Sunday, August 26, 2018

August 26, 2018, Bob Brinker's Moneytalk: Summary, Commentary and Advice

August 26, 2018....Bob Brinker live on Moneytalk today.....(comments welcome)

HOW FAST TO DOLLAR-COST-AVERAGE INTO STOCK MARKET NOW

Caller Mike from Los Angeles said:  "You are not on live on KABC in LA....(BB claimed that it is live "sometimes" - he is wrong.) I have a large amount of funds ($350K) I want to invest in portfolio III. When you talk about dollar-cost-averaging...you typically suggest, four, five, six pieces.  A little background. We just passed this last week the longest bull market run backing up the '90's. I'm anticipating, based on your  newsletter (Marketimer) which was helpful - in your October letter a year ago, you said to anticipate a mid-term set-back this year so I took advantage of that. Thank you very much. That helped pay for the letter many times over. Anticipating the market topping say in the next year, year and half, how many pieces should I be breaking my money into?" 

Honey EC: Brinker didn't mention that when stocks had the 10% correction in February that he sent out a bulletin stating that he was looking for a retest of those lows before issuing a new "buy-signal." That is all water under the bridge and he has moved back to old buy signals - leaving out the repeated mistakes in 2008-2009.  Jim eloquently explained in the comment section today:

Jim Wrote: 
"If caller Mike took advantage of the mid-term "setback" this year then he wasn't paying attention to Brinker who advised to wait for a retest. It seemed Brinker didn't want to talk about the current year correction but instead chose to mention prior year buying opportunities that he was able to identify. I wonder why. LOL"

MARKETIMER'S FIXED INCOME HOLDINGS....Brinker's reply to Mike: "I would say on model three on the fixed income side, I don't regard a need for DCA....We have largely inoculated that fixed income side by selecting short-duration portfolio assets. In fact, our average duration is less than one year....and the current income on that portfolio stands at a little less than 3%...…"

INTO EQUITIES.... Brinker's continued reply to Mike: "On the equity side, that comes down to your tolerance for risk....The fact is, if you are going to DCA money in, you want to do it in a way where if something goes awry in the market, you are not going to panic and do something that's going to be counter-productive. So I'd move it in on a schedule that you are comfortable with in terms your tolerance for risk - and that would be the key."

IT MUST BE FUN TO BE A PAYING CUSTOMER SO YOU CAN SHARE SECRETS WITH NATIONAL RADIO TALK SHOW HOST.....Honey EC: IMO, it is really scummy to leave out the vast majority of the audience while sharing long calls with subscribers about Marketimer portfolios - in hopes of pulling in  a buck or two on the dangled carrot. Let me clarify:  Brinker's model III portfolio is roughly half equities and half fixed income. He holds only two bond mutual funds,  and as he has repeatedly said, Vanguard Prime Money Market on the fixed income side. Today Brinker described the duration and income from portfolio III fixed income holdings. The ONLY reason, he is getting 3% income on those two bond funds is because they contain high-yield junk bonds!  Where else would he get 3% on one year duration? 

CORRECTION IN 2018 LASTED NINE DAYS.... Brinker comments: The January/February 10% correction last a total of nine days.....We are looking at a market that is basically the longest cyclical bull market ever - we are at 9 1/2 years. ==> dRahme's Audio Clip: Brinker's stock market history comments, "Secondary Buy Signal" 

BRINKER'S NEW INVENTION: "SECONDARY BUY-SIGNAL"...==> dRahme's Audio Clip: Brinker EXPLAINS new term for giving buy-signals while fully invested.

Honey EC: While I understand his embarrassment at the illogical and obvious scam of selling "buy-signals" while he has all followers, and model portfolios, fully invested, this only makes him look more foolish and desperate (in my opinion). Brinker's newly-minted "Secondary Buy-Signal," which he explained means to invest new money while already fully-invested, makes almost no logical sense to anyone who thinks rationally. 

INTEREST RATES-INFLATION.....BB comments:   Fed Chair Powell not concerned about inflation, but will gradually keep raising interest rates. PCE Index is now at acceptable almost 2%...Fed fears deflation....deflation is the "worst thing that can happen." 

FED DUAL TRACK...BB comments: With the Fed on dual track right now, this has never occurred before: raising interest rates and Quantitative Tightening.

BRINKER READS FROM MARKETIMER: THE INVERTED YIELD CURVE.....Caller Marty from Kansas City asked Brinker to explain why he used the Fed Funds to diagnose a possible inverted yield curve. Marty cited the August issue of Marketimer. Brinker explained and read a WHOLE PARAGRAPH FROM MARKETIMER.  ==>dRahme Audio Clip.....

