Gyroscopic Investing

Schiff, 50, isn’t fazed that gold is heading for its first annual price drop in 13 years, or that Goldman Sachs Group Inc. has called it a “slam-dunk sell.”? He predicts bullion will reverse its 21 percent year-to-date decline and probably surge 52 percent to reach a record $2,000 an ounce within a year. That’s just the beginning: Schiff said he would “be amazed”? if the U.S. dollar didn’t collapse and gold failed to skyrocket before President Barack Obama leaves office in 2017.

“I’m waiting for the dollar crash, I’m waiting for the real crisis to hit that I know will benefit gold,”? Schiff said Oct. 18 over lunch of spinach-and-beet salad and stewed rabbit in the sun room after the radio show. “The longer it takes, the longer I have to wait for that payday. But the longer it takes, the bigger that payday is going to be.”?

Read the rest here...
http://www.bloomberg.com/news/2013-11-0 ... -2000.html

Someday he will be right...

As a PP investor who has bought into the strategy I have to ask what difference does it really make whether gold goes to $2000 or not?

ns2 wrote: As a PP investor who has bought into the strategy I have to ask what difference does it really make whether gold goes to $2000 or not?

For a guy who has a ~30% track record and gives awful advice even when he makes the right call, I honestly don't know why anybody would listen to him. He's just a political pundit masquerading as a sub-par investment guru.

Ad Orientem wrote:

ns2 wrote: As a PP investor who has bought into the strategy I have to ask what difference does it really make whether gold goes to $2000 or not?

I gather ns2 "hit the proverbial nail on the head", but can you explain?

buddtholomew wrote:I gather ns2 "hit the proverbial nail on the head", but can you explain?

I think Ad was saying we should "strike while the iron is hot". Problem is that Schiff's track record and advice is just terrible. One might be better off doing the opposite of whatever he says.

buddtholomew wrote:

Ad Orientem wrote:

ns2 wrote: As a PP investor who has bought into the strategy I have to ask what difference does it really make whether gold goes to $2000 or not?

I gather ns2 "hit the proverbial nail on the head", but can you explain?

Hammer meets nail head.

What makes him so special that he knows the future?

If he did know the future, if he had some special insight, why would he be sharing that insight with me?  And for free?  He is thus messing up his arbitrage opportunity.  Why not instead take that insight and make a fortune?

Gumby wrote:

buddtholomew wrote:I gather ns2 "hit the proverbial nail on the head", but can you explain?

I think Ad was saying we should "strike while the iron is hot". Problem is that Schiff's track record and advice is just terrible. One might be better off doing the opposite of whatever he says.

See https://en.wiktionary.org/wiki/hit_the_nail_on_the_head - what difference does it make what price gold is at is exactly the right question.  For a PP investor, the answer is . . . .  it doesn't make any difference!  If gold goes up by 50% something else will probably go down (e.g. LT treasuries) but overall we'll be OK.  Similarly, if gold goes down by 50% something else will probably go up (e.g. stocks) but overall we'll be OK.

We understand how the sausage is made, and insist on very high quality ingredients, but instead of focusing on the ingredients we focus on the end results.  We're not gold bugs, or stock bugs, or LT treasury bugs.  We're  sausage aficionados.

Schiff is an entertainer.

His job is to say things that entertain people.

Getting people stirred up is a form of entertainment.  The media does it every day and people love it.

Every single news program should be called "Story Time with Chicken Little."

MediumTex wrote:His job is to say things that entertain people.

Doesn't his firm sell gold? Which would make him more than just an entertainer...

jan van mourik wrote:

MediumTex wrote:His job is to say things that entertain people.

Doesn't his firm sell gold? Which would make him more than just an entertainer...

... right, like an entertainer that also sells t-shirts at concerts.

rickb wrote:

Gumby wrote:

buddtholomew wrote:I gather ns2 "hit the proverbial nail on the head", but can you explain?

I think Ad was saying we should "strike while the iron is hot". Problem is that Schiff's track record and advice is just terrible. One might be better off doing the opposite of whatever he says.

See https://en.wiktionary.org/wiki/hit_the_nail_on_the_head - what difference does it make what price gold is at is exactly the right question.  For a PP investor, the answer is . . . .  it doesn't make any difference!  If gold goes up by 50% something else will probably go down (e.g. LT treasuries) but overall we'll be OK.  Similarly, if gold goes down by 50% something else will probably go up (e.g. stocks) but overall we'll be OK.

