Binding: Audio CD
Dewey Decimal Number: 332
EAN: 9781596592742
Format: Audiobook
ISBN: 1596592745
Label: Your Coach in a Box
Manufacturer: Your Coach in a Box
Number Of Items: 6
Publication Date: 2009-05-01
Publisher: Your Coach in a Box
Studio: Your Coach in a Box

According to Peter Schiff, the coming decade will look very much like the 1970s - a decade few investors of today remember in any detail. As before, it will be a difficult investment environment. A time of rising inflation, higher interest rates, and soaring commodity prices coupled with a weakening dollar, falling real estate, stock and bond prices-and recession. As a result, many of the investment strategies that worked so well in the 1980s and 1990s will be doomed to failure in the coming decade. No longer can investors count on falling interest rates, decelerating inflation, and rising asset prices - the hallmark of the boom years. As these trends reverse, Schiff will show investors how to change with the times and adapt their investment strategies to new circumstances.

In The Little Book of Bull Moves in Bear Markets, Schiff will analyze the bull markets of the 1920's ,1960s, and 1990s and the bear markets that followed in the 1930s, 1970s, and the one currently under way. Analyzing the various similarities and differences among these time periods from market, economic, and political perspectives, he will discuss the investment themes that worked in prior bear markets. He will also provide detailed advice on which techniques and strategies will help investors maintain and build their wealth in the difficult times that lie ahead.

Customer Rating:
Summary: Flawed, but worthy
Comment: Schiff was among the few who predicted the economic crisis (way before this book was written). Therefore, what he had to say obviously came with some credibility.

In this book (completed in June of 2008), Schiff identified a number of problems with the US economy, most notably that it produces little exportable goods and services, imports and consumes more than it exports and produces, and from the average individual to the federal government the US is living beyond its means. The account deficit, the budget deficit, and the average savings rate are all proof for the notion.

Schiff compares the current economic crisis with the Great Depression, and identifies similarities and differences. His description of the current crisis is based on the premise that the demand destruction is mostly affecting the US, whereas the economic engines (the "BRIC" countries, most notably China) are decoupled from the US economy enough to drive demand for commodities even higher. Thus, whereas the demand destruction in the US would be a deflationary force, due to the uncoupling, the globalized economy will cause an inflation of prices, which will make goods even less affordable to US customers because of the continued fall of the dollar.

I think that the idea has some merit, at least in the long run. However, since the completion of the manuscript, the market's movements suggest that the decoupling idea is wrong. To be truthful, it might not be wrong, but the internal consumption of China and other countries might take time to compensate for the demand destruction in the US. Whether this is merely a delay, or the decoupling idea is totally wrong, only time will tell, but if one acted on Schiff's notion to invest in foreign markets, his losses have been worse than remaining in US stocks. The S&P500 held up better than the EAFE index, and even more so than the emerging markets.

If the idea of decoupling is wrong (as it looks like), the concern for inflation as the main problem is also wrong because what remains is the global demand destruction. The decreased demand is due to the shrinking amount of credit - Schiff also pointed out in this book that international investors will decrease their willingness to invest in US and to buy its Treasuries. All these factors, and the ongoing "deleveraging" (writing off losses, decreasing the debt levels by paying off more than the amount of new borrowing) point to deflation. Needless to say, investment strategies in deflation are different from those in inflation, and that's where the most important flaw in Schiff's book is.

In addition to investing in foreign stocks, betting against the dollar, Schiff also recommends investing in gold. In a deflationary phase, this is a bad idea. In contrast, the holding physical cash (something that Schiff implicitly frowns on) is a good one. However, I still believe that Schiff's idea of holding gold in the portfolio is worth considering. For one, fiat money is bound to lose value in the long run. In addition, gold would be a good hedge in case the deflation were to be be successfully fought by the Feds (i.e., the efforts of "reflation" succeeded). Gold's advantages also include liquidity. Schiff makes concrete recommendations how to own gold, and some appear to be very sound, offering protection against a potential resurfacing of Roosevelt-era gold confiscation laws.

There is a specific recommendation that I have found suspicious: Investing in gold mining stocks. Schiff stated in this book that gold mining stocks shined during the stock market decline of the Great Depression. This statement is at odds with Robert Prechter's book (Conquer The Crash; Wiley, 2002), according to which gold mining stocks were down. I have no reliable source to verify either claim, but one of them is wrong. (My bias is that Schiff is wrong.)

Schiff's solution to the crisis involves buying gold and buying high dividend foreign stocks on foreign exchanges. For both, one needs the service of a specialized brokerage firm. Conveniently, Schiff's firm is providing these "must have" services... Whether this apparent conflict of interest is undermining your confidence in Schiff's recommendations is up to you.

