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Thread: Peter Schiff talks about Mish

  1. #1

    Default Peter Schiff talks about Mish

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  3. #2

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    Peter Schiff's investment strategy has been very straight forward and consistent since around 2000. Basically precious metals and foreign stocks with high dividends in fiscally sound countries. It's easy to check the record on his strategy. Compare that to a typical portfolio and you'll see that his strategy FAR outperfomed the typical one since 2000. The only time the typical strategy did better was in 2009 but Schiff did much better in all the other time frames. It's wrong to cherry pick one small time frame when he lost money and ignore the vast majority of the time when he made money. Plus the most important fact is that the NET gain for Schiff's strategy is much higher than the others since 2000.

  4. #3

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    Schiff is a big proponent of investing in those foreign dividend stocks in their respective currencies. ex; AUD, CAD, etc.

    I've yet to find a way to do this with a small investment account. Seems like you have to be a high roller to do this.

    Anyone have any experience with currency ETF's like FXA or FXC?

  5. #4

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    Correct me if I'm wrong but here is a list of his funds: http://www.europacificfunds.com/

    Most don't show much of a history (atleast according to morningstar...which has it flaws) the ones that do have underpreformed their peers. The cost is much higher then their peers. If you have longer history I'm all ears. But ussually when you have a flawed fund they "re-create" the fund with a different ticker to get rid of its lack of preformance rather then its above average preformance as you're suggesting.

    All things being equal. Their investment philosphy is flawed. You can't invest using our current currency (dollars) into foreign stock or precious metals held in dollars and escape any of the doom and gloom he's predicting. Massive inflation which seems to be his biggest concern (as is mine) will effect all aspects of life. Foreign companies and dollar denominated PM's will have no better or worse ability to increase in value over any other type of asset (assuming that asset would rise with inflation as most assets do)
    Last edited by jbauer; 12-05-2012 at 11:33 AM.

  6. #5

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    Quote Originally Posted by sluggo View Post
    Schiff is a big proponent of investing in those foreign dividend stocks in their respective currencies. ex; AUD, CAD, etc.

    I've yet to find a way to do this with a small investment account. Seems like you have to be a high roller to do this.

    Anyone have any experience with currency ETF's like FXA or FXC?
    Open a retail brokerage account. Unless the brokerage house has a low end limit you should be able to buy as little as one share of an ETF provided you're willing to pay the ticket charges. Now spreading the cost of the purchase and sale over one share might mitigate any ability to make anything but thats on you.

  7. #6

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    I'm talking about the ability to convert USD to CAD and invest in the Canadian stock market, for example.

    Seems like most brokerages that will even do this require minimums of 100K and up.

  8. #7

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    Quote Originally Posted by sluggo View Post
    I'm talking about the ability to convert USD to CAD and invest in the Canadian stock market, for example.

    Seems like most brokerages that will even do this require minimums of 100K and up.
    Wrong. Check out any discount brokerage. Even fidelity or something like that would work, given the huge number of ETFs available to the average joe investor.

  9. #8

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    Quote Originally Posted by sluggo View Post
    I'm talking about the ability to convert USD to CAD and invest in the Canadian stock market, for example.

    Seems like most brokerages that will even do this require minimums of 100K and up.
    It is my understanding that you cannot hold foregin currency in a domestic account denominated in a foregin currency. (even if a statment says you own that currency) If you can it certainly isn't readily availible. All etf are going to trade back to local currency at some point and since you live here that currency is dollars. Now if you want to move to another country that is one way to accomplish this. The whole trade back to local currency makes it possible for "the man" to be able to tax you accordingly.

  10. #9

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    Quote Originally Posted by jclay2 View Post
    Wrong. Check out any discount brokerage. Even fidelity or something like that would work, given the huge number of ETFs available to the average joe investor.
    Jclay is right you're very much able to trade canadian currency (denominated in dollars) in any plain jane brokerage account. Have fun.

  11. #10

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    http://www.sitkapacific.com/files/Si..._Portfolio.pdf

    Mish has outperformed both the S&P Benchmark and the Hedge Fund industry tracker over the last 5 years.

    Schiff's funds, on the other hand, have trailed both benchmarks. Unsurprising that he, unlike Mish, doesn't make his results easy to find.

    Not to mention the exorbitant fees he charges those that trade through his firm.

  12. #11

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    What Peter says as to why he refused to be on the same show as Mish sounds perfectly reasonable to me. I would have done the same thing.
    My personality type: INTJ - please forgive my weaknesses (Not naturally in tune with others feelings; may be insensitive at times, tend to respond to conflict with logic and reason, tend to believe I'm always right, tend to be unwilling or unable to accept blame )

  13. #12

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    Quote Originally Posted by jbauer View Post
    Correct me if I'm wrong but here is a list of his funds: http://www.europacificfunds.com/

    Most don't show much of a history (atleast according to morningstar...which has it flaws) the ones that do have underpreformed their peers. The cost is much higher then their peers. If you have longer history I'm all ears. But ussually when you have a flawed fund they "re-create" the fund with a different ticker to get rid of its lack of preformance rather then its above average preformance as you're suggesting.

