Moneytalk Bob Brinker Summaries - Information ONLY

Top 347. Aug 17, 1999 1:56 PM

» SteveT - Kirk

You wrote above. "We had people give their summaries of the show before David started "pay per view" so I hope this resumes again."

My local radio station has Bob preempted again this weekend. If thunderstorms don't keep me off the net this Saturday afternnon we will have a summary up by later Saturday night.

-- posted by SteveT

Top 348. Aug 21, 1999 4:52 PM

» SteveT - Saturday August 21, 1999

This summary is what a gleaned from today’s show. It is intended to assist those that were unable to here the program live. I will ask you to refer to other sources for complete information, such as the archive link below or a trusted friend that heard the live event. This summary in no way should be considered a replacement for the live show. While it would be great for my ego if lots of people read this summary, if Bob doesn’t have a large enough audience we very soon won’t have this valuable resource to assist us in making our money management decisions. I will include time reference points should you wish to consult the archives.

:10 Bob opened talking about having empathy for Fed chairman Greenspan. Along with all the other problems he has to worry about we now have a deterioration in the Dollar. The Dollar has been sliding since July and not much has been reported on this. We like to see a Strong or at least firm Dollar. This is a problem as a weak Dollar means foreign goods cost more and add to inflation at home. This affects Stock and Bond prices. In the last 4 years foreign buyer have purchased 150Billion in US treasuries annually. Recently foreigners are net sellers of Treasury Debt. This is a big deal as it gives the Fed a reason to raise rates. Bob says the things we need to see an up trend in the markets are 1. Slower economic growth 2. Lower rates 3. Reduced Inflation 4. A firm Dollar. Slower growth should help with the labor tightness. Bob thinks the fed chairman is not wearing a watermelon smile.

:23 Caller asked odds of rate increase this week. Bob said 100%. Caller asked how this would affect the markets in the next 3-6 months and if it will be the final raise? That depends on the data Bob said. Bob thinks Wall Street will be relieved when a .25% raise in rates is announced on Tuesday. Bob said the fed will continue to raise rates if economy continues to grow to fast regardless of Y2K.

:25 Caller asked if we don’t get a bear what are the near term possibilities? Bob said the market will do what it will do, but continues to deteriorate and could be a major negative. Now it is important to stay close to the indicators to look for a change in investment policy.

:27 Caller thought heard Bob say in July they should stop DCAing and a bear was emanate. Bob said No this was not true his model is either Bullish or Bearish there is not such thing in his model as an emanate sell signal. Bob did say he sees not chance of a bear market sell signal in August of 1999.

:34 Bob talked about the risks of listening to the pumping of stocks on Internet chat rooms. Caller has $350K portfolio and his Broker has him in mostly Tech stocks bought 18 months ago. We saw a big run up and pull back and the Broker doesn’t seem to have a exit strategy, some is on Margin. Bob said now is not the time to have any margin.

:39 Caller has a major portion of total asset in a TIIA CREF fund ( I didn’t catch which one) was diversified enough? Bob is comfortable as long as he is still Bullish.

:44 Caller put money in the market last October and now is scarred most of it is tech stocks and wonders how to divest, all at once or a little at a time? Bob said he needs to make adjustments to diversify. Bob recommends having a plan in place if policy chances and could be distracted by trying to get diversified.

:53 Caller asked about what to do with his non deferred money most of which is in MSFT and under the 4% rule and how he may hedge. Bob said Put options would not be the way to go but could short NASDAQ 100 ticker QQQ. This would not be a pure hedge but an essential hedge.

:57 Caller is in an investment club and want to know what they could do when the sell signal comes? Bob said choices are to sell and go to cash or ride it out. Bob has no interest in "riding it out".

1:10 Bob is amused at the flap over George W. Bush and alleged cocaine use. Bob is anti drug and has never used illegal drugs. Bob related in foreign counties they seem to do a better job of sticking to issues vs. personal attacks. We are 15 months from the election and right now the fed will not give politics any regard when making monetary policy. Bob said the Fed will raise rates next week and read the data until October then will see if other adjustments are needed then. Bob reviewed M-2 money supply and history of what the markets like refereed to in opening monologue.

1:16 Caller asked when a bear market signal comes how long will it last? Bob reviewed the phases of a bear market. Phase 1. Area of bench mark highs of Indices particularly the Dow due to it’s cyclical nature. We could be there now around 11,000- 11,200. 2. Bear market sell signal, haven’t seen yet and Bob predicted we will not see it in August . When we see a sell signal the slide may be a week to a few months away. It means the risk of down side is much greater than up side and the slide will not start tomorrow. Should last 6- 24 months and most likely will be 6- 18 months.

