Fade the Bum
By Barry Ritholtz - February 24th, 2010, 10:30AM
Don Luskin says now is not the time to invest overseas: Thinking of Investing Abroad? Think Again:
“All I’m saying is that you’re making a huge mistake if you mindlessly send all your money overseas — just because all those other economies are the devil you don’t know. The devil you do know may be your best bet.”
Luskin’s track record and forecasting history suggest he is a reliable one man contrary indicator.
Contrary-interpretation of Smart Money article: One of the greatest overseas investing trades — in the history of mankind — is very likely about to begin.
You read it here first . . .
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February 24th, 2010 at 10:40 am
Why does a ‘bum’ have followers?
What do they know that you don”t?
Or are they ignorant?
February 24th, 2010 at 10:41 am
Good point! You should follow Losekin’s investment advise
February 24th, 2010 at 10:42 am
I would say the “idiot” (Luskin) that we all (unfortunately) “know” is most definitely not our “best bet”.
February 24th, 2010 at 10:43 am
How much money has Merrill lost for people over the years??
They bankrupted the wealthiest area in the country (Orange County), had an analysts scandal in 2000, a securitized derivative scandal in 2007, and collapsed under the weight of thweir own stupidity, and needed a taxpayer funded bailout in 2008.
And yet STILL people trust them with their assets . . .
Does that make them good money managers — or good marketers ?
February 24th, 2010 at 10:54 am
It is mandatory to always listen to someone wh0′s always or mostly always wrong. Any great mover and shaker listens to ALL information that will shed some light on the future.
If Luskin is always wrong that makes the recommendation to fade him a sure bet.
What better indicator could anyone ask for?
But he does hedge and say not to send “all you money overseas”, which cannot be argued with.
The few times I’ve heard him he has been 180 off. So here goes. 1000 ETF for an emerging market fund.
February 24th, 2010 at 10:56 am
I’m a numbers guy… I understand this person actually manages money. Any idea what his returns are over the years?
February 24th, 2010 at 10:59 am
Zack:
OpenFund closes its doors
NEW YORK (CNNfn) August 2, 2001 Posted: 2147 GMT
PERFORMANCE:
EXCUSE:
He (apparently) does not run money any more . . .
February 24th, 2010 at 11:01 am
I would think it’s a mistake to mindlessly send all your money anywhere…
February 24th, 2010 at 11:07 am
Thanks Barry. I never imagined there was a writer with such a long and distinguished record of being WRONG. Check out the Smartmoney archives for these doosies:
Aug 07 Stocks are underrvalued
March 08 Safe to return to risky assets
May 08 Housing near a bottom
The most ironic must be the 4/11/2008 article where he says Greenspan and Bernanke made huge mistakes and Lusking says “If I made the kind of mistakes they have, I’d admit it”
Since I don’t read this rag, could anyone more familiar please tel me the date of the article where Luskin admits his errors and says ” I am sorry, all that stuff I wrote about stocks are cheap was crap and if you listened to me you lost a ton of money”
February 24th, 2010 at 11:15 am
I don’t understand Mr. Luskin’s reasoning … is Greece that big of deal? … the Western world will always have its problem countries … the US 5.7% GNP growth in one quarter doesn’t mean that much on the macro level … China’s trump card is Brazil … but I do like reading Barrons because their focus is on the USA.
February 24th, 2010 at 11:38 am
Oversees is pretty big….. care to ro narrow down the focus a bit? My last investment in Zimbabwe or Japan didn’t work out that well. I hear that I’m late for the Chinese orgy-porgy.
February 24th, 2010 at 11:46 am
The useful tidbit in the quote centres on the word “mindlessly.” Any “mindless” investment strategy is likely to get you in trouble. Myself, I know what I don’t know, and do very little direct foreign investment. On the other hand I have holdings in North American companies that I know and that have profitable overseas operations.
February 24th, 2010 at 11:52 am
Why hasn’t some entrepreneurial type put all these revers indicators into a Twitter update?
February 24th, 2010 at 11:54 am
Let’ s mindfully send all of Luskin overseas.
February 24th, 2010 at 12:05 pm
Think the implication of his remarks as a contrarian indicator is perfect, have learned to “listen” to his idiocies for just that purpose!
February 24th, 2010 at 12:28 pm
Then again Cramer is pushing foreign holdings.
February 24th, 2010 at 12:29 pm
Luskin, however, is bullish on gold and gold mining stocks.
EWZ and GDX, for example, are highly correlated. Those who are bullish on gold should also be bullish on the stock markets of commodity-based economies.
February 24th, 2010 at 1:26 pm
Can I go 200% then?
The guy is a clown. He was flogging that we were not in a recession 6 months into it because it would reflect poorly on Bush. Then even more damming, he gives lots of bad investment advice because he is ideologically blinded. That is the sin, isn’t it?
He’s Long Gold? wow! a real contrarian play – totally out of left field. I don’t know anyone who is long gold. Nobody ever buys it anymore because it is too expensive.
I haven’t looked at emerging markets in a bit, but his recommendation to avoid them really is a good reason to start checking them. I’ll probably end up going long based on obvious fundamentals and clear technicals.
February 24th, 2010 at 1:38 pm
I actually shockingly agree with Luskin and foreign investment.
But the part Luskin gets wrong is that he confuses the U.S. economy and dollar. It just kills me that the trade of the year last year was short the dollar and be long the market, yet most people either thinks the U.S. sucks or is great. They don’t get that the dollar and economy can move in opposite directions especially with deflation even after last year’s trade of the year.
I personally think the U.S. economy is in far worse shape because of decreased demand resulting in deflation. However, by definition, the dollar gets stronger with deflation. So Luskin makes a bunch of astute observations, but his final recommendation was way off the mark as usual.
February 24th, 2010 at 1:43 pm
he’s bullish on gold, but only really got bullish on gold when it hit US$1200/oz.
Also, if you go back to March of 2009 he was writing pieces on how the market was doing during the great depression and said we were even worse off. I don’t recall exactly what he said, but the inference was that the market had a long way further to fall. Of course, this was Obama’s fault at the time according to him!
and do you ever notice how he wears a t-shirt and a blazer? lame.
February 24th, 2010 at 2:10 pm
Every time I send my money away it refuses to come back
February 25th, 2010 at 12:00 am
Luskin may be right in spite of his many other increasingly discredited views. Brad DeLong calls him “the stupidest man alive.” Funny. I always thought that was Larry Kudlow.