    All things being equal. Their investment philosphy is flawed. You can't invest using our current currency (dollars) into foreign stock or precious metals held in dollars and escape any of the doom and gloom he's predicting. Massive inflation which seems to be his biggest concern (as is mine) will effect all aspects of life. Foreign companies and dollar denominated PM's will have no better or worse ability to increase in value over any other type of asset (assuming that asset would rise with inflation as most assets do)
    Schiff is a long term investor. Correct me if I'm wrong but I think he just started his funds a couple of years ago. That's not long enough to make an evaluation.

    As far as avoiding inflation why wouldn't foreign stock be a hedge? If I buy 100 shares of Toyota, does it matter what currency I used to buy those shares? The fact is I now own 100 shares of Toyota and not dollars. So if the dollar loses value my shares will go up in dollar terms.

    Shedlock thinks we are going to have deflation, Schiff thinks inflation. Would you rather own gold (Schiff) or treasuries (Shedlock)?

  14. #13

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    Quote Originally Posted by sluggo View Post
    Schiff is a big proponent of investing in those foreign dividend stocks in their respective currencies. ex; AUD, CAD, etc.

    I've yet to find a way to do this with a small investment account. Seems like you have to be a high roller to do this.

    Anyone have any experience with currency ETF's like FXA or FXC?
    If you have a 401K check to see if you have an option to go outside of the normal, crappy mutual fund choices they give you. I called my investment company (Fidelity) and they sent me some paperwork to set up this thing called a brokerage link. Now I can buy anything that you can buy with a normal investment account. I own a lot of foreign mining companies, a gold ETF (GLD), and an oil ETF (USL). My guess it most investment companies don't advertise this feature. Maybe they don't want the liability. If someone loses their 401K day trading they might try to sue.

  15. #14

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    Quote Originally Posted by LibertyIn08 View Post
    http://www.sitkapacific.com/files/Si..._Portfolio.pdf

    Mish has outperformed both the S&P Benchmark and the Hedge Fund industry tracker over the last 5 years.

    Schiff's funds, on the other hand, have trailed both benchmarks. Unsurprising that he, unlike Mish, doesn't make his results easy to find.

    Not to mention the exorbitant fees he charges those that trade through his firm.
    Do you think we are going to have inflation or deflation in terms of dollars?

  16. #15

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    Quote Originally Posted by Madison320 View Post
    Schiff is a long term investor. Correct me if I'm wrong but I think he just started his funds a couple of years ago. That's not long enough to make an evaluation.

    As far as avoiding inflation why wouldn't foreign stock be a hedge? If I buy 100 shares of Toyota, does it matter what currency I used to buy those shares? The fact is I now own 100 shares of Toyota and not dollars. So if the dollar loses value my shares will go up in dollar terms.

    Shedlock thinks we are going to have deflation, Schiff thinks inflation. Would you rather own gold (Schiff) or treasuries (Shedlock)?
    Your 100 shares of Toyota should go up within spitting difference of a 100 share of GM or Ford given a certain set of circumstances. I'm not sayin Schiff is not hedging for inflation. I'm saying owning stock regardless of region should do the exact same thing esspecially given the correlation factors between regions of late.

  17. #16

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    Quote Originally Posted by jbauer View Post
    Your 100 shares of Toyota should go up within spitting difference of a 100 share of GM or Ford given a certain set of circumstances. I'm not sayin Schiff is not hedging for inflation. I'm saying owning stock regardless of region should do the exact same thing esspecially given the correlation factors between regions of late.
    I totally agree, assuming that Toyota and Ford are equally profitable in the future. But given our debt and coming inflation there's a good chance that US companies will not be as profitable as foreign companies in the future. (Maybe Toyota was not such a good example given Japan's debt!)

    But foreign companies are not Schiff's only strategy. He also thinks you should buy precious metals like gold and avoid cash like US treasuries. Most investors think treasuries are the safest investment you can make. Schiff thinks it's one of the riskiest. What do you think?

  18. #17

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    Quote Originally Posted by Madison320 View Post
    Do you think we are going to have inflation or deflation in terms of dollars?
    Isn't that irrelevant to whether Schiff's criticism of Mish's firm is accurate?

