October 24, 2010, Bob Brinker's Moneytalk: Summary, Excerpts and Commentary

[honeybee]

Posted October 24, 2010....Bob Brinker hosted Moneytalk today. Bob
Brinker's radio program is broadcast on Sundays only now.

Bob Brinker comments paraphrased or excerpted:

STOCK MARKET

Dow: Total return 8% year-to-date.
S&P 500 Index: Total return year-to-date 8% including dividends.
Nasdaq: Trading 2% below high for year, but up for the year.

Bob Brinker said: "If you've been with us on the program, you are
aware of my view that we had a correction in 2010. I know many were
forecasting a bear market. I never believed that. We thought it was a
correction, and the S&P 500 corrected 16% and the Dow corrected 13
1/2%.....And that correction ended July 6th and that is when the
market was down in the 1030 area.....

......Anybody listening to this broadcast is already aware that I have
been bullish on the market to the extent that in the early part of
July in my investment letter, I upgraded the market at that time, down
in the 1030 area of the S&P 500, to attractive for purchase. Now of
course, we've gone back to dollar-cost-average with the tremendous run
we've had since early July...."

BRINKER'S ACTIVE-PASSIVE PORTFOLIO

Russ from Massachusetts said that he is a Marketimer subscriber and
that of his $1.6 million, he had $800,00 in Brinker's active-passive
portfolio -- 80% in VTI and 20% in EFA. He said he had another
$800,000 in cash and didn't know what to do with it. He wanted to know
if Brinker would recommend that he put it in the Marketimer fixed
income portfolio? Bob Brinker told Russ that even though the fixed
income fund was having a great year, interest rates are very low right
now, so he ("we") are monitoring the funds very closely in terms of
interest rate risk.

Honey EC: What the caller and Brinker were talking about was using
Brinker's active-passive and fixed income portfolio to create a
"simple" balanced portfolio. As the caller stated, Brinker's active-
passive portfolios is simply 80% in Vanguard Total Stock Market Index
(VTSMX); 10% in Vanguard International Growth (VWIGX); and 10% in
Vanguard All-wlorld ex-U.S. (VFWIX). Or you can substitute those with
ETFs - 80% in VTI and 20% in EFA.

As for what Brinker said about the dangers of his fixed income fund,
he is right. In 2008, a year when the GNMA Fund was up almost 8%, his
fixed income fund lost money.

WHAT TO EXPECT INTEREST RATES TO DO

Brinker said: "The reality is, somewhere down the line, you are going
to see a change in the interest rate picture. It certainly does not
appear to be imminent, but I think eventually, it's inevitable."

VANGUARD REDUCES ADMIRAL FUND MINIMUMS

Caller Jack from Wheeling asked Brinker about Vanguard automatically
moving his account to the lower-cost Admiral Funds because of their
reduced minimum requirements. Brinker said it was a "no-brainer" and
he "applauds" Vanguard. This is from the Vanguard website:

"Effective today, Vanguard has reduced the minimum amount required
to qualify for Admiral™ Shares to $10,000 for most of our broad-market
index funds and $50,000 for actively managed funds, down from the
previous $100,000 minimum. Admiral Shares cost significantly less than
traditional fund shares, and their expense ratios are among the lowest
in the mutual fund marketplace."

HOW LONG CAN YOU HOLD CHECKS BEFORE DEPOSITING?

Caller Bobby from Hayward, said she had her life savings ($40,000) in
two bank checks that were stashed away in a safe deposit box for 8
years. The bank was taken over by another bank. She decided last week
she wanted to deposit the checks, however, they refused to cash them.

Brinker advised her to go in to the bank tomorrow with her reciept,
and talk to an officer of the bank. Brinker said: I'm glad you called
Bobby, because here is some advice for all of our listeners: Don't
take checks from banks, put them in a safe deposit box and let 8 years
go by before you call on the money. Not a good way to go about
business......Good luck on the meeting. Let us know what happens."

FORMULA FOR CUTTING LIFE OF MORTGAGE IN HALF

Judy from Illinois asked about this.... Brinker replied: "The formula
is very simple. You take the amortization schedule for your mortgage,
if its a 30-year mortgage, and you add a principal payment every month
to cut the payment time in half.....It also cuts a 15 year mortgage to
a 7 1/2 year mortgage."

TAX BRACKETS MAY CHANGE ON NEW YEARS DAY

Brinker said: "Nobody knows what the tax brackets will be starting New
Years Day. The dysfunctional United States Congress refused to adopt a
tax schedule for 2011. I know this sounds impossible to believe, but
it's true......So under current law, if they don't adopt a tax
schedule for 2011....a new one...... all of the tax brackets that are
currently in force will expire on New Years Eve. And all of the tax
brackets will go up on New Years Day if they don't act. Normally, I
would say that they would act responsibly, but given the nature of
what we've been seeing out of congress, I think they've become
incredibly unpredictable. Frankly, I think it's very sad."

