Moneytalk Bob Brinker Summaries - Information ONLY

» Kirk - Where have all the Believers Gone?

Original Post

Where are the adoring fans of Bob Brinker? Are we to believe that the only people who admire and appreciate Brinker's advice are those that drop by in hit and run style on Suite 101? You know the ones who have nebulous stories about retiring early based on money they made following Brinker's advice but are a little short on detail. Only folks who claim that an idea in Oct 2000 for 1/3 of a portfolio doesn't count while an idea in March 2003 for the same amount for aggressive investors does count? Are we to believe that each of those one hit wonders happens to post right before Alan Coleman's atta boy?

Where are the legions of supporters of Bob Brinker? In the old days although Brinker under his aliases led the cheers on all of the threads devoted to him, there were scores of folks who you could tell were honest believers. They would discuss Brinker's positions among themselves. Some were of course nasty to non-believers but many didn't care about anything other than discussing Brinker's take on the market with one another.

Bob under his aliases and Bob Jr showed up often to move the fawing believers into the "right" direction.

Let's look at what was and what is:

Bob began on the aol boards and quickly moved to inhabit the Silicon Investor community

Here are just some of the threads that were devoted to Bob Brinker in his hey day

http://www.siliconinvestor.com/stocktalk...

The "Radio Savant" thread was the first. When some questions began asked about Brinker's stock picking on that thread, the first "moderated" thread was born by Brinker's henchman and ironically the guy that outted Brinker posting as Don Lane on the net--Justawerkinstiff. The moderated thread was a thread where only positive things could be said about Birnker.

http://www.siliconinvestor.com/stocktalk...

This was the first of the censored threads about Brinker--and lasted until about the time Justa was recruited by Brinker to have a thread on Brinker's own site. It was then terminated and later the other one bearing the same name returned.

As Della has been documenting the threads at Brinker.com were very heavily censored and finally they were shut down even though subscribers were the only posters allowed.

Another venue for Brinker's aliases and fans were two threads involving UTEK--his conflict of interest stock recommendation.

http://www.siliconinvestor.com/stocktalk...

and

http://finance.messages.yahoo.com/bbs?.m...

the latter has always been heavily used by the Brinker's to hype their newsletter and originally to tout UTEK. Note one of the first posts on the thread was a prediction of Brinker's PBS recommendation in Oct 97 to buy utek at about 30 bucks.

Here on Suite 101, the Brinkers, Junior playing himself and Sr. under an alias were quick to infiltrate this thread on its inception.

http://www.suite101.com/discussion.cfm/i...

The progression was obvious. The "radio savant" Bob Brinker had no internet history when coverage of him hit the internet. Many had listened to Brinker on the radio and his claims about what he had and had not done. There was no "record" of the radio advice and as we know his newsletter is rather sparse. By the mid nineties he had made many people forget about his bear hunt in the late 80s and early 90s. The simple fact is that when people began to get together to discuss Brinker and look at what he said --there were some contradictions and some failings brought to light. Brinker under his aliases jumped on the posters on other threads. He would try to tell other posters not to listen to those terrible people who were telling the truth about him. Some of his loyal supporters would get down right nasty to those telling the truth with Bob cheering them on. When they realized that Brinker was posting on the threads, some were "star-struck" to curry favor with him by kissing his ass and helping to bash those telling the truth about him. It was a rather bizzare scene and is funny to read in hindsight.

One guy "Rillinios" , probably more than any other turned the light on the cockroaches that were in Brinker's kitchen. The attacks on Ril made the complaints about me pale in comparison. But the seeds of doubt were sewed. It became clear to many that Brinker was more of a marketeer than a marketimer.

Many have emailed me over the years thanking me for being a part of pulling the scales from their eyes. They often mention that they had some nebulous feelings about Brinker but it took a critical mass of evidence before they could let go of what had become their crutch in investing. They truly wanted to continue to believe in Brinker.

All of this is to make a point. Go to any of the places Brinker is discussed now. Go to the "censored threads" where supposedly all the good things would be said about Brinker. ---I listed the URLs. When you get there you will find that nobody talks about Brinker anymore. Months go by and he is not mentioned on that thead even though inhabiited by his former staunch supporters.

Look at any of the other threads--there is almost no traffic compared to the day when there were a lot of Brinker believers. People who were fairly savvy about equity investing would hang around and talk about Bob. They are all gone. They saw the truth and simply left.

As I've told you, Brinker has a new target audience for his flagging newsletter business and that is indeed the goobers and the geezers. The reason that a few plants work these sites is because if the goober or geezer does an internet search before sending Brinker money, Bob wants them to see something positive or so much chaos that they don't find the truth.

They are indeed fun to watch.

Even Bob Brinker, Jr. used to post here
to promte his site and wish us well.

-- posted by Kirk

» David_Korn - Bob Brinker's Moneytalk Summary and Interpretation

Excerpt from my September 14th Newsletter

BOB BRINKER PREDICTS NEW I-BOND RATE WILL BE LOWER

Caller: How much do the I-Bonds pay? Bob noted that current holders of I-bonds during the 6-month period ending October 31st, are earning an annualized rate of 4.66%. If you buy them prior to November 1, 2003, you will get a base rate of 1.1% plus the annualized inflation rate which totals 4.66%. On November 1, 2003, the Treasury will revisit the base rate and Bob projects that the base rate will either stay the same, or decline. Bob said he thinks the chances of the Treasury raising the base rate are zero. With respect to the inflation component, Bob thinks that will be lowered on November 1st. Accordingly, when the new rate gets issued on November 1st, Bob said he expects the new rate to be lower than 4.66%. If you buy it by October 31, you lock in the 1.1% base rate for up to 30 years. The inflation component is subject to change every six months. Bob noted that when the I-Bonds first came out, they were paying a fixed rate of over 3% for 30 years which shows you how off base the Treasury was thinking at that time. Bob said he still likes the I-Bonds if you are looking for inflation protection and have a conservative objective.

Editorial Comment "EC": I agree with Bob's view that the total I-Bond rate will probably be lower effective November 1st. Thus, if you want to purchase I-Bonds before November 1st, you have about 6 weeks left. On a related note, I e-mailed the Treasury to verify that for 2003 individuals can invest $60,000 in I-Bonds. I received a prompt e-mail reply confirming that this was accurate provided you invest up to $30,000 in paper I-Bonds, and the other $30,000 in electronic I-Bonds through Treasury Direct:

http://tinyurl.com/l2rw

Caller: This caller noted that if you use a credit card to purchase I-Bonds online, you can get a 1% rebate depending upon your credit card. That means, if a husband and wife team purchased $30,000 each, you could get a $600 rebate. Bob said he heard this option will not be available next year.

