I listened to all three hours of Neale Godfrey and will not be covering anything she said. Her main topic of the day was jobs and how "we" can get this country going again.
Jeffchristie sent the following comments about Neale's show today:
Honey,
Neale made several statements today that didn't make sense to me. She said several times that the United States no longer produces Steel. According to the World Steel Association the United States is the third largest producer of steel in the world.
List of Countries by Steel Production
About 40 minutes into the third hour she said that 2010 was right in the middle of the recession. The recession started in December 2007 and ended in June 2009 according to the National Bureau of Economic Research.Business Cycle: National Bureau of Economic Research
It is mistakes like these that make me wonder if Neale is qualified to do this type of show.
Honey here: Looks like Brinker is trying to call the stock market top.
I want to talk about the "elevated level of vigilance" which Brinker claims he is maintaining in the January 2013 issue of Marketimer -- certainly not the first time he has said that.
Friday, the S&P 500 Index closed at 1472.05, so it is very close to Brinker's target range of "upper 1400s to lower 1500s." What is he likely to do next in light of the fact that for the past TEN YEARS he has NEVER recommended raising cash -- in spite of the fact that he has issued multiple "buy signals?"
He claims the buy signals are for new money, but unless one got an inheritance, retired with a big lump sum, sold a home or won the lottery, most new money would have been already dollar-cost-averaged in to the market according to his regular advice.
In August 2012, Brinker began saying that the 9.9% stock market pullback in 2012 was not "health-restoring" like the corrections in 2010 and 2011.
In September, October, November and December, he repeatedly stated that in 2010, the S&P 500 Index declined from its April 23 close of 1217.28 to its July 2 close of 1022.58 for a 16% correction, and at that time, he rated the market "attractive for purchase."
He also points out that in April of 2011, the S&P 500 Index declined from its April 29 close of 1363.61 to its October 3 close of 1099.23 for a 19% correction, and at that time, he again rated the market "attractive for purchase."
On the air, Brinker first said he was "keeping an eye on" the market in October 2012 on a Red Eye radio midnight guest-appearance. I posted some excepts HERE.
So we know that in the last five years, Brinker has ridden the market down with a 57% mega-bear, a 10% correction and a 20% correction. Is he likely to pick a top now or in the future? Obviously, he would like listeners and subscribers to think he is trying. We will know in the "fullness of time."
Jeffchristie's Moneytalk Final Exam Question:
A) The first blood bank.
B) The first Islamic bank.
C) The first Women's bank.
D) The first sperm bank
Godfrey's guest-speaker today was Sanjay Bose, a professor who spoke about how climate change and weather patterns can affect investments.
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.)
29 comments:
Damn!!!!!!!!
Mike...I couldn't have said it better myself.
She is very difficult to listen to, but I will force myself for the sake of my blog readers. :)
The KSFO link is broken.
I don't really mind her it is just that I would rather listen to Bob.
MikeE
The KABC link doesn't work either.
Thanks for the heads-up on the links. I fixed both of them. Any more?
.For the second week in a row, Bob Brinker did not host Moneytalk.
Darn it. I missed the last two weeks. In fact, I missed the last 522 weeks of the show, and the qqqq is still under the purchase price.
Whatta genius..........
Speaking of market timing...did anybody see Kirk Lindstrom's market timing call?
I didn't but he is supposed to be a market timer according to Timer Digest. I didn't know that.
Mr. Pig,
Indeed, 13 years later, QQQ is still under the price where Bob Brinker so vigorously said it should be bought "immediately."
But he cleared himself of that albatross around his neck -- didn't you know? In the October 2012 Marketimer, Brinker said:
"In addition to our recommendation to eliminate Rydex Nasdaq 100 Fund from model portfolios I and II, we also recommend the sale of any QQQ shares that are held by subscribers, with reinvestment of the proceeds in either the Vanguard Total Stock Market Index (VTSMX), or the corresponding exchange-traded fund (VTI).
So there you have it. If anyone complains about still holding their Q's, he can say, I sold those when the market was near a top.
Nice huh?
anonymous said: "The chief source of "new money" for most people would seem to me to be savings from your salary, which you would dollar cost average according to your preferred allocation at this time. I dont know why this is such a controversial statement on this blog unless everyone is retired."
Hi anonymous,
Not really, because as far back as the eye can see in Marketimer and on Moneytalk, Brinker recommends "dollar-cost"average on weakness." Whatever that is.
Perhaps you are not aware of what it means to dollar-cost-average money into the market.
Alan G,
Kirk can certainly speak for himself, but I think the timing he does has to do with buying and selling individual stocks.
BTW: Timing Digest has his newsletter ranked highly.
"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."
