The Next Great Bubble Boom: How to Profit from the Greatest Boom in History: 2006-2010

I can't dispute any predictions of the stock market, because nobody can know for sure until after the fact.

But I am really amazed at the shameless spinning by Harry Dent in his latest book about his past predictions. He makes it sound like he foresaw the crash of 2000-2002. But in fact, his previous book, The Roaring 2000s, published in late 1990's, made all sorts of bullish predictions that were totally 100% wrong in retrospect. When reading that book back in 1999, you'd get the urge of going all out to buy NASDAQ. In fact, his lucky streak of winning predictions for 1990s prompted the creation of the mutual fund AIM Dent Demographic Trends in late 1990s/2000 and of which Harry Dent is an adviser -- that fund underperformed S&P500 by a wide margin, not to mention that S&P500 was itself miserable for the past 5 years already. [...]

Now, I'd still respect Harry Dent if he had said in this latest book, "My predictions were wrong for the first half decade of 2000's, but I think the big trend will resume for the second half of the decade." But instead, he shamelessly spins his miserable track record of the past 5 years!

This much waited book by now a famous economic forecaster pretty much repeats what he has stated in his previous works. The economy and the stock market will boom from now until around 2010. Then they will falter badly from 2010-2025 with 15%+ unemployement, deflation, bad housing market, and massive social problems. His advice is simple, invest heavily into the stock market until 2009 and bail. Homeowners should also sell their homes around 2009 and rent until 2013 when the housing prices should bottom. Business owners should also sell their high flying businesses around 2009.

Harry Dent's economic model has proven to be accurate. Although he tries to incorporate other statistical methdologies to backup his forecasts, Harry's main tool is still his demographical analysis. Based on the fact that spending patterns differ considerably based on age, Harry has done a great job of charting the future based on economic impact of domestic consumption based on demographical changes.

Here are what I thought were the flaws:

1)Harry makes little attempt to counter his own arguments. For example, Harry does not fully address the impact of the current 3%+ productivity growth. Also, the impact of the rise and the changes in the use of IT is not addressed fully. Harry dismisses these two trends as a mere side effects of demographics and technological progress. He apparently believes neither will change the outcome of the demographic economic cycle.

2)Harry does not fully address the impact of exports. Harry fully acknowledges that domestic consumption in Asia and South America will continue to increase well into 2020. Can the rise of US exports to these regions offset the lack of domestic consumption from 2010-2025? Harry doesn't make this clear.

Here is yet another book in which Harry Dent tries to cash in on his ridiculous demographic theories. Before investing any money on Harry Dent's advice, readers should do themselves a favor and investigate the history of the "Dent demographic trends fund". In June of 1999, Harry became a mutual fund advisor. It did okay for all of six months, then lost 70% of its value. It regained some ground in the last two years, but is still down substantially from its inception. Just a few weeks ago, the fund was quietly merged into another and the Dent name removed. It probably wouldn't be good for book sales if Harry's name was still attached to a losing mutual fund.

The charts and data may be of use, but people need to reach their own conclusions.

I'll give it 3 stars for now. We'll see in 5-10 years what happens.

I think Dent has some good ideas so it's not a total bomb of a book, but too often it seems to me he is stretching and convuluting statistics to fit his model instead of remaining objectively scientific. And some of what he says is just down right misleading, even if technically accurate.

On page 200 he is trying to show that a ten year time span is not enough to over come a large bust in the market. He says that if you had purchased stocks in 1929 you would have had to wait 24 years to break even. But the fact of the matter is people don't buy stocks like that. Hardly anyone would have just bought at ONE point in time, at the PEAK of the market in 1929. People buy a little here, a little there. For instance, if someone started buying in 1929 and put a little bit in per month (dollar cost averaging) they would be buying stock at low prices as well as high prices. Done this way, it would have taken 5 years instead of 24 to break even.

So Dent uses the fact that supports his point instead of being objective.

One more example is the chart on page 175. He changed the notion of small stock out performance during the time frame 1975 - 1983 to 1958 - 1983 just to support his theory. Using that time frame matches what he's trying to show. One can use a variety of different time frames in this example but he choose one because it supports his theory, not because it's objective.

So, I think the book is worth reading and getting a few tidbits out of, but to follow it blindly - whoa is you! I just wish he was more scientifically objective. It is WAY to easy to twist statistics to support a theory. Try it yourself -- see how easy it is!

Law of probability: Enough people flipping a coin enough times, and, at some point, someone will seem to have the uncanny ability to call heads or tails correctly-- some may even take credit (and write books) about how they had some extra foresight in having predicted the outcome.

In the 90's Harry Dent did. He shrewdly touted his "skills" at having called the market by extrapolating from the spending/saving/investing patterns of the consumption-driven baby boom bulge. Prescient genius? More like an educated (and lucky) guesser-- probability-based and confirmation-biased coin flips being what they are.

Even so, his much hyped demographic-based system did work for a while, then crashed-- along with the market-- when the decade turned. In the "Roaring 2000's"-- which came out near the top of the bubble-- he bullishly advised investors to jump into equities-- advice that if followed at that time, no doubt led to severe fiscal injury.

Apparently the last four years have just been a hiccup, because here Mr. Dent is again, back with his same old spiel, along with post hoc explanations about how he actually saw it all coming and that his demographically-driven boom may not have happened exactly as he predicted the last time around, but will untimately be correct nonetheless.

According to Mr. Dent, the demographic stars are properly realigned, and we can once again get ready for boom-times through the rest of the decade. As before, his data driven arguments seem compellingly rational, but, unfortunately, the markets are not.

Harry Dent, can bring out all the demographic tea leaves he wants, but tea leaves are all they are; and all he really is, is a marketer trying to sell books (he even lent his name to the AIM Dent Demographic Trends Fund, which has followed his investment strategy since 1999 and is down almost 35% since inception as a result: UNDER-performing the entire market-- as well the fund's benchmarks).

Wishful thinking aside, there is no way to beat the market, and Mr. Dent doesn't know its future any better than you do. Diversify your portfolio, allocate your assets, and keep your debts low. That's all that works, or that has ever worked. Some people may guess right, but chances are, it won't be you. "Systems" may work in the short term, but to paraphrase Keynes: "in the long run, they're all dead." Save your money and your time and skip "The Next Great Bubble Boom."