Peter Schiff talks about Mish

[LibertyIn08]

You keep saying Schiff hasn't made any money but you haven't shown any proof. It's OBVIOUS his clients made money. Just look at gold for example. It was $300 an ounce in 2000 when Schiff recommended buying it. Plus I keep telling you that his funds are only a couple of years old and only a tiny fraction of his investing. But you keep ignoring that.

But the real evidence that you are wrong is that you keep insisting that it's IRRELEVANT whether we have DEFLATION or INFLATION for investors!!!! Are you kidding me??? I rest my case!!!

You're assuming they put their entire portfolio in gold. This isn't a good portfolio allocation model so it is not obvious that his clients made money. [One should be wary of any financial wizard whose "success" is pinned on one call. Schiff might have called investing in Gold in 2000 (although there are plenty of funds who have beat that performance with lower beta, like Renaissance Technologies) but that doesn't make him a good portfolio manager. John Paulson's fund is down dramatically over the past few years immediately following his huge gains due to the mortgage meltdown.]

For example, even if one was a large supporter of gold, one might purchase junior miners (Ron Paul owns quite a few mining stocks at apparently favorable entry positions). Over the past 5 years, some of these firms have had periods of extreme share price volatility. Many people have lost money on the junior miner stocks despite the thesis of higher gold prices broadly holding true.

Similarly silver has seen wide price volatility. Depending on when one purchased, they could be down deeply.

At the end of the day, we have no evidence of the success of Peter's clients beyond his claims that they've done well. Most successful funds and brokerage firms will tout their clients' results. Why? It is good marketing. The only thing we know for certain is that his claims in 2009 were absolutely incorrect and that his commission fees are a joke.

[itshappening]

At the end of the day, we have no evidence of the success of Peter's clients beyond his claims that they've done well. Most successful funds and brokerage firms will tout their clients' results. Why? It is good marketing. The only thing we know for certain is that his claims in 2009 were absolutely incorrect and that his commission fees are a joke.

Peter can't talk about his brokerage clients by LAW, he cannot release his performance or how well they've done. This is why he says Shedlock has an obvious agenda because someone like him should know that he cannot by law talk about his brokerage clients performance and he asked in his article for Peter to reveal what he cannot do.

I think it's safe to say his clients have done well over the last 5-10 years on the stocks they get recommended by Peter and his team otherwise why would 20,000+ customers stick around? because they like him? The dollar has lost value relative to several currencies like the aussie and new zealand dollar, just the other day he was saying he bought the new zealand dollar at 40 cents, now it';s 80 cents and he does that to invest in NZD stocks that pay dividends, that's his strategy and I think if you look at the other fiat currencies relative to the dollar and the price of gold and whatever else it's obvious that it's worked out well

[jclay2]

Isn't that what a businessman is supposed to do? Its not charity. Its about making money. Ayn Rand talked about shit like this. Rational self interest. Watch the movie Atlas Shrugged.

Are you freaking serious? So charging your unknowing and foolish clients rates 100s of times above the market rate for a service is what a businessman is supposed to do.

I support most of schiff's views, but he is in this for the money. And if that means ripping his clients off, he will do so with pleasure. Can someone give me any evidence that schiff is not completely screwing his clients over with his egregious brokerage rates to implement his investment strategy?

[itshappening]

Are you freaking serious? So charging your unknowing and foolish clients rates 100s of times above the market rate for a service is what a businessman is supposed to do.

I support most of schiff's views, but he is in this for the money. And if that means ripping his clients off, he will do so with pleasure. Can someone give me any evidence that schiff is not completely screwing his clients over with his egregious brokerage rates to implement his investment strategy?

He isn't ripping off his clients, he charges industry standard for managed brokerage fee's. This has been pointed out.

He has a team of 100 or so brokers, that's why managed brokers can be expensive.

It's not Interactive Brokers where you download the software, wire them the money and buy stocks yourself. These are people doing research, scouring the globe for opportunities, providing advice and handling clients with a personal touch and bespoke service. This is why his fee's for those services are 3% or so.

[jclay2]

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

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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.
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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:

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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.

No offense, but these specialized portfolios are a joke. There is no intense research on Peter's part that goes into their picks. It is dart throwing at best and (at least in my dad's case) they put him into very volatile stocks that were not suitable for his circumstances. Trust me, I work in this industry, stay away from him. You can replicate any strategy that is touted by peter with instant diversification and extremely low costs using index funds and etfs. No need to pay 3-4 percent to have some moron broker blindly pick 20 companies from an excel spread sheet.

[LibertyIn08]

Peter can't talk about his brokerage clients by LAW, he cannot release his performance or how well they've done. This is why he says Shedlock has an obvious agenda because someone like him should know that he cannot by law talk about his brokerage clients performance and he asked in his article for Peter to reveal what he cannot do.

