Modern Performance Art

Forbes Magazine had a recent article on "Aftershock," a book of anxiety and despair regarding the modern financial markets. The three co-authors, brothers David and Robert Wiedemer, and Cindy Spitzer (whose last book was "Sex for Grownups"), are making a lot of money by advising people to sell their homes now, cash out their life insurance policies, and dump their stocks ahead of what they predict will be 50% unemployment, a 90% stock market crash, and 100% annual inflation. Aftershock argues that a succession of bubbles (dotcom, housing) have set the country on the path to ruin.  Now Federal Reserve market "manipulation" make banana republic inflation levels inevitable starting in 2012. Their advice: Sell everything, buy gold and inflation-linked securities.

But the $800,000 or so in book royalties the authors may receive pales in comparison to the trio's ancillary businesses. David Wiedemer told Forbes Magazine the book is responsible for $100 million in assets flowing into Absolute Investment Management, a Bethesda, Md.-based money manager with whom the brothers partnered and where they are now managing directors. On top of that, 1,000 people have paid an annual fee of $399 to receive the Wiedemers' investment advice, a number that is growing faster as more people read the book.

A new book is coming but David is thinking bigger. "I'd really like to do a mutual fund," he says. (Forbes)

There is something about doomsday advice, some flame to the investor moth. Somehow even optimistic people can not stay away. They crowd in like a disaster movie. Global warming has a similar feel, the threat of chaos and the perhaps insane arrogance that regardless of the degree of disaster, we can take charge.

Sounds a lot like the hubris of certain politicians.

Years ago there was a guy named Joe Granville who was a very popular, very bearish investment adviser. At financial conferences he would come dressed as Moses or emerge from a coffin on stage. Sometimes he had animals on stage that did tricks. The Hulbert Financial Digest that reviews investment advisers' performances always rated his performance as low but I don't think Glanville was so concerned with the financial end of the performance.

He, like Barnum, knew what his audience was really interested in.