G'day I'm far from an expert, but I do enjoy the works of those mentioned below. cheers Rod
MASTERS OF AUSTRIAN FINANCIAL ANALYSIS
Krassimir Petrov, Ph.D. 9/21/2004
In the financial world today, mainstream financial media and their web sites present a lot of news and events as economic and market analysis in their agenda to promote securities to the public. Their main audience is the mainstream investor who is expected to blindly follow their “expert” financial advice. It is only the savvy, relatively sophisticated and independently thinking investor that seeks “alternative” investment advice. From a sea of fundamental and technical analysts, gold and silver bugs, geopolitical analysts, and oracles and soothsayers, only Austrian Economists present a scientifically developed economic theory based on the general laws of human economic behavior. Only Austrian economists have been able to consistently explain historic events and “puzzles” and provide the necessary understanding for interpreting current economic developments and forecast future ones. Therefore it is not surprising that Austrian analysis has gained almost mystical reputation amongst a relatively small circle of investors; it is also not surprising that many alternative analysts claim to be “Austrian”.
It is the objective of this article to identify for the general and the sophisticated investor, as well as the financial advisor and money manager, what are in my opinion the three best contemporary investment analysts who consistently apply the Austrian economic theory for investment purposes. It is important to emphasize that these are not the Austrian economists of the more academic type, the very best of which are associated with the highly reputable Mises Institute of Austrian Economics (www.mises.org), but financial analysts who use their analytical skills to put money to work. It is my firm belief that the reader who familiarizes himself with the work of these three people will have a comprehensive understanding of the investment environment today and a solid foundation to make one’s own investment decisions in accordance with one’s personal financial affairs.
When it comes to a broad analysis of the American economy today, Jim Puplava stands out as a giant of economic analysis. His web site, www.financialsense.com, is, in my opinion, the best site on the Internet for fundamental economic analysis, as well as for various investment areas, such as precious metals, energy, and commodities in general. His “Financial Storm” series delivers Austrian analysis at its best. Careful investigation of his past analysis proves that Jim has been able to correctly predict fundamental changes in the American economy and markets, and to pinpoint the most appropriate investment themes in the changing environment. His weekly radio show Financial Sense Newshour provides in depth analysis of the economy and financial markets; more importantly, every week he interviews some of the best and brightest financial authors, investment analysts, and investment managers. I must admit that listening to all these interviews has been truly educational and most influential in forming my views of the world and the economy today. I would encourage every reader to thoroughly study his complete “Financial Storm” series and listen to all of his interviews. No doubt that this will require a tremendous amount of effort, but I guarantee that it is more than worth it. I believe that today Jim has a number of crucial analytical insights that have not been well recognized by the mainstream, not even in the “alternative” investment circles, which over time will prove absolutely correct. In other words, he penetrates the subject matter much deeper than the rest, and this is what earns him highest honors in the field.
When it comes to the American Financial and Credit Markets, the best analyst today is Doug Noland. His analysis focuses on the heart of the matter: the credit system of the United States. Only by understanding the credit system, is one properly equipped to understand all major financial markets: currency, debt, equity, commodity and real estate. His work is published on www.prudentbear.com under the series “The Credit Bubble Bulletin”. The “Bulletin” itself has two major sections: (1) a general review of credit-related sectors of the American and World credit systems, and (2) his insightful analysis of the economy and markets today. The analysis itself is of a fundamental nature and thus remains significant months and even years later. The reader is advised to visit his archive and study the last couple of years of his weekly analysis; the active reader should also consider following on an ongoing basis his regular Friday releases. He has a number of interviews with Jim Puplava, and I highly recommend that the reader pay special attention to those.
When it comes to the analysis of the world economy, whether in particular China, Argentina, Brazil, Russia, or Germany, today Marc Faber is in a league of his own. His phenomenal background in world history, in economic history, and in classical Austrian economics allows him to see the world as one integrated organism, and to identify economic and geopolitical trends well ahead of his peers. I highly recommend his book “Tomorrow’s Gold”, which in my opinion is the best investment book published in the last five years. Dr. Faber’s insightful analysis is archived on his web site www.gloomboomdoom.com, a highly recommended reading for the intelligent investor. Everyone is urged to listen to his five interviews with Jim Puplava (two of them jointly with Jim Rogers) and watch his two appearances on the “Riverside Conversations” (again with Jim Rogers). He is the only analyst who has reconciled meaningfully the still-raging inflation-deflation debate, and he elaborates it in his first interview with Jim Puplava and in his book.
I am aware of the work of many fine Austrian Investment analysts. I would expect that many Austrians might feel offended for not having been included in this review. I am sure many more fans of Austrian analysts will not appreciate that their favorite analyst has not been included either. I hope they will all understand that my goal has not been to provide a comprehensive list of all major Austrian investment analysts, but exactly the opposite: to reduce the list to those that are in my opinion the best and brightest, the crème de la crème in the field. I also expect that some readers will lose no time in communicating to me who their favorite analysts are; to them, I promise a second part of this article with a rather complete list of names based on the frequency of their suggestions. My request to them is to abstain from sending me the names of icons in the investment world, for there are plenty of books and articles on those, but only those investment analysts that base their analysis on Austrian Economics. For the general reader who wants to familiarize himself or herself with the Austrian theory, provided that they insist on only one book, I can heartily recommend Murray Rothbard’s treatise Man, Economy, and State.
