Peter Schiff, smart guy with bad timing, running for U.S. Senate
Good for him.
Let's just hope for the sake of his would-be constituents that Schiff's temporal acumen turns out to be better than his forecasting ability. After all, what's true in life goes doubly so for investing: Timing is everything -- and in that respect, Schiff hasn't exactly covered himself in glory.
Schiff, founder of Euro Pacific Capital, a brokerage in Westport, Conn., busted out of the pundit pack back in the summer of 2006 when the Dow Jones Industrial Average stood well above 11,000 and still had about three thousand more points of upside to go. Banging the drum back then on housing, supbrime and -- most important -- the implosion of the dollar made one stand out (as did being anything other than bullish, really).
Or seem like a possible crackpot.
Then, lo and behold, Schiff was right about a lot of stuff. The economy and markets tanked, indeed. And yet Schiff was on the wrong end of too many trades too much of the time. Guesstimates put Schiff's losses at something like 70 percent or more in 2008.
So how could a guy be so right on The Call and not profit from it? Well, being long foreign equities sure didn't work because global stock markets all plunged at the same time. (The U.S. was actually one of the better performing equity markets in 2008, nauseating as that it to say.)
Even more disastrous was Schiff's dissing of the U.S. dollar at just the wrong time. There's no doubt that the buck is burning these days. The U.S. Dollar Future Index, which measures the greenback against a basket of major currencies (you can see the related ETF here), has plunged, falling 11 percent in less than six months.
Unfortunately for Schiff, he was anti-dollar pretty much just before it took off. When the global financial system blew up a year ago there was a worldwide flight to safety. Money poured into Treasuries, gold and dollars -- all of which created demand for the greenback. From March 2008 (or about the time Schiff burst into the mainstream by being big on TV and YouTube) to March 2009, the dollar soared nearly 20 percent.
Right call; wrong time. Ouch.
"There's no question 2008 comes around and we got creamed," says Andrew Schiff, a Euro Pacific Capital spokesman, broker -- and Peter's brother. "But since January 2009 those losses have largely been recouped. And our investment strategy has not changed."
Whether Schiff gets a shot at the senate seat is a matter for the voters in Connecticut. And whether his finance background translates into being a solid senator (should he win) remains to be seen.
But this we do know: Schiff is not unfamiliar with the world of hard-fought, high-stakes political campaigning. During the 2008 primaries, he was an economic adviser to Republican superhunk Ron Paul.
[Updates with comment from Euro Pacific Capital]