Recommendations regarding Lyn Alden's site?

OldShooter said:
So you'd be comfortable getting medical treatment from a doctor who flunked out of medical school, flying with a pilot who had never had any flight traiing, and going into court with a criminal defense lawyer who had never been to law school and had never tried a case?

My attitude is different. In the cacophony of ideas, my first move is to look at credentials.
Click to expand...

It seems we disagree on this approach. Credentials simply mean that someone [usually an educational institution, but not always] has approved, or is willing to vouch for, a person's knowledge of a particular subject.

People who realize this can, and sometimes do, spout the party line long enough to get the credentials--and then they do what they want, and use the credentials as a shield.

i.e. They commit a logical fallacy--or run a total con--and then when someone objects, they take the attitude "you can't criticize me because I have a degree in X and you don't, and plus, millions of people have bought my book." But the credentials and the book and the TV appearances and all the supposed 'expertise' merely serve in support of the con.

Moreover, every group of people has a blind spot. Even a group of Nobel-Prize winners can be stunned by some revolutionary new finding. It's happened before, and it'll happen again. Einstein, for example, revolutionized the entire field of physics. By definition, he therefore had insight that previous experts lacked.

In short, credentials can be abused. Or meaningless. Or both.

In my own field, there was such a tidal wave of nonsense by well-intentioned people that I left the field. Very few people actually knew what the heck they were talking about, and then they acted offended when someone points out a logical flaw, or even a contradictory fact that's well-established! I suppose these people believe their egos are more important than reality.

In general, your strategy of listening to experts is probably a good approach. Credentials are typically going to be a decent guide to finding actual experts in a given area.

But, of course, there's no guarantee that those credentialed experts are honest, or even competent. The only guarantee is that they've jumped through hoops that somebody else set up.

(Where relevant I have also found https://brokercheck.finra.org/ to be useful. More "authority," I guess.)
Click to expand...

Actually, FINRA is a self-regulatory body: https://en.wikipedia.org/wiki/Financial_Industry_Regulatory_Authority
The financial industry would rather throw a few hundred million per year into FINRA than face the teeth of an empowered SEC.

I recall reading some years ago that, between SEC and the self-regulatory body, total fines levied against financial companies have decreased since 2007, when FINRA replaced NASD. Of course, I can't locate that source now.

According to that now un-findable source, FINRA is basically a strategy to keep the SEC at arm's length. And according to that source, it's working.

That doesn't necessarily mean FINRA is bad. But I'm not sure I'd use that as a guide to choosing a good advisor; only as a way to weed out fraudulent ones. If looking for a financial advisor, I'd consider a CFP designation as much more meaningful. Still not a guarantee of competence, but probably the best credential in the financial world.

A counter argument here might be to observe that nobody can predict the future anyway, so it is basically a bunch of chattering monkeys whose qualifications are irrelevant. So then this woman is as good as any other.
Click to expand...

Quite right--I don't trust anybody's predictions of the future. That includes my own.

But I can educate myself about what's happened in the past, and what's happening now. That's all I'm trying to accomplish here--I want to acquire information.

Others have also said that they're impressed by her economic analysis, so it seems that I'm not alone in thinking it's worthwhile as one data point among many.

Your observations have been most helpful in clarifying my own thinking, OldShooter. One tends to learn more from debate than from getting nothing but nods and agreement. So thanks! :)
 
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creekstone said:
I looked at her site and the going rate for the newsletter is $199/yr. Did you get a discount or has her rate increased?
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I think it was discounted when she first launched it. I can't remember if that was for a set time or not. Guess I'll find out at renewal!
 
I was subscribed to her paid newsletter for 2 years (2020, 2021). She is a very convincing writer and, as a result, I lost a lot of money on her stock picks. She is a good analyst (I always enjoyed reading her market analysis) but a terrible stock picker. Her portfolios underperformed all major indexes/benchmarks and her "12 best stocks" portfolio is a joke, when the market was up over 20% in 2021, many of her portfolios were in the red. What was really upsetting me is her attitude, when things were not happening according to her "predictions" she would pick some phrases from her past newsletters to justify her position and to prove that she "predicted" this scenario.
 
