David Korn's Perspectives
(Guest Commentary by David Korn – March 7, 2010)
Note: John Mauldin's most recent commentary on his 7-day information sessions at the “Singularity University” is a must-read. The overriding theme of the sessions was “accelerating technology,” namely accelerating technological changes in the areas of biotechnology, alternative energy, and supercomputing.
Dear Subscribers and Readers,
As I mentioned on our mid-week commentary, I will not be writing this weekend's commentary. Instead, I have brought in David Korn of Begininvesting.com as a guest commentator. David believes that we're currently witnessing a cyclical bull market within a secular bear market – and offers his perspectives on the current cyclical bull market through an analysis of the first cyclical bull market within the 1929 to 1949 secular bear market. For all the fundamental faults of the global economy, both David and I believe that the current cyclical bull market remains intact.
David also offers his thoughts on other investments such as emerging market debt and CDs. Finally, David closes with a commentary on the optimal withdrawal strategy for retirees. David's analysis has always been very good and insightful – and so I urge you to read this commentary in its entirety. His style is a little different to mine, although similar to me, he also mentions the popular sentiment indicators like the Investors Intelligence and the AAII surveys. Thank you, David and enjoy!
First of all, I believe a little bit of introduction is in order: David is the author of a weekly financial newsletter which is sent via e-mail and is editor of the website, www.Begininvesting.com. His newsletter is focused on personal finance, stock market timing, and independent stock market analysis. He also provides a summary and interpretation of the radio show Moneytalk, hosted by Bob Brinker.
David's newsletter has been quoted on TheStreet.com, CBSMarketwatch.com, and he recently appeared as a guest on Paul Merriman's radio show, Sound Investing.
David offers a unique brand of market timing, and has been successful in identifying some major inflection points in the market. His newsletter has attracted a devoted following, and he prides himself on providing personal responses to every question he is asked. I respect David's work a lot and I have also previously been a guest commentator in his newsletter.
David Korn's Stock Market Commentary, Interpretation of Moneytalk (Bob Brinker Host), Financial Education, Helpful Links, Guest Editorials, and Special Alert E-Mail Service. Copyright David Korn, L.L.C. 2010
Web site: http://www.BeginInvesting.com
March 7, 2010 Newsletter
QUOTE OF THE WEEK
“The public, as a whole, buys at the wrong time and sells at the wrong time. The average operator, when he sees two or three points profit, takes it; but, if a stock goes against him two or three points, he holds on waiting for the price to recovery with oftentimes, the result of seeing a loss of two or three points run into a loss of ten points.”
- Charles Dow
MARKET NUMBERS AS OF FRIDAY MARCH 5, 2010
S&P 500: 1,138.69
10-Yr. Bond: 3.682%
DAVID KORN'S NEWSLETTER EQUITY INVESTMENT PORTFOLIO
This portfolio is based on an asset allocation consistently entirely of equities (when fully invested). It does not include fixed income (i.e. bonds) which would be more appropriate for some investors -- especially those approaching or in retirement. If you are interested in a retirement portfolio, consider my other newsletter, The Retirement Advisor at http://retirementadvisor.blogspot.com/.
25% Vipers (Ticker: VTI) Cost Basis: $54.12 (Current Price: $58.21)
27% S&P 500 Index Depository Receipts (Ticker: SPY) Cost Basis: $103.44 (Current Price: $114.25)
15% Spiders Select Technology (Ticker: XLK) Cost Basis $19.44 (Current Price: $22.31)
5% iShares MSCI Japan Index Fund (Ticker: EWJ) Cost Basis $9.80 (Current Price: $10.14)
2% ProFunds Rising Rates Opportunity Inverse Fund (RRPIX) Cost Basis: $18.83 (Current price: $14.58)
2% Vanguard Total World Stock Index Fund (Ticker: VT) Cost Basis: $48.12 (Current price: $43.45)
24% EverBank Money Market 1.51% (3-month Promotional Rate of 2.25%)
DAVID KORN'S WEEKLY STOCK MARKET COMMENTARY: For the week, the Dow gained 2.3%, the S&P 500 gained 3.1% and the Nasdaq rose 3.9%. The Russell 2000 gained the most ground, rising 6.5%. Last week, I noted that the Russell 2000 was the only index up year-to-date showing that investor appetite for risk is still healthy as the Russell 2000 represents a barometer of the small-cap segment of the U.S. Equity universe. The continued out-performance in the Russell 2000 (and Nasdaq) are positive signs for the continuation of the bull market trend. With the gains this week, all of the benchmark indices are up in 2010, tacking on hefty gains from last year.
