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A new guest Steven Jon Kaplan

May 20, 2016

A new guest Steven Jon Kaplan, editor of the True Contrarian newsletter shares his insights on the general investing mood toward gold. Click on his banner below to visit his website.

Click download link to listen on this device: Download Show

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Discussion
39 Comments
    May 20, 2016 20:47 AM

    Steve, unfortunately you use your own contrarian theories trying to time tops and bottoms in various markets and the majority of the time you have been wrong.

    Ignoring technicals and discounting them as useless information thereby inflicting financial losses on all your subscribers as contrarian investing takes much longer to be successful with and in many cases… years.

    You bought precious metal stocks at the very highs many years ago 2013 after a big correction and continued averaging down till the present.

    You did the same in commodities in 2013 and averaged down with major losses for subscribers.

    Picking tops in the stock market in 2014 and averaged down. I would like to see your track record over 5 years because several years ago you did not disclose your profits and losses till subscribers were getting very uncomfortable losing money.

      May 21, 2016 21:18 PM

      Dear Trader Jake,

      The whole point of successful investing is that you cannot and should not try to time tops and bottoms. Whenever an asset is far below fair value, one should gradually begin to accumulate it even if it is nowhere near a bottom, because eventually it will be much higher. Similarly, when an asset is far above fair value, it is necessary to sell it because even if it moves higher in the short run it will eventually decline by a dramatic percentage.

      That is why, if you look at the world’s ten thousand wealthiest people, many of them made money through patient investing using fundamentals and behavioral analysis, while there are no technical traders who fit into this category.

      As Warren Buffett and all successful fundamental investors know, it’s not how long you are ahead or behind on a given trade that matters, but what percentage of your trades end up ahead when you close them out and how consistently you make profits over a period of decades. The fact that my total holdings have more than doubled since January 20, 2016, and will likely more than double again during the upcoming year, is not something which could have been predicted with any method four months ago. However, because I was giving guidelines to buying assets which were near 20- and 30-year lows and were far below fair value, they eventually were certain to gain huge percentages. There was no way to know in advance–not even approximately–when they would bottom, or at what prices. But it was inevitable that they would all end up being profitable. Only those who lacked discipline and sold near the bottom ended up with losses, and that is true of any solid fundamental approach. Some emotional people probably bought Berkshire Hathaway near its 2007 top and sold it with a loss of more than half near its 2009 low, but those who have gradually and patiently invested with Warren Buffett over a period of decades have been among the biggest long-term winners in the world.

      My track record goes back to 1981 and has always been available to all who request it. There have been very few losing trades during those 35 years.

      Sincerely yours, Steve

    May 21, 2016 21:15 AM

    Steve you talk so fast I have no idea what you are talking about

      May 21, 2016 21:18 PM

      Dear Mr. John Law,

      My apologies if I spoke too quickly. I will do my best to try to be clearer in the future.

      All the best, Steve

    May 21, 2016 21:05 PM

    Thanks for the input Steven Jon Kaplan.

    In contrast to the previous comment, I thought your talk was a pace that was fine and your points were clear and easy to understand. I prefer someone that can cover some ground during an audio over someone that ditters around and stammers trying to come up with answers to a question or a topic or drags out a point for 5 minutes.

    It’s OK to play an audio show again if you missed a point, or pause it and back it up if you want to hear a segment again. I often play these audios twice because I pick up on points I missed the first time being deep in thought.

    Again, overall I really enjoyed Steven’s contribution. Thanks Big Al & Cory for having him on the show this week.

      May 21, 2016 21:19 PM

      Dear Excelsior,

      I very much appreciate your compliment!

      Very truly yours, Steve

    May 21, 2016 21:44 PM

    There are some really good thoughts in this interview. Thanks for having Steven on the show.

    The idea that news does not lead but rather lags the market is important. Not focusing on each detail as it is reported allows us to focus on larger trends.

    Also, it is important to recognize that the actions of many investors have been greatly altered by low interest rates. The chase for yield has caused people to take on greater risk than they recognize..

    Having subscribed to Steve’s letter for many years, I can say that Steve has helped me earn large gains from 2006 to 2012. Steve had large short positions during the crash of 2008, and bought commodity related equities heavily in late 2008 and early 2009 after they crashed. This was a major win when these positions were sold in 2010.