I think it's safe to say his clients have done well over the last 5-10 years on the stocks they get recommended by Peter and his team otherwise why would 20,000+ customers stick around? because they like him? The dollar has lost value relative to several currencies like the aussie and new zealand dollar, just the other day he was saying he bought the new zealand dollar at 40 cents, now it';s 80 cents and he does that to invest in NZD stocks that pay dividends, that's his strategy and I think if you look at the other fiat currencies relative to the dollar and the price of gold and whatever else it's obvious that it's worked out well

He's allowed to publish the returns of his managed funds. His site goes out of the way to hide the (mandated to be publicly presented) results of his funds because of their poor performance:

Here's the annualized returns since inception for his various funds:

EPIVX 1.3%
EPIBX 4.22%
EPASX -.16%
EPHCX 1.59%
EPHAX -3.24%
EPLAX -5.26% YTD (No annualized data yet available)
EPUSX -.53% YTD (No annualized data yet available)

Is it any wonder they hide this information in the fact sheet rather than openly advertise it? These funds might beat carefully selected MSCI indices but do quite poorly when contrasted against Mish's funds or other highly rated funds. In some instances they actually underperform even basic ETF trackers.

As an aside, nobody is asking for him to release the rates of return of his brokered clients. There are other ways to show how his brokerage firm is creating value for their clients (aka "results" in the case of brokered clients). He can be more upfront about the following:

Total AUM
Client Growth
Client Numbers
Comprehensive Fee Listing

I'd hazard the reason he doesn't is that it would show to anyone familiar with the wealth management business that his firm is a relative minnow. Funnily enough, this is the same reason his brother and Schiff dismiss Mish. At least Mish has a record of producing alpha in his funds.

As an aside, 3-4% is not the standard even for managed accounts these days. We're not living in the 80s anymore.

[jclay2]

It's not Interactive Brokers where you download the software, wire them the money and buy stocks yourself. These are people doing research, scouring the globe for opportunities, providing advice and handling clients with a personal touch and bespoke service. This is why his fee's for those services are 3% or so.

Interacting with clients? Yes. Scouring the globe for opportunities? HAHAHAHA. They are Salesman! End of story. They do not do research or look for opportunities. Their only job is to sign up clients and earn commissions.

[itshappening]

No offense, but these specialized portfolios are a joke. There is no intense research on Peter's part that goes into their picks. It is dart throwing at best and (at least in my dad's case) they put him into very volatile stocks that were not suitable for his circumstances. Trust me, I work in this industry, stay away from him. You can replicate any strategy that is touted by peter with instant diversification and extremely low costs using index funds and etfs. No need to pay 3-4 percent to have some moron broker blindly pick 20 companies from an excel spread sheet.

They aren't blindly picking companies, they do research and find those companies all over the world.

IF you buy mutual funds some of them have management fee's of 2-3%, some of the world's biggest like Blackrock charge 3%. This isn't Peter ripping off his clients, he charges what everyone in the industry charges for similar products and services.

[itshappening]

Interacting with clients? Yes. Scouring the globe for opportunities? HAHAHAHA. They are Salesman! End of story. They do not do research or look for opportunities. Their only job is to sign up clients and earn commissions.

I'm sure he has a research team that finds the opportunites and a sales team to handle sales and everything else in between but I dont know his company. I'm sure he also employs backend staff, web designers, compliance lawyers, they're not all sales people are they?

[itshappening]

He's allowed to publish the returns of his managed funds. His site goes out of the way to hide the (mandated to be publicly presented) results of his funds because of their poor performance:

Here's the annualized returns since inception for his various funds:

EPIVX 1.3%
EPIBX 4.22%
EPASX -.16%
EPHCX 1.59%
EPHAX -3.24%
EPLAX -5.26% YTD (No annualized data yet available)
EPUSX -.53% YTD (No annualized data yet available)

Is it any wonder they hide this information in the fact sheet rather than openly advertise it? These funds might beat carefully selected MSCI indices but do quite poorly when contrasted against Mish's funds or other highly rated funds. In some instances they actually underperform even basic ETF trackers.

As an aside, nobody is asking for him to release the rates of return of his brokered clients. There are other ways to show how his brokerage firm is creating value for their clients (aka "results" in the case of brokered clients). He can be more upfront about the following:

Total AUM
Client Growth
Client Numbers
Comprehensive Fee Listing

I'd hazard the reason he doesn't is that it would show to anyone familiar with the wealth management business that his firm is a relative minnow. Funnily enough, this is the same reason his brother and Schiff dismiss Mish. At least Mish has a record of producing alpha in his funds.

As an aside, 3-4% is not the standard even for managed accounts these days. We're not living in the 80s anymore.

He has said he has over 20,000 clients. Most of them, infact probably nearly all of them are brokerage clients who sign up and then are presented with different strategies by the broker. They're dividend paying foreign stocks. That's his focus and i'm sure they do ok over the long term otherwise why would they stick around? If the client Shedlock wrote about in his silly article stuck around, he would be up and outperforming the market despite one of the companies in the portfolio going bankrupt and despite Shedlock claiming it would take 25 years for that to happen.

Mutual funds charge 3-4%, some of the "high growth" ones can charge up to 5% management fee's. Why is this hard to understand? his fee's are standard. Have you looked at the fee's for the funds with some wall street firms?