Even though the quoted comments below are a year old, I feel like they're worth a reply.

ZachTB said:
Credentials simply mean that someone [usually an educational institution, but not always] has approved, or is willing to vouch for, a person's knowledge of a particular subject.
[...]
Moreover, every group of people has a blind spot. Even a group of Nobel-Prize winners can be stunned by some revolutionary new finding. It's happened before, and it'll happen again. Einstein, for example, revolutionized the entire field of physics. By definition, he therefore had insight that previous experts lacked.
[...]
In general, your strategy of listening to experts is probably a good approach. Credentials are typically going to be a decent guide to finding actual experts in a given area.

But, of course, there's no guarantee that those credentialed experts are honest, or even competent. The only guarantee is that they've jumped through hoops that somebody else set up.
Click to expand...

Although much of what's being said here is essentially true, the problem with it is that there is no way to know in advance who the next un-credentialed revolutionary will be, until they actually demonstrate—in a open, verifiable, concrete manner—their revolutionary expertise.

The world is absolutely filled with un-credentialed financial prognosticators who purport to have unique insights into the markets, despite having little or no formal training or track record. Sure, one of them could be the real deal and go on to become the next Warren Buffet, or even better. But how can you possibly know which one it will be in advance?

Your reference to Einstein is a false analogy, because it equates knowing after the fact that someone was a revolutionary to the possibility of knowing ahead of time that a particular person will be one.

Since none of us is clairvoyant, relying on credentials is usually the best we can do to help ensure that we are getting intelligent, well-reasoned advice from a trained professional. And credentials coupled with a good track record of performance is even better. I'll take that any day over trying to pick a winning lottery ticket in the form of an un-credentialed advisor with little or no track record.
 
I have always been very unconvinced that Alden / Alden Schwartz is what she claims to be.

edit: Oh, this thread has been revived after almost a year? Well, I felt that way then, too.
 
In Germany alone we have more than 1000 authors of market news letters.
Each town with more than 10,000 citizens is having or used to have its own investment club + news letter.
Each publisher is having its audience.
Do we get anything for visiting and assessing her webpage?
 
I like macro-economics and I think she’s effing brilliant at explaining the movement of various asset classes (not omnipotent at predicting it). I always learn something new from her free monthly newsletter and when she’s interviewed for a podcast.

Now, carry on the snobbish echo chamber of “Nobody knows nuthin” while I go for a walk and finish listening to one of the more highly talented researchers and educators I’ve encountered, just for the sheer enjoyment of it.
 
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markrub said:
I was subscribed to her paid newsletter for 2 years (2020, 2021). She is a very convincing writer and, as a result, I lost a lot of money on her stock picks. She is a good analyst (I always enjoyed reading her market analysis) but a terrible stock picker. Her portfolios underperformed all major indexes/benchmarks and her "12 best stocks" portfolio is a joke, when the market was up over 20% in 2021, many of her portfolios were in the red. What was really upsetting me is her attitude, when things were not happening according to her "predictions" she would pick some phrases from her past newsletters to justify her position and to prove that she "predicted" this scenario.
Click to expand...

Hmm...all-too-common, unfortunately. This is why (as I wrote earlier) I'm slow to act. That habit has helped me avoid mistakes.

I agree that she's a convincing writer. Sorry to hear that your trades didn't work out well. :(
 
"“The only way to make money with a newsletter is by selling one.” -- Malcolm Forbes
 
Sojourner said:
Even though the quoted comments below are a year old, I feel like they're worth a reply.



Although much of what's being said here is essentially true, the problem with it is that there is no way to know in advance who the next un-credentialed revolutionary will be, until they actually demonstrate—in a open, verifiable, concrete manner—their revolutionary expertise.

The world is absolutely filled with un-credentialed financial prognosticators who purport to have unique insights into the markets, despite having little or no formal training or track record. Sure, one of them could be the real deal and go on to become the next Warren Buffet, or even better. But how can you possibly know which one it will be in advance?

Your reference to Einstein is a false analogy, because it equates knowing after the fact that someone was a revolutionary to the possibility of knowing ahead of time that a particular person will be one.

