LOOK AT YOUR STOCK ALLOCATION ....Brinker comments: "First time in a long time, this week we have seen the inevitable return of volatility.....it does provide a reminder of some important stuff....Asset allocation is the name of the game....You have to be diversified and if you are in or near retirement, a balanced portfolio makes the most sense....This is a reminder to anyone who is over-exposed in the stock market. Ask yourself, what are you doing..... Now that does not apply to anyone that is a balanced portfolio approaching or in retirement because that makes sense......"
STOCKS NEAR ALL-TIME-HIGH....BB continued: "We all know that the stock market has one of its greatest runs of all time......Even though the S&P 500 is still close to its record at 2772 - it's within less than 4% of its record high, consider that it was trading at 676 in March of 2009 - less than ten years ago...."
WELLS FARGO GETS SLAPPED DOWN... Federal Reserve Imposes New Penalties on Wells Fargo
FEDERAL RESERVE GOING TO TRAUMATIZE INTEREST RATES.....BB continued: "What we have going on is a trauma in the financial markets right now, and it's about interest rates.....We have made it very clear that interest rates are going higher.....it is an inevitable fact that when you have the Federal Reserve tightening monetary policy on two fronts, raising short term interest rates as they are expected to do next month - and additional after that."
FEDERAL RESERVE THROWING THEIR SECURITIES ON OPEN MARKET.....BB continued: "In addition to that, they are throwing securities every month on to the open market from their portfolio. That's the quantitative tightening - the reversal of quantitative easing, where they are now redeeming, therefore forcing the market to absorb - to find other buyers for the securities they no longer have on their balance sheet as they redeem them and throw them off on to the open market....."
PRESSURE CAUSING INFLATION WORRIES.... BB continued: "That places pressure on interest rates, but especially when investors start worrying about inflation as they are beginning to start worrying....In my opinion, it is inevitable that rates will continue to rise......"
TREASURY YIELD IS STILL RIDICULOUS..... BB continued: "It's ridiculous.....Right now, the 10-Year Treasury is yielding about 2.85%. But when you look at the Consumer Price Index annual rate, it's 2.1%. So when you subtract 2.1% from 2.85%, what are you left with in real return net of inflation? The answer is pathetic - 3/4 of 1% real return if held to maturity.....That is a really low rate of return on a 10-year Treasury, even though it has no credit risk......"
==> Additional Brinker comments sent by RJB:
* Investors have historically gotten 3 to 3.25% real return on 30 year Treasuries.
* Right now the 30 year Treasury yields 3.1% and inflation is 2.1%, so the real return is only 1%
* Have 1 year liquidity set aside in advance per BB
* Have 1 year liquidity set aside in advance per BB
BRINKER'S PROJECTION FOR INTEREST RATES..... BB continued: "So in my opinion, you are going to see upward pressure on interest rates and it's going to come from three camps. The first camp is going to be that the Federal Reserve is going to continue to raise short-term interest rates. I expect them to raise them in March. I expect to see at least three hikes this year....And in addition to that, they are going to continue quantitative tightening. By the 4th quarter this year, the Fed is going to be throwing into the open market at an annual rate $600 billion of Treasuries and Agencies."
DEFICIT NUTSO..... BB continued: "We already know the deficit is going nutso.....Nobody is doing anything about the Federal deficit.....It's become unmentionable....So that's another $600 billion plus that requires financing in the open market - that's $1.2 trillion by the 4th quarter this year that has to be financed in the open market - through new issues and quantitative tightening.....We have shortened our bond duration, which was already short."
MONEYTALK LISTENERS DON'T ALL BUY BRINKER'S FUTZY MATH:
==> Comments from Tom:
"I am wondering if it is a mis-conceived notion that Bob is promoting about interest rate increases and how much more the US debt increases. He says a 1% increase in interest rate translates to 1% of the 21 trillion dollar debt thus about $200 billion annually. However, isn't that only if all the debt is refinanced annually? Seems to me there are plenty of long term treasuries sold by the government that span many years til maturity. Is Bob saying that the $21 trillion is turned over every year for re-financing? That would mean all the debt was short term, right? What am I missing?"
"I am wondering if it is a mis-conceived notion that Bob is promoting about interest rate increases and how much more the US debt increases. He says a 1% increase in interest rate translates to 1% of the 21 trillion dollar debt thus about $200 billion annually. However, isn't that only if all the debt is refinanced annually? Seems to me there are plenty of long term treasuries sold by the government that span many years til maturity. Is Bob saying that the $21 trillion is turned over every year for re-financing? That would mean all the debt was short term, right? What am I missing?"
==> Comments from KC:
"Related to the $200 billion in annual debt increase due to interest on the national debt, what are Republicans supposed to do about that? Just asking someone more educated in that arena than I am but seems like the fed's interest rate is something neither political party can control. Quit blaming Republicans for it!!!
Also, when Bob mentioned the national debt was increased $1.5 trillion for the recent Republican tax cut, wasn't that cost over ten years (not annually)? If so, that is a very misleading statement these snake-oil salesmen on the left like to sell."
Also, when Bob mentioned the national debt was increased $1.5 trillion for the recent Republican tax cut, wasn't that cost over ten years (not annually)? If so, that is a very misleading statement these snake-oil salesmen on the left like to sell."
MARKETIMER BOND PORTFOLIO CHANGES....
Caller Norman in New Mexico said: "I get your newsletter and I'm taking your advice and selling the Metro Bond Fund...."
Caller Norman in New Mexico said: "I get your newsletter and I'm taking your advice and selling the Metro Bond Fund...."
Brinker rudely interrupted Norman: "Yeah, we are reducing our duration with the recommendations in the newsletter, which has just been published, Norman. What is your question?
Norman continued: "I sold the Metro and at Vanguard, I was able to convert the assets over to the Vanguard Prime Money Market Fund. However, at Fidelity and Schwab, that fund is not available to me."
Brinker replied: "Let me give you a couple of ideas, Norman, for those particular outfits. For Fidelity, I suggest that you take a look at a money market fund, symbol: SPRXX....I recommend that as an alternate. Schwab also has a money market fund that I suggest you look at as an alternate: SWVXX."
Honey EC: In a nutshell, Brinker converted the Metro Unconstrained Bond Fund in portfolio III and the fixed income portfolio to Money Market Funds.