EC: I suppose you could also get airline miles if you used certain credit cards to purchase I-Bonds. Just another benefit to purchasing I-Bonds!

REBALANCING A PORTFOLIO FOR YOUR OPTIMUM ASSET ALLOCATION

Caller: This couple is in their late 30s to early 40s, and just subscribed to Bob's newsletter. They need to know how to go about rebalancing their portfolio which is all in stocks right now. Bob said the first thing they need to decide, is what their asset allocation should be. Bob said in his opinion, based on their age bracket, they could have 70-75% of their assets dedicated to the stock market during "favorable periods" and 25-30% in fixed income securities. Since they were 100% invested, all they needed to do was move about 25% into the fixed income area. Bob said if it were him, he would try to do that in tax-deferred accounts so that all of the income they earned would be deferred all the way out to retirement. In other wards, try to make the asset allocation changes in the tax-deferred accounts, rather than the personal accounts. The caller then asked whether they should get to the 25% fixed income by relegating new money to fixed income. Bob said that was one possibility, or they could do a combination new money, and selling some equities now.

EC: One of my subscribers recently asked me if I had a link to a good synopsis of the concept of asset allocation. Here is a good one-page primer on asset allocation:

http://tinyurl.com/nd7t

Caller: This caller has about 8-10 years until retirement, and isn't sure what her asset allocation should be. Bob said if you are close to retirement or in retirement a balanced approach is a good start for your asset allocation. A "balanced approach" means that you have 50% of your assets in stocks and 50% in fixed income. If you have reached critical mass (i.e. have enough money such that you never have to work again), there is no need to place your entire portfolio at risk. If you are 8-10 years from retirement, Bob said he would be comfortable having 2/3rds of your holdings in stocks, and 1/3rd in fixed income, during a positive market environment.

EC: Since Bob would presumably view today's market as a "positive market environment" you could have as much as 66% of your asset allocation in equities if you are 8-10 years away from retirement and want to follow Bob's guidelines.

Brinker Comment: In determining your asset allocation, you have to keep in mind your risk tolerance. Bob referred to a caller who said she was totally unnerved by the stock market. Bob noted that emotions should not play a part in your investment strategy. If you invest in stocks emotionally, that is a ticket to losses. Why? Because emotional investors tend to sell on weakness, and buy on strength.

Caller: This caller has all of his 401(k) plan invested in a fixed income security that is generating a 6.86% annual rate of return. Should he switch some of it over to equities? Bob asked the caller if he held equity holding outside the retirement plan, which the caller said he did. In response, Bob noted that you calculate your asset allocation by taking into consideration ALL of your holdings, not just one particular account. In addition, Bob noted that if you can make 6.8% guaranteed in a fixed income account, keeping it in a tax-deferred account would be the perfect situation.

EC: Here are links to three sites that have asset allocation calculators which can help you decide how to allocate your investment assets among stocks, bonds and cash:

http://www.smartmoney.com/oneasset/

http://www.forbes.com/tools/calculator/a...

http://tinyurl.com/nd83

Caller: This caller cashed in a life insurance policy, and put the bulk of her money into a money market account, but wants to get to her proper asset allocation. Bob, of course, recommends a diversified portfolio and to the extent you are going to invest in the equity market, Bob recommends using a dollar cost averaging approach. HOWEVER, there is still risk in that approach, which Bob pointed out he has said on numerous occasions. Bob cautioned people who think that dollar cost averaging carries no risk, when in fact it does, depending upon what kind of market environment you get into. Bob concluded this call by saying that the dollar cost averaging approach is well-grounded, but does entail risk.

EC: I was waiting for this comment from Bob which confirms that his stance toward new money has not changed. Bob continues to recommend dollar cost averaging new money into the stock market, although today, he didn't use the phrase "on market weakness" which may have just been an oversight on his part. Trust me, if the market declines precipitously, Bob will say that he had recommended dollar cost averaging on weakness! More importantly, the fact that he continues to stress the risks of this approach implies that he believes there is a chance (even a small one) that the market could correct significantly at any given time.

GOLD AND OTHER PRECIOUS METALS

Caller: What is your opinion on gold as an investment right now? Bob thinks that what you are seeing with respect to the gold is speculation by traders who think that inflation will get out of control which so far hasn't happened. In addition, the gold bugs are betting on geopolitical events that would threaten the currency. This could come in the form of a major terrorist attack, or a nuclear holocaust involving India/Pakistan or North Korea. Any type of chaotic event would be good for gold. By in large, Bob thinks gold remains a speculative vehicle.

EC: Another caller this weekend told Bob that she was afraid of investing in stocks out of fear that there would be another major terrorist attack on U.S. soil. I can certainly empathize with this fear. In the wake of the September 11, 2001 terrorist attacks, the Dow declined from 9.605.50 to 8,235.80 in the five trading days the market was opened after the attack. Bob has previously stated that his stock market timing model does not factor in the threat of a terrorist attack; however, he has acknowledged that the risk of terrorism is now a component of equity investing that we all have to live with.

Caller: This caller wants to invest in a gold mutual fund. Bob said there are dozens of such funds, some of which are even no load funds. The caller asked Bob for a recommendation, but Bob didn't know any and recommended that the caller refer to Morningstar to find a fund.

EC: The Fidelity Select Gold Fund (FSAGX) is perhaps the largest gold mutual fund. Other gold mutual funds include The Midas Fund (MIDSX), Tocqueville Gold (TGLDX), and Gabellie Gold (GOLDX). Compare these funds to each other at the following link:

http://cbs.marketwatch.com/tools/mutualf...

Caller: This caller believes that gold is a worthwhile investment at this juncture due the fact that he thinks we will have more problems with Iraq. In addition, he thinks the situation in Israel is going to escalate, and that the chances of a terrorist attack on U.S. soil are high. Bob gave the caller credit for at least justifying his position in gold. However, Bob noted that there is a counter-argument to the caller's position. For example, if we do have more terrorism and the like, that could be counter-productive to economic growth which would be directly contrary to the notion of inflation coming back which typically is the basis for a fundamental rise in gold prices. Bottom line? Bob isn't sure that gold would do well even if the caller was right.

