Show Notes

• Trump’s tariffs
• Hedging against uncertainty
• The flip side of restraining imports
• Optimistic, but…
• The lazy man’s way to riches
• Freedom Fest investment conference
• Alternative investments in a diversified portfolio
• Maxims of Wall Street
• Completing Ben Franklin’s autobiography

Connect With Mark Skousen

✩ Facebook – http://www.facebook.com/mskousen
✩ X – https://x.com/markskousen1
✩ LinkedIn – https://www.linkedin.com/in/MarkSkousen

Summary

Mark Skousen, Ph.D. is a nationally known investment expert, economist, university professor and author of more than 25 books. Since 1980, he has been editor in chief of Forecasts & Strategies, a popular award-winning investment newsletter. Dr. Skousen describes his personal investment philosophy, and shares how he and his wife finished Benjamin Franklin’s autobiography.

Full Transcript

Brian  

Welcome to another episode of LifeExcellence with Brian Bartes. Join me as I talk with amazing athletes, entrepreneurs, authors, entertainers and others who have achieved excellence in their chosen field, so you can learn their tools, techniques and strategies for improving performance and achieving greater success. Dr Mark Skousen is editor of “Forecasts and Strategies” and a nationally known investment expert, economist, university professor and author of more than 25 books. In 2018 Dr Skousen was awarded the inaugural Triple Crown in Economics for his work in economic theory, history and education, and is widely known as America’s economist and has been identified as one of the 20 most influential living economists. Dr Skousen earned his PhD in monetary economics at George Washington University, and he has taught economics and finance at a number of schools, including Columbia Business School, Barnard College and Chapman University, where he is currently a Presidential Fellow in the Doti-Spogli Endowed Chair of Free Enterprise. He has also been a consultant to IBM, Hutchinson Technology and other Fortune 500 companies. Dr Skousen is the producer of Freedom Fest, which bills itself as the world’s largest gathering of free minds, is a former analyst for the Central Intelligence Agency, a columnist of Forbes magazine and past president of the Foundation for Economic Education in New York. Mark has appeared on ABC, CNN, Fox News and C-span and he was a regular contributor to Larry Kudlow and company on CNBC. In honor of his work in economics, finance and management, Grantham University renamed its business school the Mark Skousen School of Business. Mark has lived in eight countries and has traveled and lectured throughout the United States and around the world. I’m super excited for our conversation, and it’s an absolute honor to have him on the show. Welcome Mark, and thanks for joining us on LifeExcellence.

Mark  

Brian, thank you. That was quite an introduction. It’s pretty lengthy. I kept saying to myself, is that me?

Brian  

Well, it’s lengthy, but I actually shortened it. I could have gone on about another five minutes. You’ve been around a long time. Mark, one of the things you’re known for is successful forecasts and strategies around geopolitical events in the stock market. Now, this is a super interesting time to have an economist on the show, because we’re recording this a little more than two months into the start of President Trump’s second term, and since things are happening really fast, it’s quite likely that we’ll see significant changes even between the things that we talk about now on the show and the time this episode drops. I’m curious, though, what have you been writing about since the 2024 presidential election in November, and what events are unfolding right now that are in alignment with some of those predictions?

