Moneytalk Bob Brinker Summaries - Information ONLY

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Top 719. Jun 29, 2004 8:05 PM

» David_Korn - Summary of Bob Brinker's Moneytalk by DavidK

Here is an excerpt from my last newsletter which provides summary and commentary of Bob Brinker's Moneytalk

David Korn's Interpretation of Bob Brinker's Moneytalk (June 19-20, 2004)

BOB BRINKER SAYS THE SUMMER DOLDRUMS ARE HERE

Bob Brinker Comment: This was a very quiet week for the stock market. The changes in the major indices were very small. The Dow was only up 6 points for the week. The S&P 500 dropped only 1.5 points, and the Wilshire 5000 fell 11.8 points, which is only about .1%. This is the time when people leave town for their summer vacations and the summer doldrums hit Wall Street.

Editorial Comment "EC": The Stock Trader's Almanac rebuts the widely held belief that summer produces the greatest rally of the year. The so-called "summer rally" was defined by Ralph Rotnem as the lowest close in the Dow in May or June, to the highest close in July, August or September. The Almanac points out that there are rallies in every season of the year, but the summer is actually the weakest statistically speaking. Nevertheless, a rally is a rally and over the last 40 years, the summer rally produced on average gains of 9.2% using Mr. Rotnem's guidelines.

source, 2004 Stock Trader's Almanac (p. 70), Yale Hirsch and Jeffrey A. Hirsch editors, http://www.stocktradersalmanac.com

BOB BRINKER'S VIEW OF THE LONG TERM TREND

Brinker Comment: Bob said that we had an indication that the secular bull market from 1982-2000 came to an end during the speculative peak in the first quarter of 2000 which ushered in a new bear market megatrend. We are now in year 5 of that secular bear megatrend, which Bob thinks will last anywhere from 8 to 20 years. Nothing Bob sees right now, however, suggests to him that this secular bear market will end anytime soon.

BOB BRINKER'S OVERALL VIEW OF THIS CYCLICAL BULL MARKET

Brinker Comment: Bob said he feels that we began in earnest a cyclical bull market in March, 2003 which was the successful and final test of the initial bottom that occurred in October, 2002. Bob said he has referred to this as a market "double bottom" which is where you get a low for the market, followed by a failed rally, and then a crucial retest which determines whether you get a buying opportunity. Bob said we saw the initial low in October, 2002. This was followed by a failed rally into the winter of 2002, and then a successful final retest of the low area in March, 2003. On March 11, 2003, the S&P 500 closed at the 800 level, just 3% from its prior low which is when Bob issued his buy signal when he "saw what he needed to see."

EC#1: As I have discussed in prior newsletters, I believe that Bob decided to return to a fully invested position after seeing the market had a 90% down day which occurred on March 10, 2003. In fact, it was based on the market's close of March 10th (not March 11th), that Bob's timing model issued its "buy signal" and Bob recommended investors return to a fully invested position based on the market's close that day. I am aware of at least two other advisors who turned bullish at the same time, both in large part due to the 90% down day phenomenon in my opinion.

EC#2: I realize that Bob likes to refer to the market as a "double bottom" but I maintain that it is more accurate to refer to this as a "triple bottom." Bob likes to use the S&P 500 area of 800 as evidence that it had tested the lows of October. However, the S&P 500 actually CLOSED at 797.70 on July 23, 2002! That was the first bottom in my opinion, followed by the lowest close which occurred in October, 2002. The third bottom occurred in March, 2003, but the October 2002 saw levels significantly lower in the Nasdaq Composite.

BOB BRINKER SAYS THE EASY MONEY HAS BEEN MADE

Brinker Comment: The stock market is up over 40% since the buy signal in March, 2003. However, Bob thinks that the "easy money" phase of the cyclical bull occurred from March, 2003 until earlier this year. The consolidation period, which we are in now, has been very modest. Even now, the S&P 500 is within 3% of its recovery high, and has never been more than about 6% from its recovery high. Nevertheless, since the easy money was made during the initial 40% thrust from last year, we will now have to fight for our profits and be patient.

EC: I agree, and that is why I am trying to identify inflection points such as the buy signal I identified on May 17th, which so far marks the correction bottom this year.

THE CYCLICAL BULL MARKET HAS NOT ENDED

Brinker Comment: As we move through this consolidation phase, we will have to be patient in a market that can be more than frustrating as it has shown so far this year. AT THIS TIME, however, Bob said he does NOT see the evidence that this cyclical bull market is over.

EC: The cyclical bull market we have seen thus far comports with other cyclical bull markets. If you would like to see my analysis of all cyclical bull market in the last secular bear market, just e-mail me at davidk555@earthlink.net.