Seems like forever ago, but the last bull market ended on October 9, 2007, when the S&P 500 closed at 1,565.15, and the Dow closed at 14,164.53. The bear market that followed was brutal, with the market declining about 56% until the bear market low recorded on March 9, 2009 with the S&P 500 closing at 676.53 and the Dow closing at 6,547.05. That was a scary time for investors as it appeared the entire system was going to collapse.
It's now a year later. Tuesday markets the anniversary of the bear market lows. Since that time, the S&P 500 is up about 66% from the lows. During this bull market, mid-cap and small cap stocks have outperformed in a big way, up 88% and 91% respectively. According to Standard & Poor's Equity Research, during the first year of a bull market, small-cap and mid-cap typically beat large cap stocks, returning 22% on average in the second year versus a 15% rise in large cap stocks. Check out the article this weekend entitled, “How to make money in the bull market's second year” at this url:
I remain of the opinion that this bull market is of a cyclical nature — short term, as compared to a secular or long term nature. We had a secular bear market from 1966-1982. And I have been of the opinion for the last decade, that we entered another secular bear market that began in the first quarter of 2000. During this long-term period, stocks go through various short term cycles of bulls and bears. My belief is that this secular bear market involves a long term reversion of the valuation of the market to the mean. It reached crazy levels at the end of 1999, and excesses have to be wrung out of the system.
When analyzing past secular bear markets, the 1966-1982 secular bear market seems the most apt comparison. It is fairly recent history after all comes with all of the bells and whistles of a modern day stock market exchange and modern day thinking. But I believe the 1929-1949 secular bear market is a more apt comparison. Today, I start off with the first cyclical bull market of that period of time, and about every other week will analyze another bull market during that period. Hopefully, it will provide some interesting insight into how the stock market behaved 80 years ago and reveal that investor behavior hasn't changed much at all during that time.
SECULAR BEAR MARKET (September 1929 - June 1949)
Let me take you back in time for a few minutes to set the stage for this analysis.
Its the roaring 20s. And they don't call it "roaring" for nothing. Stocks were the place to be, and borrowing was plentiful. For every dollar you invested, you could borrow $9 worth of stock on margin. And trust me, people were not afraid of using margin back then. Who would be? From August 24, 1921, through September 3, 1929, the Dow rose from 63.90 to 381.19 in a glorious secular bull market producing gains of 497%!
Consider how much press there was when the Dow hit 10,000 a few years back. Now, picture how it must have been when the Dow topped 100 in 1922, doubled that and broke through 200 in 1927 and then just a year later hit the 300 level on December 31, 1928. Talk about a Happy New Year!
"Stocks have reached what looks like a permanently high plateau."
- Irving Fisher, Professor of Economics, Yale University, October 17, 1929
That's a fishy quote from Fisher eh? On September 3, 1929, the day after Labor Day, the Dow hit its pre-crash closing high of 381.17. Are you sitting down? It wouldn't reach that mark again for almost 25 years!
Its hard to believe, but in just over two months, many investors saw their entire portfolio cut in half. Can you imagine that? You have probably heard about "Black Thursday" October 24, 1929, when panic selling took place amongst a frenzy on Wall Street. Indeed, eleven well known speculators had committed suicide before Richard Whitney, then vice-president of the NYSE stepped in, and announced that he was buying stock. This helped alleviate the fear and stop the bleeding.
"The worst has passed."
- Joint statement by representatives of 35 of the largest wire houses on Wall Street at the close of trading, October 24, 1929
"We feel fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices."
- Goodbody and Company, market letter to customers, quoted in the New York Times on October 25, 1929
The following two days, Friday and Saturday (the market was open back then on Saturdays), saw steady sessions with investor confidence being restored. However, investors' hopes were dashed the following week when the market suffered a record one-day loss of about 13% on Black Monday, October 28, 1929, and another 12% loss on Black Tuesday, October 29, 1929.
(You would think market historians could come up with a more creative color scheme to name the days -- perhaps Charcoal Monday or Slate Tuesday, for example).
