Peter Schiff was WRONG!!!!

[Gaddafi Duck]

I really would like to reiterate this again, because I believe it's so important to understand. And in fact, it is the point of this whole thread. Yes, that's right, the point of the thread is not Peter Schiff. My objective in making this thread actually had nothing to do with Peter Schiff per se. The thread is a gift from me to RPF, trying to help those with significant money from losing that money in investment schemes -- a scenario which is all too common. Hopefully using Peter as a muse has enabled me to make my point in a way that some have understood.

So, once again, the point of all this:

"Even investment professionals don’t generally beat the markets. The Hulbert Financial Digest tracks the results achieved by the published model portfolios of hundreds of investment newsletters — written by people who spend 8-12 hours a day watching and studying the investment markets.

"Each year only a handful of newsletters outperforms the Dow Jones Industrial Average. And the handful changes from year to year, so there’s no way to know which advisor will have a 'hot hand' in the coming year.

"Professionals are consumed with the job of tracking investments, and they have easy access to far more information than you do. If they can’t consistently beat the investment markets, how can you? The answer is: YOU PROBABLY CAN'T."

-- Harry Browne, in Fail-Safe Investing

Yeah, Harry Browne sounds like an investing dumbass. As Doug Casey says, he's an idiot savant. Maybe a bright guy, but he's clueless.

Case in point: David Einhorn outperformed the market at a 24% compound annual rate since the 1990's. Warren Buffett's compound annual return is something like 22% for decades. How do you explain the countless of people who became multi-millionaires/billionaires when they only had a couple grand to start out? Because they all outperformed the market.

In Harry Browne's view, just do index investing. YEAH!

Every company in the S&P or Dow or NASDAQ demonstrates you can outperform the market. Because they wouldn't be on those indices if they didn't!!

 

[helmuth_hubener]

AHHAHAHH!!!

Oh, good. I am glad I am so amusing to you. Always gratifying to help someone accomplish their goal in life.

Game. Set. Match. Booyah! helmuth just got 0wned

Certainly I do not see it that way.

But then, we retards often see things differently than you clever people.

 

[helmuth_hubener]

How do you explain the countless of people who became multi-millionaires/billionaires when they only had a couple grand to start out? Because they all outperformed the market.

I do not have to explain such people, because I do not believe that they exist in the wild. I have never known one. Have you? Warren Buffet didn't do it. I do not know anything whatsoever about David Einhorn, yet this phenomenon (supposedly so common) is so exceedingly rare I feel totally safe and confident in saying that he didn't either.

There's a lot of people that make fortunes giving investment advice.
There's a lot of people that make fortunes writing investment books.
But there are not lots of people who make their fortunes merely by investing their own money. I have never known anyone who took $2,000 and turned it into $1 million, much less billions. Neither did Harry Browne, who spent more than 40 years in the investment industry. Neither, I venture to say, do you.

You make your fortune in your career. You don't make it in your investments. Your investments can help you. But your money comes from your career. You are not going to take $2,000 and turn it into $1 million. That simply doesn't happen. It is a myth and a lie and a totally unrealistic expectation, and that unrealistic expectation causes many people to lose huge, huge quantities of money every year.

Thank you so much, Gaddafi, for reminding me to make this point more strongly.

 

[Gaddafi Duck]

I do not have to explain such people, because I do not believe that they exist in the wild. I have never known one. Have you? Warren Buffet didn't do it. I do not know anything whatsoever about David Einhorn, yet this phenomenon (supposedly so common) is so exceedingly rare I feel totally safe and confident in saying that he didn't either.

There's a lot of people that make fortunes giving investment advice.
There's a lot of people that make fortunes writing investment books.
But there are not lots of people who make their fortunes merely by investing their own money. I have never known anyone who took $2,000 and turned it into $1 million, much less billions. Neither did Harry Browne, who spent more than 40 years in the investment industry. Neither, I venture to say, do you.

You make your fortune in your career. You don't make it in your investments. Your investments can help you. But your money comes from your career. You are not going to take $2,000 and turn it into $1 million. That simply doesn't happen. It is a myth and a lie and a totally unrealistic expectation, and that unrealistic expectation causes many people to lose huge, huge quantities of money every year.

Thank you so much, Gaddafi, for reminding me to make this point more strongly.

Whoa! Warren Buffett DIDN'T outperform the market?? Wtf..so what you're saying is if I put $10,000, which is what Warren Buffett started with, into the S&P, then I too can be worth $60 billion after 50 years?

You're so blinded by dogma it's ridiculous. OBVIOUSLY Warren Buffett far outperformed the market. Here's the actual numbers:

Let's see...hmmm..compound annual gain of 19.7% vs. the S&P 500 WITH dividends at 9.4%. Yeah, I'd say he outperformed!

 

[Gaddafi Duck]

Lol...look at those overall gains.

Buffett: 586,817%
S&P 500: 7,433%

Which number is bigger, helmuth? Buffett, right? So, that would mean he outperformed the market...quite significantly, too. So it's entirely possible to far outperform the market consistently, and you don't just have to be Warren Buffett to do so.

 

[helmuth_hubener]

Whoa! Warren Buffett DIDN'T outperform the market??

Oh Mr. Gaddafi, thank you so much for your reply! I do not know how you do things in Libya, but here on RPF when we "reply" to someone, that means we address what they actually said. That's what makes it a valid "reply."

As with so many other of your replies, you have taken something I said, twisted it into something I did not say, mixed it with vitriol and over-the-topness, and made an unquestionable conclusion, the same conclusion all the rest of your posts have come to: that I am an idiot.

So that's fine -- wonderful, in fact! I am wondering, though, before I reply to your "replies," what you are wanting out of this conversation. Do you want:

1) For me to actually reply, line-by-line, to all your posts. If so, would you do me the courtesy of reciprocating?
2) For me to "reply" as you do: by skimming through your post, and then writing whatever I want, or misrepresenting something you have written if possible.
3) For me to come to accept some truth or other that you are trying to get across to me. If so: what?
4) For me to get fed up and descend into anger and start replying in kind to your prodding.
5) Something else.

Just tell me what your ideal outcome would be. What would be most entertaining to Mr. Gaddafi, leader of the Free North-African World? What would make you laugh the most? I live to serve.

Your servant,

Helmuth

 

[helmuth_hubener]

In the meantime, awaiting guidance from Gaddafi, let me mention that I know a little bit about Warren Buffet's life. Especially about his genesis (his early years). And I will just reiterate what I said before: Warren Buffet did not get rich by putting his own money at risk. Anyone interested could perhaps, oh, I don't know: read a book.

 

[helmuth_hubener]

Hi, Madison! Speaking of gaining more knowledge, did you ever listen to those Harry Browne radio shows I linked you to? You had sounded excited to do so.



Here, again, are the two shows I recommend to start with for an overview:

• 16 Golden Rules of Investing
  
• An Introduction to the Permanent Portfolio Concept

And the whole archive:

http://www.harrybrowne.org/Archives/Archives-investment.htm

Let me know what you think! I will be very happy to discuss it with you, even if you think the ideas are terrible and strongly disagree. In fact, all the better if you disagree. Let's just disagree with knowledge and understanding.

Madison? Paging Mr. Madison!

 

[Gaddafi Duck]

Oh Mr. Gaddafi, thank you so much for your reply! I do not know how you do things in Libya, but here on RPF when we "reply" to someone, that means we address what they actually said. That's what makes it a valid "reply."

Ohh kiss my ass. I could copy and paste exactly what you said and you'll say "gee, that's not what i said!" Example:

helmuth_hubener: Warren Buffett did not outperform the market.
Gaddafi Duck: Warren Buffett DID outperform the market, see, here are the results
helmuth_hubener: THAT'S NOT WHAT I SAID. It'd be nice if you replied to what I actually said.
Everyone else reading my posts: +1 rep to Gaddafi Duck

 

[helmuth_hubener]

helmuth_hubener: Warren Buffett did not outperform the market.

So, am I to understand that you are not just playing rhetorical games, but truly and sincerely believe that the above is what I said? That is, that I claim that "Warren Buffett did not outperform the market"?

I'm just trying to figure out where you're coming from. Also, still wondering how you would prefer me to reply to you, and what your ideal conversational outcome would be.

 

[Gaddafi Duck]

In the meantime, awaiting guidance from Gaddafi, let me mention that I know a little bit about Warren Buffet's life. Especially about his genesis (his early years). And I will just reiterate what I said before: Warren Buffet did not get rich by putting his own money at risk. Anyone interested could perhaps, oh, I don't know: read a book.

Hah, this is actually quite interesting. You see, back in college I met Warren Buffett personally and had lunch with him as I live in Nebraska and took a class specifically on Warren Buffett's investment theology where I read multiple books on Buffett. They only took the top 10 students in the class to meet him. I was one of them. I'm quite aware of Warren Buffett, who he is, and how he made his money. Otherwise, I don't know how I'd make it in the top 10 of a Warren Buffett investment class and get the opportunity to meet him, have him pay for my lunch, if I didn't know about his strategy considering that's what the entire class was about.

Your point about Warren Buffett did not get rich by putting his own money at risk. is completely MOOT (and I'm sure you're going to reply with "THAT'S NOT WHAT I SAID!").

Because your original points, and quotes of Harry Browne, was this:

"Professionals are consumed with the job of tracking investments, and they have easy access to far more information than you do. If they can’t consistently beat the investment markets, how can you? The answer is: YOU PROBABLY CAN'T."