HOW LONG DOES BOB BRINKER THINK THE CYCLICAL BULL MARKET WILL LAST?

Brinker Comment: Bob said cyclical bull markets tend to last 1 to 3 years. However, how long it lasts doesn't really matter. What matters is that you are on the right side of the market when it does end, whether its in 1 year, or 3 years or even longer. Bob said his stock market timing indicators have done a very good job of identifying major moves in the stock market and he is going to stick with those indicators and not try to predict when the cyclical bull market will end. As of right now, however, Bob does not think the cyclical bull market is over. Bob will wait until the indicators give the all clear.

EC: No surprise here. The indicators that Bob tracks in his stock market timing model don't suggest to me that Bob will be turning bearish anytime soon. I will update those indicators in a future newsletter.

WHAT HAPPENS NEAR THE END OF A CYCLICAL BULL MARKET?

Caller: This caller wanted to know what will happen with jobs and interest rates toward the end of a cyclical bull market. Bob said that these are economic issues, and the economy, just like the stock market, is subject to cyclical moves. One of the first places that you will see a change in the economy is in the jobs market. You will see the absence of new jobs, you will see layoffs and if you are living in a housing community that is sensitive to new jobs, than you could see that impact the prices of housing as well.

EC: The stock market can turn, however, before the economy turns. Remember, the stock market is a discounting mechanism as investors try to anticipate what the future will hold for corporate earnings and the economy, usually six months in advance.

INVEST IN THE WILSHIRE 50000

Caller: This caller has $100,000 to invest and wanted Bob's recommendation on a security to invest in. Bob said he likes the idea of investing in the Wilshire 5000 because it will basically earn you the rate of return of the U.S. stock market. If you purchase a low expense fund that tracks the Wilshire 5000, you will get a tax efficient investment, diversification and you are assured of not under performing the market as so many managed mutual funds are prone to do.

EC: The Vanguard Total Stock Market Fund (Ticker: VTSMX) is the way to go if you want to own the Wilshire 5000 through a no load mutual fund. It only has an expense ratio of 20 basis points or 0.20%. I prefer to own the Wilshire 5000 through the exchange traded fund VIPERS (ticker: VTI) because you can trade it in real time. The only downside is you have to pay a commission when you buy and sell it, but a discount broker minimizes those transaction costs.

TREASURY INFLATION PROTECTED SECURITIES

Caller: This caller subscribes to Bob's Marketimer newsletter and observed that he made a recommendation to reduce holdings in some TIPS mutual funds. Bob said he made that recommendation some time ago, although he still keeps a small portion of his portfolio in TIPS. The caller then asked what Bob thought the optimum conditions were for TIPS? Bob said the optimum situation is what we saw a couple of years ago when the base rate was up near 3%. Recently, the base rate got down into the ones and Bob's concern was that people would demand a higher base rate and they have and that is why you have seen depreciation in the share price.

EC: Looking for inflation protection? Check out this article entitled, "Inflation-Proofing Your Portfolio" which you can access at this link:

http://tinyurl.com/2n6zm

STARTING OFF SMALL

Caller: This caller's 16-year old wants to learn about investing and purchase some stocks. Bob said he would like a young person to learn about investing, rather than actually start investing in stocks. The caller asked if Bob knew of a way to invest small amounts of money into stocks. Bob encouraged the caller not to adopt this route. Instead, he said he would rather the child wait until their early 20s, keep the money liquid in a money market account and start investing after college.

EC#1: I take a different stance on this issue than Bob. I think it can be very beneficial for children to start investing in stocks at a young age. It gets them interested in the concept of investing, and can be financially rewarding to boot. Moreover, there are now companies that allow you to buy stocks for a very small amount per transaction. One such company is Sharebuilder which allows you to start buying stocks at just $4 per investment. Learn more about Sharebuilder at this link:

EC#2: Another way to invest in stocks without paying commissions is through what are called "Drips." Drips is actually a nickname for the acronym DRP which stands for Dividend Reinvestment Plan. A related concept are the Direct Stock Purchase Plans (DSPs). These plans are offered typically by blue-chip companies where you can invest small amounts of money by purchasing stock directly from the companies. Want to learn more about this type of investing? Start here and follow the links:

http://www.fool.com/school/Drips.htm

SENTIMENT

Bob didn't address sentiment numbers on this particular weekend, but here is something you might want to keep tabs on.