Senator Obama, March 2006
Yes, Mr President. We do deserve better.
Birdbrain, good quote. Maybe at a subsequent news conference a courageous member of the White House press corps will read that quote aloud and ask Dear Leader if he knows who said it.
-- Frankj
Frank J,
When pigs fly. :)
Oh brother Climate change and investments. Yeah a few years ago, I invested in Compass Minerals (CMP) . It sells the salt for the snow, and because there was so much snow, my investment paid off big. So in that sense, Climate change affected my investments. But in the opposite way these gurus suggest.
Mark
I agree. Market timing is always good when you individually select stocks. You buy good companies when they are undervalued and sell them when they get to a certain price point when they are overvalued. Doesn't mean you are getting out of the market.
Mark
I think we may have some Louis Navellier fans who read this blog. He sounds quite bullish for 2013. This from his email newsletter:
Wall Street is turning from Bonds to Stocks in Early 2013
Lipper reported last week that investors poured $18.3 billion into the stock market via ETFs and mutual funds in the week ending January 9. When global funds are included, the figure rises to $22.2 billion, the best weekly gain since September 2007 and the second highest week since this data series began in 1996.
For most of the last four years, hedge funds and individual investors have favored bonds over stocks, but that preference could be shifting. At 1472, the S&P 500 is now 121% above its early 2009 lows and just 6% below its all-time (2007) high of 1565 - even though many investors still remain on the sidelines.
Part of the recent surge is due to avoiding the threatened 40% tax rates on dividends after the "fiscal cliff" was narrowly averted on New Year's Day. In addition, we always see new pension funding in the New Year, and an improving global economy is also helping propel many global markets higher in 2013.
As the earnings season begins, analysts are expecting a major slowdown, but I think they will be proven wrong. Going into 2013, analysts' consensus forecast for the fourth quarter of 2012 and first quarter of 2013 were only 3.1% and 1.5% growth, respectively. In other words, Wall Street expects flat earnings.
Last week's earnings reports - though few in number - started off earnings season with a ray of hope. In addition, as economist Ed Yardeni has shown, the consensus estimates over the last year have tended to bottom out just as the first earnings report start to come in. Then, we usually see some positive surprises.
Regarding Wall Street's latest worry - the impending debt ceiling and a potential government shutdown - I believe that the GOP leaders in the House know they will get blamed for any shutdown, so they do not want to risk facing angry voters who aren't getting their Social Security checks. As a result, I expect another last minute deal to be cut - likely in the dead of night - to avert a potential government shutdown.
"I agree. Market timing is always good when you individually select stocks."
That's not market timing, that is stock picking. A big difference.
Market timing is when you get out of the market based on your best guess that the market is going down and you will be able to rebuy at lower prices.
It's what Bob Brinker claims to do but he is really a buy and holder.
When pigs fly. Is this what you are talking about?
Maxwell Flies
Bob Brinker has now sold all of his Vanguard High-Yield Fund holdings. I'm not selling mine yet, but if the economy starts to tank, I may reconsider:
Are High-Yield Bond ETFs Overvalued After Big Run?
January 15th at 5:58am by John Spence
Junk bond ETFs have enjoyed four solid years of returns while investors’ hunger for income-producing assets has pushed the sector’s yields down near record-low levels. As 2013 gets underway, some investors are again wondering if high-yield corporate debt is overvalued after such a strong run.
The only problem is that investors don’t have too many other options when it comes to finding yield with the Federal Reserve committed to keeping rates low for a couple more years.
“With record fund inflows in 2012, investors clearly have an appetite for high-yield bond funds,” says Morningstar analyst Timothy Strauts. “The strong investor demand lowered credit spreads, and the high-yield category returned over 14% last year. While yields have been falling, high yield is the only bond category with a 12-month yield still above 5%.”
SPDR Barclays High Yield Bond (NYSEArca: JNK) and iShares iBoxx High Yield Corporate Bond (NYSEArca: HYG) are the largest ETFs that invest in high-yield corporate debt. The funds were big sellers in 2012 and allow investors to buy a basket of high-yield bonds with one trade and low fees.
The sector’s rally has pushed the average yield on speculative grade bonds below 6% for the first time ever. [Junk ETFs Highest Since 2008]
Fed-fueled bubble?
“One of the aims of the Federal Reserve interest rate policy is to increase risk-taking across the capital markets. High yield is one of the main beneficiaries of the Fed’s current policy. With yields of investment-grade securities below 3%, investors have been forced to look elsewhere for income. Many institutional investors that in the past only chose investment-grade bonds have been buying high yield to meet their return targets,” says Strauts at Morningstar.
