September 30, 2012, Bob Brinker hosted Moneytalk....(comments welcome)
BRINKER'S ADVICE IN A CYCLICAL BEAR MARKET....Caller Rich in California said: "My wife and I are both retired and thanks to you we reside in the Land of Critical Mass and I have a question for you regarding your model portfolio III. We're currently taking somewhat less than a 4% withdrawal rate from that portfolio. If we go from a cyclical bull market to a cyclical bear market, and the decision is made to go to cash, what would be an appropriate withdrawal strategy."
Brinker replied: "Well I certainly like the idea of minimizing the withdrawal if you have other income. But I'm comfortable with a 4% withdrawal rate in such a situation. Cyclical bear markets don't last forever. If you get into a really long cyclical bear market, it doesn't come anywhere close to lasting forever. So the reality is, I don't see any reason -- especially, look what's happened this year in that portfolio. That portfolio, in the first nine months of this year has already generated double digit returns.....You're looking at an outstanding year. So you're certainly in a position to, I think, maintain a 4% withdrawal rate even if you do enter a cyclical bear market."
Honey EC: So if you read Brinker's response to Rich carefully, it will tell you what I have been saying for years now. Brinker will never again advise raising cash -- EVEN IN A CYCLICAL BEAR MARKET. (Brinker defines a bear market as a decline of 20% or more.) That must have surprised Rich somewhat because, like lots of subscribers, he believes that Brinker will raise cash and get him out of the stock market ahead of the next cyclical bear market.
Honey continues editorializing :) Nope, he won't. It's all a myth. He has remained fully invested since March 2003 in spite of the name of his newsletter. And in spite of the mystique that he established for himself in January 2000 when he raised 65% cash. The only other time that Brinker has raised cash was in January 1988 to January 1991. But it cost him dearly to go to 100% cash because the market shot up and by the time he got back to fully invested, he had missed out on a ton of gains. See the full history here: Asset Allocation History
OKAY TO WITHDRAW 4% OVER TIME FROM MODEL PORTFOLIO III.....Brinker said: "We have spoken on the broadcast about the balanced model III portfolio in the investment letter. Where we certainly feel comfortable with a withdrawal rate in the area of 4% against the interest and dividends and capital appreciation over time in that portfolio.....But you are going to have volatility and fluctuation in that portfolio."
Honey EC: Be aware that right now Marketimer model portfolio III is not balanced as listeners might assume Brinker means. It is close to 70% stock mutual funds and only about 30% in fixed income funds. It contains a very volatile holding in Akre Focus Fund (AKREX) and a couple of international funds (VFWIX and VWIGX). It also contains Brinker's usual picks -- Vanguard's Total Stock Market Fund, Dividend Growth Fund. On the fixed income side: Vanguard Ginnie Mae Fund and Short-Term Investment Grade Bond Fund. Also 20% in the hybrid, Wellesley Income Fund. A total of 8 holdings.
WHEN WILL INTEREST RATES RISE: Andy from NY wanted to know when to expect interest rates to go up. Brinker replied: "I'm not looking for much movement in the near term in interest rates....What we have right now is Federal Reserve policy that is designed to hold rates at a minimal level....short-term close to zero percent.....Everything that we've been hearing from Ben Bernanke is consistent with this policy continuing for the foreseeable future."
DURATION FORMULA FOR INTEREST RATES... Caller Jay from Illinois asked Brinker if he would explain the formula for calculating how interest rate changes affect different durations. He also asked Brinker if he would put the formula on his website. Brinker told him no because he almost always explains this to his subscribers in his "investment letter."
Honey EC: I understand why Brinker wouldn't want to clutter up the nice Marketimer website that his son keeps so will positioned to sell newsletters, cups, golf shirts, T-shirts, sweatshirts, bumper stickers and binder stickers -- all with the Marketimer logo on them. Gee, where else can you pay $25 bucks for a light cotton T-shirt and give him free advertising too? Step right up ladies and gentlemen! It's a bargain. LOL!!!
HERE'S THE DURATION FORMULA: If you had a duration of 4, an interest rate increase of 1% would give you a depreciation of 4%.
GROSS DOMESTIC PRODUCT: Brinker comments: We are looking at a slow growth economy. Because of the drought in the mid-west -- one of the most severe in decades -- we saw a downward revision of GDP in the second quarter to 1.3%. That brings the annual growth rate for the first half of this year at 1.7%.
IS IT SAFE TO HAVE ALL INVESTMENTS WITH ONE COMPANY: Caller John from Alaska asked if doing this was risky. Brinker replied: "I'm just giving you a personal opinion here. I don't have a problem with that. If you're talking about the Vanguard's of the world, the Fidelity's of the world, the T.Rowe Prices' of the world, the very well known investment companies that have been in business for decades."