    One of the features of Steve’s method is that he buys very gradually. Trader Jake rightly says that Steve began buying precious metals stocks in 2013 after a big correction. Steve began very gradually buying precious metal equities after gold moved down to the $1200 level in 2013, and continued to buy gradually throughout 2014 and 2015. These moves down have continued further than almost everyone expected due to, I believe, the Fed’s unprecedented manipulations which were hard for anyone to anticipate. This has led to a long accumulation phase for commodity stocks. Time will tell how this works out and we should be able to judge this better in a couple of years. Certainly, a good portion of the losses since 2013 have been recouped with the recent gains in commodities. Also, the short position established between 2014-2016 was closed out at a small gain in February 2016 and then reestablished during the recent market strength.

      May 21, 2016 21:46 PM

      Martin,

      Steve K. was on the honors list making accurate market calls up until 2012 or so.

      The last 3 years or up until the end of 2015 he had so many mining shares and commodity ETF”s incl. COPX that there is no way he has recovered. His brokerage statement must be literally dripping with red ink today.

      I was being kind in my last post at the top of this page. I really don’t want to elaborate
      any further because I have a very long laundry list on his performance. He made a lot of bad decisions with too much confidence from his good success in previous years. This is common with many traders and analyst’s. They can go from great success in the market to total failure. One major problem, he is a gold bug. Like other market analyst’s who are the gold bug mentality do real well in a gold bull market. Fellow posters do listen to these same kind of analysts mentioned on this board. I never have said anything because if they are too ignorant to look at their track record performance over 5 years they are setting themselves up for huge losses. Steve has only a blog and no website. No information on performance. There you go !!!!!

      For some reason no matter how good their performance is during these gold bull markets they lose significant amounts of capital in bear markets. They just can’t recognize a bull or bear trend. Gold bears do the same. They can never get the courage to buy. Steve has had a very bad run for 3 years. How do I know so much about his performance ? I was a hard core gold bug myself and have constituents
      who follow various markets analyst’s including Steve. He is now off the list. For many reasons too. I will end my commentary here. It gets much worse.

      In fact, the best rebuttal is to put up on his blog an accountants certified profit and loss statement for 3 to 5 years. Because Martin, if you Have been investing with him last 3 years on all his recommendations you must be blank..blank. I would be pissed.

        May 21, 2016 21:52 PM

        Forgot to mention too, no one really knows if he is buying the securities he claims with subscribers. You just have to take his word for it while he collects his subscription fees.

        So far Steve offers no proof of anything.

          May 22, 2016 22:24 PM

          Dear Trader Jake,

          I am not sure what this means. Did Richard Russell offer proof of his purchases or sales? As with all registered investment advisors, I am required to keep records of all transactions for myself and my clients and make them available to anyone upon request.

          Yours sincerely, Steve

        May 22, 2016 22:30 PM

        Dear Mr. Trader Jake,

        Besides keeping required records on all transactions, it is simple enough to look at a chart of any of the securities to see how they are performing. Not all years will be equally profitable, since any method will work better when a particular strategy happens to be favorable. The whole point of my contrarian approach is to be highly disciplined and to always act gradually, so that when a depressed asset climbs by a huge percentage you will be maximally able to take advantage of it.

        Some traders can’t handle adversity and will emotionally sell near all lows and buy near all highs. Those kinds of traders won’t do well with my method, or with any disciplined method. Unfortunately, no system will turn a bad trader into a good trader. If you are a bad trader, you will always be that way, because you will always end up excitedly buying high and selling low instead of the opposite.

        With my best regards, Steve

        May 22, 2016 22:47 PM

        Dear Trader Jake,

        I can imagine someone saying in 2009: “I followed Warren Buffett for years and admired his track record, but didn’t participate until 2007. Then I lost more than half of my money in his fund by 2009, so he obviously has no idea what he is talking about.” Poor investors repeatedly “track” others instead of participating until a particular method has been successful for an extended period of time, which is almost always the worst time to jump in because any strategy will experience mean reversion periodically. After the period of best outperformance, there will be a decline, and following a period of the worst underperformance, there will be a huge gain. That is exactly what has happened since January 20, 2016, when my total portfolio has since doubled and will likely double again within a year or so. I don’t expect to quadruple my money all the time, but it has happened in the past and will continue to happen periodically because that is the nature of value investing. If you consistently and gradually buy the most undervalued assets using a highly disciplined manner, then even if you are behind for some period of time which could be as long as a few years, you will always end up way ahead eventually. As with most aspects of life, the key is in the approach you use, not the magical way in which you divine which securities to purchase or some mystical method of marvelous market timing. Discipline trumps everything, and that is why people are paying for subscriptions to my newsletter. I don’t catch fish for my subscribers; I teach them how to fish for themselves.