NEW HOME SALES.... BB comments: "We have seen some sluggishness come in to the   ….new home sales market still okay==>dRahme Audio Clip:  New home sales, inventories rose, existing supply steady; median new home sales price decline 1%; Year-over-year GDP 2.8%. 

KUDOS TO BRINKER FOR AN ACCURATE GDP REPORT….BB said: "The initial quarterly increase for second quarter GDP which was reported at 4.1%. The consensus revision is 4.0, and the range is 3.8 to 4.2.  "Right now, year-over-year rate of real growth in GDP is 2.8%. If this number comes in close to 4%, there shouldn't be any change in that critical year-over-year number, which is the actual annual growth rate of the economy - adjusted for inflation. Now standing at 2.8%. That will come out on Wednesday morning." 

SOCIAL SECURITY SUGGESTIONS... Caller Marty from Naperville has a suggestion for shoring up Social Security. BB reminds him of George Bush's suggestion to put some funds in the stock market - which clearly would have been profitable...…==>dRahme's Audio Clip (scroll half way).

NEXT WEEK IN THE CANYONS OF WALL STREET: ==> dRahme's Audio Clip

FRANKJ'S MONEYTALK GUEST-AUTHOR SUMMARY

Bob’s third hour guest on August 26, 2018 was Professor Adam Tooze.  He is a professor at Columbia University but today he weighed in from Berlin.  The prof has written a number of books and his latest is titled: “Crashed: How A Decade of Financial Crises Changes the World.”   
Oh boy … regular readers know what comes next.  All together now, “ANOTHER BOOK ABOUT THE 2008 FINANCIAL MELTDOWN??”   Yes, unfortunately.  Adam Tooze joins the very long Conga line of third hour guests on this overworked, overanalyzed topic.   Who chooses these guests?   Does Bob think this topic is still of interest after nearly 10 years?
Thankfully they didn’t spend the whole interview rehashing the financial crisis. 
Bob said the Bear Stearns bailout in March of 2008 should have been a warning shot, but it did not accomplish any substantial protective measures.   No kidding.  Someone (who was that?) saw no major consequences for the stock market and kept recommending adding money as it declined.   There was some discussion of Lehman Bros.  The guest speculated that the head of Lehman might have seen the Bear Stearns bailout as a good omen but the rug was pulled out when the powers-that-be in government said “fuggetaboudit.” 
Bob asked if the Fed fulfill their role as the lender of last resort.  The prof said yes, the Fed lent trillions to US banks and to foreign ones as well.  These loans were collateralized.
So, why is the Fed demonized, asked Bob.   Answer: all this lending revealed a disconcerting fact:  Money has no tangible underpinning, i.e. gold backing, it can be created out of thin air as illustrated by the Fed granting credit where needed.    
The only caller was Dan from Des Moines who (I think) asked a question but it was hard to discern.  Fortunately the guest untangled it for us.   The Fed is focused on inflation, but in today’s economy where the internet and all the business associated with it enhance our ability to find out prices – inflationary pressures are eased.   The answer went on to describe how deflation hurts debtors, and the consequences of deflation on any equity one might have in their home.
There was some talk of reparations following World War I.  (This was the subject of a different book the guest wrote).  The US had loaned money to the UK and France, and they needed payback from Germany to pay the US.  The consequences were foretold by John Maynard Keynes who was an observer at the Versailles conference.  He wrote afterward that the harsh reparations would sow the seeds of another major conflict. 
Bob brought up tariffs by saying “My aim is not to get political in any way …”   The guest played off this and said he is surprised the current administration went after so many countries all at once.   There was good reason to try and deal with China, but not a good idea to “lash out” at everyone. 
How many more authors are out there in the weeds with a manuscript on the 2008 meltdown?  How many will get published and find themselves guests in the third hour?  We will know in the fullness of time.   As for me – what the heck,  these summaries all pay the same.
Bob wrapped up at 3:51.  
Honey here: Thanks Frankj. For me, the words "lashing out"  used by so much of the Trump-hating media, told me all I needed to know about that guest. As for Brinker claiming he wasn't "aiming to be political," how stupid does he think his audience really is? (Rhetorical question!)
As always, I bristle when I hear Brinker singing the praises of John Maynard Keynes - but that subject has been discussed in the past when he used to do it almost weekly. 