Since none of us is clairvoyant, relying on credentials is usually the best we can do to help ensure that we are getting intelligent, well-reasoned advice from a trained professional. And credentials coupled with a good track record of performance is even better. I'll take that any day over trying to pick a winning lottery ticket in the form of an un-credentialed advisor with little or no track record.
Click to expand...

Thanks, Sojourner! I agree that it's basically impossible to know in advance--which is why I'm slow to act (as I said in a previous post) and sought the advice of people on this forum.

I find Alden's work convincing, especially the post on the petrodollar system at https://www.lynalden.com/fraying-petrodollar-system/. But since I'm aware that I'm a rank amateur, I figured it would be better to seek the input of those with more experience and expertise. Maybe she's completely wrong, and I don't know enough to realize it!

I don't think the Einstein analogy is flawed, because I'm not trying to assert that Alden (or anyone else) is some sort of 'Einstein' who's here to revolutionize our understanding of finance. In that post, I was simply debating the merits of relying on credentials.

Note that, unlike Einstein, Alden appears to have no particular credentials in the field about which she's writing. Her only apparent qualification is the logic of her arguments--which can, of course, be 1) illusory, or 2) self-taught from economics/history books. In this particular instance, it's unclear which is the case.

While her lack of a degree in finance or economics doesn't necessarily scare me off, it does give me pause. On the other hand, there is also a long history of charlatans with economics degrees, going back to John Law in the early 1700s (and, I'm sure, much further back than that).

Economist Noah Smith explains, essentially, that economists love to argue even though none of them seem to have the whole picture--or, indeed, to be able to agree on much of anything: https://www.theatlantic.com/business/archive/2013/06/should-we-trust-economists/276497/

After reading that Atlantic article, I'm reminded of the Dunning-Kruger effect. So there may not actually be a good answer to my initial question of whether she's trustworthy.

Essentially, what I was originally interested in was an analysis of her facts
and logic, especially by someone more qualified than me (which is probably just about anybody on this board!!!).

If I were to rely on credentials, I'd need to verify the credentials of the people posting on this board, to determine if that person is qualified to evaluate Alden's credentials! And how about the schools and the professors who awarded these credentials? Who determined that they are qualified to judge someone else's understanding of such matters? And for that matter, how well have these various universities managed their respective endowments? How about its economics and finance professors; how well have their investments done? And on and on, down a never-ending rabbit hole...
 
ZachTB said:
... it's basically impossible to know in advance ...
Click to expand...
There is at least 70 years of academic research and statistical studies that confirm the fact that the best approximation to the market's behavior is that it is random. There are many references; one of the best recent (May 2021) ones is the updated edition of "Winning the Loser's Game" by Charles Ellis.

In a random environment with a very large pool of chattering monkeys making predictions two things are true: (1) No matter what happens, a small number of the monkeys will have predicted it. (2) The randomness of the market makes it impossible to know in advance which one of them will be the genius monkey.

Accepting the concept that the market is random can be a heavy lift for an individual. It just seems so counterintuitive. But the data doesn't lie. Upton Sinclair explained many years ago why investment professionals do not accept this: "It is difficult to get a man to understand something when his salary depends upon his not understanding it.”
 
Thanks for all your comments, everyone! Here's a follow-up, approximately 1 year and 3 months after I started this thread:


I've read numerous books on economics, investing, and personal finance, including:
-Bogle's Clash of the Cultures
-Malkiel's A Random Walk Down Wall Street 11th edition (as suggested by Onward, earlier in this thread)
-Your Money or Your Life
-New Confessions of an Economic Hit Man
-Debt: The First 5000 Years
-When Genius Failed: The Rise and Fall of Long-Term Capital Management
-The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, and
-The Changing World Order by Ray Dalio.

I've read some other books as well, but I don't recall them right now.

I suppose my initial question was really, in essence: can anybody prove she's a fraud? Or demonstrate that she isn't a fraud?

In the time since I posted this question, the numerous books I've read have given me additional understanding of the matter. It leads me to believe that my initial question can't really be answered.

It seems that NOBODY understands economics, since it's a) extremely complex, and b) too intertwined with political decisions made in particular contexts and situations.

