WSJ Weighs in on Peter Schiff 56 comments
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Geez…. Mish’s post from Sunday night, “Peter Schiff Was Wrong”, has sure generated a lot of interest and controversy. That’s because Peter Schiff is a polarizing figure. People tend to either love him or hate him and have a hard time coming to a balanced, realistic assesment of him.
Today, The Wall Street Journal weighed in with a piece on the front of their Money & Investing section: “Right Forecast By Schiff, Wrong Plan?” (subscription required - e-mail me for a link if you want to read it). In it, they mainly rehash criticisms from Mish’s piece. Schiff was wrong about decoupling, wrong about commodities, wrong about the dollar in 2008.
They provide a couple of specific examples of how this played out for specific Euro Pacific clients. Richard De Gennaro, an 83-year-old retired Harvard University librarian, put $100,000 into a Euro Pacific account early in 2008. The account is now worth $37,000 - a 63% plunge.
Similarly, Brian Kullberg, a design engineer in Portland, Ore, put $70,000 into a Euro Pacific account early last year. That account is now worth about $25,000 - a similar 64% drop.
Schiff has put up a piece defending himself: “Peter Schiff Answers His Critics”. The main defense is that short term market fluctuations don’t disprove his longer term investment theses: “[Mish] is confusing short term market fluctuations with long term economic trends……I never held myself out to be a market timer. My advice was always geared to long term investors.”
That’s primarily how I defended Schiff as well in my “In Defense Of Peter Schiff - A Response To Mish”.
*****
The truth, as usual, lies somewhere in the middle. Peter Schiff deserves a lot of credit for the correct calls he made about the housing bubble, the financial system and the US economy - not only for the calls but the intransigent way in which he made them time and again well in advance of when most others had any clue this was on the horizon, and often in the face of ridicule and dismissal.
At the same time, the bottom line for any investment advisor is performance, and by that standard Schiff failed miserably in 2008. He was wrong, at least in terms of timing, as far as decoupling and commodities. Longer term (I’m talking about years), I think he’ll be right here as well but that doesn’t mean that losing 50+% in the medium term hurts any less.
I think what this comes down to is that Schiff is an excellent big picture, macro economic forecaster but he is not an excellent trader. That means his positions can get hammered in the short term, though longer term I believe he will outperform most other investment professionals.
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This article has 56 comments:
gene inger
ingerletter.com
cheers to those who have been realistic, and in favor of sensible trading too!
gene
gene inger
ingerletter.com
In the end, all that matters is your performance. They both have talked down this market and haven't benefited, therefore, they've been given way too much credit. Talk is cheap, results speak very loud!
Go Mish. Keep on reelin' 'em in, buddy. I'm through trying to stop the destruction of the US Dollar. When this is over I'll be able to look in the mirror.
I read Peter Schiff's books and kept the detailed investment strategy part in the back of mind to be balanced with everything else I research and observe. If it jives with what I am seeing and hearing other places it may get done.
Understanding the individual elements of such an event well enough to advise someone to navigate it without any harm is beyond anyone's ability - at least by current primitive understanding of economics we now practice.
Give the fellow credit for what he got right and for enduring the ridicule from peers and audiences every time he warned of this and calmly stood up to their hubris and criticism.
He is due credit and respect for being a masterful prognosticator and nothing but praise for stepping up to the plate and warning us of what he clearly saw coming.
On Jan 30 05:13 PM Gtarras wrote:
> Schiff's been preaching the mortgage collapse since 2003... He turned
> out to be correct in his big picture view.. His clients might have
> to wait another 4-5 years to for their portfolios to make them money...
It seems that people are all ready to throw Mr Schiff under the bus for 8 mos of performance in a highly unusual market dynamic. Hopefully people don't throw out the baby with the bath water and ignore Peters long term analysis and curative suggestions, because I think he really has a handle on the fundamental economic problems today .
The same permabears often run investment funds that ruin their clients; the permabear is only right in some macro sense. Despite the fact they have predicted the bear, they haven't been able to translate that into a benefit for their clients. That is the first warning. The second warning is that they start talking about not being market timers. Well isn't that what they claim in their macro predictions?
