Moneytalk Bob Brinker Summaries - Information ONLY
- SteveT
- TONYBRIG
- JenL_3
- SteveT
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- KirkL
- JenL_3
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- TONYBRIG
- SteveT
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» JenL_3 - May 22, '99 MoneyTalk archive
The Sat. 5/22 BB MoneyTalk show is already archived at:the KXL Broadcast.com site
....Jen
-- posted by JenL_3
» SteveT - Saturday May 29,1999
It has been awhile since my last summary, when Spring arrives in my part of the world we all tend to get outside after a long Winter. I did notice today Bob took every opportunity to infer we could see a change in market direction in our future, in June or possibly this Summer. Again I have included time reference points for your convenience when consulting archives.:10 Bob started by saying he is Justaworkinstiff. A fascinating week with lots of action. It looks like we are in a distribution pattern. Average Volume at 930 million (didn’t say which exchange or maybe average of NYSE and NASDAQ?) All indices down about 2% for week except Utilities. Are we in a profit taking mode and what is the long term out look were mentioned in the monologue. Also was mentioned the Barron’s cover article about Amazon.bomb
:20 Caller asked about Semi conductor Capital equipment stocks and how their cycle is different than the chip makers. Bob said a major factor is demand from chip makers and as geometries get smaller demand for new equipment goes up. Talked about rise in Large Cap. Stock like AMAT KLAC TER since last fall. Now it looks like DRAM prices are under pressure. Also often when Summer rolls around we often see the sector decline. Caller asked about Book to Bill ratio. Bob said it is a mirror that show industry trends. And PC sales are also important along with telecom industry trends. Bob made the first of his many disclaimers about market direction today here. Saying if the outlook as a whole were negative it is hard to think this sector would not be affected.
:32 Caller switched to Vanguard and has new money to add asked weather to DCA or lump sum in? Bob said to Dollar cost average in over 1 year monthly. Be prepared to reverse that if market conditions turn unfavorable. Caller also asked about a free sample to Bob’s newsletter.
:40 Bob said it had been a rough week for the Internet stocks and mentioned some at the Vancouver Exchange hit real hard down 50 -80 % in some cases. Caller age 35 at critical mass and will quit working for awhile to spend time with children has 1.5 Million. Asked if OK to put in active / passive portfolio needs 75 K yearly. Bob don’t know if it is a good idea, Asked caller if a sell signal came would he hold? Caller said yeas if market came back soon. Bob said it would have been easier to answer a few years ago. Bob asked what if market goes down 20-30% and stays down for a longer period? Not a pretty site. Bob thinks it better to go to a 50% bond allocation and sell some equities to make up the extra needed income. Bob then went on to say he COULD see indicators change in June or some time this Summer. Bob is cautious about equities for the following reasons P/E’s, sentiment, NYSE extending hours. Bob ended by saying if we get a bear market assuming it will be over in a few weeks is a false assumption.
:53 Talked about the markets staying open longer The last time anything similar happened was when the NYSE thought they needed more floor space. That was in 1929.
:56 Caller ‘s wife works at Walgreens and wants to buy company stock at 10% discount and no brokerage fees is a few % of net worth. Bob said go ahead but may have to ride it out if a market down turn occurs.
1:10 A big story this week was the NYSE and NASDAQ extending hours. Bob said spread (bid ask) were uncertain and it would affect the workers in Wall Street (how would you like to be in lower Manhattan at night?) and the industry worldwide as well as investors. Bob thinks this is driven by the casino effect and Internet hype and wonders about doing this before Y2K. (first time I have heard Bob worry about this) This will extend the time when price volatility will occur. Thinks maybe a bear market will heal the issue.
1:21 Caller asked what is Bob’s bias now? No change, but is monitoring close. Caller asked if it better to contribute to a 401K or Roth IRA? Bob said the 401K is better due to the tax advantage.
1:23 Caller sold under performing funds 3 months ago and put in GNMA’s and is looking for a buying opportunity. Bob corrected him and said it should have gone in a money market account. And we are not close to a buying opportunity.
1:25 Caller wanted to know about PFE and when to buy? Bob reviewed the performance of the stock and said it maybe best to use as a trading vehicle until the market shows some positive direction. Said t was a great et company and should have great growth there is some concern over sales going forward. Like to invest in this company when the market view is positive and P/E is only slightly above the S&P 500.
1:32 A few weeks ago cyclical stocks were hot and in general have been kicked around. Was the run up justified? 30 year Bonds at 5.82% may slow the economy down, will the Fed tighten. Talked about retest of the lows last October 8th. And the rise since. Said looks and feels like we are in a distribution phase. Indicators have not spoken yet were comments Bob made.
