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Peter Shiff, Have you by any chance ever heard of a small company named AMAZON...?

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May 02, 2012 – Comments (24) | RELATED TICKERS: S , TU , PID

You probably know who Peter Shiff is: The guy who likes to point out everywhere he can that he was right predicting the housing crisis, the dollar's collapse, the boom in gold, the end of the world, etc.

He basically was doing the same in this interview here, in which he's talking about him being right about the internet stocks and how he knew this internet buying/selling of goods will never take off (He even went so far compared internet commerce with Spiegel catalogs).

Well. Mr. Shiff, I can't speak for others, but I buy tons of stuff "on the internet" (billions in Amazon's sales say I'm not the only one buying), do banking and pay billes online, watch TV and movies online, communicate with friends and customers over the internet,... (and all of this most of the time on my phone).

 

Please read now what Mr. ALWAYS RIGHT had to say about the internet just 3 years ago (in 2009): 

"Everybody seemed to be living in this new era, and the Internet had captured everybody's imagination. To me, I couldn't see the difference between the Internet, really, and a catalog or a telephone.

People were saying that everybody's going to buy everything on the Internet. Why? Why aren't people just shopping by telephone? Or why aren't they just buying everything in a Spiegel catalog? It didn't seem that it was any different.

And I knew that the valuations they were putting on a lot of these companies, I knew they'd come out with a company, maybe it'd be Doorknobs.com, or whatever it was.

And you'd say, "Well, gee, even if they sold every doorknob in the world, they couldn't possibly be worth the multiples that they're trading at." And of course they didn't even make any money selling them.

And the whole idea behind so much of the e-commerce was just nonsense. The idea that it was more cost effective to individually FedEx items to people, as opposed to letting them show up and buy them and put them in their cars and leave. There's no way."

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So is Mr. Shiff really so right about everything as he thinks he is (and as many here on CAPS believe)?

My answer is in the ticker symbols above... 

24 Comments – Post Your Own

#1) On May 02, 2012 at 12:56 PM, dragonLZ (99.38) wrote:

Sorry about the typos...

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#2) On May 02, 2012 at 1:06 PM, ryanalexanderson (< 20) wrote:

To be fair, you cherry-picked the winner who won through an epic economy of scale, and now has a now-untouchable moat.

He gave an toy example of a small company selling a product that was senseless to distribute over the internet, trading at an unreasonable multiple. The implication is that a small company like "doorknobs.com" can't justify a high premium. 

Most of the things you list - movies, bill paying, communicating with friends - have nothing to do with his criticism at all. 

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#3) On May 02, 2012 at 1:21 PM, whereaminow (20.23) wrote:

Um, Amazon is essentially a catalog service, is it not?

I don't know the context of the conversation, and you've provided no quotes for this interview, which I don't have any interest in listening to.

The Internet is um, kind of a big deal. And so is Amazon. Lots of other Internet stocks however, not so much.  I'm pretty sure Warren Buffet has made similar points in the past.  

David in Liberty

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#4) On May 02, 2012 at 1:22 PM, dragonLZ (99.38) wrote:

 ryanalexanderson, I'm afraid you focused on only one thing Mr. Shiff said (and was right) about doorknobs.com.

But my point was internet commerce in general (not just Amazon as you think).

Do you really think Mr. Shiff was right when he said: " And the whole idea behind so much of the e-commerce was just nonsense. The idea that it was more cost effective to individually FedEx items to people, as opposed to letting them show up and buy them and put them in their cars and leave. There's no way."

And by the way, do you really think Amazon.com (my example) is the only company succesfully doing business online??????

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#5) On May 02, 2012 at 1:24 PM, dragonLZ (99.38) wrote:

whereaminow, I provided no quotes???? (can't you read italic?)

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#6) On May 02, 2012 at 1:38 PM, ryanalexanderson (< 20) wrote:

Ok, my mistake - you really cherry-picked. D-in-L was correct. If you had printed the next line of his speech, which was this:

...The idea that it was more cost effective to individually FedEx items to people, as opposed to letting them show up and buy them and put them in their cars and leave. There's no way.

There are certain items that lend themselves to online sales, but most items didn't, but it didn't matter. Everybody was going public.