CHARLES SCHWAB MARKETS REPORTS AT CLOSE FRIDAY: 
U.S. stocks finished the week in strong fashion as market participants seemingly had a dovish take on Fed Chairman Jerome Powell's Jackson Hole speech and as business spending reportedly rose for the fourth-straight month. Treasury yields ticked to the downside, gold and crude oil prices advanced and the U.S. dollar declined...….
The Dow Jones Industrial Average (DJIA) advanced 133 points (0.5%) to 25,790, the S&P 500 Index increased 18 points (0.6%) to 2,875, and the Nasdaq Composite gained 68 points (0.9%) to 7,946. In moderate volume, 611 million shares were traded on the NYSE and 1.9 billion shares changed hands on the Nasdaq. WTI crude oil ticked $0.89 higher to $68.72 per barrel and wholesale gasoline was up $0.01 at $2.07 per gallon. Elsewhere, the Bloomberg gold spot price added $19.79 to $1,205.35 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was nearly 0.6% lower at 95.13.
Markets were higher for the week, as the DJIA increased 0.5%, the S&P 500 Index advanced 0.9%, and the Nasdaq Composite jumped 1.7%.

Listen Talk Radio:
TALKOFCONNECTICUT 

51 comments:

Unknown said...

Booby seems live today since he talked about something that came out in the NY Times yesterday, Saturday. But he sure seems out of breath. Think he got 9 in this morning.

Stinky said...

Well nuts!

I was looking forward to telling the Brinker Bots on M* that Brinker was not live for the 11th time in 2018 today.


Guess that post will need to wait for next weekend. Labor Day. As a laboring man, Brinker will deserve a weekend of rest.

Bluce said...

Stinky re: Binky: Yes he deserves a weekend of rest, no problem there, but he also deserves us trashing him for letting thousands of duped listeners believe he is live.

Bluce said...

Halfway through the second hour: Binky has inflation/deflation backwards. During deflation, the value of money goes UP -- not down as he said. *Inflation* erodes the value of the dollar.

Mr. KABC said...

It's a shill fest!!!

Jim said...

If caller Mike took advantage of the mid-term "setback" this year then he wasn't paying attention to Brinker who advised to wait for a retest. It seemed Brinker didn't want to talk about the current year correction but instead chose to mention prior year buying opportunities that he was able to identify. I wonder why. LOL

Honeybee said...

.
Thanks Jim....I added your comments to the summary.

bob said...

Bob's opening monologue was very interesting and informative about
wills, dying intestate and the churning of a brokerage account. I am very
surprised that you neglected to mention same in your summary.

Ringside said...

Gosh and a half, the boxing match between Marty in KC and Mr. Third Rail (what is that, the electrified rail in the early days of Philly trolley cars? Don't touch it! He knows) had me riveted to the cheap AM radio speaker in the shed.

They couldn't agree upon who was going to step in and punch hard first. Initially, Marty asked Mr. Rail politely about bond yield curves, the 2-yr vs. the 10-yr, but was forced to self-defend with a solid jab when Rail gave a perfunctory "don't challenge me" answer.

All Marty wanted to know from Rail was why he always quotes the Fed funds rate as the Gold Standard fire bell for the bond market even as investors have driven down the 10-year yield because they apparently don't give a wit about the Fed's "massive" QT bond market infusion that Rail said would drive yields through the roof. He's been shaking in his corner ever since they announced it, but the yields in the open market have dropped off a cliff.

Therefore, Rail needed to come out swinging in a furious counter-attack. He started talking over Marty, which is frustrating enough, and then began the pummeling with a brutal "out of nowhere" right hook about, "Do you understand how the gap between those two rates correlates to historic ticket prices for Stones concerts?"

At that point, Marty threw in the towel and conceded defeat because his own blood was starting to blind him, and his jab strategy was being painfully offset by Rail's low blows.

Marty was the People's Favorite in that bout. It's an all-timer right next to Ali-Frazier. Check it out halfway thru the 1st hour of the radio show, right after a conga line of shills that started the party with a lot of molasses.

tfb said...

SECONDARY BUY-SIGNAL

What the furry kittens? So if I get this means Bob pulled yet another Brinker and totally missed yet another significant market decline and then responded to the decline by saying it was a buying opportunity: meaning only for those who had not already followed his advice to be all in at even higher valuations. Did I get that right?

Honeybee said...

.
From Fox Business this morning:

The Nasdaq Composite crossed the 8,000 level for the first time and the S&P 500 soared to an intraday record high on word that the U.S. and Mexico have reached a historic trade agreement that replaces NAFTA.

SuziePie said...