        Yours sincerely, Steve

    May 21, 2016 21:29 PM

    Dear Mr. Martin K,

    It is interesting how people psychologically respond to changes in their portfolios. I began my blog in August 1996 and in the final months of 1997 began recommending the purchase of gold mining shares. I ended up selling these in October 2008 when there was a sudden rally of 60% which caused these trades to gain an average of about 35%-40%. One person who had been following my web site told me, “This was not a good trade, because even though you came out ahead you were behind for almost a year and ahead for only one month.”

    We live in a society which rewards instant gratification and where people aren’t patient to wait for anything worthwhile. That is why the few who are able to be disciplined and not to insist on immediate result almost always come out ahead.

    2015, very much like 1999, was unfavorable for most contrarians and fundamental investors because the most overpriced assets generally became even more expensive while the cheapest bargains became even more depressed. However, eventually all assets will move through fair value in the end, and will fluctuate repeatedly from one extreme to another. The most successful investors knew this in the 1700s and not much has really changed since then.

    With my best regards, Steve

      May 21, 2016 21:33 PM

      Sorry, I meant that I had sold them in October 1998 (not 2008!). Emotionally, people feel uncomfortable being behind most of the time when they own anything, and comfortable being ahead. However, being behind is almost always superior–assuming you end up eventually with a large gain–because it gives you an opportunity to gradually buy more at low prices.

    May 22, 2016 22:31 AM

    Being a contrarian investor is often a lonely road. It does not suit many people’s investing styles. We hopefully find a style that suits us, and become good at it. Sometimes one style will underperform for a while. This is true of trend following as well as contrarian strategies, buy and hold, fundamental, technical or whatever other combination of strategies. Changing strategies frequently and mixing and matching tends to cause underperformance over the long term.

    Most resource sector investors have struggled the last few years. It’s hard to judge in advance at this point who will end up faring the best in, let’s say, a 2010-2020 time frame. Many people who got out of the resource sector have also missed the recent move up, which has erased some, but not all, of the last 3 years losses for many resource investors, regardless of their style. People that are too conservative may also miss some potential future moves. Who knows right now how this all plays out? I think we are in a young commodity bull, but I could be wrong or early.

    Steve started very gradually purchasing commodity related investments at what looked like an reasonable entry point in 2013. His initial and subsequent purchases are tiny, like 0.1% of capital per trade. Some people make the mistake of committing too much capital too early and run out of capital if the downturn gets protracted, greatly reducing their profit potential when it turns around. Some people complain because they have not followed a system completely.

    Steve is not a gold bug but is active in the commodity related space because of the volatility and potential for large emotional extremes. He is sometimes long precious metals and sometimes short. He also is long or short the general market and other sectors such as utilities, banks, semiconductors and treasury bonds. He has never advocated holding gold for portolio insurance or a currency collapse. So…he is not a gold bug.

    Who do you know with a subscription newsletter service who posts their performance? There are legal restrictions to doing that. If people don’t like a newsletter writer or trust him, they move on. It sounds like you have. I wish you good luck in trading.

      May 22, 2016 22:21 PM

      Really. !!! I feel so much more comfortable Martin.

      Since SJK is a registered investment advisor and licensed with the SEC, your excuse regarding legalities disclosing profit/loss investment performance is invalidated.

      There are investment analyst’s who do have websites and if they are making trades, who are not licensed, fully disclose their profits and losses daily on closed trades.

      Is there anything more you can be so kind to inform me of. As a subscriber, you sure take a lot of interest in SJK after losing a fortune last 3 years.

      You made my day. Can’t thank you enough. My check is in the mail and can’t wait to to risk my finances and believe SJK will always be of high integrity, reputable and never hide/conceal anything.

      Looking forward to my new EBT card benefits, my Obama phone and all the perks the streets have to offer.

      If I’m so lucky, I can shop at the 99 cent store a few times a year. The SJK GOOD LIFE.

