MARKETIMER PORTFOLIO CHANGES: Caller Russell from Charlotte said: "In your latest Marketimer, you made some recommendations to sell some Vanguard and buy some DoubleLine. And my question is, if the Vanguard has increased so that it exceeds the 20% recommended weighting, would you put that entire amount in DoubleLine or would you use some of that excess to re-balance the portfolio?"
Brinker replied: "I would have no problem with you using an opportunity like that to do some re-balancing. After all, you're liquidating the position anyway in concert with the recommendation. So of course, you could take the stipulated percentage and put it in the recommended fund. But if you have moneys left over as you indicate, you certainly could feel free to apportion those across the portfolio. I wouldn't have any problem like that. Again, I would follow that percentage column when you are doing that kind of an exercise. Good question."
Honey EC: I'm glad that Brinker let Russell on the air to ask about the October changes to the Marketimer "income portfolio." Now I can talk about it and speculate why he made the changes.
Firstly, Brinker misled the audience by letting Russell's statement about DoubleLine Total Return Bond Fund (DLTNX) stand, so here are the facts: He sold all of the 25% holdings in Vanguard High-Yield Fund and put that money into the fund that he recommended as a substitute when they closed the High-Yield Fund -- that is Metro West Total Return Bond Fund (MWTRX). Only 5% went into DoubleLine and that came out of Vanguard Wellesley Income Fund (VWINX). That brings DoubleLine up to a total of 20%.
Be aware that even though Brinker makes the statement that the income portfolio is now 100% in fixed income securities, it still holds a 10% weighting in Vanguard Wellesley which if about 37% in equities.
Will I sell my Vanguard High-yield Fund? Not based on this latest Brinker move. I think he did it because of the confusion that he would have had to deal with at year-end when (if) he reports his performance for the year. Unless, he is expecting a big recession soon or a stock market crash, high-yield funds will do as well or better than any bond fund with treasuries in it.
One more caution to readers. If you sell all of your Vanguard High-Yield Fund, you will not be able to buy back into it as long as it is closed.
MARKETIMER DOLLAR-COST-AVERAGE ADVICE: Caller Barbara said she wanted to be sure if she was interpreting Marketimer correctly when it says to "dollar-cost-average on weakness."
Brinker replied: "Let me explain that Barbara....You know how much the market has gone up. It's more than doubled in the last year....There is a tendency...to get more bullish on the market as prices go up....People get more excited after they have seen, in this case, literally skyrocket. So the reason that I make the observation that I'd rather see people dollar-cost-average on periods weakness is in order to underscore the importance of that notion of not waiting to chase rally, not getting caught up in the hype of rising prices....That is why we have been encouraging subscribers recently to take advantage of periods of weakness."
MARKETIMER BUY-SIGNALS....Brinker continued answering Barbara: "Now you know that our last couple of buy-signals were way lower. We had a buy-signal in the autumn of 2011 in the low-1100s....We are at 1460 in the S&P 500..... We said sure, fine. Year before that, it was at 1030 that we were willing to be a buyer....One of the things that I have always tried to shy away from is encouraging people to get more bullish about the market after they have seen a skyrocketing market, because the reality is that as prices go up, risks increase."
Honey EC: Brinker's Marketimer Timing Model© totally missed the bear market of 2008. Just before the bottom started dropping out in January 2008, here is what Brinker was saying:
October 3, 2007 Marketimer (S&P@ 1526.75) “In August and September editions of Marketimer, we rated the stock market attractive for purchase on any weakness in the area of the S&P 500 Index mid-1400’s range. During August and September there were 18 buying opportunities, consisting of 15 market days on which the S&P 500 Index closed within the 1430 to 1470 range, and three market days on which the index closed slightly below that range. Although we do not believe further weakness into the mid 1400’s range must occur, we remain comfortable with rating the market attractive for purchase should any such additional weakness occur.”GOLD IN IRA.....Brinker comments: I would never even consider putting gold in an IRA....It is a speculative play....For those that want to have a hedge in gold, the easiest and cheapest way is with GLD.
