Moneytalk Bob Brinker Summaries - Information ONLY

Top 7. Sep 26, 1998 1:23 PM

» Kirk - Saturday 9/26/98 Summary: Monologue: Boy is BB bullish! 8)

Saturday 9/26/98 Summary:

Monologue: Boy is BB bullish! 8) He thinks the bottem has been set and the rush upward could happen within weeks. Feels probing and testing is still possible. With LT Cap (mis)Management disaster not cratering the market he sees that as extremely positive.

Notes on last weeks' tape of moneytalk:

BB told one caller to sell Benham 2020 Zero fund and put money into the market. (I agree this is a smart move since the caller was buying for interest capital gains with falling rates, these rates are near bottom relative to 7% when purchased, and so the stock market is the appropriate place to be).

BB told another 44 yr old caller with 90-100% in equities, like me, to wait until the new highs are set before reallocating.

Kirk Lindstrom

Editor: Personal Finance and Investing
Reading List

-- posted by Kirk

Top 8. Sep 26, 1998 2:25 PM

» Kirk - BB is looking for one of the BEST increases from the low of a "m

BB is looking for one of the BEST increases from the low of a "midterm Off Presidential election year correction". If I am reading what BB says on the radio and add that with the newsletter numbers, then BB is looking for the next advance to be above 50% from DJIA 7539 and for that to happen over 6 to 24 months. Do others read the newsletter numbers and todays optimismn the same way?

3 of 7 increases have been over 60% or 65%, 68% and 98%. This seems like DJIA over 12,000 in 24 months or less though he is still being conservative and saying DJIA 9500 if being that bullish can be called conservative.

I think I will put in my last bit of dry powder (only 1%)

DO NOT concentrate yet into small caps. Stay in the total market.

He just said on "1 to 10, he is a 10 on bullishness!"

Roger Babson, what have ya got to say to that?

Kirk Lindstrom

Editor: Personal Finance and Investing
Reading List

-- posted by Kirk

Top 9. Sep 26, 1998 9:27 PM

» JenL_3 - Sat. Sept. 26, 98 - Just a few notes: When a caller asked BB

Sat. Sept. 26, 98 - Just a few notes:

When a caller asked BB to define hedge funds, he said "fat cat investment pools".

BB said two things struck him about the Hedge Fund Bail-Out:

1) on the show BB had been telling callers to look for bond rates to come down; but LTCM was shorting bonds.

2) on the show BB always tells callers to avoid junk bonds; whereas LTCM had "tons of junk bonds" in their portfolio.

(They shoulda listened to B.B.) J.L.

-- posted by JenL_3

Top 10. Sep 27, 1998 7:01 PM

» Kirk - ** Saturday Full Length Summary ** To: +Justa Werkenst

** Saturday Full Length Summary **

To: +Justa Werkenstiff (1184 )
From: +Justa Werkenstiff
Sunday, Sep 27 1998 8:33PM ET
Reply # of 1222

FLASH: BRINKER IS THE MOST BULLISH I HAVE HEARD HIM AT
ANYTIME THIS YEAR.

We have now had three consecutive up weeks in the stock market. We
have now put in the bottom in this correction DOW 7537, 957 S & P,
around 1500 NASSDAQ. Dow was up 1.7% at 8028, S & P 500 up 2.4% up
to 1045 and NASDAQ up 4.8%. NYSE: 2084 gainers and 1374 losers. New
highs 131 over 32 the prior week. New highs up about 300%. New lows
contracting from 522 to 460. Bond market strong.

We are now in a position, albeit additional probing and testing,
backing and filling could occur, "at any time within the next few
weeks to launch a rally" that carry the markets to all time record
heights.

Everything that could possibly go right down the road has the
potential to go right down the road. We cannot control Russia,
Japan, Asia and Latin America. Part of the reason for the
intermediate correction is because of what was going on
internationally.

And in fact, the market had a golden excuse to collapse and refused
to do so: Long Term Capital Management. But the market closed to
about where it was before the problem was made public at DOW 8000. Brinker later
stated in the show that as far a hedge fund or financial failures go, this one has to be
rated as one of the all time greatest. My note: So the fact that the market survived this
debacle so far is a very positive sign.

