For people interested in Gold (V: hint, hint)
 

Hi,

Link is below ...

Best,

- Boyd


http://www.miami.com/mld/miamiherald...ss/5290493.htm

G and D from Mr. B (V, you readin this?)
 

Hi,

As usual, link is below ...

(P.S., to anyone who likes the stuff I post, I welcome and appreciate feedback.)

Best,

- Boyd


G and D from Mr. B

kcabdeef
 

Boyd:

I read the links you post.

Any chance you could add a teaser paragraph to your posts. Otherwise it's kinda like a lucky-dip - click and wait for it to load up to find out what I clicked through to read. :o)

BTW... who or what is V - V: V, - I don't get it.

Now excuse me while I go look up what a derivative is...

Michael Ross

The teaser para is a good idea--I'll do it [DNO]
 

dno
> Boyd:

> I read the links you post.

> Any chance you could add a teaser paragraph
> to your posts. Otherwise it's kinda like a
> lucky-dip - click and wait for it to load up
> to find out what I clicked through to read.
> :o)

> BTW... who or what is V - V: V, - I don't
> get it.

> Now excuse me while I go look up what a
> derivative is...

> Michael Ross

How you can escape the coming Depression
 

Boyd!

Thanks for posting that link.... Anything from wise man Buffett is good to read.... :)

By the way, there are also a lot of good articles about him in the latest edition of Fortune magazine.... (Link below.)

I've recently been reading more from Harry S. Dent. I picked up a copy of his book, "The Roaring 2000s Investor" just a few days ago.

He predicts a coming depression in the USA.... But not all hope is lost. At the same time, a few Asian economies should be doing well.... He names South Korea, Hong Kong, Singapore, and a few others. (This was before the current North Korea crisis though - that could affect the fortunes of South Korea.)

Outside of Asia, Spain could do well too. This is all based on demographics....

So, if you're willing to be a global investor, it gives you hope! Although I wouldn't want my money in the US market after around 2008 (or probably even earlier), it may be a good time to start educating yourself about investment in some of these other countries....

Anyhow, that's one thing I plan to do. (Will add it to the "To Do" list!)

- Dien Rice


Click here, then go to the "Special" on Warren Buffett

Thanks Dien + Check this out
 

Hi,

Thanks for that info, Dien.

Bad crud is coming. Today I read an article that I'll quote some text from and then post a link to.

-Boyd

[quote begins below]

At the moment, North Korea is striving to create a crisis that will force us into another round of negotiations. Their recent interception of our reconnaissance aircraft is part of that plan. The critical moment will probably come shortly after we enter Iraq. At that point, when our military is least able to handle war on the Korean peninsula, the North Koreans will begin to reprocess spent fuel rods at the Yongbyon nuclear reactor into weapons-grade plutonium. The plutonium will then be removed from Yongbyon, secured against the gaze of spy satellites or future inspectors, and used to produce nuclear bombs. More ominously, the plutonium, and/or finished bombs, will then be sold to al Qaeda, and to regimes like Iran, Syria, and Libya. This will force us into a choice between 1) losing the war on terror through inaction; 2) an attempt to impose-ineffective — sanctions; 3) negotiations with a government of proven liars; 4) a terrible war.


Click here to read more

Neanderthal Investing
 

Neanderthal man remained unchanged for around 500,000 years. Same huntung method. Unable to predict or recognise seasonal patterns.

If the food he was hunting ran out, he moved to another place where that food could be found. He did this instead of figuring out a way to hunt the available food.

I liken this to investing in the stockmrket in other countries.

Instead of learning other investing methods, you stick with what you know - buy and hold stocks - and try and find those stocks in other countries.

It would make more sense to learn a variety of investing methods. That way, if the stocks go down, instead of trying to find stocks to buy elsewhere, you change your investment mode.

Warren Buffet doesn't just buy stocks... sometimes he buys whole companies not listed on the stock exchange.

So while Buffet Wanabees seem to concentrate on and only buy stock, the man himself buys stock AND unlisted companies.

Granted, the stock he buys belong to Companies. And the stock is just the "market value" of the company. But still.

Also... wouldn't it make sense to buy when the market goes down down down? Wouldn't there be a lot of bargains to be had?

Michael Ross

Advice from the Neanderthal Man
 

Hi Michael,

You may be right. There are many ways to profit, even if stocks are going down....

