Thursday, December 27, 2012

Contrarian Investing Techniques by Garth Turner

Recently, Garth Turner, in one of his characteristic sweeping generalizations said:
"Day traders are idiots. Professional stock brokers are going deservedly extinct. 
...And don’t get me started on mutual fund salesguys"
Presumably then he is no longer predicting Dow 30-50,000 by 2015, and "Mutual fund TV" is no more? - Whilst it is a well known statistic that as many as 95% of retail daytraders do lose, and in among those, there are certainly some idiots, what he doesn't seem to get, is that anybody who is consistently beating the market for long enough to call themselves a professional day trader, is far from an idiot.  

But he's smarter than those dumbass daytraders anyday, he's been around a long time, since as far back as the 1987 Black Monday crash in fact, as the video below shows, he was there. Here he is acting like every other losing retail trader, on the day of the very bottom when you should have been buying, advising everybody to stay out for the foreseeable future.  


Still, this was a long time ago, it might be unfair to single out just this one extraordinary event which did catch most off guard, and he did change his views on stocks back again, and then started DotCom Television.

Recently Mr Turner has started to imply that his investing techniques do involve trading by means of attempting to time the market, with comments like this:
You do buy-and-hold? Explains a lot. — Garth
As stated here, it means maintaining weightings for assets in a diversified portfolio and rebalancing as prices change. Simple. — Garth 
 When challenged..
#37 chaser on 12.11.12 at 11:18 pm
S&P is less than it was in 2008 and 2001. Great asset. haha
You do buy-and-hold? Explains a lot. — Garth
Garth, that is a bit rich, no? You yourself tell people to buy and hold, and to not try and time markets. So people aren’t supposed to daytrade the markets (hence your frequent chiding comments about traders) yet they are not supposed to buy and hold (or they are just dopes).
So clearly, your audience is supposed to time markets perfectly for big long term swings to catch the major moves. Oh, and buy the right etfs while they’re at it. All while holding down their regular jobs which usually have nothing to do with the markets. C’mon people, catch up!!

Day traders court short-term risk, buy-and-holders define long-term risk. Smart investors establish target weightings for assets in a balanced portfolio and rebalance as prices change. That way you always buy low and sell high. And if you don’t have time, you hire somebody smart to do it. How hard is that? — Garth
So  if he is now trading with other people's money,  rebalancing portfolios, he wouldn't still make the same mistake twice (way more actually) many years later? After all, one definition of an idiot is someone who does not learn from repeated mistakes.  So what was he writing in 2008/2009, some 20 years later?  Had he learned the lessons a successful daytrader needs to learn very quickly, to survive?  
“We’ve had a crash. America has crashed, stock markets crashed, Wall Street crash, real estate crashed and the global economy crashed,” he says of the events of the fall. “The world as we’ve known it is gone.
You are not going to get credit cards in the mail, you are not going to get lines of credit easily. Those days are gone. The question now is are we going into a bad recession, are we going into a depression?”
Turner believes Canada’s gross domestic product will plunge five to eight per cent from the beginning of the recession, which he believes began after Labour Day, to the end, which he says won’t come until the spring of 2010.
As well, he expects housing prices will plunge another 30 per cent next year - on top of the 11 per cent drop so far this year. For the first time since the Dirty Thirties, Turner expects many Canadians will wind up owing more on their homes than what their home is worth, particularly those who purchased in the last two years with little down payment.
That’s not a depression, as he sees it, but pretty darn close.
Nope, faked out again, just like every other daytrading loser.  Fear and Greed are hugely powerful human emotions, and (not only) idiots usually find it very hard not to be scared at the bottom, and are way too confident at the top. 

That's how it works, that's how "The Market" takes your money

Turner claims to be a "contrarian investor" but closer examination reveals that he actually just flips and flops on the reactive side of the market his whole career, jumping onto every latest thing that's going up, just like the rest of the investing "Herd" who get systematically sheared at regular intervals.  

Turner is attempting to claim recognition from one potentially (maybe) correct call on Canadian Housing, and align that with his financial advice about the future, having been previously blindsided by virtually every bursting bubble you can name for the past 14 years.

Hopefully he was a better politician than his "Financial Guru" record shows, because Garth Turner is neither smarter than the markets, NOR any single consistently successful daytrader


  1. Interesting site but does anybody remember that he was CANADA'S FINANCE MINISTER for a short time.Yo.He also wrote a book extolling the virtue of borrowing money on your home to give to a mutual fund salesman to manage.That worked out fabulously too.

    1. there is a place for that ideal but only for those who understand the risks and have the time frame to invest like that for most of us this is not a way to invest our money i consider the idea dumb especially when he complains canadians are carrying to much debt