Brinker's first reaction to Norman announcing this change that Brinker made in the just-published issue of Marketimer was extremely angry. But he probably realized that the information was out there - millions heard it - and one cannot put the toothpaste back in the tube. So he made the best of it by simply giving the symbols for Schwab's (SWVXX) and Fidelity's Money Market Funds (SPRXX). Vanguard's symbol is: (VMMXX).
CURRENT MARKETIMER BOND DURATION ONE YEAR.....BB said: "We have shortened our bond duration, which was already short. We are down under one year now on our bond market duration - now that's short."
Honey EC: It was in 2013 - almost 5 years ago that Brinker made a bond timing call to shorten duration that was premature and very costly for those who followed his "income portfolio" off of that cliff.
Brinker did not have a third-hour guest today because he was not there. He left at the end of the second hour to watch the Super Bowl. Did he announce it? Nope, too bad. His listeners would have said, go for it, Bob. Instead, he chose to be deceptive about it. Last week he said he would be here today. That's what you call a 2/3rd truth.
Listen Live: 710Knus
150 comments:
Just first two hours?
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That's all I can guarantee right now because that's what he did last year. It's Super Bowl Sunday.
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For all of you wanting to know what changes Brinker made in Marketimer, it just was broadcast over the air. I will post the whole conversation in the summary, but here it is in a nutshell:
He converted the Metro Unconstrained Bond Fund in portfolio III and fixed income to Money Market Funds.
"Honeybee said...
For all of you wanting to know what changes Brinker made in Marketimer, it just was broadcast over the air"
++++++++++++++++++++++++++++
I don't think BB was too happy about that.
As soon as the caller said "Metro Unconstrained Bond Fund", BB started speaking and seemed to want to interrupt the caller.
Not good for Marketimer subscription sales for callers to announce these things...!
Robert
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I agree Robert. Brinker was taken off guard, and was clearly angry.
Then he decided it was too late to put the toothpaste back in the tube, and made the best of it.
Hello.
I made my SELL adjustment per Bob's recommendation. I have not executed the BUY side, yet as of 2/2/18 9:58amEST/8:58amCST.
In my telephone conversation with the Fund House involved, the Fund House was well aware of the M portfolio change recommedations - I called 12 minutes after I received my online notice the M Newsletter was up and posted. The notice hit my Inbox at 1:38pmEST/12:38pmCST.
In the course of my conversation with the Fund House, the Rep told me that two (2) advising services had made the recommendation to SELL said fund. I asked who the other advising service was and the Fund House Rep would not tell me.
Last, the Fund House Rep asked if I understood the impact of the decision to sell and I did of course. However, I thought it was interesting the Rep would go as far as coaching me that if I hold a longer duration to expiration I would get all my money back. I said that would be true if it were an "actual" bond or note investment held to maturity versus a bond "fund" that was turning-over investments within the fund and impacting duration during a said period and never maturing, so to speak. Rep went silent.
We had some other conversations but rather specific to the changes by Bob so I'll wait to send those until later. I don't care to release the M changes to the interweb.
From the Petri Dish to the World
Thanks!
E. Coli
E Period Coli: Sounds like the broker guy meant that if a bond fund had a duration of, say, four years, and you hold it throughout that time, then you will end up more or less even.
Of course, there are numerous types of bonds and bond funds out there, and their price movements are not necessarily predictable.
I am wondering if it is a mis-conceived notion that Bob is promoting about interest rate increases and how much more the US debt increases. He says a 1% increase in interest rate translates to 1% of the 21 trillion dollar debt thus about $200 billion annually. However, isn't that only if all the debt is refinanced annually? Seems to me there are plenty of long term treasuries sold by the government that span many years til maturity. Is Bob saying that the $21 trillion is turned over every year for re-financing? That would mean all the debt was short term, right? What am I missing?
Bluce-
What you state is exactly what the Fund House Rep stated about a bond "fund".
However, taking that example of a bond FUND with a duration of 4 years. If you buy the bond fund today and then after 4 years you sell the bond fund. And, the bond fund maintains a duration of 4 years 4 years later, do your make your all your money back? (the investments inside the bond fund turn periodically to maintain a 4 year duration) I am not sure.
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Tom....Good questions. I think he is determined to be as negative as possible about whatever he can find to be negative about in what he clearly thinks is the "opposition Party," now in power.
He is enjoying the market correction way too much for someone who has his followers 100% invested and still recommends dollar-cost-averaging. Of course, his go-to cop-out is that he tells retirees to have a "balanced" portfolio. Yeah, that covers you, Bob....
And he was dragged kicking and screaming into admitting the economy grew much faster last year than it had in the prior eight years.
Brinker is also assuming that things cannot change in the economy enough to actually start paying down the debt.
So does the change in Bob's MT portfolio 3 (moving money to a money market fund) count as him raising cash? I know prior discussions on this site have noted that Bob rarely raises cash prior to market corrections so just wondering how rare Bob's portfolio adjustment is and what it could be signaling.
Related to the $200 billion in annual debt increase due to interest on the national debt, what are Republicans supposed to do about that? Just asking someone more educated in that arena than I am but seems like the fed's interest rate is something neither political party can control. Quit blaming Republicans for it!!!
Also, when Bob mentioned the national debt was increased $1.5 trillion for the recent Republican tax cut, wasn't that cost over ten years (not annually)? If so, that is a very misleading statement these snake-oil salesmen on the left like to sell.
Articles on MarketWatch last week reported Budget to Actual that borrowing would be less than projected for short term. To fund Short term, Bonds/Notes would need to be issued to continue to fund the Gov't. In my opinion, short term funds are going to have to be offered out at higher yields to attract buyers. Couple the preceding sentence to longer term rising rates nets a lift in the entire yield curve.
Changing topics, the Caller that identified himself as a Republican, i did not follow the logic of Bob or the Caller. Neither Bob, nor the Caller, acknowledged QT taking place right now and is reducing Govt debt obligations. To me that debunks the comments Bob made to the Caller.
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KC....I would say the answer to your question is no, but that does not mean that the "SOS" won't claim it does if things go really south in the future.
He explained it in Marketimer as simply a way to "reflect our preference for a shorter average duration in our fixed-income holdings."