LTC was short Treasuries and long junk bonds including emerging
market bonds. Brinker said LTC bet that interest rates were going
up in an inflationary environment here in the US. Wrong. With dead pan humor, Brinker
could not for the life of him understand why the smarties in Greenwich did not listen to
MoneyTalk because he had been bullish on bonds and told listeners to steer clear from
junkies.

Change of Brinker position. Previously, he stated that new highs
would be made by next summer or within about a one year time frame.
He now sees new highs within six to twelve months. (Why Brinker does not announce
changes in his thinking by first reviewing previously held market views is beyond me).

Prefers SPY over MDY for better chance for full rally
participation.

How bullish is Brinker? Let me count the ways:

1. "These are the buying opportunities that come along only on pretty
rare occasions."

2. "As midterm, off presidential bottoms go, this is going to rank as
one of the best ever. All of my market timing model indicators at
this time are flashing outright buy signals."

3. On a scale of 1 to 10, the market is acting like a 10 from its
lows.

4. On a scale of 1 to 10 with 10 being he most bullish, Brinker is at
a 10.

5. The market is more attractive now than at anytime in 1998.

6. Brinker stated that this is one of the most exciting times to be in the stock market.
Brinker believes we are about to embark on a rally that will exceed 20% off those lows
and it may "exceed 20% by a substantial margin."

7. Brinker trashed the bears on several occasions without taking names. This is the new
Brinker Confidence Indicator in my mind as we saw rare bear bashing in the
prior three weeks since the correction exceeded the original benchmarks.

The probabilities highly favor a rate cut by the Fed. Historically,
that has been a very favorable underpinning to the market. What the
market does the day of the cut does not matter. It may have been

The only question remaining in Brinker's mind is how much Greenspan
will cut the federal funds rate. The market has already discounted
a .5% move. Brinker noted that Greenspan has a reputation as a
gradulaist. (My note: Greenspan has a penchant for moving in .25%
increments). If Greenspan moves .25%, Brinker surmises that there
are no more cockroaches behind the baseboard in the form of LTC. I
------------------------------------------------------------------
Greenspan goes .50%, Brinker surmises that he may well have
knowledge that there are other hedge funds with similar problems
that are unknown to the investing public at this time.

In the absence of recession, it is certainly untrue that corporate
earnings are one of the most important things in terms of the
market outlook. For example, in the absence of recession if you
have a flattish outlook for corporate profits but you had an
outlook for lower interest and lower inflation, that could justify
higher price-earnings ratios. Higher price-earnings ratios would
mean higher stock prices so long as earnings were in a flattish
area.

Brinker sees price-earnings ratio expansion in the next six to
twelve months and even though earnings might not go up a whole lot,
he thinks the price earnings ratio expansion can get us to new
highs in the markets.

The idea that earnings are the biggest driver for stock market
performance is total nonsense. Suppose you had rising higher
corporate earnings were caused by an economy that was growing too
fast and, therefore, producing higher inflationary expectations and
higher interest rates, the stock market would not go up.

The market has a glass ceiling of between 23 and 24.5x earnings. We
got to 25x trailing earnings this summer.

Charts will show you resistance and support has been but have no
predicitive value.

You guys all owe me lunch .

Kirk Lindstrom

Editor: Personal Finance and Investing
Reading List

-- posted by Kirk

Top 11. Sep 27, 1998 8:13 PM

» JenL_3 - Sun. Sept. 27 BB show - just a few notes: One caller asked ab

Sun. Sept. 27 BB show - just a few notes:

One caller asked about having an "exit plan", that if a certain stock drops a certain % then that would be a selling point. BB answered that would be a "perfect recipe for whipsaw".

Another caller asked should we follow insider trading? BB said that insider trading was certainly worth watching, although the signals given are not necessarily right all the time. It is another source for gathering information to help in decision making.

Thanks for the Sat. summary, Kirk and Justa. J.L.

