The Trouble with Harry Dent, Robert Kiyosaki, Jeremy Grantham: Part 2, 3, 4, 5…
Investors nearly exactly a year ago to the today, I released what would become my most watch StockTalk You-tube video to date. It’s title, “The Trouble with Harry Dent, Robert Kiyosaki, and Nassim Taleb – Fear Sells- Crash of a Lifetime”. Here’s a link to that video. https://www.youtube.com/watch?v=PPUrkEUQKGE It has over 6500 views. It’s message, Fear. Yeap, you heard that right. Fear, fear and the looming “crash of a lifetime for 2024” as this group of soothsayers called it in late 2023 and early 2024.
The Trouble with Harry, which is a great Alfred Hitchcock black comedy, and unlike the horrific market calls of Harry Dent, is that fear sells. Like clockwork, at the start of 2024, renowned, and I use that term carefully, demographic economist Harry Dent was out with his now near exact copy of his annual, end of the world is upon us, the stock market will crash forecast for 2024. Last year’s remake was titled, Crash of a Lifetime, coming in 2024.
And what did the S&P 500 stock index do in 2024? Well, it gained over +23% in price appreciation and near +25% in total return including dividends. Harry has been so confidently wrong for over a decade now that even in June of 2024, he quadrupled down on the looking crashing predicting a -98% CRASH IN NVDA, -92% DROP IN THE Nasdaq. Well, the S&P 500 rose another +11% after his call, while NVDA gained about +15% post June into year end.
Investors, why do we keep hearing the same thing from Mr. Dent or Rich Dad Poor Dad, or Mr. Black Swan, Nassin Taleb, or Jeremy, I’ve been wrong for 15 years and counting, Grantham, year after year? Largely because, permabear stock market appearances on TV bring in baby boomer TV viewers which drive advertising dollars. Doomsday economic and black swan stock market calls bring in views on social media and clicks-throughs from nearly retired, semi-retired or just always fearful investors, driving? Advertising dollars to social networks. Investors, remember the lyrics to Don Henley’s hit song “Dirty Laundry? https://www.youtube.com/watch?v=fwgJgTL5JmE
He could have substituted almost any phrase in the financial markets to his lyrics and the song would have been rang just as true. People like watching train wrecks and fear sells. It sells often and it sells well. Selling fear is an outright money maker. There is a group of RIA’s who will remain unmentioned here who’s entire schtick is selling and preaching fear. Most often, the purveyor of doom, gloom and the end-of-the-world forecast ends up making far more money than those individuals following their advice.
At the end of the day, we keep hearing from these same individuals, who almost never actually manage money for their living, but rather sell books and newsletter subscriptions, the Harry Dent’s, the Robert Kiyosakis of Rich Dad Poor Dad fame, because those services are not regulated by the SEC or other investment supervisors. We don’t keep hearing about them because their forecasts have proven omniscient, but rather because they have personality, and at the end of the day, fear sells. Particularly fear in the financial markets.
Once again, I’m going to pick on Harry Dent and his forecasting ability for the last 20+ years. Why? Because he’s the gift that keeps giving and for a short time, I was one of a group of portfolio managers running the money early in the launch of the long defunct AIM Dent Demographic Fund in 1999. Quite opposite one viewers previous comment on “nothing to see hear, he’s just ranting”, I had personal firsthand experience with Dent’s thematic, demographically driving market calls and stock picking ability.
So far, 2025 is about 10 days old and I have yet to see Harry’s prediction for the year, but wait for it, its coming, more doom for boomers. And I say this because I’ve surveyed many people under the age of 40 and they have zero idea of who Harry is and how consistently and self-promoting wrong he’s been.
Even after decades of being “early”, code for dead wrong, calling for the crash of a lifetime, he remains near the top of the list of doomers that our clients who are over 50 and at or near retirement, seem to ask about time and time again regardless of how wrong he’s been.
It’s easy to do a timeline Google search and see for yourself, while loudly and confidently broadcast in books, on TV, and elsewhere, how poorly Mr. Dent’s forecasts have been. Or you can read from Roger Wolhers research done for his December 2021 article “Harry Dent’s Stock Market, Economic Predictions, 1999-2021: How did they turn out? Here’s a link to that great article.
My quick summary Mr. Dent’s last 25 years and Mr. Wolhers article is as follows.
Mr. Dent: October 1999, Mr. Dent releases “The Roaring 2000s: Building the Wealth and Lifestyle You Desire in the Greatest Boom in History,”. Dent predicted that the stock market would experience a significant boom during 2000’s. Harry predicted that the Dow could hit 35,000 in the upcoming decade, based largely on Mr. Dent’s economic specialty, demographic changes, citing the Baby Boomer generation reaching their savings window for his optimism.
At the time the Dow was trading around 11,000. What happened? The Dow peaked at just under 12,000 on January 14, 2000, and went? Absolutely nowhere, with very high volatility for the next 10 years. 2000 didn’t enter the roaring 20’s as Mr. Dent surmised but instead the lost decade of no stock returns net.
