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Saturday, June 27, 2009

Political Humor

Bob Brinker seems to love bashing politicians. A Canadian friend sent me this and I felt this was a great place to post this joke.
Last Tuesday, as President Obama got off the Marine One helicopter in front of the White House, he was carrying a baby piglet under each arm.

The squared-away Marine guard snapped to attention, saluted, and said, "Nice pigs, Sir."

The President replied, "These are not pigs. These are authentic Arkansas Razorback Hogs.

I got one for Secretary of State Hillary Clinton and one for Speaker of the House Nancy Pelosi."

The squared-away Marine again snapped to attention, saluted, and said, "Excellent trade, Sir!"

Feel free to add other CLEAN jokes in the comments section.

Sunday, June 21, 2009

Bob Brinker's "Evolving" California GO Bond Advice Ignores What President Obama Did to Chrysler Bond "Speculators"

Yesterday and last weekend Bob Brinker made it quite clear to his audience that his recommendation for California Municipal bonds, including General Obligation (GO) bonds, is NO MORE than one percent of your portfolio in any one issue. This is a big change from the past where he has strongly recommended CA GO bonds with no limits on how much to invest. I also do not think Bob Brinker is paying attention to what President Obama did to bond holders when he gave some of their assets to powerful unions.

At the facebook's "Investing for the Long Term" forum to discuss Bob Brinker, Runner Twentysix said:

Runner Twentysix replied to Honey's post on June 18, 2009 at 12:03pm
I wonder if anyone ran out and bought CA GO's after Brinker, over the past month said there was not chance of the Federal Gov. letting CA go bankrupt. Remember how he said that if CA went bankrupt, there would be no Highway Patrol! There is no chance of that he SHOUTED. If anyone followed his advice and bought, and then heard this weekends show, they have to feel that old Bob just blindsided them. And maybe they loaded up because Bob never mentioned the 1% bond rule before, only his no more than 5% in one stock. It is obvious that he just makes this stuff up as he goes.
George Johnson replied to Runner's post on June 18, 2009 at 6:06pm:
That's why I don't listen to him. Even though he may have some good and wise investment advice, how can you trust a snake oil salesman?
Unlike Brinker, I sold my CA GO bonds as soon as California ran into budget trouble back in 2008. I think Brinker takes too much risk with his fixed income portfolios. Brinker's fixed income results for 2008 were horrible as all four of his "fixed income only" model portfolios lost money while the Total Bond Fund at Vanguard gained 5.1%!

Bob Brinker's 2008 Fixed Income Performance

Every six months, major investment newsletter tracker Mark Hulbert publishes a performance summary for the large investment letters he follows. From "The Hulbert Financial Digest January 2009 Long-term Performance Ratings" Mark lists for last year, 2008:
  • Brinker's "fixed income advisor" model portfolio #1 lost 21.7%
  • Brinker's "fixed income advisor" model portfolio #2 lost 11.5%
  • Brinker's "fixed income advisor" model portfolio #3 lost 5.2%
  • Brinker's "Fixed income only" portfolio in “Marketimer” lost 2.1%
From listening to Moneytalk, you get the impression Bob Brinker did really well in 2008 since Vanguard's GNMA fund (VFIIX Charts) gained 7.1% in 2008. Obviously, Brinker took a lot of risk with his fixed income portfolios and they suffered in a good year for the more conservative "Total Bond Fund" from Vanguard (VBMFX Charts) that I recommend for the fixed income side of my "core and explore" newsletter portfolios.

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 104% (over a double!) vs. the S&P500 DOWN 11% vs. NASDAQ down 17% vs. Warren Buffett's Berkshire Hathaway (BRKA) ONLY up 24% (All through 6/21/09)

Does Bob Brinker Pay Attention to President Obama?

In past months, Brinker surprised me by saying he still liked CA GO bonds because they were by law second in line to be paid from CA revenue after teacher salaries. I thought this was odd to say given President Obama was at the same time attacking Chrysler bond investors, including retired teachers, as speculators when they objected to giving union employees Chrysler assets that they were legally entitled to. My thinking was if President Obama thought it was OK to take assets legally due Chrysler bond investors to give to powerful auto unions, then he would have no problem taking assets due CA GO bond holders to pay salaries of powerful California public employee unions. I am sure there are far more voters working for California than investing it its bonds.

Doubled Money in a Down Market!

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 104% (over a double!) vs. the S&P500 DOWN 11% vs. NASDAQ down 17% vs. Warren Buffett's Berkshire Hathaway (BRKA) up 24% (All through 6/21/09)

As of June 21, 2009, "Kirk's Newsletter Explore Portfolio" is up 5.0% YTD
vs. DJIA DOWN 2.7%
(More Info & FREE Sample Issue)

HURRY! Subscribe NOW and get the June 2009 Issue of "Kirk Lindstrom's Investment Newsletter" for FREE! !

Saturday, June 13, 2009

SU Suncore Energy Charts Information Discussion

Suncor Energy Inc. ( SU Stock Quote and Charts) is an integrated energy company headquartered in Calgary, Alberta. Suncor's oil sands business, located near Fort McMurray, Alberta, extracts and upgrades oil sands and markets refinery feedstock and diesel fuel, while operations throughout western Canada produce natural gas. Suncor also operates a refining and marketing business which includes refining, retail, pipeline and distribution operations in Ontario, Canada and in Colorado and Wyoming in the United States. Suncor's common shares (symbol: SU) are listed on the Toronto and New York stock exchanges. Suncor Energy (U.S.A.) Inc. is an authorized licensee of the Shell® and Phillips 66® brand and marks in the state of Colorado. Sunoco in Canada is separate and unrelated to Sunoco in the United States, which is owned by Sunoco, Inc. of Philadelphia.

