November 7, 2010, Bob Brinker's Moneytalk: Summary, Excerpts and Commentary

[honeybee]

November 7, 2010....Bob Brinker hosted Moneytalk today. Bob Brinker's
comments summarized, paraphrased or excerpted:

STOCK MARKET......As the market opens tomorrow, the S&P 500 is at the
closing high for 2010 (1225.85), with a year-to-date total return
(including dividends) of 11.6%. Wilshire 5000 has done better with a
total return of 13%. The Nasdaq (2578.98) and Dow (11,444) at year-to-
date closing highs for the year.

Brinker said: "This is on top of extraordinary gains that occurred in
2009....The Dow is now higher than it was when Lehman Brothers filed
for bankruptcy in September 2008. The S&P 500 is at its highest level
since September 2008. And the Nasdaq is closing in to its high level
of October 2007. Give you an idea how many gains have been chalked up
in this stock market..... .... And the stock market is liking a number
of things it is seeing. It certainly likes the gridlock that we are
going to have in Washington. Certainly likes the results of the
election and anticipated those results perfectly -- well in advance.
It certainly like the accommodative Federal Reserve monetary policy
that we are seeing. And it definitely likes the earnings report we are
getting......

.....Earnings are now up 39% year-over-year. And in addition to that,
in this third quarter reporting season, we are looking at 80% of
companies exceeding Wall Street's expectations......Now of course the
way to take advantage of a market like this is to be fully invested.
That is the posture we have taken. For those sitting with idle cash in
early July, we recommended putting it in the market at the low for the
year -- down in the 1030 area.....

Honey EC: Yes, it's wonderful to be fully invested during a "market
like this," but in spite of his inferences, Brinker was also fully
invested in 2008-2009, during the worst megabear market since the
1930s.

Yes, Brinker did recommend putting cash in the market in July at S&P
1030, but he misleads by not saying that in 2008, he also recommended
putting cash in the market at S&P 1450, mid-1300's, low to mid 1200's.
I get letters from people who lost money on that advice. Brinker seems
to not give a flying fig. As he says on each program, "It's about the
money." Maybe he should add the word "my" ....
Brinker continued: "This definitely has been a profitable year for the
market in 2010, year-to-date. It comes on top of the extraordinary
gains of 2009, following the 2008 debacle which really culminated with
the bankruptcy of Lehman Brothers in September of 2008, and the
freezing of the credit markets within less than 24 hours all over the
world."

JOBS REPORT.....Brinker said: "Very, very good.... 159,000 private
sector new jobs and a 54,000 uptick in the September revision. that's
a very good report."

Honey EC: Brinker was very upbeat about the new jobs report even
though he has repeatedly pointed out that each month, it takes 100,000
to 150,000 new jobs just to absorb new entrants into the labor force.
And he didn't mention the underemployment numbers which is at least
17.1%.

HOW TO PROTECT BOND FUND HOLDINGS IF INTEREST RATES RISE.....Brinker
recommends establishing a mental stop at a price that you want to sell
the fund if the net-asset-value drops down to it. This offers
psychologically protection against fear of catastrophic losses in your
bond funds.

RESET COST-BASIS FOR THOSE WHO QUALIFY FOR ZERO CAPITAL GAINS in
2010....Brinker said: "If you're selling a security on which you're
going to have no capital gains tax liability, then you can reset your
cost-basis by buying a security back. If you're selling at a profit,
you can buy it right back. There are no wash-sale rules on
profits....." Honey EC: If the Bush tax-cuts are renewed, this would
not be a necessary move. But it might be advantageous for some if the
tax cuts are allowed to expire.

IF GINNIE-MAE FUND NET-ASSET-VALUE GOES DOWN, WILL THE YIELD GO UP?
Brinker said: "Oh yes. What you will see if you see a decline in the
net asset-value of the Ginnie-Mae Fund, you would see a gradual
increase in the yield." Honey EC: Brinker recommends Vanguard's Ginnie
Mae Fund [VFIIX).