EC: John Hathaway, manager of the Tocqueville Gold fund (TGLDX), thinks that the case for gold transcends Iraq and the that "the overriding driver of money into gold is the loss of confidence in financial assets." Check out the article in which he made those comments entitled, "Gold Ringer - Fund manager says the case for gold transcends Iraq":

http://tinyurl.com/cpc6

Caller: Do you have any thoughts on silver as an investment? Bob said he doesn't really follow silver, and asked the caller what price it is trading at. The caller noted that it is trading around $5.33 an ounce. Bob remarked that it seems as if silver has been trading in the $5 range forever, and he has no recommendation on it.

EC: Gold, silver and other so-called "hard" assets have done exceptionally well since the terrorist attacks on September 11, 2001, being up around 25% since that time, compared to the Dow Jones Industrial Average which is about even since then. If you have never considered owning a precious metal or "hard asset" holding, you should at least know about their availability. I recommend an article written by Thom Calandra this weekend entitled, "Hard asset bugs keep the faith" which you can access at the following link:

http://tinyurl.com/nbik

S&P EQUAL WEIGHT INDEX

Caller: This caller heard about an equal weighted S&P 500 fund and wanted to know if Bob heard about it? Bob said he was aware of the fund which instead of being market cap weighted, is equal weighted. Bob noted that there really wasn't a track record yet to judge it. What we do know, is that if large amounts of money flowed into the smaller companies in the S&P 500 that should drive up the price. Bob didn't make a recommendation either way, and just said he was going to have to see how it played out.

EC: The S&P Equal Weight Index (EWI) will conduct its quarterly rebalancing at the close of business Friday, September 19, 2003. All stocks will be rebalanced to have an equal weight in the index. You can trade the S&P Equal Weight Index through the Rydex S&P Equal Weight Exchange Traded Fund which seeks investment results that correspond to the S&P Equal Weight Index. It trades under the ticker symbol, RSP and has an expense ratio of 0.4%.

NOTE: That was merely an excerpt of my newsletter, if you want a copy of a recent newsletter, or want to learn how to subscribe to my service, click on the following link and e-mail me: mailto:davidk555@earthlink.net

Or, visit my web site:

http://www.BeginInvesting.com/

-- posted by David_Korn

» Kirk - FACT: Bob Brinker posted as Don Lane on Silicon Investor

Author: Kirk
Date: October 8, 2003 3:00 PM
Subject: FACT: Bob Brinker posted as Don Lane on Silicon Investor
.
In response to message posted by La_la:

FACT: Bob Brinker posted as Don Lane on Silicon Investor and I have enough proof to even convince OJ's Jury. Much of it is via private messages between myself and those who worked for Brinker such as his son and TomS who posted as Justa on his site and had the power to delete posts on Brinker's site. BTW, long after the last post made by Brinker using the Don Lame name was made, he had SI change the name to "mister topes." You can examine the last few replies to his posts as "mister topes" and chuckle as they address his as "Don." Now why would anyone change their name years after their last post?

Even without my proof, this guy on SI made a pretty good case for it today:
http://www.siliconinvestor.com/stocktalk...

Read his evidence then answer his open question (in bold) below:

To:Jeffrey D who wrote (19491)
From: stockalot Wednesday, Oct 8, 2003 3:49 PM
Respond to of 19494

"I don't know if Don Lane is Bob Brinker, and more importantly, I don't care. In fact, why should anyone care?"

I would think since you are the primary pro Brinker defender here that you would want some credibility. By being so evasive on the subject of Brinker posting as Don Lane, when the evidence is handed to you, lessens any possible credibility I would say.

Why does answering the question about those two posts directly bother you so much, Jeffrey? If it wouldn't matter then you should not be so anxious to avoid giving your rationale for the posts that to almost any thinking person proves Bob Brinker posted here as Don Lane. I will show you very quickly why "anyone should care". Let's just look at the two posts, the links are there and you can easily go back and get the context. Then please either tell us what other possible explanation is possible other than Don Lane was indeed Bob Brinker. For your convienence here is the exchange proving Bob Brinker posted as Don Lane again.

Either agree that it is Brinker posting as Don lane or give a single logical explanation of the first post. Thank you.

Repeating for Jeffrey:

Rather than dismiss "conspiracy theories" when they are nothing but fact please explain the two posts below.

1) Do you believe the poster who posted here as Bob Brinker jr was indeed Bob junior?

2) If so do you have an explanation for Don Lane (mistertopes) predicting that Brinker would be in Colorado and play two rounds of golf with Junior the following weekend which Junior confirmed to Justa Sunday night?Please confine your answer to possible facts on this issue. Who could Don Lane have been if not Bob Brinker. Thank you.

To:Justa Werkenstiff who wrote (4966)
From: mister topes Wednesday, May 13, 1998 11:09 PM
View Replies (3) | Respond to of 19481

Speaking of time off for good behavior, my good friends in
Colorado tell me the university that houses the famed Golden
Buffalo will be holding its spring commencement exercise this
weekend in Boulder, Colorado. Hasn't the Starship Commander
discussed his daughter's senior year at the university during
several programs over the last several months. And if so, wouldn't
it make sense for him to attend his daughter's graduation
exercise? And while he is at it, wouldn't he be a good bet to
challenge Bobby Junior to a couple rounds of you know what?
If so, who will we be treated to this weekend? Will it be William of
Flanagan, The Goddess of Neale, or those very motley fools?
Or is my Colorado information as bankrupt as Mr. Bowtie's advice?

Original: http://www.siliconinvestor.com/stocktalk...

To:Justa Werkenstiff who wrote (4972)
From: Bob Brinker, Jr. Sunday, May 17, 1998 9:57 PM
View Replies (2) | Respond to of 19481

Justa: I'm happy to report that after a grueling two day tournament, the undisputed champion of the Colorado Invitation Spring Tournament has been crowned. Although I have a suspicious feeling the next several Moneytalk programs will be far too busy for the results to be announced, this forum does grant me the pleasure of announcing that Bob Jr. has swept Bob Sr. in 36 holes of high-altitude golf. I love this game!-bb jr.

Original: http://www.siliconinvestor.com/stocktalk...

