Robert Prechter's 'Conquer the Crash': A Forecast That's Still Coming True 38 comments
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Today's financial and economic tribulations were a long time in the making. Many people ask, "Why didn't someone see it coming?"
But a New York Times bestselling book did see it coming. More than 100,000 people read it in time to protect their wealth.
They read this about real estate:
What screams 'bubble' – giant, historic bubble – in real estate today is the system-wide extension of massive amounts of credit to finance property purchases.... Many people have been rushing to borrow the last pennies possible on their homes. They have been taking out home equity loans so they can buy stocks and TVs and cars and whatever else their hearts desire at the moment. This widespread practice is brewing a terrible disaster.
And this about stocks:
...the number one precaution to take at the start of a deflationary crash is to make sure that your investment capital is not invested in stocks, stock mutual funds, stock index futures or any other equity-based investment.
About Fannie Mae (FNM) and Freddie Mac (FRE):
Investors in these companies’ stocks and bonds will be just as surprised when [Fannie and Freddie's] stock prices and bond ratings collapse. Most rating services will not see it coming.
About junk bonds:
Don't think you will be safe buying bonds rated BBB or above. If you have invested in municipal bonds, consumer debt, real estate debt, junk bonds or anything other than top-grade paper, sell it at today’s lofty prices.
All these observations are from Robert Prechter's Conquer the Crash, first published in early 2002, when the Dow was above 10,000 and the financial world was partying around-the-clock. Fast-forward to today: The average U.S. homeowner has suffered a decline of 30% to 40% in property value. Stocks and commodities had their biggest fall since 1929-1932. Fannie Mae is a zombie corporation under the government’s protection.
If Prechter thought a whole new book would help, he'd have written one. But Conquer the Crash is a book-length forecast that's still coming true-- only some of the future has caught up with the specific predictions he published back then. There is much more to come. And that means more danger but also great opportunity.
The same authorities who said "the worst can't happen" now claim that "the worst is over." That's one of the many reasons why Prechter is choosing now to put out a second edition of Conquer the Crash.
Conquer the Crash, Second Edition, offers you 188 new pages (480 pages total) expanding Prechter’s unique deflationary argument and escorting the reader through the stock market’s manic climb to the 2007 peak. (If you think you remember this period, wait till you read Prechter’s description.) And it still includes all the original forecasts and recommendations that make the book as compelling and as relevant as the day it published.
In every disaster, only a very few people prepare themselves beforehand. Think about investor enthusiasm in 2005-2008, and you'll realize it's true. Even fewer people will be ready for the soon-approaching, next leg down of the unfolding depression.
Prechter warns that the doors to financial safety are closing all over the world. Prudent people need to act while they still can.
We couldn't agree more. This book is a must-read.
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I am not commenting on the specific issue, after all. History has many positive and negative turns. Many instances of war, famine and trouble. However it also has many period of peace, prosperity and development.
If Prechter is bringing out a new book now, I would suggest that we will be going to enter a period of prosperity and peace. Based purely on Prechter awful awful timing.
And just recently,in the latest issue,his forecasters did it again,calling sept.23 as the top and end of rally wave.
2 weeks later, when the markets made new highs above that mark....not only was it ...'too early' again..... the wave action completely Negates the wave count they were applying .(according to elliott wave rules).... so its not just 'being a little too early'..... its a blunderous incorrect call.
Will the markets finally end their 'rally' ...of course, and maybe sooner than later. But somebody at EWI is/has been getting the count wrong. and I'm losing a bit of respect for their analysts, - Prechter's great reputation not withstanding.
For analysts who have been doing this stuff for many years.... they are making bad calls.....or else,lets put it another way.... the market is totally rigged, and elliott wave analysis is being 'overrided by' the manipulations of government sachs.
Whats a fair conclusion?
Count the waves....but always recognize this whole market system is a rigged game,and play it like the rigged game it is.
On Oct 17 11:07 AM irondoor91 wrote:
> Points to ponder regarding Prechter and his use of the Elliott Wave
> forecasting principle:
>
> . Early in his career, he won a trading championship with a gain
> of over 400% in just a few months using options.
>
> . He called the bull market of the 1980's and the crash in 1987.
>
>
> . He put out a "short" recommendation in July, 2007 a few days after
> Sec of Treas Hank said that the economy was the "best in his lifetime".
>
>
> . He called for covering those shorts in late Feb 09. This short
> trade is likely the largest S&P futures point gain in history
> (800 points) and will probably never be beat.
>
> . He forecast (in April) that the Dow would hit 10,000 in the next
> uptrend and at the end of the runup investors and the government
> would decree the bear market dead.
>
> . On the other side of the coin, he was generally recommending shorting
> the market from time to time during the runup from 2002-2007. He
> did not see the extent of the "equity mania" generated by the massive
> credit inflation during this period.
>
> . His latest recommendation was a short in August this year. Obviously
> very early, by his own admission. One of his publications called
> a later top on Sep 23rd. Still a bit early, as the market has continued
> higher.
>
> He is now publicly forecasting Dow under 3,000 in the next leg down,
> and ultimately under 1,000 before a final bottom. Many commentators
> say that we are in a new bull market and the sins of the past are
> over and were solved by government action.
>
> Someone is going to be terribly wrong and the day of recognition
> is coming ever closer.