Mark  

Well, two things. One is, I wrote an article – I have a free e-letter called The Skousen Cafe – in October before the election. I wrote an essay called “Trump’s Disaster Plan,” and it was about the tariffs. I want to be fair in saying that I think 80% of what Trump has been doing to reverse some of the errors of the previous administration have been positive for the country; attempts to reduce the income taxes of corporations… I mean, we were talking about maybe reducing the corporate rate to 15%, extending the personal tax cuts, the deregulation, DOGE – the efforts to remove waste and fraud in the federal government, the pressure to reduce at least, if not eliminate, the illegal, criminal activity that crosses the borders. I try to make that distinction because I believe in a liberal immigration policy and I don’t think we’re doing much of that right now. We’ve just basically closed the borders. Tourism is down, by the way, down 4%. That’s not a lot, but 4% from last year because a lot of people are afraid that they will be harassed, if you will, as foreigners coming into this country. I do have a problem on the woke culture. I’m really glad to see changes there and the transgender athletes type of situation, impinging on women’s sports that have worked so hard to have fairness in today’s world. So there are a lot of things that I like about the Trump administration, but I do think that, from an economic point of view, his dislike, for whatever reason, of foreigners, as reflected in this tariff debacle – in my opinion, because I’m a big advocate of free trade as an economist. This is one area where most economists are universally in agreement; that free trade and globalization has, on net balance, been a good thing for this country. But he’s creating a lot of problems. You mentioned my newsletter “Forecasts and Strategy,” my forecast in the January issue of my newsletter – which comes out every month and every January I do a forecast – the title of my January issue was “Threats to the Trump Bull Market.” I specifically said the first year of a presidential term is the most dangerous, the highest risk. This is the time when changes are made from the previous administration, and the adjustment period is difficult, and you can have a bear market and that’s exactly what we were having. I didn’t know exactly what it would be, and it turned out to be these tariffs that have really shaken things up a lot more than the wholesale releasing and layoffs of federal workers. I’m surprised the unemployment rate hasn’t risen much. We could see a recession. We could see stagflation, higher inflation because of the tariffs increasing the cost. A lot of people don’t want to admit it, but tariffs are taxes, and you are increasing the cost of doing business. I don’t know where you stand on this issue. You may be favorable toward Trump in his tariffs and trying to bring back manufacturing and stuff like that. I’m not in that camp. I think there’s a gradual economic development in the world that means if there’s progress, it’s… I mean, this country used to be 80% agriculture, and you go through patterns of where certain areas of the economy dominate. So it starts off with agriculture, then it’s manufacturing and industry, then it’s services, and then it’s technology and finance, and information developing the most, and so we’ve moved from the manufacturing sector. We still have a very vibrant manufacturing sector overall. But to bring back agriculture is really unnatural. We should allow other countries that are developing and have lower standards of living, we need to let them have the opportunity to grow and become prosperous as we are. So I’m not a big fan of America First doctrine. I am a big fan of making America free again, rather than necessarily making us great if that means making everyone else poor or losing their jobs. I mean, we’ve been a savior to China. The Chinese people had no hope under Mao, and they adopted capitalism. They were getting a dollar a day, and now maybe they’re getting ten dollars a day. We’ve given hope to millions of Chinese, billions of Chinese. Are we going to take that away? Labor is adjustable, so we can be retrained. We don’t have to be in manufacturing. We can be in technology and services and finance and technology, and there are a lot of things that we can do. Labor is the most flexible of all the factors of production, as I tell my students. So that’s kind of a general introduction. I’ve probably covered a lot of material but hopefully that’ll give you a sense of where I stand on these issues.

Brian  

Now it certainly does, and it’s hard to know where it’s going to land with the tariffs, because the rates that are being thrown about and then pulled back, we don’t know where that’s going to end. We can certainly, once we see where it lands, we can probably have a good idea of at least, of some of the ramifications of that.

Mark  

Brian, I should interrupt and just mention that this is one of the biggest problems, the uncertainty. I’ve already spoken to a number of business people who say almost all businesses have some kind of dealings offshore, whether it’s a publisher – I’ve had books published outside the United States, in Korea, for example. There are people who… well, take the US manufacturing of automobiles. US automobiles, 40% of the 30,000 different components and parts that make up an automobile, 40% come from outside the United States. There’s no such thing as an American made car anymore. There’s an American assembled car, but there’s not a pure American car. We all depend on imports, and those costs are going up. But the problem is that a lot of people – because there’s uncertainty and they don’t know what the tariff rate is – it’s freezing up a lot of business activity, and this is what is threatening a recession. Many shippers, for example, are postponing the shipping of products to the United States because they don’t know what the tariff is going to be when they arrive. Most trade agreements took over a year, two to three years, to do a tariff agreement, because the agreement isn’t usually just, well, free trade for both sides. That would be nice, but it’s not that way. You go through a lengthy negotiation process, it takes a lot longer than 90 days.

Brian  

Or two days. You mentioned the uncertainty and what we’ve seen, obviously, in the stock market, because of that uncertainty is a roller coaster. I think CNBC reported that there was $5 trillion in lost market share and then yesterday, I think it came back. A lot of it, maybe all of it came back, and now it’s back down again. I know you don’t have a crystal ball, Mark, but you are an investment expert. You mentioned earlier the forecasts that you share with your subscribers every January. I’m curious, even though you don’t have that crystal ball, what do you see as possibilities for the economy and for the stock market over the next, say, 12 to 24 months, and what do you recommend to your newsletter subscribers during a topsy-turvy market like this?

Mark  

Well, it’s been difficult. I sleep fairly well, so it hasn’t affected my sleeping patterns too much. But I’m sure some people are coming awake at night saying what’s going to happen tomorrow. My approach has been very diversified in terms of my portfolio, because I think we are entering a recession. I think it’s a minor recession at this point. It is interesting that just yesterday, when the president suddenly switched gears, the reason he switched gears was there was a mini-crisis developing in the bond market. The treasury bond market, interest rates were rising because there was this fear of inflation. Bond holders were fearing inflation, a stagflation type of situation, and so they were selling bonds. Yields were going up toward 5% or higher, and they were buying gold. Gold is at an all time high of over $3,000 an ounce. Now I am recommending several positions. I have five different gold stocks. I have gold itself as an investment. It’s one of the few areas that has done really well, because it’s a hedge against uncertainty, a crisis, inflation. There are a lot of factors. It’s done a lot better than Bitcoin, to be honest with you, the Bitcoin has not held up as an inflation hedge like people claimed it would be so we’re going back to the barbarous relic of gold. Benson, the treasury secretary, rushed into the Oval Office and said, look, the bond market is sending us a clear message that we need to back off, that we’re rushing this too far, too fast. So the President paused for 90 days, even though he said our policies are permanent and they won’t be changed. I understand his strategy and negotiations and that sort of thing, but this is developing into a real crisis. I’m hopeful the President will be more pragmatic in his attitude. He’s basically wrong about protectionism and trade and the trade deficits and so forth. These are not problems that really are that serious. The train left 40, 50 years ago, with the rust belt and we now make automobiles around the world. You’re not going to change that. You’re not going to be able to bring manufacturing, that’s an unnatural decision. Yes, there are going to be some companies coming back and producing; already BMW and Toyota and other producers come here and assemble their cars. I lived in Latin America, I’ve lived in the Bahamas, where they’ve all pursued import substitution rules, where they require you to make the product in their own country. I lived in Venezuela for a year, and they required Buicks to be built in Venezuela. You could buy an American Buick, but it cost three times more because they had a 300% tariff on American made Buick. So you could buy a Venezuelan Buick. Well, the Venezuelan Buick was in the shop all the time. It was a real problem. It just wasn’t built as well as it was in the United States. So I’ve seen these kind of experiments in protectionism. Argentina is a classic example. Argentina went downhill under Juan Perón because of protectionism. So we need to be very careful about how we’re going in this direction, which has historically been proven to be a big mistake. I would rather see Trump promote exports rather than restrain imports. Asia… if you look at Korea, you look at Japan, Taiwan, Hong Kong, Singapore, all of these countries had a pro-export policy. They never restricted imports, hardly at all. They just said let’s see if we can produce products that we can sell to the United States, into Europe and to Australia, let’s see if we can do that. They would invite foreign capital into their countries in order to do this; this is the true model of economic growth. It’s not to restrain imports, because when you restrain imports, you end up restraining exports. Imports dropped 20% last month. Now that may not seem like a lot, but if that trend continues that means you’re going to have fewer exports as well, because the focus is on imports and it should be on exports. So that would be my advice if I were speaking to President Trump, and of course, I know a lot of the people in this – the supply siders and so forth – who are close to President Trump, and he’s pretty much made up his mind that he wants to have a big border around the United States. We’re a great country, but you can’t… the toothpaste is out of the tube, my friend, and it’s really hard to put it back. He’s trying to put it back. Or it’s Humpty Dumpty who’s fallen off. But it’s an artificial crisis. It’s a self-inflicted, manufactured crisis. Look, illegal immigration was a problem, fentanyl and drugs that’s a problem, but goods and services, iPhones being made in China, is that really a problem? I don’t think so.

Brian  

Well, it just so happens that we’re meeting during a very tumultuous time, but I’m interested in talking more about your long term general investment philosophy. Whatever happens now, we’ll get through it. We’ve gotten through other crises. This might be different than anything I’ve experienced in my lifetime, or what you’ve experienced in your lifetime, but I do believe that the United States is a resilient country, and we’ll get through it, either because or in spite of decisions we make. Mark, you’ve been involved in investing for close to 50 years now. I guess you started the award winning newsletter that we talked about, “Forecasts and Strategies,” in 1980 or so. That was 45 years ago, and you’ve experienced long periods of prosperity as well as a few downturns; this might end up being yet another one of them. I’m curious, how do you describe your general investment philosophy, and what’s the objective that you’re looking to achieve long term, both for your own portfolio and also for your subscribers?