People can point to historical situations to support almost ANY claim. Such as:
-Lowering taxes promotes economic growth. Just look at Country X in 1780!
Except when lowering taxes led to a recession in Country Y in 1327.*
-Countries on the gold standard enjoy greater prosperity and stability. Just look at Country A, from 1600-1732!
Except Country B, from 1578 to 1832, had a fiat currency and enjoyed even more prosperity and stability, over a longer timeframe.*

*I made up all of these dates and so forth. But you can certainly find arguments like this over every conceivable macroeconomic topic.

And so on, and so on...it's possible to find historical examples to support nearly any claim. So, when it comes to macroeconomics, it seems that everybody has an ideological axe to grind, and nobody has the full picture.

I think this ancient piece of wisdom is relevant here: https://en.wikipedia.org/wiki/Blind_men_and_an_elephant

I haven't made any trades based on Alden's recommendations, nor do I plan to do so. So my curiosity about Alden is mainly academic, I suppose.

For my own portfolio, I use index funds. My 401k, through Fidelity, is very simple: 50% US Stock Index Fund, 45% International Stock Index Fund, and 5% US Bond Index Fund.
I have another account with Vanguard, in which I hold the following: mostly VTSAX (US index) and VTIAX (international index). I also have small positions in VSIAX for a dose of US value stocks, VTRIX for int'l value stocks, and VEMAX for emerging market stocks. For my approx. 10% in bonds, I use VBTLX. I also have a fair chunk of funds in VGSLX, held in a Roth IRA so I'm not hit with a nasty surprise at tax time.

It seems to me that Alden is a more active trader, with lots of individual securities. For better or for worse, that's not my own preferred approach.
 
OldShooter said:
There is at least 70 years of academic research and statistical studies that confirm the fact that the best approximation to the market's behavior is that it is random. There are many references; one of the best recent (May 2021) ones is the updated edition of "Winning the Loser's Game" by Charles Ellis.

In a random environment with a very large pool of chattering monkeys making predictions two things are true: (1) No matter what happens, a small number of the monkeys will have predicted it. (2) The randomness of the market makes it impossible to know in advance which one of them will be the genius monkey.

Accepting the concept that the market is random can be a heavy lift for an individual. It just seems so counterintuitive. But the data doesn't lie. Upton Sinclair explained many years ago why investment professionals do not accept this: "It is difficult to get a man to understand something when his salary depends upon his not understanding it.”
Click to expand...

I'm in the same boat as you, OldShooter, and my own holdings reflect that. The market appears to be fairly efficient, in aggregate and over the long-term. I don't have any debt, which makes me more robust (or "Antifragile," as Taleb would put it) against unusual or 'Black Swan'-type events (such as COVID).

I keep doing research, though, because I don't fully trust anyone or anything. Economic history is as old as human society, and the past ~100 years for which we have fairly solid data is just a blip compared to the thousands of years of human civilization. So I keep looking for more information and additional perspectives, in hope of gaining better understanding.

I'm probably chasing the wind here. But hey, knowledge is a worthwhile pursuit anyway. Right? :)
 
Markola said:
ZachTB: And as for John Maynard Keynes himself? No economics degree.
Click to expand...

Didn't know that, thanks Markola!

I know that, today, there remain adherents of Keynes' perspective. And, of course, there are also adherents of von Mises' perspective, and Hayek's perspective...and oftentimes, they're all ready to strangle one another!
 
ZachTB said:
Thanks for all your comments, everyone! Here's a follow-up, approximately 1 year and 3 months after I started this thread:


I've read numerous books on economics, investing, and personal finance, including:
-Bogle's Clash of the Cultures
-Malkiel's A Random Walk Down Wall Street 11th edition (as suggested by Onward, earlier in this thread)
-Your Money or Your Life
-New Confessions of an Economic Hit Man
-Debt: The First 5000 Years
-When Genius Failed: The Rise and Fall of Long-Term Capital Management
-The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, and
-The Changing World Order by Ray Dalio.

I've read some other books as well, but I don't recall them right now.

I suppose my initial question was really, in essence: can anybody prove she's a fraud? Or demonstrate that she isn't a fraud?

