I am getting some questions via email about Moneytalk with Bob Brinker. Maybe someone will answer this one in the comments section
Tuned into Bob today (1/27/13) for the first time in a long time and heard that he recommended a sale of all QQQs (Charts and quote) in October 2012. I bought some in the low 80s when he suggested a buy about 12 years ago. Do you know if this is the first time he suggested that the position be closed out?
This person is talking about Bob Brinker's famous QQQ Advice.
I am enjoying my Sunday, a beautiful day in the San Francisco Bay Area, so I will post a recap of the show later this week along with an answer to this question.
Bob Brinker has spoken at length about what he calls the dysfunctional government in California (Taxifornia) and our excessive tax rates. In the last election, CA voters voted to enact a retroactive tax hike of an additional 3.0% on its richest citizens for all of 2012. Those "only" making $250,000 a year will "only" have to pay an additional 1.0% for a total rate of 10.3% on ALL income (earned and capital gains are taxed at the same rate in Taxifornia.) We also raised our sales taxes so I now pay 8.625% in Santa Clara county. Those making over $500,000 a year in California will pay the highest rate of 12.3% on 2012 and 2013 income. I posted a full summary of the rates and changes here:
Bob Brinker said the rich might get tired of this nonsense and leave the state. This weekend, 42-year old PGA Tour star Phil Mickelson, with $67 million in PGA Tour earnings which does not count his endorsement income that can be far more, said he would make drastic changes because of higher Federal and California taxes.
"It's been an interesting off-season," Mickelson said. "And I'm going to have to make some drastic changes. I'm not going to jump the gun and do it right away, but I will be making some drastic changes."
Mickelson did not rule off just flat-out retiring from golf. "I'm not sure what exactly, you know, I'm going to do yet," he said.
"I'll probably talk about it more in depth next week. I'm not going to jump the gun, but there are going to be some. There are going to be some drastic changes for me because I happen to be in that zone that has been targeted both federally and by the state and, you know, it doesn't work for me right now. So I'm going to have to make some changes. "If you add up all the federal and you look at the disability and the unemployment and the Social Security and the state, my tax rate's 62, 63%. So I've got to make some decisions on what I'm going to do."
He acknowledged that he could end up leaving his home state of California. And he further agreed that the financial issues were the reason why he pulled out of an ownership team that purchased the San Diego Padres back in August.
This is the first I've heard of people making a decision NOT to invest in CA due to the higher taxes. Of course, Intel builds its factories outside of CA even though its headquarters is here and the whole Silicon Valley used to be full of expensive (high property tax) chip making factories. They are almost all gone now... gone to states with lower tax rates.
Today Tiger Woods, in his Tuesday morning news conference before this week's Farmers Insurance Open at Torrey Pines, said he agrees with Phil Mickelson.
"Well, I moved out of here back in '96 for that reason. I enjoy Florida, but also I understand what he was, I think, trying to say. I think he'll probably explain it better and in a little more detail."
I bet Bob Brinker will break his arm this next weekend patting himself on the back while saying "I told you so!"
Bob Brinker remains bullish for 2013. His model portfolios are "fully invested." In his January 2013 Marketimer, he wrote the "S&P 500 Index has the potential to reach the upper-1400s to lower-1500s range in our view... a reasonable valuation range of 14 to 14.5 times our current 2013 S&P 500 Index operating earnings estimate of $105." [Note: Bob Brinker has been fully invested since March 2003 (See Bob Brinker's Asset Allocation History.)]
Yesterday, Elaine Garzarelli was the guest "Market Monitor" on the Nightly Business Report." Elaine was quite forthcoming about her timing model and its indicators. Elaine believes the market will go up 10 to 15 percent this year with the same operating earnings estimate of $105. (See blue below for this summary.) You can watch the video or read the transcript below of her interview with Tom Hudson.