Mark  

Well, I tend to be a long term investor and get through these things and tend to be optimistic, as you are. I’ve written a book called “The Maxims of Wall Street,” which has a lot of quotes about optimism versus pessimism and the gold bugs versus the Warren Buffett type that buy and hold for the long term. I’ve also written a book called “Investing in One Lesson,” and the one lesson is Wall Street exaggerates everything; the business of investing is not the same as investing in a business. So generally speaking, I tend to be an optimist. But if you look at a year by year chart of the stock market, the S&P 500, it looks volatile. It goes up and down. The stock market goes up and down like a yo-yo. But if you go long term and look at cumulative, it looks really stable, and it looks like it always makes a comeback and moves to new highs. But let’s understand that there’s nothing automatic about a long term bull market in American exceptionalism when we have outperformed – our indexes have outperformed – 34 other countries. There was a study done in 2000 called “Triumph of the Optimist” by three British academics. They looked at 34 countries that had stock markets throughout most of the 20th century. Now notice there were no stock, no listings of country funds in Latin America, the Middle East or Africa, and only one country in Asia was covered in the 34 country study, and that was Japan. But they all had an upward trend, and they went through wars and great depressions and all of that sort of thing. So that’s really positive overall, and the US outperformed all of them; American exceptionalism. Even in the 21st century, America has outperformed all the other markets. I do like Donald Trump’s optimism, and we’re going to make America great again. He’s always speaking in an optimistic tone, which I like, but I don’t think he’s necessarily delivering on that promise. And look, we’ve gone through, for example, from 2000-2010, a whole decade was the last decade the stock market went nowhere. During that time period it went down, and when it went up at 2010 we were at the same level as we were in 2000. So you can go a fairly long period of time in kind of stagnating economy. We’re in that right now, in my opinion, and what’s going to bring us out? Well, what’s going to bring us out is entrepreneurship. It’s saving and investing. It’s controlling government spending. There are some positive things that Trump is doing in terms of deregulation and getting entrepreneurship going again, low taxes and so forth. The only fly in the ointment is this tariff idea, and it’s really unnecessary, to be honest with you. In fact, if anything, it’s a deep distraction to what we could be doing, because it is the largest thing he’s recommending. These tariffs are the largest tax increase since the beginning of World War II. These people who deny that somehow the tariff is not a tax are mistaken because it is increasing the cost. And who’s actually paying these tariffs? It’s not the foreigners when those products come in, it’s the American importer and it’s the consumer who pay these taxes, they’re the ones who write the check. So when President Trump says, isn’t this beautiful, we’re getting two billion every week, or whatever it is, I’d like him to say, hey, we’re raising taxes on the American people, this is beautiful, we’re bringing in billions of dollars into the treasury, because that’s, in essence, what he’s saying. Somehow he’s making some crazy distinction that someone else is paying these taxes and they’re not. It’s us. We’re paying them. It’s very frustrating to deal with the president who went to the Wharton School, and Jeremy Siegel, who’s the premier wizard of the Wharton from the Wharton School, he’s just shaking his head saying –  he teaches economics and finance, he’s one of the top economists at the Wharton School – Trump must have been sleeping through class, because this is his quote, “total insanity.” That’s the way Jeremy Siegel puts it. I hate to be such a downer on this, but I wish he’d move on. Work on this tax cut bill that’s sitting there struggling on Capitol Hill. What is he doing? He’s just constantly involved in 150 countries dealing with all of them who are contacting him; Mr. President, please make this change. Couldn’t he have waited until after he got the tax cut through? I mean, that’s what Steve Moore and other supply siders are saying to the President.

Brian  

How does what’s going on in Washington impact your investment strategy? Is that something that’s evolved through the years? Are you changing, going in ebbs and flows, from a strategy standpoint, personal investment strategy recommendations you’re making in your newsletter? How do you factor in the kinds of decisions that you’ve been talking about, either they’ve been made or they’re being contemplated?