Some react by buying gold. Others will look to buying property. Others may buy bonds. And others will short-sell.

I'm no expert on these other things, though....

It's perfectly legitimate to move your investment activities to elsewhere when things dry up somewhere else.

It's like business. If people don't want to buy your gizmos in Lapland, sell them in Siberia. (Well, you know what I mean.)

There's a 1980s band I kind of like, their name is "Swing Out Sister". They had a big hit in the late 1980s with a very upbeat song - "Breakout". Recently, I decided to look them up online - are they still around?

I got a shock. They are originally from the UK, but NONE OF THEIR RECENT ALBUMS ARE AVAILABLE IN THE UK (or in the USA or Australia for that matter). Guess where they are available?

Japan! Swing Out Sister are VERY BIG in Japan!

What they found was that, their sales in the UK and elsewhere dried up. But in Japan - their fortunes got higher.

Nowadays, Swing Out Sister focus on the Japanese market - and do very well there. Even though they are a British pop group, and all their songs are in English!

Of course, they could have stayed in the UK. They could have stopped the pop music game, and gone into a different business. Perfectly legitimate. But sometimes, if you've mastered one thing, it's good to stick to what you're good at (and what you enjoy).

Of course, investing in other countries doesn't mean you CAN'T do all these other things - short selling, buying gold, property, etc.

Thanks, though - you made a good point. :)

Dien Rice
(there's a Neanderthal Man in here struggling to get out!)

> Neanderthal man remained unchanged for
> around 500,000 years. Same huntung method.
> Unable to predict or recognise seasonal
> patterns.

> If the food he was hunting ran out, he moved
> to another place where that food could be
> found. He did this instead of figuring out a
> way to hunt the available food.

> I liken this to investing in the stockmrket
> in other countries.

> Instead of learning other investing methods,
> you stick with what you know - buy and hold
> stocks - and try and find those stocks in
> other countries.

> It would make more sense to learn a variety
> of investing methods. That way, if the
> stocks go down, instead of trying to find
> stocks to buy elsewhere, you change your
> investment mode.

> Warren Buffet doesn't just buy stocks...
> sometimes he buys whole companies not listed
> on the stock exchange.

> So while Buffet Wanabees seem to concentrate
> on and only buy stock, the man himself buys
> stock AND unlisted companies.

> Granted, the stock he buys belong to
> Companies. And the stock is just the
> "market value" of the company. But
> still.

> Also... wouldn't it make sense to buy when
> the market goes down down down? Wouldn't
> there be a lot of bargains to be had?

> Michael Ross

Thanks Boyd - we live in dangerous times... (DNO)
 

Ug. Huh. Grunt.
 

Air Supply are also BIG in Japan and some other Asian nations.

I understand the point you are making, using Swing Out Sister as an example.

But you're talking about SELLING.

INVESTING in stocks is not selling.

Trying to find under valued stocks is not playing a monotonous-sounding musical piece on the radio.

And it appears that no matter what the economy is doing, there are certain industries that always make money and survive.

Entertainment is one - even though sales may drop, they don't disappear entirely. Entertainers can still make a VERY good living.

Food. Shelter. These are items that MUST be bought. People NEED them.

People don't NEED to invest in the stock market.

Certain stockmarket investing "options" may be more "secure" during economic hardship - such as Gold which you mentioned. And if that is the case, then it would be a prudent thing to LEARN about these.

Instead of looking for another pond to fish in, why not learn the various methods you can use to catch the different fish in the pond you are already fishing in?

Because maybe, just maybe, you might not ever find your other pond. Or if you find it you discover you aren't allowed to fish in it.

I'm not saying to not look for the other places to invest. Just saying to Cover Your Downsides.

Michael Ross

Interesting...
 

Germany and Japan.

Iraq and North Korea.

Similarities?

I can just picture it... Sod Him, He's Insane is on the phone with Him Looney...
Looney. Listen buddy. I'm in some deep do do and need you to do something for me.

How can I help, Insane? And what do I get out of it?

Well. I want you to start up your nuclear program.

WHAT!? What about the USA and the UN.

Ba humbug. They are pathetic. Just look how I have had them running around for ages. Anyway. Start it up. They will be distracted by you.

And what do we get out of it?

Apart from you actually having some nukes now, *I* will buy some off of you. Name your price.

Hmm. I'll have to think it over.

Of course. I wouldn't have it any other way. But remember. If you do nothing before the US comes after my butt, the deal is off.

