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Saturday, December 26, 2009

Moneytalk with Bob Brinker Show Summary

Warning. Today's "Moneytalk with Bob Brinker" is a replay of one or many past shows. Note that they don't give a phone number to call into the program like they usually do when the show is live.

I have not heard any announcements that the show is repeat on KGO810 in San Francisco. This is unusual because KGO usually announces their locally produced shows are "best of" programs to their audience.

My Oct. 09 GNMA Sell Advice

Thanks to "Runner Twentysix" for posting this on the "Bob Brinker" discussion board on our "Investing for the Long Term group" at facebook.
Post #592 Runner Twentysix wrote: Yet another rerun program today, and the couple of calls I heard on the way to Target were not good ones either.

Here are some recent "Retirement Advisor" blog posts to consider before the tax year ends:

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 159% (a double plus another 59%!!) vs. the S&P500 UP a tiny 8.6% vs. NASDAQ UP a tiny 3.5% (All through 12/31/09)

In 2009, "Kirk's Newsletter Explore Portfolio" gained 33.5% vs. the DJIA up 18.8%
HURRY! Subscribe NOW and get the This Month's Issue of "Kirk Lindstrom's Investment Newsletter" for FREE!! (Just mention this advertisement and I'll start your paid subscription with the next calendar month's issue.

Tuesday, December 22, 2009

Bob Brinker Bullish for 2010 Says Mark Hulbert of Marketwatch

Today Mark Hulbert, editor of "Hulbert's Financial Digest," reports in the Marketwatch article "Upbeat for 2010" that Bob Brinker is bullish for 2010.
I normally don't put too much weight in the year-ahead forecasts that investment advisers circulate every December.

But I make an exception when it comes to the newsletters on the Hulbert Financial Digest's Newsletter Honor Roll for 2010. Making it onto that Honor Roll requires jumping over a number of demanding hurdles; merely beating the market won't do. Instead, to make it onto the Honor Roll, a newsletter had to have above-average performance both in up and down markets.

Bob Brinker's Marketimer.
Brinker in his most recent issue wrote: "Based on our earnings estimate for next year and our fair value price/earnings ratio of 16 to 17 times operating earnings, we estimate upside potential for the S&P 500 index (Quote and chart) into next year in the 1170 to 1240 range." That upside potential represents a gain from current levels of between 6% and 13%; his model portfolios are fully invested.
I don't know what Mark Hulbert was smoking to award Brinker the "Honor Roll" after he missed the biggest bear market since the Great Depression and issued at "gift horse buying opportunity" near the very top in the mid 1400s.

In November 2007 I wrote this article: Bob Brinker Still Bullish According to Mark Hulbert that said:
In his article "The best vs. the worst: Best long-term market timers believe we're in a bull market," Mark writes of Bob Brinker:
Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early November, editor Bob Brinker writes: "We continued to believe that there is no risk of a cyclical bear market (a decline of 20% or more as measured by the S&P 500 index (S&P500 chart) in the months ahead ... We expect the stock market to set a series of new record highs into next year." His model portfolios are fully invested.
Mark covers nine of his top market timers and concludes Bob Brinker is not a "lone voice in the wilderness" with his bullishness.
I am not alone with my amazement as the comments on the article show. Here is a sampling:

slee915 10 hours ago
This article loses all credibility as soon as it mentions Bob Brinker's Market Timer is in the Honor Roll. C'mon Mark, Bob stayed FULLY INVESTED through the last bear market.
G-ron 1 hour ago
Not sure how Brinker is on the honor roll because he totally ignored the financial crisis. Barely mentioned it as well as ignoring it in his timing. Hulbert added nothing in this post but that said he still has something to say worth reading from time to time. In my mind it is more important who he has left out of his survey than who he has included.

My criticism is with the method and not with the conclusion which I think has a higher probability of being right than wrong.
MexicanBatman 44 minutes ago
I have to agree with slee and G-ron. Brinker was fully invested during the recent power dive. I can't imagine any newsletter subscriber believing they got their money's worth... [clip]

I think that Bob got on Mark's list because he did have a good call in 2000-2001 to get out of the market... but Mark doesn't consider Brinker's cocky "QQQQ counter trend rally" which he advised people to buy the Q's and never told people to dump them as we slid into the great dot-com abyss. There are scores of web pages complaining about call....