  19. #18

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    Quote Originally Posted by ronpaulfollower999 View Post
    OMFG! I had respect for Mish till now. WTF was he thinking doing that to Peter?
    Quote Originally Posted by Ron Paul
    The government is incapable of doing what it's supposed to do. A job like the provision of security is something best left to private institutions.
    My music/art page is here"government is the enemy of liberty"-RP
    That which doesn't kill me has made a grave tactical error
    Quote Originally Posted by Anti Federalist View Post
    This whole board is a thoughtcrime in progress.
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  20. #19

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    Quote Originally Posted by heavenlyboy34 View Post
    OMFG! I had respect for Mish till now. WTF was he thinking doing that to Peter?
    Peter - the paragon of principle. The man who uses his books to attracts clients who overpay by exceptional margins for basic brokerage operations and underperfoming funds with egregious management fees.

    Yes, lets just take his word on the matter.

    At least Mish has the guts to admit when he's wrong.

  21. #20

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    I would like to hear the audio of Schiff talking about Krugman's attack on him last week

    Does anyone have it ?

  22. #21

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    Quote Originally Posted by LibertyIn08 View Post
    http://www.sitkapacific.com/files/Si..._Portfolio.pdf

    Mish has outperformed both the S&P Benchmark and the Hedge Fund industry tracker over the last 5 years.

    Schiff's funds, on the other hand, have trailed both benchmarks. Unsurprising that he, unlike Mish, doesn't make his results easy to find.

    Not to mention the exorbitant fees he charges those that trade through his firm.
    Why are you only going back 5 years?

  23. #22

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    Quote Originally Posted by headhawg7 View Post
    Why are you only going back 5 years?
    That's a fairly standard time frame for a firm that's only been around 7 years. I'm sure when the fund hits 10 years they'll have a 10 year track record.

    That being said, that is also irrelevant as the linked document also contains a performance column for the fund since inception. It has beaten both indices over that length of time as well.

  24. #23

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    Quote Originally Posted by LibertyIn08 View Post
    Isn't that irrelevant to whether Schiff's criticism of Mish's firm is accurate?
    No because Schiff's investment strategy is based on the dollar collapsing.

    Schiff's strategy is based on Austrian economics and the belief that US debt is going to cause the dollar to collapse. Shedlock is more of a Keynesian.

    I'm confused by the large amount of anti Schiff comments coming from a Ron Paul site. You do realize that Schiff's investment strategy is about the same as Ron Paul's right?

  25. #24

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    Quote Originally Posted by LibertyIn08 View Post
    http://www.sitkapacific.com/files/Si..._Portfolio.pdf

    Not to mention the exorbitant fees he charges those that trade through his firm.
    Do you have proof of the "exorbitant fees"? I've never used his investment company but I have bought gold from his precious metals company. I paid 4% above spot for 1 ounce Canadian maple leafs, which is a pretty good deal.

  26. #25

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    Quote Originally Posted by LibertyIn08 View Post
    Peter - the paragon of principle. The man who uses his books to attracts clients who overpay by exceptional margins for basic brokerage operations and underperfoming funds with egregious management fees.

    Yes, lets just take his word on the matter.

    At least Mish has the guts to admit when he's wrong.
    That's cool of him. He used to do a segment on Charles Goyette's show. Mish should find another public forum because even when he's inaccurate, he's interesting.
    Quote Originally Posted by Ron Paul
    The government is incapable of doing what it's supposed to do. A job like the provision of security is something best left to private institutions.
    My music/art page is here"government is the enemy of liberty"-RP
    That which doesn't kill me has made a grave tactical error
    Quote Originally Posted by Anti Federalist View Post
    This whole board is a thoughtcrime in progress.
    Quote Originally Posted by danke View Post
    I carry my man purse for fashion, not function.

  27. #26

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    Quote Originally Posted by Madison320 View Post
    Do you have proof of the "exorbitant fees"? I've never used his investment company but I have bought gold from his precious metals company. I paid 4% above spot for 1 ounce Canadian maple leafs, which is a pretty good deal.
    Yes! My dad used his firm. They were extremely high near 3-4 % for canadian energy stocks. I tried as hard as I could to shift him away from it, but he go suckered in by Schiff's presentation and commentary. BTW, those commission rates are absurd. Just go check Interactive brokers foriegn stock market rates to see. On IB, the rate for canadian stocks is 1 penny per share! Schiff is a joke as far as being a moral business man. While I agree with most of his opinions on the economy, he is a self serving individual looking after himself before the people he serves.

  28. #27

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    Understanding how the economy works over the long term and being a good trader are two skill sets that have zero correlation with each other. You could be the best trader of all time (see Soros) and not understand basic economics. On the flip side there are almost no economists that make money in the markets.