Well in that case. Consider it done. I shall start "Operation Annoying Gnat" A.S.A.P. Ciao.

Meanwhile back in the Whitehouse...

Col? Rummy? Conny? Listen up. We need a full set of plans and backup plans, and backup backup plans for dealing with Looney over in North Korea. And keep this super hush hush okay gang. Not a peep out of any of you. We want the media and everyone to think we aren't doing anything about North Korea except ignoring them. That way, they won't see us coming.

And when we do move stuff around, make sure it serves a dual purpose - to mis-direct as well as be something we need anyway. Like, when the time is right, take some bombers of to Guam... but only while we similtaneously do stuff elsewhere. That way, everyone will be looking at Guam and not where the real important stuff is going on.

Okay. get to it and let me know when you've got your plans and triple backups ready.


While all this is going on, leftists tied to and sponsored by Iraq/AlQaeda- in a filtered and hard to trace kind of way - convince a bunch of dupes and school kids to hold anti-war marches all over the world.

Of course, they make sure to get pro-abortionists to be against all the babies that will die should a war break out. They do this to show us how stupid the marchers are. But the media doesn't get the joke.

On the other side of the pond...

Blair tries in vain to talk sense into schoolies and others. Never realizing that no-one is yet to change their mind on this since the beginning. Those who were anti-war are still anti-war and will always be anti-war no matter what. It's like those who believe the shroud of turin is real despite the overwhelming evidence it was faked (different size front and back images, head that doesn't sit right, material not as old as should be, owned by people who employed the great artist who knew how to put images into things without painting, etc., etc.)

And down the bottom of the pond... in out of the way Australia... more dopey school kids march to the sound of their teachers and parents brainwashed drums. Being anti-WhateverIsInVogueThisWeek without offering a viable alternative.

And in France, little old Jaques - who once sold a nuclear reactor to Iraq! - says the same thing he said four years ago... we must give them more time.

Man. You couldn't write a script with so much stuff in it.

Michael Ross

Re: Advice from the Neanderthal Man
 

Ever notice that, despite all of the pirating of
music that goes on in Asia, they're always 10 or 15
years "behind" the U.S. in what's popular?

Also, Japan and some European countries seem to
be good markets for U.S. actors who decide to cut
an "album" (wow, does that sound antiquated or what?).

For example, David Hasselhoff and Alyssa Milano both
had quite of bit of musical success in those markets
in the 1990's. And, I just read today that Jennifer
Love Hewitt is quite popular "over there" and has
just released her 4th album!

But, here in the States -- Jennifer Love sings?
What, you mean like at parties 'n stuff?

Just an observation...

Chris

P.S. I liked Swing Out Sister, too. ;->

> There's a 1980s band I kind of like, their
> name is "Swing Out Sister". They
> had a big hit in the late 1980s with a very
> upbeat song - "Breakout".
> Recently, I decided to look them up online -
> are they still around?

> I got a shock. They are originally from the
> UK, but NONE OF THEIR RECENT ALBUMS ARE
> AVAILABLE IN THE UK (or in the USA or
> Australia for that matter). Guess where they
> are available?

> Japan! Swing Out Sister are VERY BIG in
> Japan!

> What they found was that, their sales in the
> UK and elsewhere dried up. But in Japan -
> their fortunes got higher.

> Nowadays, Swing Out Sister focus on the
> Japanese market - and do very well there.
> Even though they are a British pop group,
> and all their songs are in English!

> Of course, they could have stayed in the UK.
> They could have stopped the pop music game,
> and gone into a different business.
> Perfectly legitimate. But sometimes, if
> you've mastered one thing, it's good to
> stick to what you're good at (and what you
> enjoy).

Re: Advice from the Neanderthal Man
 

Hey Dien:

Amazon has a load of Swing Out Sister albums for sale...

> Hi Michael,

> You may be right. There are many ways to
> profit, even if stocks are going down....

> Some react by buying gold. Others will look
> to buying property. Others may buy bonds.
> And others will short-sell.

> I'm no expert on these other things,
> though....

> It's perfectly legitimate to move your
> investment activities to elsewhere when
> things dry up somewhere else.

> It's like business. If people don't want to
> buy your gizmos in Lapland, sell them in
> Siberia. (Well, you know what I mean.)

> There's a 1980s band I kind of like, their
> name is "Swing Out Sister". They
> had a big hit in the late 1980s with a very
> upbeat song - "Breakout".
> Recently, I decided to look them up online -
> are they still around?

