the fund, thus the name. It started to lag and then Brinker sold it.

There are only two ways for Brinker to improve performance.
Either superior marketiming or superior fund selections. Since Brinker's marketiming (or lack of) has been dismal recently, trying to choose better funds is the only option. He might do well with this fund for a few years before it suffers the same fate as most managed funds. Either the fund manager loses his touch, or the fund becomes too big. Managed funds can never be bought and held forever, even for buy and hold investors."

January 14, 2012 8:50 PM


Jim,

I'm sorry that I mistook the "new" Jim for you. I sensed that it might not be you (you are unique), but didn't think to check your profile date.

So from now on, when the "new" Jim sends comments, I will follow up with a note that explains that it is not the "old" Jim.

Note to readers: The other "Jim" comments posted this morning were from the "new" Jim. Please check the profile when in doubt.

The "old" Jim has been on the blog since it started in 2008.

Jamesj24 said...

Honey,

I'm not even sure whether I am the "old" or "new" Jim, so I changed my display name to one that will help to distinguish me from the other Jim. My participation dates back to the days of your and Kirk's forums on suite101, although I have been away for a long while. I'm the one who particularly likes to trade options.

As for my investing and trading strategy for the past year: it has been to buy high dividend paying stocks and ETFs, and writing naked puts and covered calls on them when possible. I had a concentration of money in REITs, which mostly collapsed in price later in 2011. I now have about 1/3 of my retirement account in cash because I think a major correction is on the horizon early in 2012.

I ended the year 2011 virtually at break-even, and had a small loss in my retirement account, which I have at Schwab, which is an undesireable broker with whom I have my account only because it is the only personal choice retirement account (PCRA) offered by my employer. When I retire, I look forward to rolling it all to an IRA with my preferred broker, thinkorswim, which has been acquired by TDameritrade.

Of all my investments in 2011, the CA tax free ETFs have performed best. I want to buy more but they keep going up in price.

Honeybee said...

JamesJ24 said: "I'm not even sure whether I am the "old" or "new" Jim, so I changed my display name to one that will help to distinguish me from the other Jim. My participation dates back to the days of your and Kirk's forums on suite101, although I have been away for a long while. I'm the one who particularly likes to trade options.

Oh my goodness! Welcome JamesJ24. I had not idea that you were the "new" Jim. LOL!!

I know that I enjoyed your comments, but as I said, while similar to the "old" Jim's in some ways, I could sense some difference, but chalked it up to my own perceptions.

Yes..you and I go way back to the Suite101 days. And you posted on the Discussion Group that Pig and I had for some time. It fizzled because the Google discussion forums are so convoluted.

Anyway, I'm glad you set up a new handle so we don't have to keep labeling you and the other Jim. Not sure which is worse, being called old or new. LOL!!!

Pig said...

And you posted on the Discussion Group that Pig and I had for some time. It fizzled because the Google discussion forums are so convoluted.

I disagree.....it did not fizzle, it CROAKED BIG TIME, but I still post there once a month to annoy wimpy-Impy and keep it active, so I can whack him again if he posts.

Honeybee said...

Mr Pig...I had not checked in over there for some time now.

I'm glad you keep it alive. Who knows, maybe the Queen of Quibble or Math Junkie might miraculously re-appear to shill for Bob Brinker again some day -- maybe not. It's not as easy as it used to be. LOL!

We did have a lot of fun in what was basically a no-holds-barred free-for-all discussion board.

Post a link to it if you want to. It's fine with me. :)