Transcript HUDSON: A year ago I described tonight’s “Market Monitor” as quote, a bull, plain and simple. And even as the stock market trades near five-year highs tonight, she is even more optimistic about higher stock prices today. Elaine Garzarelli back with us, president of Garzarelli Capital. Elaine, always great to see you and happy New Year. ELAINE GARZARELLI, PRESIDENT, GARZARELLI CAPITAL: Nice to see you. HUDSON: A bull plain and simple a year ago, more optimistic today. Are you more optimistic than a year ago and why? GARZARELLI: Well, I have 13 indicators in the stock market and they’re at 82 percent. Anything below 30 percent would be a major sell signal or a bear market signal and below 42 percent would be a correction of 10 to 15 percent. So that’s a very, very high level and the indicators include monetary policy, economic cycles, sentiment and valuation. The valuation indicator is very bullish, suggesting a 10 to 15 percent gain in the market over the next year. HUDSON: Let’s talk about that valuation part of the market here, because we’re seeing the valuation with a background of really kind of tepid economic growth. How do you square those two? GARZARELLI: Well, we see economic growth of 2 percent this year. The earnings gain will be modest. It will only be 5 to 6 percent per the S&P 500 operating earnings. That’s a level of about 105. So give that a conservative P/E ratio of 15 to 16 times and that gives us our 10 to 15 percent gain for the overall market. But if you get in the right sectors, your gain could be twice that much. HUDSON: And you brought those along as fate may have it, consumer discretionary being one of those sectors as illustrated by XLY ticker symbol exchange-traded fund. It’s up near a 52-week high tonight, but you see more gains. GARZARELLI: I do. The reason is because consumer confidence has turned up and we have lower oil prices and housing is doing very, very well. So this should bode well for this particular ETF and some of the stock markets in there would be Home Depot (NYSE:HD), related to housing, Disney (NYSE:DIS) and Ford. HUDSON: All certainly household names. You like semiconductors in the technology space, SOXX. We’ve had a tough time over the past 12 months as folks have looked at the traditional computer market thinking that it is going lower while the big movement towards smart phones and tablets continue. GARZARELLI: Well, we think there’s a turnaround in technology this year. As a matter of fact, we have technology growing three times more than real GDP this year. So with the uncertainty of the fiscal cliff over, we see a real turnaround there and semiconductors are the most leveraged high data area of technology group. There we like Broadcom (NASDAQ:BRCM), Taiwan Semiconductor, Texas Instruments (NYSE:TXN) and Intel (NASDAQ:INTC). And that group is down 10 percent from its peak last year. It’s very, very good value. HUDSON: A bit of Valuation. You also like telecommunications equipment and the telecom sector has gotten off to a pretty rough start here at the beginning of the year. What do you anticipate in the year ahead? GARZARELLI:That’s why we love it. Underperformed last year, down from its peak last year, extremely cheap and there we like the IGN Ishares and there we have Qualcomm (NASDAQ:QCOM), Cisco (NASDAQ:CSCO) and Juniper Networks (NYSE:JNPR). HUDSON: Finally believe it or not, it has been a year ago since we spoke. You were a bull then; you’re a bull now. You liked three sectors of the market, small caps, the Russell 2000, up 14 percent, technology up 13.5 and industrials up 10 percent. You still like these sectors at all? GARZARELLI: Yes, I do. HUDSON: Would you put new money to work even though we’ve seen those double digit gains from a year ago? GARZARELLI: I would, especially in the IWM, which is a small cap composite, reached an all-time high actually a couple weeks ago and still love that sector. HUDSON: Are you a hundred percent invested in stocks at this point? GARZARELLI: For my sector analysis fund, I am a hundred percent invested in stocks. HUDSON: The funds we mentioned tonight, do you have positions in those? GARZARELLI: I have positions in all—everything I mentioned tonight in the sector analysis fund, yes, I do. HUDSON: Eating your own cooking here, the brand new year ahead of us, Elaine Garzarelli back with us, president of Garzarelli Capital. GARZARELLI: Thank you Tom.
This is a great note from Terry Savage about today's deal to avoid the "fiscal cliff." Terry is my all-time favorite guest host for Moneytalk with Bob Brinker. I wish the producers would consider making her a regular or even replacing Bob Brinker with Terry since Brinker avoids talking about the markets or giving direct answers to questions unless he can make himself look good with his answers. Unlike Brinker, Terry is a straight shooter and isn't afraid to let you know her opinion. Happy New Year and Good Riddance to a Bad Congress!
The actions of Congress over the past two years, and especially the past two weeks should be an embarassment to all Americans, no matter what political party.
The last-minute "deal" was no deal at all -- when it comes to preserving America's future. And the process destroyed respect for our country around the world. We now look much like the governments of Greece and Italy and Spain -- taking laughable baby steps toward the resolution of a huge and overwhelming debt problem. Here's a link to my comments on CNN yesterday. Kirk Comment: I embedded her CNN interview about the so called "deficit deal" that is a sad joke for anyone who understands the real issues.
I called it an "Alice in Wonderland" moment -- the "Mad Hatter's Tea Party." This is what we have come to -- and historians will look back on this moment with dismay. The overwhelming issue is that the deal does absolutely NOTHING to change our annual budget deficits, which keep creating a larger national debt. And the term "budget deficit" is more than an oxymoron -- because while we have had trillion dollar deficits for each of the past three years, we have not even had a Federal budget! The Congressional Budget Office just announced that this "deal" will actually add $4 Trillion to our national debt over the next 10 years! And now that we have had so much ado about nothing, the new Congress will have to start out by dealing with the debt ceiling. That's a much more significant fight because it will call into question our legal ability to pay our bills and refinance our debt. Will the next Congress be any more sensible? Markets React Don't be fooled by the reaction of global markets and rising stock prices. Markets think short term - -and in the short term the entire world is glad the United States didn't destroy its economy with huge tax increases and spending cuts. After all, if America doesn't keep producing and buying, the rest of the world is in deep trouble. So of course the global markets are cheering. But keep your eye on gold, which though down recently from its highs for last year, responded to the "deal" by jumping nearly $20 per ounce to $1690, while the dollar fell on global markets. Our lack of real fiscal discipline means that big bets are being placed against the future value of the dollar -- even if it is the "least worst" place to hold assets globally. Kirk Comment:Gold's ETF is GLD: GLD Charts and Quote What can and should you do? Get back to work, and keep on investing. And speak up! This kind of Congressional confrontation is only possible because so many in Congress find themselves in "safe" seats, because of redistricting. Maybe if they understand they are vulnerable to our votes, they will get something done for America in the next Congress and in the New Year. And that's The Savage Truth. More about Terry Savage:
