Harry Dent

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Harry S. Dent, Jr. (born 1950) is an American financial newsletter writer. His 2009 book, The Great Depression Ahead, appeared on the New York Times Bestseller List.

Biography[edit]

Dent, born in Columbia, South Carolina, is the son of Harry S. Dent, Sr.

Dent is the Founder of HS Dent Investment Management, an investment firm based in Tampa, Florida that advises the Dent Strategic Portfolio Fund mutual fund. Dent is also the president and founder of the H.S. Dent Foundation and H.S. Dent Publishing.

Dent writes an economic newsletter that reviews the economy in the US and around the world through demographic trends focusing on predictable consumer spending patterns, as well as financial markets, and has written nine books, of which two recent ones have been bestsellers:

  • The Demographic Cliff: How to Survive and Prosper During the Great Deflation of 2014-2019 (2014)
  • The Great Crash Ahead (2011)
  • The Great Depression Ahead (2009)
  • The Next Great Bubble Boom (2006)
  • The Roaring 2000s Investor (1999)
  • The Roaring 2000s (1998)
  • The Great Jobs Ahead (1995)
  • The Great Boom Ahead (1993)
  • Our Power to Predict (1989)

The basis of Dent's research is the predictable nature of consumer spending based on a family's formation pattern: minimal spending as young adults, increased spending while rearing children, peaking their spending as their children leave home, and then slowing spending during the last 15 years of working life (48-63) while saving more and preparing for retirement. Dent popularized the baby boomer spending wave theory.[1] According to him, after baby-boomers' children leave home, they begin paying down debt and saving for retirement, which means spending less.

Forecasts[edit]

In the late 1980s, Dent forecast that the Japanese economy, then the darling of the world, would soon enter a slowdown that would last more than a decade. In the early 1990s, he predicted that the DOW would reach 10,000. Both of these predictions were met with much skepticism, and yet both eventually came to pass.

In Japan, Dent was using their peak of 45-50 year olds (1990–1994) as the beginning of a long slowdown. In the US, he used, and continues to use, the peak year for 48-year-olds, 2009, as the top of a long term growth pattern.

In 2000, based on his forecast that economic growth would continue throughout the 2000s, Dent predicted that the DOW would reach 40,000, a prediction which was repeated in his 2004 book. In his book, he also predicted the NASDAQ would reach 13,000 - 20,000. In late 2006 he revised his forecasts to much lower levels, estimating the Dow would reach 16,000 - 18,000 and the NASDAQ 3,000 - 4,000. In January 2006, he predicted that the DOW would reach 14,000 - 15,000 by the end of the year. It ended 2006 at 12,463, 11% below the lower end of his prediction. It ended 2007 at 13,264, again significantly lower than Dent's revised prediction of 15,000 by early 2008. Since then, the Dow crossed 14,000 in late 2007 before retreating.

His 2011 book goes on to suggest consumer spending will begin to plummet in 2012 with the Dow bottoming out somewhere between 3,000 and 5,600 in 2014. After hitting bottom, stocks will experience a mini-rally in 2015-2017 before falling into a final bottom during the 2019-2023 period, when the 45-50 age group troughs because the U.S. birth rate reached its own low in 1973.[2]

In 2012 he began writing weekly articles for the free investment newsletter Survive & Prosper, which offers investment advice guided by his belief that a major economic crash is inevitable and that it will drop the DOW all the way to 3,300. As of early 2013, he has amended his predictions slightly to an expectation that the financial crash will begin between the end of 2013 and the first half of 2014.

In 2013 Dent predicted the market will crash again in the Summer of 2013 and will take a further year and a half to recover.[3]

In 2014, while promoting his book The Demographic Cliff in Australia, he predicted a major Australian housing market correction beginning in 2014 after an even bigger one in China.[4]

Criticism[edit]

Dent makes heavy use of charts, cycles, and trends, apart from his demographic theories in predicting short and intermediate term economic and stock cycles. His work is based primarily on the assumption that most long term stock market performance can be explained by long-term trends and charts from the past. His critics question the assumption that clues to all major stock market events can be found in the relatively short history of well functioning stock markets in the world. However, a "well functioning stock market" may be a concrete concept in academics but in the real markets the term may not have a true reality. His work has been criticized also for heavy use of data dredging—where it is easy to find patterns in past data and assign predictive powers to them when many such patterns occur in every data collection purely by chance. Dent has been criticized also by many economists for being downright wrong in several of his predictions. In fact, www.maxfunds.com, a financial reporting site awarded him the "Ultimate Charlatan"[5] Award. They write: "The worst investing advice usually arrives near the top and bottom of stock market cycles. Demographic trends guru Harry S. Dent is making the rounds again, and touting his latest book, The Great Depression Ahead: How to Prosper in the Crash Following the Greatest Boom in History ...." In his 2006 work, Dent predicted, “The Dow hitting 40,000 by the end of the decade, the NASDAQ['s] advancing at least ten times from its October 2001 lows to around 13,500, and potentially as high as 20,000 by 2009 … The Great Boom['s] resurging into its final and strongest stage in 2007, and even more fully in 2008, lasting until late 2009 to early 2010.” None of these predictions turned out to be true. In 2011 and 2012, Dent made new predictions on the state of the Dow Jones Index and the S&P 500 in both the short and long term.[6] Among these was a prediction that the S&P 500 would fall 30-50% inside of 2012. However, the S&P 500 ended the year 2012 up 13.4% [7]

In advertisements in May 2013 Dent wrote, "Yes, today the Dow Jones Average may be near historic highs… but it won’t be for long! The Dow will drop.. Many investors are making the mistake of thinking the downturn is over, and Dow stocks will continue to roar upward. But that’s not what my research indicates. Not even close. I see the Dow Jones Average winding down, week after week… falling through the 12,000 mark… below 10,000, then 9,000, 8,000… to 6,440—where it’s likely to rally briefly… before ultimately dropping as low as 3,300. And there’s nothing you or I, or any politician or government, or any team of monetary experts can do to stop the Dow Jones Index from dropping." [8] The same advertisement also makes claims about the ability to "time the market" by stating, "But here’s the good news, extraordinary wealth can be made by knowing the future. In Survive & Prosper, my free e-letter, I’ll show you my economic analysis and demographic research that proves the DOW is about to make a historic drop. But that’s just the beginning, you’ll also learn: How to predict the economic future! Imagine if you knew when to buy stocks like Microsoft during the tech bubble for $.85 a share after factoring in splits—and watched it rocket to over $58, a better than 67-to-1 windfall. I will show how predicting and profiting from the future is a SCIENCE and is easier than you might have imagined."

See also[edit]

References[edit]

  1. ^ Siegel, Jeremy J. (2002-06-21). Stocks for the Long Run: The Definitive Guide to Financial Market Returns and Long-Term Investment Strategies, 3rd edition. New York: McGraw-Hill, 388 pp. ISBN 978-0-07-137048-6.
  2. ^ Jim Fink. "Harry Dent and Demographic Investing: Concept Better than Reality". InvestingDaily.com. Retrieved 2012-02-19. 
  3. ^ http://www.businessinsider.com/harry-dent-predicts-market-crash-in-q3-2013-1
  4. ^ Collett, John (2014-02-13). "Nightmare vision of impending property crash". The Sydney Morning Herald. Retrieved 2014-02-14. 
  5. ^ cited numerous errors.
  6. ^ "Tracking Harry Dent's predictions". PunditTracker. Retrieved January 3, 2013. 
  7. ^ "S&P 500: INDEXSP:.INX quotes & news - Google Finance". Google.com. Retrieved April 4, 2013. 
  8. ^ "DOW 3300!"

Bibliography[edit]

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