Ken Fisher Knew Something That Wasn’t So

February 25, 2008 at 7:23 pm  ·  Category: Business and Investment Philosophy, The Investment Advice Business

Don’t buy it. For months now the debate has been over whether America will have a hard landing or soft landing, the answer hinging on how big 2007’s housing disaster turns out to be. Well, there won’t be any housing disaster. We won’t have a landing at all, soft or hard. Right now the U.S. and global economies are both accelerating.

You can see right through the housing crash story by looking at the prices of housing stocks. The market knows what the economic worrywarts do not, which is that the housing sector is already making a comeback. In the last six months housing stocks are up 24%, well ahead of the overall market. If housing were destined to fall apart in 2007 these stocks wouldn’t be so strong now.

Did you know that housing sales are up in the last few months, not down, and that inventories are lower than six months ago? We’re accelerating, not landing. This is true not just in housing but also pretty much across the board.

– Ken Fisher, “Housing Boom!”, Forbes Magazine, February 26, 2007 (bold and italics added; Hat tip The Big Picture)

Does any investment advisor market himself more than Ken Fisher of Fisher Investments?  You can’t get away from the guy.  He’s everywhere: on CNBC, on Yahoo!, TheStreet.com, Forbes, etc…

Doing so has helped him crack the Forbes 400 list of the 400 wealthiest people in the world (he’s #271 on the 2007 list).

His new big idea from his book The Only Three Questions That Count: Investing By Knowing What Others Don’t (2007) is that you make money by having some kind of edge i.e. knowing something others don’t.

I’ve heard that line over and over again on his commercial that is currently running on CNBC.

This is clearly correct as any good or bad news that is widely known is already reflected in security prices.  In order to profit you need to understand something that is not widely known and therefore not already “in” security prices – and make an investment that will profit as others begin to understand what you already know.

The problem is when you know something that others don’t – that just ain’t so!  Then you have to come around to their way of thinking and the investments you made on your special insight don’t work out so well.

See, for example, the action in the homebuilder stocks (Pulte, Toll, Beazer) Fisher recommended in his February 26, 2007 Forbes column: Pulte and Beazer are each down more than 50% and Toll is down about 33%.

Posted by Greg Feirman  ·  Trackback URL  ·  Link
 
19 Responses to “Ken Fisher Knew Something That Wasn’t So”
  • Bad job picking the couple of stocks that he published which were down last year…his portfolios and other Forbes stocks were up over 17% while the market was only up 5.5%…looks pretty good to me. Did you expect him to be perfect with every pick? No one is that good.

    Jay  ·  May 12, 2008 at 10:03 pm  ·  Permalink
  • I’d like to see the results you suggest documented.

    This isn’t just a couple stock picks he missed. He missed the most important fact about the recent economic boom and bust: the housing bubble and subsequent bust. That’s a big miss and it likely distorted his entire thinking about the economy and stock market.

    So whatever.

    Greg Feirman  ·  May 12, 2008 at 10:07 pm  ·  Permalink
  • His track record is published at CXO Advisory and stands to be one of the best on record. How has he missed the the entire economy?…Real Estate makes up 4.5% of GDP…even if it drops in half which is unlikely that is a one time accounting statistic. It appears to me he got the other 95.5% correct. The econoic data shows we are still doing well with low unemployment and low but still growing GDP. I would deduce you also believe we are in a recession. You can call any of his 800 numbers and get the performance figures sent to you. They are also public as the SEC requires. Try looking into some of the facts before casting stones

    Jay  ·  May 12, 2008 at 10:14 pm  ·  Permalink
  • CXO Advisory doesn’t report the actual returns of the money he manages. They just report on some of his picks:

    http://www.cxoadvisory.com/gurus/Fisher/

    I want to know what he returned for the money he actually managed. That’s the bottom line number, the only one that really matters.

    Show me he returned 17% last year and I’ll have to admit that’s good.

    Greg Feirman  ·  May 12, 2008 at 10:19 pm  ·  Permalink
  • Yeah: “What housing disaster?” (Feb 2007) Missed that call didn’t he?

    And another note: I READ FISHER’S FREE JAN 01, 2009 REPORT—AND SAW NOTHING IN IT WORTH THE PRICE. ………A WASTE OF TIME.