> I got a shock. They are originally from the
> UK, but NONE OF THEIR RECENT ALBUMS ARE
> AVAILABLE IN THE UK (or in the USA or
> Australia for that matter). Guess where they
> are available?

> Japan! Swing Out Sister are VERY BIG in
> Japan!

> What they found was that, their sales in the
> UK and elsewhere dried up. But in Japan -
> their fortunes got higher.

> Nowadays, Swing Out Sister focus on the
> Japanese market - and do very well there.
> Even though they are a British pop group,
> and all their songs are in English!

> Of course, they could have stayed in the UK.
> They could have stopped the pop music game,
> and gone into a different business.
> Perfectly legitimate. But sometimes, if
> you've mastered one thing, it's good to
> stick to what you're good at (and what you
> enjoy).

> Of course, investing in other countries
> doesn't mean you CAN'T do all these other
> things - short selling, buying gold,
> property, etc.

> Thanks, though - you made a good point. :)

> Dien Rice
> (there's a Neanderthal Man in here
> struggling to get out!)

Winning is usually just the refusal to defeat yourself [DNO]
 

dno
> Air Supply are also BIG in Japan and some
> other Asian nations.

> I understand the point you are making, using
> Swing Out Sister as an example.

> But you're talking about SELLING.

> INVESTING in stocks is not selling.

> Trying to find under valued stocks is not
> playing a monotonous-sounding musical piece
> on the radio.

> And it appears that no matter what the
> economy is doing, there are certain
> industries that always make money and
> survive.

> Entertainment is one - even though sales may
> drop, they don't disappear entirely.
> Entertainers can still make a VERY good
> living.

> Food. Shelter. These are items that MUST be
> bought. People NEED them.

> People don't NEED to invest in the stock
> market.

> Certain stockmarket investing
> "options" may be more
> "secure" during economic hardship
> - such as Gold which you mentioned. And if
> that is the case, then it would be a prudent
> thing to LEARN about these.

> Instead of looking for another pond to fish
> in, why not learn the various methods you
> can use to catch the different fish in the
> pond you are already fishing in?

> Because maybe, just maybe, you might not
> ever find your other pond. Or if you find it
> you discover you aren't allowed to fish in
> it.

> I'm not saying to not look for the other
> places to invest. Just saying to Cover Your
> Downsides.

> Michael Ross

A question(s)
 

"Although I wouldn't want my money in the US market after around 2008 (or probably even earlier)..."

Why is that?

Here's what I am thinking...

Pull out just before 2008. Watch the stock price drop and then buy up again.

If you are buying and holding for long term, does it really matter that much what the stock will do in the short term?

I know you don't want to lose a whole bunch of value for nothing - which is why I said to sell just before. But once the stock goes down, doesn't that mean there will be a lot of bargains to be had?

And the stock going down doesn't necessarily mean the underlying business is buggered, does it?

I mean... coke's price might drop but that's not going to stop people buying coke, is it?

And wouldn't the same logic then apply to the other stocks?

I don't know. That's why I am asking.

Michael Ross

A possible way to predict the (general) future of the stock market index...
 

> "Although I wouldn't want my money in
> the US market after around 2008 (or probably
> even earlier)..." Why is that?

> Here's what I am thinking...

> Pull out just before 2008. Watch the stock
> price drop and then buy up again.

> If you are buying and holding for long term,
> does it really matter that much what the
> stock will do in the short term?

Hi Michael,

I'm following the model proposed by Harry S. Dent.... You can read more about it by clicking here....

If you click on the little graph on that page, you can see a larger version. This graph gives a prediction for how the US economy will go, based on demographics (in particular, from the birth rate, shifted by 46.5 years).

(The age of 46.5 years is used, since it approximates the age of peak spending.... At around that age, people are spending the most that they do in their lives. That's partly because as well as spending on themselves, they're also spending for their teenage kids.)

The red bar graph is from birth rates, and the yellow line is the Down Jones index (adjusted for inflation). You can see that the birth rates, shifted by 46.5 years, gives a reasonable prediction of the Dow Jones index....

According to this graph, after around 2008 the Dow Jones should start plunging. Unfortunately, it predicts that this will last a long time, too - until around 2022 or so....

Will this really happen? It might not.... But it seems prudent to be aware of this possibility.