The question from Marty was quite interesting about the use of the Federal Funds Rate versus the 2 yr Note in determining an inverted yield curve. But rather than answering Marty's question directly, Mr. Brinker got really defensive about his investment letter. I think Mr. Brinker needs a weekend off because he certainly woke up on the wrong side of the bed.

Irwin in Skokie said...

interviews from Europe are at 1, 3 a.m local time...have to give Brink and Ravi credit for securing the guests. Still believe the "crash" books are important since almost NO prosecutions and trials brought by O and Holder DOJ

frankj said...

Irwin, I have wondered how the guests get chosen. I don't know anything about this aspect of talk radio however. Maybe someone who knows would like to comment on how this works.

Both the author and the book publisher are interested in promoting the book. Maybe the publisher has a boiler room operation responsible for obtaining interviews for the author on appropriate shows. Or maybe the author has an agent who does this. Bob Brinker might have approval but I don't picture him and staff beating the bushes, making calls to line someone up.

Bluce said...

After 28 years of having Vanguard Prime MM fund, which I used for paying estimated taxes, property taxes, or other large bills, I am closing it and moving it to Schwab. Yeah, I'll get maybe .2% less yield but that isn't going to change my life.

I've been with Schwabbie for 21 years and have zero complaints, and tons of praise for the way it is run. And besides that, "Chuck is a friend of mine."

Suzie: I don't think we want to encourage Binky to take MORE time off than he already does, lol. But yes, he does get very defensive at times, and sometimes he even get offensive.

Pretty rare for a national talk radio host.

House Doc said...

Bluce,
Pls enlighten us on what you don't like at VG or what is much better at my friend Chuck Schwab. I am at VG but have no problem moving for a good reason. Tks

Honeybee said...

.
We now know that there is a great-for-America trade deal with Mexico.

Larry Kudlow on with Varney on Fox Business, predicts that it is very possible for us to 4.6%
growth for a couple of quarters and talks about what's ahead with Canada:

Kudlow on Trump https://www.foxbusiness.com/politics/kudlow-says-trump-will-force-canadas-hand-on-trade-heres-how>Larry Kudlow and Fox Business Report on Trade and Economy

Irwin in Skokie said...

Authors have agents, publishers, press releases..I think Brinker does have an active list of books, titles, and authors he wants to talk about.

Bluce said...

House Doc wrote: Bluce, Pls enlighten us on what you don't like at VG or what is much better at my friend Chuck Schwab. I am at VG but have no problem moving for a good reason. Tks
-----------------------------------------------------------------------
HD: One reason was to just simplify my life and have it all under one roof (my entire investment portfolio is at Schwab's). In addition: I like Chuck's website better, I like that I can call them 24/7 -- not so with VG, and the people I talk to at Chuck's are just plain nicer than anywhere else, including VG.

Also: I have VG Wellesley through Chuck, and I don't like the arrangement the two brokers have -- and I'm blaming VG. I have the Admiral shares and I cannot buy more shares. I would have to switch it over to Investor shares, which might be a taxable event, depending on who you ask.

Or I could transfer it to VG, which would be a non-taxable event, and convert it there, then I would be complicating my life more than it is so I'll just keep it at Schwab and let it run.

So, that's it.

tfb said...

I am not Bluce, but...

From an investors perspective:

Vanguard has repeatedly demonstrated that they do not accurately track cost basis. This is not just a me thing but its well documented in investment forums. And while it is ultimately up to the taxpayer to track their own cost basis, the fact is the IRS uses that data they get from Vanguard about your tax basis, meaning you will likely have your initial tax return disputed. Vanguard has known of this issue for years and has yet to correct the problem. They simply do not care. But think of it, you know it will be an issue with the IRS and require additional effort on your part in order to exonerate yourself.

Poorly trained, unknowledgeable customer service reps with weak condescending supervises who are not empowered to do anything nor seem to care. This is a personal observation. A relative told me That Vanguard told them their Roth 401K was not subject to RMDs. I called myself was informed the same thing. I asked to speak to a supervisor, 20 minutes later I was talking to one, who was not only unconcerned but asked me why I asked to speak to a superior who was indignant and said they did not understand what it was I wanted since I already knew the correct answer. Now that is customer service at Vanguard.

Vanguard switched the assets allocation of one of my relatives, 3 times, without their consent into a Lifestrategy fund. They claimed it was a technical glitch in their system that was triggered when they maxed out on their 401K plan early and then also when they received a company match. If you are counting that only accounts for two of the three instances. The third they could not explain and suggested we monitor the account each month.

