Sunday, October 8, 2017

October 8, 2017, Bob Brinker's Moneytalk, Stock, Bonds, Economy and Investing

October 8, 2017....Bob  Brinker hosted Moneytalk live today....(comments welcome)

STOCKS....Brinker did not talk about the stock market's  amazing run up. 

Honey EC: Brinker has made no change in his fully invested market outlook.

=> Thanks to dRahme: audio clip of jobs report

COLOMBUS DAY HOLIDAY..... Monday, the banks are closed and the markets are open.

WILSHIRE 5000 NOT 5000 STOCKS.... Caller Gary from Texas asked Brinker why there were only about 3600 stocks in the Wilshire 5000. BB replied that the name is just that, a name, and that they may have started with 5000 stocks, but have since weeded out all of the penny stocks.

BONDS.....Brinker did not discuss the bond market today.

Honey EC: Brinker made no changes in his recommendation to keep duration of bond fund short - 1 to 2 years.

ECONOMY....Brinker did not talk about the economy....

QUANTITATIVE TIGHTENING.....BB mentioned his guest-author from last week, Alan Blinder.  Brinker and Blinder talked about Quantitative Tightening last week in depth. (Please see my summary, and Frankj's summary of Blinder's Moneytalk interview.) 

BITCOIN.... Brinker had two calls today about Bitcoin, and he pointed out that he has covered this before. He stated that he believes it is speculative, and drug dealers love it.

NATIONAL DEBT....BB stated that the $20 trillion National Debt was no longer talked about in Washington DC.

Honey EC: As my Moneytalk summaries will show to anyone who wants to research them over the eight years of the Obama administration, Brinker was virtually silent all of those years as the National Debt DOUBLED. Yes, that's right - it doubled over all the prior administrations.

TERM LIFE INSURANCE VS WHOLE OR UNIVERSAL LIFE
....BB stated categorically that the only way to go was to buy Term Life Insurance. Caller Colin from Missouri disagreed with Brinker 100% and gave several very good reasons why Term Life Insurance is NOT the only way to go for everyone. Colin's most important point was that life does not always follow what is planned, so with Term Life Insurance, one could end up with no investments in later years.

Honey EC: Brinker does not like to be disagreed with, and was quite rude to Colin. He tried to make up for it by "praising" his call later in the program. Far too little and too late. Colin was a perfect gentleman and a superior caller.

=> Thanks to dRahme: audio clip of Colin's life insurance call (scroll 3 minutes in)

POLITICS AND TAXES....Honey EC: Brinker did a massive hit job on President Donald Trump today. The only thing that Brinker did not do was use the president's name. Clearly, Brinker gets his talking points from MSNBC, CNN, WASHINGTON POST and the NYTIMES. I will not dignify a mere radio talk show host who flies under the banner of "Moneytalk" and "non-partisanship" by spending time repeating his leftist talking points. I agree with Jim:

Jim has left a new comment on your post "October 8, 2017, Bob Brinker's Moneytalk, Stocks, ...":
Brinker's political views were irritating today. He was basically telling the President to stop being a populist and get in bed with the GOP Establishment if he wants legislation passed. He seemed to take the side of Corker and McCain and against the President. I'd like to ask Brinker if he thinks it's proper for politicians to vote NO on legislation that may be beneficial to the country just because they have a personal vendetta against the President. I think a politician who no longer cares about the country and votes NO simply to be spiteful should not be serving.

He also opened the show once again by emphasizing the value of a college education. From a purely financial point of view I cannot dispute what he said, but doesn't Brinker ever think about how college students minds are poisoned by liberal college professors? While a college education can reward a person financially it can harm them in their political way of thinking. Bernie Sanders was popular with college students. Why would college students be attracted to an old guy like Bernie? He probably reminded them of their college professors who spouted the same kind of nonsense. So going to college does have negatives on a persons life as well Bob.