Honey EC: Brinker still maintains GLD in his list of Individual Stocks list, along with a few of the biggest index ETFs, and Suncor. He has had Microsoft and Vodafone on that list for eons. He presently rates them all hold.
HOW TO RE-BALANCE MARKETIMER MODEL PORTFOLIOS: Caller Bonnie from Chicago said that because of the run-up in stocks, her investments were heavily weighted in stocks. She wanted to know how to re-balance and when to do it. Brinker told her to simply sell portions of her holding so that the dollar value was in line with the percentages Brinker recommends.
Honey EC: Brinker does recommend certain percentages of each holding, but be aware that if you have been following model portfolio III -- the so-called balanced portfolio -- for the past three years or so, you have about 67% in equities now. This also happened in 2007. The portfolio had about the same weighting in equities as now, but the bear market took care of that in short order -- bringing it back down.
WHEN TO REBALANCE OR TAKE CAPITAL GAINS.....Brinker comments: Usually it's better to take capital gains after the first of the year in order to shift tax liabilities into the next calendar year. However, we are facing a substantial capital gains tax increase on January 1st. They are scheduled to go to 20% (high earners to 23.8%) but this year they are capped at 15%, so it might be better to take them this year -- especially if you are going to make changes anyway.
Honey EC: I'm surprised that Brinker outright advised Bonnie to take capital gains. The past few weeks on Moneytalk, he has clearly stated that he fully expects congress to act on the fiscal cliff after the election. Just recently, he advised a caller to at least wait until closer to year end before taking capital gains.
JOBS REPORT AND UNEMPLOYMENT...Brinker comments: The underemployment number (U6) was unchanged at 14.7%...The official unemployment rate at 7.8%....new private sector jobs at 104,000 -- certainly nothing to get excited about. We haven't even come close to replacing all the jobs that were lost in the 2008 recession....Disregard the upward revisions of July and August because it did not involve private sector jobs....Lot of part time jobs picked up in the September report....That's why no improvement in under-employed rate....It was patently obvious that this was not in any way an excellent jobs report...We need at least 150,000 private sector jobs monthly in order to impact the unemployment numbers.....Last winter, we were adding over 200,000 monthly....So when you boil it on down, "it was totally pedestrian."
WILL MUNI-BONDS BE MADE TAXABLE?...Caller David from Ohio asked if there was a move "afoot" to make muni-bonds taxable. Brinker replied that he didn't see any indication right now that there is any push under way to make muni-bond interest taxable. It is one of the few things that the new health care tax has exempted, but it covers most everything else -- capital gains, dividends, rents, royalties dividends, income from annuities.
TAXES, WHAT'S FAIR?.....Brinker comments: What is this "fair share" number that you hear so much about all the time? Is it fair that in France, high-earners will now pay 75%. Is it fair that in California the top brackets will be paying in excess of 60% -- including Obama's new health care tax? Is it fair that 40% in this country pay zero income tax?
Honey EC: In California, when you consider the extreme cost of living and include property taxes, sales taxes and a myriad other taxes, the 50% of us who DO pay taxes are paying much more than 60% right now. And Moonbeam Brown has some more goodies for Sacramento lined up on the November ballot. (Gas is selling for over $5 per gallon right now because we can't import from other states to help out with a refinery and pipeline problem.)
Brinker's best quote of the day: "All over the world governments want more of the private sector money."
Jeffchristie's Moneytalk Final Exam Question:
Bob Brinker Jr. is also in the newsletter business. He prepared himself for this in college where he majored in:
A) Animal Husbandry
B) Greek Philosophy
C) Computer Science
D) Rocket Science
Answer: Bob Brinker's Biography Part One
Brinker's guest today was Jay Elliott: Leading Apple With Steve Jobs: Management Lessons From a Controversial Genius
KSFO preempted Moneytalk today for sports. KSFO 560: 1-4pm (KSFO archives Moneytalk Free on Demand for seven days after broadcast. You can download and listen on the go.)
46 comments:
Thanks Honey,
Found the Oct7 Brinker show time was an airshow production. Upon visiting your site it was determined an alternate station was broadcasting the Brinker show I could listen too on the internet. Thanks to you I was listening again. Thanks again.