The number of advisors who are turning bullish in the Investors Intelligence survey deserves special attention. Look at how the number of bullish advisors has increased over the last four weeks:

May 26th: 42.4% Bullish
June 2nd: 45.1% Bullish
June 9th: 49.5% Bullish
June 16th: 55.7% Bullish

Conversely, the number of bearish advisors has steadily dropped over the last four weeks:

May 26th: 27.3% Bearish
June 2nd: 24.5% Bearish
June 9th: 20.2% Bearish
June 16th: 17.5% Bearish

Using the formula [(bulls)/(bulls + bears)], the current sentiment ratio comes in at a fairly high 76.09%. The four-week moving average is knocking on the 70s door, coming in at 68.18%. Remember, this is only one sentiment indicator so you don't ever bet the farm on it alone. Nevertheless, it does "bear" watching as it has served as a good long-term contrarian measure at times.

Interestingly enough, the latest poll from the American Association of Individual investors showed a decline in bulls and an increase in bears. In that poll, 41.4% are now bullish, down from last week's reading of 55.3%. Bearish sentiment rose to 28.1% versus last week's 15.8% reading. Using the formula [(bulls)/(bulls + bears)], the sentiment ratio comes in at 59.55%. The numbers this week serve as a good reminder that the AAII poll can be extremely volatile from week-to-week.

The CBOE put/call ratio closed the trading week out at .79. Its 10-day moving average is .95, and its 21-day moving average is just a decimal point higher at .96. The so-called "fear" gauge, the new methodology Volatility Index (VIX), closed Friday at 14.99. The original formula VX0 closed Friday at 14.75.

- David Korn, editor of http://www.BeginInvesting.com

If you would like to learn about my service, visit the Bob Brinker Fan Club Hosted by Suite101.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.

-- posted by David_Korn

Top 720. Jul 19, 2004 3:38 PM

» hoopstar - BB on Buy and Hold

BB July 17, 2004

We had a secular Bull market, fortunes were made. Everything changed early in 2000 when we entered the current secular bear megatrend. This is what life is like in a secular bear megatrend. The Buy and Hopers live through extended periods of frustration, usually 8-20 years in length. The whole Church of Buy and Hold, with their High Priests fostering these notions of Buy and Hold, always become frustrated in a secular bear megatrend. And the reason is because they just don't understand how the stock market works. If they did understand how the stock market works they would leave The Church of Buy and Hold.

Caller: I must be in that church cause I have never sold anything. That's all I've ever been taught about investing. What is wrong with buy and hold?

BB: Buy and hold is fine if you're willing to ride out the bears- all of them! In this latest example you saw the S & P 500 from top close to bottom close lose 49%. A lot of people would say, "I really don't want to see half my money disappear." Actually it's worse than that if you go back because the worst cyclical bear market we ever had it went down 89%. For a lot of people it just doesn't work. If you can accept that kind of volatility where you're gonna lose half your money and not let it bother you then it's a whole different deal.

Caller: Would the long term investor be better of with the buy and hold strategy or something else?

BB: If you're going to sign on to the buy and hold strategy then you have to sign on to the reality, which is a reality that is seldom talked about in the Church of Buy and Hold by the High Priests and that reality is that if you're a Buy and Holder you're signed on to all of the bear markets all the way down, every single time, for the rest of your life. That's the part of buy and hold that nobody ever talks about.

-- posted by hoopstar

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

Top 721. Jul 19, 2004 9:28 PM

» Kirk - 1100 "Buying Opportunity" was Hit Today

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Author: rasputin
Date: July 18, 2004 5:51 PM
Subject: This weekend

So what was the gist of Bob's opening comments this weekend? I didn't listen much. I know he was talking about the election and taxes. Anything seminal? And what's with the S&P 1100 buying opportunity? I missed those comments completely. TIA.

My answer:
Author: Kirk
Date: July 19, 2004 9:04 AM
Subject: Re: 1100 S&P500 Buying Opportunity or Gift Horse
http://www.suite101.com/discussion.cfm/i...

During the 1990’s when Brinker was bullish, he had a “buy the dips” strategy that he had as “gift horse” levels listed in his newsletter and often discussed on the radio. Did he discuss his “Buy at 1100” level this weekend? (I was at a funeral Saturday and windsurfed Sunday so I heard just a few minutes on Sunday when he took a call from our chat regular JB about critical mass and “Church of Buy and Hold.”)

He was quite successful with these as many of his “buy the dips gift horse levels” were hit. Not all of them were hit, but I don’t recall one level being a bad buy a year later (that is the markets sometimes went much lower, but the buy level turned out to be OK in the longer time frame or a year or more.)