Look up another well-known permabear, Joe Granville. For two-and-a-half decades he averaged a -20% annual performance. His seminars sometimes featuring a trained chimpanzee who could play Granville's theme song "The Bagholder's Blues," on piano.
Peter Schiff had an interview on Seeking Alpha recently where he advised people to buy batteries to tide them through the coming economic collapse. That says it all for me.
Batteries.
Peter Schiff failed to exercise the proper planning for client
Peter Schiff use one size fits all approach
Peter Schiff lacks diligence when managing client money
Peter Schiff killed his client's portfolio
Peter Schiff is right about inflation, US currency long term
but many other also know! He is not genius
Peter Schiff is good at writing book and marketing
Peter Schiff is a failure and irresponsible when it comes to managing money
Do we still need to debate more on Peter Schiff?
But they're 180 degrees out of phase. Excess production produces broader wealth. Rich people hire workers, not poor people. Rich people like Bill Gates and Warren Buffet can invest billions in finding new ways to alleviate poverty and improve education. And yesterday's luxuries- portable phones, airbags in Mercedes, houses with home offices- become today's necessities. And expanding trade and financial engineering, even when it creates inefficiencies in the short term, translate to improve production capacity in the future.
The reticence of Mr. Bernanke to live up to his nom de plume, combined with the normal 6-9 month lag between monetary stimulus and GDP, mean this downturn will last a bit longer than it should have (and it should never have been created by the excessive Fed rate hikes in the first place), but when inflation starts to kick in and the dollar weakens again (as it did during the last boom) and we're starting to employ additional and alternative lower cost sources of supply again and jobs recover here and abroad, Mr. Schiff and Mr. Roubini will really be exposed- and I doubt Mr. Sciff's investors will be able to recover their losses in the meantime.
When you find a heavy favorite (housing bubble) you want to bet against it. But you still have to pick the winner. In this case , Schiff beat the favorite but still ripped up his tickets , having backed a LOSER in the race.
Happens every day.
Also, I have viewed the videos of Mr. Shiff when he was (very accurately) predicting what was coming and when. I remember in particular that on "Bulls & Bears", the other guests were giggling and pointing at him as schoolgirls might, ridiculing his predictions of a housing collapse and credit crisis.
To be fair, I think his predictions were much more on target than a "broken clock" would be. There were only a few voices in the wilderness, and Mr. Schiff was one of them.
What a moron!
Noworries
Peter runs a brokerages. Brokerages don't get paid to put people in money market funds. I do wonder if his "business" influenced his advice - he chose to put people in a "more safe" alternative (dividend paying foreign stocks) which turned out bad rather than going total "Mad Max" and getting totally out of the market. Peter does say his personal wealth is >50% gold/gold miners. I don't know about you, but my gold portfolio (GLD, Perth Mint, miners) is doing just fine. Thanks Peter.
Peter is not a politician (excluding the Draft Peter Schiff for Senate campaign). It is fine for him to tell you that the best medicine for the depression is letting the market work. Unemployed workers and their families won't eat Austrian Economics, so Peter can talk about the evils of government all he wants, but until he is in office, it is just an intellectual argument - people don't eat over the long run.
I have given dozens of copies of his books to friends/family. This whole argument is the best case for listening to experts but make your own decisions!
Now, how was that possible? Someone was flooding the entire planet with lending! Usually, the lenders doing this have super-low interest rates. And who, pray tell, was that?
The Bank of Japan with its ZIRP loans! Duh! I predicted not only the date of the apex of the bubble correctly, I also correctly noted that it was global AND I accurately predicted that the funny money pouring out of Japan would shift towards immense take-over schemes which hedge funds and investment bankers dump epic loans on top of businesses.
I even accurately predicted the month the Japanese carry trade would end and also, that this would cause a freeze up of 'liquidity' as lending ceased to flow from Japan and the rest of the world.
I even figured out who would start the very violent unwinding of the Japanese carry trade and the rise of the yen: China. For China and Japan had a nasty spat in the middle of July, 2007. I must have been one of the few people [I read both Chinese and Japanese economic and diplomatic news] to notice that Japan told China, 'We will drive the value of the yen down to 120 to the dollar and then will flood China with this money!'
