I am apparently in an internet feud with Jim Altucher. It is true that I started it by writing a blog post criticizing Altucher for questioning Buffett's motives for writing his acclaimed oped, "Stop coddling the Rich." It was not my intention to turn that blog post into a full blown feud. I even changed the title to accommodate his wishes not to be embarrassed in front of his children.
Like most of the country, I have been disgusted with the debt ceiling limit talks. When patriotic Americans like Buffett, who can influence the debate, came forward with a suggestion, I wanted to see his argument attacked on the merits not innuendo. For example, I loved Mike Arrington's brilliant analysis of Buffett's proposal on Techcrunch. Arrington argues that the rich support raising income taxes because they do not want to take a chance that the government could impose a tax on their already accumulated wealth. His expostulation convinced me that a property tax similar to Pennsylvania's might be the answer.
I read with great interest Charles Koch's opposition to Buffett's proposal in the National Review. He argued that he could allocate his wealth more efficiently than the government. Koch's reasoning gave me pause. Who can really make a case for the government's efficiency?
In the end, I could not support his contention. The Koch Brothers have donated more than $600 million to cancer research, the arts, and a private school. This is certainly generous. But I have to wonder who is going to pay for poor children's education, build roads, and prosecute crime if we do not tax?
While I do agree with Altucher that Buffett probably has an ulterior motive for urging the government to raise taxes on himself, I think he is dead wrong in suggesting that it is because it will make it easier for him to sell his holdings. His post annoyed me because it was factually inaccurate. In addition, I have always found him to be an irresponsible financial journalist.
I know many people including my mother and friend Linda that have been financially hurt by taking his advice. For a while I tracked his stock suggestions in 2010, I found that they fell more than 39% during a period of great market volatility. Very few of his suggestions were defensive in nature or were risk adjusted. A sophisticated portfolio should not be consist entirely of high fliers.
I did send him my original blog post because I wanted to understand why he kept giving out capricious stock advice even though he is losing people money. Not, as he alleges, because I was looking for readers. Over 800 people have read the original post.
Altucher's answer was one that I would expect from a feckless carnival barker, but not from an accountable financial adviser. I quote directly from his email, "As for stocks: PIP, CIGX, DNDN, GNW, and on and on have been good picks for my investors and readers (up 100s of % at some pt after article).
Altucher touted his winners and simply eradicated from memory the ones that did not perform as well. This is too "Paycheck" or "Eternal Sunshine of the Spotless Mind" for me. A professional would have sent a track record of all his recommendations or at least included some losers.
Altucher accused me of having a personal beef with him. It is absolutely not true. I feel the same way about Jim Cramer. I can not believe he is still on the air after recommending Bear Stearns right before it imploded and had to be acquired.
It is very hard to give one size all investment advice over the internet or television. Maybe commentators should not be able to ballyhoo without first encapsulating their entire track record.