Article in WSJ today.
Right Forecast by Schiff, Wrong Plan?
"Mr. Schiff's Darien, Conn., broker-dealer firm, Euro Pacific Capital Inc., advised its clients to bet that the dollar would weaken significantly and that foreign stocks would outpace their U.S. peers. Instead, the dollar advanced against most currencies, magnifying the losses from foreign stocks Mr. Schiff steered his investors into"
At least some unhappy clients.
"A number of investors said their Euro Pacific portfolios lost 50% or more in 2008, worse than the 38% drop in the Standard & Poor's 500-stock index last year. People familiar with the firm say that hardly any securities recommended by Euro Pacific brokers gained ground in 2008."
To be fair looks like there were better results in prior years.
"When global markets were soaring, many Euro Pacific investors' accounts experienced strong performance. For several years, investors saw returns in excess of 20% a year as foreign stocks and commodities surged, according to people familiar with the firm."
What have you done for me lately? ;-)
Here's the decoupling bit which was a real miss.
"One of Mr. Schiff's biggest forecasts was that many overseas economies would "decouple" from the U.S., gaining strength even as the American economy struggled. Instead, overseas stock markets plunged as much or more than U.S. stocks in 2008 as the global economy skidded. Prices for commodities also tanked, torpedoing another favorite investment theme of Mr. Schiff's. After last year's losses, his firm has about $845 million in assets."
I don't believe his record is public but here's someone who came forward.
"Early last year, Richard De Gennaro, a retired Harvard University librarian, put $100,000, about 15% of his assets, into a Euro Pacific account that included Canadian Oil Sands Trust, which focuses on crude-oil projects in Canada, and the India Capital Growth Fund, which holds investments in companies that do business in India. Both investments took big hits in 2008, compounded by the fact that the Canadian dollar and the Indian rupee fell 18% and 19%, respectively, against the U.S. dollar. The 83-year-old retiree's account is now worth about $37,000, a 63% plunge. Mr. Schiff "goes around saying that he was right," says Mr. De Gennaro. "He was right about one thing and wrong about everything else."
And another
"Among investors who turned to Mr. Schiff's firm just as his strategy began to falter, Brian Kullberg, a design engineer in Portland, Ore., says he started to worry about the state of the U.S. economy in early 2008. He put $70,000 into a Euro Pacific account, hoping it would benefit as the U.S. economy and the dollar weakened. By late January 2009, his investment had shrunk to about $25,000."
Don't get me wrong. My view of Schiff isn't [b]all[/b[ negative. I'm just saying he gets some things right some wrong - but I don't think he is in any way deserving of the praise some are laying on him. Being right about an investment thesis can still get you killed if you have the timing wrong. Schiff predicted in 2002 that the Dow Jones would go "to 2000 to 4000 or maybe less". The next 6 years saw the Dow Jones rise 40%! Then in his book last year he predicted decoupling. if you bet on it you probably lose even more than you did in the Dow. We don't know all his client's results but we can see he is speculating based on his macro views and when the timing is wrong is losing his clients more money than they would have otherwise.
But who has put their money where their mouth is? How many of you have invested with Schiff? Or how many would/will? His company, Euro Pacific Capital doesn't have a required minimum investment other than minimum lot sizes in any purchased foreign equities which is going to be minimal. If you've invested with him how are you doing? If not, why not?