And China, fighting rising inflation, said, 'No way in hell...we are going to force the yen up to 100 to the dollar!' And they did and the carry trade unwound starting on August 15, 2007, one month after the diplomatic spat.
International trade is collapsing because too much credit was made from thin air. Schiff could see the vague outlines of what was going on but NOT the details nor the ultimate underpinnings and what to watch.
This is due to Americans and British being very ego-centric. They think they are the world's finance and economic powerhouses when they are both just leaves running in the waters going down the gutter in an Asian downpour.
Many reasonable people correctly anticipated an economic downturn when the housing bubble burst. A few reasonable people correctly anticipated that the bad loans would destroy the banks that held the bad paper when the madness ended.
I'm unaware of anyone who foresaw a synchronized collapse of economic activity worldwide, appreciation of the US Dollar, and collapse of nearly all commodity prices except gold.
I bought a little paper gold (GLD) in one of my retirement accounts yesterday. FWIW I've been all in cash except for a few trades since June 2008. It pays to be paranoid.
Have you noticed how intensely anti-business Obama is? Obama has been in office less than two weeks and we have seen the demonization of Wall Street and business, a trillion dollars of pork misnamed a stimulus package, and the revitalization of labor unions.
With such an anti-capitalist pro-socialist President and an accommodating Congress, I'm wondering if anything other than hard assets look attractive at this time.
Peter advocated stocks with high yielding dividends. Don't dividends get paid even if the stock is down? Gold, was the hedge against a catastrophic meltdown of the stock market & US dollar. Isn't gold poised to skyrocket, just as Schiff predicted it would? The gains on gold will dwarf the downside of the stock portfolio in a very short period of time.
Tough concept for day trader types to grasp, i understand. Stop looking at the stock price during a down turn. Only a fool, trader type, would panic & sell a high yielding stock at any price.
Perhaps going back to school & re-enrolling in a reading comprehension course would be adviseable for the Peter Schiff critics out there.
On Jan 31 09:29 AM Elaine Supkis wrote:
> Generalized calling of events is easy. Calling them exactly is hard.
> Saying, 'There is a bubble' is easy. Explaining where the funny money
> comes from is hard. For example, the housing bubble was NOT local.
> It was NOT in America. It was GLOBAL.
>
> Now, how was that possible? Someone was flooding the entire planet
> with lending! Usually, the lenders doing this have super-low interest
> rates. And who, pray tell, was that?
>
> The Bank of Japan with its ZIRP loans! Duh! I predicted not only
> the date of the apex of the bubble correctly, I also correctly noted
> that it was global AND I accurately predicted that the funny money
> pouring out of Japan would shift towards immense take-over schemes
> which hedge funds and investment bankers dump epic loans on top of
> businesses.
>
> I even accurately predicted the month the Japanese carry trade would
> end and also, that this would cause a freeze up of 'liquidity' as
> lending ceased to flow from Japan and the rest of the world.
>
> I even figured out who would start the very violent unwinding of
> the Japanese carry trade and the rise of the yen: China. For China
> and Japan had a nasty spat in the middle of July, 2007. I must have
> been one of the few people [I read both Chinese and Japanese economic
> and diplomatic news] to notice that Japan told China, 'We will drive
> the value of the yen down to 120 to the dollar and then will flood
> China with this money!'
>
> And China, fighting rising inflation, said, 'No way in hell...we
> are going to force the yen up to 100 to the dollar!' And they did
> and the carry trade unwound starting on August 15, 2007, one month
> after the diplomatic spat.
>
> International trade is collapsing because too much credit was made
> from thin air. Schiff could see the vague outlines of what was going
> on but NOT the details nor the ultimate underpinnings and what to
> watch.
>
> This is due to Americans and British being very ego-centric. They
> think they are the world's finance and economic powerhouses when
> they are both just leaves running in the waters going down the gutter
> in an Asian downpour.
On Jan 31 12:00 AM FETZ wrote:
> Peter Schiff is a nobody. No MBA from a prestigious school. No CFA.
> No CAIA. No CPA. He is a stockbroker and everyone that works for
> Euro Pacific Capital is too. I wonder how he came up with such a
> sophisticated name. he doesn't have any credentials for me to even
> bother to listen to him.