Mark  

Well, first of all, it’s really hard to make money in a stagnating economy where the stock market is up one day and down the next. So I focus on what I call maybe the lazy man’s way to riches. There was a book by that title many years ago, and the idea is to have a diversified portfolio that is in the stock market, but not entirely. You’re in growth and income stocks. I have a number of stocks with high and rising dividend policies in finance, in technology, in energy, and so that cushions the fall. First of all, even though the stock market may be drifting lower, you’re getting those monthly and quarterly dividends, and that can really help you feel comfortable, and especially if you’re in a recession and these companies are still paying their dividend; they’re not cutting their dividend, they’re still paying their dividend. So yield is higher and you’re reinvesting the dividends and what have you. Plus, I always have a gold position, because we live in an era of permanent inflation since World War II. We’ve never really had a year by year decline in prices. We have prices constantly going up, sometimes faster than other times. So gold is an ultimate inflation hedge. We’ve done very well this year. Our gold stocks are up 30%-40%. I mean, how many stocks are up 30-40% now. Technology, no, biotech, maybe a few of them have. I do have one big pharma stock, a drug stock that’s up this year, up by 10%; that’s pretty good. My energy stocks are paying 4%-6% dividends, rising dividends. They’re pipeline companies. They’re the midstream, they’re not Exxon and Chevron which are down with oil prices being down. So my energy stocks have done pretty well, but my gold stocks have been the real factor in keeping us from losing too much money. In fact, I think we’re about break even for the year right now, while the stock market itself, if you look at NASDAQ and the other indexes, are down 15% or more. We’re doing pretty well, but I’ll give you a quote from the late Dick Russell who said in a bear market the winner is he who loses the least. That’s the best I think we can do, unless we want to – there are some people who use a moving average technique, charting. You’re familiar with like the 200 day average or the 39 week moving average? Well, they got out of the market last month and they’ve been in cash. Now, of course, when the market takes off like it did yesterday, they’re not in it, but it was just a one day rally that was a relief rally, so probably just as well they’re not in it, because the market dropped again today, and the problems are still with us. President Trump is not willing to admit it. Well, he says short term pain for long term gain. My feeling is we’re having a short term pain because we’re not doing the right things for long term gain, which is globalization and free trade. Now look, if this ends with all the countries adopting free trade and eliminating their tariffs, like Vietnam is recommending, and some of these other countries… Israel’s saying, hey, President Trump we’ll come in at zero tariffs. No, no, he says 10% that’s what we’re charging. He’s putting a big barrier around the United States with this 10% tariff that’s five times bigger than what we’re used to. We’re normally at 2%-3% on our tariffs, we’re almost a free trade zone. The country that has had the best performance economically for the last 50 years – guess what it is? Hong Kong. Hong Kong has had the best economic growth in 50 years. It’s now ahead of all the other countries in per capita income, at least it was until the Chinese clamped down on their country a couple years ago, and they’re a free trade zone. They have no tax on exports or imports. They don’t even tax capital gains or interest or dividends. They do have a flat tax of 16.5% income tax and they do have a big tax on real estate, it’s like 10% a year. That’s where they make most of their money to pay. But they have been a booming economy because they are open to the world, and we’ve adopted an open door policy for these many years through Republicans and Democrats. So yes, Trump is making a revolutionary change, if, in fact, he is. He wants to have a big America first, and barriers to coming into our country in terms of goods and services and immigration and so forth, I think it’s going down a very dangerous road.

Brian  

You mentioned cash and money managers who are in cash now because of the 200 day moving average. The amount of cash sitting on the sidelines in terms of total dollar value, has probably never been higher, not even close. What are your thoughts on on cash? Are you fully invested still, or are you at least considering that given the fairly decent yields available still?

Mark  

Well, I’m of the age where I have to take the RMD. Do you know what that is? (Brian:  Yes, I do.) Required Minimum Distribution. Actually, Ronald Reagan signed it in the TEFRA bill (Tax Equity and Fiscal Responsibility Act of 1982) back in 1982 to offset the tax cut of 1981 and he said he held his nose and signed it. They’ve tried to close loopholes and all that sort of thing. Robert Dole was one of the big advocates of TEFRA. In TEFRA, they require you to give back and tax a certain percent once you turn 72 or 73, something like that. I’ve reached that point so I had to go to cash. You sell that, and then you go to cash. I would say 20%-30% of my portfolio is now in cash. I have been lightening up as we’ve been going down, but overall, still, the majority of my funds are in the stock market. Because when things do turn around – and turn around where we’re sure we’ve reached the bottom  – those moving averages, it takes a while if the stock market has to go up a good 10% before you’re back in the market. So you never get out at the top and you never get into the bottom. There’s that 80% that you are able to take advantage of when you have these moving average systems, these market tiny timing systems, and they work fine when there’s a major bear market or a major bull market. But there are times year after year where the market’s really not going anywhere and you’re constantly being whipsawed. You’re in the market, you’re out of the market, you’re in the market and you’re out of market, and that can be pretty taxing as well. It’s really hard to find a free lunch now. At our Freedom Fest conference, we have two speakers, Mike Turner and Jim Woods, who both have a technical timing type of system. They’re both out of the market right now, and they’ve saved a lot of money for people and you can sleep at night knowing that your money is not going down in value, but you’re still only earning three or four percent. Now, one of them, Mike Turner, actually will short the market when it’s appropriate so he has a possibility of actually making money. He’ll be speaking at our Freedom Fest Conference, which, by the way, will be in June:  June 11-14th at the Palm Springs Convention Center in California. This is the first time we’ve had our free our annual event there, normally it’s in Las Vegas, but this year we’re having in Palm Springs so it should be really interesting. We have some pretty interesting [things], we have a whole three day investment conference there, and we’ll be discussing the Trump tariffs and these other effects on the marketplace. We’re going to be talking about gold and what’s the best place to invest there and these market timing methods. It’s going to be a lot of fun, I’m looking forward to it.

Brian  

The two gentlemen that you mentioned to our market timers, how have they performed historically against even an index fund like the S&P 500?