Frankj's Moneytalk Guest-Author Summary:
Scott Galloway, author of  “The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google,” was Bob’s guest today, October 8, 2017.  Mr. Galloway is a professor at the New York University’s Stern School of Business.   
The author researched and wrote about these companies out of admiration for them as well as some of the issues raised by their success.  Despite mention of these four firms in the title, most of the interview concerned Amazon. 


“Amazon fulfills a need to hunt and gather …”  The guest went on to give his interpretation of how men shop differently from women.  Whatever.  What was more interesting was his explanation of “tedious, low-consideration, non-joyous shopping.”  This is the routine shopping we don’t look forward to but is a necessary part of life.  He said Amazon is very good at fulfilling this need, and with artificial intelligence and analysis of shopping habits we could reach the point where groceries are automatically delivered to homes. 
The purchase of Whole Foods (or Whole Wallet as Bob Brinker and my mother-in-law call it) is a game changer.  Despite the fact that Whole Foods was about 9% the size of Kroger, the biggest grocery chain in the US, Kroger’s stock dropped about one-third in the days after Amazon announced they were acquiring Whole Foods.   The acquisition turned 550 WF stores, into potential Amazon warehouses – and these stores in close proximity to a very sizable percentage of the US population.   The guest characterized the Amazon/WF combination as getting a Mercedes for the price of a Toyota. 


Does this mean the end of shopping malls?  
The higher end malls will probably be OK.  Some re-engineering may be required.  Malls in lower income area may not be OK.   We have more retail square footage then we really need, he cited some comparisons between the US and Canada and Europe.   The demise of malls and traditional stores is exaggerated right now because about 80% of purchases still take place at brick and mortar locations.
Bob asked what parts of the market would an investor avoid if they didn’t want to get “Krogered” (my term) by Amazon.  The guest was hesitant to be very specific but he pointed out the recent decline in UPS and Fed Ex shares with Amazon hinting about getting into the delivery business.   He said any sector where Amazon could be viewed as a competitor could have a setback, citing Walgreens’ and CVS as pharmacy/retail that could take a hit if Amazon gets into the pharma business. 


He quoted Mickey Drexler the former CEO of J Crew as saying, “How can you compete with any company that doesn’t care about profits?” 
Indeed.  Amazon is successful enough to be able to borrow at very favorable rates of interest.  


All this talk about their success led to mention of anti-trust activities.  The guest said the Justice Dept. only looks at about 3 anti-trust actions per year whereas in the 1980s they looked at about 20 per year.   He thinks any anti-trust actions against Amazon will come from the European Union.
Google has 90% of the search market so they may not be immune from anti-trust.


Facebook:  the recent scrutiny over Russians using FB to influence the 2016 election is warranted, said the guest.   It was “frightening that it (FB) was weaponized by Russia.”  The average age of FB employees is only 28 so they have no historical perspective.   Whether they realize it or not, they are a media company, not just some social platform for posting selfies.  Zuckerberg has to insure that FB never gets used in that way again.
Caller Sam from St. Louis brought up the issue of low pay and no benefits for Amazon drivers.  The guest was not ready to assess the equity of wages but he did point out that the tech business has two strata of employees, the creative, innovative group who are paid handsomely and the worker bees who are not necessarily paid that well.  He said we need more CEO like Henry Ford was and fewer like Jack Welch. 


Ike from Davis, CA wanted to know how you define the middle-class.  Mr. Galloway said you look at household income and group households by quintiles.  The middle class is in the middle three quintiles, i.e., between the bottom 20% of household income and the top 20% of household income.  He said the percentage in these three quintiles has shrunk recently and is now between 51% - 55%.
Finally, the guest used the work “gestalt” several times so I decided to look it up.   It’s a noun that means “something that is made of many parts and yet is somehow more than or different from the combination of its parts.”   It came up in the discussion of Amazon.  


