Gyroscopic Investing

Peter Schiff has a new book out.

It's called "The Real Crash."  

http://www.amazon.com/The-Real-Crash-Ba ... 358&sr=1-1

I'll bet it's a few hundred pages that basically say, "Printing money causes inflation."  

I got a call from his brokerage, Europacific, the other day (they have my information on file from my pre PP days).  I told the guy that I found a strategy that I liked that was very simple.  He actually asked me what it was.  I asked him if he knew who Harry Browne was, and he said he did not.  I then explained the PP as quickly as I could, "25% each of stocks, Treasury bonds, US dollars, and gold," and he told me that it was a good short term strategy.  He said it would not work once "decoupling" occurred and once China started selling US Treasury bonds.  I asked when he thought this would occur and he said in 2-5 years (or something like that).  

For some insane reason, I am still curious to read this book.  There was a time when I hung on Peter Schiff's every word...

AdamA wrote: Peter Schiff has a new book out.

It's called "The Real Crash."  

http://www.amazon.com/The-Real-Crash-Ba ... 358&sr=1-1

I'll bet it's a few hundred pages that basically say, "Printing money causes inflation."  

I got a call from his brokerage, Europacific, the other day (they have my information on file from my pre PP days).  I told the guy that I found a strategy that I liked that was very simple.  He actually asked me what it was.  I asked him if he knew who Harry Browne was, and he said he did not.  I then explained the PP as quickly as I could, "25% each of stocks, Treasury bonds, US dollars, and gold," and he told me that it was a good short term strategy.  He said it would not work once "decoupling" occurred and once China started selling US Treasury bonds.  I asked when he thought this would occur and he said in 2-5 years (or something like that).  

For some insane reason, I am still curious to read this book.  There was a time when I hung on Peter Schiff's every word...

Always interesting to talk to a broker about the PP and Harry Browne.  Most have never heard of either one.  I've yet to hear one tell me that it was a good short term strategy.  They need to check "Historical Returns" on the Crawling Road web site.

I use to be quite interested in Perer Schiff's views for investment purposes.  Now I'm just interested in his views for entertainment.

AdamA wrote: Peter Schiff has a new book out.
[...]
I'll bet it's a few hundred pages that basically say, "Printing money causes inflation."  
[...]
There was a time when I hung on Peter Schiff's every word...

As did I. Peter Schiff has seemingly made some good predictions over the years, but then he just keeps making the same prediction over and over again: a collapse of the U.S. economy and dollar. Every single year, same prediction. In years when a crash of sorts actually happens, he takes credit for predicting it, and in years when there is no crash, he just emphasizes that it hasn't happened quite yet.

Heads he wins, tails he gets to flip again.

I eventually tired of that game and was delighted to find the market-agnostic Permanent Portfolio and the subtle insights behind it.

my guesstimate is that P Schiff has a somewhat-religious zealot belief in his Libertarian philosophy, that inflation = horrible, deflation = actually good, etc.

Unlike another Libertarian Harry Browne, P Schiff cannot separate his personal philosophies, from asset allocation advice.  P Schiff assumes the future IS knowable, because his own as-he-interprets-it strain/sect of Libertarian philosophy indicates that we Must Have Inflation Now due to Government/Bernake's monetary policy, etc.

Here's an imperfect mediocre analogy (definitely not on MT's great level), H Browne is a devout Muslim anti-eating pork, butcher who actually do his job, & will cut a pig for the pork if his customer wants it, or devout Christian anti-birth control, pharmacist or physician who will facilitate delivery of birth control for a woman patient that wants it.  P Schiff is the butcher or physician that tells their customer to f off & randomly gives them a religious sermon.

Peter Schiff's business is selling books, not predicting the future.  He is good at selling books, and not so good at predicting the future.

He's an entertainer.  He's like a monkey who can juggle bananas.  It can be quite entertaining to watch, but should not be mistaken for anything other than entertainment.

MediumTex wrote: Peter Schiff's business is selling books, not predicting the future.  He is good at selling books, and not so good at predicting the future.

He's an entertainer.  He's like a monkey who can juggle bananas.  It can be quite entertaining to watch, but should not be mistaken for anything other than entertainment.

But he seems so confident. 

Gosso wrote:

MediumTex wrote: Peter Schiff's business is selling books, not predicting the future.  He is good at selling books, and not so good at predicting the future.

He's an entertainer.  He's like a monkey who can juggle bananas.  It can be quite entertaining to watch, but should not be mistaken for anything other than entertainment.

But he seems so confident. 

Of course.

That's part of the show.

All hustlers are confident.

Schiff was right about the real estate crash (but so were others). However, he was wrong on the solution. He advocated using commodities, mining companies, betting against the dollar, etc. Yet, investors following that advice took a loss far worse than being 100% in the total stock market index in 2008.

But this is not an indictment against him as much as it is against the idea of market predictions from anyone. When you make a prediction you need two things:

1) Make a correct prediction about the upcoming event.
2) Make a correct prediction about how the markets will react to the upcoming event.