Wheezer
Call me crazy, but I'm still not seeing any reason to believe that Bob is a great market timer. :-) Were there any buy signals when SPX was trading around 700?....and even if there were, wasn't he trapped long from 2007?...it doesn't matter if he said to buy at 700, 1000, 1100, 1200, (or whatever) if he never said to sell before the market collapsed in 2008. What about the QQQ trade? Is he still trapped long QQQ from 12 years ago? :-)
Bob Brinker Jr. is also in the newsletter business. He prepared himself for this in college where he majored in:
A) Animal Husbandry
B) Greek Philosophy
C) Computer Science
D) Rocket Science
E) Studying the genitalia of other males in the locker room.
tfb
Hello Honey thanks again for your Bob Brinker weekly update. I like yourself was surprised bob told a caller to sell securities this year as the capitol gains are lower. I also thought he mentioned before that after the election they would settle the fiscal cliff issues. Anyways this is something I have to look at as it makes a big difference if you liquidate assests. I am sorry you are getting those high gas prices perhaps this will rethink the political thinking on the pipeline project. Again thanks for the update John
One of the possible changes to the tax code that Brinker talked about was putting a cap on the mortgage deduction. I thought there already was one. If a mortgage exceeds one million dollars I don't think anything above that figure is deductible. Maybe one of the tax preparers who post here can address this issue.
I wish Bob would have stated the reasons why he removed RYOCX and VWEHX from his recommended funds and from his model portfolios.
Any thoughts on these?
anonymous asked: "I wish Bob would have stated the reasons why he removed RYOCX and VWEHX from his recommended funds and from his model portfolios.
Any thoughts on these?"
Well if you had read this summary, you would already know my thoughts on VWEHX. I covered it extensively.
As for RYOCX, it did not come up on the program yesterday, but I do have thoughts on it and they are not purty.
I will soon be writing an article on the subject of Bob Brinker's long "sleep" with QQQ, how he ended it.
This was perhaps one of the worst deceptions ever in the history of "financial advice."
Bernie Maddoff should have been as clever, he wouldn't be in jail now.
"(E) Studying the genitalia of other males in the locker room."--tfb
More obscene un-funny posts from this character. Why do you allow such garbage?
Sarah Zynga
Frankj:
Thanks for the summary, I was unable to listen.
A topic that came up this past week but was not mentioned by BB was that a number of funds and ETFs offered by Vanguard are changing their benchmarks.
This move should save shareholders some money because Vanguard will pay a lower licensing fee to the new benchmark index provider.
23 funds are affected, one of them being the Vanguard Total Market Index, which is one BB has recommended often.
Sarah,
I apologize if TFB offended your delicate sensibilities.
His humor is often a bit on the "risque" side. So I will make it easy for you to avoid it. I will put his handle at the top of his posts so you can skip them.
However, I think you missed TFB's point, and that is his LOW opinion of Bob Brinker Jr., who since beginning his own newsletter, has appeared to deliberately want to be mistaken for the famous talk show host.
Brinker Sr. has cooperated with this deception on Moneytalk -- many times.
This Wall Street Journal article is titled: California's Green Gas Shortages It says Californians are grumbling. Not altogether true. Some Californians are LIVID!
Californians are grumbling about a gas price spike, which state officials blame on disruptions in the supply chain. Actually, they're paying through the nozzle for their greener-than-thou government.
Gas prices in California have soared by 55 cents in a week to an historic high of $4.65 per gallon, about 84 cents higher than the national average. The immediate cause was a power outage at an Exxon refinery in Torrance. A Chevron refinery in Richmond that caught fire in August has also been operating at reduced capacity. The resulting fuel shortage has forced wholesalers to ration deliveries, and retailers that buy on the spot market to close.
This gas crisis is self-inflicted, like so many problems in the state. Because California's fuel regulations are the most stringent in the country, the state is isolated from other energy markets. Few refineries in the world can produce the unique reformulated gasoline blend that the state requires, and almost all are located in California.