We understand how the sausage is made, and insist on very high quality ingredients, but instead of focusing on the ingredients we focus on the end results.  We're not gold bugs, or stock bugs, or LT treasury bugs.  We're  sausage aficionados.

Makes no difference to me. I could care less one way or the other.

I think that Schiff has been right more than wrong. I am certain that he has made lots of money for himself and for his investors, being that he has been heavily invested in gold over many years. Having heard him speak in the past, I believe that he is just making a statement on the poor state of the U.S. economy, our massive debt of $17 trillion, and the poor economic and job conditions favoring a weaker long term dollar and higher gold prices. Why is he castigated for stating an opinion that makes good sense?

Good point Reub.
I own lots of gold and await its move up.
My experience is that it went down and I didn't make no money.

Reub wrote:I think that Schiff has been right more than wrong.

Do you have any evidence to support that? I couldn't find any. Here's a rundown of his miserable track record:

http://www.economicpredictions.org/pete ... edictions/

And that doesn't even include his latest blown 2013 Treasury collapse call.

Very few gurus ever have a track record that is better than 50%, but Schiff's record, at ~30% success, is closer to the bottom of the barrel. You'd be better off flipping a coin.

Reub wrote: I am certain that he has made lots of money for himself and for his investors, being that he has been heavily invested in gold over many years.

Not from what I can tell. The Wall Street Journal ran this piece in 2009 after he gave the dead wrong investment plan in response to correctly predicting the 2008 credit crisis:

WSJ: Right Forecast by Schiff, Wrong Plan?

Some good quotes from the article about Peter Schiff and his Euro Pacific Capital Funds:

The Wall Street Journal wrote:A number of investors said their Euro Pacific portfolios lost 50% or more in 2008, worse than the 38% drop in the Standard & Poor's 500-stock index last year. People familiar with the firm say that hardly any securities recommended by Euro Pacific brokers gained ground in 2008

Such losses came as something of a surprise. Mr. Schiff's prescient call for the collapse of the U.S. housing market and the weakening of the financial system helped him gain fame as an economic guru and savvy investor who promised shelter from the financial storm.

In his 2007 book, "Crash Proof: How to Profit from the Coming Economic Collapse," he recommends that investors pile into gold, commodities and overseas stocks that spit out steady dividends.

When global markets were soaring, many Euro Pacific investors' accounts experienced strong performance. For several years, investors saw returns in excess of 20% a year as foreign stocks and commodities surged, according to people familiar with the firm.

In 2008, investors nervous about the state of the U.S. economy who were impressed by Mr. Schiff's track record poured money into Euro Pacific, nearly doubling the number of accounts to 16,000. But many did so at the worst time possible, much like investors who piled into Internet stocks as the dot-com bubble peaked.

Mr. Schiff, 45 years old, says the downturn in his strategy is a short-term setback. He argues that it is only a matter of time before the dollar collapses, pressured by massive government bailouts, triggering outsize returns for his investors.

Source: WSJ: Right Forecast by Schiff, Wrong Plan? (2009)

The Wall Street Journal wrote:Critics say Mr. Schiff's strategy is much riskier and more aggressive than many investors realize. David Yeske, managing director of Yeske Buie, a Vienna, Va., money manager, says Mr. Schiff's investment strategy was a focused bet on a single outcome, rather than risk management for investors looking to protect assets from an economic collapse. "He's a speculator; he thinks he can see the future," says Mr. Yeske, former chairman of the Financial Planning Association. "That's not really risk control."

One of Mr. Schiff's biggest forecasts was that many overseas economies would "decouple" from the U.S., gaining strength even as the American economy struggled. Instead, overseas stock markets plunged as much or more than U.S. stocks in 2008 as the global economy skidded. Prices for commodities also tanked, torpedoing another favorite investment theme of Mr. Schiff's. After last year's losses, his firm has about $845 million in assets.

Early last year, Richard De Gennaro, a retired Harvard University librarian, put $100,000, about 15% of his assets, into a Euro Pacific account that included Canadian Oil Sands Trust, which focuses on crude-oil projects in Canada, and the India Capital Growth Fund, which holds investments in companies that do business in India.

Both investments took big hits in 2008, compounded by the fact that the Canadian dollar and the Indian rupee fell 18% and 19%, respectively, against the U.S. dollar. The 83-year-old retiree's account is now worth about $37,000, a 63% plunge. Mr. Schiff "goes around saying that he was right," says Mr. De Gennaro. "He was right about one thing and wrong about everything else."