He was specifically referring to the euphoria of the late nineties, as he mentioned in his intro. He was talking about the ridiculously valued niche companies like pets.com. Not those selling low-weight, high-value items like books which lend themselves to online sales. Like he says. 

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#7) On May 02, 2012 at 1:39 PM, Valyooo (99.41) wrote:

Schiff has been completely wrong about treasuries for sooooo long and he won't give it up and to back it up he goes "well I was right before!" (even though he missed the new bull market)

 

I agree with him on monetary policy but ideas are not reality. And even though I love Ron paul, it's hard to promote anarchist ideas as a politician (schiff and Paul).  

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#8) On May 02, 2012 at 1:45 PM, Valyooo (99.41) wrote:

Your blogs are alwaYs my favorite. You're sarcastic but people take it seriously. So funny

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#9) On May 02, 2012 at 1:49 PM, Frankydontfailme (27.30) wrote:

Wait... you were being sarcastic?

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#10) On May 02, 2012 at 1:53 PM, whereaminow (20.23) wrote:

Ah, I see. The quotes are from the same interview. I inferred they were different.

Anyway. thanks for not getting all bent out of shape about it ;)

David in Liberty

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#11) On May 02, 2012 at 1:56 PM, whereaminow (20.23) wrote:

And even though I love Ron paul, it's hard to promote anarchist ideas as a politician (schiff and Paul). 

Val,

Hard to promote it to whom? To the media and establishment? Sure, but who gives a fluck about them?

I'll be at his UCSD rally on Friday night. I suspect he won't have much trouble promoting his ideas to the 5,000 or so that will show up ;)

David in Liberty

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#12) On May 02, 2012 at 2:17 PM, Valyooo (99.41) wrote:

Hard to promote it to me...how can I fully endorse a Presidential candidate when my view is there should be no President?  And the argument "he's better than what we currently have" is still weak, because thats why we have a two party system.. "I am a republican, cuz its better than being a democrat!"

I would vote for Paul, because he is my favorite OF THE CHOICES. But I still can never fully get behind a politician.

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#13) On May 02, 2012 at 4:35 PM, dragonLZ (99.38) wrote:

ryanalexanderson, I see now why you think Peter Shiff can do no wrong (all your green thumbs are PM related stocks).

Let me then give you this example:

Back in 2010, this one guy, dragonLZ, said: "I knew GM and Chrysler will go bankrupt. Thinking that this "car thing" is going to take off is just crazy. Who would ever exchange their buggy and the horse for a metal box on wheels that needs gas to move? There's no way."

So, basically, you are telling me dragonLZ wasn't wrong about the "car-mania trend" because he was right about GM and Chrysler going bankrupt and having ridiculously high valuations prior to that?

p.s.

Just FYI, Amazon.com doesn't only ship low-weight stuff. I'm really starting to get very concerned about your up-to-dateness...

Peter is that you???

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#14) On May 02, 2012 at 4:44 PM, Frankydontfailme (27.30) wrote:

Wait..... you aren't being sarcastic????

Hehe. You're upset that the guy who nailed the dot-com bubble didn't forsee AMZN succeeding after losing massive market value during that bubble?

Peter Schiff is so frequently wrong about so many things, and this is what your bring up? I'll be nice and assume you're being sarcastic and not obtuse.

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#15) On May 02, 2012 at 4:50 PM, dragonLZ (99.38) wrote:

Your blogs are alwaYs my favorite. You're sarcastic but people take it seriously. So funny

 Valyooo, This might be one of the best comments ever written here on CAPS (or at least your best one).  :) 

p.s.

Do you remember the guy the other day, who commented on my comment about WB with something like: "I don't think you are right in saying Warren Buffet was the first one to say: Buy Low - Sell High?

Or the guy who commented with something like": It's beyond misleading to say WB started out with nothing." 

And they were dead serious.

They never got in on our joke. Never noticed anything wrong with me saying Warren is doing other people's taxes (because he "owns" HR Block), or that he's made millions (with m) in the stock market, and the bunch of other "inaccuracies" in your and my comments.

You are right, people are so funny sometimes (but not Peter Shiff)... :)

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#16) On May 02, 2012 at 5:01 PM, dragonLZ (99.38) wrote:

Franky, I see you also don't understand my accent.