Honey EC: How interesting that Brinker now includes T. Rowe Price but still refuses to include Charles Schwab (Brinker used Schwab exclusively for his BJ Group clients until he sold it). Could it possibly be because on September 11, 2012, he added a 15% weighting of T. Rowe Price New Horizons Fund (PRNHX) to portfolio I, and a 10% weighting to portfolio II and that fund can only be bought directly from T. Rowe Price. It's closed at Vanguard, Schwab and Fidelity.
BOB BRINKER'S COMPLIMENTARY ISSUE OF MARKETIMER: According to one of the blog readers, if you request a back issue, you will get November 2011 issue.
CONGRESS A NATIONAL DISGRACE....Brinker comments: I can't believe what I just saw. I speak about the audacity of congress to declare another vacation....Congress took most of the summer off....They came back for a very short period of time in September....Now they are back on vacation.....I include running for re-election vacation time because they're not working on the nation's business....The vast majority of the dysfunctional government are automatically returned to office year after year....These guys and gals in congress defy belief. They are, through their negligence in governing, they are a national disgrace.
CALIFORNIA IS IN TROUBLE.....Brinker said: "How many realize that under current law, the top bracket in California in January is 61% if the new Jerry Brown tax increase passes in November?....Spending is completely out of control in California. You've read about the bankruptcies in Vallejo, Stockton, Mammoth Lake, San Bernardino. Who knows where it will end. In too many cases, the so-called governing body of those domiciles over-promised to the public work force and now they can't deliver. And if you're lined up for one of those big, fat pensions in one of those places that can't afford it, don't count on getting that pension. Because if the taxpayers refuse to pay or move out of town, you're not going to get it.....The taxpayers, in many cases, are saying, I'm not going to take it anymore."
Honey EC: Brinker is only counting federal taxes. To that 61%, you have to add sales tax close to 10%, property tax, phone tax, gas tax, and dozens of other ways they pick our pockets in California.
FRANCE.....Brinker comments: The new Socialist president wanted higher taxes....There top bracket is now 75%....Why stop there? Why not make it 100%.
EUROPE: Brinker spent much of his monologue time talking about the European Union and what is going on over there. Not worth my time to cover it or you time to read about it.
POLITICS: Brinker also spent a lot of time pretty much repeating his political views again. In my opinion, the only subjects he covered that will directly affect investors is the fiscal cliff and the Keystone Pipeline.
FISCAL CLIFF....Brinker comments: It's not a joke even though Leno and Letterman are making it one. They have left the taxpayers a gigantic black hole only three months away.
PRESIDENT'S REFUSAL OF KEYSTONE PIPELINE IS INSANITY.....Brinker said: "Something that I just cannot get past is the refusal of our president to approve the Keystone Pipeline so we can bring more of that Canadian oil down into the USA. Does the United States have a better friend in the world than Canada. The only country that is even close is Britain....And this country because of the delay in the approval of the Keystone Pipeline, which is the no-brainer of all time, is now placing Canada in the position where they are looking onto building a pipeline to British Columbia and selling the oil to Asia. Why? So we can import more oil from the unstable mid-east? Ladies and gentleman, this stuff is crazy......This is the definition of INSANITY! Give it a name!"
AMERICAN GREED AND BERNIE MADDOFF: Brinker mentioned that the TV program, "American Greed" did a show on Bernie Maddoff. I made a point of watching it last week because mentioned it was coming on last week. The one thing I learned was that Maddoff was put in a cushy prison and lives a lot better than many on the outside -- and he's actually a celebrity. Bernie Behind Bars
BEST QUOTE OF THE DAY: Brinker said: "If you give your money to a scam artist, Katy Bar the Door."
Jeffchristie's Moneytalk Final Exam Question:
Bob Brinker is often critical of congress for taking too much time off. In the first nine months of 2012 there have been 39 Moneytalk broadcasts. Bob Brinker has missed how many of them?
A) 4
B) 8
C) 9
d) 12
Answer: Bob Brinker's fill-in weeks for 2012
January 1, 2012: Bob Brinker
January 8, 2012: Lynn Jimenez
February 12, 2012: Lynn Jimenez
March 11, 2012: Lynn Jimenez
May 27, 2012: Lynn Jimenez
June 10, 2012: Neale Godfrey
July 8, 2012: Neale Godfrey
August 12, 2012: Neale Godfrey
September 2, 2012 Lynn Jimenez
(He has been absent 23% of the time so for this year.)