    GEORGE WORLEY  ·  Feb 4, 2009 at 11:32 am  ·  Permalink
  • Response to Greg Feirman above: Fisher managed my money for most of 2008 (until I reclaimed it in December) and he did not beat his index–he lost about 3% more than the MSCI index. AND this was before Fisher took his 1.25% management fee AND before trading costs were subtracted. At his last seminar that I attended he basically said “Well, shit happens but I’m still the smartest guy around and we are REALLY going to kick ass now.” ….Riiiight! But not with my money.

    GEORGE WORLEY  ·  Feb 4, 2009 at 4:11 pm  ·  Permalink
  • Ken Fisher Really Blew it. His advice was some of the worst you could have bought into before the market panic and crash. It is not that he was not right in what he was saying. He should have been right. There were , however forces operating against him. If you listened to Tim Geitner in March 2009 , the tax cheat secretary of the treasury under Obama, you would have heard him tell bankers, “we need to re-securitize” it was securitizing mortages that created the apparent mess according to broadcasters but that is not really the case. securitization was just an attempt by the banking system and financiers to protect themselves against the debasement of the US dollar by the US government.

    Before you blame Ken Fisher for getting it really really wrong as he did, you have to understand what he got wrong. There was no problem with the securitization there was a problem with the collateral underlying the securities. The reasaon why is that the US congress made the banking laws and the foreclosure laws that just allow borrowers to walk away and loans can not be easily extended allowing more time for payment the way the rules work. Leverage on wall street was out of control but even that did not necessarily cause the market crash what made it crash was 100% psychological group behavior. It was a group psychology orchestrated by political interests to win an election and then after that to turn the country into a marxist state. Ken Fisher got that wrong too. he was saying everything would stay the same essentially under Obama because of checks and balances and compromise in the congress and limits by the courts but that is proving revolutionarily wrong now. Obama is a wanna be hugo chavez and a fidel castro. Few americans hohoing for him in the election realized how much further left than Jesse Jackson he is. Dr Phil may have already turned against him and it may dawn on Oprah that she could make better friends unless she is in line to become the director of the US cultural revolution!

    The thing that is so frustrating about this panic and crash is how all these doctor dooms have come alive in the media. Its because Bad news forces the good news out. Dr Dooms are instant stars now. In as much as they originally predicted the disaster is a bit of a fraud since they predicted it over 20 and 30 years and it has not happened until now and that does not mean it will last. To everyone it does not seem like this is the cheapest time to buy gold but rather a good time to sell it when there is this much fear and panic going on! So these dr dooms are gettting free advertising from the press and dooming a lot of people to buy over valued treasuries and gold in a new unsustainable bubble. Gold is a terribly hard thing to market when the market goes in the opposite direction. It still has not much surpassed its last major spike durring the carter oil crisis and has not exceeded it much when corrected for inflation. Ken fisher was not wrong but his timing was off and his expertise in timing is pure nonsense just as much as the expertise supposedly belonging to the dr dooms who are the new heros.

    The dr dooms really seem to be fanning the panic for profit . short sellers and even warren buffet are not going to tell you that everything is OK because that kills their immediate and future profits if things stabilize. Soros is not going to come out and say we have entered the age of utopia if he wants to trash the british pound at the same time he is shorting in units of billions. the bears worked to gether and the they allied themselves with the marxist obama people first to get him elected and now to turn the country into a nationalized green fantasy disaster. Fortunately the US is still the US and the Obama admin is going to meet severe resistance. His policy so far looks more like Louis the 14th who ultimately generated the french revolution by taking a completely in debt france much further in to debt to revitalize its economy. This nose in the air woodrow wilson posing idiot obama is an omnibus stupid ass for a freak show of crazed santa spending. Not even Stalin had such bad financial sense! Stalin relied on slave labor and there is no chance that Obama is going to get that in a freedom loving country like the US without a big fight to remove him by impeachment.

    Ken Fisher must have destroyed a lot of wealth but considering the Geitner re securitization coming watch out Fisher will probably come out ahead.