T.A.R.P NOT A FAILURE, IT MADE A PROFIT

Brinker said: "The individual investors across the country, a lot of
them believe things that are completely false. It's easy to find
people today who think that TARP was a failure. TARP was not a
failure. It has shown a profit for the U.S. Government. Aside from
providing financial stability in 2008 after the Lehman debacle, it's
actually provided a profit. There is a lot of misinformation out
there."

THE STOCK MARKET GOLDEN CROSS

Rick from Illinois asked Brinker if the golden cross was a reliably
market indicator. Brinker said: "I would not use a golden cross as a
forecaster of a market correction......The Dow had its first golden
cross in four years on the first of this month. And historically, a
golden cross is a bullish sign for the market.......If you go back to
1929, over the next six months following a golden cross, the Dow has
gained an average of 3.9%. .....Without a golden cross, you would get
a return over the next six months of 3.1%."

Brinker continued: "But from my point of view, I would rather use a
market-timing approach to try to identify the bottom of a correction
as I did at the beginning of July as opposed to the golden cross. The
problem with the golden cross is, it's very, very late to the party.
The S&P 500 is at 1183.....I would much prefer using a market-timing
approach to identify areas of entry - you're not always going to be
right, we know that. But that's not the point. The point is, you
should be able to hit some very, very well. And as a result, you
should be able to take positions as we were able to do at the
beginning of July when the market was at its lows for 2010. And that's
an example of using market-timing as opposed to using a technical tool
like a golden cross."

Honey EC: Bob Brinker has not made any changes to his model
portfolio's asset allocation or cash reserves for over 7 years -- they
have remained fully invested. He has recommended that his subscribers
be fully invested by dollar-cost-averaging and several gift-horse buys
for new money, since March 2003. In spite of all of his forecasts and
predictions, he has been a buy-and-hold "market-timer" all of these
years.

Brinker's has relentlessly attempted to give Moneytalk audiences the
impression that he can successfully time the stock market. Finally,
after playing this sucker's game for all these years and damaging
anyone who actually trusted his advise, one of his calls has not been
damaging -- so far. But take a look a these and think about sinking a
large amount of money into the market on these "market-timing" calls
each time. These are all Marketimer quotes, but you will not find any
of this discussed in any current issues:

April, 2005, (S&P: 1172.92) "Attractive for purchase at the 1120
level"
May, 2005, (S&P: 1156.85) "Attractive for purchase at the 1160 level"
September, 2005, (S&P: 1220.33) Attractive for purchase below the 1180
level"
July, 2006, (S&P: 1280.19) "Attractive for purchase at 1250 level or
lower"
April, 2007 "Attractive for purchase at 1380 or lower"
August, 2007 (S&P: 1455.27) "Attractive for purchase mid-1400's.".
January 4, 2008 (S&P: 1468.36) Brinker said: "We continue to rate the
market attractive for purchase on any weakness into the S&P 500 Index
mid-1400's range."
February 10, 2008 (S&P: 1331), "Attractive for purchase at low-1300's"
Aug 5, 2008 (S&P: 1289) "Attractive for purchase at 1240 or less"
Sept 2, 2008 (S&P: 1277) "Attractive for purchase at low-to-mid
1200's"

Brinker said that he knows that market-timing is "not always going to
be right." Mr. Brinker, as you told a caller today: "You sir, are the
master of mispeak."

Caller Jerry in Providence thanked Brinker for his July market-timing
call and said it "was very helpful." Brinker thanked him, but never
asked him why it was helpful. Brinker seems to not want to give away
the fact that he has recommended that all of his subscribers and
listeners remain fully invested in their equity allocations throughout
the 2008-2009 megabear market. Therefore, model portfolios and those
who follow Brinker's market-timing are still in recovery mode.

Bob Brinker's most truthful quote: "It's all about the money."

Bob Brinker's guest-speaker was Peter Chapman: "The Last of the
Imperious Rich: Lehman Brothers, 1844-2008" (Hardcover)

Moneytalk To Go is Available on Demand Totally Free at KGO810 radio
for seven days after broadcast. Moneytalk is broadcast only on Sunday.
The program is archived in the 1-4pm time-slots. To download and
listen later, right click on each hour that you want and use "Save
Link as." KGO: Download Moneytalk Here Don't forget to save your copy
of Brinker's guest-speaker, Peter Chapman, in the 3-4pm hour!


(A funny: Readers who remember the fun discussions that we had here
about Bob Brinker quoting Jackie Gleason, will laugh like I did when
they find out that Brinker has changed his opening gambit. He no
longer includes Jackie Gleason. It seemed to be all new..... As our
good friend, Mr. Pig, sometimes says: "ROAR"!! - UPDATE: Jim said:
"After doing a little research, I learned that Brinker's new opening
is a line spoken by Danny DeVito in the movie "Heist"."

Congratulations to the Giants and Rangers!

My daughter took this picture in her garden yesterday:

http://honeysbobbrinkerbeehivebuzz2.blogspot.com/