The question is actually open to anyone. Please give a plausible explanation of any scenario that the person posting as Don Lane on Silicon Investor was not Bob Brinker. Or does everyone else agree that Bob Brinker was posting here as Don Lane and changed it more recently to mistertopes?

-- posted by Kirk

» Kirk - Re: vested interest here!

Original: post

In response to message posted by SCoe46:

Let's not ever forget there are several individuals who post here IMHO that have an obvious agenda and vested interest in slamming Brinker. I believe Kirk peddles his newsletter frequently in his posts and at the end of each. Slam BB and hope the fools cancel their Moneytalk subscription and send the $185.00 to Kirk.

Ah M.r SCoe46. I can see where you might get your mistaken impression but the truth is my business would be much better if Brinker could reliably time the market AND he didn't have to resort to trickery to fool folks by leaving his risky advice "off the books.".

Consider my newsletter is aggressive growth which should be compared to his P1 or a Kevin Landis fund. In 1999 my newsletter was up 117% vs. Brinker's P1 which was up 65%. This year I am up over 55% while Brinker is up considerably less.

IF Brinker would really time the market, then wouldn't you be better off to buy his newsletter for timing and then just buy the stocks in my newsletter for their high return?

You see, I am up over 55% YTD with 30% in fixed! Do the math, but the stocks and funds are on average up considerably more. I think 6 of my 11 individual stocks are up over 100% YTD and the worst in the portfolio is MSFT.

If Brinker could time the market with reliable precision, then I'd be the first to add his timing to my stock selection and then I'd never have to work again.

I actually think people SHOULD subscribe to both. If you get benefit from his show and he has really helped you, then $185 a year is a small price to make sure he keeps doing the show.

Likewise, if you get benefit here and don't want me to "take an offer I can't refuse" someday... then subscibe to my newsletter as well so I am less tempted to do something else.

I also believe SteveT has some type of summary of moneytalk that he sells.

SteveT does a FREE summary of Rukeyser's Wall Street Week. You are probably thinking of David Korn who sells a Brinker interpretation. Don't you think David Korn's business would be all that much better if he could show Brinker really did add significant value over buy and hold?

I would consider their comments to be more creditable if there wasn't at least an appearance of a conflict.

Thanks for the suggestion. My first goal here is to help people by providing a forum to follow analysts and gurus as well as to share best practices about investing. I have been quite successful in my past so I offer a newsletter that people can subscribe to if they want more information. I would really like to find a way to make a decent living helping people invest and I actively look at many ideas (well away from here) to offer alternatives someday to the large brokerage houses that churn accounts or the folks that seem more interested in their $10M a year newsletter subscription business than in actually helping folks they gave bum advice to. I've made plenty of blunders in my stock selection but I sure do all I can to explain to my subscribers what I learned, what I did wrong and I keep all my buys and sells on my permanent record. Hopefully if enough of us keep the big guys feet to the fire with complaints about how they run their business, then someday they will have to be more honest in how they report their results.

Thanks for your comments and patronage of our forum!

  Date       Kirk    S&P500   Delta
2003 YTD    +58.7%   20.3%    38.4%  as of 10/15/2003 
 

                                Kirk   S&P500+  NASDAQ 
4.75+ Yrs 12/31/98 to 10/10/03 141.0%  ( 9.2%) (11.8%)
Annualized Annual Return        20.2%  ( 2.0%) ( 2.6%) 
 

9/30/98 Inception Value:   $100,000
9/30/03 5 yrs later value: $345,395 up 245.4%
S&P500 between 9/30/98 and 9/30/03: up   4.6%
With dividends reinvested. All Numbers unaudited. 
Click for a free issue of my newsletter .

IF market timing worked, then people would be well advised to buy Brinker's newsletter to find out when to get in and out of the market and then buy my newsletter to find what highly cyclical technology stocks I like the best. Then they ignore my idea to use volatility to take profits as explained here and just sell all my highly volatile tech stocks at the top and buy them back at the bottom following Brinker's advice. My taking profits along the way as the stocks go up and buying them back in small chunks as the prices go lower is an admission that I can't time the market, but I believe you can add value to a portfolio using "dynamic rebalancing" which has been proven to be an academically valid concept.

-- posted by Kirk

» David_Korn - Bob Brinker, Sir John Templeton

Excerpt from David Korn's Stock Market Commentary, Interpretation of Moneytalk (Bob Brinker Host), Financial Education, Helpful Links, Guest Editorials and Special Alert E-mail Service. Copyright 2003 David Korn, L.L.C.

FEAR OF A DECLINING DOLLAR

Caller: This caller read an interview by Sir John Templeton where Sir John said he would not be surprised to see the U.S. dollar devalued by 40%. What kind of class of assets would be most ideal to take advantage of this type of decline? Mr. Brinker, with a little edge in his voice, said he would not be overreacting to ANYTHING that is said at this juncture by Sir John Templeton. Bob said he has observed that Templeton has become bearish about a LOT of things and Bob doesn't know what that is all about. The reality is that the U.S. dollar has been an amazing and resilient currency. Even in the past year, when it has been weak, it has not declined that much. The Federal Reserve dollar index has declined to 92 from about 106 last year; however, there has been a relative sideways trend going back to the late spring/early summer. Bob said when people come out with these drastic announcements about the dollar, Bob said he would take them with a grain of salt. Moreover, Bob noted that there is a facet of currencies that is self-correcting; namely, changes in foreign exchange dealings. As the rates change in the foreign exchange market, everything changes along with it. For example, as the dollar declines, this increases the effectiveness of U.S. products overseas which is a plus for the U.S. export account. This factor, in turn, is a plus for the U.S. dollar. Bob added that the dollar's recent decline has been modest, and nothing like the projection made by Templeton. Bob also pointed out that if you are going to live in the U.S. for the rest of your life, there is no need to hedge against the dollar.

Editorial Comment ("EC")#1: The declining dollar is an important issue, and may ultimately be what brings about the end of the current cyclical bull market. Bob seems to be relatively cavailier about the dollar's prospects. I am certainly more nervous about the dollar than Bob is. Anyhow, I am glad the topic was raised on Moneytalk, and I imagine it will come up more often. A few additional ECs are warranted relative to this call.

EC#2: Bob has never really been that complimentary of Templeton, who Money Magazine dubbed "the greatest global stock picker of the century." Templeton launched his flagship fund, Templeton Growth, Ltd. in 1954. Each $100,000 invested then with distribution grew to total $55 million in 1999. He was knighted "Sir John" by Queen Elizabeth II in 1987 for his accomplishments, including the $1 million-plus Templeton Prize for Progress Toward Research or Discoveries about Spiritual Realities. He is now about 92 years old, but still incredibly active.

