The Illusion of Economic Theories - the Real Lesson of 2008

Over the past 12 to 18 months we have seen the mass destruction of a lot of institutional and individual wealth. Many - even most - of our cherished theories of free-market capitalism have been questioned or have been revealed as basically wrong.
Many on the right are saying that much of what has gone wrong over these 18 months is the responsibility of the former Chairman of the Federal Reserve, Alan Greenspan. In some ways, I can understand this view; however, many of these individuals are the same individuals who only four to five years ago were saying how great a Federal Reserve Chairman Greenspan was!
I was listening to a financial podcast by Andrew Horowitz - The Disciplined Investor. It’s highly informative and interesting and I would recommend the podcast to anybody who is interested in how the stock market really works and in ways of protecting their money. In a recent week’s episode, Horowitz interviewed Peter Schiff, President of Euro Pacific Capital. Peter is a well-known and very popular TV financial commentator. His nickname is Dr. Doom. Peter was one of the few so-called financial experts who predicted the housing bust and its consequences to the American economy.
You can see a famous, or should I say notorious, speech Peter Schiff did in front of the Western Regional Mortgage Bankers Association Meeting in November 2006 on YouTube. In this speech, he predicts -- in front of a hostile audience -- the coming collapse of the U.S. housing market.
Spreading (Saying 'bye' to) My Investment

I have always admired Peter, mostly connected to this speech. It takes real intellectual guts to publicly swim against prevailing popular views.
I personally decided to invest a little bit of my own money with Peter’s company, which over this past year he and his colleagues have managed to completely destroy! He has managed to reduce my principle amount invested with him by half in one year!
Luckily, I decided to place only a small amount of my savings with Peter Schiff. I would strongly advise any of you not to put all your eggs in one basket. Just look at the poor people who invested all their money with Bernard Madoff!
No, one of the basic rules of investing is, spread your money around.
I still agree with a lot of what Peter Schiff has to say; however, he is bit like a broken record, repeatedly playing the same song. Also, he doesn’t seem to believe he and his team should protect their clients’ money using options strategies, diversification and other professional tools. I have recently felt like sending Peter a copy of Andrew Horowitz’s book, The Disciplined Investor Essential Strategies for Success.