About two weeks later, the market bottomed (although not its ultimate bottom for this secular bear market). On November 13, 1929, the Dow closed at 198.69 -- a decline of 47.9% in just over two months! Coincidentally, in our most recent bear market, if you look at the S&P 500, it declined about 47% from its peak in March 2000, to its closing low in March 2003. The percentage decline was pretty much the same as in 1929, but the time frame over which it happened, is far different. In 1929, if you had lost half of your net worth in just over two months, the last thing you would be thinking about would be investing in stocks again. If that had been the case, you would have missed a relatively short, yet very profitable cyclical bull market run.
With that introduction, let's take a look at...
CYCLICAL BULL MARKET NUMBER 1 (November 13, 1929-April 17, 1930)
Date: Dow Jones Price (All based on closing numbers)
As the foregoing numbers show, the Dow began the first cyclical bull market of the 1929-1949 secular bear market at a price level of 198.69. Hard to imagine now that the Dow is in the 10,000s. Anyhow, the Dow began its bull journey with a hefty 25% gain in just six trading days. Holy smokes! Talk about volatility. That must have been a relief for many investors.
With gains like 25% in just over a week, you should expect a pullback and that is exactly what happened. From November 21, to November 26, 1929, the Dow made its first correction, pulling back to 235.35 - a decline of 5.29%.
A couple of weeks later, the market had recovered all of its correction declines, and broken through its prior high to close at 262.20 on December 9th. This marked an 11.4% move off of the correction low, and now the Dow was up 31.9% from the bear market lows.
Just 11 days later, the Dow "tested" its previous correction level. This "second correction" as I call it, marked the low that this cyclical bull would fall to. This was an 11.95% correction off of the high.
After correcting the second time to 230.89, the Dow rose slowly but steadily. It took about seven weeks before the Dow hit a new closing high for this cyclical bull market on January 20, 1930. The Dow continued rising with no significant pull back until closing at 272.27 on February 13, 1930. The Dow was now up 37% from its lows.
On February 24th, the Dow corrected 3.6% from its cyclical bull market high. This was an important inflection point for this bull market, because it marked the last correction of any significance which for purposes of my analysis, is a correction over 3.0%.
Ok, stick with me for a moment here before you look at the last set of numbers. This cyclical bull market peaked almost two months later on April 17, 2004, when the Dow closed at 294.07. Once the Dow broke into the 290s, you can see how the market churned before it topped on April 17th. You will see that number in the data below, but I want you to notice how the market spent a lot of days right around that level.
4/17/1930: 294.07 * *Cyclical bull market closing high
4/22/1930: 290.01 * *Last day Dow was in the 290s
As you can see, the Dow stayed within about 6 points from its closing high for about 2 weeks in April. One interesting thing that you can't see from the closing numbers, is that on an intra-day basis, the Dow rose above 293 on seven of those trading days. In my opinion, this is an important point from the "technical analysis" perspective, as it shows that the sellers always came in by the end of the day to prevent it from closing above 294. A sign of distribution, and a flag that the end may have arrived.
All in all, the Dow gained 48.00% during this cyclical bull market which lasted only about five months. Kind of similar to the action we saw since the March lows. The question is whether this bull market is going to have more legs. I personally think it will.
Studying past bull markets, can give you the ability to gain a perspective on how the market moves. Too often, we are unable to see the forest through the trees; or, we follow so closely, that we only see the trees without being conscious of the forest. What can we discern from this analysis? Well, first of all we can learn the obvious. Even in a cyclical bull market, the market doesn't move in a straight line, and there can be several significant pull backs. On the other hand, the largest pull back was only on the magnitude of 11.95%. This fits within the pattern that I observed in the cyclical bull markets during the 1966-1982 secular bear market. Certainly, there can be merit in waiting for buying opportunities, but as you can see, the moves up can be ferocious at times. Moreover, there really were not many "buying opportunities" during this cyclical bull market, so keep that in mind.
Investors Intelligence: According to the latest data, the number of bullish advisors as interpreted by Investors Intelligence rose from 41.1% in the last reading to 42.1% in the latest reading. The percentage of bears declined from 23.3% to 22.7%. Using the formula, Bulls/(Bulls + Bears), the sentiment ratio is 64.96%. The four-week moving average has remained pretty steady at 60.39% in recent weeks, still down considerably from the dangerous level of 77% we saw two months ago.
AAII: According to the latest poll conducted by the American Association of Individual Investors, 35.86% are bullish. Bearish sentiment is at 26.21%. Using the formula [(bulls)/(bulls + bears)], the sentiment ratio is 57.77%. Just a bit higher than last week, but still a benign reading.