-- posted by JenL_3

Top 12. Oct 2, 1998 1:07 PM

» Kirk - *** Abbreviated Summary of 9/27/98 Sunday Moneytalk ***

*** Abbreviated Summary of 9/27/98 Sunday Moneytalk ***

To: +Lars (1331 )
From: +Lars
Friday, Oct 2 1998 1:07PM ET
Reply # of 1336

- We have a classic market drop-off 2 years after election. Mentioned historical results.

- February '78 decline of 26.9% followed by a rally of 22%.

- August '82 decline of 24% followed by a rally of 65%, in less than one year.

- September '86 decline of 8.5% followed by a rally of 50% in 11 months.

- Early 90s (I missed exact date) decline of 21.2% followed by a rally of 68% over 39 months.

- April '94 decline of 9.7% followed by a rally of 72% in 28 months.

- August 31, 1998 decline of 19.3% followed by a rally ???????

- All of the previous corrections were accompanied by bad news (Franklin Bank, Chase, etc.).

- Currently our correction was facilitated by Russia, SEA, Latin America (Brazil), LTC bailout.

- Bob mentioned that the current position of the Fed is critical. They must be prudent.

- Bob said the Fed needs "to involve itself in solution" and be watchful for the future.

- Mention of Greenspeak saying we are not "an oasis of prosperity" due to the global economic
challenges.

- KO weak earnings and still room to decline. P/E = 50 at one point w/growth targeted for 17%
range. Moneytalk trekkies will note Bob's review of KO awhile ago. Since then it has retreated 36%
from high. 1999 earnings $1.58. Based on '99 earnings the stock is still has a P/E + 30.

- Dell leading rally in NASDAQ. P/E = 63 based on '98 earnings, highest in large cap universe. 300%
increase in '97. #1 performing stock in S&P 500. $90 B market cap, nearly two times that of Gillette,
Boeing, etc.

- Microsoft P/E = 58 based on '98 earnings. Watch out if there is an earnings disappointment.

- Several areas showing leadership potential, two in particular: drug stocks and tech stocks. Stocks
that were mentioned (not as buys), just mentioned.

Drug Stocks: PFE, Eli Lilly, WLA, MRK
Tech Stocks: CSCO

- Caller had inherited stock due and was concerned about taxes. Owned T and had LU due to
spin-off. Bob said to keep brokerage statement re: cost basis and that he wouldn't receive anything
from Lucent. Adj gross income = $50,000. Some short term gains. Caller worried about being pushed
up in tax bracket. $12,000 short term added to ord income will not move bracket. Bob said not to
worry. Caller had 6 figure tax burden on older stocks. Subject to LT gains rate.

- Commented on the absurdity of LTC. E.G. LTC would buy junk bonds of company and sell stock
short (rumored Globalstar Communications position). LTC rumored to have $80 B in positions due
to leverage w/only $500 million in actual capital.

- Bob followed up with an excellent example of how much leverage LTC had. Picture a $160 portfolio
and you only have equity of $1. Obviously, if the position moves against you there are major
problems due to your leverage.

- UBS rumored to have lost $600 million due to loans to LTC managers.

- Bob mentioned how all of this is "not a pleasant thought". An owner in LTC may end up with a
net worth of $0 or worse to the point of bankruptcy. Many wealthy individuals appear to be in bad
shape with personal finances

Kirk Lindstrom

Editor: Personal Finance and Investing
Reading List

-- posted by Kirk

Top 13. Oct 3, 1998 7:42 PM

» Kirk - Sat 10/3/98 Summary To: +Kirk (8119 ) From: +Wren

Sat 10/3/98 Summary

To: +Kirk (8119 )
From: +Wren
Saturday, Oct 3 1998 5:22PM ET
Reply # of 8154

In his opening remarks, BB said that the test of the lows that he indicated was needed
happened. He said that the test to prove July31/Aug1 was the low had three parts:

That the averages trade near the lows but do not break thru

That there be significantly less volume on the test than when the low was set

That there be a reduction in new lows.

Both the DOW and Nasdaq traded near the lows.

The volume on both the DOW and Nasdaq was 25% or more lower on the test.

On 8-31 there were 1183 new lows and on 10-1 there were only 310.

He said this put in the 1998 lows and set the stage for a rally which could begin anytime.

BB also said there may be residual testing and probing this month.

