Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

One of Harry Dent’s Three Keys to Market Prediction is Cycles

Stock-Markets / Cycles Analysis Apr 17, 2014 - 05:36 PM GMT

By: Survive-Prosper

Stock-Markets

Harry Dent writes: I learned three crucial principles early on in my forecasting career.

The first is that the economy is a dynamic play between opposite principles.

The second is that natural, cyclical forces have an unstoppable effect on markets and economies, regardless of what we do.


I’m talking about demographic cycles, technology cycles in productivity, geopolitical cycles, commodity cycles… even natural cycles in weather and sunspots. All of these things allow us to see where the puck will move on the ice next.

And the third, possibly most important, is that objectivity is essential.

My success in calling some of the greatest changes in economic trends — changes that almost no one else saw coming — was simply thanks to my being objective… to looking for the truth, not for what I wanted to see.

If you get too caught up in the daily news, like with the recent Flight 370 coverage, you lose sight of the most obvious insights (as I described in recent articles). And that’s true for economic and market matters as well.

Take the Democrats latest efforts, for example…

Democrats are now looking to impose more regulations on the economy and markets, all because the free-market system, with the help of government stimulus, went nuts and created the greatest debt and speculation bubble in modern history.

That move would be a mistake if it went beyond some simple responses to financial policy failures.

They’re not viewing the situation objectively, especially because the top 1% to 20% has garnered most of the gains since the 1990s.

They’re not looking at the natural forces and cycles in play.

They’re taking sides instead of understanding the fundamental truth that opposites are important for growth.

They’re ignoring the fact that extreme income inequality has always marked a major bubble boom and bust.

That rising taxes on the rich and falling power always follows the bubble burst.

Do you know that the top 1% saw their share of wealth fall from near 50% to 25% between 1929 and 1975?

Do you know that their share of income fell from 20% to 8%?

All of this is the result of natural cycles of innovation, which favor the entrepreneurs and investors who take the most risks in periods of rapid change, and the emergence into the mainstream of new technologies (like in the early 1900s and from 1994 – 2008).

The inevitable shake-out that follows during the Economic Winter Season reverses that trend, reducing the inequality and bringing the middle class back.

So clearly it’s better to objectively study these more natural and fundamental cycles, and NOT the politics of “reaction” against them.

Even during boom times, when there are strong bull markets, there are always major corrections… like we saw in 1987, between 2000 and 2002, and from 2008 into early 2009.

In longer-term bear markets, there are strong rallies… like those we saw from late 1932 into early 1937, and early 2009 into early 2014.

It’s interesting to note that, since the Industrial Revolution in the late 1870s, longer-term bull markets have outweighed bear markets by about 2:1, which has compounded into the greatest bull market bubble in modern history.

But the longer we boom, the more complacent businesses, investors, and governments get. That sets us up for greater debt and asset bubbles, which become extreme… and ultimately crash and burn.

Stability leads to instability and visa-versa.

The longer and higher we boom, the greater and faster we bust. This was Minsky’s great thesis in the 1970s, and I believe he was much wiser than Keynes in the 1930s.

Keynes sowed the seeds of governments stimulating to offset downturns in the private sector. But it was the Federal Reserve that started stimulating to prevent downturns. In so doing, it created a greater period of stability, which in turn created the extreme period of instability we’ve lived through since late 2007.

In fact, the greatest depression in U.S. history followed the creation of the Fed in 1913. Its efforts to reduce volatility in the economy only created greater imbalances and hence the bubble of the 1920s and the greater bust of the 1930s.

Mark my words: The greatest bust since the 1930s is what we have to look forward to in the next six to 10 years!

The truth is that our economy thrives from the play of opposites. This is what creates energy and innovation, just like the positive and negative poles of a battery, or like men and women.

It’s not about being pro male or female… or pro republican or democratic… pro bull or bear… or even pro inequality or equality.

It’s about objectively understanding the fundamentals at play… that the battle between the opposites creates innovation and produces creative destruction. Without the ups AND downs, making money in the markets would be impossible… growing your wealth would be impossible.

What I am is pro innovation and progress.

It’s a clear, exponential, long-term trend that brings healthy payoffs to the golden goose of free market capitalism… if and when governments allow it to happen. They’re not allowing this trend to unfold at present, and that doesn’t bode well!

What we do here at Dent Research is remain objective. We help guide you through the inevitable cycles without bias, so you can survive and prosper regardless.

So, listen to us on economic cycles and trends, not the politicians, or media, or economists, or analysts. They’re almost always biased… never objective… They have too much at stake in the status quo.

Harry

P.S. Make a note on your calendar: I am holding a live Twitter event on Tuesday, April 8, from 4 p.m. to 4:45 p.m., to answer any questions you may have about my book, The Demographic Cliff. On April 8, use #democliff to ask your questions ;@harrydentjr.

http://survive-prosper.com

© 2014 Copyright Surive Prosper - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in