GOLD AS A HEDGE AGAINST DOLLAR DEPRECIATION Brinker said: "Firstly,
keep in mind that unless you plan to spend your money in foreign
currencies, then it should work for you here in the United States
buying goods and services.....This would only be a major problem if
your liabilities were in Euros, or Yens or some other currency. But if
your liabilities are in dollars, then you are in the currency that
will cover that....

....Hedging the portfolio against decline in foreign exchange, and
there is a way to do that. It is a speculation, but there is a way to
do it. And that is to put some GLD, the Exchange Traded Fund for gold
in your portfolio, a few percentage point perhaps, if you elect to do
this. And that will give you a precious metal in the name of gold
bullion-hedge in your portfolio against the dollar. It won't pay you
any interest......When I first started mentioning this years ago on
the broadcast the GLD shares were in the $50s. They are now well over
$100 per share.....I would say the general guideline we've used on the
GLD shares for those wanting a hedge is to have up to 5%......"

Honey EC: Brinker is very clever and seems unscrupulous when it comes
to being honest about his financial advice. Brinker has been bearish
on gold for years. When callers insisted they wanted to buy gold, he
would say that GLD was the best vehicle to use. Pen-name, TFB wrote:
"Da Brink has openly and repeatedly slammed Gold Bugs for ages."

This is not the first time that Brinker has deliberately mislead the
audience by inferring that he recommended purchasing gold when it was
$50 an ounce. It's simply not true. In 2007, David Korn wrote: "Bob
has been steadfastly BEARISH on gold for as long as I have been doing
my newsletter."

Brinker added GLD to his off-the-books Marketimer Individual Issues
list in May, 2009. However, he wrote no explanation as to why he did
that; and never gave a price or an amount.

BUYING SILVER AS HEDGE Brinker said: "As far as silver is concerned, I
think it could be considered as an alternative form of hedging in a
portfolio......The preferred way for those who wish to have a silver
hedge in their portfolio would be the Exchange Traded Fund that holds
the silver bullion -- that trades under the symbol SLV.....the Ishares
Silver Trust. There is a derivatives investment in an Exchange Traded
Fund which is under the ticker symbol DBS (futures ETF). If I were
going to consider the possibility using a silver hedge, I think I'd be
looking at owning the silver bullion."

HIGH YIELD BOND FUND [VWEHX].....Caller Carl told Brinker that he was
using Vanguard's High Yield Bond fund for part of his grand-child's
college fund. He asked for Brinker's opinion. Brinker said: "I think
you will see that it's done quite well. The yields have been excellent
on that fund, and the net-asset-value is doing fine. Last time I
checked it was like $5.83. I think that you'll be find that you'll be
very happy when you look at the numbers."

Honey EC: Brinker has recommended the Vanguard High Yield Fund [VWEHX]
in his Marketimer Fixed Income Portfolio since April, 2003. At that
time, he sold 15% of the portfolios 50% GNMA [VFIIX] holdings and put
the money into the high yield fund. The fund took a heart-stopping
dive in 2008, but has come back quite nicely.

RISKS OF CALIFORNIA MUNICIPAL BOND FUNDS Brinker said: "I think there
are two areas with a California Muncipal Bond Fund. One of those areas
would be if in the future, we see an increase in interest rates, then
you would see a decline in net-asset-value of the shares. So if you
are concerned about that, you would want to protect yourself with a
mental stop that would allow you to terminate your
holdings.... .....The other risk with California is political. I don't
like what I'm seeing in California in terms of fiscal
irresponsibility. And I'm not convinced that the results of the
gubernatorial election that was just held in California will do
anything other than put further strains on the fiscal situation in
California.....If either one of these resulted a degradation you'd be
able to protect your money with a mental stop......The reality of the
situation in gubernatorial election was that the voters had an
Hobson's choice in California."

Honey EC: "Meg Whitman and Jerry Brown a "Hobson's Choice"???!!
Brinker is either ignorant of the facts or his extreme hatred for
women in leadership roles messes with his judgment. I have listened to
Bob Brinker since 1987 and I have never heard him have a good word to
say about strong women. He actually goes out of his way to denigrate
strong, conservative women.