On Jan 30 05:13 PM Gtarras wrote:
> Schiff's been preaching the mortgage collapse since 2003... He turned
> out to be correct in his big picture view.. His clients might have
> to wait another 4-5 years to for their portfolios to make them money...
1) Saying stocks will come back would imply that they will be around. Research Oz Minerals, Babcock Power, Minara Resources, Silver Mining Corp and let me know if they are anything but bankrupt. These are 4 of the Schiff picked stocks (3 of which were in my account).
2) have you ever placed a sale with your stockbroker and they said, hey first I have to look and see whether you are selling the stock for a gain or loss. If you are selling it for a gain I get a 1% percentage commission .. if you sell it for a loss it costs you $50/trade. Guess which comes out higher (his clients are losing big time so you should figure this out easily)
I could go on and on with this. I actually agree 100% of Schiff's recommendations when he is on the talk shows talking about US government policies, FED, ect... But that doesn't mean he is a good investor or worthy of having my money. If he believes in capitalism as much as he says he does he should realize that his firm should go out of business for what it has done to its clients money/savings. IF his actual track record would out there people would not be investing with him.
Even this articles opening "performance shock drops" , which only details the performance of short term investors , does not include as well
examples of longer term Schiff investment portfolio results.
My personal opinion is that there are no gurus over the long run
and you have to periodically take some profits at peaks and buy at
valleys.
But Schiff has been amazingly accurate and FUNDAMENTALLY LOGICAL in a world where insanity generally trumps common sense.
To attack him for poor market timing -
Hey , dont invest with him if you like -
But you're a fool if you dont heed his theoretical analysis , and "Mish" is a frustrated letter writer jealous of Schiff's popularity , who may have made some good timing calls and considers that the whole ball game .
Next time , Shiff's timing may trump "Mish's" -
I assure you there'll be no "attack" then. Only silence.
How do I iknow?
Cause it's always that way -
IE; When's the last time "revered guru" Robert Prechter's been right about anything?
Having said that, the effect of financial calamities are unpredictable due unpredictable actions that take place in future so it is impossible to know where the money has to be parked for the best results.
Going cash when all western banks were about to collapse is one thing that an analyst who had predicted bank failures could not do . Those that had no clue stayed with the collapsing banking system and they were saved by their governments and guarantees just because they got lucky.
So give the man credit when it is due.
It's safe to say nobody has a freakin clue what is going on or where we are headed. Gold will benefit under all scenarios.
thesnowjob.wordpress.c...
"Batteries!" LOL
Reminds me of when on his radio show he was replying to a caller who asked about holding US dollars and he responded that the only US money he should hold was pennies and nickels because the intrinsic value would be well above face value (cost) in the coming commodity boom.
So apparently jars of pennies are a good investment or hedge to Schiff!
What's the wife going to say when you convert tens of thousands of dollars into pennies and nickels and fill up the house with them?
For a guy who made some great calls and comes across as highly intelligent and articulate on talk shows he occasionally really makes you wonder.
On Jan 30 10:49 PM otbricki wrote:
> The Peter Schiff story is not new. Every down market gets predicted
> by some group of permabears. A broken clock is right twice a day.
> Roubini and Schiff and so on are the names this time. These people
> generate a cult following based on this call.
>
> The same permabears often run investment funds that ruin their clients;
> the permabear is only right in some macro sense. Despite the fact
> they have predicted the bear, they haven't been able to translate
> that into a benefit for their clients. That is the first warning.
> The second warning is that they start talking about not being market
> timers. Well isn't that what they claim in their macro predictions?
>
>
> Look up another well-known permabear, Joe Granville. For two-and-a-half
> decades he averaged a -20% annual performance. His seminars sometimes
> featuring a trained chimpanzee who could play Granville's theme song
> "The Bagholder's Blues," on piano.
>
> Peter Schiff had an interview on Seeking Alpha recently where he
> advised people to buy batteries to tide them through the coming economic
> collapse. That says it all for me.
>
> Batteries.
>
I think *both* Mish and Peter have good insights, and I wish they would both focus more on education and clarification rather than bickering with each other.