        May 22, 2016 22:27 PM

        Clarification regarding full disclosure of profit and losses in the above comments.

        Honest reputable analysts disclose all their open and closed trades going back at least 3 years to present. If they are not doing it, your definitely in the wrong company and risking/suffering financial losses more than likely not.

        I have seen some very ugly open positions on investment performance disclosures going back many months and even years from analysts. At least its being honest.

        Nondisclosure is deceptive business practices.

          May 22, 2016 22:35 PM

          Dear Trader Jake,

          You are clearly not familiar with U.S. government rules. Investment advisors are not permitted to publicly advertise their gains on a web site or anywhere else, because past performance will not necessarily translate into success for future investors and the SEC will crack down on any one who claims that their past behavior will carry into the future. Only those who manage publicly traded and audited mutual funds and hedge funds are permitted to disclose their results, and only with an explicitly posted caveat that past behavior doesn’t guarantee future results.

          My actual trading record has always been available to those who request it. That is the legally proper way to see the past history which goes back to 1981. I receive such requests frequently and always respond to them.

          All the best, Steve

            May 23, 2016 23:44 PM

            Steve, you might be selling but I’m not buying. You have so many open positions in mining shares and commodity funds from 2013 through 2015 at very high prices because of your love affair with inflation hedges.

            All your commentary, just like your interview with KE Report is just fast talk and more mumbo jumbo. If gold does not recoverand fails in the future taking out new lows especially towards the 800 dollar handle, you realize you will be completely wiped
            out. You buy long term positions and no stops. When the market goes against you, your investment philosophy is to buy more averaging down. In the mining shares you have accumulated a large portfolio and to this day holding those positions from 2013.
            Your focus is on ETF’s and the individual stocks if you were such a good analyst as you claim, would have saved your portfolio from heavy losses in ETF’s. The smart money was buying quality miners that outperformed ETF’s by a wide margin and also holding their gains in a correction. Fatal error on your behalf. Thats why your subscribers are leaving you in droves. Financial losses that were only significantly worse due to poor judgment and unnecessary. However Steve, you think you know it all. ETF’s are not very safe when the market goes against you and there are lots of junk in ETF portfolios. Bottomline Steve, speculation is very risky business and you don’t know how to help stop the bleeding buying ETF’s. Unfortunately, your profits and losses prove over the last 3 years you don’t know what your doing.

            When gold ran up in 2014 and we have spectacular gains you never took any profits because you are so buried in miners. You never recommended to subscribers to take profits because it was not in your best interest since your buried in them. Could affect the prices in the market place since you can’t sell only suffering heavy losses. You kept buying on the correction too.

            Last few months miners have done well but far from any recovery from reckless purchases from prior years.

            You made a careless reckless bet with mining shares buying and accumulation at very high prices since 2013. You have lost lots of subscribers and your money under management can’t be helping since you charge 20 percent of what the gains are.

            If gold fails, and in your case if it does, your reckless careless investment philosophy will be a major financial fatal error/mistake.

            It already is, but all the hope is now if gold can hold and rally from here. Very poor decisions on your part and terrible judgment.

            You best to keep quite Steve, because there are a lot more issues with you than I have disclosed here in this commentary.

            It just gets much worse with you. Do yourself a favor. I can just keep going and don’t prompt me to do it. Lets end it here.

            Please, thank you.

            BTW, 800 gold is not out of the question. If you say differently, and I’m sure you will, just like mining shares have bottomed so many times you speculated on since 2013. Unfortunately, you made a big bet at high prices keeping you from taking any profits
            and possibly opens you up to catastrophic losses in the future. No comments from you. I don’t want to hear your pitch or poor excuses any longer. Its a nuisance. Myself and my colleagues since 2014 have placed you in the reject file for gross negligence
            and carelessness with regard to your flawed analysis and contrarian philosophy that rarely works. Many reasons why too. Too bad you haven’t discovered your failures in this area for yourself. Luckily, we discovered early enough to avoid listening and
            wasting our time reading what you had to say regarding the markets or anything for that matter. My colleagues don’t want to hear your name ever again. I’ll end it with this. You don’t want to know what they had to say.

    May 22, 2016 22:39 PM

    Steve discloses every trade he makes as soon as he makes it.

