Harry Dent: Bold Predictions of the Great Depression Ahead

by Alexander Green, Chief Investment Strategist Monday, October 6, 2009: Issue #1108

As they said in the movie “Poltergeist”: “They’re baaa-aaack.”

Who’s back? Harry Dent, the self-styled “economic futurist,” who presumes to tell us about the great economic booms and busts that lie ahead.

How can he possibly know these things?

According to Dent, an analysis of the “highly predictable” nature of consumer spending based on demographic trends – increasing spending during child-rearing years, peak spending as the kids leave home and slower spending during late work and retirement – reveals what lies ahead for the economy and the stock market…

Harry Dent: Dow 44,000 & Other Flimsy Forecasts

Harry Dent is a man worth listening to. After all, he has a near perfect track record – as a contrary indicator…

For example:

With less than auspicious timing, Dent ...

Yesterday we detailed the different between this current economic contraction, and your usual run of the mill plain vanilla recessions. We also went over the MASSIVE consumer credit contraction that needs to occur before American households have finished de-leveraging.

Today, we’re detailing why stocks will Crash this coming fall. As you know the media is rife with folks calling the end of the recession and the beginning of a new bull market. It’s clear to me that this is a load of nonsense. Today I’ll show you why.

Because a lot of the alleged “analysis” that is backing up the bulls’ claims of a new bull market comes from technical analysis and charts, I’m presenting the below chart from David Rosenberg of Gluskin Shef. It charts today’s bear market over that of 1929-1932.

As you can see, today’s bear market is mirroring that of the ‘30s almost to perfection. Indeed, …

Stock prices are falling even faster than Alan Greenspan’s reputation or Warren’s Buffet’s mystique. Come to think of it, they are all falling at about the same pace. Hmmm…it’s as if they’re all one and the same.

Greenspan’s reputation - like AIG’s share price - is already in shambles. In fact a move to zero might be an uptick. Warren Buffett, on the other hand, still boasts a rabid following, as well as a few billion dollars in the bank. So let’s weep not for Warren.

Even so, this formerly glistening icon of “buy and hold” has become a bit tarnished. Buffett’s genius, we are now discovering, correlates quite highly with the S&P 500 Index. His genius is not quite as highly correlated with the S&P 500 as, say, Bill Miller’s, the former investment genius at the Legg Mason Value Fund. (For a little background, please click here). But an

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Based on the investor poll, commodities seem to be the most appealing investment for 2009. Followed by stocks, bonds and cash as the worst asset class for the year. In this post I would like to gather opinions about investing in 2009 from top investor gurus. Let me start with Warren Buffett. Warren called stock market bottom already in mid 2008 and have started to add equity positions to his holding. Last actions show buying interests in railroads companies. He increased stake in Burlington Northern (BNI). Despite of declining volume, earnings have gone up by 19%. Other interesting picks from industry are Union Pacific with 35% earnings growth or CSX Corp (CSX) with 16%. Another two top investors, Donald Coxe and David Winters, like railroads. Companies will benefit from low energy costs. P/E vary in range of 6 - 8 for the ...

Today’s post comes from a guest blog, New Rules of Investing:

Institutional investors have powerful tools at their disposal to screen through reams of data.  Part of the institutional investment process entails screening through thousands of securities looking for a needle in a haystack — stocks that fit certain investment criteria.  From thousands of stocks, analysts can filter through a couple of hundred that fit these so called screens.  With a couple of hundred stocks in hand, analysts set out to do the hard work analyzing these companies, comparing them to one another, speaking to management and whatever else hedge fund and mutual fund analysts do when looking at prospective investments.