Mark  

Well, if you talk to them, they think they’ve really done spectacularly well, but in the case of Mike Turner – he would have to speak for himself – but he has had to change his system from time to time, because it’s hard to develop a system that is consistent all the time, and you’re constantly learning new things. So he’s had to revise his own system a number of times. Again, the same thing with the 200 day moving average that Jim Woods uses, there have been whipsaws where you’re in and out of the market, and that is frustrating, and you tend to lose money when you do that. So look, I think it’s worthwhile looking at these systems, and we recommend people put some money in it and see how it goes. It’s certainly comforting right now to put your money in that, but I’m more of a long term investor, and I go through these cycles and have to hold my subscribers’ hands. Most of them stay with me, because I’ve been around, as you say, for 45 years, and my goal is to continue writing till I reach my next Fibonacci number, if you can figure out mathematically what that is; that’s a sign I’ll be around for another 12 or 13 years.

Brian  

You mentioned alternative investments in gold specifically, and it sounds like you’re fairly heavily invested in that, but you said 30% in cash, roughly for your newsletter subscribers in what you’re recommending for them, if not the investment philosophy that you follow yourself. How heavily weighted are the alternative investments and what else is included? Is crypto part of that or are you focused on gold?

Mark  

I have crypto in there, specifically an ETF that invests in crypto and blockchain technology; they invest in companies involved with blockchain, so Coinbase is in there, MicroStrategy, which is basically investing in Bitcoin, and it’s got PayPal in there, which accepts Bitcoin and cryptocurrencies, and even has some IBM in there. So it’s a well diversified ETF. It was up pretty nicely. Now it’s down, but I think Bitcoin has a chance to rally after the event of a couple months ago where the supply becomes more difficult to to mine. If inflation comes back, there’s a good chance that Bitcoin will move to back over $100,000 and maybe even to $200,000 so that’s one of my alternative investments. I have two gold positions. I have gold itself through the ETF – GLD – and then I have a miner that has the highest profit margins of any gold mining company, it’s up 40% this year. Then I have, as an alternative energy, my pipeline companies, which pay very nice dividends, 4%-6% rising dividends. That’s been helpful. They’re about break even this year with the dividends. Then I have a financial company that pays a monthly and quarterly dividend, and the yield is currently over 8%. That company has returned 300% gain in the last five years. There are some companies that have done really well and have kept me from… again, my portfolio is basically flat this year, maybe down slightly, possibly, but nowhere near the the sell off that you’ve seen in the indexes, so I’m beating the market. That’s comforting, I think, to investors. I think they’re staying with me and when the market does return and recover, my portfolio should continue to do really well. Diversification really helps.

Mark  

You strike me as a fairly conservative guy. The alternative investments, is it reasonable to be in the 10% range on alternatives or do you feel differently about that?

Mark  

Well, let’s see. I have five positions that – if you consider energy, and I don’t know if you consider that alternative – but I do have one position in the crypto arena and blockchain, I have two positions in gold, so that’s three. I did have foreign investments in it, but I’ve removed them because of the Trump negatives regarding foreigners. I did have an investment with the Argentina fund, but that’s been going down now. It was really good. It was the best performer last year when we were in it. But this year I’ve had to drop it as well as my Brazilian iron ore firm that we were in and the copper position. I thought copper was doing really well, but unfortunately, when Trump imposed these tariffs, he’s imposing it on copper as well so my copper position, we had to drop as well. We’re down to maybe 12 positions altogether. I’m hopeful that we will get back into a bullish position, especially in technology, because we’re in a golden age of technology and AI and Internet of Things and self-driving cars; there are all kinds of dynamics going on that Elon Musk and others are involved in, that really, really could be very promising; blockchain technology. There are all of these things that I’m very, very favorable toward, but I don’t want to be like Cathie. Cathie Wood, who has done really well, and then suddenly, for the last three or four years has done very poorly. You’ve got to be careful about this whole technology field, you don’t want to be too early. 

Brian  

Yeah, she’s really missed it, at least for a time. I’m sure she’ll be back at some point. I mean, I guess it’s like every investment philosophy is going to work at some point, but…

Mark  

Timing, timing is effort, and I do admire what Warren Buffett has done. I’ve always been a fan of Warren Buffet. He built a strong cash position, as I have. He’s been selective in what investments he’s into. I do like Berkshire Hathaway. I’ve been to his anniversary. I took my son to his 50th anniversary that he had several years ago. And I’ve met Warren Buffett a number of times. I think he’s still got it, even though he’s like 94 or 95 years of age. He’s my most quoted. He really likes my book, “The Maxims of Wall Street,” which has sold 50,000 copies. He says, I really like your book, I want to steal some of the lines. I figured out why he liked it, because he’s quoted more than anybody else. One of his quotes is really good. He says the light on Wall Street can go from green to red without stopping at yellow. And of course, it’s true the other way around, right? It can go really red to green without stopping at yellow, as it did yesterday.