By the way, Bob frequently mentions the exchange traded fund VTI which is Vanguard’s total US stock market ETF, weighing in at about $86 billion in assets.   Apple comprises 3% of this fund, Facebook A shares, 1.59% and Amazon 1.55%.   If you own any diversified, large cap fund, managed or passive, it is likely you own these companies, as well as Google. 
Honey here: Thank you, Frankj, that turned out to be a very interesting interview.

=> Thanks to dRahme: audio clip, what's up in the Canyons of Wall Street next week, and FOMC.

57 comments:

Honeybee said...

.
I have to apologize to all of you who sent comments to the blog this afternoon.

I am having a real struggle with learning Windows 10 and it has messed up my ability to edit my blog posts.

So in my efforts to get the summary posted, I ended up losing my original format - which is where I always add the summary after it is written - and where you sent the comments.

All I can do now is post copies all of your comments.

This is me sorry and FUMING MAD at Microsoft.

Pavlov's Cat said...

.
Considering reinstating subscription. Any opinions?
These are "interesting times"!!
Pavlov's Cat

Bob said...

Glad to hear it.

sn said...

Listening to Bob's irritating needless banter with his listeners today; maybe it is best for him to take off as often as he does or maybe even more often.

Bob (not THAT Bob) said...

Pavlov's Cat,

You can find much less expensive bird cage liner.

Honeybee said...

.

Pavlov's Cat....I do have an opinion, but rather than explain it to you, I will say this:

I subscribe only because of wanting to be 100% accurate in what I write on this blog.

Bob (not THAT Bob) said...

"Bernie Sanders was popular with college students. Why would college students be attracted to an old guy like Bernie?"

Bernie never had a real job - he's been a slacker if you will.

The kids that admire him seek a career in "slackerism." They seek to do nothing of substance, yet get paid for it. They will be searching for careers as "Community Organizers", etc.

Gabe said...

How about the Flat Tax?

The racing weekend--------Of the 4 horse racing entries.......3 finished out of the money------lost money. The large purse race.......we came in third! So.....overall we made a few bucks.

Regardless of politics, I do not envision any major legislation getting through!

Gabe

SuzyPie said...

It was fun to listen to Mr Brinker spar with Colin, the insurance salesman. Mr Brinker just said that he believes there are better investments than whole life insurance. But Colin was sure that he could sell Mr Brinker some whole life insurance for his legacy. Colin sounded like a good salesman, but he couldn't close the sale with Mr Brinker.

Frankj said...

I'm glad the insurance guy got through because there were some callers who probably shouldn't have gotten through. The guy from South Carolina who wanted to talk about taxes and I think, was on last week. Then the guy with the Indian accent who talked so fast I couldn't understand him. Was the call screener toying with Bob? Was this the call screener's last show before he moves on? Is Ravi in big trouble? We may never know.

It is good when someone like the insurance guy with thorough knowledge of a subject gets to discuss it with Bob. Bob was against using insurance as a "legacy." Whether it is term insurance to replace the income of the deceased, or whole life, etc. which pays off at death, how is it NOT a legacy?

Jim said...

Brinker's political views were irritating today. He was basically telling the President to stop being a populist and get in bed with the GOP Establishment if he wants legislation passed. He seemed to take the side of Corker and McCain and against the President. I'd like to ask Brinker if he thinks it's proper for politicians to vote NO on legislation that may be beneficial to the country just because they have a personal vendetta against the President. I think a politician who no longer cares about the country and votes NO simply to be spiteful should not be serving.

He also opened the show once again by emphasizing the value of a college education. From a purely financial point of view I cannot dispute what he said, but doesn't Brinker ever think about how college students minds are poisoned by liberal college professors? While a college education can reward a person financially it can harm them in their political way of thinking. Bernie Sanders was popular with college students. Why would college students be attracted to an old guy like Bernie? He probably reminded them of their college professors who spouted the same kind of nonsense. So going to college does have negatives on a persons life as well Bob.

