Tedded - Business Book Review

“The situation we are facing is of a magnitude comparable to the Great Depression of the 1930s and the next worst bear market, the stagflation period of the 1970s.”

“The Little Book of Bull Moves and Bear Markets” by Peter Schiff was published in October 2008. Before releasing the book, Peter Schiff predicted the situation of the housing market in the US ‘right’. The reason that it took me more than six months to review is that a financial and invesment book’s quality will be proven over time (just like the investment per se). And for this book in particular, reading it now and reading it in October 2008 are like reading a different book.

This book is, in a nutshell, about the cause of the current economic crisis, what will happen in the future, and how we can deal with it financially, professionally, and socially.

Contents

Chapter One: Let’s Do the Time Warp Again

Peter Schiff explained, in a simple language, different periods of economic slumps and booms and the causes. The conclusion is that we are now in an inevitable recession for many years to come.

Chapter Two: Saving Your Assets

“Stay Out of Cash and Bonds.” In this chapter, he wrote on how the US exported inflation and it is going to backfire making US dollar worthless.

Chapter Three: Beware of False Prophets

He claimed that the government’s economic policy is political and measures and indicators are misleading such as GDP, inflation, unemployment, among other things. He stated that the government, Wall Street, and industry groups were having an agenda and their information is misleading.

Chapter Four: Of Babies and Bathwater

This chapter is about investing in the US. His parting words are to stay away from dollar. However, there are some US stocks worth holding onto.

Chapter Five: Hot Stuff

Commodities are hot and this chapter tells you how to hold onto them.

Chapter Six: The Ring in the Bull’s Nose

“Making Money with Gold and Silver”. It’s self-explanatory. And he tells you six ways to play gold and silver.

Chapter Seven: Weathering the Storm

He predicted that dollar will be in a free fall and we should invest in other currencies and this chapter tells you how.

Chapter Eight: Favorite Nations

Following the previous chapters, Peter Schiff recommends numerous nations from the North America (Canada) to Europe (Norway, Switzerland) to Asia (Singapore, Hong Kong), etc. to invest in.

Chapter Nine: If You Want to Roll the Dice

He briefly tells you that the emerging markets are on the way to bull markets.

Chapter Ten: To Infinity and Beyond

This chapter is for your ‘profession’ consideration. He portrays the profession or industry that are going down, i.e., retail, real estate, etc. and potentially profitable ones such as construction, agriculture, merchant marine, etc.

Chapter Eleven: A Decade of Frugality

Spend less, start saving (not in dollar), get rid of debt, stockpile goods, etc.

Chapter Twelve: Pack Your Bags

He advised you to emigrate to other countries. This chapters tell you brief information on immigration laws, banking environment, lifestyle, language, and how should you choose the country to live in.

Chapter Thirteen: The Light at the End of the Tunnel

He wrote about the (then) upcoming election that both candidates will make the country suffer more with different means. He tells you to wait until 2012, the next election, and his solution is two words: Ron Paul.

…

I’ll compare this book to the ideal book; a book that is easy to understand, distinct, practical, reliable, insightful, and provides great reading experience.

Ease of Understanding: 8/10: The very first few chapters are the background and analysis of economic crisis we are in but Schiff explained it simply although there are few points that you need basic knowledge in finance or economic to comprehend. The second half of the book is very straightforward, ditch your dollar, invest elsewhere and move!

Distinction: 6/10: The point of the book is similar to other books explaining the economic crisis and how to deal with it. All of them are different in one way or another because, in economics, there are countless ways to foresee the future but the worst case of this one is one of the worst around.

Practicality: 5/10: Talking about investing abroad is easy, doing is much harder. Chapter five to seven offer solid but complicated (for normal people) ways to invest but you can simply go to, surprisingly, Schiff’s company, Euro Pacific Capital, and they will simplify the complicated investment! The very last chapters are also easier said than done such as emigrating to other countries and probably looking for a new job if you are in the busting industry. Moreover, if you are not an American, you will not find much use of the book.

Reliability: 3/10: This is very controversial. More than six months on, Peter Schiff predicted a doom in housing market, an inevitable recession, and a rise (but not that high) in gold price ‘right’. As of the rest, I have to say they are wrong (or not so right yet). I do not want to jump into the debate and analysis because everyone is a genius in a hindsight but the most obvious mistake is that he ‘overestimated’ the rest of the world. BRIC (Brazil, Russia, India, and China) and the rest of Asia could not capitalise from the US downturn because US is a customer too important to the economies. Thus, dollar is still fine (at least now) meaning that most of the second half of the book is void.

Insight: 4/10: For a start, trying to put the world in a small book is tough. And almost everything is Schiff’s opinion with very little insight from other experts.

Reading Experience: 5/10: If you like a thriller movie where everyone dies in the end, you will probably enjoy the book. This book is equal to the movie ‘Knowing’ starring Nicolas Cage.

Overall: 5.2/10: It is almost impossible to write a book that can predict the economy in the future right. Peter Schiff took a gamble on this book and it did not turn out well. His assumptions were rigid with no margin for error. However, it might be possible that his prediction is too early and a total collapse in the US market is yet to come. Until that time, rest this book on the shelf and when the perfect storm is actually coming, get this book and emigrate!