Suncor Energy Inc.
112-4th Avenue SW
PO Box 38
Calgary, AB T2P 2V5
Phone: 403-269-8100
Fax: 403-269-6200
Web Site:

Friday, June 12, 2009

FREE Chocolate Every Friday from Mars

Free Chocolate today and every Friday through September.

M&Ms, Snickers, Twiz, Dove, 3 Musketeers and MilkyWay candy bars.

It is a first come, first served coupon for the first 250,00 people every Friday! If you don't get it this week, come back next week and try again.

Works with Internet Explorer and SeaMonkey but I had trouble with Firefox.

Saturday, June 06, 2009

Bob Brinker Still Likes Vanguard's GNMA Fund VFIIX

A caller asked Bob Brinker today if now was the time to get out of US Treasuries, especially Bob's favorite GNMA fund from Vanguard.. The caller also asked about selecting individual companies. Brinker said he preferred to buy an index fund of the total stock market thus eliminating the risk of under performing the market. He went on and on about the advantages of index funds for individual investors, advice I agree with for your core portfolios. I think many of us enjoy beating the market (or attempting to for many) with individual stocks so that is fine for the "explore" part of your "core and explore" portfolio.

As for GNMAs, Bob said he still recommends Vanguard's GNMA fund (Ticker VFIIX - VFIIX charts). Bob said he is still looking at the Vanguard GNMA fund trading between $9.50 and $10.50 which he says is no change in his outlook. He said if you are fine with that range and can accept the NAV variation, then he recommends holding.

Kirk's Comment: VFIIX closed at $10.54 Friday, down from its recent high of $10.72. It seems rather sloppy that Brinker has not adjusted his standard GNMA reply to reflect this new data above $10.50.

This chart shows VFIIX over the last six months clearly showing VFIIX well above $10.50.

This chart shows VFIIX back to 1987, when interest rates were much higher. You can see that the net asset value (NAV) of the fund fell under $9.50 for a significant period of time. I suspect it could go even lower if we were to get high inflation like we saw in the 1970s and early 1980s.

Lets say the NAV drops from $10.54 to $9.50. That would be a decline of $1.04. In percent, that decline would be:
  • $1.04 / $10.54 x 100% = 9.9%
Given the fund currently only yields 4.19%, you would lose about 2.5 years worth of interest if the fund dropped to $9.50!

Also note that if interest rates soar, the fund could go much lower than $9.50.

To be safe, if you own the fund, you might ask yourself how you would feel if the NAV fell to $9.00 again.

Update later in the day. I added another chart of VFIIX below back to 1980 when we had double digit inflation and US Treasury rates were around 14%! Note that the NAV of the fund got as low as $7.50. From today's $10.54, this would be a decline of 34%!

Doubled Money in a Down Market!

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 113% (over a double!) vs. the S&P500 DOWN 9% vs. NASDAQ down 16% vs. Warren Buffett's Berkshire Hathaway (BRKA) up 28% (All through 6/4/09)

As of June 4, 2009, "Kirk's Newsletter Explore Portfolio" is up 10% YTD
vs. DJIA DOWN 0.3%
(More Info & FREE Sample Issue)

HURRY! Subscribe NOW and get the June 2009 Issue of "Kirk Lindstrom's Investment Newsletter" for FREE! !

More Fixed Income Charts for:
  • Vanguard GNMA VFIIX mutual fund

  • Vanguard TIPS VIPSX mutual fund

Monday, June 01, 2009

Market Above 200 Day Moving Average

Today the S&P500 closed above its 200 day moving average, MA(200) on the chart below. For more charts, go to S&P500 Charts, then click "10-Yr Chart" to see 200-dma on a 10-year scale.

The last time this happened Bob Brinker bashed the Casandras for saying we would enter a recession while he was predicting the market would go to the 1600s in 2008.
=> 5/31/08: Cassandra Bashing Brinker said:

“So what we have here basically, is an example of false prophets and it’s sad. And the reason it’s sad is the damage done. Think of the people that are looking today at the market, S&P at 1400 and they’ve been scared out of the market in the first quarter by these bears………It’s just amazing and yet these people are out there, and these people are not happy, I’m sure, to find themselves out of a rising market since March. To find themselves looking for ever lower prices when in fact we’ve had the opposite.

We’ve had the market rising since mid-March. It’s rather significant when you stop to think about it. If you go back to mid-March and you take a look at the S&P 500 Index since mid-March, right now you have a total return, including cash dividends of about 10 1/2%.....................So it’s fair for you to say to the Cassandras, where is that recession, where are those millions of lost jobs, where are the two quarters of negative real GDP growth?

Where’s the bear market? …………The answer is, they blew it! That is the answer, they blew it. They got caught up in their own negativity and they pronounced that it was all over, it was going to spiral downward and there was no end in sight – and they got it completely backwards. Truly amazing to see, and sad to see the people that are harmed by such unjustified negativity.”
Lets hope Bob Brinker is a little more humble this next weekend so he does not jinx the rally.

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Vangaurd Equity Index Funds:

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