CBOE Put/Call Ratio. The put/call ratio closed Friday at 0.83. The 10-day moving average is 0.90 and the 21-day moving average is 0.92. These numbers didn't budge from last week.
After seeing an inordinate degree of bullishness in mid-January as the market was peaking, sentiment has become more balanced, although still on the bullish side as you would expect during an extended uptrend.
NEW BOND OFFERINGS
Stocks still get all the headlines in the financial media. It's what most people want to read about. So much sexier than bonds, even I like to write about the stock market more than bonds. Funny thing is even in the bond arena, there is a hierarchy of interest. Most fixed-income investors are well versed in Treasuries, municipal bonds, GNMAs and the like. Well, with the advent of exchange traded funds, there are ways an individual can diversify their bond portfolio that would have been impossible in years passed.
Emerging Market Debt
Van Eck, an ETF issuer that specializes in hard asset and international equity funds has registered a very unique fixed income exchange traded fund. It is called the Market Vectors Emerging Markets Local Currency Debt ETF which would provide a security that provides exposure to international debt markets and track the respective total return index comprising fixed interest rate bonds. The bonds will have a minimum outstanding amount equal to $100 million in local currency and will be classified as sovereign debt, supra-national bonds or corporate bonds. It's wild that you can get this kind of exposure now through an ETF.
If you are looking for something that is already trading, U.S. Investors can get exposure to emerging market debts through the PowerShares Emerging Markets Sovereign Debt Portfolio (PCY) and the iShares JP Morgan Emerging Bond Fund (EMB). These funds had banner performances over the last year, each up close to 30%. The Van Eck fund that is not yet trading would be the first one denominated in local currencies instead of U.S. Dollars.
More about at the Van Eck web site at this url:
Incidentally, last year Van Eck launched the first ETF to focus on the high-yield segment of the municipal bond market. It is called the Market Vectors High-Yield Municipal Index ETF (ticker: HYD) which tracks the Barclays Capital Municipal Custom High Yield Composite Index. Now's that's a mouthful! That's going to be riskier than most of your average munis. Not necessarily bad, just riskier. The holdings are bonds from private issuers like nursing homes and hospitals, or solar/wind projects that have a public purpose and therefore qualify for tax exempt status.
I am not much for chasing yield in the bond market, and if you are interested in investing in a diversified portfolio of munis, consider the iShares S&P National Municipal Bond ETF (ticker: MUB) or the SPDR Barclays Capital Municipal Bond (ticker: TFI).
For those of you earning next to nothing in your savings, high yield checking accounts are a relatively new development in the financial markets and are gaining popularity as people start to feel more comfortable banking online. In this low rate environment, there remain a few standouts in terms of offering competitive rates.
First Security Bank & Trust is now offering a reward checking account nationwide. It pays 4.01% for balances up to $25,000. There aren't too many places you can get 4% on your money. And even if your checking account goes over $25,000 (we should all be so lucky, you would get 1% on amounts over that).
The requirements to get this rate are not overly restrictive. You must make one direct deposit or ACH debit each month, have 10 check card point of sale transactions each month, and receive e-statements and conduct banking online. There is only a $25 minimum initial deposit and it has some very attractive features including:
1. No monthly service charges
2. Free online banking
3. Free bill pay
4. Free debit card
This bank is located in Iowa, but the reward checking account is offered nationwide. The bank has been a FDIC member since 1934 (FDIC Certificate # 1852). To learn more about this opportunity, go to the following URL:
DETERMING A WITHDRAWAL STRATEGY FOR RETIREMENT PORTFOLIOS
While you may or may not be close to retirement, it is always a good thing to think about the end game — where you want to be financially in retirement. Not only is this exercise practical, but it helps you focus on a goal. Although most investors pre-retirement are thinking about how to maximize returns on their investments, you should also consider what happens after you reach the point where you begin withdrawing from your nest egg. To do so, consider the following questions:
1. How much of my portfolio should I withdraw every year to fund my retirement needs?
2. What is considered a “safe” withdrawal strategy, taking into account the potential for significant equity market declines (such as the 1973-1974, 2000-2002 or 2007-2009 bear markets) or periods of high inflation?
3. I want to withdraw a certain percentage of my portfolio every year. What should be my portfolio's allocation be toward equities or other growth assets?