I've lost half the money I invested with Schiff, but I lost almost as much in my other investments during the same time period, based on mainstream-vanilla advice. Who's to blame for that?
Does anyone here remember Julian Simon's bet with a famous population doomster? Julian Simon postulated that the rise of composites would cause some metals to lose. I can't remember exactly what the time period was, but Julian Simon won the bet.
Eating, drinking, and staying warm enough in the cold are seeming valuable to people where I live. There is also a great deal of internet activity on these subjects.
National statistics may also mislead. Maybe gold is still the thing in upscale parts of Manhattan, but I live on the Upper Left Coast. I know someone who sold a skirt made of organic produce ties off the lower part of her body at a Halloween party that drew party people who flew in to party. Granted, there was some metal in the ties, but It's not your classic metal play.
The silver lining of an appointment of Geithner is that we now have the Geithner defense concerning tax payments.
I guess what I am saying here is that it is a different game now. We had a top-down decider who decided against the average guy and whose reign was an absolute disaster of sending dollars off-shore in counter-productive activity. Little seems to have changed with the new king so far, but some parts of the U.S. population have shrugged and decided to start trading locally.
How have we calculated underground activity in the past? Where does it show up in statistics, and how do we figure it in with investment activity? I left money I might need soon in a local credit union in Franklin Templeton double tax-frees. So far that has worked out pretty well, compared to other scenarios. I almost wish I had put my IRA in it, though my advisor would not have let me. I feel fortunate I seem only to have lost about a third of the IRA money.
Anyway, I'm looking for some conversation that is between buy-gold and buy-McDonalds.
Now, 3-4 years down the road will China be a new growth driver? YES. But Schiff's clients (some of whom may not live that long) will be starting off on this new adventure with only 20% o their original capital or less. That is going to have to be some mighty powerful growth to make up for this whacking!
The lesson for Schiff is there is no such thing as a successful non market timer because the entire stock market is one big rolling Ponzi Scheme into which only gamblers enter. Nongamblers just buy physical gold and are done with the process of trying to screw their neighbor out of their money. But if you are going to gamble in the Ponzi Scheme, buying stocks should be done on fundamentals AND technical analysis. Selling stocks should be done mainly on technical analysis.
On top of this, I have archives at three other places: emsnews.wordpress.com/
elainemeinelsupkis.typ.../
culturelifenewsii.blog.../
If you want, you can explore my site. Just look at the cartoons, they explain everything. And one other thing: people grossly underestimate the mess created by the Japanese carry trade. Many Americans who are not inside the investment banking community, probably never even heard of this thing. It is now gone and incidentally, our banking 'liquidity' vanished at the same time.
Now, the US is ZIRP and we are at zero interest rates only it doesn't work for us so hot since we are an importing economy, not a major exporting economy like Japan.
About gold: it is now going up due to desperation. When banks collapse, gold goes up. Double, triple. But it, too, can go down and do this with amazing speed. All we have to do is stop the 0% lending.
On Jan 31 12:00 AM FETZ wrote:
> Peter Schiff is a nobody. No MBA from a prestigious school. No CFA.
> No CAIA. No CPA. He is a stockbroker and everyone that works for
> Euro Pacific Capital is too. I wonder how he came up with such a
> sophisticated name. he doesn't have any credentials for me to even
> bother to listen to him.
"In Europe, it is illegal to talk about the awful close similarity of Naziism with Zionism. But luckily for me, right now I have some freedom of speech. So I can deduce the obvious. More proof comes in every day, that the Jews in Israel are going insane and are very tempted to have a Final Solution. Obama and his new envoy will struggle to tame this beast but we shall see. Will AIPAC pull strings? Will the US media begin hammering Obama mercilessly? If he is fair, he is a dead man walking."
I am not sure, even after searching the site, if she is writing this stuff, or it belongs to others, but she is using the site as evidence in her favor so I start there. I couldn't even find anything particularly about her and her views, so I am not sure the site supports her at all. However, again, she cites it, so I am assuming it comports with her views. Maybe not, and she would do well to explain that connection.
But the use of this site by her at all says something to me about her state of mind and presents a question of credibility in the first place.