In 2016 Vanguard told me that they did not have the infrastructure in place to support an in place conversion and an in-service distribution in any 401K plan. The limitation was not on the employer’s side, but was limited by what Vanguard stated they can support. What this means is, no employer using Vanguard for their 401K plan can allow their employees the benefit of a mega-back-door ROTH IRA. Caveat, that was when I spoke to them in 2016. They had no plans to support tit in the future. It is ridiculous and is costing employees of willing firms perhaps millions in lost opportunity costs over their working lifetime.

And in terms of intrinsics, at all service levels, Schwab, Fidelity, and T Rowe Price run circles around Vanguard for customer service. Vanguard’s Flagship service is a joke compared to Fidelity Private Client.

Other considerations:

I own a small boutique IT consulting firm. We mostly sub to major players. That being said, my contractors are highly skilled, earn a good buck (all > 100K), and are in demand. I cannot find anyone skilled to staff a Vanguard gig. Why? Simple, Vanguard treats contractor and consultants like garbage. Were it isolated to just IT that, perhaps, would not be so bad, but having been on site many times I can assure you they treat their customer service reps like garbage also. I have issues with firms that do not respect their employees. My observation is, Vanguard does not. By the way, I have had people sub on Schwab, Fidelity, T Rowe Price gigs and they would all be willing to go back to those companies.

My observation, Vanguard is the queen of arrogance: you will do things Vanguard way. Read about their ridiculous PAS service and what happens if you have assets that don’t meet their cookie cutter, er, I mean personally customized plan – LOL.

Personally I rue the day I ever put a dime in at Vanguard. Even more unfortunate for me is it is all taxable money with substantial gains. I keep the bulk of assets at Fido and Schwab. I just wish I had tested Vanguard out with an IRA so leaving would not be a tax bite.

Bluce said...

tfb: Interesting post.

FWIW: I've always been under the impression that you can transfer taxable holdings from broker to broker and as long as you aren't selling and re-buying, then it is not a taxable event.

Low Rent Larry said...

Regarding your last paragraph, wait a minute! You can directly transfer the same assets from one taxable brokerage account or "Fund House" to another without selling and incurring a capital gains tax event.

Oh, hold on, are they telling you they can't direct-transfer Vanguard funds to Fido or Schwab? Try establishing a "brokerage account" at both places, and put your funds in the brokerage account. Brokerage transfers are easy. Your shares just transfer like magic.

Done it many times. In fact, transferred a Merrill Lynch taxable account containing a dozen individual stocks to Vanguard completely online. Never had to pick up the phone. I'm not a Vanguard geek, just wanted to get the cheaper rates and leave the annoying loud-mouthed lady Lynch broker who called every day when she discovered I inherited Dad's account.

Dad was old school, he loved the ladies fawning over him. May he rest peacefully. Hey Dad, your stocks are up!

Unknown said...

Discount brokers push higher-cost products

At Fidelity, Charles Schwab and TD Ameritrade, brokers are encouraged to put customers into investments that make the companies more money—and the brokers get paid more when they succeed.

Example: Fidelity representatives receive 0.04% of the assets if their clients invest in most types of mutual and exchange-traded funds. But they receive .10% -- more than twice as much -- if they get customers to invest in higher-cost managed accounts and annuities and make referrals to independent financial advisors. The three firms say that they remain focused on finding appropriate investments for clients. The fourth major discount firm, Vanguard, does not use sales incentives.

Source: Interviews by The Wall Street Journal with dozens of former employees of Fidelity, Charles Schwab and TD Ameritrade. Reprinted from BottomLine Personal

tfb said...

Bluce,

You can sort of. You can convert some of the funds I have at Vanguard to an etf and transfer those. But that does not apply to one of the funds I have (I think it is the international fund). I would know except Vanguard system apparently purges old e-mail exchanges also...sheesh), the other two are S&P500 and total stock market. But supposedly there was some reason I could not get totally away from them. But really, in the end it does not matter. I am not planning on selling and leave it to my heirs to get the stepped up cost basis, leaving a note behind for them to run from this 5th rate company.

Honeybee said...

.
Jester....thanks for offering the back up for your claims.

However, I want to caution readers that, in my opinion, it leaves a lot of room for opposing opinions.

So DO YOUR DUE DILIGENCE before making any decision along that line. Each one of the above-named firms offer many different services in general and in particular.

And your comment about Vanguard not offering sales incentives: Those words may be true IF applied according to certain criteria, but IMO, they DO offer incentives of various kinds. Some of which, I find offensive.

I won't say more because I do not discuss anything that personal.

tfb said...

