The Great Crash Ahead by Harry S Dent, Jr With Rodney Johnson – Book Review

Synopsis of Content: Harry Dent has been confounding the “experts” for twenty years by predicting economic and financial trends and markets based largely on demographic data and economic cycles.

This is his fifth book in a series that has predicted economic trends. If Harry Dent is right yet again everyone should be reading this book! Dent’s thesis is relatively simple enough: he submits that demographic trends drive economic cycles that have been predictable for several centuries and that these cycles drive the economy regardless of much else that is going on.

This fifth book traces that giant “baby boom” generation – 92 million people in the US born between 1946 and 1964 who have had the greatest impact on our economy and society in the past half century. He explains how this large demographic changes demand for goods and services as they pass through different phases from the explosion of school construction in the 1960s to educate them to through the strong economy of the 1990s and early 2000s when they were at the peak of their consumptive period.

The Great Crash Ahead now predicts an economic depression from 2008-2018 or longer due to the aging of this demographic and its reduced demand for goods and services. Combined with misguided government and financial policies this cycle built a giant “bubble” for real estate and credit during the first decade of the 21st century. This period from 2001-2007 was seen as a good time with easy credit and easy access to home ownership.

All bubbles in the economy are self-correcting. Dent describes how the correction in this credit and housing bubble combined with the steady reduction in spending by the largest group of Americans is working to create the worst financial depression since the 1930s. He weaves through this the over extension of credit both to the government and the private sector and how it cannot be quickly repaired. This then inevitably leads to failures of the financial markets and significant price deflation for the next decade. Dent does not limit himself to the US. He explains how similar bubbles and demographic trends led to the depressed Japanese economy for the past 20 years and will lead to similar problems in Europe and China.

Dent bases much of this on an 80 year cycle of boom and bust that his research shows has repeated itself many times over the past several hundred years. Now 80 years after the great depression we are again in the “winter” of this cycle which will last ten to fifteen years before a new spring will lead to a slow recovery in the 2020s.

It is difficult to ignore Dent’s theory. In the late 1980s he predicted the demise of the Japanese economy when most economists and pundits were bullish on Japan. Likewise in the 1990s when many were predicting difficult times for the US economy Dent was predicting the boom of the 1990s and early 2000s. The book traces the failure of government to correct this cycle because it simply cannot do so. It examines the huge private and government debt which must be paid off or written down to restore the economy. His macro predictions have been spot on so far, making it foolish to ignore what he says now. If he is wrong it will be the first time in his three decades of predictions and if he is right we are in for some tough times.

At the end of the book Dent gives advice for how we can use this information to protect assets, invest wisely in this “new” world. He teaches how to forget the way of doing things that we learned over the past half century and learn how to adapt to a new economy.

To be sure Dent has his critics. A quick Google of his name and books shows a number of highly critical articles arguing that Dent assumes too much, that his analysis while technically impressive overlooks other factors that will influence the economy beyond his demographic predictions and some who offer complex Elliott wave analysis suggesting that Dent has it wrong.

At the same time he has some impressive supporters. David Bach, John Thomas, Kim and Charles Githler, and a long list of others endorse his book. I cannot say for sure whether Dent is right or the critics are – but if he is right, he bears consideration. Again, while some of the details of his predictions may not have always panned out perfectly one cannot overlook or dismiss the general accuracy of his predictions to date.

Usefulness: It must be noted that any predictions of future economic trends and behaviors are inherently fraught with risk. However if Dent’s predictions in this book are as accurate as his past analysis this will prove very useful to anyone saving for retirement, investing, running a business or choosing a career.

Readability/Writing Quality: Dent writes clearly and well. The book is full of rather complex economic and demographic analysis. It is not an easy book to read but well worth the effort to understand.

Notes on Author: Harry Dent is an author and head of the HS Dent Financial Advisor Network. He publishes a regular financial newsletter. He is author of The Great Boom Ahead, The Roaring 2000s Investor, The Next Great Bubble Boom and The Great Depression Ahead.

Three Great Ideas You Can Use:

1. The economy is driven primarily by demographic trends which in turn drive economic cycles. External activities including wars, natural disasters and government actions have a minimal effect on these trends. Understanding these cycles and trends is critical to plan for the future and protect investments.

2. In the later part of the first decade of this century we have entered a winter phase of a very large 80 year demographic and economic cycle. Nothing the government does will change this. This winter cycle will lead to large debt restructuring, market corrections and deflation. The period between 2008-2018 will look much like 1930-1940.

3. Understanding this mega trend and its inevitable consequences is essential to investing wisely over the next decade to protect current assets and exploit the winter economy.