EC#3: Bob's reference to Sir John Templeton being bearish on a "lot of things" probably stems from a widely quoted article last month in the Sarasota Herald Tribune entitled, "Templeton Feeling Bearish" (10/14/2003) in which Templeton was quoted as telling investors to avoid U.S. stocks and sell off excess residential real estate. In that same article, Templeton allegedly said that he believed the dollar would lose 40% of its value against foreign currencies, especially the Japanese Yen and the Chinese Yuan. Note, however, that Gary Moore, who has served as John Templeton's media spokesman, clarified Templeton's views by saying that he did not actually predict a decline of 40% in the dollar, but that he probably wouldn't waste much time arguing with that prediction. I direct you to an excellent article by Bill Fox which includes a link to the "Templeton Feeling Bearish" article, as well as a reprint of Gary Moore's letter which you can find at this link:

http://www.financialsense.com/fsu/editor...

EC#4: Sir John Templeton isn't the only financial guru with concerns about the dollar. On October 26, 2003, Warren Buffet wrote an article for Fortune Online entitled, "America's Growing Trade Deficit is Selling the Nation Out From Under Us." In the article, Buffet said for the first time in his life, he purchased foreign currencies, and now holds a significant investment in several foreign companies within his holding company, Berkshire Hathaway. Of course, purchasing foreign currencies is tantamount to a bet against the dollar. You can read Mr. Buffet's article at this link:

http://tinyurl.com/srdj

To learn how to subscribe to my newsletter, just e-mail me at:

mailto:davidk555@earthlink.net

Or, visit my website, http://www.BeginInvesting.com/

-- posted by David_Korn

» Kirk - Marketimer returns Vs. Year

What I have done below is process Mark Hulbert's return data for Brinker and the Wilshire5000. Starting with Mark's raw data, I used Excel to show how $1,000 would grow if invested in both portfolios. Finally, I corrected the result (2002Q) for Brinker's QQQ advice so we can see the results on the totals.

Conclusion: $1,000 invested in the Wilshire5000 between 1986 and 2002 grew 25.4% more than if it was invested as Brinker recommended when you include his QQQ advice.

• 1980-2002 Data From Hulbert's Financial Digest
  
• Issues: December 1996, page 5 & May 7, 2003 page 3
  
• QQQ Corrections calculated and explained here.
  
• All data includes dividends reinvested
  
• 2003QE Shows the corrected results with 2003 Estimated through the December 2003 Marketimer.

Year   Brinker        Wilshire5000    Difference 
       Return         Return            $    %
 
1982    N/A           18.7%   
1983    N/A           23.5%   
1984    N/A            3.0%   
1985    N/A           32.6%   
1986    N/A  $1,000   16.1% $1,000     $  0   0.0%
1987   -3.3% $  967    2.3% $1,023    -$ 56  -5.5%
1988   10.2% $1,066   17.9% $1,206    -$140 -11.6%
1989   15.2% $1,228   29.2% $1,558    -$331 -21.2%
1990   -4.4% $1,174   -6.2% $1,462    -$288 -19.7%
1991   31.7% $1,546   34.2% $1,962    -$416 -21.2%
1992    6.1% $1,640    9.0% $2,138    -$498 -23.3%
1993   23.4% $2,024   11.3% $2,380    -$356 -15.0%
1994   -4.4% $1,935    0.0% $2,379    -$445 -18.7%
1995   22.0% $2,360   36.5% $3,248    -$888 -27.3%
1996   14.8% $2,710   21.2% $3,937  -$1,227 -31.2%
1997   15.2% $3,121   31.3% $5,169  -$2,047 -39.6%
1998   14.1% $3,561   23.4% $6,378  -$2,817 -44.2% Max Diff.
1999   28.5% $4,577   23.5% $7,877  -$3,301 -41.9% 
2000    1.5% $4,645  -10.9% $7,019  -$2,373 -33.8%
2001   -2.0% $4,552  -11.0% $6,246  -$1,694 -27.1%
2002   -2.9% $4,420  -20.9% $4,941    -$521 -10.5% 
2002Q -16.7% $3,684    0.0% $4,941  -$1,257 -25.4% QQQ Adj.
2003QE 29.9% $4,785   25.9% $6,221  -$1,436 -23.1%

Year-to-date:
 
  Date       Kirk    S&P500   Delta
2003 YTD    +74.6%    24.1%    50.6%  as of 12/14/2003 
 

Total Return:
                                 Kirk   S&P500+  NASDAQ 
4.75+ Yrs 12/31/98 to 12/14/03  167.7%  ( 6.3%) (11.1%) 
Annualized Annual Return         22.0%  ( 1.3%) ( 2.3%)  
 
  
9/30/98 Inception Value:   $100,000
9/30/03 5 yrs later value: $345,395 up 245.4%
S&P500 between 9/30/98 and 9/30/03: up   4.6%
With dividends reinvested. All Numbers unaudited. 
Click for a free issue of my newsletter 
Suitable for the aggressive growth part of your 
diversified investment portfolio. 

-- posted by Kirk

» David_Korn - Interpretation of Bob Brinker's Moneytalk

David Korn's Stock Market Commentary, Interpretation of Bob Brinker's Moneytalk (Excerpt from last week's show)

BOB BRINKER'S BRAGGING RIGHTS

Brinker Comment: Bob noted that he posted his bulletin recommending a fully invested position on the morning of March 11, 2003 after staying up most of the night. Bob said he put up the bulletin at 2:00 a.m. Pacific time (5:00 a.m. Eastern time), because he knew it was a major call. Bob said he purposefully did it so that it would not be posted during market hours. Bob said he was really happy that on March 11, 2003 (the first day you could act on that recommendation), the market didn't do much because it gave everyone who had access to the bulletin to return to a fully invested position at great prices. On the evening of March 11th, the S&P 500 closed at 800, within 3% of the major bear market low.

EC: I thought Bob might issue a buy signal during that time frame, and am happy I was able to alert my subscribers via e-mail on March 11th at 8:00 a.m. (30 minutes before the market opened), that the bulletin feature had been activated.