As for other countries, they all have different demographics.... One interesting thing about Harry Dent's book "The Roaring 2000s Investor" is he goes through these kinds of graphs for many other countries. This suggests that at about that time - around 2008 - it might be wise to have your money invested in countries whose stock markets should be on the way up (if this model applies there). That is, their birth rates suggest that their economies will still be booming. Some of those countries are places like South Korea, Hong Kong, Singapore, Spain....

Will it hold? I don't really know.... I still have questions about it all I'd like to have answered (so I plan to do more of my own research). However, it is an interesting thing to look into and consider....

- Dien Rice

Michael, your post made me think of that BTW [DNO]
 

dno
> dno

Yeah, but what about my question(s)?
 

I had a look at the chart. It looks interesting. And something glares out at me...

He predicted a DOW of 30,000 (roughly) for 2003. We are NOWHERE near that number. If we continued his yellow line we would be chopping off a large section of purple block. And we're not talking a slight miss like the "under-cut" near 1993. We are talking about a DOW which is near 25% of what he predicted. That is a BIG miss.

If this is all supposed to be based on "necessary family spending" than small little outside influences shouldn't matter.

And doesn't following this model show that the followee is basing their investments on price of the stock and not the underlying business - which my original question was asking about.

Sure the DOW might go down (plummet, crash and burn, whatever.) But what about the underlying companies. Some of which should be experiencing growth during this same period...

Certain medical stocks.
Certain property stocks.

Being two just examples.

I recall you even mentioning your stocks going up while the index fell.

So your experience shows certain underlying business are not effected by the index.

His model is so way off the mark it is not even funny.

And we haven't even thrown into the mix the idea that as soon as you know about something, the outcome changes because your actions change thanks to the new information.

So with your experience proving otherwise and his so totally wrong prediction, what stock/faith/reliability can we place in anything else he predicts from this point on?

Wouldn't the smarter thing be to study the stock market from the 1930s to find out which stocks did better than the rest during such a tumultuous time? Because if the economy of today is going to echo the end of the roaring 20s, doesn't it stand to reason the same companies that did well then will do well now - after all, human behavior doesn't really change.

Thoughts?

Michael Ross

I am sensing the need for a simple book to explain "Everything you need to know about the stock and bond market". Stockmarket for dummies?

And also...
 

In a previous post regarding Dent, the chart was offset by 49 years and not 46.5 years (a 5% change in time line)...

http://www.sowpub.com/cgi-bin/forum/webbbs_config.pl?read=3726

He sounds like he's adjusting his formula to make it fit. Now he adds migration into the mix, adjusts for inflation (anyone know the formula he uses to make these adjustments?) and rescales the charts to fit.

Hmmm.

Michael Ross (think I'll just stick with simple investing HA!)

Like all good and short "sayings"...
 

there is a lot of truth and value.

Quite profound.

I have added it to my list of quotes in Writer's Friend.

Michael Ross

I like creating daytrading systems
 

Hi,

I like creating daytrading systems, and the temptation to "optimize" them is incredible. I mean I create a system and then apply it to some historical data, and it occurs to me that if I changed the rules in a certain way, the system would work even better, like gangbusters in fact! (The problem, of course, is that systems optimized for a particular dataset don't work very well on any other dataset.)

Personally I think the stock market is getting ready to take a big dump. In fact, earlier today I was saying "Later they're gonna call today Bloody Friday!" (My prediction didnt' turn out correct.)

Best,

- Boyd

Harry Dent's model....
 

Hi Michael,

What you say is right about various businesses peaking at different times. Harry Dent already covers that in his books, and has different peaks for different businesses. (Of course, I can't summarize his whole book in a short post.)

Does that mean that those investments could represent good possibilities? Maybe. But keep in mind there are large lengths of time when Buffett has stopped buying stocks completey. If you read the recent articles, you'll see Buffett is at that stage again - he says he's not selling his stocks, but he's not buying any new stocks either.

As for the 46.5 years vs. 49 years, yes, he has changed it - but I don't see it as a problem. This is partly due to culture, since if people start having children later, then the point of "peak" spending will change. There's nothing wrong with making a small adjustment like this.

If you say that you can't adjust for this, then you're saying that the age of peak spending should never change. That's unrealistic. The POINT is that the age of peak spending roughly correlates with the stock market, which seems to be true most of the time.

