Ruff’s Little Book of Big Fortunes in Gold & Silver Book Review

Ruff's Little Book of Big Fortunes in Gold & Silver
Ruff's Little Book of Big Fortunes in Gold & Silver

Ruff’s Little Book of Big Fortunes in Gold and Silver:  A Middle Class License to Print Money
By Howard Ruff
10 Finger Press 2006
122 pages.  $19.95

Ruff’s Little Book of Big Fortunes in Gold and Silver (RLB) is a rollicking roller-coaster of a book.  Like an amusement park, it’s entertaining and fun.  Employing another simile, it’s like going to a seminar where the keynote speakers are Tony Robbins, Zig Ziglar and John Hagee.  A combination of motivation, inspiration and religion.  When you’re done with it, you’ll feel electrified, empowered and galvanized – ready to go out, buy a ton of silver, and become a millionaire overnight.

You’ll feel that way because the author – Howard Ruff – is the consummate cheerleader.  He knows how to blow his own horn and energize others at the same time. Self-promoting is a word that certainly describes Howard Ruff.  Yet he pulls it off in such a way, with such style and panache, that you can’t help but like him.

In other words, RLB may not be the best book ever written about investing in gold and silver, but it’s the most sensational.

In his introduction, Ruff’s opening sentence sets the tone of the book.  “This book is deliberately designed not to be a weighty academic tome, but a small, inexpensive guide to help anyone get rich fast!”  Who can resist such an overture?

Chapter one explains why you should buy gold and silver right now.  Ruff gives what he calls the “Reader’s Digest” version of the history of money – short and sweet.  Then he states that the dollar is falling in value and that there is “a serious supply problem” as regards gold and silver.  Production and exploration cannot meet the demand.  And existing inventories are woefully inadequate.  All these factors mean “silver is the poor man’s gold.”

In chapter three, Ruff discusses the three basic uses for gold and silver:  1) Gold and silver coins as insurance.  2) Government holdings of gold and silver to prop up currency.  3) Gold and silver for investment purposes.  In the latter instance, “timing is critical.”  He goes on to declare that “the timing is right.”  So “just do it.”  Get out there and invest in gold and silver.

Proceeding to chapter 4, Ruff refers to himself as “a real Pollyanna, an optimist with guts.”  Unlike Wall Street, which downplays precious metals because of the lack of commissions, Ruff believes real investors aren’t afraid to go against the flow.  The psychological appeal of his non-conformist message is hard to shrug off.

As he explains in chapter 5, Ruff approves of ETFs, because they “mean a big increase in demand.”  He believes ETFs are good investments, as long as they “meet their legal obligations,” by which he means, buy the required amounts of silver.  That being said, he discourages futures contracts, because of inherent risks.  However, Ruff likes junk silver, silver rounds, silver mining stocks, and semi-numismatic coins.  He does not like silver bullion bars, because of the assay necessity before they can be sold.

A series of economic scenarios are briefly presented in chapter 7.  They run the gamut from worst case to best case.  Ruff’s conclusion?  “There is no best- or worst-case scenario in which I can conceive of gold and silver being losers.”  In fact, due to rising inflation and all that goes with it, he has no doubt gold and silver mining stocks will multiply by a factor of 5 or 10 times their current value.

‘The Classic Middle Class Investment” is the title of chapter 8.  According to Ruff, investing in metals is “as easy as pie, and requires no more knowledge than you will get in this book.”  Ruff’s preferred method for choosing a mining stock?  Go to his list of OK mining stocks.  “Put all of their names on a piece of paper, put them on the wall and throw ten darts at them.  Then invest in the holes.  You will have created your own personal mutual fund.”  For those who are still a little shy, he recommends his own newsletter or that of Jim Raby.

Chapter 10 is simply glorious!  It begins like this.  “Now it’s time for Ruffonomics 101.”  Ruffonomics 101 is a very short lesson in supply and demand.  And according to Ruffonomics, gold will soon rise to $2000 and silver to “over $100.”

The next chapter – chapter 11 – likens mining stocks to “a license to print money.”  The reason for this is “because they are uniquely leveraged in relation to pure bullion.”  Ruff is so self-confident that he goes on to make specific recommendations.  The following mutual funds make his hit parade:  ASA LTD, Central Fund of Canada, American Century Global, Tocqueville Gold, US Global Investors, and Fidelity Select Gold.

The silver mining companies he touts are Hecla, Pan American Silver, Silver Wheaton, Silver Standard, Coeur D’Alene Mines, and several others, which are not mentioned.  You can access the others, if you subscribe to The Ruff Times.

Closing out chapter 11, Ruff reminds his readers that “the safest course of action will be to buy gold and silver coins and take them home.”

Ruff makes an amazing suggestion in chapter 12, which is entitled ‘Income in a Gold Bull Market.’  He writes, “Here is an oddball idea that flies in the face of conventional wisdom.”  The idea is to liquidate about 8% of your gold or silver coins or mutual funds over the course of the year.  This will provide you with income.  The rationale behind the oddball idea is that – due to the bull market in metals – your capital will keep growing at a faster rate than your withdrawal.  And the only tax you’ll have to pay is the capital gains tax.

This oddball idea assumes, of course, that the ‘middle-class investor’ has half-a-million dollars or more invested in precious coins.

The book continues for three more chapters.  And each one is more entertaining than the last one.  Which is what makes RLB such fun to read.  It is not a subtle book, nor does it make any pretense to being analytical.  It’s very, very basic and brushes any latent risk for investors aside with debonair insouciance.  But despite all its outlandish declarations, its blatant self-promotion, and its kitschy excess, it’s not a bad book.  In fact, Howard Ruff just might turn out to be the prophet Pollyanna after all.

3-star On the Read-O-Meter, which ranges from 1 star (bad) to 5 stars (wonderful), Ruff’s Little Book of Big Fortunes in Gold & Silver earns 3 and a half stars.