Blodget, to his credit, at least felt shame for the destruction he wrought. If Schiff is any kind of man, he'll at least take responsibility for his incompetence (instead of making excuses), and slink away into the shadows.
On Jan 30 10:02 PM occdude wrote:
> I reiterate. Barring the "all in equities crowd", Mr. Schiff recommended
> more than just equities. He recommended substantial positions in
> gold and foreign currencies as well. To his credit I think he makes
> very little with the latter recommendations also, he doesn't encourage
> churning of accounts and favors a buy and hold strategy suitable
> for passive, less that knowledgable long term investors. I read
> both Mish and Schiff regularly and respect both of their opinions
> but realize that Mish is more short term and Peter has a good macroeconomic
> outlook WITH the fundamentals on why he thinks the way he does.
>
>
> It seems that people are all ready to throw Mr Schiff under the bus
> for 8 mos of performance in a highly unusual market dynamic. Hopefully
> people don't throw out the baby with the bath water and ignore Peters
> long term analysis and curative suggestions, because I think he really
> has a handle on the fundamental economic problems today .
Jim Rogers considers himself the world's worst market timer, too. Let's ignore him as well.
Who IS a good market timer? People telling you they can time the market perfectly are selling you a bill of goods.
THE SOROS INVESTMENT YEAR:
Positions I took were too big for ever more volatile markets
Although I positioned myself reasonably well for what was coming last year, one thing I got wrong cost me dearly: there was no decoupling between markets of the developed and developing worlds.
Indian and Chinese stocks were hit even harder than those in the US and Europe. Since we did not reduce our exposure, we lost more money in India than we had made the year before. Our Chinese manager did better by his stock selection; we were also helped by the appreciation of the renminbi.
I had to push very hard in my macro-account to offset both these losses and those incurred by our external managers. This had its own drawback: I overtraded. The positions I took were too large for the increasingly volatile markets and, in order to manage my risk, I could not go against the market in a big way. I had to try to catch minor moves.
That made it difficult to maintain short positions. Although I am an experienced short-seller, I got caught several times and largely missed the biggest down-draught, in October and November.
On the long side, where I stuck to my guns, I lost an enormous amount of money. I was impressed by the potential in the new deep-water oilfield in Brazil and bought a large strategic position in Petrobras, only to see it decline by 75 per cent at one point in time. We also got caught in the developing petrochemical industry in the Gulf.
We did get out of our strategic long position in CVRD, the Brazilian iron ore producer, in time for the end of the commodity bubble and shorted the other big iron ore groups. But we missed an opportunity in the commodities themselves – partly because I knew from experience how difficult it is to trade them.
I was also slow to recognise the reversal of fortune for the dollar and gave back a large portion of our profits. Under the direction of my new chief investment officer, we did make money in the UK, where we bet that short-term interest rates would decline and shorted sterling against the euro. We also made good money by going long on the credit markets after their collapse.
Eventually I understood that the strength of the dollar was due not to people choosing to hold dollars but to their inability to maintain or roll over their dollar obligations. In a very real sense the strength of the dollar, like the fever associated with sickness, was a measure of the disruption of the financial system. This insight helped me to anticipate the downturn of the dollar at the end of 2008. As a result, we ended the year almost meeting my target of 10 per cent minimum return, after spending most of the year in the red.
I was perceptive enough to see the risks in housing, financials, and retail, avoiding those sectors entirely while focusing primarily on energy (which had served me well in the 73-74 bear market), on technology, and on healthcare. I also bought into the China story.
And while I swore that this time I'd sell on technical breakdowns instead of holding based on fundamentals, those fundamentals were simply too compelling when the time came to dump my "prudently" chosen stocks. Ego (I know better than the market) is still the biggest challenge to successful trading.
For me personally, my mistakes loom much larger than my perceptive analysis of the risks I managed to avoid elsewhere. I realize that it might have been worse without those perceptions, but I'm not likely to write a book or seek kudos from others for my ability to navigate the great bear market of 2008, a market that did terrible damage to my net worth.
So I feel a certain amount of sympathy for Peter Schiff, but not as much as I'd feel if he were more willing to address his own limitations with a bit more honesty and humility.