Brian  

I’m glad you mentioned that book. I actually wanted to ask you about two books. In addition to your newsletter, you’ve written more than 25 books on economics, personal finance, investing and history. Our time is limited today but we could probably devote an entire show to each one of those books. I did want to ask you about two, and you already covered one, “The Maxims of Wall Street,” which I love. I’m a quote junkie and I love anecdotes and adages that really capture the essence of a topic, and “The Maxims of Wall Street” certainly does in the investment area. The other book that I wanted to ask you about, and a project that I find super interesting, is Benjamin Franklin’s autobiography, which you and your wife Joanne, completed in 2006. How was it that Franklin himself didn’t finish his autobiography, and what inspired you and your wife to complete this important project?

Mark  

Well, let me just say that one of the reasons why I was attracted to Franklin is because I am actually a direct descendant of Benjamin Franklin. I don’t know if you knew that or not, but I’m a sixth generation grandson of Benjamin Franklin, admittedly through an illegitimate line at one point, which is kind of traditional for Franklin. And a couple of things we have in common:  one, we’re both left handed, so you can give me that, and we both have written. He wrote “Poor Richards Almanack,” and I wrote “The Maxims of Wall Street,” these collection of sayings. I just want to mention on “The Maxims of Wall Street” that I’ve done it in a way that people find really appealing because I do it by topic. So if you want to look up about income investing or bargain hunting or gold or what have you, it’s not just quote after quote. I break it down into various sessions, and I have some short stories and some pearls of wisdom in it and so forth. I’ll give you one great quote – and by the way, Ben Franklin, is quoted numerous times in “The Maxims of Wall Street,” – but one of my favorites is “Nothing makes the spirit fly higher than finding a bargain when you’re the buyer. Nothing can make the spirit sink deeper than finding it later a whole lot cheaper.” There’s a lot of cynicism in this book “The Maxims of Wall Street.” I went to Wiley that has published some of my books, Wiley and Company, and I said, would you like to publish this book? And they said, well, no, quote books don’t sell and gift books don’t sell, so we’ll pass on it. And I call them every Sunday, every Christmas time, and I say, well, I’m up to 50,000. I’ve sold 50,000 copies, now do you want to reconsider? [Laughter.] But anyway, on the Franklin book, again, my ancestry had me attracted to Franklin. When you read the autobiography, it ends in 1757; this is prior to him being the an agent in London, the signing of the Declaration of Independence, the American Revolution. There’s nothing in there about his eight years in France as ambassador to France. There’s nothing about the constitutional convention. Yet this book has been a best seller because it talks about how he’s gone from really the American dream of starting with nothing and ending up being very successful, and his success as a scientist and as a publisher and so forth. Then it also talks about his civic duties and that sort of thing. He really is the ideal businessman in so many ways. So I’ve been collecting the papers of Benjamin Franklin, and I noticed that… I said maybe he’s written the rest of his autobiography. He was very old when he started writing and he died before he could finish it. I thought,  in terms of the letters he’s written and his essays and stuff, they’re very autobiographical, I wonder if we can complete his autobiography in his own name and have it be something he would be happy with. So we spent a couple of years, my wife and I, going through the papers of Benjamin Franklin, and we were able to pull it together and it turned out too. It’s called “The Completed Autobiography by Benjamin Franklin.” It’s Volume II, in essence, and it’s quite a bit bigger, thicker than the original autobiography, and it was published in 2006 on the 300th anniversary. It sold so well that it sold out. But you can get used copies on Amazon and other used book websites.

Brian  

It seems like a daunting task to complete someone’s autobiography, especially someone as important as one of our founding fathers. How did you approach writing in Franklin’s voice? I know you had papers, and so I’m sure that helped tremendously. How did you make sure you were preserving and honoring his legacy? Because I’m guessing that as a direct descendant, that was something that was very important to you.

Mark  

Yeah. Franklin himself wanted one of his heirs, his children or grandchildren, to write or finish his autobiography, and his grandson, Benny, did do that. But it was more like, well, here are a couple of letters that he wrote, and here’s this article that he wrote and stuff like that. It wasn’t written in an autobiographical way that you normally would expect. So that was our task, and my wife in particular was very good. I originally compiled all of these papers that I thought were relevant, and then she interwove them into his voice in a very powerful way, and it came out really well. I will tell you though, there was one year where he didn’t do a lot of personal writing. And guess what year that was?