“This new demand has pushed yields down and given corporations the ability to refinance a lot of debt in 2012. It was a record year with over $300 billion in new bond issuance. The ability for even very low-rated, highly leveraged companies to get financing has helped many firms stay afloat when they would otherwise have defaulted in a normal year,” he wrote in a recent commentary. “The high demand for these speculative issues has caused some investors to discard fundamentals in favor of searching for the highest yield without regard for quality. This strategy has worked so far, but at some point demand will soften, poor business fundamentals will catch up with firms, or the Fed will change its policy.”
Despite worries that high-yield bonds are in a bubble, corporate defaults are below the historical average.
Although high-yield bonds are often considered high-risk and speculative, the asset class has outperformed the S&P 500 the past five years with less volatility, says Peritus Asset Management, the subadvisor for Peritus High Yield
For the five-year period ended Dec. 31, 2012, the S&P 500 had an annualized total return of 1.65%, compared with 9.53% for the Credit Suisse High Yield Index. The S&P 500 had an annualized standard deviation of 19.04% versus 12.89% for the high-yield index during the period, according to Peritus.
Read more
Neale did something in the beginning of the second hour that Bob hasn't done in quite a while. She talked about the stock market going foreword. She said we are four years into the current bull market and historically bull market have run longer than four years. Neale even suggested rotating out of certain sectors into others. She is bullish about 2013. I thought it might be a good idea to get her forecast documented and on the record.
Thank you, Jeff....
Bob Brinker says that the 9% correction in 2012 was not "health-restoring" enough to ensure the continuation of the cyclical bull market that started in early 2009.
However that said, he is still 100% invested and is recommending new stock market money be dollar-cost-averaged in.
The flavor of his recent Marketimers has turned decidedly cautious in that he claims he is "keeping an eye" on things. So I guess we should all just relax. :)
I've head the bond doomers predict a bond market crash for over 3 years now. Each time they were wrong. Face it, we are stuck in a low growth, low yield new normal and will be for a long time. I agree that Treasuries are a bad deal now because rock bottom yield, but you can still get 3% to 4% from investment grade corporate bonds. You can also get high-yield bonds currently still paying 6% or so.
Blair,
You are right about the Cassandras, saying that about the bond market.
High yield is a place people have gone to restore yield to their portfolios (including me). Recently I've read articles about the shrinking of the yield in the high yield. The message being that investors in this sector are not getting compensated for the risk they are incurring.
One of the reasons yield has been driven down in certain ETFs is the inflow of $$.
All we can do is watch carefully. Everyone will have a different trigger point where they decide that a more conservative investment better serves their needs.
rasputin here: Yes, she is hard to listen to. Neale Godfrey seems to promote class envy. More than once she seemed to fault those evil corporations for sitting on all that money and not investing it. Neale, it's their money. They can do with it what they wish. Not once did she point a finger at Obama for the uncertainty he's injected into the market. Typical West coast blather.
I have wonder/speculated if Neale got where she did solely on the basis of affirmative action. I certainly have not heard anything form her that makes me think she is particularly knowledgeable about money or finance, nor banking and big business. Moreover. If you think about it, she is from a time in banking when banks were not in the retail consumer market, they primarily catered to business. A time when S&Ls were thriving and that is where the common man deposited his money in a thrift lending institution. I mention it because it seems odd that someone with her core beliefs could ever have been a credible banker during the time she was in banking. To me it reeks of affirmative action. And perhaps she knows it and hence the apparent chip on her shoulder. She was promoted well beyond a level of ability or understanding and it must be horrible to realize all you thought you were or are was nothing but a joke of convenience due to affirmative action.
All the above is my opinion only and a speculative one at that.
tfb
TFB,
Neale Godfrey primarily teaches children (supposedly) about finance. She writes children's books and runs websites geared to them.
She is less than qualified to teach or advise adults.
About affirmative action. I tend to agree with you that it played a real role in her "success."
She often talks about how unjustly women were treated back when.....
She actually started a "Woman's Bank."
This is from Wikipedia and I think proves every one of your points:
Neale S. Godfrey is an acknowledged expert on family and children’s finances who has been in the financial field for more than 30 years. Early in her career, Neale became one of the first female executives at The Chase Manhattan Bank. Later, she became the president of The First Women’s Bank and founder of The First Children’s Bank.
Learning about finances is good. In my opinion, the generation that stands to benefit the most is the 16-30 year olds. They're the ones who will have to deal with this slow growth economy, and if Peter Diamond is correct, will be affected by slow growth in wages in the critical first years of their lives.
Our local high school offers nothing -- but the course outlines and lesson plans are out there. And I've never run into anyone in their late teens, early 20's who was NOT interested in money.
-- Frankj
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