Even though he sounded like he was trying to scare people to death today about "volatility," in Marketimer, just one paragraph above the bond fund changes, he raised the target for the S&P and reiterated that there is no recession or bear market risk at this time.
As he said on the program today, he recommends dollar-cost-averaging during periods of weakness.
KC, I agree with what HB said that it does not represent raising cash (as in from selling equities) it was just about the only place Bob could go to further reduce duration.
Bond holders are now in an unenviable place that has been a long time coming: Rates still low but due to increase. Even with low durations, share values will erode gradually. Inflation eating up most or all of the yield. You can avoid the duration problem in money market but inflation will get you.
HB, when are you planning to post your summary for today?? Brinker beat you to it!
.
I posted it about 10 minutes ago. What do you mean, Brinker beat me to it. Is he stealing my stuff, like Kirk Lindstrom does?
Honeybee,
You mean BB converted DLSNX and OSTIX to money market as well?
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Stan...where did I say that?
Well, if anyone uses the Super Bowl indicator to predict the direction of the stock market then we should have an up market this year. The Super Bowl indicator shows that when an NFC team (Eagles this year) wins the Super Bowl we have an up market around 80% of the time.
Two things:
1. Congrats to BB and all the Philly fans for the Eagles win. Here at Blue Collar Inc., the guys from Philly never waivered in their loyalty all these years. Good on them.
2. Yes, it's always a chuckle when BB takes a call from Norman Rockwell in Vermont, listening on the Great WNEW out of Bangor, and then the oldster divulges all of BB's secret newsletter advice in the first sentence of his ramblings.
Then BB is forced to spin hard to his blind side to avoid the tackle, and further obfuscate with a loud voice and unintelligible codes to fake-out the offender. Ultimately, Norman hangs up because he thinks he called the wrong number and Ma is calling him to supper anyway.
You see, 5pm on a Sunday evening is often called supper time, not dinner time, because on Sundays, dinner is served around noon, shortly after returning from church. It's the big meal of the day. Supper is always smaller and often "serve-yourself" style.
That's why brother and I consumed cases of Captain Crunch on Sunday evenings.
L. Skywalker, Du Bois PA
THIS JUST IN... Driving past Boomtown Hotel Casino in Verde, NV today saw a huge, brightly-lit billboard message pointed at the Interstate 80 traffic: "Job Openings, Housekeepers, $13 per hour, Boomtown"
-Freddie
Deficit spending- Yes, we are addicted to easy money machine and have been since WWII. We're gradually backing ourselves into a corner, that will have ugly results in the future. We will have a generation that will sooner or later pay the price for our good times. It's been political for that long and since removing gold standard the ability went on steroids via fiat money. We all know how to stay out of trouble, but our popularity politics will never stand for it. Also, our economy or risk is managed by the fed as we all hang on every word they pronounce. This, also, at some point in future will be a problem. The Fed is not as smart as the mass market. The fed will distort reality and impart their wisdom. This "wisdom" will turn and bite us. Most economist believe that some sort of black swan event will trip up the fed and they will double down on what worked before. The black swan event would then be magnified by their mistake.
I've been reading on safe draw downs or perpetual draw downs for those that need steady income off of finances. I was reading of an analysis of commentary on the fear of a retiree that wanted 100% elimination of future risk. It seems we are all hard wired to risk aversion. The reality is risk is connected to ones risk of running out of money. Anything can happen within markets or economy. No one can eliminate risk as we are part of a community that will impact our future. Were blessed to live in very capable U.S. and not Valenzuela for example. We have educated citizens that have been trained up to know better. So, risk will always be present and must be manged no matter your age or wealth. We need to be proactive, and cognizant of the financials/environment. Financial risk is actually decreased with more stock ownership percentage. We need to get used to volatility/losses. This will make us "safer". Safety starts at 60/40 and looks to increase up to 85/15.
Freddie,
This news about BoomTown offering a start of $13/hour for housekeeping confirms what I read recently about northern Nevada.
https://www.sierrasun.com/news/amid-white-hot-northern-nv-housing-economy-verdi-development-growth-sparks-concern/
AD
Hindenburg Omen (HO) hit two confirming signals in a row on an earlier signal prior to the big move down Friday 2/2/18. Need 3 in a row for confirmation of signal. So no signal.
(From historical data, the probability of a move greater than 5% to the downside after a confirmed Hindenburg Omen was 77%. Note again: the signal was not triggered. Also though the Omen does not have a 100% success rate, every NYSE crash since 1985 has been preceded by a Hindenburg Omen. Of the previous 25 confirmed signals only two (8%) have failed to predict at least mild (2.0% to 4.9%) declines. smile Note: I do not think we are anywhere near a recession and believe the expansion will continue at about the low to mid 2's GDP and inflation especially wage inflation is not a problem going forward)
I like the steepening yield curve, the implication in my mind is again confirming no recession and continued growth. and also I think the unemployment report Friday may have been a blip based on 2017 GDP of 2.5%.
Bottom line is I don't think much has changed.
With Powell at the Helm he will be less likely to mistakenly over-tighten eventhough Yellen did a good job of data dependency for rate normalization. QT is still out there on the fringe but understand this needs to be.
Dow Futures were down over 350+ and if we end up down but less down = selling exhaustion that is good.
TINA market buy the dip is my personal view.
smile
Volatility on steroids!
Gabe
Made the greatest positive impact on my investing;
Sir John Templeton
John Bogle
Bob Brinker
Gabe
Waiting for Buffet to hit the interview circuit & for BB to utter the words gift horse buying opportunity. Then its dry powder time.
Does anyone feel "health restoring" breezes yet?
@ 12:12 PM PST:
DJIA -1,328.63 (-5.21%) 24,192.33
NASDAQ -232.23 (-3.21%) 7,008.72
S&P 500 -108.53 (-3.93%) 2,653.60
Why the sell off? Inflation, interest rate on the 10 year bond? Or is this the big drop that the doom and gloomers like Hussman & Schiff have been pounding away away at for years?
Surprised my call to BB stumped him asking about options based funds. MORNINGSTAR lists 114 in the category. Responded talking about stock options, does not like them. Good to get on the air for the anniversary show and that WLS Chicago will be on every week.............IRWIN in Skokie
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Hi Irwin...Your call was about 50 minutes into the first hour.