In other news the Department of Labor issued a ruling that small business owners and franchisees who ban together to form groups that provide low-cost healthcare to their employees will be exempt from joint-employer liability.

Every time I look the Trump Department of Labor is doing something to roll back the intrusive, job killing, government overreach of the tyrannical Obama regime and free entrepreneurs to live their dreams. And this, boys and girls, is why my phone is ringing off the hook now, with start-up after start-up looking for advice in the awesome Trump economy. Now if Trump would only hear my pleas to get changes implemented to Social security to allow seniors to work without penalty to stave off a labor shortage.

May God continue to watch over Donald Trump.

tfb

Unknown said...

Discount brokers push higher-cost products – Part 2

I decided to do a deeper dive on my previous post which turned out to be little more than a tease. Since the complete article is pay-wall blocked by the Wall Street Journal, I was able to find this more comprehensive summary of the investigative report.

I had not heard of the term “sandbagging” new client assets in financial jargon before. I could not have imagined “Achiever” bonuses approaching 6 figures in a discount brokerage. I would not have imagined employee access to a “Chairman’s Club,” an incentive that included travel to a Hawaii or Florida resort.

At all three firms, representatives received incentives for referring clients to independent advisors, who then in turn, payed the discount brokerages up to 0.25% on client assets annually.

I think I’ll stay put at Vanguard!

House Doc said...

Interesting info about VG and other firms. I guess I don't trade as much as some of you do. Proceeds from my activity have never been called into question by IRS...yet. I thought for a moment, Bobby was ranting away using an alias. I will take a look for a new place to park my mid 7 figure nestegg. It is a mass that is critical!

Unknown said...

When Fidelity made news of their zero load offerings the article I read listed the income generated at Fidelity. It was a multiple of Vanguard even though Vanguard had much more investor money under management. The author did claim Fidelity would not lose money on the zero load offers as they have skilled salesmen to push investors to more profitable products and services.

From my viewpoint the best investment advice that is not commercial will commonly advocate for Vanguard investments, but these same people may not always buy them from Vanguard. Also the Ishares funds are popular for them.

I did read an article on Swab finances and this author was amazed on income generated by their zero cost trade funds.

It comes down to trust as these financial houses have so much inside info and ability to part you from your money. It is complex and even the experts have a hard time to be on top of the analysis. Vanguard is investor owned company.

https://paulmerriman.com/7-reasons-vanguard-better-fidelity/

Trees said...

I'm fully invested in markets. Was out three months looking for buying opportunity. Lots of pandemonium in press as they attempt to persuade public and have them act up to their political desires. Markets aren't buying it. Some minor good buys. What is the quote? Markets scale a wall of fear to better returns. It's never a good time to be in stock market per media.

I read a comment from a study that had almost every investor whom held cash (out of market) for over 6 months lost money. People forget of the dividend side of investments.

The economy is doing extremely good. We have some incredible legislation that will prosper the country for the long term. Income tax overhaul is just starting to make an impact on economy. I do think those that attempt to tell us that this is just a short spurt advantage are full of it. Our regulation industry is for the first time being held accountable for their cost. Same for our trade policies. We have a historic period within the country. My guess U.S. companies profits will increase and with that market gain. Dividends will increase and cost per share will rize given the more favorable P/E ratio. The U.S. will attract more international wealth.

Anything is possible and nobody knows nothing. Don't do something stand there. I think that is how the funny sayings go?

Stinky said...

Rejoining the Brinker conversation on M*. Somebody posting as GerryCamerond had a great piece on M* about “fair use”.

We’ll see if the Bots engage, or just stay quiet.

Bluce said...

House Doc: I rarely make trades either, maybe 2-3 adjustments per year. I have my AA where I want it and I just let 'er run regardless of what the stock or bond markets are doing.

A suggestion: Move part of your holdings to Schwab and see what you think after a year or two. I guarantee you will find -- at a minimum -- their phone people to be several cuts above any other business.

There are no or very little hold times, and if the first person cannot help you with a maybe not-so-common question they will hook you up with someone who can -- and again, there will be very little hold times.

frankj said...

RE Vanguard: I have not had any of the problems tfb described. I have not had any problem with their tracking of cost basis. Telephone interactions have been fine. That said, I have not tried to do anything along the lines of a backdoor conversion of a 401K to a Roth IRA. They did an analysis and made recommendations for my account and that of a relative a few years ago.

Another relative of mine has given high praise to the Vanguard rep she's been working with. Her husband passed away and she has been transferring stuff there and getting things in her name. She has dealt with the same woman on several calls and it is not a large account.

