Update 9/2/2010: I last wrote about newsletter writer Howard Ruff back on April 3, 2009 after he had made numerous appearances on CNBC. In that article below I documented his horrible long-term track record, which CNBC failed to cite - if they had researched it, they wouldn't have wasted their viewers time having him on the air!
Now, a MarketWatch reporter has written a puff piece on Ruff citing his great performance! The recent article
, which was entitled, "Ruff rides major trend: Veteran stock picker defies bad month," states:
Over the year to date through August, Ruff's Ruff Times is now up 8.8% by Hulbert Financial Digest count, as compared to negative 3.9% for the dividend-reinvested Wilshire 5000 Total Stock Market Index. Over the past 12 months, the letter is up 44.1%, against just 5.1% for the total return Wilshire 5000.
Ruff is a veteran of the 1970s gold wars, and in essence he argues that era's stagflation (or worse) is returning.
...In recent years, Ruff has done particularly well. He was one of 2009's top 10 performers by Hulbert Financial Digest count, despite being skeptical of the overall stock market all year.
The message: This market forecaster is a veteran and has done well during recent years, which as we all know were trying times.
Only once in the piece, did the reporter make any negative reference to Ruff's overall record (which he failed to cite and quantify as I do below) when he said, "His record is long and checkered."
But, then he quickly added, "His relentless self-promotion tends to irritate financial journalists, who are sensitive souls, but he did make perhaps the handsomest recantation I've ever seen, when Mark Hulbert and I found he had exaggerated his gold record -- which was actually quite impressive enough."
I didn't know he misrepresented his track record so now we have another reason to not listen to what he says. But, hey, don't listen to me, I must be an irritated financial journalist who's being too sensitive!
P.S. It's also worth noting that in his March, 2009 CNBC appearance (video below), during which he told viewers to get out of stocks, coincided perfectly with the end of the bear market and beginning of a huge, global stock market rally. At that time, he said that the Dow would fall 3,000 more points from its then current level of 6,700. He also predicted sharply rising interest rates and a falling dollar. So, on all three of those major predictions, he has been very wrong.
Howard Ruff on CNBC Issues Dire Warnings for Years Ahead
In the first quarter of 2009, CNBC had Howard Ruff on as a
guest multiple times. I had to do a double-take when I spotted him while channel flipping.
Like a pile-up on the Interstate, I just can't help myself from watching NBC's "Must
It's been more than a generation since I've seen Ruff in the
national limelight. He was in the news in my late youth for his book, "How to
Prosper During the Coming Bad Years" (Warner Books), which vaulted onto
best-seller lists when it was released in 1978. He also publishes a newsletter,
The Ruff Times. Ruff went to school for music education and his current publicist tells
me that he worked as a singer and actor for 25 years before becoming a
financial pundit. (I suppose those stage skills come in handy when
appearing in the media.)
I remember the 1970s and early 1980s well. My father lost
his job during the severe 1973-1974 recession when I was in middle school. Bad
news was all around the country and world at that time. Vice President Agnew
and then President Nixon resigned in disgrace so we ended up with a President
(Gerald Ford) who wasn't even voted into office. Inflation and interest rates
were rising and conflict abounded in the Middle East.
The Arab Oil Embargo caused gas lines at stations and high energy prices.
Gloom was everywhere and Howard Ruff was there to save
everyone from the rough times. Ruff was never shy about expressing his
investing opinions and his book, newsletter and media appearances were filled
with dire warnings. Consider these predictions and recommendations from his 1978 book:
- The dollar will collapse and there will be an
"international monetary holocaust" that will take down all paper currencies
- Recommended that everyone stock a year's worth of
food to provide for when the economy collapses and supermarkets close
- Recommended keeping plenty of gold and silver coins at
home to pay for things for when paper currency became worthless
- Exploding inflation
- Skyrocketing gold and precious metals prices
- Failure and bankruptcy of private and government pensions
including Social Security.
- Predicted the bankruptcy of the United States
- An economic depression
- Recommended dumping stocks
None of these things even came close to happening. So, not
only was Ruff wrong, he was hugely wrong and anyone who followed his advice
decimated his investment portfolio. It's ironic that gold today is trading just
under $900 per ounce, almost exactly the same price it hit back in 1980 -
nearly three decades ago when Ruff was saying to shun stocks and buy gold. The Dow Jones Industrial Average back in
1980 was trading around 800 versus around 8,000 today (and remember this index doesn't
account for all the dividends an investor earned).
It's a tad ironic to look back at Ruff's 1978 statement made
in his book in which he said, "...much of the American wealth is an illusion
which is being secretly gnawed away and much of it will be completely wiped out in the near
future." His prediction, I suppose, came true for anyone who followed his
As for Ruff's newsletter, its track record is equally dismal
according to the Hulbert Financial Digest which has tracked financial
newsletter investment recommendations for decades (and Ruff's newsletter since
1980). Over that period, the Dow Jones Wilshire 5000 index has produced returns
totaling 1372 percent (9.8 percent annualized) whereas Ruff's portfolios have
returned just 226 percent (4.2 percent annualized). Ruff's investment picks
have been so bad over the years that an investor solely holding Treasury-bills
would have done better (5.6 percent annualized) and with a lot less risk than those following his
So, I was simply stunned that CNBC would have such a boob on
the air. I guess I shouldn't be surprised that CNBC doesn't research
prognosticators' track records before having them on air. They've had plenty of
charlatans and dimwits on over the years. But, Ruff's appearance surprised me
until I reflected upon it further and then it made sense.
Early this year when the stock market was still getting
hammered, gold and other precious metals' companies were advertising big time
on CNBC. Ruff is long known as a gold tout and thus an advertising friendly
guest to have on air. In such a climate, don't expect to find CNBC having guests
on telling viewers the truth regarding what a crummy long-term investment gold
has been and to stay away from their advertisers. Besides there's no room on their schedule with all of Peter Schiff
Apparently Ruff has been making the media rounds to lay the
groundwork for touting the re-issuance of his 1978 book now with the title "How
to Prosper During the Coming Bad Years in the 21st Century" which I was sent a
press release for by his publicist this week.
This isn't the first time that Ruff has dusted the cobwebs
off of his tired ideas and republished them with a slightly new package. In
April, 1999, he had published "How to Prosper During the Hard Times Ahead: A
Crash Course for the American Family in the Troubled New Millennium" (Regnery).
In it, he predicted nearly all the same apocalyptic events that he did a
generation earlier plus havoc from Y2K issues, which, as we know, never