"Herein is a formula for making a lot of money as a money manager. Have
a shtick, get known, wait for your sector to get hot. In the 1970s
James Dines acquired fame and fortune by being a gold bug. In the 1990s
George Gilder minted money as a fan of technology stocks. In the past
six years Renee Haugerud’s Galtere International Fund ( FORBES, Jan. 20, 2003) has grown from $1 million in client capital to $1.5 billion by being in commodities . . .
That was the reductio ad absurdum paragraph from what I can only describe as a really weird hit piece from Forbes on Peter Schiff. I’m not sure why they are took this route, but the column is rather unsatisfying in both its critique and its proof:
"Schiff’s Chicken Little take on the U.S.
economy–that it is on the brink of collapse–isn’t new. He’s been
serving up the same spiel for a decade. But these days he’s getting
more applause than eye-rolling from jittery investors. He’s also
getting a lot of attention from financial media outlets, in part
because he has mastered the delivery of three-alarm sound bites. ("The
consumer is in great trouble!" "Things are worse than in the 1970s!")
perfected his rant in stock newsletters in the late 1990s, when few
investors had heard of him or Euro Pacific. He posted commentaries on
his Web site and started sending them to CNBC. His first big media hit
came in April 2005, when CNBC asked him to appear on Squawk Box.
Schiff faced a hostile panel when he said the dollar would lose half
its value–which still hasn’t happened. That first interview ended with
the host, Mark Haines, saying: "I don’t know whether to shoot him or
Now, if Schiff is really such a perma-bear who has been negative and wrong on US stocks for 10 years, that would be worth discussing. There must be 100s of examples of his bad calls if that’s the case. But oddly, Forbes cites exactly zero examples online. (I haven’t seen the dead tree version).
Such bald accusations make for poor journalism. If you are going to make that claim, then back it up. Is it asking too much to pull a few wrong trades as evidence? Can you show me the guy was Bearish on Tech in 1998, hated dividend payers in 2002, avoided firms Oil firms in 2003, sold industrials in 2004, dissed the miners in 2005, shorted exporters in 2006? Just imagine what a similar hit piece on Jim Cramer would have to include.
Anyone who works on Wall St. long enough should be able to pull a long
list of pretty bad calls over the years. (My own list of market boners is extensive). If you are any decent at running money/doing stock or market analysis, however, the good ones should outweigh the bads ones.
What’s so very odd about this whole affair is, at its core, a critique of a strategy that is making investors money. Weird.
I’m not looking to defend Schiff — he’s a big boy, and can do that on his own. My beef is with Forbes — its a sloppy work.
What I was singularly disappointed with involved the lauding of George Gilder’s 1990′s success. What Forbes failed to mention was what came after: From 2000 forward, Gilder’s readers lost 44%, then 43%, then 56% in each successive year (WSJ). Apparently, it was okay for George Gilder Newsletter to lose 89.4% of his readers money, because he was permanently bullish.
Oh, and one other thing: Gilder’s newsletter is a joint publishing venture with Forbes, another disclosure also somehow misplaced in the column. Shame on Forbes for omitting that disclosure; if Schiff had done that, it would be worthy of an SEC/NASD investigation.
According to this article, making money by identifying risk is somehow not good, but losing nearly all of it by cheerleading the tech bubble is A-okay. That doesn’t seem very much like the Forbes "free market" ideology I know from over the years. Then again, it is an election year.
Capitalist tool? The article makes them look more like capitalist fools to me . . .
UPDATE: February 23, 2008 9:29am
Schiff discusses the Forbes piece in a radio interview here.
Where Are They Now: George Gilder
WSJ, May 8, 2006
George Gilder: So THAT explains it
Tuesday, May 09, 2006 | 07:15 AM http://bigpicture.typepad.com/comments/2006/05/george_gilder_s.html
Gilder Technology Report
Gildertech: "GTR is published by Gilder Publishing, LLC in association with Forbes Inc., 1996-2007"
The WSJ is reporting that Economicindicators.gov will remain open. To all of you who contacted Senator Schumer’s office: Nicely Done!
From the site:
The U.S. Department of Commerce’s Economics and Statistics
Administration (ESA) has decided to continue the economicindicators.gov website.
Featuring the economic releases from ESA’s Census Bureau and Bureau of Economic
Analysis (BEA), the site was started by this Administration in 2002 to give
greater awareness to these economic statistics. ESA initially planned to
discontinue the service due to cost concerns but given the feedback ESA
received, the decision has been made to continue the site and improve its
A popular feature of the site is the calendar that links
directly to economic indicators on the Census and BEA websites. By continuing
the Economic Indicators (EI) site, the fifteen major indicators released by
those bureaus will still be listed, along with links to the full text of each
release. EI’s information will continue to be provided free of charge.
Many users also subscribe to the site and have economic
indicators and the full releases emailed to them. There are a number of
technical challenges with this aspect of the EI site – the service often backs
up and fails because of bandwidth issues, releases sometimes take hours to reach
subscribers, and some subscribers receive multiple copies of the releases while
others get none at all. The cost of maintaining the site is almost entirely
attributable to operating this feature.
To address these concerns we will redesign the subscription
feature of economicindicators.gov. The new system, which will remain free of
charge, will email an abstract and link so that users can access the full
release on the source website. We believe the cost of rewriting the system
will, in the long-run, be less than continuing to run the existing system. The
new subscription service will be operational in the next few months.
Existing subscribers of the economicindicators.gov service were
offered a free trial subscription to the STAT-USA/Internet service (http://www.stat-usa.gov). A number of you have already signed
up for that and we hope you will make full use of it.
Thank you for your responses to last week’s notice. We look
forward to continuing to provide economic indicators, in the most efficient way
Interesting new site coming from Frank Cioffi, the PR and media relations guy, and former tv news journalist: Tech Investor News.