Honeybee said...

.
I apologize again if I did not get those in correct order. I had to quickly dig them out of my trash bin before I lost them for good.

:(

dRahme said...

Anonymous Pavlov's Cat said... Considering reinstating subscription. Any opinions?

Yes - after four times now soliciting the help desk concerning lack of newsletter with proof of payment......

Consider keeping the outlines of a complaint to the Better Business Bureau in your hip pocket should the subscription renewal not go as planned.

Ghost of Bob said...

Jim said: I cannot dispute what he said, but doesn't Brinker ever think about how college students minds are poisoned by liberal college professors? While a college education can reward a person financially it can harm them in their political way of thinking.

I just had a heart to heart with my children. It went like this:

Hi kids, mom and I were going to send you to college because we thought it would be ultimately good for you. We wanted you to learn and grow and be able to think for yourselves. However, some guy named Jim just changed our minds. We don't want you to be poisoned. We don't want you to be harmed. There are liberal college professors out there that will change your political way of thinking. How can you possibly learn to think for yourself and simultaneously listen to other points of view.

Now turn your minds off and go get a job. Please don't read any magazines, watch TV, or talk to people (except Jim, because he has it all figured out.)

Love, Mom and Dad

I am the ghost of Bob and I went to college. Somehow I was not harmed.






Anonymous said...

I posted in last week's blog about the Sequential Periodic Payment Plan (SEPP) for IRA's Roth and non-Roth (i.e., 401k roll-over,etc.) accounts. The SEPP withdrawals from the Roth IRA are not taxed since you already paid tax on the contributions. Typically you can withdraw 4% annually from your IRA's under the SEPP. So it is like getting an annuity well before reaching 58 years old.

Technology gains, the Amazon.com effect, and oil oversupply due to fracking is keeping "government-reported" inflation below 2%. This provides "margin" to the federal government. The federal government may view this as "margin" to print more money without creating hyperinflation and "margin" to raise taxes without adversely impacting standard of living.

AD

Honeybee said...

.
So Bob....While I appreciate your participation on this blog - even found your other post quite amusing - I do not allow insults of other posters.

You are free to send you opinions, but do not insult my posters.

Stinky said...

Honeybee’s excellent summary notes that BB did not talk about the economy or the stock market. Maybe he didn’t tak about those two important and timely topics because he used the second hour monologue to pre-record an opening segment for a future “best of” program. That monologue was one of those tiresome “pay yourself first” speeches that all Monrytalk regulars have heard numerous times.

Did anyone else notice that?

Trees said...

Stryker medical was a local business here in town many years ago, but still a big presence. I've been told their hiring practices don't exactly favor college grads. They give more weight to successful military record with education as the hallmark of good employee. The college grads that take more than four full time years for degree are rated worse than never attended. The applicants that work and continue education are rated gold.

My parents about Ronald Reagan generation. Dad was a self made businessman that hired and fired per construction type industry. His business growth was during the Great Depression. He never had time for politics, but I knew he didn't think much of Roosevelt solutions. Basically, it was slacker popularity. He had a big CCC camp north of his lumberjack business. The camp was goof offs and big party time. Much immoral activity and no work.

I will say from my parents nine children, my older brother may be the earnings champ. He knew what he wanted to do from the get go. He tried a year of college, but unsatisfied with the education and low workload. He strongly believes college is the place children learn to avoid work, party, gain bad habits, bad debt, and waste a precious part of their life earnings. His fours sons are a chip off the block and very successful. Extremely hard working and forever thinking of business opportunities. This bro has a magnetic personally. He is a good story teller and quick to address the situation at hand. I believe his best training may have been a sewing machine door to door sales job wherein he completely relied on sales to survive at a young age. Also, being a waiter at a dinner club while in high school helped.

Anonymous said...