Publication Information: The Great Crash Ahead by Harry S. Dent, Jr. with Rodney Johnson Copyright 2011 by H.S. Dent Publishing Published by Free Press, a division of Simon and Schuster

Send Out Cards Review – Is Send Out Cards Real Or Hype?

Send Out Cards established by Kody Bateman in 2004 in Salt Lake City Utah has grown from a $800,000/year business to one turning over $70 million in 2009.

While this growth is staggering, we need to ask “Is Send Out Cards a scam?” or are customers and distributors getting involved in a real deal?

In this Send Out Cards review we are going to look at what the company does, what support and training are given to distributors, the quality of their products, costs to get involved and what flaws are evident in the business. At the end you’ll be able to make up your mind if you want to get involved either as a customer or a distributor.

Kody Bateman started the business after the passing of his brother when he realised that acting on a prompting by sending a card is difficult for most people. When a prompting enters their head it often passes just as quick because usually a person doesn’t have a card handy at home or they get put off the fact of having to go to a shop, park their car, find a card, write their message, then go to the post office, wait in a queue to buy a stamp and finally post their card. Most people say “I’ll do that tomorrow” but unfortunately that day never comes and their heartfelt thought is not expressed to their potential recipient.

Send Out Cards offers customers or distributors a virtual store service which can be operated from anywhere in the world whereby they can choose a card from over 10,000 selections, create a personal message in their own hand writing, upload a photograph, select a recipient and click send on their computer.

The Send Out Cards team then prints their card, puts a stamp on it and posts it for them. Printing occurs in Utah and Australia. Distributors and customers can take advantage of the company’s campaign manager feature which allows people to create cards, select recipients and have those cards sent at a future date.

Such a service sounds appealing but is the final product quality? The GSM card quality is the same used by all the major card manufacturers but as opposed to the ‘off the shelf’ cards offered by Hallmark cards and American Greeting cards, Send Out Cards products can be personalised with you own message. You can even add photographs to give your card a more personal touch. By uploading your own hand writing you can save time when ‘writing’ cards in mass.

With over 8 billion cards being sent annually in the USA alone, there is a lot of competition. Hallmark cards and American Greeting cards dominate the market with physical greeting cards. Blue Mountain cards and 123 Greeting cards offer an ecard service that is also popular. Send Out Cards takes the pluses of these companies by providing an online service that produces a physical, quality card just by clicking send on your computer.

Card costs vary but generally range from $3 to $6 for a quality card. As a distributor or wholesale customer of Send out Cards, your cards cost just 62 cents. The company also includes your first 100 cards with these packages when you start.

Getting started with Send Out Cards can be as little as $9.80 as a Retail Customer. This will allow you to ‘put your toe in the water’ and trial the company. You don’t get all the features with this product and your cards will cost you $2 each. The Retail Customer account does give you 10 cards included in the package.

Preferred Customers can acquire a pack for $31 per month. Card costs are now reduced to 31 cents for each unit. Typically a card will cost 62 cents without personal photos.

But if you are in small business such as real estate, financial services, mortgage lending, medical, health or beauty, then this Preferred Customer package is your best deal. Cost per card is now 62 cents and includes all the features. For those wanting to start a Send Out Cards business then you need to acquire the Entrepreneur package at $295. This pack includes all the same benefits of the wholesale package but includes a distributor kit allowing you to conduct a business.

Now up to this point you maybe thinking that Send Out Cards looks like a great service or business. But what flaws are there?

Well you need to be organised to some extent with this service. Send Out Cards still relies on the postal services of a country. There in lies some issues. Postal services can be unreliable for being late and are often subject to having strikes. The message here is send your cards early. You should budget for approx 5 days including printing time and postal time.

Humans are also involved in the process which can ultimately lead to problems. Mistakes can be made but with Send out Cards they are compensated by the company if they are at fault.

Computers at times also have glitches and with an increasing print run, sometimes these glitches occur more frequently. However based on the larger broader picture such glitches are very minor.

So is Send Out Cards the real deal? Well you be the judge. Before you get involved in any service as a customer or distributor make sure you do your own due diligence.

With businesses trying to figure out how to stay in contact with their customers in an economical manner or people just wanting to send a heartfelt message quickly, the 8 billion card market is certainly growing.

How to Trade – Book Review – John Murphy, Intermarket Analysis

The majority of literature that discusses asset allocation linking multiple markets has a heavy dose of macro and microeconomics. Typically, macro-micro relationships require applying econometric models to comprehend the structural linkages between the two intertwined fields of economics.  John Murphy removes the hard statistical methods while retaining the economic logic with chart-based reasoning.

John Murphy was the technical analyst for CNBC-TV for seven years and a professional analyst for over 25 years. His career includes time at Merrill Lynch as a Director of Commodity Technical Analysis.  John has his own consulting firm, JJM Technical Advisors.  He is also president of MurphyMorris, Inc., which was created to produce educational software products and online services for investors.

