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Investing with Peter Schiff?
I know that there are a number of Peter Schiff fans among readers & participants at this site, but I'm wondering if any of you have actually opened an account at Euro Pacific Capital (run by Schiff) and if so, what has been your experience & $ returns so far?
I spoke with a representative there recently, and from what I gathered from our brief conversation, they invest all client's money the same, regardless of whether you're giving them $50,000 or $5,000,000 to invest, and regardless of whether your 30 or 70 years old. I thought that was interesting.
More interesting, since Schiff largely anticipated the economic situation we're all experiencing, I would have assumed his clients would have done great over the last year, if not making a lot of money, at least not losing much. However, when I asked about year-to-date performance figures, I was told he's down about 30% in 2008. Perhaps not much more than anyone else, but considering he anticipated this downturn, I would have thought he would have been better protected . . .
I was told that they are investing exclusively in foreign stocks whose stock price (like everything else) has been beaten down but which are paying high dividends. Most interestingly, clients buy the foreign stocks in foreign currency! Perhaps smart, but then of course you've got multiple investments going on. Not only are you investing in a company / stock based in a foreign company, you're also investing in (and have risk associated with) foreign currency. I'm not saying that's not smart, but it is unusual.
Finally, I was told they do not do much trading but mostly buy & hold, and that there is a one time fee of 3%.
Has anyone "put their money where their mouth is" & invested $ with Schiff? Any comments or personal experiences would be greatly appreciated!
Doug
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According to Mike Shedlock (Mish) Schiff is way down because he didn't anticipate that foreign equities would get hit just as hard if not harder than US equities. Schiff is also convinced we're headed for inflation or hyperinflation imminently, whereas Mish and others see a long period of deflation over the next several years.
I read Schiff's book and in general I think his analysis is right on. I did remember questioning his faith in foreign equities, though. It seems to me that if we have a global meltdown as severe as it looks like we might have, I wouldn't want to be in equities at all - no matter where they are.
That's the main concern I'd have investing money with Schiff.
If he is correct - and I think he is - that the USD is seriously overvalued and during the first Obama term the USD will collapse, then it make sense to start diversifing into other currencies and gold, especially now while the USD is so strong. It seems the recent volatility and speed of change in markets precludes waiting and watching for trend reversal and then starting your move. Who knows how long this strength will last? [disclosure: I am almost fully in cash (AUD, YEN), with maybe 5% in stocks.]
I opened an account with Europacific late last year. Schiff's assumptions are as follows:
1) USD will ultimately go down the tubes.
2) Since the US is primarily consumption based, the US is actually the caboose rather than the engine of world economic growth.
3) The producers of the world are the engine of the world economy. They may temporarily get dragged down by the US, but they will recover.
His strategy is to own assets outside of the US. This way, you are protected when the USDollar tanks.
That said, my account is down about 40% because the stocks themselves are down, and also because the dollar has gained substantially over the last few months. At least I still get the dividends, though. Most of the stocks in the account are from their list of recommended stocks. But, they can pretty much get you whatever you want. I own a few junior mining stocks in the account which I picked myself (non-dividend paying). The advantage is that they can buy directly on the foreign exchange instead of doing it yourself over the pink sheets. They have no minimum to open an account, but they recommend at least $50K in order to be properly diversified. I opened it with 20K originally. Some foreign stocks can only be purchased in blocks of shares. Their strategy does not include trading. So I have a separate brokerage account via Schwab where I do my trading. Of course, that account is down too at the moment.
Hi romulane,
Do you have access to the list of stocks he reccomends, and would you mind sharing?
Thanks
I read his book and read occasional stuff. All I can say is that local "wrap account" advisers charge 5% so he is cheaper than they are. His book made a lot of sense but, as you note, the stocks he reco'd are down also. My guess is that, like my U.S. big caps, his foreign stocks have fallen so far that the dividends don't come near covering the losses.
I did like his book, pretty much in line with the rest of the Doomers we all read, LOL.
SG