So whats the problem then ? The problem is that the market action is Being Rigged by the Elite Game Riggers. call them by whatever name you want....new world government, power elite, goldman sachs, federal reserve, global finance power system, whatever.... whoever is pulling all the levers from behind the curtain....
What they must be doing is issueing massive buys and sells , at the right moments, engineering stick saves when needed, changing wave structures, breaking through resistance lines when needed,etc....engineering the market movement.
The wave counting is not 'wrong'.... the game is a rigged game. thats all it is.
Its good to know how to count elliott waves. Its a really great 'vision tool'. and it works.
But its also necessary to know how to 'see' the ways the rigged game is being engineered and play along if you think you can succeed at it.
Its a dual frame of mind. I ask myself two questions at all times.
1) what is the elliott wave count?
and
2) what do the NWO Game Rigging Masters WANT the market to do right now?
....and watch how the action plays out.
Hochberg has an extreme bearish bias which causes him to lose objectivity and he will structure wave count interpretations to suit this bearish bias. It is through his biases that causes him to be WRONG when calling a turn, on many occasions. He will continue to be wrong until eventually he's right, which is pretty pathetic for a person entitled as a senior market analyst at Prechter's firm.
On Oct 18 04:11 AM sheeple123jump wrote:
> ....I want to revise my above comments a little bit. I think I understand
> it a little better...the elliot wave forecasters were not necessarily
> 'wrong' in their wave count analysis regarding the september 23
> call (rally wave end), nor was Prechter 'wrong' in his call on august
> 3.... If you count the waves correctly, you will see that '5 waves
> up' completed on both those occasions.(just as its about to do again
> in a few days in various charts)..... so what else Can a forecaster
> do when the wave count says " up wave completed"..... "next wave
> is down",.....thats not a 'wrong forecast'.
As to the twists and turns of it, all his firm has recommended for years is staying safe in cash equivalents and "some gold." Higher equity prices are only a boon if you take advantage of them to sell, which hardly anyone does. The Dow at 10,000 this week is just a reminder that "stocks for the long run" believers have made zero net progress in over a decade.
I may be a Prechter apologist, and I realize that he has made his share of mistakes, but I think on the balance his work stands tall.
On Oct 17 01:43 PM Albertarocks wrote:
> On Oct 17 11:30 AM popey wrote:
When Prechter pays back every cent to everyone who lost their shirt following his advice, he'll have earned a miniscule of redemption.
On Oct 18 12:36 PM Dean M wrote:
> I think he's a pretty good macro economist hobbled by his adherence
> to the useless Elliott wave junk.
Everyday when I wake up I will write an article or Instablog saying my neighbors dog is going to die today. Everyday day in and out for years I will follow this ritual. Sooner or later, assuming my neighbors don't move away their dog will Die. This is then my spring board to say "I predicted the Future" give me a book deal, give me hundred of thousands of dollars for lectures, give me CNBC appearances because I can see the future. Of course when the question of a decade of wrong predictions on when my neighbors dog was actually going to die comes up, I can simply deflect and say "I was Early"
GreatWhite
I'm glad I didn't buy his book in 2002 and heed his advice at that time considering that my accounts gained more than 100% in 2003 on the way to further strong gains into 2007. I wish I'd followed his advice in 2007 when I thought I was becoming defensive only to discover that there were no (long) places to hide. I find EWT quite interesting, but agree with another commenter that there are more useful measures of technical analysis available.
"(WSJ in) August 1993 with the headline, "Robert Prechter sees his 3600 on the Dow--But 6 years late,"
So he predicted Dow at 3600 in 1999. If this guy was any good and believed his own words, he would be running a hedge fund shorting the market and keeping his mouth shut. Instead he publishes books (14 to his credit) predicting the end of world.
Total Return:
* Wilshire 5000 Index + 857 %
* Prechter's Trading Advice - 98 %
www.erictyson.com/arti...
Come on. Prechtor missed 95% of the bull market that you claim he predicted. He was OUT post 87. That is inexcusable.
On Oct 18 02:04 PM woollyB wrote:
> A lot of people overlook the big picture: Prechter predicted the
> biggest bull market in history, to be followed by a commensurately
> large bear market. The former happened, the latter is underway.
>
>
> As to the twists and turns of it, all his firm has recommended for
> years is staying safe in cash equivalents and "some gold." Higher
> equity prices are only a boon if you take advantage of them to sell,
> which hardly anyone does. The Dow at 10,000 this week is just a
> reminder that "stocks for the long run" believers have made zero
> net progress in over a decade.
>
> I may be a Prechter apologist, and I realize that he has made his
> share of mistakes, but I think on the balance his work stands tall.
We have not even scratched this surface. Prechtor is right IF we lived without the Fed. The Fed will fight the deflation just enough to make the deflation tolerable. You can see this if you properly devalue the dollars role in stocks. Take every asset class you have and chart it versus gold. Even this recent rally in stocks looks dramatically different when you no longer measure it in monopoly money. Go to stockcharts, type in $indu:$gold, weeklies, 20 years, it is shocking.
With a total disconnect from reality, scam-artists & charlatans appear from every quarter. I really don't get the whole "follower" thing, but the groupies' propensity to distort and mislead is even more alarming. Are they working on commission? What else could explain the intellectual dishonesty?