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Howard Ruff On CNBC: Contrarian Signal From Trading Gods at Trader’s Narrative





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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):

howard ruff books plotted on dow jones chart long term

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.

howard ruff sings album cover.jpgIt 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):

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13 Responses to “Howard Ruff On CNBC: Contrarian Signal From Trading Gods”  

  1. 1 Steffen

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    I know that Germany is not the center of the investment world. But I observed also an interesting contrarian signal here:

    In Germany, we have the notorious magazine ‘Focus Money’, which is read by a lot of people, and which could be seen as the ‘CNBC’ of Germany. Over the course of the last year, with every issue, they have tried to push people into stocks: ‘This is the bottom! Buy now! Stocks are grossly undervalued!’

    In their recent issue, suddenly not anymore. Title of recent issues: ‘SAFETY: Investments in Gold, government bonds and the money market’. And ‘The new Great Depression’

    There was once a time when ‘Focus Money’ had nearly exactly the same cover story. When? In February 2003…

  2. 2 Babak

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    Steffen, is this the cover?

    focus money vorsicht magazine cover.png

    It doesn’t look like what you describe but worse!
    Vorsicht = watch out!
    weltwirtschaftskrise = depression

    right?

  3. 3 Steffen

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    This is the recent issue. ‘Weltwirtschaftskrise’ is even worse, literally ‘world economic crisis’, usually refers to the Great Depression of the 30s. ‘Vorsicht’ means ‘Watch out!’ as you observed, or something like: ‘Careful!’, ‘Attention!’, “Danger!’

    What I had in mind was this cover story, from january 21, 2009:

    focus money Jan 21 2009 cover.png

    It is astonishingly similiar to the cover story of february 13, 2003:

    focus money Feb 13th 2003 cover.png

  4. 4 Babak

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    Steffan, thanks. I just used google translate since I don’t sprichen deutsche. Care to translate some more of the covers? what exactly is so strikingly similar between them?

  5. 5 Steffen

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    Hi Babak,

    Translations:

    Cover from 01.21.09: “The best investments without risk. SAFE. Checked by experts. Bonds, Real Estate Fonds, Convertibles, Gold, Protection from inflation”
    Cover from 02.13.03: “Lucrative & Safe: Die 55 best fixed income investments. Fixed-term deposits, overnight deposits, money market fonds, government bonds, profit certificates, corporate bonds, convertibles, foreign currencies, fixed income funds.”

    The similarities between them gets clearer when you take the whole picture into account: ‘Focus Money’ usually is one of these magazines which most of the time tries to push people into stocks aggressively. Their covers are always filled with headlines like: “The next price rocket!” “Hot Stocks!” “The 10 stocks everyone NEEDS!”. I think you get the point.

    These two covers are exceptional during the history of this magazine. Both are the rare occurrence where they changed their tone to “Safety, Riskless, Fixed income”.

    I wouldn’t overrate this observation, but I found this an interesting piece of the overall puzzle. Especially because ‘Focus Money’ is read widespread by the so-called ‘dumb money’. And the last time they appraised ’safe fixed income’, only three weeks later we had the last market weakness before the big bull market of 2003-2007 started.

  6. 6 Robert

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    Hi Steffen,

    Die Wirtschaftwoche ist aber der ultimative Contra-Indikator.

  7. 7 Steffen

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    Robert,

    thank you for bringing up again this thread to attention.

    In retrospective, the timing of the discussion here is outright scary. My observation of the magazine cover indicator in 2003 was “only three weeks later we had the last market weakness before the big bull market of 2003-2007 started”.

    The main discussion of this blog entry took place on Feb. 12-13 this year. And three weeks later we had the last market weakness before the big upswing of 2009 (with bottom point on March 9th). Honestly, I have a very scary feeling now how the magazine cover indicator worked again perfectly.

    It is again very interesting to have a look at the Focus Money title directly at the market low (issue released on March 11th):

    Translation: “Euro shakes, Stock Markets tumble. HELP! MY MONEY!” How to protect yourself from financial crash & money devaluation” And (in smaller print, at the top): “Open real estate funds: The big analysis. Which is the most safest? Which makes a steady 5% p.A.?” (I have to add that real estate is viewed as one of the most conservative investments in Germany)

  8. 8 Babak

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    Steffen, this makes me curious what the cover indicator is saying now. Do you have any recent ones? can you translate them for us? thanks

  9. 9 Steffen

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    Hi Babak,

    sure, I’m glad if I can contribute:

    Here the three recent Focus Money titles:

    Translations of the titles, as far as they are relevant to markets & investments:

    a) Top Interest rates, Safe Funds, 7% dividends. THE BEST FOR YOUR MONEY 2010. Our recommendations made a gain of 16.7% (Top Line, small print): “Emerging Markets & Small Cap Stocks: 6 ultra-hot speculations for 2010″)

    b) You can earn 6% interest for 10 years! REASON instead of GREED. These 6 value investments will double your wealth sustainably.

    c) The new world currency: Myth GOLD. Why the ounce will climb to 2300$. Funds, Stocks, Direct investment. (Top line, small print): “Safe Dividends. Up to 8% with Telekom, E.on. Post and RWE”. “Top Interest! 5,3% with Fresenius Bonds”

    My interpretation: Wall of Worry, still overwhelming focus on Safety. Recommendations are value investments, and very conservative stocks (utilities and telcoms) Most recent issue has first line on “Ultra-Hot speculation”, perhaps first glimpse of enthusiasm.

  10. 10 Babak

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    Thanks Steffen, the only thing that jumps out is the gold cover (with a target at more than twice the current level!).

  11. 11 Steffen

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    Babak,

    right, when looking for a major theme there in the last months since the march market low, one thing catches attention:

    Several issues address on their title page Gold, National Debt and/or Inflation. Most of them play fear with the theme “Your saved wealth is in danger! Act now!” For example, the issue of 15 april asks the question “How dangerous is the financial crisis to your life insurance?” (Life Insurance is also something sacrosanct in german investment culture)

    Astonishing few issues are pushing into stocks.

    One title that also jumped out was end of october:

    “Deutsche Bank fears a threefold throwback: SELL EVERYTHING? Interview with Deutsche Bank Chief Economist Norbert Walter: ‘Stay alert!’”

  12. 12 Sue

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    I subscribed to Howard Ruff’s newsletter in October 2009. I canceled within his time frame and STILL DON’T HAVE MY REFUND. I have been going back and forth with his customer service people and they are giving me the run around. He says he has a no hassle money-back guarantee - NOT TRUE!!! I finally opened up the dispute with my credit card company and they said they will take the charges off my account and deal with the Ruff Times directly.

  13. 13 Babak

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    Sue, out of curiosity what is Ruff saying these days? I’m curious if his shtick has changed at all or if he’s still all about gold, canned goods and crash and burn for the market.

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