In Brave bulls charging again Peter Brimelow reported Marketimer's Bob Brinker said:

He expects an alternating pattern of cyclical bull and markets as in the 1966-1982 period. Right now, he says, "we view the market as attractive for purchase on dips below the 1,100 level on the S&P 500."

We just went through 1,100 for the S&P500 so we are officially in Brinker’s buy zone according to Peter Brimelow’s article.

If you are bullish and follow Brinker, then you might want to try my newsletter stocks for some “extra beta.” I am not a fan of market timing, but if you are going to do it despite what I recommend, then you might as well consider the quality stocks in my newsletter over the QQQ index which has many companies that are over valued according to Brinker.

For the past year (6/30/03 through 6/30/04):


Kirk's Newsletter  +36% (at 70:30 Stocks:Fixed)
VTSMX              +21%  Total Stock Market 
VFINX              +17%  S&P500 Index Fund
Nasdaq Composite   +26%
Brinker Model 1    +24%
Brinker Model 2    +23%
Brinker Model 3    +13%
Brinker Average    +20% 
                (Hulbert will give the Average of the 3)

This is a pretty amazing chart.

Make sure you click the above chart to see the full sized image where the S&P500 seems to be “walking up” the middle tine of the blue fork.

Kirk's Newsletter (NL) performance


PERIOD Returns     Kirk’s  W5000  S&P 500     Nasdaq  
                    NL     VTSMX   VFINX   ^IXIC   QQQ
1 Year to 6/30/04   36%     21%     17%     26%    26%
3 Year to 6/30/04   25%      2%     (3%)   ( 5%)  (17%)
5 Year to 6/30/04   65%     (5%)   (11%)   (24%)  (34%) 
 Total Return: 
                      Kirk  Wil’   S&P    NASDAQ    
                            5000   500   Comp  QQQ 
5 Yrs 6/30/99–6/30/04  65%  (5%)  (11%) (23%) (35%)
Annualized Return      11%  (1%)  ( 2%) ( 5%) ( 8%)
 
Click for a free issue of my newsletter 
Suitable for the aggressive growth part of your
  diversified investment portfolio.

More Info: Bob Brinker Fan Club

-- posted by Kirk

http://shorl.com/bigykegevyvy

Top 722. Aug 1, 2004 12:43 PM

» David_Korn - Bob Brinker Summary and Commentary

Here is an excerpt of my newsletter which in part provides summary and commentary of the Bob Brinker's Moneytalk. This is an excerpt from the last time he broadcast.

BOB BRINKER BUY SIGNAL?

Editorial Comment "EC":Bob didn't really talk about his recommendation to buy into the market when the S&P 500 dipped below the 1,100 level. Recall that Peter Brimelow discussed Bob's Marketimer newsletter where Bob gave that advice, which is a deviation from Bob's prior "dollar cost average" strategy which he had been recommending for several months. To read Brimelow's article, go to this url:

I bring it up at this juncture because the S&P 500 closed Friday at 1,101.39. That's only about 1 point away from Bob's recommended entry level. If you are following his advice to the letter and looking for an entry point to put some cash to work, you may get your chance next week.

STILL IN CYCLICAL BULL MARKET?

Caller: This caller wanted to know if Bob thought we were still in a cyclical bull market? Bob said yes. He has made no change in his position that back in March, 2003, we started a new cyclical bull market. At that time, the S&P500 was around 800. The market has come up significantly since then. From Bob's point of view, he hasn't seen ANY evidence that we are at risk for a cyclical bear market at this time. A cyclical bear market would mean a decline in the S&P 500 of more than 20%. Bob doesn't see anything to suggest a decline of 20%.

EC: Bob once said a long time ago that his timing model is designed to attempt to predict market tops within 5%, and market declines of greater than 20%. A decline of 20% is regarded (at least by Bob) as a legitimate bear market (although he hedges on this point relative to the crash of 1987 which his "former timing model" did not catch.)

EC#2: Bob's statement today, comports with my understanding that until Bob thinks a 20% decline in the stock market is coming, he will remain committed to his belief that the cyclical bull market remains in tact.

SECULAR BEAR MARKET ISSUES

Brinker Comment: One of the most curious things that Bob has seen in the business of investing, is the market strategists who have spread the gospel of long-term investing. The key when you are doing this is to not tell people about the difficult times. Don't tell them about the secular bear market that started in 1929 and ended in 1949 and saw the Dow Jones Industrial Average lose about 50% of its value, not including dividends. Don't tell people about the secular bear market that started in 1966 and went through 1982, during which the Dow lost about 22%. Other than your cash dividends, all you had were losses in your portfolio.