      May 23, 2016 23:22 PM

      Dear Trader Jake,

      If you want to believe that gold will drop to 800 U.S. dollars per ounce, then that is your privilege. Whether or not I disagree with you is irrelevant; it is what the market does that matters. Being a value and contrarian investor often means that I begin buying assets near 10-year lows, and keep on buying them at lower prices as they fall further to 20- and 30-year lows as many mining and emerging-market shares did near the end of 2015 and especially at the beginning of 2016. To be a successful long-term investor you must be willing to consistently buy whatever is most undervalued. Sometimes it will rebound quickly, but usually it will go lower and sometimes much lower before doing so. This is not a good approach for an impatient investor or someone who will panic near a multi-decade bottom, and I do not recommend it to everyone for that reason. Emotional investors should look elsewhere for guidance. Probably 90% of my trades are behind at some point during their lifetime, while 90% of them end up profitable; that is par for the course for any long-term value investor.

      I will take profits when insiders are selling and amateurs are making heavy inflows, as I had done in 2014 with the SCIF I bought in August 2013 which more than doubled by the time I sold it in May and June of 2014. With my current holdings like GDXJ, even though they have more than doubled, there is no meaningful insider selling while funds like GDX have experienced outflows for 80% of the weeks in 2016. That is why I am holding on now rather than taking profits. The market will determine whether or not this was a wise decision, as it always does.

      Undisciplined investors use stops and trade in the direction of breakouts, because they don’t have the patience to accumulate gradually over a period of months or years, nor to hold on during a strong bull market. Since the most successful investors in the long run have always been value investors with a contrarian philosophy, this highlights the superiority of this strategy. It works well precisely because so few are willing to follow it.

      All the best, Steve

    May 23, 2016 23:34 PM

    Steve, SCIF is only a very small percentage or fraction of all your major holdings in mining ETF’s. Its an India fund but it’s minuscule to the investment you have in mining shares.

    Yes, mining shares have doubled in the ETF’s give or take at this point in time. However, you are still deep under water and the majority of all your recommendations have been in mining shares since 2013.

    Whether or not gold can hold here and climb the wall of worry is anyone’s guess. You sure have gambled and speculated taking very high risks. You know you won’t sell until you have a substantial profit and will another large correction be on the horizon.

    Precious metals and especially mining shares are dangerous high risk investments and there is no way to know this bear market is over for gold. Just look at what happened in the 1990’s and coming out of the 80’s. It was a long hard and very difficult time for precious metal investors who lost fairly substantially.

    800 dollar gold is not the real argument here. Its performance and so far we have heavy losses in the mining shares if anyone accumulated since 2013. Luckily, I stayed out and avoided poor market analysis and investment recommendation on inflation
    hedges and precious metal promotions.

    If subscribers like to take high gambling risks – whatever. I do know timing is everything in precious metals. Precise accurate timing. Nothing short of that buying and selling.

    Final conclusion, it’s a gamble and the stakes are high. We just had a correction to the upside from extremely oversold conditions. So, good luck because it could go either way for the next year or so anyway. 2017 might ring in a dramatic bottom.

    I don’t know and quite frankly I would never risk it right now until about 2017. Gold community has their hope all built up but gold only rallied for one reason only. It was an extremely oversold condition. The market makers and elite club took advantage of it. Thats over now and where we go from here is a major gamble. Gold is not cheap at 1250 or so. Prices are coming down right now and thats not positive for gold. Deflation is the real monster that lies ahead with the deleveraging of high debt.

    Also, gold is manipulated. You said it wasn’t. But they now admit it. You were wrong there too including accumulating gold shares since 2013. Central Banks own gold for one reason only to control and cap prices.

    May 23, 2016 23:15 PM

    Steve, I think I’m being way overly nice here. You also break important investing rules. Was in August I believe in 2014 you bought back into miners and we had lower lows. Lower highs as well. Just because prices got hammered and we had a correction you said we have reached the market bottom for uncountable times since 2013. Those positions right now are probably in a very small profit. Only because of the recent rally. However, they were significantly under water prior to 4 months ago when you bought in Aug. 2014. We have all the email updates. #2000 update was starting off with
    May 2014.