In the time since I posted this question, the numerous books I've read have given me additional understanding of the matter. It leads me to believe that my initial question can't really be answered.

It seems that NOBODY understands economics, since it's a) extremely complex, and b) too intertwined with political decisions made in particular contexts and situations.

People can point to historical situations to support almost ANY claim. Such as:
-Lowering taxes promotes economic growth. Just look at Country X in 1780!
Except when lowering taxes led to a recession in Country Y in 1327.*
-Countries on the gold standard enjoy greater prosperity and stability. Just look at Country A, from 1600-1732!
Except Country B, from 1578 to 1832, had a fiat currency and enjoyed even more prosperity and stability, over a longer timeframe.*

*I made up all of these dates and so forth. But you can certainly find arguments like this over every conceivable macroeconomic topic.

And so on, and so on...it's possible to find historical examples to support nearly any claim. So, when it comes to macroeconomics, it seems that everybody has an ideological axe to grind, and nobody has the full picture.

I think this ancient piece of wisdom is relevant here: https://en.wikipedia.org/wiki/Blind_men_and_an_elephant

I haven't made any trades based on Alden's recommendations, nor do I plan to do so. So my curiosity about Alden is mainly academic, I suppose.

For my own portfolio, I use index funds. My 401k, through Fidelity, is very simple: 50% US Stock Index Fund, 45% International Stock Index Fund, and 5% US Bond Index Fund.
I have another account with Vanguard, in which I hold the following: mostly VTSAX (US index) and VTIAX (international index). I also have small positions in VSIAX for a dose of US value stocks, VTRIX for int'l value stocks, and VEMAX for emerging market stocks. For my approx. 10% in bonds, I use VBTLX. I also have a fair chunk of funds in VGSLX, held in a Roth IRA so I'm not hit with a nasty surprise at tax time.

It seems to me that Alden is a more active trader, with lots of individual securities. For better or for worse, that's not my own preferred approach.
Click to expand...

Lyn is one of the best macro people out there. Her podcast a few months ago on macro voices was incredible

https://podcasts.apple.com/us/podcast/macro-voices/id1079172742?i=1000542996826


Her stock picking service. Less so.
 
ZachTB said:
Thanks for all your comments, everyone! Here's a follow-up, approximately 1 year and 3 months after I started this thread:


I've read numerous books on economics, investing, and personal finance, including:
-Bogle's Clash of the Cultures
-Malkiel's A Random Walk Down Wall Street 11th edition (as suggested by Onward, earlier in this thread)
-Your Money or Your Life
-New Confessions of an Economic Hit Man
-Debt: The First 5000 Years
-When Genius Failed: The Rise and Fall of Long-Term Capital Management
-The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, and
-The Changing World Order by Ray Dalio.

I've read some other books as well, but I don't recall them right now.

I suppose my initial question was really, in essence: can anybody prove she's a fraud? Or demonstrate that she isn't a fraud?

In the time since I posted this question, the numerous books I've read have given me additional understanding of the matter. It leads me to believe that my initial question can't really be answered.

It seems that NOBODY understands economics, since it's a) extremely complex, and b) too intertwined with political decisions made in particular contexts and situations.

People can point to historical situations to support almost ANY claim. Such as:
-Lowering taxes promotes economic growth. Just look at Country X in 1780!
Except when lowering taxes led to a recession in Country Y in 1327.*
-Countries on the gold standard enjoy greater prosperity and stability. Just look at Country A, from 1600-1732!
Except Country B, from 1578 to 1832, had a fiat currency and enjoyed even more prosperity and stability, over a longer timeframe.*

*I made up all of these dates and so forth. But you can certainly find arguments like this over every conceivable macroeconomic topic.

And so on, and so on...it's possible to find historical examples to support nearly any claim. So, when it comes to macroeconomics, it seems that everybody has an ideological axe to grind, and nobody has the full picture.

I think this ancient piece of wisdom is relevant here: https://en.wikipedia.org/wiki/Blind_men_and_an_elephant

I haven't made any trades based on Alden's recommendations, nor do I plan to do so. So my curiosity about Alden is mainly academic, I suppose.

