I would like to make three points in this post. They are all related, they touch upon topics that I care about, and they all have an element of madness to them. And it is March.
Point Number 1: I was listening to the Thom Hartmann radio show today and was very disappointed to hear him hawking the virtues of owning gold in one of the ad segments. Ignoring for a moment the wisdom of such advice, I was particularly put off that Mr. Hartmann, as liberal as they come, used the language of apocalyptic fear to promote the ownership of gold (via his sponsor, ITM Trading). Yes, both sides of the political aisle routinely use fear-mongering to draw support for their respective causes. But playing the fear card for commercial purposes is a tactic usually associated with Fox News, CNN and other mainstream media outlets. The fact that Thom Hartmann and Ed Schultz joined Herman Cain in telling you to buy gold because the world is going to fall apart — well, it shows you how much they all care about gold, namely their own. Hartmann and Schultz are cashing out and devaluing their credibility, one ITM Trading ad spot at a time.
Point Number 2: Gold is bad investment. It should not be called an investment at all but a speculation. Unlike a company that exists to make profits (and share the profits with its shareholders), gold has no profit motive. It does not produce goods or add value. It does not care if its value rises or falls. Its price, like those of tulips, depends only on what the next greater fool is willing to pay. Many others have pointed out that, since 1980, the price of gold has barely kept pace with inflation, while the returns of the stock market as a whole have far outpaced those from holding gold. As financial planner and self-styled wealth manager David John Marotta wrote, “The optimum asset allocation to gold is always zero.” If the apocalypse that Hartmann and Schultz keep warning us about in their ads were ever to materialize, the amount of gold we managed to accumulate wouldn’t last us more than a few days. The more likely scenario is that your grocer or gas station would say, “What the hell am I going to do with your damn gold? Get the hell out of here!”
Point Number 3: With respect to the aforementioned David John Marotta — I am afraid he is too cool by half and too expensive by a-hell-of-a-lot. On his website, he has a section devoted to kittenomics, “a practical, humorous series featuring financially savvy kittens and the wealth management secrets that gave them their success.” It bothers me to no end how financial advisors (and I use the term loosely) package their advice in an attractive little box with a ribbon on top and hints of riches within, to get people interested — and then, once you walk inside, how the advisers spend most of their time trying to convince you they are worth the hefty sum they want you to pay them. Mr. Marotta’s client profile page is pretty clear — yes, he wants you, but only if you have “$1,500,000 of manageable assets” or are “willing to meet our annual fee for services of $14,000.” When I read crap like this, I wish I were younger and had the energy to start a new career, providing helpful and realistic financial planning for the not-so-well-to-do.
There is my three-pointer. Slap my hand.
I would like to make three points in this post. They are all related, they touch upon topics that I care about, and they all have an element of madness to them. And it is March.
Point Number 1: I was listening to the Thom Hartmann radio show today and was very disappointed to hear him hawking the virtues of owning gold in one of the ad segments. Ignoring for a moment the wisdom of such advice, I was particularly put off that Mr. Hartmann, as liberal as they come, used the language of apocalyptic fear to promote the ownership of gold (via his sponsor, ITM Trading). Yes, both sides of the political aisle routinely use fear-mongering to draw support for their respective causes. But playing the fear card for commercial purposes is a tactic usually associated with Fox News, CNN and other mainstream media outlets. The fact that Thom Hartmann and Ed Schultz joined Herman Cain in telling you to buy gold because the world is going to fall apart — well, it shows you how much they all care about gold, namely their own. Hartmann and Schultz are cashing out and devaluing their credibility, one ITM Trading ad spot at a time.
Point Number 2: Gold is bad investment. It should not be called an investment at all but a speculation. Unlike a company that exists to make profits (and share the profits with its shareholders), gold has no profit motive. It does not produce goods or add value. It does not care if its value rises or falls. Its price, like those of tulips, depends only on what the next greater fool is willing to pay. Many others have pointed out that, since 1980, the price of gold has barely kept pace with inflation, while the returns of the stock market as a whole have far outpaced those from holding gold. As financial planner and self-styled wealth manager David John Marotta wrote, “The optimum asset allocation to gold is always zero.” If the apocalypse that Hartmann and Schultz keep warning us about in their ads were ever to materialize, the amount of gold we managed to accumulate wouldn’t last us more than a few days. The more likely scenario is that your grocer or gas station would say, “What the hell am I going to do with your damn gold? Get the hell out of here!”
Point Number 3: With respect to the aforementioned David John Marotta — I am afraid he is too cool by half and too expensive by a-hell-of-a-lot. On his website, he has a section devoted to kittenomics, “a practical, humorous series featuring financially savvy kittens and the wealth management secrets that gave them their success.” It bothers me to no end how financial advisors (and I use the term loosely) package their advice in an attractive little box with a ribbon on top and hints of riches within, to get people interested — and then, once you walk inside, how the advisers spend most of their time trying to convince you they are worth the hefty sum they want you to pay them. Mr. Marotta’s client profile page is pretty clear — yes, he wants you, but only if you have “$1,500,000 of manageable assets” or are “willing to meet our annual fee for services of $14,000.” When I read crap like this, I wish I were younger and had the energy to start a new career, providing helpful and realistic financial planning for the not-so-well-to-do.
There is my three-pointer. Slap my hand.