I have received some emails asking me whether Harry Dent could be right this time. In case you were wondering, the Harvard Business School alum who has been predicting a major crash and an ensuing economic depression for years cast another warning on the state of the market.
Damn it! Like some other gurus who prefer to choose the easy way – sensationalism, Harry Dent has been predicting gloom and doom his entire career. Will he be right this time?
I can assure you that his latest prediction does not faze me in the slightest. At the risk of sounding like a broken record, to achieve long-term success in the market, maintaining a positive mindset and optimism about the future is essential.
Challenges can always be overcome, and the economy and markets have a history of rebounding. More money is often lost by waiting for catastrophic events and remaining inactive in the meantime. This recent article on Business Insider discusses his latest prediction.
Here is a section:
Dent says stocks look like they’re in the “bubble of all bubbles” thanks to overly loose monetary and fiscal policy that has inflated asset prices for the past decade. When that bubble finally bursts, Dent estimates that the S&P 500 could lose as much as 86% in value, while the Nasdaq Composite could lose as much as 92%. “Hero” stocks, like chipmaker Nvidia, could drop as much as 98%, he said, implying a multi-trillion market crash.
“This thing has gotta blow. It’s showing signs of topping here,” Dent said in an interview with Fox Business network on Sunday, noting that stocks were now “barely” making news highs.
“We’ve got to see a crash of about 40% to say, okay, the bubble’s finally let off the steam. And once it gets that much momentum, I think it’s hard to stop,” he warned.
Dent estimated that the bubble has been forming for the past 14 years, far longer than most bubbles in history, which typically last for five or six years before bursting, he said.
That’s partly because markets have been flooded with stimulus since the 2008 downturn, Dent said. Markets have benefited from around USD27 trillion in stimulus since the financial crisis, he estimated, based on accumulated budget deficits and the amount of cash printed since then.