EC: Good point by Bob. I agree that we are in a secular bear market and investors need to be realistic about the long-term performance of equities. That said, Bob's argument is weakened by the fact that he doesn't explore the impact of dividends during the last secular bar market. If you look at 15-year compound annual returns including dividends from 1966-1980, the S&P 500 earned 6.71%. Between 1967-1981, the S&P 500 earned 7.11%. And, between 1968-1982, the S&P 500 earned 6.96% annually. If you extend the time frame to 20-years, and do compound annual returns between 1966-1985, the S&P 500 earned 8.66%.

EC#2: When this secular bear market began, I was doing some research because I was skeptical that dividends would play a factor going forward. Toward the end of the last bull market, dividends were increasingly becoming out of favor as investors were demanding more in terms of price appreciation. Conversely, in these more difficult times, investor demand for dividends is on the upswing. Its a gradual process, but little by little, more and more companies are increasing their dividends which should help offset the declines going forward. Just a thought to consider.

Caller: How can you tell that we entered into a secular bear market? Bob said we knew we were in a secular bull market that started in 1982 which we knew could not last forever because historically all secular bull markets come to an end, so it was just a matter of when. Bob said all he had to do was focus on the most likely time that the secular bull market would have run its course. It turned out to be at the end of 1999, to the first quarter of 2000. This particular secular bull market ran out of gas for valuation reasons. Valuation was carried to an extreme level in the secular bull market because it was accompanied by a mania, a bubble if you will. Whenever you have a mania, they all end the same way -- badly. So, we knew it had to end. Bob said he felt the secular bull market was coming to an end because he had a sell signal in January 2000 which was a sell signal for a cyclical bear market to begin which opened the door for the possible beginning of a secular bear market megatrend and that is exactly what happened.

EC: Bob's timing model actually turned "unfavorable" based on the S&P 500's close on December 31, 1999. During the first quarter, when the market peaked in March 2000, Bob was quick to point out that he hadn't called for a bear market, but merely adopted a tactical asset allocation which would enable him to take advantage of the market's rise, while simultaneously affording protection against a decline. The tactical asset allocation, however, did include a selling component of reducing equities from 100% to 40% initially followed by another 5% move in August later that year. Bob gradually began referring to his tactical asset allocation decision as a "sell" signal and now has said he was calling for a secular bear market. Not quite accurate in my opinion, as most of the predictions were made in hindsight. This is not to take away from Bob's decision to raise 60% cash reserves in December 31, 1999, because the reduction in equities proved to be very profitable, until much of those cash reserves were deployed in the QQQ investment in the fall of 2000.

TERRORISM WEIGHS ON INVESTORS

Brinker Comment: Against the backdrop of healthy earnings and encouraging economic data, Bob said for everything to work out, we need the Department of Homeland Security to do its job and protect America. Bob said he is certain that one of the things that is contributing to the market malaise here in the summer of 2004, is investor fears of possible terrorist attacks in four venues in particular. People are worried about the Democratic Convention, the Republican Convention and the Olympics. However, the fourth venue should cause the most consternation, and that is the November elections in the United States. The terrorists were successful in Madrid, Spain by getting a change in government, and they are empowered to try and do it again. This is wearing investors down. Investors are saying to themselves, "I am not going to walk in front of a freight train." Sure, there is a chance that nothing will happen before the election, but there is a chance something will happen.

Bob said the fear of terrorist attacks are weighing on investors so much, that it doesn't matter if IBM or another company gives great earnings forecasts. Bob said when he sees an industry analyst or market strategist go out and pretends that geopolitical concerns don't exist, he can't believe it! Bob said he feels very strongly about the fact that the geopolitical situation plays into all investor choices and for those advisors who don't even consider it, they should change their careers!

EC: I couldn't agree more with Bob on this point. However (and there is quite often a "however" in my ECs isn't there?), what is Bob doing about it relative to his portfolio? I am going to keep some cash reserves in my portfolio (perhaps anywhere from 10%-20%) in the event of a terrorist attack. Another option, would be to invest in some gold which would probably go up in the event of a terrorist attack. For now, Bob is staying fully invested. Of course, if there is a terrorist attack, Bob can get on the radio and say I told you it was something we needed to be concerned about blah blah blah, but he has made a conscious decision to ignore that risk relative to staying 100% fully invested in equities.

THE CHURCH OF BUY AND HOLD

Caller: This caller has heard Bob discuss the concept of the "church of buy and hold" and he wonders if the concept of rebalancing applies to them. Bob said a lot of people do a certain amount of rebalancing, but that is a pretty minor factor if you are in a vicious bear market. For example, if you were in a fully invested position and road this last bear market down 49% -- essentially cutting your portfolio in half -- how would that help you? Suppose you were in your 20s or 30s and had all of your money in stocks, what would there be to rebalance? If you were a dues paying member of the church of buy and hold, the high priests would be telling you that you can't have any cash reserves.