Basically, it seemed to me that the only information Brinker added was that when one writes options, they limit their upside on that stock.
Was that your take?
YES, Read some advisers recommending buying options and several funds had strong 2017 returns IRWIN in Skokie
Vanguard.com was down and unable to login. Bummer.
Trying to buy some S&P 500 at close but Vanguard website was locked up for the 15 minutes before end of day. first time I've been disappointed in Vanguard. I guess I will know tomorrow whether I saved money or lost money by not being able to buy
Investors are taking profits putting the big sell-off on fire.
Lou from Solvang, CA
According to the S&P website, all indices had turned negative for the year.
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Li Lou,
They are mistaken. The Nasdaq is still up a little for 2018.
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Li Lou,
We don't know what all was going on this morning, but let us hope that it was capitulation.
wow that was interesting biggest DOW point drop in history... of course you look at % drops not point drops...
I did a little side ways equity move from wilshire 1000 into NASDAQ index but no bottom fishing yet.
smile
It looks like the big boys(girls) shaking the tree to get rid of the fair weather fans. More buys today. This is surely “weakness” even on Bob’s terms.
Pavlov’s Cat
Honey you did not post my message. Whats up?
BB has been recommending dollar cost averaging into the market on weakness. Can today's and last week's combined loses be considered sufficient weakness to dip one's toe back into the market with new money?
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J. Wales...The last message I got was at 11:23 this morning.
It is there....
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Anonymous...Please use a handle of some kind. I don't always publish posts that have no identifiable signatures.
Yo, Gabe,
You are the suspender expert here.
Are these appropriate for the current market?
https://goo.gl/pBBu7f
JC
Have any of Bob's subscribers received an alert today?
I recall that he was really ballyhooing his web site "electronic enhancements" some years ago. It seems to me that today would be a logical choice to send out a subscriber alert.
My bad. You are spot on. Mea culpa. Getting old I guess.
Is this MOABO? (mother of all buying opportunities) You know, like when BB called MOABO in 2009 when S&P500 hit 1,100 before it went to 667?
-Mr. Stallone, Philly
Although U.S. futures are up marginally as I post, I think that it may be quite early to be buying here.
Overseas market reactions should be followed closely. Personally, I am not putting one dime into the market unless/until I see convincing evidence on the charts that there is a turnaround in place. Way too much risk with no definable reward.
It is not a good thing to see stocks knifing through their 20, 50 and 200 day moving averages
(If I discover that I have a fascination with falling knives I will become a magician).
JC
Got a little hung up on the Superbowl yesterday but if there are any audio requests from the Sunday show...I can do that.
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Bob Brinker's website says: "There is no bulletin posted."
Looks like this is the mid-term election year correction. The only thing unusual about it is that it is happening early in the year. Brinker might give a buy signal at some point but it's meaningless to most subscribers who are fully invested. Still too early for the buy signal though since we could have a major correction. Dow futures are down 400+ points as I'm posting this so we still have a more declines ahead.
Futures are UGLY again @ 6:25 PST:
Dow 30 -480.0, -2.01%
S&P 500 -41.75, -1.60%
Nasdaq -87.50, -1.36%
JC
I sold everything today and put it in gold, bitcoins, and PIG bellies.
Imma gonna get rich!
Seriously, my AA remains unchanged and I'm enjoying watching the blood, gnashing of teeth, and the overall circus. Has anybody jumped out of a window yet?
Who was it, Bogle who said: "Don't just do something, stand there."
Futures down over 500 points!
Gabe
Chances are we gonna have a rebound, especially drop with this magnitude.
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dRahme.... We missed you, but hope you enjoyed the game and that your team won. :)
gabe said...
Futures down over 500 points!
Gabe
+++++++++++++
Gabe, what are the websites you like to check things like this out?
Robert
Yes, hung wong.. I think with this sort of rapid drop, there should be a rebound. I see it as a buying opportunity.
I would never sell after a 1800 point Dow drop in two days. Time to buy (funds/ETFs) on the dip tomorrow. And if it drops more, I'll buy a little more. As it goes down, buy! - Not sell. Right?
Too bad about the markets. I well. The important thing is we can now say merry Christmas again and know what bathroom to use.
Kilgore Trout
Even with today's drop, I'm still up YTD. 2018 is still young.
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Kilgore Trout....We can do without your political sarcasm.
No one ever said that markets don't correct - not even the President.
Well, we all knew this was coming. So, pretty much business as usual and not some fundamental shift. Actually a good thing. As consumers of financial media we do need to continue to understand media is a business. They do not work for your best interests, but all are attempting to sell you something. Are these businesses attempting to gain you attention for ratings or clicks with the ever so powerful attractant such as fear mongering? Are they selling news letters and advice? How about their funding that goes to the understanding to push gold, silver, or oil. What hook or snare do they use to motivate or entice you? When we do receive advice from elderly experience titan within the financial industry that has no more motive other than leave the planet with more respect, like Bogle, we should cherish the wisdom.
I read often how the buy the dip popularity is poo poohed. If your suspicious of such commercial advice, it might lead you to believe that this practice is screwing up the smart money earnings. Such, as I read that the after hour trading, analytical computation, and coordination of effort, has savaged the hapless individual investor within this type of market volatility. Often we read how volatility works for expert investor community. My thinking is the futures of corn and petrol were once exploited and came under review. For example the ethanol credit market was proven to be corrupt by one agency. Same was proved with currency and natural gas. It's an insider game we play in and were are not in the inside. Buy the dip popularity may be eroding or limit market gyrations? Not so good for the big guys.
This draw down reminds me of the fear mongering upon Brit-exit. Lot of hype back then and a lot of hype now. We still have a memory or 08/09 loss and that is a good thing. Much money on the sidelines. I heard a financial adviser say something wise last Sunday. He has a practice developed per experience to wait three days for such times as these before making a move. Delay, Friday, Monday, and Tuesday and then decide upon a plan of action. So, I'm thinking before trading day is over to invest cash 12% or move some. The ten year treasury often heard the best safe haven. I'm more concerned on loosing the buy the dip opportunity. I just checked and the draw down velocity is quite stiff. It may get ugly as all rush to the gate. Expensive to sell when everyone is pushing the same direction. Many have a 10% stop gap policy. It does bode well for future market return after this correction. It would be nice to time some loses if that is even possible or just to risky?