Does the model hold recently? The model is not an exact fit, as you can see for yourself, and may be even less of one in recent times. Does that mean the model is no longer valid? I don't think so - but it is a theoretical model.

This is different from day-trading - this model is ridiculously simple. Take the birth rates - shift them by 46-49 years. None of the day trading models I'm aware of are this simple. Plus, there is rationality behind this model - whereas day-trading models often don't seem to have a "reason" as to why things should behave the way they say.

However, there's an inaccuracy in the model....

He looks at BIRTH RATES. What he really wants to look at is the POPULATION SIZE at the age of peak spending (around 46-49 years). While there will be a large correlation of the population size at those ages with the shifted birth rates, it won't be exact - because of immigration.

If you adjusted for this, I wonder if it would make a difference.

Anyhow Michael, like I said - I can't summarize everything in his books here. He's taken into account many of your points already. I've only talked about a very small part of what he's written about.

- Dien

P.S. There is another effect - the more people know about this model, the more it will affect their behavior. So, the more this model is well-known, the less accurate it will be - because the knowledge of the model itself will start to affect people's stock-buying and selling behavior. The effect should be that everything the model predicts should start happening sooner. So, for example, if everyone expects a depression starting around 2008 - they might start selling their stocks earlier than that to be safe. This could mean that the depression could occur even earlier than the model predicts.

Re: Harry Dent's model....
 

> As for the 46.5 years vs. 49 years, yes, he
> has changed it - but I don't see it as a
> problem. This is partly due to culture,
> since if people start having children later,
> then the point of "peak" spending
> will change. There's nothing wrong with
> making a small adjustment like this.

> If you say that you can't adjust for this,
> then you're saying that the age of peak
> spending should never change. That's
> unrealistic. The POINT is that the age of
> peak spending roughly correlates with the
> stock market, which seems to be true most of
> the time.

I am not saying the offset cannot change. But, from my understanding, he has changed the offset for the entire time period. He has not adjusted the offset as time has gone along.

So the first chart was offset by 49 years. Now his new chart didn't fit he had to change the entire chart's offset by 46.5 years. THAT is changing his chart to fit what he want to prove.

Doing that, I bet I could make a radom ECG stip match the stocks.

> However, there's an inaccuracy in the
> model....

> He looks at BIRTH RATES. What he really
> wants to look at is the POPULATION SIZE at
> the age of peak spending (around 46-49
> years). While there will be a large
> correlation of the population size at those
> ages with the shifted birth rates, it won't
> be exact - because of immigration.

I also question his peak spending idea...

At 49 (or 46.5) most parents don't have kids living at home. Certainly not the Boomers. Tha would mean, if they had a child at 25, the child is 21-24 and at home.

That's a little unrealistic in my opinion.

I think he is finding arguements to fit his model. And I am sure we could find equally strong prof that peak spending happens at other times instead.

> P.S. There is another effect - the more
> people know about this model, the more it
> will affect their behavior. So, the more
> this model is well-known, the less accurate
> it will be - because the knowledge of the
> model itself will start to affect people's
> stock-buying and selling behavior.

Yes. That's what I said... just knowing about it changes it.

The
> effect should be that everything the model
> predicts should start happening sooner. So,
> for example, if everyone expects a
> depression starting around 2008 - they might
> start selling their stocks earlier than that
> to be safe. This could mean that the
> depression could occur even earlier than the
> model predicts.

If that is the case, then the peak spending reason why goes out the door. How would he adjust for that? Change the offset again, perhaps :o))

I actually find it interesting. A piece of info to keep up my sleeve and bring out and consider.

One thing I wonder... seeing as the stockmarket didn't go as high as he said... and it goes as low... that wold keep it about it's current level for the next whole bunch of years, wouldn't it?

I wonder why the mainstream hasn't picked up on his theory?

On another note... Beating The Streat (Peter Lynch). Have you read it? Would you recommend it as a good book for a novice know-nothing-about-the-stockmarket guy like me?

Michael Ross

Re: Harry Dent's model....
 

Hi Michael,

> I am not saying the offset cannot change.
> But, from my understanding, he has changed
> the offset for the entire time period. He
> has not adjusted the offset as time has gone
> along.

> So the first chart was offset by 49 years.
> Now his new chart didn't fit he had to
> change the entire chart's offset by 46.5
> years. THAT is changing his chart to fit
> what he want to prove.

> Doing that, I bet I could make a radom ECG
> stip match the stocks.

