Peter Schiff

Gary Shilling: Say Goodbye to the Great Gatsby Era

Why do you accuse me of getting the investment theme wrong? I started preparing my clients for this crisis many years ago. Since the late 1990’s I have advised investors to get out of the dollar, own foreign stocks instead of domestic stocks, and own gold and other commodities. My major theme has been that the U.S. borrow and spend economy was a bubble that was destine to burst. I believed that economic dominance of the global economy would shift east, and I stressed China and natural resources. Thus far over the past 10 years, that advice has worked out extremely well. However if you judge my strategy based solely on how it preformed during the most recent major correction, you reach an unfair conclusion as to its effectiveness. Judging my long-term investment strategy based on a few bad months in 2008 is analogous to judging Warren Buffet’s performance based on the results achieved from Aug 1987 to Nov 1987.

Also, you need to look at how well my strategy has preformed since Oct. 2008, which marked the low point for most of my stocks. Since I advised investors to keep some powder dry to take advantage of short-term dips that might occur in foreign markets as a consequence of our economic problems, many were able to take advantage of what so far looks to have been an incredible buying opportunities.

Also by only looking at one part of my investment strategy you overlook other parts that did well in 2008. Do you realize that I helped form one of the only hedge funds in the nation that was established specifically to short subprime mortgages? We formed the fund in late 2006. My clients provided the seed capital for that fund and you can only imagine how well it preformed. I also advised shorting many U.S. stocks, specifically financials and homebuilders.

For whatever reason several people who post on this site seem to get some kind of satisfaction in criticizing the performance of my investment strategy despite such criticism being completely unwarranted by the facts. That’s fine with me, as I would rather make money while being publicly criticized for losing it, then lose money in obscurity.