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Diehards Recap: From Stein To Landau
Written by Murray Coleman   
Saturday, 08 March 2008 03:20

 

Celebrity posters have been seemingly out in full force at Diehards.org lately.

A rousing critique of best-selling author and actor Ben Stein's latest book brought his advisor and co-author to his defense.

And an ongoing discussion of the plight of the U.S. economy brought out a gold bug signing off as Academy Award-winning actor Martin Landau. (The poster even engaged in some quick observations about his roles).

Whether it was the real deal or not, the commentator known as Martin Landau at Diehards sure had a lot to say-especially regarding history and the argument against gold. If nothing else, it made for some interesting discussions (he even cites Aristotle).

Let's start our weekly review with the thread about Stein's latest financial musings. Several Diehards gave it big thumbs down. "Yikes. The table of contents doesn't look promising. Seems like Ben has discovered r-squared stats," deadpanned one poster.

In fact, the dialogue got so pointed that Stein's co-author, Phil DeMuth, went online to clarify some issues.

Several posters made reference to Stein's paid association with a trade group representing the annuities industry. And Diehards accused Stein of advocating more than token use of stocks and other active management strategies.

DeMuth, an advisor, responded on a point-by-point basis. Just a sampling: Stein encourages use of broad index investing and he "endlessly" discloses his affiliation with the trade group pushing variable annuities.

And as far as advocating stocks, DeMuth says their theory is that you can replace some of your stock allocation as well as part of your bond allocation with stocks showing low correlations and low volatility.

You can find this juicy discussion here.

Among other topics, a continuing discussion of the seemingly deteriorating state of the U.S. economy included posts from someone signing off as Landau and a nifty graph depicting stocks in bear markets and recessions.

"The market is pretty good at forecasting recessions in advance, so usually by the time a recession actually starts, the market correction is almost finished. Also, since a recession usually isn't declared until about a year after it starts (need six months of negative growth, plus the time needed to compile accurate statistics), by the time you know we're having a recession, the bear market is (usually) long gone," wrote Baw703916.

But Taylor had an even longer encompassing chart. "It clearly shows how, for long-term investors, the U.S. stock market has steadily increased in value since 1802. This chart clearly shows the importance of staying-the-course," he noted.

The poster who would be known as Martin Landau responded by congratulating Taylor on presenting a great chart. He added that long-term trends are important to consider. Then, ML asked if Taylor had a chart that traced the value of fiat and gold from the first Egyptian empire to present day.

"If for over 5000 years of human history, humans have valued shiny metal when their governments and fiat paper around them collapsed-why buck the long-term trend? Central banks still trade in the stuff, right?" the poster known as ML wrote.

He then quoted Aristotle: "Paper money as such is alright, provided that our authorities are perfect and the kings are of divine intelligence."

ML tossed out: "Stay the course indeed!"

An obviously amused poster congratulated ML on his fine performance in a movie (complete with a link to a clip).

That was followed by Taylor: "I don't have a gold chart going back to the Egyptian empire (I assume you are serious). Did you notice in the link I posted above that from 1802-1997 (196 years) the real (after inflation) value of gold was slightly less at the end of the period than at the beginning?"

ML later responded first by briefly commenting on some of his performances raised by the previous poster. Next, he came back to answer Taylor by offering that while the U.S. has had a long run, "the last days of Rome are upon us-financially speaking."



 

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