Among investors who turned to Mr. Schiff's firm just as his strategy began to falter, Brian Kullberg, a design engineer in Portland, Ore., says he started to worry about the state of the U.S. economy in early 2008. He put $70,000 into a Euro Pacific account, hoping it would benefit as the U.S. economy and the dollar weakened. By late January 2009, his investment had shrunk to about $25,000.

"It's curious," says one longtime client of Mr. Schiff's who works in finance. "His thesis of how things are going to collapse and crumble and fall apart isn't effectively executed in [my] account." The account, which is largely invested in gold, mining and infrastructure stocks from Canada to Australia, was down roughly 35% last year, the client estimates. The Australian dollar weakened 19% against the U.S. dollar in 2008.

Source: WSJ: Right Forecast by Schiff, Wrong Plan?

It take a special kind of talent to correctly foresee the 2008 credit crisis and then steer investors in the completely wrong direction. Anyone who lost 50% of their portfolio with Schiff from 2007-2009 would have needed a 100% gain just to get back to break-even. And those with a 65% drawdown would need a 200% gain to get back to break-even!

Read more: http://www.businessinsider.com/2009/1/p ... z2jv6eYqlQ

Reub wrote:Having heard him speak in the past, I believe that he is just making a statement on the poor state of the U.S. economy, our massive debt of $17 trillion, and the poor economic and job conditions favoring a weaker long term dollar and higher gold prices. Why is he castigated for stating an opinion that makes good sense?

Because that's really just a political statement. And as far as I can tell, he rarely ever makes a good call. And the one time he does make a good call he gives horrific advice in response to that call. Like all the other "gurus", he's just a snake oil salesman. He riles up conservatives in hopes that they will buy his books and back his funds.

Gumby, I would never engage you in verbal fisticuffs. However, I believe that he has been a bull on gold for many, many years and that is his best call.

Reub wrote: Gumby, I would never engage you in verbal fisticuffs. However, I believe that he has been a bull on gold for many, many years and that is his best call.

Schiff is a dedicated gold bug. So he has certainly profited from that position over most of the last 13 years. But what happens when gold doesn't work anymore? That's a proposition that doesn't fit into the world view of most gold bugs. But Harry Brown did understand that no asset works all the time. I guess the problem with Schiff from my perspective is that he is a one trick pony. That trick was a a damned good one for more than a decade. But outside that and his prescient warning about the real estate bubble, his track record is actually quite poor.

Reub wrote: Gumby, I would never engage you in verbal fisticuffs. However, I believe that he has been a bull on gold for many, many years and that is his best call.

I'm not saying he never made a good call. I'm just saying that most of his advice has been dead wrong (i.e. he's ~30% correct).

Economicpredictions.org wrote:...If you followed Peter Schiff's advice about the housing bubble and gold you could have made a lot money or at least saved yourself a lot of losses. On the other hand if you followed his other predictions you would have lost a lot of money.

According to some of Schiff’s own clients, portfolios invested with Schiff were down anywhere from 40 - 70%.

Source: http://www.economicpredictions.org/pete ... edictions/

The experiences in the WSJ article I linked to seems to confirm that statement. He's just a snake oil salesman that thinks he can see the future. I wouldn't take much advice from someone like that. That's all I'm saying.

Gumby wrote: He's just a snake oil salesman that thinks he can see the future.

Snake oil actually has a ton of great Omega 3s!  Of course, that doesn't help with seeing the future.  Actually, no: it does help you, to be around to see more of it.

Ok i want to be a guru, too. I go contrarian to Schiff and say that gold will hit 1000$ till may next year! (If i`m wrong i repeat this every year )

frommi wrote: Ok i want to be a guru, too. I go contrarian to Schiff and say that gold will hit 1000$ till may next year! (If i`m wrong i repeat this every year )

Just being wrong isn't enough to become a guru. You need to write whole books full of falsehoods and incorrect predictions, and you also need to be obnoxious enough to catch the interest of TV shows who will want to put your face on the screen to generate controversy. It's a time-honored formula that seems to work every time!

Pointedstick wrote: Just being wrong isn't enough to become a guru. You need to write whole books full of falsehoods and incorrect predictions, and you also need to be obnoxious enough to catch the interest of TV shows who will want to put your face on the screen to generate controversy. It's a time-honored formula that seems to work every time!

You also have to go on TV after you are wrong and act like you are right. 

Pointedstick wrote: Just being wrong isn't enough to become a guru. You need to write whole books full of falsehoods and incorrect predictions, and you also need to be obnoxious enough to catch the interest of TV shows who will want to put your face on the screen to generate controversy. It's a time-honored formula that seems to work every time!

made my day