Vladimir Senkov

This Is Just the Beginning

> Peter some credit, if not for his 'predictive power', for his courage
> and conviction.

I would if I thought this was courage, but I believe there is a conflict of interest here. And being on TV and giving "radical" predictions is exactly what a fund manager would need to do to get a certain amount of fame, to find his followers. There are a million fund managers out there and to get noticed you need to come out and say something that will resonate with some people. Peter was good at that and he got his following.
Those people who invested money with him may have underperformed during bull markets because of his "crash proof" strategies but that's ok. Now when the crash finally came (it always does eventually) and they still underperformed you just have to wonder how "crash proof" those strategies really are.
What Peter says makes a lot of sense. He is smart and educated and it shows. However, I don't think any of it has to do with courage. Madoff on the other hand, that's courage! :) Just kidding.

This Is Just the Beginning

Peter, for as long as I can remember, you were predicting "the crash". And I actually agreed with you, I was as sure as you were that the crash is going to come. What I didn't know and I believe neither did you, is exactly how bad the crash was going to be and exactly when it was going to happen.
I was assuming that the public generally disagreed with your views and invested in the market, so I was expecting your clients to outperform the average joe when this crisis you were predicting was finally beginning to unfold. I guess I was wrong.

What you say makes a lot of sense, but it doesn't have much predictive power.
I hereby predict two things:
1) "the market" will reach new highs
2) "the market" will crash to new lows
Both statements are true because i haven' told you how i define and measure "the market" and when 1 and/or 2 is going to happen.
However, neither statement has any predictive power.
The only real test of predictive power is long (as in forever) term return. IMHO, Buffet stands up to this test so far, but recent performance of some of your clients casts doubt on your ability to stand up to this test.
Although these recently publicized returns do not prove anything, neither do your attempts to rationalize them.

I guess for a money manager it's not nearly as important to be factually right as it is to be able to convince other people that you may be right, otherwise one would just manage his/her own money and not have any clients. I guess that's why so much energy and time is spent constantly debating if Peter is right and when and how it may be considered "proven" :)
This is where PR comes in. This imho explains that predictions need to be as bold as possible. No, it's not just a market crash, it's an Armageddon! Otherwise who would be interested, how would the celebrity status be obtained? Where will the new clients come from?
I believe some of your "predictions" are influenced by the this conflict of interest. Please correct me if I'm wrong.

Why Gold Hasn't Been a Hedge Against Inflation

John,
you said that eventually it might make sense to hedge long gold positions by going long oil.
Excuse me for stating the obvious, but this is very difficult to do with oil. Gold is easy. I buy bullion and store it in a vault. Oil on the other hand is expensive to store. If you think oil is "cheap" now look at the contango! It's not going to be cheap at all if you wanted to hedge a longer term position (even if it is just a few months long).