There are adequate reader reviews on Amazon and Google Book Search, to help you decide if you will get the book. For those who have just started or are about to read the book, I’ve summarized the core concepts in the larger and essential chapters to help you get through them quicker.

The number on the right of the title of the chapter is the number of pages contained within that chapter. It is not the page number.  The percentages represent how much each chapter makes up of the 246 pages in total, excluding appendices.

1.  A Review of the 1980s.  16, 6.50%.

2.  1990 and the First Persian Gulf War.  16, 6.50%.

3.  The Stealth Bear Market of 1994.  18, 7.32%.

4.  The 1997 Asian Currency Crisis and Deflation.  14, 5.69%.

5.  1999 Intermarket Trends Leading to Market Top.  16, 6.50%.

6.  Review of Intermarket Principles.  16, 6.50%.

7.  The NASDAQ Bubble Bursts in 2000.  18, 7.32%.

8.  Intermarket Picture in Spring 2003.  16, 6.50%.

9.  Falling Dollar During 2002 Boosts Commodities.  14, 5.69%.

10.  Shifting from Paper to Hard Assets.  14, 5.69%.

11.  Futures Markets and Asset Allocation.  20, 8.13%.

12.  Intermarket Analysis and the Business Cycle.  20, 8.13%.

13.  The Impact of the Business Cycle on Market Sectors.  18, 7.32%.

14.  Diversifying with Real Estate.  18, 7.32%.

15.  Thinking Globally.  12, 4.88%.

Focus on chapters 3, 7 and 11-14, which makes up about 46% of the book. Especially chapters 11-14 are relevant for practical trading purposes.  Unlike my prior book reviews, where I’ve summarized the key points for each focus chapter, I will summarize the key points across chapters 3, 7 and 11-14. This is to recognize the connectivity of intermarket relationships across the 4 main asset classes of Stocks (Equities), Bonds, Currencies and Commodities.  The context of the summary is to be viewed from a retail option trader’s perspective.

Here are the Key Directional Intermarket Relationships in brief.

The U.S. Dollar (USD)

  • USD turns up as Bonds rise under normal conditions but Bonds fall during deflationary periods. USD turns down as Bonds fall but Bonds rise during deflationary periods.
  • USD turns up as Commodities fall.  USD turns down as Commodities rise.
  • USD turns up as Stocks rise but Stocks fall during deflationary periods. USD turns down as Stocks fall but Stocks rise during deflationary periods.

The USD remains the most liquid of all major traded currencies and maintains its position as the primary global reserve currency, despite growing sentiment for an alternative basket of currencies to replace it.

Bonds

  • Bonds turn up as the USD falls but the USD rises during deflationary periods. Bonds turn down as the USD rises but the USD falls during deflationary periods.
  • Bonds turn up as Commodities fall.  Bonds turn down as Commodities rise.
  • Bonds turn up as Stocks rise. Bonds lead Stocks and Stocks lag behind Bonds. Bonds turn down as Stocks fall. Again, Bonds lead Stocks and Stocks lag behind Bonds.

Commodities

  • Commodities turn up as the USD falls.  Commodities turn down as the USD rises.
  • Commodities turn up as Bonds fall. Commodities turn down as Bonds rise.
  • Commodities turn up as Stocks fall. Commodities turn down as Stocks rise.

Stocks

  • Stocks turn up as the USD rises.  Stocks turn down as the USD falls.
  • Stocks turn up as Bonds rise.  Stocks turn down as Bonds fall. Again, Bonds lead Stocks and Stocks lag behind Bonds.
  • Stocks turn up as Commodities fall.  Stocks turn down as Commodities rise.

Specific to Equities, as you trade the options on Sector Indexes of the S&P 500, please be aware of the correlation versus non-correlation with other equity and non-equity traded products. I am stating in brief, the more commonly known relationships that are repeatedly elaborated on in the book:

  • Changes in Energy (XLE) especially Oil (OIH, OSX) impacts Semiconductors (SMH, SOX).
  • Utilities (XLU, UTH, UTY) are negatively correlated with Semiconductors (SMH, SOX).
  • With broad-based Equity Indexes, the highest correlation is between Dow Jones and S&P 500.
  • Canada benefits from rallies in oil being the ninth largest producer of crude oil globally.  While Japan, a major net oil importer suffers. The tickers for this inter-play would be FXC/XDC (Canadian Dollar), FXY/XDN (Japanese Yen) and OIH/OSX (Oil).
  • Gold (XAU, GLD) behaves like the Australian Dollar (FXA, XDA). Australia is the third largest producer of gold globally.
  • Top three currencies that have the tightest correlations with commodities are the Australian Dollar, the Canadian Dollar and the New Zealand Dollar.
  • Gold/Silver (XAU, GLD) has very little correlation with other Indices.
  • A deeper understanding of these inter-plays can help you construct effective pairs trading methods.