1:44 Caller owns several thousand shares of LU and wants Bob’s view on the stock. Bob’s owns too, Great company and great growth potential. P/E is affected by inflation and Interest rates. Has a P/E of 40 times 2000 estimates likes long term and thinks it can return to the $60 range short term when the S&P or Dow reach new highs. Going to be hard to get higher P/E. were Bob’s comments
1:52Caller wants to know if putting money in a house (San Jose, Ca.) would be better than the market because of the Capital gains exclusion. Bob thought the market would return enough more to off set the taxes.
1:56 Caller asked about John Dessaur (sp) view of a strong Dollar preventing the Fed from raising rates. Bob disagreed thinks a strong Dollar provide more lee way for the Fed to raise rates, if Dollar is weak Fed tends to support the Dollar by raising rates. If Dollar were weak Fed may raise rates to attract money to the Dollar. If Dollar is strong Fed don’t have to raise rates to attract money to the Dollar. If the Fed does raise rates with a strong Dollar they are not as concerned about the Dollar getting hurt. (All this according to Bob if got it right in my notes)
2:10 Caller wanted to know why the past week didn’t qualify as a health restoring correction versus a possible bear market? Bob said he hoped to see that correction weeks ago 10-15 %. We have not seen it So far a minor 5-6% in the S&P and Dow. Bob is worried about P/E’s, Money supply, and the casino environment with longer hours of trading. Caller asked for a definition of distribution phase. Bob said essentially when no material new highs on Major Indices and heavy volume. The shares are being transferred from the savvy experienced investors to the inexperienced and speculators this will be a problem if it continues can be a precursor to a change in market direction. Have to monitor very close.
2:17Caller has $3500 to invest in IBM currently has about 6% of net worth in Stock. Bob thought should DCA in if trading cost weren’t to high.
2:21 Caller thought 401K inflows would support the market. Bob thinks it is part of why we have enjoyed a 400% run up since 1990. But if asked would this factor make Bob bullish if the timing model said bearish? NO was the answer. Bob also said his Golf score is coming down ( with a smile no doubt).
2:26 Caller has money in Vanguard S&P and extended market and International growth at Bob’s recommend weightings and has new money and want to know were to put it. Bob said to DCA until something changes. May see an inflection point in June or this Summer any thing is possible. He also said he has tried to stay on the right side of the market but no one is a god or descendant of one.
2:32 Caller retiring in July and is a GE stock holder but don’t know net worth or how much of net worth is in GE. Bob thought since it is GE it was fairly well diversified and could hold unless market conditions change.
2:34 data coming out this week Friday June 4th Employment report and the Columbia University CICBR inflation report. This report has risen the last 3 months and when this has happened the odds of the fed tightening raise too.
2:42 May 31 Barron’s has an article about 1980’s corporate raider Carl Icon (sp?) and he is unhappy about high valuations and individual investors buying stocks and day traders. Bob mention a old Wall street adage " when the fish are biting feed the fish". Talking about Internet IPOs
2:52 Couple is buying life Insurance and wanted to know weather they should go term or whole life. No brainer Term and invest the extra.
2:56 Rates on the 30 year bond are up, the 2 year treasury auction will be June 23 and the 5 year is now quarterly so we won’t have one in June. Look for the CICBR and employment report on Friday and Leading economic indicators Tuesday the 1st. that’s all she wrote.
-- posted by SteveT
» KirkL - Great Summary Steve!
I thought it was a good show and your summary is the final touch.I did take exception to his comments about the stock market staying open for the "gun slingers" and "casino gamblers". It is clearly competition and discount brokers are selling the idea that people can get rich beating the pros if they trade themselves. Of course the discount brokers don't have a stake in convincing the public this…..ha!
Anyway, the public clearly wants to handle some of their own stock trading so there is a market to fill. The day trader effect is tiny. It is more people like Slick (have coffee with Slick Thurs in Chat, btw) who find it hard to buy a stock during the day and don't trust market or even limit orders with so much volatility we have today. There is talk of an all electronic exchange as well as foreign exchanges that would satisfy this market so the NYSE and NASDAQ are trying to answer this competition.
I guess I should continue this discussion in the Brinker thread since this is for the summaries. (comments on my comments should go there!)
thanks again Steve!
<img src=http://www.internetcount.com/1867610713.cgif width=32 height=32>
-- posted by KirkL
» JenL_3 - Good Job Steve!
Steve - Your BB MoneyTalk summaries are greatly appreciated.<img src=" http://www.geocities.com/WallStreet/Dist...">
....Jen
-- posted by JenL_3
and I missed the live feed on KGO.
» SteveT - Tone in Bob's voice
Randy you hit on the key issue in Saturday's show TONE. I thought about trying to interpret that tone but I couldn't tell what his tone was. I don't know if he was trying to prepare us for a bear or trying to talk the market into a health restoring correction. Seriously I don't think Bob or any one else could have that much affect on the market. It was however like no other Moneytalk I have heard before. As Bob says we shall know in the fullness time.-- posted by SteveT
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