    Think about what you would do if you had bought gold over the years and stored it earning no interest. on average say you paid $400 an once and now a little more doubled in value for your holding what do you do? continue to hold or start selling your stock telling eveyone else they now need gold to protect their portfolios? You might start selling now and buying very discounted stocks including companies who mine copper and also some gold that crashed because eventually they will pay dividends again and the gold wont. And don’t forget when you sell your gold you pay taxes . If you were in stocks you might have stocks that appreciated as much as 10 or 20 times your investment and now they are down to 5 and 10 times.

    Fisher also was correct about buying bigger mega corporations that will cash in with the low interest rates at the moment and survive the storm. He was not all wrong just missed the psychological bomb blast the economy received.

    Donkey  ·  Mar 7, 2009 at 1:54 pm  ·  Permalink
  • The most amazing thing about Ken Fisher is his arrogance.I admire him.After having been so wrong, any normal human being would go into hiding.But not Ken.He still has the nerve to lecture about sockmarket, he goes on radio, TV as if nothing had happened.His incompetent advices are put forward without a blink in his eyes and hardly anybody challenges him.

    payote  ·  Jul 8, 2009 at 5:39 am  ·  Permalink
  • Ken fisher know how the economics work for the long term. He is a student of economics and history.

    however no one can predict short term economic trends because investor sentiment (human psychology) have a much greater impact on short term market direction.

    Since most of ken fisher’s clients usually have long time horizons –
    It shouldn’t really matter what fisher says vs what happens in the short term – unless the clients are damn fools.

    Mougou Tong  ·  Aug 1, 2009 at 9:46 pm  ·  Permalink
  • I guess it shouldn’t really matter then if Ken Fisher loses clients money? Only damn fool investors must care about that….

    Greg Feirman  ·  Aug 2, 2009 at 3:38 pm  ·  Permalink
  • WHEN KEN’S SUPER AGGRESSIVE SALESFOLK, IN THEIR ATTEMPT TO SIGN YOU ON–TELL YOU “KEN WILL PROTECT YOU DURING A RECESSION. HE CAN TELL AHEAD OF TIME THAT WE ARE GOING INTO A BEAR MARKET.” THEN TO SEAL THE DEAL–YOU ARE TOLD THAT A SPECIALLY TAILORED PORTFOLIO WILL BE PREPARED JUST FOR YOU. THEN YOU FIND OUT THAT HE IS RUNNING AN UNREGULATED MUTUAL FUND. IN MAY OF 2007–HE PUT INTO MY ACCOUNT EVERY BANK AND FINANCIAL HE COULD FIND EVEN AS THE MELTDOWN WAS COMMON KNOWLEDGE TO EVERYONE ELSE. HE EVEN PUT PINK SHEET STOCKS IN THE PORTFOLIO. WHEN HE TRADED–HE BOUGHT HIGH AND SOLD LOW– IGUESS THAT IS HOW HE REBALANCES.–ALL PURCHASED AT TOP DOLLAR AND WHEN CHECKING–I FIND THAT EVERYONE REGARDLESS OF AGE OR ANY OTHER CIRCUMSTANCE WINDS UP WITH THE SAMO-SAMO. HOW COULD HE PROTECT ANYONE IF HE HAD TO DUMP MASSIVE AMOUNTRS OF SAMO-SAMO?.. WHO WOULD HE LIQUIDATE FIRST? WITHIN MONTHS–I WATCHED MORE THAN 50% OF MY PORTFOLIO EVAPORATE INCLUDING A ROTH IRA. WHERE WAS HIS FIDUCIARY DUTY? MOST OF HIS CLIENTS ARE IN FL AN CA AND ARE ELDERLY AND BELIEVE THE PUFFING AND LIES. KEN HAS A NEW BOOK OUT.. IT IS CALLED ” HOW TO SMELL A RAT” IT IS HIS AUTOBIOGRAPHY. HE HAS SUED IN COURT FORMER CLIENTS- HE-HAS EMPLOYEES WHOSE JOB IS TO SCRUB THE INTERNET FOR BLOGS LIKE THIS.. HE THREATENS LEGAL ACTION TO KEEP HIS IMPOVERISHED FORMER CLIENTS IN LINE. I DO NOT KNOW HOW HE IS PERMITTED TO CONDUCT HIS BUSINESS IN SUCH A MANNER. EVEN HIS STATS CANNOT BE RELIED UPON.. HE JUST CAHNGES BENCHMARKS. HE DOEN NOT HEDGE, TAKE PROFITS OR PROTECT CLIENTS IN ANY WAY.

    fran  ·  Sep 15, 2009 at 3:17 pm  ·  Permalink
  • I was honored by a contingent of Ken’s salesmen. They told me that Ken would personally manage my portfolio. Knowing that he had several billion dollars under management, and that that meant that there was probably ten of fifteen thousand or more portfolios, I knew that that couldn’t possibly be true.