1:24 Bob talked about Senator Mc Cain from AZ. Stating we should allow Governor Bush Privacy concerning Drug use. Caller asked how Bond Funds would be affected by a bear market? Bob said a recession would be OK but other Bear market causes would be bad for bonds. Caller asked about riding out a bear market in Blue Chips such as Wal mart? Bob said it depends on the individual and is worried they may panic out at the bottom. If we see a sell signal Bob will sell.

1:34 Bob reviewed the ten secrets of success from IBD. Caller asked about contrasting opinions by analysts regarding Bonds and rates by the 4th Quarter of this year.? Bob reviewed many complex factors ( I refer you to the archives). Bob called the situation dicey and said we could be facing a lot of difficulty. The caller asked about reference books about hedging? Bob said non come to mind on his reading list most don’t come from that direction. He does have a wide variety of opinions from several authors on his recommended reading list.

1:46 Caller plans to go to cash when the Bear arrive in IRA’s but what to do in personal accounts? Bob said he could sell, ride it out, or short. Bob prefers to sell and pay the capital gains vs. going short in a margin account.

1:54Caller had a friend refer him to a broker who is trying to sell a private placement in a Internet Company which would require about 10% of his net worth or 20% of equities and hope for an IPO in about a year and holding for 9 months after IPO . Bob asked how he would feel about loosing it all? He said he would like it but would accept the risk. Bob referred to the meltdown in the speculative Internet stocks and has no interest in such a deal. Suggested may be better to go to Vegas and bet on the pass line.

1:58 Caller lost her husband 18 months ago at age 50 and is retired and money is in Bonds about 600K owns her home and no debt. Has a $750 monthly income from real estate property. Bob was running short of time but made great use of time available and told her to figuratively go to school and learn how to manage her money and referred her to his favorite web sites bobbrinker.com and vanguard.com.

2:10 Tuesday’s FOMC meeting should yield a .25% rate increase in fed funds rate and the futures markets are trading as if the odds are 90%+ and Bob says he sees it at close to 100% after reviewing the data from July. Bob believes the stock and bond market will both be relieved and wait for new data until October then we will see, it is to early to tell about future rate moves.

2:17 Caller asked under what conditions he would be out of Bonds and what would he go into? Bob said he would go to Money Market funds if we see rates rising.

2:24 Novice caller asked if the sell signal comes should he sell it all? Bob said a sell signal means the model is predicting a 5% chance of up markets and a 20- 30% or more chance of down markets and it is up to each of us to decide what to do.

2:26 Caller thanked Bob for getting her into SPY at 92 now about 134. Owns no Internet stocks and is sleeping well. Asked about Bear market funds in an earlier newsletter and shorting SPY or QQQ? Bob said the funds would not be dollar for dollar and be about ¾ of dollar for dollar.

2:35 Bob talked about the article in the 8-20-99 WSJ on George W. Bush. Caller has virtually all of his and his wife’s money about 4 Million in INTC she works there, cost basis between 3-12 they are getting ready to retire. Caller was worried about diversifying and not putting it in something better. Bob said he has signed on for systemic RISK by having to much in one stock and talked about IBM going from 170 to 40 years ago. Bob would reconstruct the portfolio and put the US put in VTSMX. ( the guy seemed to think he was a great stock picker the following caller wondered why he called in the first place frankly so did I).

2:46 Bob reviewed the Baseball team of years gone by the " Big red Machine" from Cincinnati. The fans got very arrogant because they believed they could not lose. Investors can also develop this attitude Bob thought it was " the human condition".

2:48 Caller has 175K in personal money and wondered what options are in a bear market? Sell, ride it out or hedge were Bob’s answers, Bob prefers to sell and go to cash.

2:55 Caller asked if get a sell signal do you sell all stocks? Bob said it is up to the individual, and if they care about the timing model. Bob think those that have made a lot of money by using the model and believe it has something to contribute will take action. Not everyone will sell and we don’t want that. Caller followed up asking if Bonds should also be sold. Bob said if we see inflation rising to sell bonds even munis. Or if you own individual bonds of high quality one could hold them to maturity. When the model turns bearish Bob sees no point to be in the US market overseas will shall see.