First, you should adopt a “total portfolio approach” when determining an appropriate withdrawal percentage from a retirement portfolio. Consider, for example, your current income sources (such as Social Security or annuity payments from a defined benefits retirement plan), dividends from stocks and interest from fixed income securities. But that is just the beginning. You also need to focus on inflation, expenses and the unexpected, such as:
• The impact of inflation on the purchasing power of your investments. While certain of your retirement funding such as Social Security may be adjusted for inflation, the overall impact of inflation on your future spending power cannot be overstated. A modest 3 percent inflation rate would cut a portfolio in half in just 24 years. A 6 percent inflation rate would cut a portfolio in half in just twelve years.
• Increased spending on certain goods and services that are typically “consumed” by retirees. Examples include health care expenses, vacation and holiday expenses, or even financial responsibility for an elderly parent (which is increasingly common since many folks are now living into their 90s).
• A “shock event,” such as a 50% decline in the global equity markets over a 3-year period or the destruction of your primary residence due to a natural disaster.
In “The Age of Turbulence,” Alan Greenspan, the former Chairman of the Federal Reserve, said that during his tenure the Fed evolved from making monetary policy based on their “most likely” scenario to making policy based on the worst-case scenario. Ironically, Greenspan didn't forecast the financial meltdown that ensued in 2008, yet many retirees were unprepared for the carnage that occurred in the real estate market and financial markets.
By definition, the greatest risks to one's lifestyle are the ones that one did not plan for ahead of time. Natural disasters, for example, are not commonly a topic of conversation on investment programs. Most people are simply wondering whether the stock market is going up or down. But even in the last few years, individuals in the United States have had lives significantly altered by the unexpected. Take, for example, the fires in California or Hurricane Katrina. These events revealed that many individuals, even sophisticated investors, were under-insured — something that can quickly be remedied in today's world of instant access to information.
So what is an appropriate percentage for a withdrawal strategy to fund retirement needs? Before we further our discussion, please keep in mind that an appropriate withdrawal strategy should meet the following goals:
• Insure you do not run out of money before your life ends.
• Allow for annual increases in withdrawals to offset inflation, and thus maintain a certain standard of living in future years.
Various academic studies place this initial percentage in the 3% to 6% area depending on what assumptions are made. This range covers a variety of assumptions:
• From an assumed 20-year to a 40-year payout period.
• From annualizing one's entire portfolio at retirement to keeping a significant part of it in equities or other growth assets.
Assuming that one is retiring at age 65 today, it makes a lot of sense to leave a significant portion of your funds in equities, especially if you have a 30 to 40-year horizon for a significant part of your portfolio (over a 20-year period or longer, the probability of bonds outperforming equities has historically been about 5%, all the more so given today's low interest rate environment). Case in point: The Vanguard Target Retirement 2025 fund currently has a 60% allocation to equities.
Investors should also be prepared for an inevitable truth; namely, that asset returns do not move up in a straight line, and rarely hit “the average.” Diversification and rebalancing only work if you stick to it in all markets.
For those that want zero equity exposure, the greatest risk to your portfolio will be the chance of you outliving your portfolio, unless you are willing to put up with a significantly low withdrawal rate, such as 3% annually or even below. Moreover, unless you are investing a substantial portion of your portfolio into investments that are tied to inflation (such as iBonds or TIPS), you are also exposing yourself to the risks of higher inflation going forward. While equities also tend to underperform in a high-inflation environment, they are, to a certain extent, less affected as companies can partially compensate the ill effects of high inflation on earnings by raising prices.
“The Journal of Financial Planning” has some of the best work on this topic covered by three exhaustive and insightful papers written by CFP William Bengen in the mid 1990s. Bengen discussed what would make sense for a withdrawal strategy – looking at historical bond, stock and inflation return data from 1926 to 1992 (at http://tinyurl.com/yuudas). More importantly, this period covers three tumultuous periods for financial assets, the 1929 to 1932 bear market for stocks, the 1937 to 1941 bear market, and the 1973 to 1974 high-inflation bear market for both stocks and bonds. Moreover, this study was done using lower return data from right before the stock market bubble from 1995 to 2000.
Assuming a 50/50 allocation to stocks and bonds, Bengen concluded that a 3.5% withdrawal rate in the first year of retirement (with subsequent withdrawal amounts adjusted for inflation) is “absolutely safe,” to the extent that there are no more shocks to financial assets going forward than what have occurred over the 1926 to 1992 period, and assuming that the retiree's life expectancy is less than 50 years. If a retiree has a 33-year life expectancy, then a first-year withdrawal rate of as high as 4.0% should be safe. However, based on historical experience, a first-year withdrawal rate of just 4.25% could result in the portfolio running out of funds in as little as 28 years.