I'm glad the insurance salesman made it on and I would have liked to hear more from both sides. I side with Bob: term generally provides more of the product for the buck. And yes, it gets more expensive as one ages and moves up the actuarial ladder. You're typically not shopping for insurance as a "legacy," but as insurance. On an internal rate of return, how do typical whole life and universal policies perform relative to other investments? Let's talk about that.

Of course life changes. A sales pitch should move beyond the bromides: life changes and legacy are things the caller mentioned. That's like death and taxes.

Instead, talk about internal rates of return, net of fees. And this: how are policies and carriers of permanent insurance holding up in a low interest-rate environment? Is term becoming more advantageous, or does the permanent side of the fence feature some element that gives it an edge?

Present value, future value, internal rates of return, and yes: commissions, fees, charges. We ought to have a numbers-based discussion. Not everyone's numbers will be the same, and no situation will ever be the same, either. I'm sure the gentleman caller yesterday has clients who've been saved from disaster by a policy he sold them; I'm equally sure other clients could have made out better by buying term and investing elsewhere.

But it's Bob's microphone. He should devote a full hour to running numbers --- show your work, Bob. We're adults, we're sophisticated, and we can deal with it.

Good luck to all!

Irving said...

Last week I mentioned I inherited a portfolio of long term taxfree Muni bonds maturing some in 2024, mostly 2030-2036,then a few in 2042. They yield about 4-5 % tax free

I finally figured out the arduous task of figuring out what a bond at a premium sold before maturity is worth.



They're all going to be transferred in kind or as is from Edward Jones to vanguard soon.

The value of the bond surprisingly according to my studies isn't a ton higher than face value even with interest rates falling it appears since they were purchased.

It will be a tough call to sell or keep them for their yield than exposing myself to possible higher interest rates hurting their value later if I choose to sell.

A problem not really but very interesting learning about individual bonds for a bond novice.



birdbrain said...

So, is the stock market overvalued?

Setting aside current p/e ratios, bears can say the market has more than tripled over the last eight years and is due for, if not a substantial decline, a lengthy sideways move to digest these gains. The bull camp can claim that since Jan 2000 (before the most recent bear markets) the annual compounded S&P 500 return is 3.3%, a tad over five percent when including reinvested dividends. Adjusted for inflation the numbers are a paltry one and three percent respectively. Well below its historical average.

But what was the level of that index at the start of 2000? 1498 after having, you guessed it, tripling in value since 1993.

What does all of this mean? Whatever you want it to.

Bob (not THAT Bob) said...

Honeybee said
So Bob....While I appreciate your participation on this blog - even found your other post quite amusing - I do not allow insults of other posters.

You are free to send you opinions, but do not insult my posters.


Honeybee,

I'm confused. Are you referring to me, or another "Bob'?

If you are referring to me, could you tell me how either of my TWO posts insulted another poster? Both were meant to be somewhat (humorously) insulting, but certainly not to the poster.

The first one somewhat (humorously) insulting Bob's monthly.
The second one somewhat (humorously) insulting Bernie and his followers.

If I inadvertently offended someone posting here, please let me know and I will surely apologize.

Honeybee said...

.
Bob (not THAT Bob)....No need to be confused. I was talking to "Bob".....

When I talk to you, I use your full handle - as I do with everyone.

Unknown said...

Honey, I think you were a little harsh in your criticism of Bob on the Insurance call. The Insurance Salesman (bias?) gave one reason for buying whole life: you may need to buy more insurance when your term life insurance expires and you might not be in good enough health then. That is a terrible reason. Buy a longer term! Whole life costs about 5 times more per year than 20 year term. 35 year term for a 30 year old is about 2x the cost of 20 year term.
So you can get term insurance for 35 years for less than half the cost of whole life. Why would you ever buy whole life?

If you are older, it can be part of an estate plan. But even that you can get as a term cheaper.

Bob was correct, almost everyone should buy term insurance.

Bob (not THAT Bob) said...

