Comments by "Roger Dodger" (@rogerdodger8415) on "Biggest market crash of our lifetime is coming: Economist Harry Dent" video.
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1. Dent has been spectacularly wrong in the past.
Although his emails won’t tell you that. He predicted in 2006 that the Dow would hit 40,000 by 2010, along with a “great boom”” that would run from 2007 until early 2010. He then predicted a market correction after this explosion, which anyone could have done. Of course the market would simmer down after hitting 40,000, which it never approached. Dent was far from reality on these predictions.
2. On the other end of the spectrum.
Dent also predicted that the S&P 500 would fall 30-50% in 2012, when in fact it ended up 13.4% in 2012. This should give us caution when we ruminate over Dent’s latest prediction that the Dow will drop to 3,300 within the next half-year.
3. Dent has had two exchange-traded funds shut down in the past several years.
Both of these funds were based on the hallmarks of Dent’s research: broad trends in the global economy combined with extensive demographic analysis. The DENT Tactical ETF (DENT) was closed in August 2012 after falling 12.9% over the nearly three years of its existence, in contrast to the Vanguard Total Stock Index Fund (VTI), which rose 42.7% during that period . Comparable funds gained between 5 and 43% during that same period. A mutual fund known as the AIM Dent Demographic Trends merged with another mutual fund and hit $2 billion in assets before losing 80% of those. Dent said the fund did not take all of his advice and suffered for it.
4. While Dent has been praised as a very smart man, intelligence alone does not guarantee accurate predictions regarding the stock market.
Lots of smart people are wrong when they begin making predictions in this area, particularly in today’s volatile economic climate. Just because Dent has two New York Times bestsellers does not mean that he has been correct more often than any other pundit.
5. Dent draws on mounds of data based on past performance of the market in light of demographic trends.
There is certainly some merit for this approach, but the past is so limited in the history of stock markets that it can be very difficult to predict the future from it. The sample size is limited, and almost all other financial experts believe that other variables should take precedence over demographic data when making predictions about the market.
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