Live chat with Harry Dent Jr.
harry dent crash jr. dow 40,000 chat markets dow
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Harry, just to start things off, I'd like to ask for a brief overview and update of your market forecasts. A couple weeks ago you told our Shirley Won you believed a 50 to 70 per cent market crash was in the cards, with the brunt of that possible this year. We did get news yesterday from the Fed though that rate moves should stay on hold until late 2014 and further quantitative easing may be in the works. Any change of heart? -

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That is why we see the stimulus plans failing at some point, most likely in mid 2012 or 2013. A second meltdown is very likely to be deeper. Hence, stocks should at least retest the March 2009 lows of 6440 on the Dow and likely lower. That's how you get a 50-70% crash from current levels. -

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Baby Boomers have been retiring around age 63 on average for the last decade. It is likely that they will stay in the workforce longer, but those earnings will be put towards saving for retirement. This is especially the case now that many have seen their retirement plans fall in value... -

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Good morning Darcy and Mr. Dent, it is my pleasure to be with you this morning. Mr. Dent highlights some very important trends in terms of demographics. While demographics is not my specialty, we do deal with an aging population, hence the demand for income- or yield-oriented products more and more. The aging population is of some concerns to us especially in countries and/or economies such as Japan and China that may have an impact on the preformance of equities in general. -

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That is a fair question but a difficult one to answer as we are not int he business of forecasting. However, investors are always intersted in knowing our viewpoints. We agree that there are some serious structural problems in the global economy and that the events that habve shaped Europe or the Eurozone over the past three years coupled with the slowing economic trends of China have had a tremendous impact on investor behaviour... -
We also believe that the fiscsal problems that the Eurozone is facing wil not go away easily or soon for that matter. This will be a long way to recovery. Economic data out of the Eurozone and the UK (such as yesterday's UK GDP release) do show us that Europe will be entering another recessionary period... -

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We at BMO Mutual Funds have seen a much higher demand for income- and/ore yield-oriented vehicles. I would say that the demand will continue for some time. With so much cash on the sidelines, corporations will continue to increase dividends. I woudl also agree that long-term bonds will do better in the first part of theyear... -

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Harry, could you go over "what went wrong" on your Dow at 40,000 prediction? When sensationalistic claims miss by that much, one is naturally skeptical of the next one. Especially when each claim is accompanied by a book you need to sell. So maybe a sober look back on what you thought you saw and why it didn't happen would help explain why that mistake was the exception and not the rule. -
We were looking at the last bubble economy from 1912-1929 when there were 2 bubbles in tech stocks; the first 1912-1919, then a big crash like 2000-2002, and then a bigger bubble from 1922-1929. This time we had 2 bubbles, but in the 2nd from 2002-2007, the bubble shifted to real estate, emerging markets and commodities. Hence we got a doubling of stocks instead of a quadrupling. But we still had investors in stocks during that boom including Asia./ -

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This question is for Harry - if am not a short term investor and not using leveraged money is there any reason for me to worry about a "market crash" ? well understanding that most markets tend to rebound o the upside baring an unlikely long drawn recession or "depression" ? -
From the last 2 generational market peaks in 1929 and 1968, it took the stock market 23 to 24 years to get back to those levels. if you want to wait that long be my guest. and the downside from the 1929 peak was 87% and the Japanese bubble burst since 1990 has seen 80% declines. That is too much to sit through./ -

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