Where I see a problem with Shiff is the following: "And the whole idea behind so much of the e-commerce was just nonsense."

I don't care what he was right about or wrong about before, but to me, missing the e-commerce revolution complettely (and saying in 2009 that he was right) is like saying in 2012: "Mobile phones have no chance. NO WAY."

p.s.

I'm starting to think you are now playing me...

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#17) On May 02, 2012 at 5:07 PM, dragonLZ (99.38) wrote:

Franky, Oops, I guess I copied the wrong Shiff quote. This one is actually his best: "The idea that it was more cost effective to individually FedEx items to people, as opposed to letting them show up and buy them and put them in their cars and leave. There's no way."

Hasn't he heard Best Buy is not doing so well because lots of people actually don't shop anymore by "putting stuff in their cars and leave", but prefere FedEx boxes waiting for them at their front door? 

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#18) On May 02, 2012 at 6:35 PM, ryanalexanderson (< 20) wrote:

Okay, there's a whole lot of wrong going on here. 

#1. Regarding your "better quote" in #17 - that's actually your original quote. Look back at the top. I actually requoted it in #6. 

#2. Having read this article that you brought to my attention, Schiff (with a 'c') was using the dot-com hysteria to illustrate the ideas of malinvestment, a common Austrian concept. It was a throwaway line, saying that the hysteria around the idea of e-commerce caused a lot of people to lose a lot of money. Thousands of companies tried it, and failed. Do you disagree with this? Some of them, who sold items that lent themselves out to online sales, thrived. What is so hard to understand about this?

Now, let's proceed to your assumptions about me.  

#3. Since you checked my back story, you have seen that my very few CAPS picks are several years old.  You may assume that this information is defunct. 

#4. I am not a Schiff apologist. As Valyooo correctly said, he has called for the death of the US Treasury for a very long time, very incorrectly. But this is an understandable mistake that has been echoed by people such as Bill Gross, the largest bond manager in the world. They did not anticipate the epic, brazen bond purchases made over the last couple years by the Federal Reserve. Being caught wrong-footed in this is a far more nebulous, understandable error than the supposed Ludditism you have accused him of, based on a sentence quoted completely out of context. 

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#19) On May 02, 2012 at 6:45 PM, Frankydontfailme (27.30) wrote:

err forget it. Yeah he was wrong about that. The point is the valuation for such a service was overvalued at the time, but the service does clearly have value... not even sure if he would disagree with that point.

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#20) On May 02, 2012 at 8:19 PM, awallejr (81.55) wrote:

Just a fyi if you are going to mock someone at least spell their name correctly ;p  People here know I pretty much think Schiff is a loon, who like a broken clock, eventually gets something right.

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#21) On May 03, 2012 at 10:05 AM, Valyooo (99.41) wrote:

Dragon,

I thought it would be obvious by the way I called him Warrant Bufford. People are stupid.

Ryan,

There is a difference between thinking internet stocks are overvalued, and thinking internet shopping is not going to take off.

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#22) On May 03, 2012 at 10:12 AM, FoolishVintner (< 20) wrote:

Schiff is way wrong more often times than not.  He was wrong about quantitative easing causing runaway inflation, he has been wrong for years and years and years about interest rates going through the roof, he was wrong about the tanking dollar, he was wrong about gold going to $5,000, he was wrong about the economy getting worse in 2010. 
If he made a few correct calls it's just more proof that a stopped clock is right twice a day.

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#23) On May 03, 2012 at 10:30 AM, ryanalexanderson (< 20) wrote:

There is a difference between thinking internet stocks are overvalued, and thinking internet shopping is not going to take off.

The speech that this entire discussion revolves around was delivered in 2009. Peter Schiff had already sold thousands of copies of his own book and audiobooks online by then. Amazon was already a successful empire then. 

You are quite right. There is a massive difference. My point is that Schiff was trying to make the former point, and this discussion suggests he was implying the latter. In 2009. Despite the sales of his own books, and his own presence as a video blogger and podcaster since 2005. It makes no sense. 

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#24) On May 03, 2012 at 11:23 AM, Valyooo (99.41) wrote:

Exactly....Schiff says things that make no sense...so I am not sure how you disagree.

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