San Francisco, Ca. KSFO 560: 1-4pm (KSFO archives Moneytalk Free on Demand for seven days after broadcast. You can download and listen on the go.)
Brinker's guest-speaker was Jeffrey Frieden: Lost Decades: The Making of America's Debt Crisis and the Long Recovery
51 comments:
I listened to about 15 minutes of the leftist fool he had on in the last hour - good grief.
tfb
Funny how he tries to sell newsletter by the simple formula of calculating how bond prices increase when you raise interest rates as Honey pointed out.
Mark
Newark CA
Thanks for the brinker weekly update. The post about the keystone pipeline is the only thing that jumped out at me( other than that Brinker seems to be going over the same stuff every week)Anyways I have been reading some material that Obama wants one world order to encompass all countries. He also wants people to move back into the cities and away from the suberbia so that their will be more govermental control.The saudi king and Obama are very friendly and this may have something to do with that keystoine pipeline but I am not sure. Anyways thanks again for your posting and have a good week (It sounds like they are taxing you guys to oblivion in california)
Reading Honey's summary is to experience deja vu.
Callers asking about the 4% withdrawal rate, cyclical markets, interest rates. The host commenting on the European Union, dysfunctional Congress, more political views, etc. Sure this wasn't a show of recycled calls?
Move along, folks. Nothing new here.
I agree with TFB and Mark, the third hour guest was just a propagandist. Worse, he was boring. :)
Is Bob Brinker prepping Obama to beat Romney in the debates?
"President Barack Obama arrived in Nevada last night to begin three days of debate preparation at the Lake Las Vegas Resort, a luxurious golf community just a few miles from the Las Vegas strip.
According to the White House pool report, the "resort is a strange mix of desert sand pits, green lawns, palm trees and new homes. We passed a replica of the Ponte Vecchio and some luxurious lakeside estates, also unfinished lots and a browning golf course. The president's hotel has a Middle Eastern theme and a view of the lake from the lobby."
Here are some pictures, courtesy of the hotel's website.
Read more: Brinker loves Obama
John,
Thanks for your comments. I agree that Bob Brinker's Keystone Pipeline comments were among his best of the day.
Yes, California is, as the old saying goes: WASS (We are so screwed.)
Now the latest is that Crazy-Jerry wants to turn loose killers who have been sentenced to LIFE WITHOUT PAROLE...
Crime rates are already on the rise in formerly safe cities, like San Jose.
I suppose that just couldn't have anything to do with Crazy-Jerry emptying out California prisons because the little darling CRIMINALS are crowded.
Birdbrain,
I thought you would have some comments about what Bob Brinker said about continuing to take out 4% from his model portfolios even during bear markets.
In my opinion, he was absolutely stating that he will never raise cash again.
"I suppose that just couldn't have anything to do with Crazy-Jerry emptying out California prisons because the little darling CRIMINALS are crowded."
Governor Brown has no choice. The Supreme Court has ruled that California MUST remedy the prison overcrowding.
The voters, including you, won't pay for new prisons so the solution is to release minor offenders.
Brownbag
Mr. Pig,
Wow! So Obama is staying at Lake Las Vegas where Bob Brinker owns a million dollar condo that is now worth about $200K.
No wonder Brinker didn't have much to say about Obama not knowing how much the national debt is....
"Wow! Bob Brinker gave himself away yesterday. He intends to ride out future bears fully invested."
That's NOT what Brinker said at all. He said it was alright to continue to take out 4% even in a bear market.
That portfolio could very well be cash in a bear market but you could still withdraw 4% of that cash is what Brinker was saying.
In other words, it's alright to take out 4% in bull or bear markets.
@John, you certainly read "conspiracy" theory there. It must be a recycled material years in and years out and never out of style. Just fill in the blank and you get sensational lines -- be it FDR, Nixon, Bush Sr., Obama. Here you go, "---- wants one world order to encompass all countries. ...."
The same goes for "The saudi king and ---- are very friendly and this may have something to do with ...."
moocher101
Brownbag,
Along with the liberal whackos in our legislature, Crazy Jerry Brown is responsible for the fact that 25% of the inmates in California prisons are ILLEGAL ALIENS.
And he is certainly responsible for some of the liberal judges on our courts that have thrown out all attempts to stem the tide of the Mexican invasion of the state.
Frankj --
tfb, if you listened to 15 minutes, that was the equivalent to just one answer by the guest, to one of BB's questions.
The guest gets my award for the most long-winded answers of any guest in recent history.
Robert,
So you are one of the Brinker sycophants who reads your own interpretation of what Bob Brinker says.