Over the last two decades four refineries in the state have shut down rather than invest in expensive upgrades to comply with fuel regulations. The biggest killer was a 2002 ban on the additive MTBE, which refiners had to replace with ethanol. The California Air Resources Board has estimated that this reformulated blend adds five to 15 cents to the cost of every gallon of gas, but Californians pay a premium whenever a refinery shuts down.
The 14 refineries in California that blend its special fuel operate at nearly full capacity. So when a refinery experiences an unexpected outage or even routine maintenance, others can't pick up the slack. And since importing the fuel via tanker can take up to six weeks, Californians are usually stuck paying higher prices until the refinery comes back on line.
10/6/2012 8:59:03 PM
From: da_cheif™
kudos to Kirk....his timing newsletter as of tonite is number 4 in timer digests top ten for the year.....
Anyone find it odd Brinker is not on the list? Maybe that 2008 "Gift Horse Buying Opportunity" he issued near the very top for "mid 1400" needs to work out first....
Frankj: From the New York Times,
Brown has asked the CA Air Resources Board to OK the sale of "winter blend" to ease the shortage.
Feinstein (grandstanding) wants an investigation. Here's your investigation, Senator: the price increases are result of the market adhering to the Law of Supply and Demand.
Please go take a basic econ course and report back to us what you earn.
The link:
http://www.nytimes.com/2012/10/08/us/jerry-brown-moves-to-reduce-gas-prices-in-california.html?ref=energy-environment&_r=1&
FrankJ,
Here's your link:
NY Times
jeff: The mortgage interest deduction is capped as you said.
The interest you might pay on the debt exceeding one million dollars is not deductible.
http://taxes.about.com/od/deductionscredits/a/MortgageDeduct_2.htm
-- Frankj
Honey,
I did read your comments and I tend to agree with you on VWEHX.
Along with RYOCX, Bob also recommended getting out of QQQ which is essentially the same fund.
Years ago, when the QQQ shares fell sharply, Bob recommended cashing in QQQ shares and purchasing XLK in a wash sale. I am still holding these XLK shares and I suspect his sell recommendation applies to the XLK shares as well. Supposedly, the underlying assets should have been substantially the same but I see the performance of XLK has been poor in comparison. I suppose I will dump the shares.
Sarah ZINGA, zings this fine BLOG with 3 opinions, by dribbling:
More obscene un-funny posts from this character. Why do you allow such garbage?
Sarah Zynga, may I aks you what your definition of un-funny or obscene or garbage is?
My opinion is that your post qualifies to win all 3 descriptions and NOONE even aksed you.
Now that I have given my opinion of your trash, I must ask Ms Honey why she allows your garbage here.
Should you be banished banished banished from here as you are on other threads, or is that just your wish for other people?
ZYNGAPig
anonymous said: "Along with RYOCX, Bob also recommended getting out of QQQ which is essentially the same fund.
Years ago, when the QQQ shares fell sharply, Bob recommended cashing in QQQ shares and purchasing XLK in a wash sale. I am still holding these XLK shares and I suspect his sell recommendation applies to the XLK shares as well."
You're absolutely correct on all counts. Indeed, Bob Brinker has now completely removed all traces of the Nasdaq 100 indexes from his Marketimer.
I will be writing more on this subject very soon.
Money Talk With Don,
Please tell Kirk KUDOS!
He has worked hard to make his newsletter successful.
And he did it all without the benefit of a famous father whose name he could piggy back on.
Anonymous...please make up a handle to sign your posts with so I can get to know you better. I appreciate your comments.
I just did a comparison between QQQ and XLK back to the time that Bob Brinker recommended it as a substitute for those who wanted to hold the Nasdaq 100 based on his buys, but wanted to take tax losses.
I see that XLK has done about 50% less than QQQ over that time period.
So add this revelation to the list of Brinker's Blunders that costs followers Big Bucks.
As I said before, I will be writing an article on this subject soon.
California Governor Moves to Cut Gas Prices
Governor Edmund G. Brown Jr. ordered the state’s California Air Resources Board (CARB) to move to allow refineries to make winter-blend gas. The action normally does not occur until October 31.