Yet Warren Buffett did beat the market. Quite considerably. 500,000%+ vs. 7,000% on the S&P 500.

Now YOU are trying to sidestep it by saying, "He didn't get rich investing his own money." Who CARES where he got the money---He beat the market WITH whatever money he had! That's the point! HE BEAT THE MARKET Now you're trying to say, "Oh, it wasn't his money"

No shit? Every hedge fund and mutual fund in existence uses OTHER PEOPLE'S MONEY to make money. That doesn't negate the fact that there are numerous hedge funds and mutual funds and individuals who consistently beat the market. You're trying to make two different arguments, and you don't even get it!

 

[Danke]

Maybe not in the past, but in recent years Warren Buffett has been bailed out by government intervention.

 

[Gaddafi Duck]

So, am I to understand that you are not just playing rhetorical games, but truly and sincerely believe that the above is what I said? That is, that I claim that "Warren Buffett did not outperform the market"?

I'm just trying to figure out where you're coming from. Also, still wondering how you would prefer me to reply to you, and what your ideal conversational outcome would be.

Hahahah this is too comical! Yes, you DID say Warren Buffett did NOT outperform the market. Scroll up to your post, or here, I'll copy and paste it for you:

How do you explain the countless of people who became multi-millionaires/billionaires when they only had a couple grand to start out? Because they all outperformed the market.

I do not have to explain such people, because I do not believe that they exist in the wild. I have never known one. Have you? Warren Buffet didn't do it. I do not know anything whatsoever about David Einhorn, yet this phenomenon (supposedly so common) is so exceedingly rare I feel totally safe and confident in saying that he didn't either.

Sooo...what the fuck did you mean by that if you didn't mean what I said you said! hahahhah, this is ridiculous!! You back track like none other

 

[helmuth_hubener]

So, any reply, Mr. Gaddafi, sir?

 

[Gaddafi Duck]

So, any reply, Mr. Gaddafi, sir?

Read above. I destroyed your points. Warren Buffett outperformed the S&P. Benjamin Graham's "Intelligent Investor" illustrated that it is entirely possible to consistently beat the market, because the market trades irrationally.

 

[helmuth_hubener]

Read above. I destroyed your points. Warren Buffett outperformed the S&P. Benjamin Graham's "Intelligent Investor" illustrated that it is entirely possible to consistently beat the market, because the market trades irrationally.

No, I mean to post #306, and also to #310. In order to reply to you in the best possible way, that will cause you the most possible pleasure, I need to know in what way you want me to reply. What do you want to have happen here? What are you trying to accomplish? Well, we know that: to laugh. But what will cause you to laugh most heartily? That is what we all need to know.

Thanks!

 

[Gaddafi Duck]

No, I mean to post #306, and also to #310. In order to reply to you in the best possible way, that will cause you the most possible pleasure, I need to know in what way you want me to reply. What do you want to have happen here? What are you trying to accomplish? Well, we know that: to laugh. But what will cause you to laugh most heartily? That is what we all need to know.

Thanks!

I guess we're done here then. Feeding at the troll zoo is over.

 

[helmuth_hubener]

I guess we're done here then. Feeding at the troll zoo is over.

I'm just trying to talk to you like a human being. Do you really have nothing but ugliness to hurl? Surely there must be some purpose to you visiting this thread. Do you want to convince me of something (other than my overwhelming ignorance and stupidity, of which I am already convinced!)? Do you want to defend Peter Schiff particularly? Are you an acolyte of his? Seems unlikely if you studied Warren Buffett and are a fan of his strategy. But who knows! It's certainly possible. I, of all people -- an Austrian starting a thread about Peter Schiff being wrong -- should know about unexpected juxtapositions. Perhaps you are working on a way to create a fusion of Buffett's strategy and Schiff's. If so, I am sure we would all be interested in hearing about it. I, for one, would be.

I have no need to prove you wrong. I have no desire to make you angry. Yet you have seemed incessantly and increasingly angry and hateful ever since I welcomed you into my humble thread. So, is it not logical for me to ask you what you want from me? How do you want me to respond to you? What do you want to have happen here? I made extremely detailed replies to you in posts #244, 246, 247, and especially 249. That was after you specifically requested that I please reply to you:

Back to what I've been writing about, though...you seem to have overlooked my 3 posts. I'd love for you to counter my arguments, if you can.

But then you never replied to any of those posts. All of which were very civil, and (I think) thoughtful and substantive, just as yours had been. You just went crazy about how I am stupid to think that Peter Schiff is exclusively invested in Norway and its liederhosen sweatshops.