Bob didn't count that QQQQ "free advice to everuone, not just subsctibers" as part of his model portfolio,,, I supect this sleight of hand is why Brinker is on Mark's list...
honeybee2 16 minutes ago
Mark Hulbert never reported the following facts about Bob Brinker. Not only did Bob Brinker remain fully invested for the 2008-2009 megabear ride, but he advised all new money in at ever lower levels as the market fell:

January 4, 2008: Buy S&P 500 in the mid 1400s.
February 10, 2008: Buy S&P 500 in the low 1300s.
August 5, 2008: Buy S&P 500 at 1240 or less.
September 2, 2008: Buy S&P 500 in low-to-mid 1200s
September 16, 2008: Prior buy signal rescinded, dollar cost average recommended
January 15, 2009: Buy S&P 500 low-to-mid 800s
March 5, 2009: Waiting for retest of the lows -- missed the March 9th bottom.

In 2008, Bob Brinker's Model Portfolio I lost 39.7%; Model Portfolio II lost 37.4%; and Model Portfolio III (balanced) lost 23.9%.
More info:

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 159% (a double plus another 59%!!) vs. the S&P500 UP a tiny 8.6% vs. NASDAQ UP a tiny 3.5% (All through 12/31/09)

In 2009, "Kirk's Newsletter Explore Portfolio" gained 33.5% vs. the DJIA up 18.8%
HURRY! Subscribe NOW and get the January 2010 Issue of "Kirk Lindstrom's Investment Newsletter" for FREE! !

Tuesday, December 15, 2009

CD Rate Survey by Term

The top rate for a certificate of deposit (CD) this week is at Pentagon Federal Credit Union (fondly known as PenFed CU) where you can get a 7-year certificate that currently pays 4.00% APY.

For shorter terms, ING Direct has a 1-year CD with a 2.00% annual percentage rate. I bought one yesterday.

The one year US Treasury rate is currently 0.35%.

With rates so low, banks will try to sell you their annuity products. Make sure you read our article: Beware of Annuities

The table below shows the best CD rates for other terms. If that table is hard to read, then try Very Best CD Rates.

CD Rates Survey as of 12/15/09
Rate (APY)
(Click link for Full Rate Sheets)
Vanguard Daily
12/15/09 0.08%
Vanguard Prime Money Market Fund
Vanguard Tax Exempt
12/15/09 0.13%
Vanguard Tax Exempt Money Market Fund
FDIC Daily Savings
12/15/09 1.70%
Colorado Federal Savings Bank => Full Rate Survey
High Yield MM
12/15/09 1.60%
Bank of Internet USA
6 Month CD
12/15/09 1.55%
UFB Direct
1 Year CD
ING Direct
18 Month CD
12/15/09 2.05%
Colorado Federal Savings Bank
2 Year CD
12/15/09 2.25%
Discover Bank
3 Year CD
12/15/09 2.99%
Goldwater Bank
4 Year CD
12/15/09 3.00%
Capital One Direct Bank
5 Year CD
12/15/09 3.35%
Goldwater Bank
7 Year CD
12/15/09 4.00%
Pentagon Federal CU
10 Year CD
12/15/09 3.70%
Discover Bank
Vanguard Money Market Rates shown for Reference
==> Current US Treasury Rates as of 12/15/09 <==
With rates so low, banks will try to sell you their annuity products. Make sure you read our article: Beware of Annuities.

Friday, December 11, 2009

National Debt Passes 12.1 Trillion Dollars!

Bob Brinker constantly bashes congress and "the White House" for massive deficit spending. He says they are spending like "drunken sailors." Other than I think this is a slam on many of our sober men and women in service of our country, this is one area I am in complete agreement with him.

Check out The National Debt Clock for a sobering set of statistics.

As I type, the total nation debt is over 12 TRILLION 1o4 Million!


It advanced over 30 MILLION as I wrote that down.

