By the Grace of God

It’s dangerous to make forecasts. Especially about the future.

—Yogi Berra

Years ago, a writer from Wealth Magazine interviewed us and made the resulting article the cover story.

The interviewer didn’t know exactly what angle to take. We were either a genius or a fool, he said.

That was okay with us. We didn’t know either.

But now, Forbes editor Emily Baker-White has a less ambiguous, and thoroughly unflattering, view.

We got notice, a couple of weeks ago, that Forbes magazine wanted an interview. Our experience with the mainstream press has shown us that it rarely pays to talk to reporters. They are usually not trying to learn or understand, but to embellish a storyline that fits some existing editorial prejudice.

And the newsletter business, where we’ve spent our entire career, is always both a natural competitor to the mainstream media and an easy target for regulators. Magazines, by contrast, are ‘respectable.’ They rely on advertising from large corporate clients, and as in the case of Forbes, billionaire owners who want ‘a voice’ in public conversation. They become vanity projects, where owners show how ‘responsible’ they are — perhaps caring deeply about the planet…or about the need for more firepower…or a mixed-race workforce.

After the advent of the internet, it became very hard for traditional paper magazines to survive.

Forbes tried a number of things — including retailing and selling lots in the Colorado Rockies — but by 2014 it needed a lifeline. Then, it was bought by a China-based company and later sold to a young tech billionaire in 2023.

Getting on the internet itself, Forbes sought to boost visitor traffic by increasing the number of messages, opinions and news stories that went out under its brand. Not being too picky about what it was publishing, it hosted thousands of unsalaried contributing editors and paid them on the basis of how much traffic they generated.

This opened the door to a ‘pay to play’ editorial system which X users characterized as “one huge paid informercial for scam artists.” USA Today was harsher:

Forbes is an obvious fraud. It is not a magazine or editorial operation at all. It is just, in effect, a user comment site that allows commenters the pretense of saying they have written for Forbes. Or, even, for paid promoters to write laudatory articles for Forbes about whatever they are promoting, then to say, in further promotions, that Forbes lavishly endorses such-and-such complete baloney.

One of its most notable scam artists was Heather R. Morgan, a Forbes contributor who wrote 47 articles on cryptos. Her goal, it turned out, was not to inform readers, but to rip them off. She and her husband were arrested in 2022 for conspiring to launder $4.5 billion in stolen crypto currency.

Slipshod editorial control also has resulted in some remarkable miscues…and mis-directions…for Forbes readers.

Elizabeth Holmes and Sam Bankman-Fried, for example, were presented by Forbes as ‘dynamic, young billionaires.’ Elizabeth Holmes was named the “youngest self-made female billionaire,” by Forbes…said to be worth $4.5 billion.

Bankman-Fried, according to Forbes, was worth some $26 billion….making him the richest young man in the world.

Forbes editors did not notice or mention that they were both huge frauds. Both went to jail penniless.

Forbes peeks into the future too, but timidly…with very small print attached. It recommends mainstream companies such as Apple and Amazon etc., and then:

If you click through links [to our recommended stocks] we may earn a commission.

We are not criticizing Forbes. We are only wondering why it is criticizing us. The newsletter industry, by its nature, is quirky…often shocking. It offers ALTERNATIVE views, most of which are about the future. Each editor has his own — often outrageous, sometimes disreputable — outlook. And each dares to guess about what will happen next. Sometimes right. Sometimes wrong. And always in doubt.

Investing is always about tomorrow. Every recommendation…every analysis…every newsletter editor tries to look ahead in order to take advantage of it…or protect himself from it.

But since there is an infinite range of possible futures, it is almost a miracle that they ever get it right. And yet, they do. Newsletter track records are some of the best in the business. Our researchers and writers have followed a lot of dead-ends…but they also discovered Nvidia, Tesla, Crypto and Amazon long before Wall Street.

And that’s when it really pays off — early. The closer you get to ‘accepted, majority opinion’ — the more likely the recommendation is fully priced. The most valuable insights, therefore, are the least likely — the ones you find in newsletters…not in Forbes.

Ms. Baker-White’s ‘hit’ job on Agora shows a remarkable lack of curiosity about how and why the newsletter world works really as it does. She notices that some of our guesses do not pan out as expected. But she fails to appreciate the long odds. She even takes aim at your editor specifically — noting that he has “been selling doomsday investment advice since the advent of the internet itself.”

She sounds like there is something wrong with consistency. Your editor thought the Primary Trend turned down in 2000…and suggested a move into gold. He might have been dead wrong. It wouldn’t have been the first time. But, by the grace of God it turned out to be the safest and most profitable thing investors could have done. It would have been nice of her to mention it.

Instead, she implies that we hoodwinked old people — of whom we are now one — into foolish investments…and made money for ourselves doing so.

If so, we only wish we had done more of it.

Regards,

Bill Bonner,
For The Daily Reckoning Australia