Mr. Dent: in January 2006 published a similar optimistic view titled, “The Next Great Bubble Boom: How to profit from the Greatest Boom in History”. If you followed his advice, you did have a good 18 month run in the markets before the onset of the Great Financial Crisis started to brew in mid-2007 and before the market truly crashed in 2h08 and 1q09 down by over -50% before it was over.
Twice burned by being too optimistic on the economy and markets, Mr. Dent did a 180 degree turn and published his next book, “The Great Depression Ahead: How to Prosper in the Crash, in? December of 2008. This could be Mr. Dent’s worst call the last 25 years as since the year end 2008, we have seen returns in the S&P500 of +586%or about 12.8% per year CAGR without dividends!
More recent Harry Dent articles and headlines:
December 2016: In the wake of Donald Trump being elected the first time, Mr. Dent predicted Dow 3000-5000 on CNBC. As of this writing, the beginning of Trump 2.0, the Dow is up about +148%, or +11.9% CAGR, since that Nov 2016 election, without dividends.
March of 2021, Mr. Dent climbed farther out on a limb calling both price and time for his coming crash. Investors, this is something few ever do, it’s like Babe Ruth calling his shot and pointing before hitting a home run as its quite difficult and almost everyone advises against trying it.
His outlook, the market would drop over -45% by the end of June 2021 said Dent, making the GFC look like a cakewalk. Swing and another miss by Harry. But Harry was unflustered and tripled down in July 2021 calling for equities to fall by -80% before Thanksgiving. Why not? Didn’t get the earlier call right 4 months ago, haven’t been right in 15 years, but go all in with your money. Get out now! And what happened? The market went on to make major new all-time highs near S&P 500 4800 into yearend 2021.
Unflustered, near all-time highs, Harry once again called for the biggest stock market crash of our lifetime to hit in 2022. And well, as luck would have it, we did get a downward move in stocks that mimics a recession, -35% in real terms. So, after almost 20 years of being consistently wrong, Mr. Dent did hit a ground rule double to deep right field in the first half of 2022.
Unfortunately for investors following Mr. Dent’s advice, he doubled down in 2023, predicting both a recession in 2023 and another “big wave down” in stocks for 2023. Dent predicted that cryptocurrencies, in general, would be the hardest-hit assets in 2023. Wrong on all accounts. Bitcoin rallied well over +200% in 2023. That’s not a typo investors, +200%. The S&P500 rallied over +20%. Of course, many other financial soothsayers also got 2023 wrong. Either the economy or stocks or both wrong like Mr. Dent.
For those investors who feel compelled to listen to Mr. Dent, Robert Kiyosaki, Jeremy Grantham or a long list of retired billionaire hedge fund managers on TV, what do I think about it? I think you need to find a new hobby or at least start listening to someone who has been at least close to right on the markets consistently over time. While the aforementioned list are highly intelligent people, their financial goals and objectives most likely do NOT align with yours.
Mr. Dent is a great salesman and great self-promotor, but he’s not someone the investing public should be listening to for financial advice. That’s the trouble with Harry and the others like him, like Robert Kiyosaki, they are not fiduciaries, and as such are not required to put investors interests first, rather they can put their own self-interest be it book sales, newsletter subscriptions or clicks and ad revenue, first.
Will we get a recession in the future, yes. Will we get another financial crisis in my lifetime, the odds say yes. Sorry Janet Yellen. But the likes of Harry Dent and Robert Kiyosaki are not the ones that are likely to call them both in price and time, which is what would matter for your money.
For now, what do we see for 2025? More of the old normal that started in 2023 as we discussed back then and throughout 2024, slow growth, moderate to declining inflation, and a continuation of the bull market in stocks, and soft landing in the US economy for 2025 albeit with an uptick in volatility likely in the 1h of the year. For now, we can get to 6660 S&P500 in 2025 with some upside to that number should the earnings for 2h25 surprise to the upside. The biggest possible earnings surprise for 2025 would come from the USA dollar peaking and heading lower, as it did in 2017 under Trump 1.0, thus bolstering many S&P 500 multinational companies that have badly lagged in 2024 on slower unit growth, weaker pricing, and a strong USA dollar in the 2h2024.
From Charles and I and the rest of the OHFG investment team, have a blessed weekend and remember to join us on our YouTube livestream, January 23rd at 630PM central for our 2025 1h market outlook.
Do you need a retirement plan that goes beyond allocating funds to truly fit your needs? We can help you create a retirement life plan customized for your retirement vision and legacy. Call us at 877-896-0040 or fill out this form for a free consultation: https://click2retire.com/Connect
Chris Perras
CFA®, CLU®, ChFC®
Chief Investment Officer, Financial Advisor
Chris is a seasoned investment professional with over 25 years of experience working with some of the most successful money management firms in the world. Chris has made it a point in his career to adapt as the market landscape changes, seeking to utilize the appropriate investment strategy for a given market environment. His transition from managing billions of dollars at the institutional level to helping individuals and families retire is guided by a desire to see first-hand the impact he is making in the lives of clients at Oak Harvest.
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