  • Debt per citizen = $39,283
  • Debt per taxpayer = $111,224

  • Interest per citizen = $5,859
US Population = 308,129,449
Number of US Taxpayers = 108,834,743
Number of Officially Unemployed = 15,403,989

Number of US Workforce 138,584,486
Number of Federal Employees = 4,238,946
Number of US retirees = 37,500,533

Notes of interest:

Not all workers pay taxes since they fall below the threshold.

If you define "supporting" as you give more to government than we get from the government, then this calculation is staggering:

Us 108.8 million taxpayers are supporting 57.1 million people!
  • 4.2M federal workers
  • 15.4 M unemployed and
  • 37.5M retired people!
The price of Gold at $1,113 (Gold quote and Charts) is probably reflecting the market's belief in how difficult it will be for US taxpayers to repay this debt without massive inflation.

Disclosure: I have no position in Gold but I do have significant personal positions in TIPS, TIPS mutual funds and iBonds plus I hold them in BOTH my newsletter portfolios. See: Kirk's Two Investment Letters

Sunday, December 06, 2009

Brinker Fixed Income Advisor Returns

The Bob Brinkers are advertising very impressive returns for the "Brinker Fixed Income Advisor" on their web site. (Click the image to see advertised returns.)

What they don't tell you is how poorly they did last year and how they have greatly under performed my advice until very recently to hold Vanguard's Total Bond fund (VBMFX) for your fixed income. (I recently sold ALL my bonds and bond funds that are not indexed to inflation and put the funds into investments that should do well in an environment of rising interest rates. Subscribe NOW to get my current advice for your "Core and explore" portfolio.)

This table showing the COMBINED returns for the past three years less a month tells "the rest of the story" as the late Paul Harvey used to say.

Brinker Fixed Income Advisor 2009 YTD (through Dec 1) 2008 2007 2007 to 2009 Combined
Model Portfolio 1 30.90% (21.70%) 8.60% 11.3%
Model Portfolio 2 19.60% (11.50%) 6.80% 13.0%
Model Portfolio 3 14.10% (5.20%) 7.20% 16.0%
Vanguard Total Bond VBMFX 7.74% 5.05% 6.92% 21.0%
Vanguard GNMA Fund VFIIX 6.88% 7.22% 7.01% 22.6%
Retirement Advisor
Model Portfolio #3
7.21% 3.73% 8.32% 20.5%

I also show the returns for our 100% fixed income portfolio in "The Retirement Advisor." We have slightly under performed the total bond fund. Our returns are lower by half a percent because we have inflation protection via a TIPS fund that hurt our 2008 returns AND we recently moved to safer CDs for our long-term fixed income allocation to reduce the risk of net asset value declines should the Fed decide it needs to suddenly raise interest rates.

I can't find Brinker's returns by year listed anywhere on his web sites for ANY of his newsletters!!! What is up with that? Vanguard and I do it. What is he hiding? Call his show and ask why.

I show all my returns for "Kirk Lindstrom's Investment Letter" by year here.

We show our return data for "The Retirement Advisor" here.

The table showing Brinker's poor performance for the "Brinker Fixed Income Advisor" newsletter portfolios relative to a simple total bond index may explain why he hides that information.

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 158% (a double plus another 58% !) vs. the S&P500 UP at tiny 7.5% vs. NASDAQ UP at tiny 0.1% (All through 12/5/09) (More Info)

As of December 5, 2009, "Kirk's Newsletter Explore Portfolio" is up 33.0% YTD vs. DJIA up 19.1% YTD

Subscribe NOW and get the December 2009 Issue for FREE! !
(Your 1 year, 12 issue subscription will start with next month's issue.)

More Info:

Saturday, December 05, 2009

Moneytalk With Bob Brinker Guests: Dec 2009: List of their Books

Bob Brinker, host of Moneytalk, usually interviews a guest in the final hour of his three hour weekend radio show. These guests usually have a new book to promote. Bob has become good at interviewing his guests to let them express their opinions. This has become the favorite segment of the show for many of us. Below is a list of the guests for this month with links to buy their books to support this site.

