From the Bob Brinker Fan Club
by Kirk

I recommend my newsletter portfolio as an ALTERNATIVE to the QQQs that Bob Brinker recommended for his three model portfolios near the very top of the 2000 bubble.  The data here shows followers of Bob Brinker would TURBO CHARGE their returns had they replaced his recommended QQQ exchange traded fund with the securities in my newsletter portfolio. 
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Transcript of Bob Brinker's Guest Appearance on The Nightly Business Report
July 23, 1999 &
Kirk's Question to Bob Brinker asked on NBR

Guest Appearance - The Nightly Business Report, July 23, 1999

KANGAS: My guest market monitor this week is Bob Brinker, editor of "Bob Brinker's Marketimer" letter, and Bob of course is also the popular host of ABC radio's weekend program "Money Talk." Welcome back, Bob.

BOB BRINKER, EDITOR, "BOB BRINKER'S MARKETIMER": Thanks, Paul. Great to be here.

KANGAS: You know, you have been one of the most unwavering bulls of this entire decade as far as your market letter is concerned, but am I noticing a little addition of a more a cautionary tone to your recent letters?

BRINKER: Well, Paul, it's been a tremendous run, as you know, for nine years. We're up about 400 percent in the major indexes since 1990, and valuations have skyrocketed. We're up around 27, 28 times S&P earnings for 1999. This has been the "mother of all bull markets."

KANGAS: So, overvaluation is a problem with you?

BRINKER: Valuation is something we have a great deal of respect for. There are a number of factors we're looking at right now, the Federal Reserve, in our view, has been tightening monetary policy in recent months. There is a possibility we could be looking at a synchronized global economic recovery going forward. That could give rise to inflation concerns at the Federal Reserve. They're already preoccupied at the Fed, as you know, about the very tight labor markets. So, we're watching that. Obviously, interest rates have backed up in the last nine months, and investor complacency is amazing today. It seems as though many investors think 20, 30 percent a year is a national birth right.

KANGAS: So, what do you see ahead now, Bob?

BRINKER: We're watching all of these factors very carefully, and we're not making a change at this point. But if we have to change our investment policy, we will change it.

KANGAS: Well, we've gotten to 11,200 on the Dow, and do you see maybe that's about it for a while?

BRINKER: Well, I think that the 11,000s could be real difficult to climb through. I think there's a lot of stock for sale in the 11,000s.

KANGAS: All right. Now, in tonight's "ask the market monitor" segment for our viewers, Kirk Lindstrom of Los Altos, California, who watches us on KQED, asks, "why have you had Microsoft as a 'hold' for so may years in your newsletter rather that a 'buy on pullbacks?'" You recommended Microsoft on this program in the early 90's.

MSFT Charts & Quote

BRINKER: Well, we certainly should thank the viewer for reminding us of Microsoft. You're right, Paul. Right here on the NIGHTLY BUSINESS REPORT, also in "Marketimer" we initially recommended purchase of Microsoft in 1990 at a split adjusted $2 a share. And in the newsletter we called it the technology stock for the 90's. Now we're up over 4,500 percent on that recommendation.

KANGAS: So, are you taking money off the table now, Bob?

BRINKER: Well, we're holding the stock. We did maintain, to answer the viewer, we did maintain "buy" points for several years. But now we're at 60 times next year's earnings on Microsoft, so we're going to stay with a "hold" for now. That's a rich stock.

[7/23/99 MSFT=45; 12/20/00 MSFT=20.75!!!
As of 5/16/05 MSFT remains a HOLD in Bob Brinker's Marketimer.]

KANGAS: OK. The next question from Jackson Mississippi, Eric Ritter , who watches us on WMPN asks, "why don't you recommend more individual stocks in your 'Marketimer' newsletter?'"

BRINKER: Really the "Marketimer" newsletter's focus is twofold, to be on the right side of the major trends in the market; that's key obviously. And also to pick mutual funds that you can invest in over time to build your wealth. And that's why we publish the recommended list and the model portfolios.

KANGAS: Bob, one of your "buy" recommendations on your last visit with us was Stanford Telecom (STII) at 22. It's now up around 27. Buy more, sell it or hold it?

BRINKER: I would take profits of Stanford Telecom. They are the target of a takeover offer from Newbridge Networks (NN), the Canadian company. I think that this tremendous run-up in the stock in the last few months is a profit-taking opportunity in Stanford Telecom.

KANGAS: We just have a minute left. You also said at that time to by Ultratech Stepper (UTEK) at 29. Now, it's down to about 15. What do you do with that?

BRINKER: Ultratech's been through a difficult period. They have strong financials, close to $10 in tangible book value, mostly in cash. A new product effort under way, and they have a new technology, bump processing for advanced semiconductor manufacture. This is an important technology going forward for high performance low cost chips. So we have a "hold" on that stock.

[UTEK Prices: 7/23/99 UTEK=14.875, 1/11/00 UTEK=$15.19 ]

KANGAS: Bob, it's come to my attention that employees at Ultratech have the option to invest their 401 (k) funds with a management firm in which you are a principal.

BRINKER: Exactly.

KANGAS: So, my question is does your firm recommend individual stocks?

BRINKER: Absolutely not. The BJ Group exclusively invests in no-load mutual funds.

KANGAS: All right. So, you see no conflict there?

BRINKER: Absolutely not.

KANGAS: All right, 15 seconds. Any new recommendations Robert?

BRINKER: I would say stay very, very close to the stock market indicators here. Don't become complacent. Don't listen to this business of the market skyrocketing.

[EC: Lets see what "the market" did in the next year]

[EC: It looks like the S&P500 went up about 10% and the NASDAQ went up 90% in the year following that pronouncement by Brinker.]

KANGAS: Bob, thanks very much for being with us.

BRINKER: Thanks, Paul.

KANGAS: My guest Bob Brinker of "Bob Brinker's Marketimer" letter.

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Money Talk, Moneytalk, Marketimer Newsletter, Market timer Newsletter

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