Daily Reckoning

[FreekBear]

Occasionally we see links on HPC to the daily reckoning. http://www.dailyreckoning.com/home.cfm?nowversion=2

Is it just me, or does it read like a pyramid scam advertising site (the 'endorsement' bits) with many of the articles written by fringe loonies and con-men?

How can I take them seriously if the first link off their front page goes to pyramid scam breakingyourmould.com?

Does anyone here know more about the folks that run the DailyR?

Are they a clued up bunch or are they just promoting FREE buy-my-crappy-investment newsletters, through Fear, Uncertainty and Doubt?

[No6]

This is a DR response in a recent email.

*** A Canadian reader asks a tough question:

"I am a regular reader of the Daily Reckoning, and I especially appreciate the moral perspective that your essays bring to the often dehumanized topics of global finance and macroeconomics. A belief in the possibility of something for nothing, whatever its guise, is at root an immoral belief that disregards the concepts of real value added and wealth creation.

Sadly, such beliefs are today widespread, as Western asset markets rise in the face of steadily decreasing productive capacity and steadily increasing consumer appetites. Kudos to Bill Bonner for drawing attention this dynamic, and for placing it in a moral context.

"I write you today with a moral, and somewhat personal, question. I read with interest in your Christmas Eve essay, "Over the Top", your humble protestations that Agora Inc. (if that is the parent entity of the Daily Reckoning) did not make the extraordinary amount of money that was apparently the subject of marketplace rumors. It reminded me of a thought that has often occurred to me as I have enjoyed previous DR missives: I wonder just how Agora earns its money, and how the firm would hold up if Bill Bonner's moral lens were turned on itself and applied to his own operation.

"As you so often phrase it, does Agora get what it deserves, or does it get what it wants through feeding at the same trough of limitless liquidity as the reckless lenders and speculators it so often criticizes?

"Some clues are available. For example, while enjoying your daily email, I am often interrupted by advertisements proposing to sell me trading systems and ideas that will deliver "jumper stocks" and triple-digit returns in days. In DR emails, notice has been given that you are looking to recruit individuals with trading experience, suggesting that Agora likely trades its own capital as well. And of

course there is Bonner and Wiggin's wonderful book, which I bought and read last year.

"None of this should be surprising to anyone, I suppose. Agora's revenue comes from a mixture of proprietary trading, advertising, book publishing, and possibly subscription newsletters or portfolio management. It is natural that Agora would be first and foremost a creature of the financial markets and publishing. The DR newsletter must be funded, and Agora clearly has skills that are highly marketable in the investment world.

"The indelicate question I would like to pose is this: How does earning money through short-term trading schemes fit into your moral universe? You wisely admit to being unable to predict the near future, but claim to have a good idea of how things should eventually resolve in the long-term. Where do the speculators (even contrarian speculators!) who advertise in your emails fit into this ideal long-term resolution?

If you are in some way a profiting participant in the financial folly you lament, what do you deserve, dear editors?

"I do not want to question the integrity of the DR newsletter. It brings a very valuable perspective, I read it free almost every day, and I imagine I would love to work at a place such as Agora Inc. I pose this question only because I think your response would help me understand my own productivity, and how, if it is a conceit to believe a nation can earn money by thinking while the rest of the world sweats, any individual can rationalize in moral terms

being no more than a thinker."

We respond:

Dear Canadian reader:

Here at the Daily Reckoning our only virtue is our humility. But we have so much of it we are sure that it makes us superior in almost every way.

Well, this extreme self-deprecation leads to an always interesting and occasionally lucrative business philosophy: since we don't know what will work...we're perfectly happy to offer customers the advice and information and opinions that they actually want.

The editors of the Daily Reckoning, for example, do not trade options...or currency futures...or stocks...or baseball cards. We can walk through the lobby of the Venetian in Las Vegas with no desire to pull a single lever. (We have other weaknesses...in abundance.)

But we're not fool enough to think we have the answers to all the world's problems...or the magic formulas to wealth. We have, in fact, only our own ideas and opinions...which we offer to you, unvarnished, and we might add - for free - every day. You may take them or leave them. Or, you may wish to try the advice and opinions of others. We have been in this business for more than a quarter of a century. We have met many, many investors with many, many different approaches to making money - options, trend following, currency hedges, IPOs, insider trading information, technical systems, charts or astrology. As near as we can tell, none of them work particularly well forever...but all of them seem to work from time to time. We recall our old friend Mark Hulbert telling us that the one of the best investment records he had ever seen was made by a service that relied on the stars for its trading signals. In another period, a top performer was one where the editor never seemed to make a trade; he merely left his followers in T-bonds. We don't know which approach will work or when it will work...but we are pleased to be able to let readers find out for themselves.

You may want to think of us as book publishers (which, in fact we are). We don't claim to know which author has the ULTIMATE TRUTH; as far as we know each of them might have a little part of it.

Our personal point of view is on display here in the Daily Reckoning every day. We are neither investors, gamblers, speculators, analysts, nor economists...but moral philosophers, merely trying to figure out how the pieces fit together...and wondering if the knee-bone really is connected to the thighbone. We make no pretense of trying to make you wealthy, dear reader. Our only hope is that we all leave these daily reckonings no poorer...perhaps a little wiser...and much humbler.