The caller specifically mentioned "going to cash," and Brinker specifically did not respond to that, but told him how "cyclical bears are not forever."
Face it, Brinker will never again raise cash. He belongs to the Church of Buy and Hold. You may as well accept it.
It doesn't matter who is responsible for the prison populations or whether you agree with the courts or not.
The Supreme Court has ORDERED California to reduce it's prison over population and it MUST be done.
You can build new prisons or release some prisoners.
Which do you prefer?
Brownbag
Brownbag,
I prefer other choices. Let's start with dispatching the 700+ murderers on death row that we house, feed and provide medical for -- that will lower costs immensely.
Then we could deport every single ILLEGAL Alien back home.
You may like the California courts. I detest them.
"Crime rates are already on the rise in formerly safe cities, like San Jose.
I suppose that just couldn't have anything to do with Crazy-Jerry emptying out California prisons because the little darling CRIMINALS are crowded."
Crime is up because SJ and Oakland had to eliminate a lot of police jobs so they could keep paying the pensions and benefits for older cops.
The younger ones who would be happy to have a job and happy to contribute to their own pensions like the tax payers of San Jose and Oakland can't find jobs as cops because the current ones have union rules protecting their jobs and pensions. They are first in line at the trough and gouge on taxpayer kindness leaving nothing for new officers who could fight crime.
Vote no on any new taxes, force the cities into ch11 where one option is new contracts with defined contribution plans (and no defined benefit pensions) for all government cough...cough... workers.
Otherwise expect more of the same... more taxpayer dollars going to fewer workers and retired people with defined benefit packages.
TFB
I have heard Obama accused of being many things but Brinker's third hour guest is the first person that has ever claimed he is a "MODERATE". That was one of the most bizarre statements I have ever heard on Moneytalk.
Mr. Pig
I think Obama is in town to play golf with Brinker. Lying about his score should help prep him for the debate.
Note to the person who asked for comments about Brinker's October Marketimer:
I do not publish contents from his newsletter before there has been enough time for all subscribers to read it.
All I will say, is that he did not raise any cash -- just as I predicted.
Honeybee I agree with you dispatch the prisoners and deport the aliens. What would other countries do??How about a place like the movie Escape from New York where the prisioners were dispatched to a vacant island and they run the island and we just periodically air drop supplies...(sounds interesting)
It's always a bit amusing to hear Brinker complain about Congress taking another vacation, given how often Brinker is absent from Moneytalk.
Yes, I know their job is more important than his, but I just can't picture a Senator Brinker or a Congressman Brinker getting up in front of his colleagues, standing at the podium and saying "Ladies and Gentlemen,let there be no vacation until we hammer out a deal!"
WASS (We are so screwed.)
When that happens to me, normally I am smiling.
Nothing like a good S-ing the night before to get you to smile all day long.
tfb
Fluffy...I can always count on you to interject the humor and make me chuckle. :)
"The Supreme Court has ORDERED California to reduce it's prison over population and it MUST be done."
WHY? What would those judges do if they were just totally ignored? I would really like to find out!
WHY? What would those judges do if they were just totally ignored? I would really like to find out!
They would throw no account mothxxfxxxers like you in prison too you axxhole fool.
(Honey here: comments edited. Sorry, Dan. This person seems to live his life in a haze of hate.)
I cannot tell who actually said this -- it was either Jeff Christie, tfb, or Mr. Pig -- but it's right on the money:
"I have heard Obama accused of being many things but Brinker's third hour guest is the first person that has ever claimed he is a "MODERATE". That was one of the most bizarre statements I have ever heard on Moneytalk."
"Honey here: comments edited. Sorry, Dan. This person seems to live his life in a haze of hate.)"
Oh, did someone write something, Honey? I didn't notice!
@ Bob Brinker (the talk show host, not the famous man's wannabe-financial advisor son),
So now you think you are finally "free" from the taint of the scam and coverup that you pulled with QQQ. And you have forever abandoned those who have held them all of these years on your advice.
You know the one where you made a trade and told subscribers to use up to 50% of the cash reserves you told them to raise from your model portfolios....
However, you never added those trades (yes, there were three of them between October 2000 and March 2001) to your official record.
You scammed subscribers when you DID add them to your portfolios after they had dropped 70%.
Now you have scammed them again by forever distancing yourself from QQQ.
Where is your integrity? You seem to be fascinated with "American Greed." I see why.
I won't ever forget this, Bob....I'm a small gnat compared to your national microphone, but hey, I have saved a lot of suckers from you.
Note to the person threatening me:
Don't worry about me. Worry about yourself being thrown in jail for harassing, stalking and slandering A PRIVATE PERSON!