BOB BRINKER'S BUY SIGNAL

Brinker Comment: Bob noted that his March 2003 buy signal was issued when the S&P 500 in the vicinity of 800 which was the "fully successful test and the FINAL test" of the bear market lows. The total bear market in the S&P 500 came to a decline of 49% from closing high to closing low - the greatest bear market in terms of loss since the great depression.

EC: Bob is now on record saying that the March 11th low was the FINAL test. Trekkies know that Bob had been cautioning against a possible return to those lows for some time. Not today, the hedge has been removed!

EC#2: Thanks to Bob, one of my subscribers, who sent me a link to an article on Kiplinger.com which came out April 1, 2003 -- about two weeks after Bob's buy signal and appears to be based on an interview with daBrink in which Bob told the journalist the five areas that Bob looks at to determine whether one should be invested or not. Interestingly, of those five areas, the only one that wasn't flashing a buy signal was the Valuation component. Check out the article which I have printed out for future reference at this link:

http://www.kiplinger.com/columns/value/a...

If you would like to receive a copy of my newsletter and/or find out how to subscribe to my service, just e-mail me at: mailto:davidk555@earthlink.net

Or, visit my web site: http://www.BeginInvesting.com/

DISCLAIMER: I am not associated with ABC Radio Networks, Moneytalk or Bob Brinker and this service is neither sanctioned by, nor written under the auspices of ABC Radio Networks, Moneytalk or Bob Brinker. This e-mail is not a substitute for listening to Moneytalk. It is only my interpretation and commentary of some of what is discussed on Moneytalk, along with additional educational information that I include, editorial comments about the market, helpful financial links and even humorous remarks. I also provide my own stock market commentary to subscribers as part of my service and give them access to my web site, www.BeginInvesting.com. If you want to know what was actually said verbatim on Moneytalk, listen to the show live or subscribe to "Moneytalk on Demand" which allows you to listen to the show in case you missed it live. The web site, bobbrinker.com has all the links to the ABC Radio Network stations that broadcast the show live and a link on how to subscribe to Moneytalk on Demand. The information contained in this newsletter is not intended to constitute financial advice and is not a recommendation or solicitation to buy, sell or hold any security. This newsletter is strictly informational and educational and is not to be construed as any kind of financial advice, investment advice or legal advice. Copyright David Korn, L.L.C. 2003

-- posted by David_Korn

» Kirk - 2/28/03 Summary from Barbara

         PERIOD                Kirk  Wilshire5000  Delta
1 Year Return to 12-31-2003    +77%     +31%         46%  
3 Year Return to 12-31-2003    +25%      -7%         32%  
5 Year Return to 12-31-2003   +171%      +2%        169%  

 

Total Return:
                                  Kirk   S&P500+  NASDAQ 
5 Yrs 12/31/98 through 12/31/03  171.0%  ( 3.0%)  ( 8.6%)
Annualized Annual Return          22.1%  ( 0.6%)  ( 1.8%)
 
Click for a free issue of my newsletter 
Suitable for the aggressive growth part of your
  diversified investment portfolio. 

-- posted by Kirk

» David_Korn - Bob Brinker's Moneytalk 18th Anniversary Broadcast

Part I. Excerpt from David Korn's Interpretation of Moneytalk (Bob Brinker Host)

MONEYTALK 18TH ANNIVERSARY SPECIAL

Before I get to the financial information, for those who listened to Sunday's broadcast, the show opened up with a montage of people paying tribute to Bob Brinker and congratulating him on his 18th Anniversary show. ABC News Business Correspondent Betsy Stark, David Gibson from ABC Radio Networks, and even Albert Brooks all wished Bob well. There was a special surprise for Bob, as one of his heros appeared live on the show. It was none other than Harry Kalas, Hall of Fame broadcaster for the Philadelphia Phillies. Harry and Bob spoke about some fond memories in Philadelphia.

Brinker Comment: Bob gave a little of the history behind Moneytalk. The first time that Bob had an idea for the program was in the mid-1970s when there was no money radio programs. Bob thought you could combine someone with broadcasting (Bob had been in broadcasting since he was in the teens), and someone who had experience in the investment arena. Bob thought he could "tell it like it is" and discuss the "real deal in investing." Topics would include diversification, no load funds, keeping your expenses down. There was an opportunity to do a program in Miami, but Bob was in Pennsylvania and commuting 4 hours a day to Wall Street and he simply couldn't do it. In October, 1981, Bob was given an on-air live audition in New York for a Saturday morning program from 6-10 a.m. He got the job and began broadcasting weekly in the City of New York. In January, 1986, the program switched from a local station, to ABC Radio and began on Super Bowl Sunday - 18 years ago. Ironically, the New England Patriots were in the Super Bowl back on that first day as well. Bob said he had about 70 radio stations on the first program which has grown to about 220 radio stations nationwide.

THE SUPER BOWL INDICATOR

Brinker Comment: Bob said he has never given any credence to the "Super Bowl Indicator" because it depends on how you define "the market." Do you use the Dow? The S&P 500? Bob added that using the Dow, the Super Bowl Indicator has done "ok." However, if you go back to 1978, which is when the indicator started being followed, it hasn't been that helpful. Bob figures it is about as good as flipping a coin.

EC: The Super Bowl Indicator is credited to Robert Stovall who has worked on this indicator for 25 years. The theory works like this. If the NFC Champion (or a team that historically was with the old NFL) wins the Super Bowl then the market should be up for the year. If the AFC Champion wins, the market declines. Think this sounds silly? Consider this. The Super Bowl indicator has over an 80% accuracy rating and has been correct 30 out of the last 37 years. Last year, when Tampa Bay upset the Raiders, that was a good omen for the stock market. In 2002, the AFC Patriots' victory over NFC's St. Lois Rams correctly predicted a downturn. Of course, like all other indicators, you probably shouldn't wager on it. The Super Bowl Indicator has had a difficult time of late, being wrong in four of the last six years. Still, if you are a bull, you need to be routing for the Panthers to beat the Patriots. The Super Bowl Indicator was detailed this week on BusinessWeek Online at the following link:

http://tinyurl.com/2doch

It also was discussed on Forbes.com at this link:

http://tinyurl.com/2md7o

JANUARY WAS A GOOD MONTH

Brinker Comment: Bob noted that stock market investors should be happy. The S&P 500 is now at 1131, just a couple of percentage points off its closing high in this cyclical bull market. Since March 11, 2003, the gains in the last 10 months have been quite large. If you include dividends, the market has gained about 42%. The gains in this cyclical bull market come on the heels of three consecutive double-digit down years in the market. For those of you that follow the "January Effect," the month of January was good for stocks. During January, the S&P 500 gained 1.7% which Bob noted was actually a big number because annualized that would be over a 20% gain. The Wilshire 5000 registered a 2.2% gain for the month of January. If you annualized that number, you would get a 26% gain for the year. The Dow did not do that much in January, with only a tiny gain. Overall, Bob said he views January as an "excellent month" for the stock market which is historically something that many people look at and smile upon.

