Thursday, June 02, 2005

The Bullish Case, Revisited

Early in the life of this blog, I mentioned the macro-economic views of Harry Dent. In a nutshell (no pun intended), Dent considers the market in the mid stages of a "Bubble Boom" in which the surge of the late Nineties in the equity markets was only the first leg of this bubble. The second leg, according to Dent, is upon us now, due to assert itself and make it all friggin' obvious to us market players at any moment.

Yesterday I received an update from Dent, reaffirming his analysis and suggesting that the friggin' obvious part will make itself known between late/June-early/July and October of this year.

As for Real Estate, Dent suggests that the pending explosion in equity prices will end the Real Estate Boom as money from real estate will flow back into the stock market. Dent expects Fed tightening to be coming to a close and that oil has seen it's highs for at least a year or so.

It's hard to use this kind of trend analysis in trading, maybe even in investing, but I am revisitng it here in case Dent's scenario seems to be coming together later this summer or fall. If so, maybe we can start taking it more seriously.

3 comments:

Jack Cory said...

Allan,

I don't carry the good reputation or the cachet of Harry Dent BUT I do agree with his general analysis. I really don't know a thing about the various legs of a Bubble Boom having apparently never witnessed such a thing in over 50 years of market trading and study. (Unless the late 40's to late 60's constituted such a phenomenon. [I would like to know more.]}

Anyway, as I mentioned in my last post, the DJIA appears to be on the move toward new highs for the year. Assuming that occurs in the next two or three weeks, then I would consider that this bullish phase will continue - very much in line with Harry Dent's analysis and projection.

My analysis here reminds me of a time when a very close friend was the Chairman of the USC President's Club, definitely a money-raising job. One Saturday, at his behest, I sent a $25 check to the organization. The next morning I saw in the Sunday LA Times front page that Walter Annenberg had just donated $200 to the University the previous day. I immediately called my friend, who was still sound asleep at such an early Sunday morning.

"Norman", I said, "Just so it doesn't come as a complete surprise to you when you pick up the paper, I want you to know that yesterday Walter Annenberg and I donated more than $200 million to the University."

In much the same way, I now stand with Harry Dent in calling on the market to burst upward in a fury.

Ronny said...

Allan,I hope Dent is correct,but the record of these cycle analyzers is very poor.There has not been one person (according to Gary Smith) that has been successful using this method long term.

Allan said...

Jack, great story thanks for sharing.

Ronny, yea, I know that is a lot of skeptism about Dent, some real market savvy people I know think he is full of it....nonetheless, I find his theories engaging and would love nothing more then for him to be right, this time, giving us all a second chance at this mania thing.

A