Honeybee,

Thanks,

You have put my mind at ease.

I hope you do well with Win 10.

(I am "resisting" unless/until I have problems with web sites -OR- Microsoft drops Win 7 support, whichever comes first).

I was freaking out yesterday. Everything was working fine, but suddenly I was unable to type anything at all. My first thought was maybe it was a browser issue. Rebooted several times - no luck. Then I tried MS Word - no luck there.

So, I opened up the battery compartment. BINGO! One battery was fine. But, the other one was covered on one end with white crystals, meaning it was leaking potassium hydroxide, a caustic agent that can cause respiratory, eye, and skin irritations. I was careful in cleaning things up. Hopefully I was careful enough!

gabe said...

Gov. Brown of California signed legislation requiring advance notice by Drug Manufacturers regarding an increase in wholesale prices over a certain percentage. The goal is to enhance drug price transparency in CA. Medical and Medicare programs will benefit.

Usually, what Ca. does the rest of the Nation follows. Two other States already have it on their books. Nice going, Jerry!

Gabe

Tom in Vallejo said...

Honey, you gotta read this one !

http://www.freerepublic.com/focus/f-chat/3593743/posts

gabe said...

A nice bounce back from the last two (2) trading days!

Gabe

Mad as HELL ! said...

gabe said...

> Usually, what Ca. does the rest of the Nation follows. Two other States already have it on their books. Nice going, Jerry!

Gabe, you are certainly entitled to your opinion, but your post (and particularly the two sentences above) will be causing nightmares for me.

I am not pro-high prices by any means. But, the developmental and approval costs of a new drug can easily approach and even surpass a billion dollars.

So, if we are going to put the pharma and biotech companies under the proverbial governmental nagging microscope then R & D will dry up, the companies will fold and we will take our two aspirin and call the Doctor in the morning. The best he will be able to do is to say "Keep taking those two aspirin daily - it will cure your cancer. See me in six months."

Jerry Brown ought to focus his attention on issues that make sense and are helpful to businesses and the citizens of California. Instead, he makes it impossible for either to exist - and that is why California out-migration continues unabated.

gabe said...

Mad: Thanks for your feedback. Where we disagree is the extent of cost that Pharma supposidely spends on R&D vs. advertising.

Personally, I am able to purchase RX branded products overseas at a fraction of what it costs in the US. So.....why? The Pharma industry is ripping the American consumer by overcharging and falsifies its reasoning with the R&D message. Little adverting of drugs overseas.

President Trump has spoken about Big Pharma and the need to reign in these companies.

Nice speaking with you.

Gabe

Anonymous said...

HB,

With all the fires in CA; hope you are OK and safe.

gabe said...

Interestingly, a Socialist, a Liberal and a Republican all favor transparency in pharmaceutical pricing!

Gabe

Unknown said...

Whole life is an unnatural combination of insurance and investment that invites abuse and has historically been abusive. Typically as much as 55% of the first years premium goes to sales commissions.
Thanks Honey for the service your site provides.
The content here seems so critical of Brinker. Due to my college education I can parse what is offered and glean real information while rejecting or ignoring the petty and partisan.
Brinker saved me big with his sell signal January 2000. Yes, I even doubled down on his ill fated QQQs call. I did it eyes wide open and still value the advice and perspective he gives. I certainly disagree with him often, but likely not in the way the more conservatively oriented commenters here do.
Regarding national debt, its clearly not directly attributable so much to who is president as it is to congress (as Brinker constantly reminds us) who actually pass the spending and taxing legislation.
A chart of the debt clearly shows the 1980 introduction of voodoo supply side economics as the genesis of the exploding debt.

frankj said...

Interestingly, a Socialist, a Liberal and a Republican all .... I thought this was the start of a joke, like " ... all walk into a bar."

Anonymous said...