In conclusion, from a retail option trader’s viewpoint, always remember that it is volatility that you are trading.  To trade the volatilities across multiple asset classes, use an optionable Index representing that particular asset class.  Remember, Implied Volatility can be added to or reduced from your portfolio, as not all Asset Classes or Sectors or Individual Companies or Countries move up/down in value ALL at the same time; and/or, ALL at the same rate.

 

This is not a criticism of the book but a personal observation.  It does not address the use of Relative Strength as a mechanism to cycle in or cycle out of an asset class, as one asset class weakens or strengthens against another asset class.  I have written about Relative Strength in another article, entitled “Stock Option Trading – Fundamental Flaw in Fundamental Analysis and Stock Picking”. Please read it as a supplement to this article.

The Stars Shine Down by Sidney Sheldon: A Book Review

I got tired of mouse clicks and clicking pages on my laptop. Instead, I badly wanted a feel for solid pages in my hands. That’s when I thought I would take a break and enjoy reading a novel, flipping through its pages for real by my favorite author, Sidney Sheldon.

I went to the nearest bookstore and felt compelled to buy three novels by him and hoped to enjoy weeks reading them which is exactly what I did. One of these books was, “The Stars Shine Down”. I do want to provide a review of this well-structured, well-plotted and well-crafted novel. Read on for the review.

The novel describes a 17-year old girl, Lara who has a hate relationship with her Dad because no matter how much she wants to impress and love him, he always passes on stinging remarks about her. After her Dad passes away, she dreams of erecting a building in a nearby spot from where she currently lived in a boarding house. Eventually she materialized her dream and that was how she got into real estate business.

She also aged and became a beautiful lady and everyone was mesmerized at the first glance. Yet she was America’s princess travelling London to New York, from Rino to Rome constructing buildings, hotels and shopping centers. She was successful and became a self-made billionaire. Of course, she had help all along. She also came across her soul mate while travelling, who happened to be a pianist. They fell in love and married each other. Yet they were from different backgrounds, one erecting high rise and the other engrossed in music.

When all her valuable assets seemed to be crashing down and she almost broke off with her husband, a surprise birthday party from her husband, friends and colleagues made it all a happy ending for her.

This is a fabulous book to encounter. I would recommend it to anybody who is interested in reading novels.

Some of Sidney Sheldon’s blockbuster novels are “The Sky is Falling, “Tell me Your Dreams”, “The Best Laid Plans”, “Morning, Noon & Night”, “Nothing Lasts Forever” and a countless other ones. Almost all have been number-one international bestsellers. His first book, “The Naked Face” was acclaimed by the New York Times as, “the best first mystery of the year” and received an Edgar Award. Most of his novels have become major feature films or TV miniseries and there are more than 300 million copies of his books in print throughout the world. Undoubtedly, Sidney Sheldon reigns as one of the most popular storytellers of all time.

The Girl From the Sea by Shalini Bolland: A Review

In her amnesiac thriller, Shalini Bolland introduces us to the confusion of a solitary woman washed up the shore. Percussive short sentences indicate the woman’s state of mind. The author segues into the sights, sounds, and smells of the hospital as our heroine is brought into the Emergency Department.

Reassured by Dr. Lazowski that her amnesia is temporary, our victim obsesses because she can’t even remember her name, much less how she came to be lying on the beach, water washing over her. Well-intentioned doctors, nurses and detectives press her for any memory that might surface. “Retrograde amnesia”. The use of the term strikes her panic button.

  • Where are you from?
  • Were you out running?
  • Do you have any identifying marks on your body?
  • Can you remember names of people you may know?

“I don’t know” is her resounding response. A look in the mirror confirms her fears. She has no idea who she is.

Someone has reported that “Mia James” is missing. Could that be her name? We immediately mistrust Mia’s boyfriend and family. Upon meeting her mother, she discovers that old photos of her are “in storage.” Piers, her boyfriend, whom she does not remember, fills her in on a huge inheritance she received from her father, and a real estate business that she and Piers own together. Mia meets all new information with mixed emotions. Who can she trust?

This contemporary mystery proceeds at a fast clip, fueling my inability to put the book down. The first person narrative is peppered with short paragraphs we assume to be memories, but even these are hazy. The emotional acceleration is propulsive until the middle of the book. Lies, blackmail, secrets, accusations, mistrust weave through The Girl from the Sea, but the book’s momentum slows to the point where the thrill of the thriller is stalled. A good read for those not needing consistently compelling reading.

I thank NetGalley and Adrenalin Books for supplying an ARC for my unbiased review.