EC: Bob is too simplistic with his analysis on this issue as I have commented quite often when this subject comes up. Although I practice market timing, Bob's catchy sound-bites which demean anything that is not market timing simply do not really provide any elucidation on this issue. The "buy and hold" philosophy does not mean that you simply have all of your money at age 20, hold it forever and suffer bear markets. Presumably, if you are age 20, you are still accumulating assets, thus in effect dollar cost averaging into the market over time. Sure, you will pay high prices when the market is high, but you will also catch bargains when prices are low. As you get older, your asset allocation should switch from a fully invested position, to a mixture of stocks and bonds, and ultimately to a mostly fixed-income portfolio. Its funny that Bob never addresses that, but then again, he is selling a product called "Marketimer" so I perhaps that explains it. smile

Caller: This caller has only ever bought and held his investments and today was the first time he heard of the "church of buy and hold." What is wrong with the buy and hold philosophy, and where can someone go about learning of the alternatives to this type of investing? Bob said if you adopt the buy and hold dogma, you will have to own stocks through not just one bear market, but through bear market after bear market. In some instances, these bear markets can be brutal. Witness the bear market of 2000-2002 during which the market lost almost half its value. Back in 1929, the worst cyclical bear market produced losses of about 89%.

EC: Bob didn't address the caller's second question, which is where you can research alternatives to the buy and hold investment philosophy. I would suggest that Bob's program WOULD be an ideal place for Bob to explore the concept of market timing, but ironically, he rarely if ever discusses the methodologies behind various market timing practices. This is something I try to do periodically in my newsletter because for anyone deciding to follow market timing, it would make sense that you would want to know as much as possible about it. Right?

TIPS AUCTION

Brinker Comment: The U.S. Treasury auction scheduled for Thursday will feature a 20-year maturity of TIPS. Those of you participating in the Thursday auction will get a Treasury Inflation Protected Security with a maturity date of 20-years out. During that 20-year period, you will receive a base rate of interest and on top of that, you will receive the consumer price index paid through into your security. Because all of the interest on that security is taxable, Bob recommends you only own them in a tax-deferred account. Remember, the accrued interest on TIPS is taxable in the year it accrues. Therefore, you could wind up paying out money, even though it isn't paid out to you and is just added to your principal. What will the base rate be? Bob estimates that the base rate will be about 2.25%. Add on the consumer price index on top of that, which will vary over the 20-year term and you have your total return. Bob thinks this will be a big auction with lots of demand.

EC: If you are interested in purchasing the TIPS directly at auction Thursday, you can do so online at the following link:

http://www.treasurydirect.gov/

EC#2: The U.S. Treasury has also started a free service where you can subscribe by e-mail to the Public Debt mailing list for a variety of topics, including auction announcements, auction results, buyback operations, collateral programs, CPI Press Releases for TIPS, and other good info. Check it out at this link:

http://www.publicdebt.treas.gov/bpd/bpds...

GNMA FUND

Caller: This caller wanted Bob's opinion on the current price of Vanguard GNMA shares. Bob noted that the Vanguard GNMA Fund's net asset value closed Friday at $10.37. Bob said he expects the fund's NAV to fluctuate a few percentage points on either side of $10.00 per share. The fund is benefitting right now from the perception that the Federal Reserve will take a gradual approach to raising interest rates and that economic growth has slowed down a bit. Although they have had a pullback off of the highs which were not sustainable, they have held together quite well. So far conventional wisdom has been wrong about the GNMA fund shares because we have seen a rally in the bond market and a decline in interest rates. If anything were to happen in the geopolitical realm that have an effect on the economy, that would probably cut off any raise in rates.

EC: For all of you GNMA investors, there is an excellent article on Vanguard's web site entitled, "How interest rate changes affect mortgage-backed securities." I recommend printing this one out if you don't have time to read right now. Access it at this link:

http://tinyurl.com/49zyx

If you would like to learn about my service, visit the Bob Brinker Fan Club Hosted by Suite101.com

- David Korn's Stock Market Commentary, Interpretation of Moneytalk (Bob Brinker Host), Financial Education, Helpful Links, Guest Editorials, and Special Alert E-Mail Service

-- posted by David_Korn

Top 723. Aug 8, 2004 12:20 PM

» David_Korn - Latest Numbers

TACTICAL ASSET ALLOCATION WATCH
(based on the market's close August 6, 2004)