Read more: California Governor Moves to Cut Gas Prices - 24/7 Wall St. http://247wallst.com/2012/10/07/californ..../#ixzz28kYquxgf
"Indeed, Bob Brinker has now completely removed all traces of the Nasdaq 100 indexes from his Marketimer. " // Too bad that doesn't remove the losses that his subscribers took on that trade. :-)
So how many bow-wow mutual funds has Brinker recommended over the years.
I can think of two:
Thompson and Plumb
Meridian
What others are there?
tfb
RE: BOW WOW
"Another obscene un-funny posts from this character." Why am I attracted to such garbage?
I'll have you know that I once knew a girlie boy that got bit by a "bow-wow", and almost did not survive intensive care for 2 or 3 times, before he passed on at least twice now from something else.
It's not funny making fun of bow-wow's...that poor dog could have contracted rabies or something worse. Some rejects and low-lives have all kinds of diseases and body odors and stains.
TFB asked: "So how many bow-wow mutual funds has Brinker recommended over the years."
Well, there have been several. Probably the most disastrous was TEFQX.
Additionally, he has made several stock recommendations that have been real "bow-wows."
Do you recall back to the days of UTEK? During that time, he was touting UTEK anonymously on internet message boards while he had an insider connection to the company. I have documentation to prove this of course. Oops.
Apparently we should add Baron Funds to the list of Bob's bow-wow picks:
Yet another bad fund pick by Da Brink
Recall that he adds stuff to his recommended list but doesn't add it to his model portfolios often. Usually is is after great performance. He then talks about this fund or stock pick on the radio "on our recommended list" as if he recommended it long ago and has great gains... but in fact it is there, apparently, only for advertising and drawing in suckers.
It is much easier to sell an investment to someone AFTER it has had a huge run up. Same must go for selling market timing newsletters....
QQQ was "hold for future recovery" yet he sold long before it recovered.
TEFQX was also "hold for future recovery" but it was removed from the newsletter with no guidance about how much recovery to hold for... ICU to Hospice?
Jeff from Portland
Strong Funds was another loser also
Dancing Bozo,
I agree with all of your comments except you are mistaken that Bob Brinker sold the QQQs.
It was in the October 2012 issue of Marketimer that he finally instructed his sucke....errrr, subscribers to sell any QQQs that they were still holding.
TWELVE YEARS LATER!
What you maybe didn't know is that he BOUGHT RYOCDX (proxy for Q's) after the they were down over 70% and added it to his model portfolios.
As I said before, if Bernie Madoff had been as clever as Bob Brinker was in this coverup, he would not be in jail.
I will write an complete article on this subject as time allows -- it will be soon.
In case anyone is interested, the market should be close to a "buy" now since it is so oversold and right at the 50-day moving average.
I'm in SDS for a medium sized trade. Not a recommendation. Just sayin'.
I meant that he sold them long before they recovered in that selling now is still a long way down from the purchase price.
I look forward to your article.
I had to chuckle his show on the SF station was preempted Sunday to cover an air show.... I can't imagine anyone but a handful at the air show with radios and no friends to talk to listening to the radio about Fleet Week and the Blue Angels. People at home like me listened to or watched football (Go 49ers!) or baseball (Go Giants - Go Athletics!) or music... so I guess NOONE in the Bay Area really cares what he has to say these days.
Mr Bozo:
With the NFL occupying most of our attention on Sundays, we rely on Honey's blog to understand what Our Most Trusted Financial Advisor is saying on Sunday afternoons.
You say his program was replaced with coverage of an air show? The Blue Angels trump The Starship? What is this world coming to?
It's too bad that some people have to be such jerks.
It's really easy to get a Google account. You don't even have to use it if you don't want to. I use mine only rarely. But I can log on to it any time I want to post here.
Bob Brinker reveals his true political feeling on Larry Elder's radio show. He talks about the jobs report, the debate and a bit about the economy. He defends Barack Obama any way he can.
It's worth a few minutes so you can compare what he says there to his spin on Moneytalk.
