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Monday, August 14, 2017

Bob Brinker's Market Outlook and Advice for New Money

Bob Brinker Market Update for August 2017.  In this issue I discuss:
  1. Bob Brinker's August 2017 Market Outlook.
  2. Marketimer Allocations
  3. Advice for new money.
  4. Series I-Bonds
  5. Timer Digest Update
  6. Link to Listen Live on internet radio
  7. Newsletter Special Offer - August Issue for Free!
#1 Bob Brinker's August 2017 Market Outlook In his August 2017 Marketimer newsletter, Brinker remains bullish on the US stock market.  In the first two pages, he covers his "primary" causes for a bear market.  I guess he changed the name from "five root causes of a bear market" after they completely missed the last bear market where the S&P 500 fell over 50% while Brinker issued "buy alerts" all the way down to the 800s then stopped before the actual bottom in the 600s. Why would he change the name?  Easy, "Google Search."  As such, I take his timing with a grain of salt.  With that said, Brinker:
  • says you can get a PE of 17 to 18 times earnings 
  • projects the S&P 500 earnings will be $140 in 2018
  • thus the market has a "potential" for mid-2500s "going forward."
    [18 x $140 = $2,520]
  • At the time of publication, the S&P500 was $2470.30 so $2534 (the lower end of mid $2500s or $2534 to $2567) is only a gain of 2.6%.  Thus, he's not going out on a very big limb with that projection.
#2 Bob Brinker's Marketimer Allocations:   
  • Model Portfolio's one and two are 100% in stock funds 
  • Model Portfolio three is listed as 50% in stocks but I calculate he has 56% in stocks which means he's more bullish than "balanced."
#3 Bob Brinker's Advice for New Money:   
  • Bob continues to recommend a "dollar-cost-average approach, especially during periods of market weakness" but gives no guidance on what he considers weakness or why not just do a typical dollar-cost-average no matter what the market does.  This waiting for "weakness" has kept a good number of individual investors on the sidelines missing this great opportunity to make a lot of money!
#4 Series I-Bonds
  • Bob didn't mention Series-I US Savings bonds in the latest Marketimer but he has talked about them in the past on his radio show, Moneytalk
  • I have iBonds in my "Explore Portfolio" of "Kirk Lindstrom's Investment Letter."  I think iBonds are a good, conservative investment that will keep pace with inflation and defer taxes thus they are great for taxable savings when you are in a high bracket.
  • Read more at:  Current Series I Bond Rates  and  Historical Series I Bond Rates
#5 Timer Digest Update
  • Here is an update from the August 9, 2017 Timer Digest Hotline.  (Bob Brinker isn't mentioned but I am in the top 10.)
  • Last week I added to GE (charts) at $25 and change.  I last took profits in GE last year at $32.50.  It may go lower, but I like the juicy yield here and I have more buy targets in my newsletter to get more shares as I "dollar cost average" back into stocks after I take profits at higher levels.  Send for a free sample issue if you wish to learn more how I do this.
  • Here is an update from the August 7, 2017 Timer Digest Newsletter.  Bob Brinker isn't mentioned but I am in the top 10 for 1-year and I am tied for first place in "Long-Term" timing.
  • Get a Free Issue of Timer Digest here

#6 Click to Listen Live at KFNN from 1-4PM PST, 4-7PM EST

#7 Newsletter Special Offer 
  • Subscribe NOW and get my August 2017 Issue for Free!
  • Your 1 year, 12 issue subscription will start with next month's issue.
  • Get email alerts when I buy or sell securities for my explore portfolio. My "Auto Buy" and "Auto Sell" levels are set ahead of time for target buy and sell levels for my securities.  This allows you to place "limit orders" with your broker in advance so you can go about your business.
  • Unlike "others," I will answer All questions about what I write by Email.  If what I write is not clear to you, just ask! 

Thursday, May 25, 2017

Brinker's Suncor Energy, $25 Oil & Self-driving Cars

If you follow Bob Brinker and bought Suncor Energy (SU) when he recommended it in Marketimer in the "mid-$30's" back in 2009 and still hold it today per Bob's advice after years of under performance, then this article is something to consider.
Click for full size images
5/23/17 Article: "Be warned: $25 oil is coming, and along with it, a new world order
  • "Oil demand will peak 2021-2020 and will go down 100 million barrels, to 70 million barrels within 10 years. And what that means, the new equilibrium price is going to be $25, and if you produce oil and you can't compete at $25, essentially you are holding stranded assets," Seba said.
  • "At $25 a barrel, that means deep-water, sands, shell oil, fields, most are going to be stranded, and also all the refineries and pipelines associated with these expensive oils are also going to be stranded. And that is going to reshape worldwide oil, geopolitics and so on."
The cost to extract oil from shale is coming down but this chart shows they all lose money today when oil sells below $29 per barrel.   Where does this chart bottom out?

Bob Brinker recommended buying Suncor Oil in his newsletter back in early 2009.  After trying to snag some cheap shares in his May 4, 2009 Marketimer in the "mid-$20s" Brinker chased the stock price in the next issue (June 2009) with a recommending to buy in the "low-$30s."  By my definition, that allowed his subscribers to buy at $33.34 (lower third of "the 30s") just before it dropped back to the mid-$20s.

Bob Brinker doesn't count this recommendation in his measured performance like I do with my "Explore Portfolio" for obvious reasons...  The graph above shows how poorly SU has done compared to the Total Stock Market fund that is the majority of his model portfolios.  IMHO (in my humble opinion) Brinker likes to recommend popular things in his "individual issues" so he can talk about them on the radio as a form of "advertising" but he doesn't track their performance since I've found they usually grossly under perform when taken as a group.
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