Here is how the major market indexes have performed since Bob Brinker's timing model turned "favorable" based on the S&P 500 Index's close on March 10, 2003, and he recommended investors redeploy their cash reserves into a fully invested position by bulletin issued at 2:00 a.m. on March 11, 2003:

S&P 500 Index: Up 31.76%
Dow Jones Industrial Average: Up 29.62%
Nasdaq Composite: Up 38.99%

For those of you who also followed Bob's recommendation to invest anywhere from 20% to 50% of your cash reserves in the Nasdaq 100 (QQQ shares), here is how those shares have performed based on various times Bob recommended that security:

October, 2000 (Original Recommendation using $83.12 as entry price): Down 60.64%
January, 2001 (Second Recommendation using $62.44 as entry price): Down 47.60%
March 11, 2003 (Third Recommendation using $24.06 as entry price): Up 36.27%

If you would like to learn about my service, visit the Bob Brinker Fan Club Hosted by Suite101.com

- Daviid Korn

-- posted by David_Korn

Top 724. Aug 8, 2004 1:20 PM

» Kirk - Re: Latest Numbers

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In response to message posted by David_Korn:

The BIG Bottom was 10/10/02

Markets since "The Low" on 10/9/02
<img src=http://cbs.marketwatch.com/charts/int-ad... width=452 height=366>

Here is how the major market indexes have performed since Bob Brinker's timing model turned "favorable" based on the S&P 500 Index's close on March 10, 2003

S&P 500 Index: Up 31.76%
Dow Jones Industrial Average: Up 29.62%
Nasdaq Composite: Up 38.99%

Markets since 3/10/03
<img src=http://cbs.marketwatch.com/charts/int-ad... width=452 height=366>

RE:
For those of you who also followed Bob's recommendation to invest anywhere from 20% to 50% of your cash reserves in the Nasdaq 100 (QQQ shares), here is how those shares have performed based on various times Bob recommended that security:

I am not a big fan or market timing, but if you are going to do it, then why not substitute the QQQs or the aggressive growth mutual funds recommended by Brinker with the stocks in my newsletter? The past is no predictor for the future, but my results sure would have been better if I reduced my allocation in January 2000 and increased them again in March 2003. And unlike Brinker, the stocks I bought the week he sent out his QQQ bulletin are up rather than still down considerably!

Kirk's Newsletter (NL) performance


PERIOD Returns     Kirk’s  W5000  S&P 500     Nasdaq  
                    NL     VTSMX   VFINX   ^IXIC   QQQ
1 Year to 6/30/04   36%     21%     17%     26%    26%
3 Year to 6/30/04   25%      2%     (3%)   ( 5%)  (17%)
5 Year to 6/30/04   65%     (5%)   (11%)   (24%)  (34%) 
 Total Return: 
                      Kirk  Wil’   S&P    NASDAQ    
                            5000   500   Comp  QQQ 
5 Yrs 6/30/99–6/30/04  65%  (5%)  (11%) (23%) (35%)
Annualized Return      11%  (1%)  ( 2%) ( 5%) ( 8%)
 
Click for a free issue of my newsletter 
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  diversified investment portfolio.

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-- posted by Kirk

Top 725. Aug 8, 2004 3:06 PM

» larryjohnson - Re: BB on Buy and Hold

Deleted.

Repost your request in the Brinker Discussion forum as this is ONLY for "information about Brinker" not opinions or requests for specific information.

-- posted by larryjohnson

http://www.BeginInvesting.com

Top 726. Sep 27, 2004 6:45 PM

» David_Korn - Bob Brinker on TV

Part of my newsletter service is keeping tabs on Bob Brinker. I just sent this out to my subscribers and thought readers here would want to know about Bob's rare television appearance tonight as a guest on CNBC's Asia Market Watch. The broadcast ended about 10 minutes ago, and I worked as fast as I could to get this interpretation out.

First of all, Bob called in the show from Las Vegas. They didn't show a live shot of him, but simply showed a picture of him when he was speaking.

Bob was asked how surging crude prices are likely to play out in the equitiy market. Bob said oil is one of the major factors impacting the equity markets right now. The oil market is marching to Murphy's law -- whatever can go wrong will go wrong. The problems in Nigeria are the latest example. Nigeria is a major source of light sweet crude which is in high demand. The ability to increase the supply is limited right now and we have high demand, including from places like China. Bob noted that the price of oil includes a terror risk premium of several dollars a barrel.