    It was an unnecesary lie and it meant that he was soliciting an unsophisticated clientele. They lost my respect and my trust and any possibility that they would get my business.

    Norman Elliott  ·  Nov 28, 2009 at 5:14 pm  ·  Permalink
  • Be skeptical of any Forbes Magazine articles about FISHER INVESTMENTS and/or KEN FISHER,CEO. Fisher has been writing the “Portfolio Strategy” column for Forbes Magazine for over 26 years. During this period, Forbes claims that Fisher’s stock picks have outpaced the S&P 500 by +5.2% on average annually. This may be an accurate calculation for the FEW stocks, 5-10 per month, that Fisher touts in his Forbes column (He does not actually buy any of thes stocks). To the contrary, these few stock picks are an extremely small data sample for statistical analylsis of investment returns, given the universe of stocks available to purchase! In other words, Forbes’ analysis and conclusions are meaningless.

    Let’s look at the big picture; particularly, Fisher’s overall stock picks for his Fisher Investments Clients. These portfolios are normally comprised of 100% equities (50 or more of exactly the same stocks in each portfolio). Interestingly, neither Fisher nor Forbes publish the investment returns of these portfolios! Over the past 1,3, 5, and 10 years, I believe these returns are FAR LESS THAN +5.2% on average annually. Moreover, look at Morningstar’s rating and investment return data for the PURISIMA MUTUAL FUND (PURIX) which Fisher manages (rated 2 stars with 5 yr. annuallized return of (minus) – 4.3%). I think this gives a much clearer picture of Ken Fisher’s stock picking expertise!

    As the financial adviser/money manager of Fisher Investments Co., he charges up to 1.5% investment advisory fees + transaction costs, etc. But more importantly, Fisher has a fiduciary duty to his clients — a legal/ethical obligation/relationship of trust/confidence between himself and his clients (and money). Fisher Investments clients need to band together and demand restitution!

    Don Moore  ·  Jul 16, 2012 at 5:05 am  ·  Permalink
  • If Fisher is such a bad stock picker how does he keep such a large group of investors? Wouldn’t they be leaving in droves if all the negative things being said about his firm were true? Has anyone had a positive experience with his firm?

    Tom  ·  Nov 27, 2012 at 6:00 pm  ·  Permalink
  • I’d like to see the expense ratios for any of the funds under Fisher Investments. I’ll bet he’s got his hands deep into your pockets. Low cost index funds baby!

    Eric  ·  Jan 8, 2013 at 2:59 am  ·  Permalink
  • The business of America is fraud, and the Journal of US Business Fraud is Forbes. Anything that is connected with them is consciously promoting the bone deep spirit of fraud that is their stock and trade. Fisher is just another example of it.

    http://www.aboutlawsuits.com/fisher-investments-lawsuit-and-arbitration-claim-filed-3936/

    Susan Strohm  ·  Jul 1, 2013 at 5:23 pm  ·  Permalink
  • […] Ken Fisher Knew Something That Wasn't So […]

    fisher investments ken fisher | A Listly List  ·  Oct 14, 2013 at 8:57 pm  ·  Permalink
  • Ken Fisher is a pompous ass. And I can speak from experience. The man has set me back about 6 years. I kept telling my contact at his firm in 2006/2007 to get out of the market. I wanted to sell my stocks. They refused to do it until my portfolio was down to 45% of it’s value. He cost me $ 450,000. He was right to get out of the market before the 2000 crash, but completely wrong in 2007.
    I have been to many of his investor meetings. I never liked him and I can only blame myself for trusting him with my money,

    Do your research there are better money managers than Ken Fisher.

    Peter

    peter dejong  ·  Jan 19, 2014 at 5:55 pm  ·  Permalink
  • Ken Fischer is a scam artist and liars don’t belive them – they are good at selling that’s it

    John  ·  Jul 7, 2014 at 7:25 am  ·  Permalink

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