Saturday December 5, 2009: Joshua Kosman, "The Buyout of America: How Private Equity Will Cause the Next Great Credit Crisis"

Last Month: Moneytalk With Bob Brinker Guests - November 2009

Favorite guests from past months:

Saturday November 21, 2009: Barbara Weltman, contributing editor to "J.K. Lasser's Your Income Tax 2010: For Preparing Your 2009 Tax Return"

America's number one bestselling tax guide offers the best balance of thoroughness, organization, and usability. For over half a century, more than 39 million Americans have turned to J.K. Lasser for easy-to-follow, expert advice and guidance on planning and filing their taxes. Written by a team of tax specialists, J.K. Lasser's Your Income Tax 2010 includes all the outstanding features that have made this book the nation's all-time top-selling tax guide.
  • Over 2,500 easy-to-use tax planning tips and strategies
  • Easy-to-understand coverage of the year's tax law changes
  • Filing tips and instructions to help you prepare your 2009 return
  • Quick reference section that highlights what's new for 2009
  • Quick topic index to help pinpoint the biggest money-saving deductions
  • Advice for customers whose use software or CPAs to file their taxes
TurboTax 2009 - List of Products on Sale
FREE Super Saver Shipping
No Sales Tax

Most popular:
TurboTax Deluxe Federal + State 2009 + efile

Saturday November 14, 2009: Jim Lebenthal: Lebenthal On Munis: Straight Talk About Tax-Free Municipal Bonds for the Troubled Investor Deciding

Saturday October 31, 2009: David L. Scott: "The American Heritage Dictionary of Business Terms"

Sunday October 25, 2009: Dale Robyn Siegel: "The New Rules for Mortgages"
Bob said the switchboard lit up like a Christmas tree with a record number of callers wanting to ask Ms. Siegel questions.
Saturday October 3, 2009: Gretchen Morgenson, author of the book "The Capitalist's Bible: The Essential Guide to Free Markets--and Why They Matter to You"

Guest Host Lynn Jimenez: Lynn Jimenez Fan Club :

Lynn's Book:
¿Se Habla Dinero? The Everyday Guide to Financial Success (English and Spanish Edition)
A bilingual guide to the basics of financial success. ¿Se Habla Dinero? walks readers through the fundamentals of personal finance and money management and explains how to open and use bank accounts; establish and manage credit; save and borrow money for education; and master basic investing techniques. This bilingual guide makes intimidating topics easy and gives readers the confidence they need to move forward.

Buy from here

Disclaimer. I get a commission for books purchased with these links. Please show support and use the links.

Sunday, November 15, 2009

Bob Brinker Moneytalk Summary

These are my observations of what Bob Brinker said of note during "Moneytalk" on Saturday November 11, 2009.

Bob quoted statistics on how well the market has done this year. He didn't say it remains down considerably from its 2007 highs. Here are the returns without dividends:

IndexYTD %
S&P 50021.1
Russell 200017.4

With dividends included, the S&P500 fund at Vanguard, VFINX, is up 23.69% and the total stock market is up 25.12%.

What I find amazing is Vanguard's Emerging Markets index fund (VIEIX that I recommend in my newsletter for your core portfolios) is up 72.24%! Vanguard's Total International index funds, VGTSX, is up 36.89%. By owning international funds, we've benefited from a falling dollar.

This chart of the S&P500 shows it remains down considerably.

Click chart courtesy of for full size image

Bob took a call about iBonds where he acknowledged that the inflation adjustment for the last 6 months was 3.06%. See my article:
Brinker said we have slight deflation on a year-over-year basis due to the problems in the financial market meltdown but now we are returning to more normal inflation. He said those who had been predicting "runaway inflation" were wrong. He said he now predicts inflation will be "moderate" going forward but he didn't define exactly what moderate means.

Kirk's Comment: The Federal Reserve is comfortable with core inflation (inflation without food and energy) between one and two percent. One reason inflation came in so high (3.06%) for the last six months is the price of oil about doubled over the 6-month period (March to Sept 2009) used to calculate the iBond inflation adjustment.

Click chart courtesy of for full size image

Calls on Brinker's Favorite GNMA Fund from Vanguard, VFIIX ( Charts).