If I’m a value investor, I’m probably going to use some metrics that focus on Return on Capital (RoC) or Return on Equity (RoE) and Earnings Yield (E/P).  Growth investors might

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It's time to start doing your gift shopping. Here are some great investment, finance, and stock market books to give your friends and relatives. These are in no particular order other than the approximate order that I wrote about them, within the categories. You can click on the title of each book to get more info about them. And if you aren't sure what books are right for gifts, how about an a href="http://www.amazon.com/dp/B00067L6TQ/ref=nosim/?%5Fencoding=UTF8tag=antiquestocka-20linkCode=ur2camp=1789creative=9325"Amazon Gift Certificate/aimg src="http://www.assoc-amazon.com/e/ir?t=antiquestocka-20amp;l=ur2amp;o=1" width="1" height="1" border="0" alt="" style="border:none !important; margin:0px !important;" /.br /br / center span style="font-weight:bold;"Fiction/span /centerbr /br /a href="http://www.amazon.com/gp/product/0804119120?ie=UTF8tag=antiquestocka-20linkCode=as2camp=1789creative=9325creativeASIN=0804119120"A Conspiracy of Paper/aimg src="http://www.assoc-amazon.com/e/ir?t=antiquestocka-20l=as2o=1a=0804119120" width="1" height="1" border="0" alt="" style="border:none !important; margin:0px !important;" / by David Lissbr /br /a href="http://www.amazon.com/gp/redirect.html?ie=UTF8location=http%3A%2F%2Fwww.amazon.com%2FDay-Trader-Stephen-Frey%2Fdp%2F034544325X%2Ftag=antiquestocka-20linkCode=ur2camp=1789creative=9325"The Day Trader/aimg src="http://www.assoc-amazon.com/e/ir?t=antiquestocka-20amp;l=ur2amp;o=1" width="1" height="1" border="0" alt="" style="border:none !important; margin:0px !important;" / by Stephen Freybr /br /a href="http://www.amazon.com/gp/redirect.html?ie=UTF8location=http%3A%2F%2Fwww.amazon.com%2FSet-Up-Paul-Erdman%2Fdp%2F0312968051%3Fie%3DUTF8%26s%3Dbooks%26qid%3D1194850092%26sr%3D1-1tag=antiquestocka-20linkCode=ur2camp=1789creative=9325" The Set-Up/aimg ...

Benjamin Graham, the teacher and mentor of Warren Buffett, wrote two seminal tomes on value investing called Security Analysis in 1934 and The Intelligent Investor in 1949. I was reading The Intelligent Investor at a time when the bear market following the dot com bubble was in full swing and I remember thinking to myself that some of what Mr. Graham mentions in his book may no longer hold true as even at that point  it was almost impossible to find stocks that met his criteria such as a Price/Book ratio of less than 1.5, a P/E < 15, uninterrupted dividends for last 20 years and an adequate margin of safety. If you like bargain hunting for things, you are probably aware that there is an intrinsic value to things and unless the seller is in distress it is very difficult to ...

Early August marked the first anniversary of the credit crunch. The infant that arrived unheralded and unwelcome on the doorstep of the financial world is now, believe it or not, just over one year old. While we all hoped that its unhappy life would be a short one, it now seems as though this unwanted foundling is going to be with us for a while yet. And, by all accounts, it is going to cause us a lot more sleepless nights before it goes away.

If the credit crunch were a storm we might now be in its eye – that expanse of uneasy calm in the storm’s centre, which whispers to the unwary that the worst is behind them. No chance, I’m afraid, if we listen to the utterances of

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Warren Buffett is best known as the Chairman of Berkshire Hathaway and the richest man in the world. He is easily the greatest investor of the 20th century, if not of all time. Since 1965, he’s produced average annual gains of 21%. Put another way, a mere $1,000 invested with Buffett when he took over Berkshire Hathaway would be worth an astounding $6 million today. However, few investors realize that Buffett produced his greatest gains long before he became involved with Berkshire Hathaway. He actually started out managing money via a series of partnerships in the ‘50s. During the first five years, Buffett produced gains of 251%, beating the Dow nearly four fold. By this time, Buffett had 90 partnerships based all over the US. He consolidated all of their holdings into one group, Buffett Partnerships Ltd. Over the next five years, Buffett ...

“Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble … to give way to hope, fear and greed,” said Benjamin Graham (co-author with David Dodd of Security Analysis, 1934 – considered by many to be the bible of value investing).

But how does one gauge whether stocks, or in this case the US stock market as a whole, are over- or undervalued? In a post (Stock Markets: Up, Down, Sideways?) last week I attempted to analyse the situation by means of a few price charts and contrarian indicators. This is a follow-up, focusing more on some fundamental

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