2:58 Caller commented about George W. Bush and his troubles being of his own making and he should have answered the question instead of acting like a arrogant politician. The reason we aren’t getting substantive answers is because we aren’t getting substantive questions. Time ran out and Bob didn’t get a chance to say that’s all she wrote so I will.
archive link

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-- posted by SteveT

Top 349. Aug 21, 1999 10:34 PM

» marquis - Appreciation

Steve T; it is great to have your interpretation back on the scene. This Saturday's show was of supurb quality. I thank you for your summary; many Moneytalk listners appreciate your time and effort.

-- posted by marquis

Top 350. Aug 22, 1999 10:55 PM

» GoodGuy - Summary Correction

Hi SteveT,

Thanks for a great summary. A little correction (what I think) for following call :

I think what Bob meant was when the model turns bearish there is a little chance that market may go up - as much as 5% upside but a very high chance that the market will go down - as much as 20-30% or more.

Correct me if I am wrong and my posting is not by any means an attempt to poke holes in great service you have done for all of us.

- GG

-- posted by GoodGuy

Thanks for the GREAT EFFORT for Our Community!!!

Top 351. Aug 23, 1999 7:23 AM

» JenL_3 - Appreciation Posts for Steve

Please post Thank you messages to Steve for his great MoneyTalk summary on this thread...

We want to keep this thread for summaries only and comments on the summaries.

.....Jen

-- posted by JenL_3

Top 352. Aug 23, 1999 5:37 PM

» SteveT - Good Guy & Rande

I did check the archive and found the part in question misssing. I do believe your are both right and I was wrong. The error was unintentional I am sorry for any confusion.

-- posted by SteveT

Top 353. Sep 12, 1999 10:12 AM

» KirkL - Sat 9/12/99 and Fallout over Rande's Comments @ bb.com

Where are my strawberries!
Saturday's show was worth listening to. Bob made some good observations and I liked his paraphrase of Greenspan "if you understand what I am saying, then I am not being obtuse enough!" or something to that effect. I still don't understand his "distribution theory" as I seem to remember his saying this in the past: Here is further explanation from hawkeye on the Brinker Thread:

To: Justa Werkenstiff (43505)
Date: Sep 12 1999 11:51AM
From: hawkeye Msg #: 43537

Brinker has often stated the ability to identify
traditional bear market bottoms is partially
related to the study of past history in this
regard. For example, he has discussed on
Moneytalk often the three phases of a bear
market bottom, which also can occur in an
intermediate bottom such as autumn 1998.
His first phase establishes benchmark area lows,
second phase produces a failing rally, and
third phase produces a successful test of the
first phase area benchmark lows before blastoff.
This was instrumental in his October 1998 call
at the third phase textbook S&P 500 test
of the initial 957 closing lowpoint. As you
recall, the third phase test of 959 close was
the final bottom. He said his model was so
bullish you could not be out of the market

EC: Yes, but we also heard about several tests at DJIA 8650 so Brinker was "right" to buy at DJIA 8650 as was he right to stay in the market when it was all the way down to 7500 since it has recovered nicely as it usually does.

Also, my August 1998 Marketimer has a BUY issued on SPY for $110. Much higher than 957 where Bob rightly said to stay in the market.

for even one day. Since then the S&P soared
over 50% and the Nasdaq 90%. But without his
knowledge and respect for historic price action
at and near critical bottom turning points
this analysis would have been futile.

EC: As the analysis was futile at DJIA 8650. Keep doing analysis of a bottom and eventually, you get it right and then can claim to have called it!

Rande should know all of this full well,
but he chooses to close his eyes to the past
and theorize the past has nothing to do with
the future.

EC: Strawman tactics that that Don Lane used against me when I questioned him on Silicon Investor. Rande has said he wanted to compare fundamentals to the past to make a comparison and he considers looking at charts without looking at fundamentals as akin to "astrology".

Brinker clearly respects past
market action and incorporates his knowledge
into his long term timing efforts. Brinker
also opens himself to attacks by putting forth

EC: Yes, asking questions of a respected teacher is an open attack. I am sure glad my professors at Berkeley or mentors at HP did not think the same way!

a timing record since 1990 that ranks at the
top nationally. And in addition, in this age
of home based businesses, many like to try

EC: Home based businesses vs those done in an office with overhead? Sounds like time for a chimp to pick some stocks!

this at home. Unfortunately, market timing
is the most difficult business in the world,
and therefore those that wish to attack
someone doing their best to get it right
can do so as we have seen. They really
can never lose in their effort, because