Meg Whitman is a successful business woman that made $billions for
Ebay. She could have brought her qualifications, experience and talent
to Sacramento and may have saved the state from bankruptcy.....

.....Jerry Brown's record is well-known and clearly shows that all he
will do is increase government spending and debt. Brown is responsible
for unionizing California's public employees which has created
unsustainable entitlements -- and it explains why he was re-elected.

WHERE DOES THE FED GET THE MONEY FOR QUANTITATIVE EASING? Brinker
said: "The Federal Reserve is in charge of the money supply. They have
the ability to create money by running the printing press, by flood
the system with money. When they buy these securities, they deposit
the money into the banks, and the banks have the ability to create
money by creating credit. And so that's what this is all about. The
Federal Reserve has the power to influence the money supply, to manage
the money supply and to grow it as well as shrink it. Right now, they
are interested in growing it......."

WHO PAYS THE INTEREST ON NATIONAL DEBT? Brinker said to caller: "The
interest is paid by you, Nick, along with all the other taxpayers in
the country.....The interest goes into the coffers of whoever owns the
debt......Or it might be somebody over in Beijing who runs the
government of China."

LAME DUCK CONGRESS Brinker said: "The lame duck congress will be back
on November 15th. I don't know what they will do them. They'll
certainly want a Thanksgiving break.....They left a lot of unfinished
business. We've described this congress as being the most
dysfunctional congress of all time in terms of their inability to
govern......They did not address the estate tax situation which is
zero in 2010, to the delight of the George Steinbrenner estate and a
few others as well......This congress has not addressed the tax
bracket situation for 2011. We do not know what the tax brackets will
be on New Years Day.....

......Now there is an indication that President Barack Obama is
willing to compromise, given the results of the election, with
Republicans on what the new package will be for 2011.....The GOP want
to have the tax cuts for everybody continue, and President Barack
Obama would like to see taxes go up on families above $250,000 and
individuals above $200,000.....Now the most obvious compromise would
be the one we've talked about on this program which would be one year
extension of the tax brackets as they are now......If they don't make
changes, the capital gains tax goes from 15 to 20 in the top bracket
in January. And the qualified dividend goes from a current top of 15
to a new top of 39.6......They've governed like lame ducks from day
one, as far as I'm concerned."

Honey EC: I don't recall ever before hearing Brinker use the title
"President Barack Obama." Is he finally an Obama fan? :)

Immediately after the opening monologue, there was an advertisement
for the Brinker Fixed Income Advisor. Be aware that the publisher of
this newsletter is not the radio talk-show host, even though that is
exactly the impression that the ad gave to the audience. One of the
editors of the newsletter is Lisa J. Brinker, Brinker's daughter-in-
law, who graduated college with a degree in linguistics. If you are
interested, download a free issue, but be sure to compare it to a free
issue of The Retirement Advisor, published by David Korn and Kirk
Lindstrom. I promise there is no comparison, The Retirement Advisor is
far superior, and the performance record confirms that. Lisa and Bob
Jr's FIXED INCOME Advisor actually LOST money in 2008!

WHERE TO GET ADVICE ABOUT EDUCATIONAL SAVINGS ACCOUNTS Brinker
recommended the website: Savingforcollege.com

Brinker gave a hearty congratulations to the San Francisco Giants. He
said: "I talked about the pitching. No one would listen to me. They
went up 8 to 1 here in Las Vegas on the board. Congratulations to all
Giants' fans."

Brinker's guest-speaker was Charles Gasparino

Moneytalk To Go is Available FREE at KGO810 radio for seven days after
broadcast. (Saturday Moneytalk broadcasts have been canceled.) The
Sunday program is archived in the 1-4pm time-slots. To download and
listen at your convenience, right click on the hour and use "Save Link
as." KGO: Moneytalk Download Don't forget to download the Charles
Gasparino interview in the 3-4 hour of the program.

RR took this breath-taking picture of Aspen in fall colors north of
Bly, Oregon. Click to enlarge:

http://honeysbobbrinkerbeehivebuzz2.blogspot.com/