    The major issue with your service is you don’t have a real functional website or your own dedicated address. There is no information regarding your recommendations for the last several years. No blog where people can discuss the trades and investments.
    Even without that, you have a PO Box and where are these people that work for you at the post office ? Very little credibility and no information on profits and losses. My associate said your phone number was not in service a few years back. He contacted you at one time and the experience was very poor by email. He said you claim to be the victim of your subscribers who don’t understand why you are losing everyone so much money. I read one of your updates and you actually called one of your subscribers an idiot because he was so upset losing money on GDXJ. You claimed he was a contrary indicator and he can go ahead and sell. You said we have reached a bottom to subscribers. Turned out the subscriber you called an idiot was wise to sell and the GDXJ gold ETF moved down substantially over 12 months. We have the update but it would be a lot to sort through to find it. So please don’t deny it. We have your emails saved and all updates.

    We will provide those emails as proof to anyone who is interested if we must. It is our opinion you are inconsiderate with your subscribers and do not represent their best interests. Including deceptive business practices.

    Keep quiet Steve you are better off. We don’t want to hear anymore of your pitches or excuses.

    May 23, 2016 23:00 PM

    Thanks for having Steve on as a guest. I’m a long-time sub and will continue with his service. I have his service not to take his recommend investment choices, but to learn from him. He has taught me much about contrarian investing. All of his positions are posted on his blog. When it comes to catching falling knifes ( being early) Steve comes out a winner in the end.

    He should post his update #999 so traders may understand why he buys early. I have been a sub for many years. I have read it several times…..

    This is update #999 for Monday evening, August 31, 2009.

    Today’s main topic is falling knives.

    May 23, 2016 23:23 PM

    I want to point out that Steve did start scaling in early, but bought the bottom too. How many services did that. As he pointed out he is still holding all of his GDXJ shares.

    I’ll stay out of the Trader Jake debate, and wish and hope Trader Jake the best!

    Steve sends out a update every time he buys and I have saved all of them.. Anyway, wishing Steve the best too.

    This is special intraday update #2117a for Friday early evening, July 24, 2015.

    Yesterday and today, I bought SIL at 6.69, 6.59, 6.49, and 6.39; GDX at 13.41; GDXJ at 17.99;

    May 23, 2016 23:04 PM

    Roboman, best to you too. It’s just better the subject is dropped. How anyone can be comfortable with accumulating mining shares since the top of the market in 2013.

    We have all the updates and emails as well. RSX was another recommendation in Russian ETF. Major draw down there too. Bought way too early. We never purchased that ETF either because the reasons Steve was using and we considered it another very risky bet. So far, RSX is still very depressed. I believe Steve started accumulating at around near $20. Its well under that today. Regardless, thats not the issue. Its just a major position he has everyone in mining shares for the most part since 2013.

    Prior in the years leading up to 2012 Steve did extremely well. We stand by all the commentary on this forum page because he considers himself an expert. You don’t or you can’t claim to be an expert by breaking trading/investing rules and averaging down like he does. So far, its not working out in mining shares especially.

    If gold does not keep going in the direction Steve has made significant bets on, there will be a very heavy price to pay.

    Anyway, best of luck !!!

    May 23, 2016 23:11 PM

    Jake,

    Same to you Brotherman! I’m currently only VST, and ST trading the miners. I’ll be buying GDXJ at the next cycle low for another MT trade. Higher or lower it doesn’t matter to me because it’s just another trade.

    I stand by that Steve has taught me a lot about investing Brotherman.

    Take Care.

      May 23, 2016 23:25 PM

      Roboman, precisely – Its a traders market. This long term investment strategy has gone out of vogue in gold because its highly volatile. It came off a high just 3 or 4 years ago. Its a confused market. People are jumping at a chance to get their money back. Selling might be prevalent for sometime. I’m guessing, but there still might be one more huge correction. Many reasons. Could fill the page.

      Anyway, anyone that sat with these shares is very disappointed right now. Traders that took profits are doing quite well. If you bought at very depressed prices and did not accumulate over years paying those very high extremes.

      My very best to you my friend. Its wise to trade it !!

    May 24, 2016 24:14 AM

    Dear Trader Jake,

    Actually most commodity producers and emerging-market shares peaked in April 2011, not 3 or 4 years ago. If you look at a list of the top ten thousand wealthiest people today or at any time in past centuries, none of them were short-term traders because there is no edge from such a method. The only advantage is obtained when there is a dramatic deviation from fair value in either direction, and that can sometimes take years before it is resolved because deviations often become more extreme before they inevitably regress toward the mean. Many investors may be impatient about adopting an approach of gradually accumulating a position, while others may emotionally dislike adding to a losing position. Others will tend to panic and sell near each bottom while buying near each top. Therefore, being a successful long-term investor will not psychologically succeed for most people.