Bob noted that the fund is trading at an all time high of $10.84.
  • In past shows (you can search this blog to find summaries) he had predicted the fund would range between $9.50 and $10.50.
  • He currently says the fund can trade "in the nines and tens"
Kirk's Comment: A rage of "nines and tens" equates to $9.01 to $10.99. If VFIIX drops to $9.01 from its current net asset value (NAV) of $10.84, this will be a decline of
($10.84 - $9.01) / $10.84 x 100% = 16.9%!!!
I recently sold my personal and newsletter explore portfolio position in VFIIX and bought a 5-year TIPS directly from the US Treasury at the recent auction. The last time I looked, the TIPS went up a bit more in value than the GNMA fund but what is more important, the TIPS will do well when "moderate inflation" translates into higher interest rates while GNMAs could have low to negative returns. If you have $10,000 to invest, then $5,000 each in paper and electronic iBonds seems a good choice to me compared with money funds or Bob's GNMA fund.

For more information, see:

Bob began the third hour talking about municipal (muni) bonds. He said there are two types of muni bonds to consider:

GO Bonds or "General Obligation" bonds are backed by the full faith and taxing power of the issuing government. He said states that issue GO bonds historically have a very low default rate because they want to protect their credit rating.

Revenue Bonds are backed by the proceeds of a particular project. Bob gave an example of the Pennsylvania Turnpike where revenue bonds were issued to build the toll road then the collected tolls are used to repay the bonds. These work as long as the project is successful defined as generating the revenue necessary to repay the bonds.

Kirk Comment: Even GO bonds can default!
  • The most famous defaults of GO bonds are New York City's default in 1975 and Cleveland in 1978.
  • The largest default in the history of the municipal bond market was the Washington Public Power Supply System's (WPPSS or "Whoops") default on $2.25 billion in revenue bonds. WPPSS sold revenue bonds to build five nuclear power plants in the 1970s to supply electricity to the Pacific Northwest. Only one of the five planned nuclear plants was completed so there was insufficient revenue to repay the bonds. (Whoops Default)
Bob's guest was Jim Lebenthal, author of the book Lebenthal On Munis: Straight Talk About Tax-Free Municipal Bonds for the Troubled Investor Deciding

Current Price: $10.17 & eligible for FREE Super Saver Shipping
(Click to order and support this blog)

Jim said he was in New York when they defaulted on their General Obligation bonds. He said the only way New York was able to get over deficit spending and borrowing was to default (I believe they missed some interest payments.) Jim said the courts ordered the state to repay the bond holders. Nobody would lend New York new money so they were forced to make cuts in spending to balance their budget.

Vanguard Fixed Income Fund Charts:

From 1/1/1999 Through 11/15/09
Kirk's 80:20 Aggressive Core Portfolio is up 50.8%
Kirk's 50:50 Conservative Core Portfolio is up 67.3%
Kirk's 70:30 Explore Portfolio is up 146.1%
(not a typo... up one hundred forty six percent!)
80% Core Aggressive plus 20% Explore is up 69.8%
90% Core Conservative plus 10% Explore is up 75.1%
100% Total Stock Market (VTSMX) is up 18.2%
100% Total Bond Market (VBMFX) is up 78.2%
80% VTSMX and 20% VBMFX is up 30.2%
50% VTSMX and 50% VBMFX is up 48.2%
YTD through 11/15/09
Kirk's 80:20 Aggressive Core Portfolio is up 23.0%
Kirk's 50:50 Conservative Core Portfolio is up 16.4%
Kirk's typically 70:30 Explore Portfolio is up 26.7%

"Kirk Lindstrom's Investment Letter"
HURRY! Subscribe NOW and get the November 2009 Issue for FREE! !
(Your 1 year, 12 issue subscription will start with next month's issue.)

Kirk's Two Investment Letters

There may be some confusion because I write two different, but related, newsletters.

#1 "Kirk Lindstrom's Investment Letter" is $155 a year and uses the "core and explore" method to invest. It has two core portfolios plus an explore portfolio of individual stocks. My aggressive core portfolio has 80% equities while my "conservative" core portfolio has 50% in equities. My core portfolios are made of index funds and ETFs for the very lowest expenses.