Brian  

1776.

Mark  

That is correct. 1776. He was so busy as the member of the Continental Congress in signing, writing, helping write the Declaration of Independence, and he was on all these committees. He went to Canada and came back and almost died and then he was made ambassador to France. He left in late 1776 so he was really busy and didn’t write a lot of letters. So I thought to myself, this isn’t going to go well if we’re writing his autobiography and we’re leaving out the most important year in US history, that’s not going to work. But here’s what happened. I found a letter that Arthur Lee, who was one of the commissioners of France with Benjamin Franklin, who wrote a long letter to Richard Henry Lee, his brother, and he said, one day Ben Franklin and I had a free evening together, and we sat down, we started reminiscing about what had happened in the last year of 1776, how it all got started, and how they ended up in France, and how the war was declared, and how it was going, and stuff like that. And in this letter, he would say, now Franklin said this, and Franklin said that, and then he said this. And I looked at this letter, and I took it, and my wife took it, and we changed “he said” to “I said” because it’s Arthur Lee saying this is what Franklin said. We put that in the book in the chapter on 1776 and it filled it out perfectly. When I was finished writing and editing this book, when we finished doing this together, I just had a feeling – it was kind of an interesting feeling – that Benjamin Franklin in the heavens was looking down on us and nodding with approval, with a smile on his face. I’ve looked back at the book, and it holds together pretty well. David McAuliffe, who wrote about the founders and so forth, he said, wow, this is real, I felt this was Franklin’s spirit through and through. So we’re very proud of this book. I’d like to see it come back in to print, because the two volumes… Regnery also published the autobiography and I wrote an introduction to that. So we have the two books together very nicely and it makes for a real nice volume. It’s just beautifully done. Now I will say that I am coming out with a new book next month in time for our Freedom Fest conference. I’ll be talking about it there, and it’s called “The Greatest American,” subtitled “History’s Most Versatile Genius.” So who do you think it is? What’s that book about? 

Brian  

Oh, my goodness, “The greatest American:  History’s Most Versatile Genius.” You’ve stumped me, Mark.

Mark  

Be free Franklin. It’s Ben Franklin’s life. (Brian:  Oh, wow.) Yeah, if you think about it, I’ve got a list of 22 different occupations that he had, in addition to being a publisher and a scientist and a military leader and an ambassador and a jokester. He had an incredible life, and that title is taken from a number of stories who say he is the greatest American in so many different ways, even in terms of slavery and stuff like that. He held slaves for a while, but at the end of his life, he was enlightened. He no longer owned slaves, and in fact, he was the president of the first Philadelphia Society to free slaves. Just a great example, as opposed to Thomas Jefferson and George Washington who held slaves throughout their lives and didn’t like slavery but didn’t have the guts to free the slaves. Franklin comes across as pretty good. Ken Burns on that special he had on Ben Franklin also gave him very high marks as the greatest American diplomat in our history. So there are a lot of accolades toward him. I like to play that game where I ask people now, who’s this about, the greatest American, history’s most versatile genius? A lot of people have said Ben Franklin. Others say Edison or Abraham Lincoln or something like that. But in terms of versatility, it’s hard to beat Franklin.

Brian  

Certainly a good choice. He was a true Renaissance man and had such a wide variety of interests.

Mark  

And by the way, he was a big free trader. Trump would not like what Ben Franklin had to say, because he said, “No nation was ever ruined by trade.”

Brian  

Mark, you know that our show is called LifeExcellence, and I ask this question of all of our guests, what does excellence mean to you?

Mark  

It means marrying a wife who can make you better and clean up the messes that you’ve made in life. My wife is a perfectionist in many ways, and she’s on my case from time to time to keep my room clean, and she makes me a better person. I think excellence has to requires working with others. It can’t be just yourself. You learn so much from others, whether it’s your spouse, your friends, your enemies. Ben Franklin said, “Learn more from your enemies than your friends.” And I think you have to be an optimist, obviously, to achieve excellence. And I think that humility is extremely important. Sir John Templeton said the most important principle to learn in the world of business and investment is humility.

Brian  

Dr Mark Skousen, thank you so much for being on the show. This has been really informative. It’s been great to meet you, and I appreciate you taking time to join us today.

Mark  

It’s been my pleasure. Thank you.

Brian  

Thanks for tuning in to LifeExcellence. Please support the show by subscribing, sharing it with others, posting about today’s show with America’s economist Dr Mark Skousen on social media and leaving a rating and review. You can also learn more about me at BrianBartes.com. Until next time, dream big dreams and make each day your masterpiece.