    All the best, Steve

      May 24, 2016 24:26 AM

      Steve, it was a lot closer to the top than 5 months ago. Or even a year ago. 2013 was not a very wise choice and unfortunately your love affair with inflation hedges is not helping matters any. You also said the US dollar was going to decline in 2014 and it went in the opposite direction sparking off a huge rally in inflation hedges and causing major inflation. Never happened. The complete opposite, inflation hedges collapsed.
      You highly recommended all these inflation hedges saying when inflation takes off it will be too late to buy. All it did is crash ever since you said that.

      Nonetheless, with a war cycle we are now in, you and many others won’t have to worry about any longer. Looks very likely a conflict will ensue between the two superpowers in the not too distant future. The war will be fought this time right here on our own soil.

      Here’s your contrarian indicator too. Americans don’t have any care in the world and think that if a war breaks out they will get to sit on the couch with their poppy corn and see all the fighting/bloodshed on their television screens.

      That’s why is very likely to happen. WW3 !!!!!

      There it is your contrarian indicator. The stage is set. The populous has no care/clue.

        May 24, 2016 24:00 AM

        Dear Trader Jake,

        You might want to see how the actual strategy I have been recommending has been performing. There were substantial declines for many of these as they slumped to multi-decade lows on January 20, 2016, but they have become the top performers and many of them have traded at their highest levels since 2014. Royalty gold mining shares have tripled on average, while the entire sector has doubled. Nearly all emerging-market shares have gained about half on average. Those who have been disciplined enough to gradually buy on the way down are doing extremely well already, and since these will likely remain in bull markets with periodic sharp corrections they could end up with much greater gains a year from now.

        All the best, Steve

          May 24, 2016 24:23 AM

          Steve, you sure seem excited for the prospects of inflation hedges in the future.

          Maybe you have not looked around lately. The world is or has entered a new paradigm.

          The Central Planners are much more corrupt than ever in the past. Precious metals are now more manipulated and the criminal behavior is being openly admitted. Lawlessness rules the land.

          Like the old saying goes. Don’t count your chicken before they hatch.

          The most significant major change coming and contrary indicator is Americans think they are shielded from all the chaos in the world.

          Again, The True Contrarian indicator right now, no one cares and the populous has no clue regarding WW3 or a major financial collapse.

          Even with all the signs all around right there staring at them in the face.

          You might be the ultimate contrary indicator Steve. So far, if one did the opposite of what you said and shorted the recommendations, they would have instantly made money in a very short period of time. Probably be extremely wealthy over the last 3 years. Your newspaper clips outlining some investors are selling a particular asset does not prove anything and no reason to buy. Sometimes Steve , The Trend Is Your Friend.
          Another trading investing rule you ignore at your own expense.

    May 24, 2016 24:17 AM

    Dear Roboman,

    I appreciate your thoughtful comments. Any trading strategy will have its advantages and disadvantages. I have always followed Seth Klarman and those who advocate consistently and gradually buying whatever is most undervalued, while gradually and consistently selling whatever has become most overvalued. This will produce wildly varying and sometimes disappointing results in the short run, but excellent long-term profits. I use this method because the most successful investors in history have used a similar approach. It is certainly not for everyone, and definitely not for those who can’t stand sometimes having to old onto positions for a long period of time. Securities may be in favor or out of favor for unpredictable intervals, but through the decades they will repeatedly move through fair value on the way to an extreme in either direction and back again.

    Yours sincerely, Steve

    May 24, 2016 24:12 AM

    I would also like to mention that my telephone number has been unchanged for 20 years and is available to all. Whenever any reader would like to contact me, I can be reached at (201) 246-0003. Occasionally I will be busy or away, but I will always get back to everyone who would like to speak with me. Besides the excellent forums of Al Korelin, including this thread, all of my web site commentary has been reprinted on Seeking Alpha where people have been commenting on my ideas–both positively and negatively–for more than a decade.

    I don’t call myself an expert. Since I have been doing this method of investing since 1981, I have more experience than some, and an idea of the advantages and pitfalls of using a contrarian value approach. I am always learning from others who give me excellent ideas in refining and otherwise improving these methods.