I agree it was sort of cookie cutter in that it recommended existing holdings be replaced with a handful of their large index funds. But, you have to ask yourself, just how customized can they get when doing this sort of thing? I did not follow the plan but it might be a good idea to do so at some point i.e., to make management simple as I get older.

Honeybee said...

.
Stinky......That was very interesting post at M*...Thanks, for calling it to my attention.

Bluce said...

I guess the socialist-leaning (they certainly aren't liberty-lovers) people think brokers aren't allowed to earn a living. Who cares how much someone else makes? The wonderful thing about liberty is that if you don't like the way someone does business, you can go elsewhere.

For the record, some of the funds in question are not "zero load" (no-loads have been around for decades) but they have zero expense ratios. At its simplest: If the fund gains 10%, so do you. If there is a 1% ER, then you would earn 9%.

If you want someone else to manage your portfolio, yes, you'll have to pay for that service.

Otherwise, we investors have it better than it's ever been pretty much no matter where you go, aside from "full service" brokers.

I don't think Schwab has offered zero expense ratio funds (yet) but I hold some of their funds that have .03 - .04% ERs. That's good enough for me.

Honeybee said...

.
GOOD NEWS: BREAKING: US GDP grew 4.2% in 2nd quarter, stronger than previously reported

tfb said...

frankj:

I guess your mileage may vary. I spent a couple of seconds searching and came up with a litany of comments about cost basis problems at Vanguard, hence I am not alone. Here are just a few from one forum:

https://www.bogleheads.org/forum/viewtopic.php?t=239081
https://www.bogleheads.org/forum/viewtopic.php?t=214519
https://www.bogleheads.org/forum/viewtopic.php?t=236943
https://www.bogleheads.org/forum/viewtopic.php?t=217337
https://www.bogleheads.org/forum/viewtopic.php?t=244402

So, I guess people's experiences vary.

I have been with Vanguard since about 2004 and have never ever in my life seen such an incompetent financial firm. And that covers a lot of ground since I have been investing since 1981. But that is simply my experience based opinion and others, obviously, have different experiences and opinions.

tfb

frankj said...

tfb: I'll read those comments when I finish my petition to the tax assessor disputing the new valuation of my house.

Just today a relative told me she called Vanguard to request the form she needs to transfer a non-Vanguard fund from her crappy broker to Vanguard. The Vanguard rep said, well, if you WANT to fill out the form and mail it in, OK, but we can do this on the phone. Good service.

BWV said...

Maybe I'm missing something, but Vanguard treats me very well and does everything I ask efficiently. Outside accounts have been transferred in & consolidated with no problems. My Flagship rep knows me & I never have to ask for anything twice.

DJ said...

I was very surprised to read people having issues with VG & I would have to echo the comments by BWV. After being with them for nearly 10 years, I have not had anything but prompt service, a great flagship rep, & polite explanations of things I didn't understand. I do believe that you get better service with a flagship acct. but I was ok before flagship.

dg

frankj said...

Vanguard uses average cost as their default cost basis. Or, you can specify other approaches: FIFO (first in, first out) or, SpecID (specific identification).

Before you sell stocks or mutual funds held there people should consider what cost method they want to use. If you have not specified one they will default to average cost. Choosing either FIFO or SpecID is very easy. I did it with an account today and it took less than one minute. You start with the MY ACCOUNTS tab, then Cost Basis Summary, then in the upper right there is "Change Cost Basis."

I was told it takes one day to be linked to your holdings.

That said, if you bring non-Vanguard funds over from another broker the cost basis will transfer with it, but I don't believe they acquire the detailed history of dividends re-invested or a number of blocks of shares bought at separate times.

Bluce said...

Wow, "Fred" on M* really missed the boat with his comments on Binky.

"He believed that it was difficult to beat the market . . . " (claims to have been listening since the '80s)

I started listening to Binky in 1990 -- and someone PLEASE correct me if I'm wrong -- but as I recall, back then he declared that he aimed to BEAT the market. It wasn't until the mid- late-'90s that he started recommending index funds in a big way.

And: "He is a gentleman and a scholar." Is this supposed to be a joke? Angry Little Binky, stamping his little feet and berating callers left and right who disagree with him, is anything but a "gentleman."

Aside from the occasional renegade caller who slips by the screener, virtually ALL others are total bootlickers, walking on figurative eggshells, obviously making great efforts to not say ANYTHING that will send Binky on a rant and cause him to slam the phone in their ear.

Many are multi-millionaires who of course give Binky ALL the credit. And being the "gentleman" that we all know him to be, he humbly declines having anything to do with it.

