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Saturday, August 15, 2009

Bob Brinker Moneytalk Summary

Today Bob Brinker talked about how well the US stock market has done year-to-date. During his monologue, he gave statistics for the S&P500 and US Total Stock market saying they were up 13% and 15% YTD, respectively.

Brinker didn't mention how well the international markets have done which is odd since they have done even better!

Emerging markets leads the list up 50% YTD!

Gold and precious metals is a close second up 48% YTD.

YTD Returns as of 08/14/2009
Vanguard Funds Symbol Price SEC Yield YTD Return
S&P 500 Index Fund
VFINX $92.78 2.14% 13.02%
Emerging Markets Fund
VEIEX $22.42 50.47%
Extended Mkt Index
VEXMX $29.22 1.23% 21.73%
European Stock Index
VEURX $24.19 18.52%
GNMA Fund
VFIIX $10.68 3.99% 3.68%
Inflation-Protect Sec
VIPSX $12.12 1.54% 5.25%
Pacific Stock Index
VPKIX $9.58 16.69%
Pacific Stock Index Inv
VPACX $9.57 16.71%
Precious Metals & Mining
VGPMX $17.31 48.04%
REIT Index Fund Inv
VGSIX $12.70 note 8.47%
Total Bond Mkt Index Inv VBMFX $10.29 3.71% 3.82%
Total Int'l Stock Index
VGTSX $13.34 23.63%
Total Stock Market Index Fund
VTSMX $24.73 1.99% 14.75%
Total World Stock Index Fund VTWSX $15.98 19.97%
Prime Money Mkt Fund VMMXX $1.00 0.22% 0.47%
Tax-Exempt Money Mkt VMSXX $1.00 0.27% 0.35%

During the first half hour, Bob Brinker wore his arm out patting himself on the back for being bullish at the start of the year and recommending a buying opportunity in the mid 800s. He must have forgotten his buying opportunity and recommendation to be fully invested in the mid 1400s back at the start of 2008. Perhaps he figures people have short memories or he can fool new listeners.

GNMA Fund - (VFIIX Charts):

A caller asked about the viability of Vanguard's GNMA fund. Brinker said she must be "going off the deep end" worrying about this as that fund is backed by the full faith and credit of the US Government. That means the government will print money to bail out the fund should it run into trouble. I've never heard Brinker mention that the government does not guarantee you will earn interest or that if the Government National Mortgage Association runs into solvency troubles it could take some time to get your money back, but you will get it back.

Obama's Health Care Plan

Many callers called to talk about the health care proposals. One wanted to know if taxes could go lower. Brinker said the CBO estimated the programs being proposed will cost between $1 trillion and 1.5 trillion US dollars. With that extra cost, Bob doesn't see how taxes could go down. Brinker said the people who are complaining loudly at the town hall meetings are retired folks who like the great deal they have now and don't want any changes.

Replace US Dollar with a "World Currency"

Brinker again said he was in favor of a new World currency based on the currencies of the "industrialized nations of the World" that would compete with the US Dollar and all the other international currencies such as the Euro and Yen. He thinks this would "help to bring the politicians in Washington back to their senses" to protect the integrity of the US dollar due to "spending gone wild."

The Federal Reserve

About the people who complain about the Federal Reserve (the Fed) having too much power, Brinker says they are wrong. The Fed's mission is to maximize employment consistent with minimizing inflation. Brinker says ANY attempt to politicize or eliminates the Fed turns monetary policy over to the "people in Washington who are spending the country into oblivion."
If you turn the monetary system over to the politicians, then its over at that point.
He says what the politicians will do is simply inflate to pay down the national debt with inflated dollars. In the extreme you will need a wheelbarrow full of money to buy a loaf of bread. He says "we've been there and done that."

Health Insurance Reform

Brinker says renaming the health care reform debate to "health insurance reform" could lead to fewer health insurance policies being written. He says insurance companies won't write policies if they can't make money so we may find it difficult to get health insurance just as it is now hard to get hurricane insurance in the gulf states.

Saturday Guest

Brinker's Saturday guest was Michelene Maynard who Bob says was ahead of her time when she wrote in 2003, "The End of Detroit: How the Big Three Lost Their Grip on the American Car Market."

Michelene Maynard said she wishes she was wrong and that the people in the industry had read her book and made changes so they could have prevented it from happening. Follow Micki on Twitter.

Vanguard Equity Index Fund Charts:
Vanguard Fixed Income Fund Charts:

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 131% (over a double!) vs. the S&P500 DOWN 1.7% vs. NASDAQ down 7.9% (All through 9/7/09)

As of September 7, 2009, "Kirk's Newsletter Explore Portfolio" is up 18.8% YTD vs. DJIA up 7.6% YTD.

2 comments:

  1. Jimmy SinpantalonesAugust 15, 2009 1:42 PM

    This is funny!

    During the first half hour, Bob Brinker wore his arm out patting himself on the back for being bullish at the start of the year and recommending a buying opportunity in the mid 800s. He must have forgotten his buying opportunity and recommendation to be fully invested in the mid 1400s back at the start of 2008.

    ALL Brinker's model portfolios lost a ton in 2008. Here is some data I found:

    Brinkers Lost Money in ALL Fixed Income Portfolios in 2008!

    Mark Hulbert says Brinker's "fixed income advisor" model portfolio #1 lost 21.7% last year, 2008.
    Mark Hulbert says Brinker's "fixed income advisor" model portfolio #2 lost 11.5% last year, 2008.
    Mark Hulbert says Brinker's "fixed income advisor" model portfolio #3 lost 5.2% last year, 2008.
    Mark Hulbert says Brinker's "Fixed income only" portfolio in “Marketimer” lost 2.1% in 2008.

    All Brinker fixed income portfolios lost money in a year Vanguard's GNMA fund was up 7.22% and Vanguard's Total Bond fund was up 5.24%.

    They should stick to writing software for companies in India and announcing dirt track road races.


    Equities were even worse:

    Brinker's "Marketimer" model portfolio #1 lost 39.7% last year, 2008.
    Brinker's "Marketimer" model portfolio #2 lost 37.4 last year, 2008.
    Brinker's "Marketimer" model portfolio #3 lost 23.9 last year, 2008.

    ReplyDelete
  2. Brinker 2008 & 2009 Buy Levels

    January 4, 2008, S&P @ 1411: Mid-1400's

    Feb 10, 2008 S&P @ 1331: Low-1300's

    Aug 5, 2008 S&P @ 1285: 1240 or less

    Sept 2, 2008 S&P @ 1282: Low-to-mid 1200's

    September 16th -- rescinded low-to-mid 1200's (recommended dollar cost-average only)

    January 2009 S&P @ 931: “ bear market bottom range of 750 to 850.

    Feb. 2009 S&P @ 826: “low-to-mid 800’s.

    March 5, 2009 S&P @ 696: waiting for a bottom and a test of that low. No DC or buy levels.

    April 3, 2009 S&P @ 798: 676 benchmark low in. Short-term weakness is buying opportunity. He gave up giving specifics. S&P500 Target: 1000s to 1100s in next 12 to 18 months. (we got there in 5 months!)

    ReplyDelete

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