Doesn't changing the age from 46.5 to 49 only shift the graph left or right?

Here's a random ECG strip....



How will you make this fit the Dow Jones Index?

> I also question his peak spending idea...

> At 49 (or 46.5) most parents don't have kids
> living at home. Certainly not the Boomers.
> Tha would mean, if they had a child at 25,
> the child is 21-24 and at home.

> That's a little unrealistic in my opinion.

Should it be the average age of having the FIRST child, or the average age of having the "average" child? (Eg. if you had 3 kids, you would have to take the age at having each of the 3 kids, then taking the average.)

For example, when he had children, my Dad was aged 29, 31, and 40. If we were using him as an example, should we take age 29 as the key figure (the age he had his first child), or the average age of these three ages - that is, (29+31+40)/3 = 33.3 ?

Further questions.... Does a child have to live at home to be supported by their parents? What about children who are university students?

In the USA, the culture is such that usually children leave home to go to university (often in a different city or state). However, these kids are still often supported by their parents. Could that affect their parents' spending, even if the kids are not living at home?

> I think he is finding arguements to fit his
> model. And I am sure we could find equally
> strong prof that peak spending happens at
> other times instead.

> Yes. That's what I said... just knowing
> about it changes it.

> The

> If that is the case, then the peak spending
> reason why goes out the door. How would he
> adjust for that? Change the offset again,
> perhaps :o))

> I actually find it interesting. A piece of
> info to keep up my sleeve and bring out and
> consider.

> One thing I wonder... seeing as the
> stockmarket didn't go as high as he said...
> and it goes as low... that wold keep it
> about it's current level for the next whole
> bunch of years, wouldn't it?

> I wonder why the mainstream hasn't picked up
> on his theory?

I was told (by a friend who's read it) that Kiyosaki's latest book seems to draw on Dent's theories. (I haven't read it myself though.)

> On another note... Beating The Streat (Peter
> Lynch). Have you read it? Would you
> recommend it as a good book for a novice
> know-nothing-about-the-stockmarket guy like
> me?

Yeah, it's a good book. :)

- Dien

Re: Harry Dent's model....
 

> Hi Michael,

> Doesn't changing the age from 46.5 to 49
> only shift the graph left or right?

Yes. However, the peak spending is either 49 or it's 46.5. If it changes over time due to lifestyle then that means a constant adjustment.

Just up and changing the peak spending claim and applying it to the whole graph - as he appears to have done - is something you yourself have said is wrong due to lifestyle changes.

Now you're arguing that it only makes a slight difference.

Come on Dien. Stick to your arguements, eh? :o)

> Here's a random ECG strip....

> How will you make this fit the Dow Jones
> Index?

Well... actually it's quite easy...

See where the graph is labeled (1). What follows that is a drop, then a slight rise/level off, followed by another drop and then a rise.

This fits Dent's graph from now and further into the future... a drop, level off slight rise, drop, large rise.

See it?

To make it fit better just "adjust it" for graph recording speed or some other reason and voila!

> Should it be the average age of having the
> FIRST child, or the average age of having
> the "average" child? (Eg. if you
> had 3 kids, you would have to take the age
> at having each of the 3 kids, then taking
> the average.)

> For example, when he had children, my Dad
> was aged 29, 31, and 40. If we were using
> him as an example, should we take age 29 as
> the key figure (the age he had his first
> child), or the average age of these three
> ages - that is, (29+31+40)/3 = 33.3 ?

> Further questions.... Does a child have to
> live at home to be supported by their
> parents? What about children who are
> university students?

> In the USA, the culture is such that usually
> children leave home to go to university
> (often in a different city or state).
> However, these kids are still often
> supported by their parents. Could that
> affect their parents' spending, even if the
> kids are not living at home?

Now you're just being ridiculous. Use your same arguements for the entire graph. From the beginning of the century.

Either peak spending occurs at 49 or 46.5 (why not 46 or 47?). Either people have kids late in their 20s and into their 30s or they have them earlier. And earlier this century, they certainly had them earlier.

So a 22 year old has a child. That means peak spening occurs when that child is 25 to 27. Come on... they are having their own kids at that age.

Dent's theory is interesting. But I am not justing going to accept it without question. Especially when he changes his graphing formula to make it fit. Small technicalities? Maybe. Maybe not. But either it works or it doesn't.

As I said... it's something to keep up my sleeve.

Michael Ross