Touché Jim. I stopped listening to Bob months ago due to his left-leaning bias. He should consider going to work for MS-LSD, aka msnbc.
Bernie fans are only interested in free handouts and having other people pay for them. Healthcare, education, housing, etc.

Mad as HELL ! said...

Anonymous gabe said...

> Personally, I am able to purchase RX branded products overseas at a fraction of what it costs in the US. So.....why? The Pharma industry is ripping the American consumer by overcharging and falsifies its reasoning with the R&D message. Little adverting of drugs overseas.

Gabe,

I wish to respond, but before I do could you please share your definition of "RX branded products" with us.

gabe said...

Mad: Sorry. "RX branded products". RX= Prescription Medication - Brand Drugs. Not generic meds.

Gabe

Anonymous said...

@Frankj,

Good call, they all walked into the U.S. Senate chambers, and that's not a joke unfortunately.

Let me tell you about the priest, the rabbi, and the cop for a little ha ha...

Tom Collins

Bob (not THAT Bob) said...

Honeybee,

Harran Beehive Houses

https://goo.gl/CCGaro

Jerrod Clarkson said...

Gabe,

I saw your recent note to MAD and now I too am a bit confused - but certainly intrigued! Perhaps I would be able to realize a drastic savings in drug costs by purchasing overseas?

Are the Brand Drugs you are purchasing overseas exactly the same Brand Drugs that one would purchase in the U.S.?

For instance, some of the Brand Drugs I purchase are:

AstraZenica: Crestor 10mg (90ct)
Bristol-Myers Squibb: Coumadin 2mg (100ct)
Daichi Sankyo: Benicar 20mg (90ct)

Are these exact medications (manufactured by the above companies) available overseas for a much lower price? If so, could you give me the price of each and the ordering particulars, as I would be extremely interested in purchasing them.

I also take eight other Brand Drugs, but I won't burden you with checking all of them. If you would just take a look at the pricing for the the three above (and the ordering contacts, particulars, etc.) I would be most appreciative!

Many Thanks!

JC

gabe said...

We entered three (3) horses this weekend.

Gabe

Honeybee said...

.
Bob (not THAT Bob)...

In California those would go for a cool half-million dollars.

gabe said...

JC: There is an excellent website called Pharmacy Checker that will give you all of the information. Once you read and digested the information you may get in touch with me.

I believe you will save a ton of bucks!

Good luck.

Gabe

Biker said...

Quote from PharmacyChecker.com:

"U.S. government officials have stated that individuals who order non-controlled prescription drugs from Canada or other foreign sources (up to a three-month supply) for their own use are not being pursued or prosecuted - although it is technically not legal for individuals to import most prescription drugs."

I'm assuming "technically not legal" = illegal.

The few price comparisons that I made yielded import prices comparable to or much higher than what we pay under Part D Medicare insurance. Probably cheaper only if you fall into the Coverage Gap (donut hole), which is scheduled to be phased out by 2020 under the existing Affordable Care Act.

gabe said...

Biker is correct......however, if you have a number of medications that you take that are brand medications, one can very easily fall into the "donut hole". 2020 is three (3) years away and the way health care is these days, one never knows if 2020 may be pushed back. Only an assumption.

What I have experienced is that I have benefitted financially these many years. So.... folks need to make their own conclusions based upon their medication requirements.

Gabe

Biker said...

The copay for Part D brand-name drugs within the donut hole is being gradually reduced as follows:

2017: 40 percent
2018: 35 percent
2019: 30 percent
2020: 25 percent

So there would only be an incentive for someone on Medicare to import if the cost in Canada for a particular drug is lower than those amounts.

This article:

https://www.webmd.com/healthy-aging/features/letter-and-spirit-of-drug-import-laws#

reviews the ins and outs of drug importation and comes to the following interesting final conclusion (on Page 4) - quote:

"And if all of the above makes perfect sense to you, we'd like to know what you've been taking -- we'd like some too."

gabe said...