EC: Although Bob mentioned the "January Effect," I think he was referring to the so-called "January Barometer." According to the Stock Trader's Almanac, the performance of the market during the month of January has historically predicted the course of the market for the remainder of that particular calendar year. Since 1950, the so-called "January Barometer" has been accurate 92.5% of the time through the end of 2002 with only four major errors. Of course, those relying on the January Barometer last year were disappointed as January, 2003 showed a decline in the S&P 500 of 2.7%, yet for the year, the market returned 28.5%. Once again, this shows there is no one fail-proof indicator on the street of dreams. Source, 2004 Stock Trader's Almanac. p. 14, 16, Yale Hirsch & Jeffrey A. Hirsch, Editors. For a little more in depth view on the January Barometer, I refer you to Rebecca Byrne's article entitled, "January Barometer Sparks Debate":

http://tinyurl.com/2afh4

EC#2: For those interesting in market history and the January Barometer, make sure you check out Mark Hulbert's latest where he crunches the number and concludes that both April and November have better market timing records than January. Mark's article is entitled, "As goes January, so goes the year?" and can be accessed at the following link:

http://tinyurl.com/2ouby

BUDGET DEFICITS

Brinker Comment: Nobody should be happy about the new projections for this year's federal budget which is expected to show a deficit of $521 billion. Bob noted that past administrations have had a tax and spend philosophy. Bob said the Bush administration has a "spend and cut taxes" philosophy. We now have one of the largest new entitlement programs in the modern era; namely, the prescription drug program for seniors. We spend like there is no tomorrow, yet we cut taxes! Bob noted that $521 billion is a very large number for an annual federal budget deficit. It is more than the projection by the Congressional Budget Office, it is beyond previous budget deficit records, and the only way to put a positive spin on it, is if you compare it to the total economy. Even then, the number is extremely large. The Bush administration is saying that it is setting a goal of cutting the deficit in half over the next 5 years. However, Bob pointed out that even if they were successful, that would still leave us with a $261 billion deficit in five years and it would also mean that trillions would be added to the mind-boggling national deficit.

EC: The projection of $521 billion hasn't been formally announced yet, but an administration source leaked the outline that President Bush is supposed to give on Monday. More on this story here:

http://tinyurl.com/2b4b8

Brinker Comment: Bob noted that earlier this week, the Congressional Budget Office projected a budget deficit of $477 billion. The White House then added another $44 billion to bring it up to their projections. Bob said that fiscal conservatives in Washington have been warning the White House about the new medicare prescription drug plan adding more red ink to the deficit, but nobody is listening. The 10-year price tag for the medicare/prescription drug plan was at $400 billion a few months ago, but now it is at $539 billion. Don't ask what it will eventually know, YOU DON'T WANT TO KNOW! Where has the fiscal responsibility been in the White House? It is missing in action. Bob called Bush's spend spend spend policy as "bankrupt policy." Bob said he has supported President Bush many times in the last couple of years, but on this issue he thinks, "they are out of their minds!"

EC: This link brings you the Public Debt to the penny updated as of January 29, 2004. Its now above $7 trillion which is a number difficult to even comprehend:

http://www.publicdebt.treas.gov/opd/opdp...

CHANGING INTEREST RATES AND BONDS

Caller: This caller has patterned his investments based on Bob's Model Portfolio III which is a balanced portfolio typically split between 50% equities and 50% fixed income when Bob is recommending a fully invested position in stocks. The caller says he has a combination of Ginnie Maes, high yield corporate bonds, and a small position in short-term corporates. What is the impact of the federal reserve raising interest rate increase on these bonds? Bob noted that when the Federal Reserve raises rates, you are talking about short-term rates. Short-term rates are at extremely low levels, even below the rate of inflation. That means that the "real" rate is a negative number. When the fed gets around to making its initial rate hikes, that would only bring the rates up to the level of inflation. For example, if the inflation rate was at 2%, and the Fed Funds rate went up to 1.5%, you would still have a negative rate. Thus, the Fed will have to raise rates a considerable amount just to get them up to the rate of inflation. The year-over-year inflation rate as measured by the Consumer Price Index is 1.9%, and the Federal Funds rate is just 1%. Bob said he doesn't think there will be that much reaction anywhere to the Fed Funds rate moving from 1% to 2%. If inflation and the economy heats up, that could pose a problem for bonds. High-yield bonds march to a different drummer. An improving economy helps high-yielding securities.

EC: In my Special Alert e-mail on Wednesday, I discussed the FOMC's decision to change their statement about keeping interest rates low for a "considerable period." The FOMC's December 9, 2003 minutes were released, and we gained some insight as to why they felt the need to remove the "considerable period" language. According to the minutes of the Dec. 9th meeting, "A number of [FOMC] members argued that its deletion would serve to enhance the Committee's flexibility to adjust monetary policy at a later date when that was deemed appropriate on the basis of evolving economic circumstances. A majority, however, preferred to retain the phrase, at least for now."

Check out the rest of the FOMC's December 9th minutes at the following link:

http://federalreserve.gov/fomc/minutes/2...

Caller: This caller just retired and is taking a defined benefit plan lump-sum distribution. Should he go to a registered investment advisor, a broker, or to a bank to get the best advice so that he can beat the market. Bob noted that historically its been very difficult to beat the market so doing it for that reason doesn't make a lot of sense. If you are doing it for the emotional support that is a different matter, but it doesn't mean you will beat the market. It depends whether you need someone helping you are not. A simple way to invest on your own, is to go to a low cost fund family and use index funds. Bob noted that someone approaching or in retirement could take a 50/50 balanced approach with 50% going into the Wilshire 5000 and the other 50% in quality fixed income securities such as Ginnie Maes, inflation protection bonds and other quality short term securities and you would have a pretty good portfolio right there. Bob said he thinks people can do it themselves after you have gone down the learning curve.