He said that there had been about 56% bears during the past several weeks and that
was also a sign of the bottom.

Kirk Lindstrom

Editor: Personal Finance and Investing
Reading List

-- posted by Kirk

Top 14. Oct 5, 1998 7:01 PM

» Kirk - ** Saturday 10/3/98 Summary ** To: +Justa Werkenstiff (136

** Saturday 10/3/98 Summary **

To: +Justa Werkenstiff (1361 )
From: +Justa Werkenstiff
Monday, Oct 5 1998 9:50AM ET
Reply # of 1392

** Saturday Summary **

On August 31 and Sept 1 that he market's intermediate term
correction reached its maximum level. In fact, on September 1, we
established all time record volume on the NYSE of 1.2 b. The market
established the intraday low of 7401. On August 31, we established
the correction closing lows of DOW 7539, S & P 957 and NASDAQ 1499
On September 1, NASDAQ traded into 1460s intraday and had record
volume of 1.25b We established at that point was a significant
intermediate term bottom in terms of the level of the indexes and
we did it on all time record volume.

Of the sixteen occasions where a significant bottom has been
established over the past thirty five years, on all but one the
market has had a full retest of the lows. We had minor tests on
September 4 (Dow 7630 close) and September 10 (7615 close) but no
full retest. What happened on October 1, was a big deal. The Dow
closed at 7632 but the volume was down 25% to 900m which is a major
reduction of volume. NASDAQ closed several percentage points above
its low and did so on less than 900m shares which was more than 25
of the September 1 level.

We had three things occur on the test: (1) we had a major index go
back to the vicinity of the low (Dow about 1% from its low; S & P
about 3%); (2) we need lower volume and we got that; (3) the number
of new yearly lows of the test (August 31 NYSE had 1183 new lows
and October 1 there was 310 or a reduction of 75% which was huge;
NASDAQ August 31 had 1263 new lows but 398 on October 1 or about
75%).

"We have put in our 1998 intermediate term bottom according to our
timing model and we have now set the stage for a rally to new
record highs over the next six to twelve months and we are now in
a position where the rally can begin at any time. Although it is
posible that the market can do additional testing and probing
during the month of October, it is no longer necessary. We are now
at the position where we can say we have had a significant test of
the lows, the critical benchmarks have fallen into place
beautifully and the market has now established a bottom by shaking
out the weak hands and the nervous nellies and those that do not
belong in the market in the first place and creating a tremendous
level of bearish sentiment which is on the order of about 56% bears
in the last few weeks on average..."

The preconditions for the rally to new highs are in place. The
surprises now going forward will be on the upside.

No deflationary depression like 1929 with FDIC insurance and margin
requirements above 10%.

We could have have 0% inflation going forward. Now it is about 1 -
2%. O% inflation in a slow growth economy would be bullish.

We established the lows before we knew about LTC. Since then we
have learned of LTC and we have not gone through the lows. This
tells Brinker there is a lot of relative strength in the market
relative to the background of LTC.

"At some point during the month of October, we are going to see the
market reverse direction off these lows and start a rally which
will eventually carry us to to record highs to the shock of the
bears."

Brinker says there will be one or two more additional rate cuts due
to the slowing economy.

No change on UTEK.

While earnings may be hurt somewhat this year and next, Brinker
likes the prospects going forward.

There has never been a better time to refinance.

Kirk Lindstrom

Editor: Personal Finance and Investing
Reading List

-- posted by Kirk

Top 15. Oct 11, 1998 1:40 PM

» Kirk - Summary of snippets I heard both Sat and Sun: LARGE potentia

Summary of snippets I heard both Sat and Sun:

LARGE potential to materially adjust his target of 9500 well upward in the future, but holding firm at 9500 for now.

Predicts the market, if Friday's rally wasn't the start, will start the rise this week or this month.

"One of the most exciting times to be in this market"

VERY bullish.

Warned one caller to not be out of the market for the time it would take to transfer funds from Schwab1000 to Vanguard VTSMX.... Wait until we reach new highs was the message I got.

Kirk Lindstrom

Editor: Personal Finance and Investing
Reading List

-- posted by Kirk