Has THAT Bob moved to an "undisclosed location"?
Unbelievable!
(I think I will amuse myself by reading recaps of his reruns).
-----
PS: Honeybee,
Where the hell is our Bacon Boy these days? Hope he is OK. If he is okay, hope he gets his fat arse over here to share his insightful market PIGnostications!
MAD: When I bought $125,000 worth of pork bellies the other day, Bacon Boy's belly was included. So he is, ahem . . . "no longer with us."
From a CNBC article quoting Carl Ichan: "The market has become a much more dangerous place," he said, adding the current volatility is a precursor of potential trouble. "It's telling you something, giving you a warning." Investors are piling into index funds thinking they'll never go down, Icahn said. "Passive investing is the bubble right now, and that's a great danger."
Just by going by the PE ratios (Shiller and trailing 12 months for the S&P 500), then Carl Ichan is correct. The market is over-valued and going up against the future interest rate increases; that is why the Trump tax cut may be able to compensate for the upcoming increase in interest rates. So, maybe the market goes down 10 to 15% but not +30% because of the buffering from the Trump tax cuts.
AD
Mad as HELL ! said...
Where the hell is our Bacon Boy these days? Hope he is OK.
Blogger Bluce said...
MAD: When I bought $125,000 worth of pork bellies the other day, Bacon Boy's belly was included. So he is, ahem . . . "no longer with us."
I'm fine, and better than ever. THANKS for asking.
Sorry to disappoint Bluce but I'm still kicking (with all 4 legs). His pork bellies came from drunkey Hillary's 30 year old account.
With all the exciting "memogate" stuff and preparing for retirement, I have not had much time for the bullcrapper named brinker, nor his washed up father. Both of them are at the bottom of the barrel of my time schedule, just below reruns of Gilligan Island.
Now I find out due to global warming, I have to dress like a rancher and move my herds of bison in the Chicago suburbs further up north to Gary Indiana or Traverse City. (according to drunken Hillary the global warming guru)
Why is she still out of jail?
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Anthony....We hit the 10% correction in the first hour of trading this morning. According to Brinker, it only counts on the close - but I think that is silly.
I hope all of you watched Varney during that first hour of trading - it was an historical and wild ride!
I wouldn't have gone near my trading program if my life depended on it!!!
I know that Brinker, and a lot of the "gurus," blame interest rates and possible inflation, but I'm not convinced that's the whole story.
I'd bet my next year's salary that there was some big-time funny business going on with shorting and with the trading programs.
Program trading made this exaggerated, I’m sure. I have been accelerating deployment of dry powder with money I will not touch for at least 7 years. I’m fine with this little gift pony.
BTW, I have always known which bathroom to use and have always wished Merry Christmas to all.
Pavlov’s Cat
Pig,
Good to hear you are well!
Pig asked "Why is she (Hillary) still out of jail?"
Pig,
I think that is because most law enforcement folks enjoy their lives and don't want to "appear on the list". (I'm not sure how many people currently appear on that list. Apparently the search algorithm has been "modified.")
HB said: I know that Brinker, and a lot of the "gurus," blame interest rates and possible inflation, but I'm not convinced that's the whole story. I'd bet my next year's salary that there was some big-time funny business going on with shorting and with the trading programs.
Interestingly, today Rush was intimating during his show that he also suspects some "funny business" beyond what the financial "gurus" are offering as the blame. Wonder just how far some forces may go to stop Trump.
Honeybee, that is true, as raising interest rates and inflation above 2% annually, may not be all or the causes for the market downturn.
The state of the government such as regulations, taxes, deficit spending and debt to GDP ratio may impact the stock market as well.
I see your point as far as market shenanigans such as Soros-like hedge funds that short the market. Eventually the market goes down 20 to 30%, and the PE ratios or valuations show that the market may be a good buy. Perhaps the Soros-like hedge funds make money shorting, and then take the capital gains and place it back into the market after it has gone down at least 25%. They are good at momentum trading and trend trading, as well as asset and sector investing shifts/rotation. Perhaps when we see these types of shenanigans it is a signal that a bear market is about to begin.
AD
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Hi Pig...Still at liberty, I see.
I'm glad you didn't go loco and get locked away. Heehee....
ras here - Thanks for doing this honey.
As a short time reader of this blog who's a new and learning investor that's recently come into a large amount of money, I would also like to thank you, Honeybee.
Are we Overbought yet?
JC
Does anyone know where I can see a receipt copy of his newsletter of bob brinker
I called his office for one, they sent one to me that was 20months old from June 2016.
I need a better idea what he offers
I check youtube, nothing
Hi, I'm relatively new to Bob's newsletter. Is there a Schwab alternative for OSTIX. Schwab wants $76 a trade and I'd prefer to keep the money in Schwab. Thanks
Clearly The Big Kahunas (and their program trading) are in complete control.
Should we buy? Should we sell?
It probably doesn't make much difference. Whatever we decide to do, we likely will find ourselves completely entrenched and decimated by the Big Kahunas' investing maelstrom.
We are but a speck of sand on a very, very large beach - awaiting our destiny.
JC
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RDM 1000....Since OSTIX is a managed mutual fund, the only way you might try to duplicate it would be by buying investment along the same line as their holdings.
OSTIX is now about 3/4 high yield bonds, 4% convertibles, and 20% cash. The convertibles give some upside when the stock market rises.
You can go to their website and find out more about what they invest in.
Also note that they charge (by Bob Brinker's usual standards) a huge expense fee: 0.88%
Here's their website: Osterweiss Strategic Income Fund
Got it. Thank you. This weekend, think Bob said that he has accounts with each organization, as needed.
Volatility in the last hour bringing the market down!
Three horses going this weekend (Fri-Sun).
Gabe
To rdm1000,
I think Bob said that he recommends dealing direct with each individual fund family. That way you do no have any purchase fees such as the $76 at Schwab.
February 6, 2018 at 3:53 PM snarky posted...
HB said: I know that Brinker, and a lot of the "gurus," blame interest rates and possible inflation, but I'm not convinced that's the whole story. I'd bet my next year's salary that there was some big-time funny business going on with shorting and with the trading programs.
Interestingly, today Rush was intimating during his show that he also suspects some "funny business" beyond what the financial "gurus" are offering as the blame. Wonder just how far some forces may go to stop Trump.