So the problem of getting #1 right is hard enough, but adding #2 on top of it is just about impossible. Again though this isn't just Peter Schiff but any prognosticator.

MediumTex wrote: Peter Schiff's business is selling books, not predicting the future.  He is good at selling books, and not so good at predicting the future.

One of Harry Browne's more subtle points about predicting the future is that while you might be able to predict an event... can you time it?  That's the essence of Browne's remarks about how lucky he was with his silver trade.

Consider how wild-sounding predictions become virtual certainties once you ignore timing.  For example:

• Interest rates will be far higher than they are today.
• Everybody will abandon the iPhone.
• The value of the dollar will fall to zero.
• The planet and everyone still on it will be destroyed.  (when the sun goes supernova.)

As for Schiff the entertainer, I always enjoy listening to him.  He's the "doom" style pundit with the best sense of humor and the only one that seems like he's genuinely having a good time.  Most of these guys are just so upset and dour all the time.  They like to thunder about how angry I ought to be at "banksters" or something-or-the-other of that nature, which isn't what I'm looking for.  Just give me interesting angles other people might be missing, laugh at the Fed and/or goofballs like Paul Krugman a little bit, then wrap it up.  My itch is an easy one to scratch.

Most crucially, he's quite libertarian and thus flatters my political sensibilities.  And who doesn't enjoy people telling them what they want to hear? 

I think he underestimates over and over again how hard it is to predict the future even if you make lots of good observations that others miss.  This means that even if you are eagle-eyed enough to correctly diagnose and predict a real estate crash that most others laugh at, you have to be hedge against that one angle that might have slipped past you.

You can't just put all of your eggs into a single "dollar DOOM" basket and hope they won't break before your prediction unfolds.  That's just taking on unnecessary risk because you aren't grasping your own human limitations.

I've noticed that doom-n-gloomers seem to have a very good understanding of the risks of private credit. Then again, if you're actually looking for risk in private credit, it's not that hard to find it — you just look for the largest private credit markets..

I like listening to Peter Schiffs view of the world and economics.  He is continually interupting and talking over other guest to the point that I believe he truly enjoys getting under the skin of other entertainers....errr... financial analysts.

Alanw wrote: I like listening to Peter Schiffs view of the world and economics.  He is continually interupting and talking over other guest to the point that I believe he truly enjoys getting under the skin of other entertainers....errr... financial analysts.

Schiff's 2007 beatdown of Art Laffer on Kudlow's show about the upcoming housing crisis is an all-time classic.

There's nothing like watching one monkey steal another monkey's banana.

He's an entertainer.  He's like a monkey who can juggle bananas.  It can be quite entertaining to watch, but should not be mistaken for anything other than entertainment.

Seems to fit Cramer even more!  Except I don't even find Cramer entertaining.  His show has so much noise, flashing lights and loudness that I couldn't bear to watch it even if I wanted to.
Norm

Alanw wrote: I use to be quite interested in Perer Schiff's views for investment purposes.  Now I'm just interested in his views for entertainment.

Ditto.

craigr wrote:
But this is not an indictment against him as much as it is against the idea of market predictions from anyone. When you make a prediction you need two things:

I agree, and I hope it didn't seem like I was Schiff bashing. 

The larger point to me is that two years ago, I thought this guy was a genius.  Now I find a lot of what he says comical. 

The even larger point is that this has extended beyond investing for me.  I think I am a much healthier cynic in general as a result of my experience with the PP and investing.  At the same time, I think I'm more open minded and willing to listen to people's opinions because I have the understanding that some of what they say is probably right, and some of what they say is probably wrong...no one knows everything, and you shouldn't expect them to. 

ngcpa wrote:

He's an entertainer.  He's like a monkey who can juggle bananas.  It can be quite entertaining to watch, but should not be mistaken for anything other than entertainment.

Seems to fit Cramer even more!  Except I don't even find Cramer entertaining.  His show has so much noise, flashing lights and loudness that I couldn't bear to watch it even if I wanted to.
Norm

There is an important difference between Schiff and Cramer. Cramer does not claim infallibility. In fact he is pretty upfront with his mistakes. Secondly he is also upfront in telling people that his advice is only for speculative investing. He is always telling people that their retirement money should be in index funds.  So I don't really have a lot of heartburn with Cramer. Yeah he is an entertainer. But he is a fairly honest entertainer. And if you can get past the bells and whistles he is also a pretty smart man. I don't do much speculating but some of his calls have been very good.

Edit: Schiiff by contrast always talks like the Pope making an ex-cathedra pronouncement. Not saying he is dumb. But I am saying he is incredibly arrogant and I have no recollection of him ever admitting he was wrong about anything.

Ad Orientem wrote:

ngcpa wrote:

He's an entertainer.  He's like a monkey who can juggle bananas.  It can be quite entertaining to watch, but should not be mistaken for anything other than entertainment.