Boy, it was hard to find the letters for "humble" and "Binky" together on the keyboard.

tfb said...

Bluce,

You are correct, Da Brink use to push expensive loaded funds, and in fact the newsletter I have of his (Dec 06 2006) lists ERs of Portfolio I as follows:

1.37% Baron Partners
0.77% Dodge & Cox International
0.95% Meridian Growth
1.22% Rydex OTC
0.63% Vanguard International
0.19% Vanguard Total stock Market

Now in all fairness 50% of that portfolio were in the two Vanguard funds. Still and all some of those ERs are nasty. And this was after he saw the light and started talking more about index funds. By the way, this just serves to highlight his disingenuous. Dda Brink obviously got schooled on index funds but at the same time he missed the education of market timing? Obvious he did not and continued with the market timing blather in direct opposition to what he then knew had to be true and instead decided to back away from managed funds over time. Sort of a soft retreat wile still keeping the bread and butter he suckered from the rubes.

As I recall Da Brink also use to push some investments he had a stake in, but my memory is foggy on that topic.

tfb

Honeybee said...

.
Another week of all-time-highs for the stock market.

Excerpts from Schwab report:

"Stocks enjoy weekly rally to fresh record highs
U.S. stocks moved nicely higher, posting a second-straight weekly advance and back to record highs, with the technology sector leading...."

Honeybee said...

.
Note to all about my comments on Vanguard. I think they have been misinterpreted.

I was speaking VERY SPECIFICALLY about the topic that Jester talked about - nothing more.

I like Vanguard a lot and have had an account with them for at least 20 years. I intend to stay with them.



Honeybee said...

.
Too bad that Bob Brinker sold out all Nasdaq holdings in Marketimer five years ago:

From Fox Business:

U.S. stocks closed Friday with a robust showing as the Nasdaq Composite turned in its strongest August percentage gain in 18 years.

For more on this story: https://fxn.ws/2N1qGB6

Kate's Dad said...

Ultratech Stepper?

William "Wally" Wallace said...

Here's an epiphany. That fake radio show is like a cheap old car. You get what you paid for and end up walking away disgusted and regretful, with a little self-loathing tossed in to harden the defenses in case the spouse decides to pile on. It's never pleasant.

curt said...

I must thank Brinker for his financial acumen and radio show that got my attention many years ago. It was in the mid 1980s and, although working steadily, I just couldn't seem to get a handle on the practical financial side of living. I listened to Brinker intently and read books from his recommended reading list. Over the years I became somewhat financially literate and I was able to make my own decisions. Brinker's tutorship was key for me. In 2000, the dot com bubble was in full swing. At one point Brinker put out a partial sell signal which I felt was overdue and not enough. I sold ALL my equities in February of 2000 and stayed out of the market until March of 2003. (Brinker buy signal 3/13/2003) That move was extremely well coordinated and my investments went up exponentially. I actually became a millionaire due to that move. The market was timed perfectly!! In 2007, while the mortgage debacle was at its peak, Brinker was fully invested and ADVISING his listeners that the mortgage fiasco would NOT affect the stock market. He would shut down caller after caller who called in with concern about the general economy due to the derivative and mortgage insanity. Brinker would not admit, even after the entire meltdown, that the economy was in huge trouble!! He dug his feet in and remained fully invested. Now 10 years later he sings a different tune. I can still her him in 2007 and 2008 shutting down callers with genuine concern. I have now learned that each investor must make his or her own decisions. Additionally, I completely disagree with Bob's political stand against the Trump administration. The current trade debacle NEEDS to be addressed. Bob went ballistic accusing Trump of starting a trade war. Yes Bob, we're all familiar with Smoot/Hawley, the Tariff Act of 1930. History is a great teacher but, its time to move on. So far Trump has done a masterful job of negotiating the US out of the utterly unfair and, in some cases, incredibly stupid trade deals made in the past. Sorry, but NAFTA has huge problems as it is currently written. The status quo on trade can NOT be allowed to continue. Bob knows this better than most, but can't bring himself to admit it for some reason? (political?) He was a huge supporter of the original NAFTA agreement.

The S&P almost touched the 3000 mark this year. The last two years have been an investors dream. Bob will NOT give credit where credit is due.... a result of current economic policy. Go figure???? I quit listening in 2008 when Bob COMPLETELY missed the boat.... Bob Brinker is knowledgeable! I will give him credit for my financial education and peaking my interest in all things economic.

Rexx said...

Great commentary. This should be repeated in the next weeks comments so more people can see it.

jridge said...

Yeah, I had some of that too. :(