  29. #28

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    Quote Originally Posted by Madison320 View Post
    Do you have proof of the "exorbitant fees"? I've never used his investment company but I have bought gold from his precious metals company. I paid 4% above spot for 1 ounce Canadian maple leafs, which is a pretty good deal.
    Unfortunately they're not transparent on their site as to specific fees. (This is in and of itself a warning sign)

    Quote Originally Posted by http://www.europac.net/about/faq
    2. What are your fees for buying non-U.S. listed foreign stocks?
    We charge a percentage markup on all foreign trades that varies based on the size of each individual transaction and the total size of the portfolio. These fees can vary from as much as 5% (e.g. $50 to buy $1,000 of a single foreign stock), to less than 1% for a single stock transaction in excess of $1 million. Most clients will end up paying between 2% and 3% to build a full portfolio of foreign stocks. The more diversified the portfolio, the higher our transaction costs and the more we charge for our services. It is important to discuss with your broker the fees involved prior to placing any orders, so that you understand the exact percentage that you will be charged.
    Thankfully there is plenty of anecdotal evidence for their fees:

    Quote Originally Posted by http://forumserver.twoplustwo.com/30/business-finance-investing/euro-pacific-capital-119530/
    I talked to a broker today at EuroPac in Orange Co., CA. He said they charge 3% up front. It only drops to 2.5% at a million.
    For the vast majority of individual investors, this is a terrible deal. Doubly so if they're investing in his underperforming funds.

    Quote Originally Posted by Madison320 View Post
    No because Schiff's investment strategy is based on the dollar collapsing.

    Schiff's strategy is based on Austrian economics and the belief that US debt is going to cause the dollar to collapse. Shedlock is more of a Keynesian.

    I'm confused by the large amount of anti Schiff comments coming from a Ron Paul site. You do realize that Schiff's investment strategy is about the same as Ron Paul's right?
    If it was "about the same" how come Ron has relatively outperformed the market while Schiff has underperformed both the hedge fund index and the broader market indices?

    Further, Mish is not a Keynesian. He is most definitely an adherent of the Austrian school

    Take a look at the post by Mish that set all of this off 3 years ago: http://globaleconomicanalysis.blogsp...was-wrong.html

    Does this strike you as the writing of a Keynesian?

    Regarding your broader point, again - it is irrelevant. I'd rather have a portfolio run by someone generating alpha over a very long run than someone running a portfolio that only performs well in a very long tail situation - especially when their track record doesn't indicate that they'd even outperform in that long tail situation.
    Last edited by LibertyIn08; 12-06-2012 at 02:25 PM.

  30. #29

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    MISH has no credibility. He wrote an article attacking Peter Schiff by taking one account over a period of one year that was bad for miners and then used that to say he was "wrong" when infact that portfolio has recovered and is actually up right now despite MISH claiming it would take 20 years to recover. the portfolio in MISH's attack piece on Schiff recovered and are up within a few years.

    Mish wrote the article and his firm brought in $50m in business. Peter said Mish's company manages $70m.

    He attacked Schiff with a ridiculous article to smear him and gain business for his own firm. It brought in $50m but hardly anything since then. He is back to desperately attack Schiff and try and attract more business. The man has no credibility.

  31. #30

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    Quote Originally Posted by jclay2 View Post
    Yes! My dad used his firm. They were extremely high near 3-4 % for canadian energy stocks. I tried as hard as I could to shift him away from it, but he go suckered in by Schiff's presentation and commentary. BTW, those commission rates are absurd. Just go check Interactive brokers foriegn stock market rates to see. On IB, the rate for canadian stocks is 1 penny per share! Schiff is a joke as far as being a moral business man. While I agree with most of his opinions on the economy, he is a self serving individual looking after himself before the people he serves.

    I asked the manager at Schiff's precious metals company (who I bought my gold from) to respond. Here is what he wrote:

    ************************************************** ********************
    The transactional fees are slim with any online broker dealer. Sure, if an investor wants to do his own stock picking, he’ll just pay the transactional costs per trade.

    EPC clients pay to get Peter’s market insights and investment recommendations and to work one-on-one with a broker who will tailor a portfolio that is suitable to each individual client. 3% is very standard within the brokerage industry.
    ************************************************** ********************


    I did some research on this and found you are not comparing apples to apples. Schiff's firm is a full service broker dealing in foreign accounts so if you want to compare prices you need to make sure it's both a full service broker and you're buying foreign stocks.

    Here is a price quote I found from another international full service broker recommened by Casey Research:

    ************************************************** ********************
    Question : What is your commission structure?
    Answer : We believe that our commissions are very competitive, especially in light of our specialized services. They generally fall somewhere between those of the “discount brokers” and the larger, full-service brokerage firms. In percentage terms, you can expect to pay somewhere between 1/2 percent and 3.5 percent depending on the price of the shares and the number of shares traded, subject to a minimum of $60 per trade. There is a minimum opening transaction requirement of $1,500. Additionally, there will be a $35 charge deducted from your account annually unless you make at least two trades per year or maintain a cash balance over $10,000. To receive a commission-rate quote on a specific transaction, please don’t hesitate to call and speak with a Global registered representative.
    ************************************************** ********************

    So it would appear that 3-4% is within industry standards.

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