IT'S A FELONY!
So Mr. Pig posted that Obama is temporarily a neighbor of Bob Brinker's in Henderson, Nevada.
He's still there tonight, and Mitt Romney is in Denver:
"WASHINGTON - The presidential candidates are leaving the heavy lifting of campaigning to their running mates as they spend one more day preparing for their first debate, scheduled for Wednesday night.
President Barack Obama is in Henderson, Nev., for a strategy run-through ahead of the debate in Denver. Republican presidential candidate Mitt Romney is set to spend most of Tuesday in debate prep at a Denver hotel."
Funny how he tries to sell newsletter by the simple formula of calculating how bond prices increase when you raise interest rates as Honey pointed out.
Mark
-----------------------------------
What does that mean Mark? It makes no sense to me if you are trying to talk about duration.
And don't bond prices fall when interest rates rise?
Honey, thanks for the summary.
Now with my comments:
I thought the guest on the third hour was great. He is so right on many points.
I'd prefer Moneytalk to have more guests like him and Charlie from last week than hear questions that I've heard a million times - should I refinance, should I take a lump sum, ect.
- anon2
Are any of your planning on taking some profits and getting out of the market until the start of the new year when either the fiscal cliff issues are either resolved or lowered through compromise or the old tax rates go back into being plus the SS 2% vacation being over?
- anon2
Solid performance by Gov Romney last night, keeping the Prez on defense while clearly stating where he wants to take the country.
If the swing state voters were paying attention this should tighten up the race.
Birdbrain, I agree.
-- Frankj
"Are any of your planning on taking some profits and getting out of the market until the start of the new year..."
I just took some profits, selling into this nice rally. But no way will I wait until January to get back in.
The favorable season for stocks is just around the corner. If/when the MACD is positive after mid-October, I'll be looking to get back in in spades.
But others may have different ideas. Let's hear 'em!
It looks like Mr. Pig may have nailed it. Based on Obama's performance last night it probably was Bob Brinker who prepared him for the debate.
Anybody not believe this?
JACK WELCH: Obama Is Manipulating The Jobs Numbers Because His Debate Performance Was Awful
Read more
Maher Rips Obama's Debate Performance: "Looked Like He Took My Million And Spent It All On Weed"
"I’m sorry, he sucked. He looked tired. He had trouble getting his answers out. It looked like he took my million and spent it all on weed," HBO's Bill Maher said on Friday's broadcast of "Real Time."
Warning to Marketimer subscribers:
I'm not at liberty to say what it is (yet), but Bob Brinker has made a false statement about one of his portfolios in the October issue.
Thanks go to a blog reader for alerting me to this....
"I'm not at liberty to say what it is (yet), but Bob Brinker has made a false statement about one of his portfolios in the October issue."
A deliberately false statement...or a misstatement?
Fan
I have no way of knowing if it's deliberate or a misstatement.
If it's deliberate, he must think his subscribers are pretty dumb.
he must think his subscribers are pretty dumb.
Yes he does. And most of them are (with the notable exception of the HottieBeeBadger who subscribes merely for entertainment value).
tfb
(reposting) I also saw the error, if it's the same one being mentioned. I needed to integrate the newsletter ideas into my own thinking, and found it useful. As for the error (minor), I corrected for it...
TFB....LOL! Well, you're half right. I do subscribe and I am entertained every time I see the relentless repetition. :)
But the reason I subscribe is because Bob Brinker is a national radio talk show host flying under the colors of "America's Most Trusted Financial Advisor."
I could not possibly educate my blog audience properly if I didn't KNOW exactly where Brinker is not quite "trustworthy."
I have to have the facts, the history of past programs AND Marketimers in order to show the truth and the whole truth when Brinker fails to do that on the air.
I'm here to educate listeners who are willing to do due diligence and find this blog.
Joshcohen,
Okay, I'm glad you caught the (as you said) "minor error" in the latest Marketimer.
However, it's not so much the error as it is what the error shows. It shows that he is either incredibly sloppy or just thinks his subscribers won't notice it.
As my late husband used to say: "Take your choose." :)
Re: Labor department employment numbers:
They are NOT manipulated, they are IRRELEVANT!
These surveys were created under FDR, eighty years ago! To give the impression that SOMEONE knew what was going on, and was watching over it.
NONSENSE!
You can't catch a falling knife! Does anyone believe the CPO minus food and gas prices is worth anything????????
A manipulated phony number is just as useless as a genuine PHONY number! Stop buying into govt. propaganda!
Do you know the reason why Bob has removed RYOCX and VWEHX from his recommended funds and from his recommended portfolios?
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