====
smile response to snarky post...
HB is closer to the mark on this with program trading, IMO.
What happened Monday, had nothing to do with conspiracy theories against Trump IMO.
My understanding which is only surface level is on Monday there is an etf (or maybe an etn) called XIV which is an inverse etf for VIX which reflects market volatility. So when there is no volatility the XIV fund is up and vice versa. (note the ticker for the XIV is the reverse of the VIX clever by about half). If you look at the fund chart you can see what happened to the fund in the chart just click on the 1 yr https://finance.yahoo.com/quote/XIV?p=XIV going from over 130/shr to below 10/shr in a day on Monday. The bet had been no volatility and continued no volatility which was a bad bet on Monday.
Those in this fund (mostly institutional investors making big levereged bets) had to cover if they were on margin as the fund tanked as volocity or volatility picked up thru the day on Monday, I think on Monday there was talk of the fund needing to be liquidated. Also this fund might have been backed or sponsored by a bank which creates other uncertainties for the market... and thus more vol.
The thing that precipitated all this was concern over interest rates from Friday's unemployment report where I think there was a spike to 2.9% for wage component. The market threw a hissy fit on this creating the first wave of volatility followed by more pressure on Monday.
IMO market has it wrong on wage inflation cause they did not include productivity of 1.1% which if you add this in the hopper 2.9% - 1.1% = 1.8% which is below Fed target of 2% for inflation. But mkt probably looking at the rate of change concern for future and exacerbated.
The XIV fund collapse is reminiscent of what happened with the 1987 crash which anyone who went thru that 20+% crash in one day was all about portfolio insurance and program trading. Back then the market had no trading curbs or stops so selling beget more selling and there was a lot of leverage in the system just like now. Also in same ballpark of CDO's and Swaps with no Insurance reserves backing for the '07-'09 financial collapse.
Anyway that is my understanding surface only of what happened on Monday.
smile
Thanks MikeE
Markets fell near the close. The NDX gave back half Tuesday's gains. Expect a down day Thursday.
rdm: I just checked, there are 85 no-load no-fee high yield bond funds available at Schwab, and I'm sure some ETFs also.
LOL, JC!
MK
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Wow....45 years is a long time:
Jobless claims drop 9,000 to 221,000, remain near 45-year low
Market does not like the 2 yr spending deal the Senate came up with yesterday. The market was up before the announcement then after drifted lower.
Bond market long end ticking higher on lifting spending caps.
Potentially higher deficits going forward if this deal goes thru. Cut the spending.
smile
Honeybee said...
Wow....45 years is a long time:
--------
Indeed!
What Happened in 1973 Important News and Events, Key Technology and Popular Culture
https://goo.gl/ypPfCl
JC
Spending is an addiction. It is a result of delusional entitlement. Sowing the seeds.
My thought is that the Dow must test Dow 20,000 and be successful before I will move money into equities. Not so with my individual holdings.
Gabe
So your thinking bear market
Congress I hope you are listening to the stock market today on your profligate spending deal - Dow down -1032.89 points today.
If you pass this crazy spending you are nuts.
Where is the TEA Party in the House surely they will stand up against this crazy.
smile
Has Bob Brinker offered a “buy” signal with this current market gymnastics...
I am traveling and have been able to check from my desktop computer....so I am posting this on my phone
We're officially in correction territory now. Fox Business showed we're 10.16% off the high. Investors were pouring money into the market in January and bullishness was at or near record levels so I guess this is not surprising. At least we're closer to the end than the beginning if Brinker is correct.
FOLKS; JUST PAPER LOSSES!
Gabe
I'm jealous for all you brinkerites that BACKED UP THE TRUCK and took your YUGE profits last week from the "SELL NOW" newsletter by senior (very senior) and web page bulletin by the kid genius in Colorado who never had to hold a real job, and still won't be able to get one.
You did get the BULLETINS, didn't you? My decoder ring was flashing bright red and buzzing for 10 days. At least I know that's what the BRINKERSHILLS will say in 4 weeks.
THANKS bOB....you're the best!!
markeTimer, my big fat @$$.
How come the charlatan knows how to say "BUY NOW" for the countertrend rally but doesn't know how to say "SELL NOW".
Nor does he know how to say "OOPS...WE WAS WRONG, but screw you because I already have your newsrag money."
Hang it up, and make the kid get a real job.
Dearest Mr. Pig: Do you think Bobby's crystal ball is broken again? Funny, it always breaks just before a market drop.
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Mr. Pig....Do you remember Suite 101?
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No buy-signals from Bob Brinker...
Courage folks, courage. The fundamentals are what is important. This is not fun, but necessary.
Pavlov’s Cat
Pavlov’s Cat said: "Courage folks, courage".
Pavlov's Cat, "Courage"?
Is your real name Dan Rather?
Did you once repeatedly ask "Kenneth, what's the frequency?"
Mr. Pig....Do you remember Suite 101?
OH YES, I certainly do. I think some Canadians decided to buy it and save the place and destroyed it within one year. It probably was a front for brinker. I heard the owner cleaned up and made some big bucks.
Honey, and other Cali-residents, might be interested in this article: The Great California Exodus.
I found it interesting, even though I live on "the right coast." Plenty of people are leaving Cuomo Land too.
I wonder if Bobby's ever-increasing millionaire-caller faction :-D will henceforth need to identify themselves as a "hundred-thousander?"
Anyone have any historical knowledge of Brinker's buy recommendations or patterns? I think the last one came in early 2016 and he hit it pretty close to the bottom. Any idea how far the market had dropped for the 2016 bulletin alert?
Has he typically waited for a certain percentage drop before issuing a buy recommendation? Or would he just call this current drop a "pullback" and dollar cost some money into the market?
Today definitely tested Tuesday's lows and made me think of a "double bottom", right at the 200 day moving average.
A 10% correction........just noise?
Gabe
KC,
I think it's too early for Brinker to issue a "buy" signal. If I remember correctly on major corrections Brinker waits for an initial low to be established, then he waits for a brief rally followed by a retest of that low on lower volume before issuing a buy. The selling pressure into the close today appeared to be on heavy volume which indicates the correction is not over and we could still head lower.
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Thanks Mr. Pig....I got an email from a friend named "Bob" and decided not to explain why I asked your that.