For my own portfolio, I use index funds. My 401k, through Fidelity, is very simple: 50% US Stock Index Fund, 45% International Stock Index Fund, and 5% US Bond Index Fund.
I have another account with Vanguard, in which I hold the following: mostly VTSAX (US index) and VTIAX (international index). I also have small positions in VSIAX for a dose of US value stocks, VTRIX for int'l value stocks, and VEMAX for emerging market stocks. For my approx. 10% in bonds, I use VBTLX. I also have a fair chunk of funds in VGSLX, held in a Roth IRA so I'm not hit with a nasty surprise at tax time.

It seems to me that Alden is a more active trader, with lots of individual securities. For better or for worse, that's not my own preferred approach.
Click to expand...
You're more a less a subscriber to the philosophy of Bogle, Bernstein, and many others. You're a passive indexer! And you've found the techniques of great investors like me -- VGSLX in a Roth-IRA account...

You've provided a very good analysis of potential investment advisers, like the topic of the thread. I've never paid for a newsletter since I read a wide variety of opinions, and don't need actionable advice, since I am also almost 100% indexer. We play generate-some-spending with a 15% portion of our pie.

As you said, you didn't need the LA advice either, and are looking for understanding about the economy and maybe the stock market. Well, that really narrows it down!

There have been several threads on favorite books, favorite podcasts and favorite reading sites for investors. This is the spray and pray approach. You don't get a nice sip from the garden hose, it's full on with the fire hose!
 
ZachTB said:
Thanks for all your comments, everyone! Here's a follow-up, approximately 1 year and 3 months after I started this thread:
....
I suppose my initial question was really, in essence: can anybody prove she's a fraud? Or demonstrate that she isn't a fraud?...
Click to expand...

Interesting thread, and good to see it resurrected after a year.

I'll assume she is not a fraud (just because I'm such an optimist!), but it really doesn't matter. She could be 100% sincere, hard working, intelligent, insightful, and interesting to listen to and learn from - and still not be any good at adding value to your portfolio (which appears to be the case, at least based on the results we've been told of the past year).

ZachTB said:
.... It seems that NOBODY understands economics,....
Click to expand...

I'm going to disagree with this, or at least say it is irrelevant to the subject of adding value to your portfolio (beyond the small amount of knowledge required to select an AA and buy a a few broad based index funds).

One can have a very good understanding of economics. One can have exceptional insight into evaluating the financials and market position of a company, including understanding the products in their pipeline, what's getting outdated, what their competition is up to, their liabilities, etc. But then we run into the paradox:

All of the above (if legally obtained), is based on public knowledge. And "the crowd" has set a current value for that stock. So our hard working newsletter writer might be 100% correct on the observations made. But two things must happen - 1) those expectations are not already "baked in" to the current stock price, and 2) The future doesn't contain a downward surprise.

IOW, that stock has to do better than expectations, as the expectations (of the broad market) are already built in. Expecting something to do better than expectations is the paradox.

If someone can regularly identify undervalued stocks (and enough of them to stay invested and diversified), then yes, they could profit above and beyond the broad market. But as OldShooter points out time and time again, those seem to be few and far between, track records are not reliable, and identifying them ahead of time is pretty close to the stock picking paradox I mentioned.

-ERD50
 
Lynn Alden is very good at explaining macro events. But a lot of that info can be gathered elsewhere. Maybe that's something she does....gather facts and present them in an orderly and understandable fashion?

But, she has a terrible record at picking stocks, which is a crap shoot anyway.

For free, you can read her macro articles on Seeking Alpha.
 
I don’t know why she, or anyone, attempts to pick stocks. People like to gamble (see the Covered Calls and Naked Puts thread, and the Beat Boho stock day trading on Robin Hood thread. And there’s even a thread pondering how best to invest in the nuclear industry, LOL.). Are all of those gamblers on the Forum disqualified from making other kinds of comments? No. Maybe she likes gambling and people will pay her for her gambling tips. Market timing might be provably dumb but it’s hardly unusual.

Regardless, she has managed to break through the usual boring stuffed suit talking heads on CNBC who are frequently, entirely wrong, to offer macro economic observation in a way that excites her younger peer group about markets. So, hats off to her, I say.
 
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