Biker: Medications such as Xarelto and Junuvia to name a few, would fit that example. Review Pharmacy Checker.

Gabe

gabe said...

I want to congratulate the Chicago Cubs for their win last night! An unbelievable enjoyable and exciting game!

Gabe

frankj said...

Not to divert from the discussion of drug pricing but I ran across this when looking at a High Yield fund where a non-profit I'm working with has some $ invested. Blogsters may find it informative:


Five Myths of the High Yield Market

1.Yield compensates for credit risk
Fact – The high yield market is characterized by asymmetric risk whereby the potential for downside losses outweighs upside capital appreciation.

2.The market is deep and liquid
Fact – The high yield market is an over-the-counter market that is highly dependent on dealer capital. In fact, the majority of high yield bonds do not trade on a daily basis which means there is typically a significant difference between trade prices and broker quotes.

3.Credit ratings reflect the actual risk
Fact – Independent fundamental analysis is paramount. Additionally, the market anticipates upgrades and downgrades long before the actual rating changes.

4.High yield bonds correlate to U.S. Treasuries
Fact – Over the last 26 years there have been six periods during which the 10-year Treasury yield has risen more than 100 basis points. High yield bonds and leveraged loans had positive returns during each of these periods.

5.Spreads correlate to interest rates
Fact – Historically, spreads have been a reflection of the expected default rates over a six- to nine-month period. The expectation of low default rates should result in spread compression.

Anonymous said...

Frankj, thanks for the info.

The first three myths seem logical, almost like "there's 10 lousy mechanics for every good one."

But myth-4 required some Joe Six Pack noodling to grasp. Here goes:

Whenever Treasury yields rise by 1 percent it means that nobody wants them. They are being sold at a discount, so the yield rises above the coupon rate because the cost basis is reduced.

In "periods" like that, investors are shedding their low-interest Treasuries and purchasing some high yield bonds, so the market price for the existing high-yield rises and it results in a positive total return for the sellers, in cash, and for the holders on their statements.

After all, if the bonds pay interest and their market value increases, that's probably a positive return.

In the "periods" referenced, I'm betting that inflation was a big fear and the Fed was jacking up rates accordingly, ala Greenspan. Therefore, the bond traders were offloading low-yield Treasuries as if the building was on fire, and gobbling up high yield corps or futures in Taj Mahal Atlantic City.

The myth and the debunk are well taken. Wondering when the six "periods" occurred.
Tommy Pabst

gabe said...

Took some off the table from MFST....Friday.

Gabe

Unknown said...

Thankyou Frankj for your October 8, 2017 Moneytalk Guest-Author Summary.

The bigger thanks this time though, has to go to BB for having Scott Galloway aboard the Starship platform to talk about his first book, The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google.

Having listened to the actual live broadcast last Sunday, I was thoroughly fascinated with what this author had to say. I have purchased and read his new book and have to say that this new book will join my library of top-tier literature favorites.

His discussion of the T Algorithm and the Four Horseman is genuinely insightful, biting and occasionally snarky. His suggestions for a possible Fifth Horseman are interesting, although I can think of a few others.

Perhaps his greatest contribution though may be in the actionable intelligence he offers throughout his book and wittingly summarized in the last two chapters.

“America is on pace to be home to 3 million lords and 350 million serfs.”
The solution lies within… GET. IN. THE. GAME.

Jim said...

Looking at the Investor Intelligence Survey of investment letter writers this past week showed 60.4% bulls. That is the survey Brinker participates in and I think he used to say when it hits 60% a pullback is likely. We'll see.

Anonymous said...

Hi Jim,

Oh the list of things Bob used to say!

Too long to write.

Pavlov's Cat

frankj said...

Thank you, Jester.

gabe said...

Jim: It's different this time!

Gabe

Anonymous said...

Bob was right on about the "legacy" perspective too many baby boomers have nowadays. It's time to cut the cord and let the 20-somethings and 30-somethings swim on their own.