I have much respect for Prechter and his analysis of the markets. And yes he's been wrong as well as right in the past. But his signature contribution to the markets today may be in the field of socionomics, which predicts a historic negative social mood in the near future.
As such, he doesn't hide his view of a world wide deflationary depression, and has just unveiled a 2nd version of his "conquer the crash" book accordingly (available on Amazon, of course)... and now, it seems like all the DoomsDayers are coming out of the woodwork predicting anarchy, mad max, confusion, and dismay.
Anyways, although I agree with him that there are certain cycles that seem to play out in the markets and in life, however, to predict the biggest bear market in 300 years seems a bit like a shock technique.
The problems I have:
1. His opinion is hedged either way. If the markets tank and the Dow goes down to below 500 points, he can say I told you so. If the markets don't tank and instead shoot up to 25,000, he will either say the big tank is about to happen as evidence by the euphoria of the people, or he will say it's all fiat money giving the appearance of 25,000 when in fact it should be 500. It's a no lose situation.
2. There are charts that say that the Dow is worth nominally what it is was worth in the early 90's if priced with gold and inflation adjusted. If such, then there is no real bubble to delever, as far as the markets are concerned, as they have already been deflated + replaced with paper appearance.
3. To predict such big cycles to a day/month (special August 15th, 2009 Theorist), quarter, year, decade, or even quarter century seems far fetched, even if from analyzing social mood. Cycles are way too long and big and variable to try to pin point.
4. To say that the social mood is negative today, via the movies and music that is popular today, seems so easy to data mine. For example, one recent piece of evidence points to Rhina turning to Disurbia, instead of her usual up beat pop song. But for every "dark" song out there, there are also the Jason Mraz summer songs and Taylor Swift is one of the top selling artist of the last couple years, even during the crisis.
5. The reason why economist get it wrong is they think a trend will last forever until something stops it smack in the middle. However, this rarely is a powerful forecasting tool (i.e., people would think that China would be the most repressed today, rather than a producer of goods, if asked back in 1973). This is his main argument for using social mood. But can't it be used against his own deflationary scenario?
6. If the deflationary depression, why are you so hell bent about selling new subscriptions, new books, new services via elliott wave. Admittedly, there are thousands of subscribers. Yea you can say you are trying to teach as many people as possible, but really, is that the reason?
Bottom line, every era has had their share of end of the world predictors. And yes there are some issues that will need to be worked out in the markets and economy, namely leverage, but just remember that Fear truly sells - it's one of the easiest sells as it is appealing to your survival - so don't be such a buyer into the hype.
Sorry I don't feel like editing this for grammar, but any thoughts?
As such, he doesn't hide his view of a world wide deflationary depression, and has just unveiled a 2nd version of his "conquer the crash" book accordingly (available on Amazon, of course)... and now, it seems like all the DoomsDayers are coming out of the woodwork predicting anarchy, mad max, confusion, and dismay.
Anyways, although I agree with him that there are certain cycles that seem to play out in the markets and in life, however, to predict the biggest bear market in 300 years seems a bit like a shock technique.
The problems I have:
1. His opinion is hedged either way. If the markets tank and the Dow goes down to below 500 points, he can say I told you so. If the markets don't tank and instead shoot up to 25,000, he will either say the big tank is about to happen as evidence by the euphoria of the people, or he will say it's all fiat money giving the appearance of 25,000 when in fact it should be 500. It's a no lose situation.
2. There are charts that say that the Dow is worth nominally what it is was worth in the early 90's if priced with gold and inflation adjusted. If such, then there is no real bubble to delever, as far as the markets are concerned, as they have already been deflated + replaced with paper appearance.
3. To predict such big cycles to a day/month (special August 15th, 2009 Theorist), quarter, year, decade, or even quarter century seems far fetched, even if from analyzing social mood. Cycles are way too long and big and variable to try to pin point.
4. To say that the social mood is negative today, via the movies and music that is popular today, seems so easy to data mine. For example, one recent piece of evidence points to Rhina turning to Disurbia, instead of her usual up beat pop song. But for every "dark" song out there, there are also the Jason Mraz summer songs and Taylor Swift is one of the top selling artist of the last couple years, even during the crisis.
5. The reason why economist get it wrong is they think a trend will last forever until something stops it smack in the middle. However, this rarely is a powerful forecasting tool (i.e., people would think that China would be the most repressed today, rather than a producer of goods, if asked back in 1973). This is his main argument for using social mood. But can't it be used against his own deflationary scenario?
6. If the deflationary depression, why are you so hell bent about selling new subscriptions, new books, new services via elliott wave. Admittedly, there are thousands of subscribers. Yea you can say you are trying to teach as many people as possible, but really, is that the reason?
Bottom line, every era has had their share of end of the world predictors. And yes there are some issues that will need to be worked out in the markets and economy, namely leverage, but just remember that Fear truly sells - it's one of the easiest sells as it is appealing to your survival - so don't be such a buyer into the hype.
Sorry I don't feel like editing this for grammar, but any thoughts?
