Previously, I discussed how Legg Mason’s Chief Investment Officer and fund manager of the Legg Mason Value Trust Bill Miller, went from top to bottom in just a few short years.
See here for the article on Miller.
David Tice Makes Fortune from Sheep
Right about the same time as the mutual fund industry was in dire straits, David Tice, manager of the Prudent Bear Fund (at the time) was attracting a good deal of investors. Tice’s fund was designed to take advantage of a declining stock market.
Tice knew that the best way to lure in the sheep was to become a whore for CNBC. But he couldn’t play the typical Wall Street bull market guy because this would go against everything his fund stood for.
By the time Enron and WorldCom collapsed, CNBC was ready to air a contrarian, and Tice rose to the occasion with drama, making claims that Tyco was involved in accounting fraud.
Although Tice began these rumors in 1999, CNBC wasn’t interested in hearing about it because the stock market was flying high.
Never mind that Tice was involved in what could be argued as stock manipulation by spreading false rumors and profiting from shorting shares of Tyco. After all, CNBC specializes in securities manipulation while hiding behind First Amendment rights as its cover.
Soon, Tice became the media whore CNBC wanted, as investors were hungry to hear a guy diss the stock market after investors suffered losses of trillions of dollars when the dotcom bubble popped. He played on basic human emotions and psychology.
Tice Passes the Torch to His Friend
However, Tice’s position as numero uno CNBC whore didn’t last too long because he was faced with an onslaught of new money from CNBC sheep.
As is always the case with the financial “experts” on CNBC, once Tice managed to drum up enough business via his marketing activities on the network, he simply became too busy for regular appearances. He was rolling in the dough, so he didn’t care to bother rescheduling his vacations to the French Rivera for interviews.
This gave his friend Peter Schiff room for entry. Schiff saw how easy it was to make a huge fortune pitching to the sheep who watched CNBC after seeing how Tice made out, despite the fact that his fund was a disaster.
Interestingly, Tice is a very Jewish name, as is Schiff. This was specifically why he was inducted as a media celebrity by the Jewish-run financial media.
And you wonder why the Jewish media selects its “experts?”
They are enriching members of their own tribe, ultimately at the expense of Main Street. This is a very worrisome reality that no one dares mention for fear of being labeled a “racist.”
The Performance of Tice’s Fund
So let’s take a look at Tice’s Prudent Bear Fund. But before you continue, I'd like to refresh your memory on a piece I wrote on Tice in 2009. See here.
Below is a chart showing the performance of A shares since inception.
So how does this compare with the Dow Jones Industrial Average (the results are similar when compared to the S&P 500 Index)?
As you can see, even with the collapse of the stock market in 2009, the Prudent Bear fund didn't do so great. As shown in the above chart, if you had invested in the Prudent Bear fund in 1996, you would be down by 60% as of August 19, 2012. In contrast, if you had just stuck with the Dow Jones Industrial Average or S&P 500 Index, you would be up by nearly 120%.
Remember that part of the losses in the Prudent Bear fund are due to the effect of compounding fees, which add up to a huge amount over time.
Now I will show you the results of what you would have made if you had invested in C shares of the fund at the best possible time; 1999, right when the fund was formed and just months before the Nasdaq began to collapse.
I won’t even adjust this to inflation as it would be much worse.
Despite the miserable performance of the Prudent Bear fund, Tice doesn’t need to worry about a thing. His fund was purchased by Federated in 2008 for a reported $250 million.
I suppose the only thing is takes in this world to become rich and “successful” is to live a lie and have no conscious.
And with the help of the media, you will lure thousands of suckers who fall in love with a sales pitch rather than the merits of an investment proposal.
Federated kept Tice on as an adviser since purchasing his disastrous fund for one reason and one reason only. Because the clueless investors who originally bought the fund feel for Tice, not the fund. Thus, without Tice as the spokesperson for the fund, the sheep might start to pay more attention to the fund’s performance.
Making money from stupid people has never been easier. And Tice proved this.
I knew the Prudent Bear Fund was a terrible investment choice many years ago. Yet, after watching how assets of the fund soared year after year while the performance lingered, it was then I realized just how naïve most investors are.
Instead of taking 10 minutes to review the most basic information on Tice’s fund which is shown on every financial site, sheep get sucked into the BS presented by the media. This is why they get their asses handed to them.
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