There were some surprising recommendations in this book to survive the coming calamity. Schiff recommended stockpiling food and other necessities, some of which can be used for bartering. I am sure that Schiff forgot his years in a two-bedroom rental apartment (if he ever lived in one). Where is the storage space? And if one lives in a 4-bedroom family home that has ample storage space, the person may not need to barter. If he needs bartering, the foreclosure of the home is imminent. It is also highly unlikely that the person who invested in gold through the Perth Mint (as per Schiff's recommendation; minimum initial investment of US$10,000) will need to barter a couple of cartons of cigarettes or canned soup... In deflation, these investments will lose value. In addition, they are illiquid. The idea of stockpiling food and water is good for only one thing: To prepare for disasters, either natural (such as a tornado) or man-made (e.g., a terrorist attack).

Some of Schiff's policy recommendations are politically loaded. He would like to avoid social unrest in the US, but the very policies that he recommends would probably bring about the unrest that he fears. Schiff might not like to spend on food stamps, but he seems to forget that a full stomach is the best antidote against revolution and rioting.

Altogether, the book is more flawed than correct. I would rather recommend Prechter's Conquer The Crash, and the strategies outlined there. To be sure, once we are at the bottom of the stock market (and it may need to correct from here downward significantly), buying commodities, and using Schiff's notions of foreign investment will make very good sense. The problem with this book is not what it recommends, but when he recommends to act on the ideas. Unfortunately, timing is crucial in investing.

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Customer Rating:
Summary: The Little Book . . .
Comment: I was very impressed with the author's first book, Crash Proof: How to Profit From the Coming Economic Collapse (Lynn Sonberg Books), but less so with this one. Though there was enough new content that I marked a few pages.

Peter deepens his explanation of economic principles, which were more difficult for non-economy folk to understand. He did, however, put in new material that brought us forward in time from his previous book. He also discussed in more depth both recommendations for the future as well as the "light at the end of the tunnel."

As he recommends, his first book should be read before this one because Crash Proof better presents his rationale.

Worth the time to read--if for no other reason than to see if his new predictions are correct. They are--again.

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Customer Rating:
Summary: Gives insight and direction
Comment: Peter Schiff not only forecast, more than 2 1/2 years ago, what was coming that would shake up the corporate and personal economics of the US but has now come along with a little book of why's and what to do's
Well written, easy to read and with focused ideas on how to recession proof your investments..loved it and hope Peter writes a follow-up.

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Customer Rating:
Summary: Great quick read for anyone worried about your asset
Comment: I came across with now famous youtube video, "Peter Schiff was right," about a month ago. I was stunned how correct he was, despite he was being ridiculed by the rest of the CNBC panelist, including Ben Stein and others, who insisted that "the times are good and the stock market and the economy in general will continue to prosper."

This is an updated and concise version of Mr. Schiff's 2007 book, "Crash Proof." I do recommend this "Little book" over Crash Proof.

I believe Mr. Schiff's augment is fairly simple and elegant, if you are willing to listen to something unpleasant but true, the adversity that we face in this US economy. At this time (the end of 2008), everyone is aware that we are in deep trouble and the economic picture in the US won't be pretty in the coming years. Mr. Schiff argues that this recession is not a problem, but a catalyst and a solution to the "borrow-and-spend" economy that the US went through after the dot com boom-and-bust in 2002. Rather than taking in the recession in the chin, Alan Greenspan and George Bush decided to provide low interest rate, therefore creating another bubble, a real estate bubble that replace the dot com bubble. Now we are paying for the mistake.

In this book, Mr. Schiff outlines how we got into this mess, and paints the grim but very likely scenario of Zimbabwe like hyper-inflation of the US dollar. The Feds are, in fact, printing money (over $5 trillion now) and dropping off the helicopter as the Feds chairman has famously insinuated in the past. This move will debase and devalue the US dollar, and the purchase power we have (what's left of it after the market crash in 2008) in the US denominated assets, increasing powerless. It is a supply & demand story. Mr. Schiff often says, "soon, a stick of gum will cost you a million dollars."

Mr. Schiff's strategy is simple. Get out of the US-based assets. Sell your US stocks, especially the stocks that depend on the US consumers. Move your assets to the foreign currencies; better yet, hard assets like gold and silver, which are in limited supply and has always worked as the asset preserver for thousands of years in history. He also recommends quality foreign stocks (not bonds, which won't catch up with the inflation) that pays high dividends.

Okay, Peter Schiff is the president of Europac capital, which is a brokerage that recommends and sells gold certificates and foreign investments. You will see some advertisement passages in the book. Some people even suggest that Peter Schiff is not a patriot, for suggesting the fall of the US Dollar...even though we did this to ourselves. I say, So what? He was right on the money about the fall of the US markets and banks, way back in 2006. I've lost plenty of my money in the market this year, and I am not willing to risk losing my purchasing power further. I've sold my US stocks and buying GLD, GDX and physical gold.

Do yourself a favor, pay $15 to Amazon & read this book. I think you will be glad that you did, in a few years and many years after.

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Customer Rating:
Summary: The Man Know's what he's talking about
Comment: This is a great book. Peter Schiff is not afraid to say the unsayable. He lives outside of the box of TV talking heads. Just check out his track record. Pick up Crash Proof for a more in depth description of what's going on.

It's a great read

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