Chris Lau - Seeking Alpha

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Monday, January 26, 2009

Peter Schiff Was Wrong

Mish (Mike Shedlock) provided a very good analysis on Schiff and his investment performance for clients. Note that his blog is tracked/bookmarked here (see right panel).

http://globaleconomicanalysis.blogspot.com/2009/01/peter-schiff-was-wrong.html

Points of interest are that Schiff :
  • Called for hyperinflation (weakness in U.S. dollar)
  • Called for "decoupling" (that China and other countries would not be impacted by a weak U.S. economy)
Analysis:
Despite my findings for index downside targets, the simple truth is that we must accept that we don't know which way the market is going. Paraphrase Mish, accepting that we do not know gives no real value to investors.

The simple truth is that the market will keep changing. There is hard work ahead, and we must be malleable enough to adapt to the behavioral changes of the market.

Mish's Conclusions:
We attempt to position our clients for what the market is actually doing, not what we think it ought to be doing. The distinction is paramount, especially when such thinking just might be wrong."

My Take:
I was at a Chapters-Indigo book store reviewing Schiff's book. I didn't like it. The content was light and the investment strategies based on his investment thesis were not appealing to me.

Still, people like Schiff are likely to draw criticism. I admire those who express ideas openly and publicly when they are against the herd. For Schiff, he may not perform "as advertised" from an investor's perspective, but he did call the housing bust in 2004. See Business Week.
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