Trader’s Narrative

Does anyone still watch CNBC? I mean to actually get information, not for entertainment. If you were watching, CNBC gave us a blast from the past on Wednesday. And if you weren’t, here’s what you missed.

Their guest yesterday morning was none other than Howard Ruff. If you’re unfamiliar with Ruff, he was a huge market ‘expert’ and doom and gloomer way back in the 1970’s. Think of him as the 1970’s version of Nouriel Roubini. Well, that might be a little unkind to Roubini.

Howard Ruff’s major message back then was to buy precious metals and shun equities. And to stock up on canned food to survive a dystopian future. And guess what? he was back on CNBC re-hashing the same 30 year old message:

Had we been in a bull market, you can bet that anyone at CNBC suggesting an interview with Ruff would have been laughed at (or fired). Since CNBC, like all general media outlets, reflects sentiment, take this as a sign of the depth of the doom and gloom out there now. Remember the last bull market? or the bubble years? What kind of guests did CNBC feature then? Was Roubini or Prechter or Taleb anywhere to be found? Now we find Ruff, having dusted off his 1979 book and tacked on “in the 21st century” back in the spotlight.

Just for fun, here’s a graph of the Dow (the same Dow Ruff “wouldn’t touch”) along with the release dates and titles of Ruff’s books (click to make chart larger):

Here’s the transcript of the interview:

CNBC: “Alright, our next guess really needs no intro, Howard Ruff, and we’re glad to have you on, its a… its rare to see you on set. Howe, what do you think investors should do to prepare for the next couple of years?”

Ruff: “Well, that’s my expertise. I’m not interested in telling Congress nor the President, what they should do, they wouldn’t listen to me anyway, so my job is to look into the future and see what’s probably going to happen and tell investors and families what to do to get through this with the minimum amount of damage. And, in fact, to possibly to turn all this stuff into small amounts of money and into real wealth. You can do that.”

CNBC: “Hmmm… turn it into gold. With gold.”

Ruff: “Well, not just gold.”

CNBC: “Alright, but that is part of what people need to have.”

Ruff: “Well, yeah. Right now gold - I’m bullish on gold. I’ve been bearish on it for many years. Got bullish again in 2002, I think, and its turned out to do very well. Gold and silver. I like silver better. But there are certain stock groups that are going to very well too. But the individual family has some defensive things they ought to do. For example, all this mess and all the money they are throwing at it is going to cause massive inflation.

CNBC: “Eventually. Yeah.”

Ruff: “Eventually. Its probably going to, probably no more than six months to a year away, and when that happens that disrupts the economy. So you might go to the store and get what you want at the price you want to pay for it. So I suggest when you go to the store, individual families, if they’re going to buy some tuna, don’t just buy one can, buy a case. Store it. Eventually you’re going to buy at today’s cheap prices and consume at tomorrow’s higher prices. That’s buy low and sell high. So that makes sense. But there are certain investment groups that I like, certain industry groups, very limited. I don’t want to touch, and for years I won’t be touching, growth stocks. The Dow Jones. I think they’re going to do very very badly, which of course, makes me less than a hero in New York city.”

CNBC: “Define badly.”

Ruff: “Down. Down.”

CNBC: “By how much?”

Ruff: “I don’t know. I’ll tell you when we get there.”

CNBC: “Hmm.”

Ruff: “The best way I know to be discredited is to say how far something is going to go and when. And I’m too old, at least, and too smart to do that.”

CNBC: “Do you have a website where we can go to get more of your…”

Ruff: “Yeah, sure. You can find out more than you ever wanted to know about me if you go to www.RuffTimes.com and if you go there you can rip me off, if you want. Do you want to know how to rip me off? Well, I’ve got a book here called “How to Prosper During the Coming Bad Years in the 21st Century” and you get a free book when you got there and sign up for my newsletter, $165, and if you don’t like my newsletter after a couple of issues, you cancel get your money back and keep the book.”

CNBC: “Are you close enough to come back in, again?”

Ruff: “Well, no, not very close. But I will come back in again. Or we can probably remote me from Salt Lake city.”

At no point did CNBC bring up Ruff’s abysmal history in predicting the market, nor did they ask him to explain how his previous predictions and logic could have been so wrong and cost those who followed his advice so much money. But then again, this is CNBC we’re talking about. No one expects real journalism.

And although Ruff claims, casually, in the interview that “you can learn more about him than you ever wanted to” on his website, it has no mention at all his first book: “Famine and Survival in America” published in 1974. As you can guess from the title, it was a dreary tome published at the darkest hour of the 1970’s oil crisis and predicted that the US would be ravaged within a year by massive famine.

It is now (surprise!) out of print - although you just might run into it at the 10 cents bin in your local used book store. Amazon also has a few copies. If you have a crazy uncle who is into nuclear bunkers, has a cache of guns and canned food out in a cabin somewhere, you can thank Ruff for inspiring him. It is widely believed that the whole “survivalism” movement was started from his first book.

Market prognostication isn’t Ruff’s only gift. You can listen to a short clip of him singing a song from “Fiddler on the Roof” from his self titled album (I kid you not):