I recommend people start by getting their proper core portfolio created THEN add individual stocks I cover in my explore portfolio to build your own explore portfolio for 5 to 20% of your investment portfolio total. I have target prices to buy and sell my explore stocks so I find I almost look forward to market declines to get really great prices for stocks I can sell later at higher prices. Of course, following this explore portfolio is more work than buying index funds and rebalancing once a year that I recommend for my core portfolios. Compared to "other newsletters" costing more, my core portfolios and general stock market coverage in the first 11 pages of the 35 page monthly letter offer significant value even for those who don't dabble in individual stocks.

#2 I write "The Retirement Advisor" with David Korn. We sell this for a very modest $99. We offer three model portfolios. We do not recommend individual stocks but we have articles that discuss current financial events such as economic data and Social Security COLAs. We also have articles to help you save money plus we find CDs with FDIC paying the highest rates. Our most aggressive portfolio has 50% in equities. Our most conservative portfolio contains no equity exposure.

Difference: The conservative (50:50) core portfolio in "Kirk Lindstrom's Investment Letter" is slightly more aggressive than the aggressive model portfolio #1 in "The Retirement Advisor." Over the very long term, you should expect the most aggressive portfolio to have the highest returns but at a price of higher volatility. When we started the "The Retirement Advisor" in 2007 we thought people like Bob Brinker were far too aggressive with equity exposure recommendations for retired people at such a risky time for the markets. If you recall, Brinker's Model Portfolio #3 was nearly 2/3rds in equities when the markets peaked. As our great returns show, we were right.

From 1/1/1999 Through 11/15/09
Kirk's 80:20 Aggressive Core Portfolio is up 50.8%
Kirk's 50:50 Conservative Core Portfolio is up 67.3%
Kirk's 70:30 Explore Portfolio is up 146.1%
80% Core Aggressive plus 20% Explore is up 69.8%
90% Core Conservative plus 10% Explore is up 75.1%

100% Total Stock Market (VTSMX) is up 18.2%
100% Total Bond Market (VBMFX) is up 78.2%
80% VTSMX and 20% VBMFX is up 30.2%
50% VTSMX and 50% VBMFX is up 48.2%
YTD through 11/15/09
Kirk's 80:20 Aggressive Core Portfolio is up 23.0%
Kirk's 50:50 Conservative Core Portfolio is up 16.4%
Kirk's typically 70:30 Explore Portfolio is up 26.7%

100% in VTSMX is up 25.1%
100% in VFINX (S&P500) is up 23.7%
100% in VBMFX (Total Bond) is up 6.6%
80% VTSMX and 20% VBMFX is up 21.4%
50% VTSMX and 50% VBMFX is up 15.9%
12/8/09 update:

As of December 8, 2009, "Kirk's Newsletter Explore Portfolio" is up 32.5% YTD vs. DJIA up 17.2% YTD

"Kirk Lindstrom's Investment Letter"
HURRY! Subscribe NOW and get the December 2009 Issue for FREE! !
(Your 1 year, 12 issue subscription will start with next month's issue.)

The Retirement Advisor Model Portfolios all began with $200,000 on 1/1/2007

The Retirement Advisor Portfolios Dollar Value on 10/31/09 Change
Model Portfolio 1 $205,877 2.9%
Model Portfolio 2 $218,720 9.4%
Model Portfolio 3 $237,182 18.6%
DJIA 12,501.52 on 1/1/2007 $9,712 (24.0%)
S&P500 1,418.30 on 1/1/2007 $1,057.08 (28.0%)
FREE SAMPLE issue of The Retirement Advisor newsletter in pdf

Website for more information and our annual Performance Data

Friday, November 06, 2009

News You Can Use

US Treasury Auction Schedule - Upcoming Offerings

Charts of Historical CD Rate Data (click charts for full sized graphs)

US Unemployment Rate
" Historical Chart 1948 to October 2009"

Best CD Rates - Survey of Largest US Banks

CD Rates - APY in %
as of 11/04/09 for $10,000

6- Mo
11-13 Mo
Bank of America
JP Morgan Chase 0.75
Wells Fargo Bank
16 Mo
21 Mo
28 Mo
HSBC Bank North America
HSBC Online Rates
US Treasury Rates

To see the table in full size with the current rates, click the

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Timer Digest Features
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US Treasury Rates at a Glance - iBond Rates - LIBOR Rates

Must Read:
Beware of Annuities - Payday Loans Warning