In early-2009, as it seemed like the financial world was teetering on the edge of collapse, I was asked by a family member what I thought about a new book by Harry Dent called The Great Depression Ahead: How to Prosper in the Crash Following the Greatest Boom in History.
My response to this inquiry was that anything is always possible, but predicting a depression after all of the carnage we had just witnessed in one of the worst recessions in almost 100 years seemed like a stretch. Dent had some buzzwords to back up his prediction — demographic cliffs and such — but obviously, his timing was just a tad off. The book came out in January of 2009, exactly two months before the stock market bottomed. We have since witnessed one of the least volatile economic recoveries in history.
I was reminded about this interaction because Dent is out with another new book this week called The Sale of a Lifetime: How the Great Bubble Burst of 2017-2019 Can Make You Rich. Dent is a successful author based on the number of books he’s sold over the years, but I thought it would be helpful for those looking to profit from his predictions to take a look at his previous titles and timing.
The book that put Dent on the map was called The Great Boom Ahead: Your Comprehensive Guide to Personal and Business Profit in the New Era of Prosperity. This one was released in 1993 and the timing was fortuitous as the stock market and economy both boomed throughout the remainder of the decade. My feeling is the worst thing that can happen to a pundit is that they’re right on a moonshot call like this because it just feeds the flames of their confidence that they can do it again.
Dent’s next call wasn’t quite so lucky.
He released The Roaring 2000s: Building the Wealth and Lifestyle You Desire in the Greatest Boom in History in late-1999, just a few months before the stock market peaked and went on to get cut in half. Dent said that changing demographics would result in Dow 35,000 by the end of the decade. Instead, the stock market was down over the ensuing ten years and the economy experienced two separate recessions.
Instead of taking a breather from the world of financial punditry after a terrible call, Dent doubled down in early-2006 by releasing The Next Great Bubble Boom: How to Profit from the Greatest Boom in History: 2006-2010. This time he said the Dow could hit 40,000 by the end of the decade based on a “comprehensive forecast” that predicted a boom similar to the roaring 1920s. Obviously, this one was just a bit outside as less than two years later we saw the worst economic collapse since the Great Depression.
The script was then flipped for the aforementioned The Great Depression Ahead, which likely kept a lot of readers out of one of the greatest stock market recoveries in history.
Even after a disastrous string of predictions Dent once again doubled down with his 2011 release The Great Crash Ahead: Strategies for a World Turned Upside Down. The book’s description says that this one would be, “outlining why the next financial crash and crisis is inevitable and just around the corner — coming between mid-2012 and early 2015.”
Staying on theme was The Demographic Cliff: How to Survive and Prosper During the Great Deflation of 2014-2019 which came out in 2014.
I’m sure the latest book fails to mention any of these previous forecasts, but it does change the dates of the coming crash from 2014-2019 in the last book to 2017-2019 in this one.
Dent is a New York Times Best-Selling author. I’m sure tens or even hundreds of thousands of these books have been purchased over the years. I should be shocked that they’re still getting published, but I’m really not all that surprised. People are constantly in search of the silver bullet to get rich. There Is No Easy Way to Get Rich Overnight wouldn’t sell too many copies.
After looking back at his titles, here are the lessons I’ve learned about how to sell finance books in this way:
- Go out on a limb and make extreme predictions. The more outlandish, the better.
- Promise people you will help make them rich and know what’s going to happen in the future.
- Make sure that your forecasts are very precise — include the timing of the boom or bust and give nice round numbers for your market targets to get people’s attention.
- If at first you don’t succeed, just write another book a couple years later and hope that people will forget about your previous efforts.
- Make use of buzzwords, scare tactics and urgency to get people to read.
- No matter what happens in your forecasts, tell people that you can help them make a profit.
I get why Dent continues with these types of predictions. You can get a huge rush from being right about the markets, especially when it’s a non-consensus call. It’s also a great way to sell books and newsletters and perhaps get yourself some speaking gigs. Unfortunately, it’s a horrible way to make money for your readers and investors.
One would think that Dent will eventually be “right” with one of these predictions. That doesn’t mean it’s a good idea to listen to him. These books may help Dent get rich, but they won’t help investors get rich.
Further Reading:
Beware Stock Picks From Your Favorite Media Pundit
Will Retiring Baby Boomers Ruin Future Market Returns?