Seems to fit Cramer even more!  Except I don't even find Cramer entertaining.  His show has so much noise, flashing lights and loudness that I couldn't bear to watch it even if I wanted to.
Norm

There is an important difference between Schiff and Cramer. Cramer does not claim infallibility. In fact he is pretty upfront with his mistakes. Secondly he is also upfront in telling people that his advice is only for speculative investing. He is always telling people that their retirement money should be in index funds.  So I don't really have a lot of heartburn with Cramer. Yeah he is an entertainer. But he is a fairly honest entertainer. And if you can get past the bells and whistles he is also a pretty smart man. I don't do much speculating but some of his calls have been very good.

Edit: Schiiff by contrast always talks like the Pope making an ex-cathedra pronouncement. Not saying he is dumb. But I am saying he is incredibly arrogant and I have no recollection of him ever admitting he was wrong about anything.

Well said.  This post encapsulates how I feel better than I could have said it, myself.

With everything becoming so much more correlated, if Schiff is correct on the U.S. collapsing, wouldn't that put the world into global recession? I realize he likes hard assets, but for international stocks, if the U.S. crashes, who's going to buy all the products so wouldn't his international stuff crash too?

It just seems kinda odd to be stating that international would be the safe haven if he's thinking the investments in his company will weather the oncoming crash of the U.S. with how correlated things are. If he ran a commodities brokerage or was big on cash-instruments then maybe that would make sense but international equities doesn't really make sense to me.

But maybe I'm missing something.

1NV35T0R wrote: With everything becoming so much more correlated, if Schiff is correct on the U.S. collapsing, wouldn't that put the world into global recession? I realize he likes hard assets, but for international stocks, if the U.S. crashes, who's going to buy all the products so wouldn't his international stuff crash too?

It just seems kinda odd to be stating that international would be the safe haven if he's thinking the investments in his company will weather the oncoming crash of the U.S. with how correlated things are. If he ran a commodities brokerage or was big on cash-instruments then maybe that would make sense but international equities doesn't really make sense to me.

But maybe I'm missing something.

I think you're absolutely right. The economies of world's countries are so interrelated that a U.S. "collapse" (however he defines it) would absolutely devastate humanity. If that happens, I'm thinking you don't just want your hard assets to be gold bullion, you're going to also want a durable home (walls made of stone, concrete, or earth), farmable land, livestock, a reliable supply of water, firearms and ammunition, the means to generate electricity, and, perhaps most importantly, the skills to survive outside of a highly developed economy with specialized divisions of labor. You're going to need to be a generalist again, just like your great-grandparents were.

Pointedstick wrote:

1NV35T0R wrote: With everything becoming so much more correlated, if Schiff is correct on the U.S. collapsing, wouldn't that put the world into global recession? I realize he likes hard assets, but for international stocks, if the U.S. crashes, who's going to buy all the products so wouldn't his international stuff crash too?

It just seems kinda odd to be stating that international would be the safe haven if he's thinking the investments in his company will weather the oncoming crash of the U.S. with how correlated things are. If he ran a commodities brokerage or was big on cash-instruments then maybe that would make sense but international equities doesn't really make sense to me.

But maybe I'm missing something.

I think you're absolutely right. The economies of world's countries are so interrelated that a U.S. "collapse" (however he defines it) would absolutely devastate humanity. If that happens, I'm thinking you don't just want your hard assets to be gold bullion, you're going to also want a durable home (walls made of stone, concrete, or earth), farmable land, livestock, a reliable supply of water, firearms and ammunition, the means to generate electricity, and, perhaps most importantly, the skills to survive outside of a highly developed economy with specialized divisions of labor. You're going to need to be a generalist again, just like your great-grandparents were.

So in my eyes Schiff would be conflicted. He believes that there will be an upcoming crash at some point yet oversees a large company that specializes in foreign holdings. This seems odd unless he's doing something that he's not telling us. For instance:

1.) He could be a closet bomb shelter dude. He has everything he needs for the crash and the proceeding zombie apocalypse.
2.) He's having a side business on the weekends called "Shoot and Moo" where he specializes in selling guns, ammunition, and livestock.

Shoot and Moo! I love it. Heck, maybe we should open that business...

1NV35T0R wrote:
So in my eyes Schiff would be conflicted. He believes that there will be an upcoming crash at some point yet oversees a large company that specializes in foreign holdings. This seems odd unless he's doing something that he's not telling us. For instance:

He believes that there will initially be some pain in these foreign companies and markets, but that when everything is said and done manufacturing economies will come out on top.  He thinks that you have to buy and hold these companies and be patient.

In my opinion, this is an overly simplistic belief that fails to take into account the many advantages that the US has in the global economy. 

Pointedstick wrote: Shoot and Moo! I love it. Heck, maybe we should open that business...

Actually we should probably call is Moo and Shoot. Shoot and Moo would probably get shortened to S&M and that's not the type of shop we're trying to open yet.