It is always prudent to plan for the worst-case scenario, as folks who retired in the late 1960s and early 1970s (just before the high inflation and bear market in both stocks and bonds kicked in) painfully learned. More recently, the 2008 financial meltdown is still being felt and may not truly be resolved for years.
There is also no guarantee that the future performance of financial assets would be better than past performance. A more conservative approach would be to further ratchet down historical returns by 50 to 100 basis points across the board. Under such a scenario, the “absolutely safe” withdrawal strategy would be a first-year withdrawal rate somewhere in the range of 2.5% to 3.5%, assuming a 50/50 stock/bond allocation.
Mr. Bengen also notes that, historically (and not surprisingly), stocks have returned significantly more than bonds after inflation over the long run. Given where bond yields are today versus equity earnings yield and equity prices, it is reasonable to expect that stocks will return more than bonds over the long run. Under this scenario, the most risky portfolios hold too little in stocks. For example, using Mr. Bengen's data and assuming a 100% allocation to bonds, even a withdrawal strategy with an initial withdrawal rate of 2% is not sufficient for a 40-year withdrawal strategy under the worst-case inflation scenario.
Fortunately, for those who are very adverse to equities, even a 25% allocation to equities has historically done wonders for the portfolio. For example, assuming an initial withdrawal rate of 2%, there is virtually no chance (again, based on historical data), that the portfolio will exhaust itself based on a 50-year withdrawal strategy. Assuming an initial withdrawal rate of 3%, the worst-case scenario still allows 40 years before the portfolio finally runs out of funds. On the other hand, a 75% equity allocation has been the “optimal” allocation. While the worst-case scenario has the 75% equity allocation running out of funds one year sooner than the 50% equity allocation in all most withdrawal strategies (from 4% to 6%), there is also a slightly less chance that a retiree may run out of funds before he dies. In other words, while a typical financial shock may cause stocks to decline more than bonds, stocks have tended to recover relatively quickly. Of course, there are exceptions where bonds performed better than stocks for an abnormally long period – but keep in mind that this occurred after a long stretch of equity over performance.
While the financial market environment has changed dramatically over the last fifteen years, Bengen's methods for determining a withdrawal strategy remain the “gold standard” within the retirement community. For most retirees, an equity allocation anywhere from 25% to 75% makes sense, no matter what your withdrawal strategy may be – although as Bengen's article implies, a first-year withdrawal rate of 4% may be too high at the worst-case. For more information, you can read Bengen's paper “Determining Withdrawal Rates Using Historical Data” at the following url:
Note: The foregoing article was a modification of an article published in my other newsletter venture, The Retirement Advisor. More info at http://www.theretirementadvisor.net.
The Moneytalk broadcasts were remarkably boring this weekend, with nothing really of interest to report. I will return with a full interpretation in next weekend's newsletter.
A lot of Treasury auctions next week on Monday and Tuesday. In terms of the economic data, we get International Trade, Retail Sales, Consumer Sentiment and Business Inventories. This link brings you to the full economic calendar:
FINAL THOUGHTS FROM DAVID KORN: Have a great week! - David
GLOBEX FUTURES PRICES: Check out this link to try and gauge how the United States' stock market will open tomorrow morning. Remember though, the market sometimes opens very differently than the futures indicate:
DISCLAIMER: This e-mail is neither sanctioned by, nor written under the auspices of ABC Radio Networks, Moneytalk or Bob Brinker. This e-mail is not a substitute for listening to Moneytalk, it is only my interpretation and commentary of some of what is discussed on Moneytalk, along with additional educational information that I include, editorial comments about the market and helpful financial links. I also provide my own stock market commentary to subscribers as part of my service and give them access to my web site, http://www.BeginInvesting.com. If you want to know what was said verbatim on Moneytalk, listen to the show live or subscribe to "Moneytalk on Demand" which allows you to listen to the show in case you missed it live. The web site, bobbrinker.com has all the links to the ABC Radio Network stations that broadcast the show live. The information contained in this newsletter is not intended to constitute financial advice and is not a recommendation or solicitation to buy, sell or hold any security. This newsletter is strictly informational and educational and is not to be construed as any kind of financial advice, investment advice or legal advice. Copyright David Korn, L.L.C. 2010.