Bob is a pretty smart guy.
.
Bluce...all that moving doesn't bode well for the places they are moving into.
If you know what I mean....
[Hong Kong Morning Market] Hang Seng Index lost nearly a thousand points. Dip blow the 30000 mark (2018/02/09)
For all here who are within 10 years of listening to Brinker...
I have listened to Bob for over 30 years now and yes there are things you need to know concerning his limitations. He can be somewhat rude at times but he is brilliant.
Bob has no crystal ball and has made bad calls in the past. From my experience he is right 3 out of 4 calls. He keeps his calls to timing BEAR Markets and BULL Markets.
He has always said CORRECTIONS can happen for any reason at any time so he keeps his work mostly directed toward identifying likely Bull and Bear cyclical and secular changes. Bob's newsletter is good and he doesn't discuss content on the free radio.
With that in mind, he does little heads up! warnings concerning simple corrections. He does give patterns of behavior for us to be educated. An example would be a couple months back he explained the near 100% track record of corrections during the mid-term election year He actually is getting older now. Imagine doing 3hr radio programs Sat. and Sun. (only a few years ago) Give the guy a break.
We know energy is crucial to the country's financial success. We are entering the nation’s most energy productive era in history. We are truly blessed. Since Exxon and all other energy reports claim the world energy needs will increase and do so rapidly, this is an indicator of international wealth gain. The emerging economic countries will steady gain and enjoy more energy products. We need to be invested in international corporations and stocks poised to profit from this trend. Check out rrapier.com and the ‘18 Energy Outlook from Exxon.
Racehorse owners, rum get tax breaks in budget bill.
Cool. If your horse loses you drink the rum and get two tax breaks!
Analysts believe that both global economic growth and inflation have risen this year, which may force central banks to tighten monetary policy sooner than market expectations, while funds may shift from equities to low-risk investment products such as fixed-rate assets.
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Anonymous who wrote the Brinker-Bot slant on Bob Brinker:
Firstly, you need to know that about 9 out of 10 comments that arrive with no "handle" or account attached, go straight into the Trash Bin. My polite request has been just above the window you write in to post for a long time.
However, I published yours because it's been a long time since I have read such unmitigated bull-crap spouted for Brinker.
LOL!
Anonymous said:
"He actually is getting older now. Imagine doing 3hr radio programs Sat. and Sun. (only a few years ago) Give the guy a break."
Anonymous,
"Getting older" happens to all of us. But I think you need to reconsider your points from a consumer perspective.
Is it fair to listeners to downsize your 6-hour per week presence to 3-hours per week - and then further downsize your 3-hours per week with plentiful reruns that are unannounced and frequently so old that they have no bearing on the current market?
And then there is this ancillary issue: Do subscribers to Bob's (plentiful rerun) podcasts get full value for their paid subscriptions? I don't think so, and I believe most on Honey's Bob Brinker Beehive Buzz would agree with that stance.
JC
Kudos to Vanguard regarding being locked out of a IRA exchange Monday. I did the exchange Tue. My Flagship rep called Wednesday inquiring about my unhappy tweets. I explained the details and after research, VG adjusted the exchange price to Monday's close. About a 2K adjustment in my favor.
I guess I am a bit puzzled about these complaints about Bob Brinker not doing more live shows coupled with complaints about how wrong he is in his market calls. It reminds me of the joke Woody Allen tells in the opening scene of Annie Hall, paraphrasing a bit here: "Two women are eating at a restaurant. One says, "Boy, the food here is TERRIBLE!" And the other says, "Yes. And such small portions!" If the concern is really over whether or not the podcast subscribers are getting their money's worth, wouldn't that be up to the subscribers? I'm trying to remember the last time I read a bone fide Bob Brinker podcast subscriber on this site griping about paying to listen to so many reruns. I mean, isn't it up to the subscriber to simply decide on their own to stop subscribing to the thing if they don't think it is worth the money? I'm sure Brinker hasn't figured out some nefarious method of hypnotizing them into re-upping over and over again when they don't want to.
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Gawd....no one has complained about Brinker not doing live shows. Let me educate you:
The complaint is about Brinker's deceptiveness of pretending to be live when he's not.
And as for his timing calls not being correct - most of them aren't, but it doesn't mean a thing to those few who followed his advice and remained fully invested since March 2003.
I happen to believe that anyone who objects to people being critical or complaining about a national radio talk show host on MY BLOG, probably would be happier not reading it.
We are not here to keep you from "being puzzled" about us.
ONce again this year (2018), as in 2008-2009, Mr. Brinker has show his true investment prowess by staying fully invested in all stock market crashes, bear markets. (At least he is consistent) And people pay for this advice? Hmmmm?
Bob: The tax break for racehorses in the passed budget bill permits Owners to take a tax break re: qualifying us to take a depreciation after owning a horse for only 3 years rather than 7 if the horse no longer runs or competes.
That is nice.
Gabe
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Stock market closed into official correction territory (over 10%) during the week. But now is only down 5%.
Will we have to test that again before we turn around for good? It's possible, but I doubt it.
I just heard one of the pundits they call up every time the market moves down more than 2 cents to prognosticate and claim, "I told you so." He actually labeled this a "crash."
Beware about being terrified into making mistakes by listening to the crock of bull about "largest ever," etc.
No, it isn't even close if you properly look at percentages rather than numbers.
If you Google Bob Brinkers net worth sites agree at 25 million.
I gave up marketimer 20 years ago realizing it was pretty much useless.
I have mixed feelings for Bob. A teacher of common sense finance for all. But, highly flawed in integrity.
But, I think his good outways his bad.
Got out of work this morning 6 inches of snow on my car. After cleaning off my car, a rocky ride home. Then getting stuck in my driveway. Shoveling the driveway, sleeping then now more snow to shovel after waking up. You take the good and the bad.
Honey are you California lifer.
I know get a snowblower...nah.
tested S&P 200 DMA broke thru a little then came roaring back.
flakey market action still tail wagging dog on those inverse vix etn's
may need to go back and retest that low today sometime next week
smile
CORRECTION: Re my note 12:09 Advised by my Accountant that the depreciation is allowed for horses that are running or competing ( obviously). So..... we have a depreciating asset in a thoroughbred. Wonderful.
