Summary/TL;DR
Robert Kiyosaki, James Rickards, and Peter Schiff are three individuals with a relatively large following and a penchant for predicting stock market crashes. FREENVESTING is a large YouTube channel that frequently features them and others in ominous videos (many of which are taken wildly out of context) with the intent of striking fear into their viewers. When one looks into the past, we discover that these gurus, and many others like them, have only been wrong for the past 15 years, greatly harming those who have taken their advice along the way.
Introduction
It’s that time in the election cycle where doom-and-gloom articles and videos miraculously appear at rates that exceed their regular (and already dizzying) pace. Inevitably, individuals feel suffocated by the insistence of various financial gurus that a stock market and economic crash of historic proportions is on the horizon, especially if the “wrong person” wins. Impressed by the guru’s credentials and supposed track record of “predicting” crashes in the past, consumers grow convinced that “this time is different”. Many, to their unending regret, rush to sell. And even those who wisely resist the temptation to give into their fear are nonetheless tortured by anxiety.
The antidote to this pattern is the truth. These gurus have a history of making predictions, and they have essentially never been right. A brief exploration of their track record proves illuminating and will be the focus of today’s post.
Robert Kiyosaki
Robert Kiyosaki’s claim to fame was his best-selling book, Rich Dad Poor Dad. Since stepping into the public sphere, he has used various platforms (namely Twitter) to grow his brand awareness and regularly predicts stock market and economic catastrophes of historic proportions. None of these have, predictably, come to fruition, as can be seen in the chart below.
While this chart only displays tweets through 2021, Kiyosaki has continued to use Twitter/X to predict impending crashes to this day. The whole time, however, the market has been cruising to new all-time-highs, leaving anybody who has heeded his “warnings” far behind.
James Rickards
Of everyone discussed in today’s post, the most impressive resume belongs to James Rickards. Since 2011, he has authored seven books, all of which predict near-term collapse of the global economy and stock market. His advice to his readers? Buy gold. In fact, he has recently predicted that gold will reach a price of $27,553/oz, an almost 1,000% increase from its current level of about $2,600. Even for the so-called “gold bugs”, who have been regularly calling for $5,000+/oz gold prices for the past 15 years, this is a bold claim.
Since the publishing of his first book, Currency Wars, in November 2011, the S&P 500 has grown at about 14% annually, while gold has grown at less than 3% (despite recently hitting a new all-time high).
Peter Schiff
Of all of the “gurus” discussed today, none of them have a following comparable to that of Peter Schiff, host of the Peter Schiff show. To his credit, Schiff did correctly predict the Great Financial Crisis (GFC) more than two years before it occurred.
Since the post-2009 recovery, however, Schiff has not let up on his doomsday predictions. For the past 15 years, he has been impressively committed to his claims that the USA is on the precipice of another economic disaster which will trigger a stock market crash as bad or even worse than the Great Depression. For this entire time, he has been recommending that his listeners sell US stocks in exchange for gold and international stocks (but primarily gold), and has routinely predicted that an ounce of gold would carry a $5,000 price tag. Today, more than 15 years after he originally made this prediction, the stock market has appreciated over 750%, and the price of gold is sitting around $2,600/oz (which marks a relatively new all-time high for it).
It won’t come as a surprise to many that Schiff also has a convenient way for his followers to purchase gold and silver – directly through one of his companies, Schiff Gold! Furthermore, his investment management company, EuroPacific Asset Management, offers mutual funds which invest in… you guessed it! Gold miners, and international and emerging market equities. Here’s the performance of his largest mutual fund against the S&P 500 since the fund’s inception in 2011.
The fund has also completely failed to keep up with its own benchmark, the MSCI AC World Ex US Value Net Index:
Even during 2008, investors who were impressed by Schiff’s predictions and gave him their money found their portfolios fell farther than the broader stock market. Peter, on the other hand, has grown his wealth tremendously since then. In June 2023, he bragged on Twitter/X that his net worth “is a lot more than $80 million.”
FREENVESTING – A YouTube Channel
YouTube can turn into a rabbit hole that many of us have found ourselves falling down. While there is plenty of great content on YouTube, it’s also the case that many channels take advantage of the passivity with which we tend to consume information. FREENVESTING is one of these channels.
Despite beginning only 3 years ago, FREENVESTING boasts an impressive 1.2M subscriber count. Hilariously self-described as “an inspiring channel”, FREENVESTING posts nothing except emotionally abusive and misleading material in which all of our above-mentioned gurus are regularly featured. The screenshot below represents their last month of posting:
They must have realized that, unfortunately, they received many more views on their doom-and-gloom videos, as this is what 100% of their material has looked like for the past 11 months. Many of their followers also don’t realize that their videos are deceptively edited and regularly take people out of context.
In the 11 months since they began posting these videos, the US Stock Market is up over 38%.
You Have Nothing To Fear, Except For Fear Itself
Fear, while necessary for survival, is a favorite tool of a master manipulator. I don’t criticize these gurus because I believe their analysis is inept (although it is clearly leaves plenty to be desired). I criticize them because they promote themselves by promoting cynicism and fear – two poisons from which nothing good will ever arise. I find Michael Saylor’s description of Peter Schiff to be generally applicable to anybody who promotes themselves in this fashion – “cynics that stand for nothing, believe in nothing, and offer nothing but fear, uncertainty, doubt, and vitriol.”
Therefore, due to their needless fearmongering and their complete failure to provide anything of value to their audiences for as long as they’ve had a following, these gurus, along with anyone else with similar messages, are best ignored.
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