Marcus Cake

I have been reading extensively to understand long term trends. The aim being to identify opportunities and refine my personal strategy over the coming years. One particular author publishes long term forecasts based on global demographics and technology change -Harry S Dent . This author particularly appeals to me given my original study of economics and subsequent study of strategy. His views also mirror my belief that there will be another boom based around a narrow niche of technologies.

I extracted a few paragraphs from the book. If you are interested in how the world may evolve, the following extracts are likely to be of interest. I have also enclosed references to the original source material and recommend that you purchase the complete copies to read in detail. I would also recommend that you subscribe the HS Dent newsletter. This post is intended to be read with other articles on this web site.

Original book - “The Next Great Bubble Boom”
The original book was called the The Next Great Bubble Boom. “The theme of The Next Great Bubble Boom (Free Press, September 2004) is that it is a terrible misperception that we’ve seen a bubble in stocks, and now it’s over.” Additional information on the book is available from Amazon Additional information on the author is available from the Harry S Dent web site.

Recent update to published book - “Bubble After Bubble in The Ongoing Bubble Boom”
Harry Dent has published an update to his book called “Bubble After Bubble in The Ongoing Bubble Boom: Oil Bursts, the Housing Bubble Fades and Stocks Emerge Into a Greater Bubble that Finally Ends in 2010″ by HARRY S. DENT, JR. The full version may be purchased from Amazon.com Amazon.com for US$0.49.

“In Brief: Investors and businesses need to understand that we are in a continuing bubble boom that did not end with the 2000 - 2002 crash in stocks any more than it did with the 1987 crash. The recent oil bubble has countered the markets’ attempts to rally above 11,000 since early 2005. Stocks corrected and got the most oversold they have been since October of 2002 and March of 2003 in the mid to late April panic with extreme bearishness among everyday investors and the Dow’s test of 10,000. We are calling this the second “Great Buy Opportunity of a Lifetime,” following October of 2002, when we gave our strongest buy signal in the 16-year history of The H.S. Dent Forecast. We are advising to buy on minor corrections between August and November, before the markets accelerate again from late 2005 into mid 2006 into a dramatic peak and final bubble around 2010.”

“And finally, stocks will surge again between late 2005 and early 2006 to new extremes into 2010. That will cause a number of leading stock sectors in the past few years, like oil, commodities and housing, to lag and possibly crash. Large and small cap growth stocks, especially technology, are going to take the stage again and lead the next bubble driven by the second stage, or maturity boom, of the S-Curve technology cycle in Internet, wireless, broadband and digital devices. Again, the sharp bubble in oil prices recently has put a damper on the stock rally that attempted to accelerate in early 2005.”

“The market has been holding its gains well given the oil bubble, but hasn’t clearly moved into the next bubble phase of more consistent momentum. We think that has possibly begun since late April, but it could be until August or as late as November before we see the next very strong acceleration truly begin.”

“In The Next Great Bubble Boom, we forecast that the markets would accelerate again in early 2005. Our recent analysis given the oil and housing bubbles now suggests that should occur by mid to late 2005 instead. The Dow making a new high will be an important event as it will dispel most of the “this is just a bear market rally” forecasts and convince more investors that we are in the next major bull market. This is now most likely to occur between January and March of 2006, or May of 2006 at the latest. Most investors have not noticed that the small and mid cap stock indices have already made new highs from the peaks in 2000, confirming the next bull market.”

“There are two likely stock scenarios for the coming year:
1) The first would be the beginnings of a stronger bull market in late April with stronger growth just ahead, with a moderate correction likely into October or November, and new highs on the Dow by early 2006.
2) The second, would be a choppier bull market at first with a more substantial correction between mid August and November (but not likely lower than around 10,175 on the Dow), and then an acceleration by late 2005 with new highs on the Dow by mid-2006.”

“Somewhere between late 2009 and mid-2010 we expect the next great bubble to burst and for us to see another crash that will look much like the 2001-2002 crash, only worse and steeper at first. The difference is that this will usher in a deeper and longer-term bear market and depression, similar to the last shakeout stage on the eighty-year cycle that hit in the 1930s and the bear market in Japan in the 1990s and early 2000s.” [This paragraph has been extracted from the original book].