And then you got really very excited about your revelation about realized vs. non-realized gains. No one ever loses anything until they sell. Just because the value of an investment goes down doesn't mean you lost money, as long as you don't sell it. Well this was a very profound insight, and I'm sure all readers of the thread thank you greatly for your enlightenment. However you kept making it again and again, becoming more and more hostile about how impatient you were with having to explain it to us. That seemed unnecessary, but whatever. Perhaps it will help you regain inner calm to know that I do understand this concept, and I think many other RPFers do as well. I would point out to you, however, that just because an asset has gone down as you held it does not mean it is going to feel any obligation to you to go up in the future. Sometimes things go down and stay down. Always kind of discouraging, that.

Anyway, despite the announcement that:

I'm done sorting this all out for you.

....you continued to "sort it out" for me by making various inaccurate or insulting statements.

Yet never replying to the posts I specifically wrote for you.

Here they are again, should you wish to continue the conversational thread:
#244,
246,
247,
and especially 249

If not, and your latest pronouncement that "I guess we're done here then. Feeding at the troll zoo is over." turns out to be more true than the other(s), then I will probably just go through at my leisure and reply, line by line, to the rest of your posts, correcting your errors and applauding your truths.

 

[helmuth_hubener]

dup...

 

[helmuth_hubener]

I suppose I'll do things a little bit backwards, at least to start out, and start at the end here. Gaddafi posted:

Hahahah this is too comical!

Oh, good! Laughter is good for the soul and the body.

Yes, you DID say Warren Buffett did NOT outperform the market.

Well, certainly that would be a preposterously false thing to say. How did you possibly come to the conclusion that I said it? Probably not through just reading, dispassionately, my words and trying to understand what I was saying. If you had done that, you probably would have realized I was saying something else. But, I already knew you were not doing that (fairmindedly trying to understand) and so I take full responsibility for leaving you an opening to intentionally misunderstand/misconstrue. My bad.

Here is what gave you the opening:

Scroll up to your post, or here, I'll copy and paste it for you:

Originally Posted by Gaddafi Duck

How do you explain the countless of people who became multi-millionaires/billionaires when they only had a couple grand to start out? Because they all outperformed the market.

Originally Posted by helmuth_hubener

I do not have to explain such people, because I do not believe that they exist in the wild. I have never known one. Have you? Warren Buffet didn't do it. I do not know anything whatsoever about David Einhorn, yet this phenomenon (supposedly so common) is so exceedingly rare I feel totally safe and confident in saying that he didn't either.

Sooo...what did you mean by that if you didn't mean what I said you said!

Thank you so much for asking. It was a simple problem of miscommunication, helped along by your anxiousness, indeed giddyness, to read any lines from me that could possibly be misconstrued. I will now clarify this and fix the miscommunication problem.

People Don't Get Rich by Playing the Stock Market

I have never known of someone who saved up at least 2,000 dollars, took that $2,000 and put it in the stock market, or in gold, or in any passive investment, and ended up a few years later, or even a few decades later, with over 1 million dollars. I have never known such a person. This is just one reason I do not think this is a realistic expectation.

Warren Buffet's Takeover Career Does Not (and Will Never) = Grandma's IRA Strategy

I do not see Warren Buffet as an exception to this. For one thing, I do not know him, nor anyone like him. People like him are exceedingly, exceedingly rare. For another thing, Warren Buffett did not take $2,000, invest it passively into some company or companies, and then go about his life and come out the other side 50 years later with billions. Rather, he was doing very active, involved things like buying up whole companies and selling them off for parts, or taking control of their boards and changing how they were run, etc., etc. This was his career. What I said was: "You don't make your fortune in your investments, you make it in your career." This fits in perfectly with that. Grandma is not going to buy up the whole map company and sell it for parts. Regular people can't do what Buffett did. They can't take 60 hours a week to run a company. They have a different career they are focusing on, and should focus on. Buffett focused on his career and became a master at it. We should follow his example in that sense.

Should We Chase Exception Rainbows, or Follow Proven Rules?

My point was: don't try to make your fortune by investing. It's not going to happen. It virtually never happens.

I could give you a couple "exceptions to the rule" even better than Warren Buffett, men who did just passively invest and make fortunes, far outpacing the market, but I won't because readers like Gaddafi will latch onto them as "the rule" they want to follow; proof the plan can work. No, they are exceptions. You cannot follow in their footsteps. No more than you can decide today to become an NBA star, read a few books or maybe take a class like Gaddafi did, and then get drafted and start playing center forward for the Lakers in 2015. Not going to happen. Speculating is a talent, an inate inclination, like playing basketball. You don't get it from reading books.

hahahhah, this is ridiculous!!

Well, it certainly is unorthodox. It's a perspective you're not going to get at financial education colleges. But ridiculous? Try: proven. The data does not lie.

You back track like none other

Gasp! Backtrack! Seriously? Scandalous! Outrageous! Stone the sinner!

I mean, what great sin do you think you're accusing me of here, by saying I "back track." Could any sensible person possibly care? We're seeking for truth here, not practicing for a middle-school debate club.