Bob was asked how investors should reshuffle their portfolio at a time like this. Bob said he sees a lot of similarities between now and what happened in 1994. In that year, the Fed was raising rates. The S&P 500 had three corrections over about an 8 months period of less then 10%. This was followed by a very rewarding market the following year. The market is undergoing a malaise right now. In this type of market, patience makes sense.

Bob said he is advising his subscribers to accumulate shares when the S&P 500 is below the 1100 mark. There have already been 23 days on which the S&P 500 went below the 1100 level.

Bob was asked what he thought the catalyst might be for the market to take off. Bob said he thinks we first have to get through the U.S. election on November 2nd. We have the first of three Presidential debates coming up, but beyond that we have to get through the election because of a heightened level of event risk associated with possible terrorist attacks.

Bob was asked what he thinks about interest rates right now. Bob said there are two stories going on with respect to interest rate. Short rates are on the rise in response to what the Fed is doing to normalize short-term rates. Long rates have come down almost 1% since June which is partially related to oil prices. This takes money out of the pockets of consumers and redirects the money to the oil producers. Bob noted that this has also had an effect on inflation which remains benign.

That was pretty much it. Bob gave out his current advice to accumulate shares below 1100. Today, the S&P 500 closed at 1,103.52, so this once again presents another opportunity if you are following daBrink's advice.

If you would like to learn about my service, visit the Bob Brinker Fan Club Hosted by Suite101.com

or, visit my website:

- David

DISCLAIMER: I am not associated with Bob Brinker or CNBC. 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.

-- posted by David_Korn

http://stats.bls.gov/news.release/cpi.to...

Top 727. Oct 19, 2004 7:40 PM

» David_Korn - Bob Brinker on TV October 19, 2004

Excerpt from David Korn's Stock Market Commentary and Interpretation of Moneytalk.

Bob Brinker was a guest tonight on CNBC Asia Market Watch. Here is my "interpretation" of his brief appearance.

BOB BRINKER'S TV APPEARANCE

http://www.cnbcasia.com

INFLATION

Bob was asked about the inflation numbers that came out today. Bob said he thinks the Federal Open Market Committee will have a lot of smiles when they meet next month in Washington. The CPI year-over-year rate is 2.5% and the core rate is only 2.0%. When you dissect the CPI, other than energy, the main culprit is medical expenses. All in all, however, the CPI remains tame.

Bob predicted that the FOMC would raise the Federal Funds rate by 25 basis points at the next meeting because they want to get rate up to 2.0% to give them a cushion to lower rates in the event they need to. If there is anything that can slow down the Fed's "measured pace" its the price of oil which they will be watching closely -- especially at the December meeting.

Editorial Comment "EC:" You can read the CPI report at this link:

TERROR RISK PREMIUM

Bob was then asked whether the "terror risk premium" built into the market was going to dissipate by election. Bob said investors are looking forward to November 2nd which is only a couple of weeks away. Once the election passes, the incentive for a terrorist strike to impact the election process goes away.

EC: That question must have been either scripted by Bob, or perhaps Bob got that idea off CNBC Asia. It is pretty much verbatim to what Bob discussed on Sunday's show as set forth in my October 16-17, 2004 newsletter. (E-mail me if you would like a copy)

VALUATION

The interviewer then pointed out that despite some good corporate earnings being reported, the market didn't seem to be responding favorably presumably due to the election and the price of oil. How does this impact the market's valuation? Bob said he is very comfortable with his Marketimer estimate of $68 for next year's earnings for the S&P 500. With the market's current price, that gives the market a price-to-earnings ratio of about 16.2 which in Bob's opinion is a very reasonable valuation metric.

EC: This jives with the interpretation of Bob Brinker's timing model that SteveT and I did a few newsletters back. With the S&P 500 closing today at 1103, it is just a few points away from Bob's most recent "buy signal" of 1100 in the S&P 500.

That was about it for the interview.

On a different note, I was thinking about how technology plays such an amazing part in our lives as I was doing this Special Alert. Check this out. I don't have Satellite TV, but I wanted to provide this summary for my subscribers. So, I got on my cellular phone, called my friend and subscriber Brady in Portland, Oregon, he turned on his satellite TV, where I listened to Bob Brinker who was in Nevada speaking to someone broadcasting from Singapore. All of this while I typed on my computer in New Orleans to e-mail this newsletter out to my subscribers which are actually on 4 continents! How wacky is that!

- David Korn, editor of http://www.BeginInvesting.com

If you would like to learn about my service, visit the Bob Brinker Fan Club Hosted by Suite101.com

DISCLAIMER: I am not associated with ABC Radio Networks, Moneytalk, Bob Brinker, or CBNC Asia Market Watch. 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. 2004

-- posted by David_Korn