    May 24, 2016 24:53 AM

    That phone number was never available till recently. You only had a so called office phone number and it was no longer in service.

    Whether its true or not, you claim to have employees. Where do they work out of. Most reputable firms publish a physical address. The one’s who are not reputable hide behind mailing addresses.

    Why are not all your updates archived on a professional website like most reputable investment advisors. Its all done by email so its not accessible apparently.

    There is no accountability and how does anyone know they are safe subscribing to your service.

    I guess, just pay your money and take your chances !! No trial. Its deceptive.

    May 24, 2016 24:55 PM

    Dear Trader Jake,

    My telephone number and home address have always been available to all subscribers and through the years I have met with many of them in person. There is no “office phone number.” The other comments you have made are completely ridiculous. All of my web site updates have always been archived and are available for everyone to read as they wish. Subscribers are free to cancel whenever they wish and I always give a 100% refund for those who do so soon after subscribing. All others receive a pro-rated refund depending upon how long they had subscribed.

    It is okay if you want to criticize any or all of my ideas, but inventing nonexistent and intentionally misleading information on a public web site, especially regarding my personal character or the integrity of my company, is libelous and I will take legal action if necessary. It is pretty clear that you don’t wish to reveal your own identity, which says a lot.

    Certainly no investment method is guaranteed or “safe,” but the results speak for themselves since 1981.

    All the best, Steve

    May 24, 2016 24:16 PM

    Steve, the phone number on your website for subscriptions is (410) 484-5530. I have not called the number to see if it is valid. At one time it was not in service and the phone number you have now released was never available before. That really was unimportant and probably should have never mentioned it. You are available by email.

    You claim all your subscriber updates are on your website for review and available. I only see a blog for the website itself and only some information on your investment strategies. There are only a few or several since Feb. 2016. These are not official subscriber investment updates. You update a few times a week.

    Where is the archive ???

    Also, I don’t want to meet with you in person. This is a subscription. Why would I meet in person on the other side of the world.

    REGARDING : LEGAL ACTION AND LITIGATION
    Your threat to me in regards to legal action is has no validity and your judgment is misplaced once again. Your welcome though to take any kind of legal remedies that are at your disposal. In return, I will file a motion for a cross complaint seeking damages for false claims against me. Thereby, seeking liquidating financial damages in my favor.

    I’m asking you to disclose all of your updates and recommendations on your website that you email to customers. Since you have represented that these documents are available.

    Where is your office where these company officials work for you. It should be on the website. No one should have to ask for it. That would be the reputable way to conduct business.

    I trust you will take action and make available your updates you email to subscribers.
    Any legalities I’m more than happy to rebuttal and file cross complaints if necessary.

    May 24, 2016 24:38 PM

    Dear Trader Jake,

    All of my web site updates are clearly available in the archives and people often comment about something I said many years ago. You have made many false claims about my integrity and character which are completely unjustified. We have never met and you have never been a subscriber, and you know nothing about me other than what I have published on the internet. I also know nothing about you, not even who you are. You can criticize my investing philosophy as much as you like, although I would recommend sticking to the facts rather than imagining what I might have said or might have done. You are not entitled to malign my character or reputation on a public forum when you have no facts to support your wild inventions.

    There are not many newsletter writers who meet frequently with their subscribers at no charge. That is just one example of how reality differs completely from your invented maligning image of myself.

    Yours sincerely, Steve

    May 24, 2016 24:14 PM

    Steve, where are the archives with all your official updates to subscribers ???

    I have reviewed your website and unable to locate them. You only have some monthly commentary you publish for the site only.

    The claims against your character are justified. I can validate them with remarks in your updates where you call one of your subscribers an idiot. That was you who said that. It wasn’t me. Please refer to my comments on this board above regarding these inflammatory degrading remarks against your subscriber you refer to as an idiot.

    Your phone number was disconnected at one time. Like I said that’s unimportant.

    What’s an important matter, is your business operations as an investment advisor. All of your updates should be available to review with the exception of anything within maybe a few weeks time frame. However, they are not available as you have misrepresented. This misrepresentations and the criteria that is used to judge your character. It’s my opinion, you are misleading and deceptive.

    You refuse to disclose all of your updates on your website. I trust you will stop stonewalling and act accordingly acting in good business conduct and integrity.