EC: Let me see. I pay $185 to get timing advice that goes against what the masters like Bill Sharpe and John Boggle say so I go to a website for discussion of the advice and I get accused of "attacking" for asking questions and voicing an opinion contrary to the advice. Sounds more like a church to me than an open exchange of information.

they simply declare all great timing calls
"lucky", and all miscues evidence of the
futility of the effort. Interestingly, in the
case of the September Marketimer, the
feedback mentioned to date has been the
best of any issue in 14 years, which suggests
that Rande can pursue his "it cannot be done"
line while the world ignores his agenda.
You have always distinguished yourself on the
web as one of the most astute posters anywhere.
Your understanding of the principle of
respecting past market behavior says tons for
the importance of this subject. There will
always be a handful that just don't get it.
But that's OK, because it really does not
matter at all. Brinker will do his best, and
if there is to be a bear some day, which the
New Era Crowd cannot possibly believe can
ever happen, Brinker will put his efforts into
identifying the turning point and sharing
the knowledge with those showing an interest.
It really sounds like Rande would be better off
signing on with Abby, because all evidence
suggests that Abby is a permabull, and that
would fit right in with Rande's philosophy.

EC: A HIGH compliment to be compared with Abby Joseph Cohen!

After all, when is the last time you heard
an analyst, such as Abby, sing the praises of
the bull market, and then set targets that
are very close to the levels we have already
seen in 1999. And did you notice how Abby

EC: Lets see, just about every issue of Marketimer I have going back to 1994 has targets for the S&P500 that always prove to be WAY LOW. My Jan 8, 1999 issue of Marketimer says "…9800 to 10,100. These are our new 1999 target price levels going forward."

Hello? We were at DJIA 11,200 not long ago…Why is Abby wrong to have targets that prove low?

never even mentions the aspect of risk?
It is as though the market cannot go down,
it can only go higher and higher. By the
way, you are probably aware the S&P is now
close to five percent lower than July 16 and
at the identical level as five months ago.
When will the New Era Crowd discover this
interesting fact? Oh they don't care anyway,
because they have No Fear. What me worry?
27 times earings is great. Pour another one!

Speaking of Favorite movies….I like Bogart in "Mutiny on the Bounty".

Wow! Rande sure got under someone's skin!<img src=http://www.internetcount.com/1867610713.cgif width=3 height=3>

-- posted by KirkL

Top 354. Sep 12, 1999 12:05 PM

» RandeS - Kirk,

Kirk,

The best part is when they spell your name correctly!

-- posted by RandeS

Wall Street Recap: Chapter and verse on mania and ruin

Top 355. Sep 12, 1999 8:40 PM

» JenL_3 - Mania and Ruin

First let's close the green....... OK that's better I hope..

Rande and Kirk - Ya know Guys, we should be thanking BB for his increasingly bearish views on the Market. Those gloom and doom scenarios help the Bull Market continue to climb the wall of worry. It's when no naysayers can be found that the Bull Market will come crashing down like a house of cards. At least that's the view of this author in Sunday's The Seattle Times:

some excerpts:

"A Wall Street panic comes suddenly like thunder from a blue sky. No shrewdness can foresee and no talent avert it."

- Matthew Smith

Looking for a reason why stocks will transgress infinity?

Some say it's the continuous and expanding flow of retirement funds.

Some say it's the enormous gains in computer technology that have so enhanced productivity that corporations need not fret a sagging economy.

Some say it's because the United States and its economically successful allies have become so adept at jumping on international financial fires that damage is limited to the equivalent of a stock-market correction.

Some say it's the highly profitable result of corporations getting lean and mean in the 1970s and 1980s coupled with a benevolent federal government.

Some say it's the Federal Reserve Board, which has finally learned to fine tune interest rates just enough to allow for controlled economic expansion without serious downside impact.

Some say it's a combination.

Wall Street Recap says "bunk." We know what truly perpetuates the longest bull market in our lifetime. It's books either predicting a market collapse or reassessing financial crises of the past. That may sound ludicrous, but look at it this way: The market climbs a wall of worry; if everything were totally positive, all the cash would be in stocks and there wouldn't be enough to propel stocks further.

Just in recent months a handful of watch-out-the-collapse-is-coming books has invaded the otherwise bull-market psyche. Where were those in 1986 and early 1987? Not extant. No wonder the crash of '87 kneecapped October....

So I say Thank You Bob...Thank You Roger...and Special Thanks to all the Perma Bears out there for without you this Greatest Bull Market Ever could not continue.....Jen

-- posted by JenL_3