EC: I like Bob's advice here. Essentially, it is like his Active/Passive portfolio for stocks, only you use if for a balanced portfolio. Put 50% in the Wilshire 5000, and 50% in good quality fixed income and you should do all right over the very long term with minimal expenses if you use a no-load fund family.

LIFESTYLE MUTUAL FUNDS

Caller: Have you ever heard of lifestyle mutual funds? Yes. These funds are simply a product whereby a mutual fund family is going to come up with a mutual fund that targets someone's investment objective depending upon their lifestyle.

EC: One such example is Fidelity's Freedom 2030 which targets a specific retirement date. Before you hop in one, check out this article entitled, "Do Lifestyle funds provide greater security?" which you can access at this link:

http://tinyurl.com/yumgv

BUYING BONDS

Caller: This 44-year old caller wants to move 25% of his portfolio into bonds. Bob said if you are in a high bracket and are talking about taxable money, you should consider quality municipal bonds. If you have enough money, you should try to buy them on new issues. Bob said he likes state General Obligations which you can own until maturity so you don't have to worry about the day-to-day fluctuations. In tax-deferred accounts, Bob noted that you might consider some inflation protected securities which you can buy from Treasurydirect.gov. They auction 10-year bonds several times a year. The Treasury will not function as a custodian so you will have to go through a broker and pay a commission. You can also now buy them through an exchange traded fund which trades under the symbol, TIP.

EC: Bob is referring to the iShares Lehman US Treasury Inflation Protected Securities Fund (NYSE: TIP). For the advanced investor, the American Stock Exchange announced this month that it will launch trading in options on the underlying shares of the iShares Lehman US Treasury Inflation Protected Securities Fund. Learn more here:

http://biz.yahoo.com/prnews/040120/nytu1...

Caller: This caller is trying to mimic Model Portfolio III and his advisor suggested he put some of his tax-deferred money into an annuity. Bob was outraged and called that recommendation unconscionable! An annuity program is tax-deferred, so it is completely redundant to have an annuity program in a tax-deferred account. If the person giving you this advice did not know that, then they are incompetent! Bob said he is getting sick and tired of hearing this kind of PATHETIC advice!

EC: I think Bob would like the article I just found entitled, "Why Annuities Don't Add Up" which you can read at this link:

http://www.windsorwealth.com/annuities.h...

DOOMSDAY?

Caller: This caller is afraid that in 10-15 years when the baby boomers retire, there will be no social security and the system will basically collapse in a doomsday scenario. Is he better off in stocks, cash or real estate? Bob said his view is to take a diversified approach. If you have a balanced portfolio approaching or in retirement, you have 50% in quality fixed income, and 50% in a diversified stock portfolio. Hopefully, you also have real estate, or at least your primary residence. However, Bob hasn't recommended holding cash at this time.

EC: If there were a collapse in the financial system, you might want to own some gold as well to hedge against a currency devaluation.

GROSS DOMESTIC PRODUCT

Brinker Comment: Bob discussed the Gross Domestic Product (GDP) report for the 4th quarter which was reported on Friday. Real gross domestic product -- the output of goods and services produced by labor and property located in the U.S. -- increased at an annual rate of 4.0% in the fourth quarter of 2003, which according to Bob was a "very good number" marking the second consecutive quarter of excellent growth. Recall that the 3rd quarter was huge with GDP coming in at 8.2% helped by the tax refund. Bob thought it was amusing that some financial analysts put a sad face on the 4th quarter report. Bob thought it was a very good quarter and pointed out that all of the broad components were in the positive column. There was an over-estimation by some economists of inventory accumulation, but Bob said that is not a big deal. Overall, Bob thought the report gave investors a lot to be happy about, and the numbers bode well for 2004. Of course, people want to see new jobs as we go forward and investors will be looking for that down the road.

EC: Friday's GDP data is merely the "advance" estimates based on source data that may be incomplete. The data will be subject to two further revisions. Read the report here:

http://www.bea.doc.gov/bea/newsrel/gdpne...

HEDGING AGAINST THE DOLLAR

Caller: This caller is very concerned about the devaluation of the dollar and is wondering where he can put money in the event the dollar drops. Bob pointed out that as long as the caller was planning on living in the United States, his liabilities would be denominated in dollars. Sure, you could speculate on the dollar by translating your dollars into other currencies, but whatever you do in that regard will change every day. The caller then asked Bob about gold as a possible hedge, to which Bob said you could consider gold a hedge; however, people who thought it was a hedge 20 years ago have lost half their money. Gold is down about 50% over the last 22 years, although it has bounced around along the way. You could use up to 5% of your portfolio in a gold mutual fund as a hedge, but Bob wouldn't do any more.

EC: It was exactly 60 years ago today (January 31, 1934), when President Franklin Roosevelt issued an Executive Order which officially devalued the dollar by 41% by raising the price of gold to $35 per ounce. Wacky.

I will try to post Part II of this newslettter tomorrow.

If you want me to find out how to get on my newsletter e-mail distribution list, just drop me a line at mailto:davidk555@earthlink.net

Or, visit my website, http://www.BeginInvesting.com/

DISCLAIMER: I am not associated with ABC Radio Networks, Moneytalk or Bob Brinker and this service is neither sanctioned by, nor written under the auspices of ABC Radio Networks, Moneytalk or Bob Brinker. This e-mail is not a substitute for listening to Moneytalk. It is only my interpretation and commentary of some of what is discussed on Moneytalk, along with additional educational information that I include, editorial comments about the market, helpful financial links and even humorous remarks. If you want to know what was actually said verbatim on Moneytalk, listen to the show live or subscribe to "Moneytalk on Demand" which allows you to listen to the show in case you missed it live. The web site, bobbrinker.com has all the links to the ABC Radio Network stations that broadcast the show live and a link on how to subscribe to Moneytalk on Demand.

-- posted by David_Korn

» Kirk - 3/14/03 "A Trader asks Is the Bull Market Over?"

This past weekend, a caller debated Bob on whether this cyclical bull (in the context of secular bear) is over. The caller, a trader adept with TA, pointed to Fibonacci retracement of downtrend that began in 2000. The caller used this to argue that the cyclical bull which began a year ago is over. Bob disagreed using blanket statement associating Fibonacci with an analyst who has been wrong on market. The caller won the debate imo.

-- posted by Kirk