Gabe
Bob advice on short duration bonds for safety is simplistic. Historical back testing has proven this approach will lower you returns.
Bob's market timer is a recession timer. Financial data is at best only able to foretell a higher risk of recession. This is good stuff and will help one stay out of trouble or continue to invest up to trouble. But, your gut instincts and some simple stats will do as good. Moving averages, unemployment, and the rest are about as capable. Bob's greatest ability is to spin imagination for those wanting to board his money ship. He has no magic within reality to justify the expense of his newsletter. You can get the same advice for free.
If I have to “read between the lines” wink, wink, nod,nod, to get value from Bob’s radio program, give ME a break!
And no, I am not Dan Rather.
Pavlov’s Cat
An anonymous poster praised Bob for carrying on with 3 hours a week at his age. Big deal. Check Bill Wattenburg's record of radio advice. He answered all kinds of calls about science, physics, electronics, you name it, on his long running radio show in the Bay Area and he worked into his late 70s.
Horse racing is a business, even though some people view it as a hobby for the rich. A horse is an asset, with a cost basis and so forth. And they depreciate. Gabe: what's the depreciation period? 3 years, 7? more? Inquiring minds want to know.
Honeybee: Please clarify - which market is now only down 5%?
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Biker....Clearly, I was speaking in rough guestimates.
The Dow, and I believe the S&P, both closed in correction territory (by Brinker's definition), but have now risen to only about a 5% decline level.
If you have the exact numbers, I'm sure we'd all enjoy seeing them.
WSJ has some very nice tabular data here:
http://markets.wsj.com/?mod=Home_MDW_MDC
- or -
https://goo.gl/wnsyw2
Unfortunately, it doesn't list the peak-to-trough drawdowns. If I find that info I will post it.
JC
Here is an interesting cover off regarding the drawdowns. Still, not exactly what we need, but I will continue to search.
https://goo.gl/EZvDrN
PS: Do yourself a favor and DO NOT play the Black Star Hip-Hop-Rap video at the bottom of the page. No idea why it is there, but it is an assault on one's hearing and mind. I hate that crap!
JC
I have an exact estimate of -8% on thr S&P.
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Thanks J Wales and JC....
Re: S&P Drawdown:
1/26/18 New High Closing was 2,872.87
2/09/18 Today's Closing is 2,619.55
Drawdown from 1/26/18 New High to Today's Close = -8.82%
JC
Thanks JC. One other number to note for further reference in the process of "finding a bottom:"
2/08/18 Yesterday's closing was 2581.00, -10.16%, when S&P500 first reached correction territory on a closing basis. Lowest close (so far) in this correction.
If I remember correctly, there were a lot of jokes made during the last correction (September 2015 - February 2016) about whether BB could find his bottom.
J Wales said: "I have an exact estimate of -8% on thr S&P."
"Exact estimate . . .?" Is that like jumbo shrimp?
Honeybee, I see updates from you and others on which days, how many days and what percentage of days Bob Brinker airs a rerun instead of a live show quite often. I naturally assumed that is done to complain rather than praise. Or is it only a matter of sharing information just for the sake of sharing information without judgement either way?
FrankJ: Three years!
Gabe
It may not be so nice given the long stable gains. The unease that investors feel coming from historical gains when looking over their shoulder of two rather nasty corrections. That we are within a terrible partisan period of history that will motivate some investors, (especially those with other peoples money) to go to the fear mongering side. We are facing the mid year election hit.
I read the typical bull correction can be sharp, but averages -13% and will take one month to shake out lows. After that four months to recoup to peak. So, those experts that claim the year end will be higher are probably correct. However, this correction may be not typical given the great foundation. I'm thinking all in all the result more apt to be typical.
Also, those that are working on tax deferred money and ETFs probably could jettison without much cost on an up tic market. They would have plenty of time to go back in and ensure the limit of loss. Stop loss in general usually work against investor returns, but I do think the tax deferred accounts and with a little sales timing that may not be true. May these robo stop loss investors all kick in on same time period? Sales spread would be large, if so. Not good.
https://www.cnbc.com/2018/02/08/the-stock-market-is-officially-in-a-correction--heres-what-usually-happens-next.html?__source=yahoo%7Cfinance%7Cheadline%7Cstory%7C&par=yahoo&yptr=yahoo
BB likes to dollar cost average. Research from Vanguard shows that two-thirds of the time, investing a windfall immediately yields better returns than putting smaller, fixed dollars to work at regular intervals.
BB currently likes extremely short duration bonds. The ten year has proven itself as the best security within risky times. We buy bonds to limit risk, so we should evaluate the best bond within high risk times. BB advice would be good for someone who wants to have immediate access to stash with little down risk of depreciation. A plain bond fund or intermediate bond will suffice for risk.
Timing the market is probably a fools errand, but attempting to avoid a down fall within recession is very attractive. Recession happens often enough and have a timing that can really screw up your retirement and with the recovery sometimes taking many years. Having said that, some of the best returns are close to this period. What to do? Keep a well diversified portfolio with several years spending cash in reserves, not such a bad idea. Subscribing to low cost analytical service that will keep tabs on health of economy, not such a bad idea. One that doesn't sell managed funds or promote within infomercial hype. Just the facts mam.
"Drawdown from 1/26/18 New High to Today's Close = -8.82%"
That's 2x as painful. Going from 100 to 200 is 100%, but from 200 back to 100 only takes 50%. The pain and fear are magnified.
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Gawd wrote: Honeybee, I see updates from you and others on which days, how many days and what percentage of days Bob Brinker airs a rerun instead of a live show quite often. I naturally assumed that is done to complain rather than praise. Or is it only a matter of sharing information just for the sake of sharing information without judgement either way?
Gawd: It is done to put the truth out there which Bob Brinker does not put out there.
You can judge for yourself if it's honest never to announce when the programs are reruns and let the audience think they are live. And actually SELL them via Moneytalk on demand.
The first of three horses running this weekend WON!
Picked up a few bucks!
Gabe
Don't worry, BB will be "alive" for most of his time slot on Sunday. After all, he can't spend all of his million-dollar fade bet on the Eagles in one week.
Jethro
Brinker is loosing it. I used to listen to him all of the time. If you want good advice listen to annex wealths podcasts. They don't Time the market as much but they are real
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