It's about the third link down -- about 3 minutes into the audio
Larry Elder Inteviews Bob Brinker
Jason....Did you forget something? LOL!
Ouch! FrankJ sent this five-minute video, a non-partisan analysis showing why our national debt cannot be paid:
United States Budget Dilemma
"Honey EC: In California, when you consider the extreme cost of living and include property taxes, sales taxes and a myriad other taxes, the 50% of us who DO pay taxes are paying much more than 60% right now. And Moonbeam Brown has some more goodies for Sacramento lined up on the November ballot. (Gas is selling for over $5 per gallon right now because we can't import from other states to help out with a refinery and pipeline problem.) "
Don't forget the HIDDEN TAX ON SAVERS we pay via lower rates.
I remember 14 yrs ago doing a calculation saying if I grew my assets to $3M that I could get $120K a year safely with a 4% take out rate. That relied on half the money in safe, fixed income investments like US Treasuries, CDs and savings accounts paying about 5%. These all pay next to nothing now.
Consider $1M at 5% interest paid you $50K a year... take another 2% in dividends from $1M in the Total Stock market for $20K for a total of $70K income...
Today that $70K is maybe 1% or $10K from savings accounts and $20K from the stocks... so our income was more than cut in half... just for playing by the rules....
But... where else will the government get the money but from savers? They KNEW THEY COULD NOT DIRECTLY RAISE TAXES so they have done so in stealth mode. Everyone agrees you can't get an improving economy with tax hikes.... so we shouldn't be surprised that the economy has not improved. Savers making next to nothing now spend next to nothing as we fear the government will put a "property tax" or worse on our savings (been discussed to tax assets in IRAs with a property tax)....
It is why it is so important to not approve new spending until we balance the budget.
JoefromSpringfield wrote:
Good evening ladies and gentlemen. This is the late Howard Cosell bringing you tonight's vice presidential debate. Now entering the ring, and debating out of the blue corner is Joe Biden a veteran debater well past his prime. Winner of seven Senate victories. Once considered the great white hope until his defeat in 2008 in the championship bout with the Kenyan/Indonisian champion Barry Soetoro.
Debating out of the red corner Paul the Kid Ryan with seven house victories and no defeats. A mere three years old when his opponent won his first senate race. Looking fit and trim the kid appears to be in top shape and ready for tonight's debate.
Your referee for tonight's match is Martha Raddatz.
Biden opens with a Libyan left that misses its target. The kid counters with a right that mentions the Youtube video debacle. Biden grins as if to tell the kid that the jab did not affect him. Biden continues to smirk. He then blames the intelligence community for the confusion and claims there was no a request for additional security. The Kid looks puzzled.
The debate moves on to the budget. Biden throws a left jab at the Ryan Budget. Ryan comes back with a hard right saying his opponents have no plan to deal with this issue. He says they promised to cut it in half but instead they doubled it.
Next they moved on to jobs and the economy. Biden starts with blaming the prior administration. He then plays the class warfare card. The kid points out the terrible record of the current administration. Ryan hits Biden with a hard right saying: "Sometimes the words don't come out of your mouth the right way". The crowd roars.
Both contestants are Catholic and the abortion issue comes up. Biden claims that the values of the Church are not being attacked by the healthcare bill. Ryan then asks him why the church is suing the administration.
There you have it folks. One of the contestants was rude and abusive laughing at serious issues while his opponent was respectful and took things seriously. Thank you for tuning in tonight and don't forget to vote in November.
Siliconinvestor
I thought Joe Biden showed the leadership and maturity of the office. Ryan just doesn't have the experience. He only got two bills passed, one to rename a post office and the other so he could get cheaper arrows for his bow.
"I thought Joe Biden showed the leadership and maturity of the office."
The only thing Joe showed were his ultra white teeth in his smiling face. He seemed to think the whole thing was a big joke. In November I hope the joke will be on him!
- Dan G
Dan,
Biden was an embarrassing, rude jerk.
Ask me and I'll tell you what I really thought of his disgusting debate buffoonery.
Post a Comment