But as an investment adviser he was a failure. There is an audio clip on YouTube of an unhappy client of his who called in to Schiff's radio show. Schiff was extremely defensive and, as the client accused him, he sounded just like any other stockbroker. ("These are great companies." "Just hold on and they'll do great.") He should have admitted he screwed up.
I thought Mish's piece was great and overdue. We on the free market side of economic theory tend to excuse and forgive the mistakes of our fellow travelers.
I am one of those who believe that investment advisers are mostly rolling dice and don't realize they are doing so. As Hayek said, it's a lot easier to pick major trends in economics, but almost impossible to tell what's going to happen tomorrow--too much data. I don't think Schiff realizes this.
The client just kept talking about the total value of his account. While Schiff kept asking what is your dividend return on your initial investment?
The client clearly didn't get it and kept asking what will I live on? If the client is receiving greater than a 10% dividend on his original 1.5 million that is pretty good to me. The talk should have been around the safety of continued dividend payouts, but the client was just not at a high level of understanding.
On Feb 01 02:46 PM Econophile wrote:
> There are two sides to Mr. Schiff. I think he's great at macroeconomics
> and understands Austrian theory. But, basically when you come down
> to it, he's a stockbroker. Being a stockbroker also means he's a
> great salesman. Who can forget the bet with Arthur Laffer.
>
> But as an investment adviser he was a failure. There is an audio
> clip on YouTube of an unhappy client of his who called in to Schiff's
> radio show. Schiff was extremely defensive and, as the client accused
> him, he sounded just like any other stockbroker. ("These are great
> companies." "Just hold on and they'll do great.") He should have
> admitted he screwed up.
>
> I thought Mish's piece was great and overdue. We on the free market
> side of economic theory tend to excuse and forgive the mistakes of
> our fellow travelers.
>
> I am one of those who believe that investment advisers are mostly
> rolling dice and don't realize they are doing so. As Hayek said,
> it's a lot easier to pick major trends in economics, but almost impossible
> to tell what's going to happen tomorrow--too much data. I don't think
> Schiff realizes this.
>
Schiff's every recommendation, statement and position rely upon an assumption that trends will proceed uninterrupted by unseen, unknowable, unplannable gotchas. Well, if even some of what he ultimately predicts will play out at the macro level occurs then his disciples will be sitting there shocked, wondering how being right could lead to being so wrong about what to do.
> Schiff is kinda like Roubini in a way that they both may have been
> correct about the financial and housing pain in the US, but neither
> have benefited from it. They really aren't any different then me
> if that I expected some weakness in the US due to the housing market,
> but I never expected this level of destruction.
>
> In the end, all that matters is your performance. They both have
> talked down this market and haven't benefited, therefore, they've
> been given way too much credit. Talk is cheap, results speak very
> loud!
I disagree about Roubini because he is not a stock market analyst he is a financial expert and he did exactly what he was supposed to do which is speak the truth and warn those who will listen.
Roubini, btw, DID expect this kind of weakness and pretty much all the kinds if weakness we have seen. Your claim that "They really aren't any different then me..." is baloney and self-serving. I listened to THEM and am now up some 50% from the 2007 highs.
You are right that results speak very loudly and a good investor uses all the data available and then applies it in a way that makes the most money. Anything else is an excuse or a learning opportunity.
Anyone who ignored Roubini is a fool because everything he has said has been right and was verifiable. He has been on the optimistic side, in fact, and remains so. There is significant downside left in this market and anyone who doesn't sit it out or find a way to profit from it (SDS or SRS?) shouldn't show up here and make excuses and try to vilify those who were right.
--joe
On Jan 31 10:32 AM snoopyjc wrote:
> In the long run, we're all dead. Peter is a great economist, but
> a really bad stock picker, unless you are investing for income only
> and don't care about your principal. He has a "one size fits all"
> plan and doesn't care if you are a growth investor or an income investor.
> I only invested in a few of his picks, and most of them went into
> the toilet. He picks companies that pay from 8 to 25% dividends.
> (If a company is paying 25% dividends, that company is severely broken!)
> The only one that didn't tank was his physical gold pick. Even his
> most recent picks from Jan 7 are down from 7 to 20% in THREE WEEKS!!
> (Fortunately I didn't buy them.)