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Dent is the Founder of HS Dent Investment Management, an investment firm based in Tampa, Florida that advises the Dent Strategic Portfolio Fund mutual fund. Dent is also the president and founder of the H.S. Dent Foundation and H.S. Dent Publishing.
Dent writes an economic newsletter that reviews the economy in the US and around the world through demographic trends focusing on predictable consumer spending patterns, as well as financial markets, and has written seven books, of which two recent ones have been bestsellers:
The basis of Dent's research is the highly predictable nature of consumer spending based on a family's formation pattern: minimal spending as young adults, increased spending while rearing children, peaking their spending as their children leave home, and then slowing spending during the last 15 years of working life (48-63) while saving more and preparing for retirement.
In the late 1980s, Dent forecast that the Japanese economy, then the darling of the world, would soon enter a slowdown that would last more than a decade. In the early 1990s, he predicted that the DOW would reach 10k. Both of these predictions were met with much skepticism, and yet both eventually came to pass.
In Japan, Dent was using their peak of 45-50 year olds (1990–1994) as the beginning of a long slowdown. In the US, he used, and continues to use, the peak year for 48-year-olds, 2009, as the top of a long term growth pattern.
In 2000, based on his forecast that economic growth would continue throughout the 2000s, Dent predicted that the DOW would reach 40k, a prediction which was repeated in his 2004 book. In his book, he also predicted the NASDAQ would reach 13-20k. In late 2006 he revised his forecasts to much lower levels, estimating the Dow would reach 16-18k and the NASDAQ 3-4k. In January 2006, he predicted that the DOW would reach 14-15k by the end of the year. It ended 2006 at 12,463, 11% below the lower end of his prediction. It ended 2007 at 13,264, again significantly lower than Dent's revised prediction of 15,000 by early 2008. Since then, the Dow crossed 14,000 in late 2007 before retreating.
Dent popularized the baby boomer spending wave theory. According to him, after baby-boomers' children leave home, they begin paying down debt and saving for retirement, which means spending less. That means the stock-market would have plateaued between 2007 and 2009, and remain basically flat through the fourth quarter of 2011.
His 2011 book goes on to suggest consumer spending will begin to plummet in 2012 with the Dow bottoming out somewhere between 3,000 and 5,600 in 2014. After hitting bottom, stocks will experience a mini-rally in 2015-2017 before falling into a final bottom during the 2019-2023 period, when the 45-50 age group troughs because the U.S. birth rate reached its own low in 1973.
Dent makes heavy use of charts, cycles, and trends, apart from his demographic theories in predicting short and intermediate term economic and stock cycles. His work is based primarily on the assumption that most long term stock market performance can be explained by long-term trends and charts from the past. His critics question the assumption that clues to all major stock market events can be found in the relatively short history of well functioning stock markets in the world. His work has been criticized also for heavy use of data dredging - where it is easy to find patterns in past data and assign predictive powers to them when many such patterns occur in every data collection purely by chance. Dent has been criticized also by many economists for being downright wrong in several of his predictions. In fact, www.maxfunds.com, a financial reporting site awarded him the The "Ultimate Charlatan" Award. They write: "The worst investing advice usually arrives near the top and bottom of stock market cycles. Demographic trends guru Harry S. Dent is making the rounds again, and touting his latest book, The Great Depression Ahead: How to Prosper in the Crash Following the Greatest Boom in History ...." In his 2006 work, Dent predicted, “The Dow hitting 40,000 by the end of the decade, the NASDAQ['s] advancing at least ten times from its October 2001 lows to around 13,500, and potentially as high as 20,000 by 2009 … The Great Boom['s] resurging into its final and strongest stage in 2007, and even more fully in 2008, lasting until late 2009 to early 2010.” None of these predictions turned out to be true. In 2011 and 2012, Dent made new predictions on the state of the Dow Jones Index and the S&P 500 in both the short and long term. Among these was a prediction that the S&P 500 would fall 30-50% inside of 2012. However, as of late November, 2012 the S&P 500 is nearly up 10% for the year to date.