Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression, Expanded and Updated Edition (Paperback)

~ Robert R. Prechter (Author) "How many times over the past decade have you heard glowing reports about the "New Economy"?..." (more)
Key Phrases: deflationary crash, term electoral landslide, deflationary depression, Federal Reserve, United States, Conquer the Crash (more...)

Editorial Reviews

Review

"…A must read especially for the discerning investor…" (Malaysian Business, 16 November 2003)

Product Description

WILL deflation and depression really happen?

WHAT causes deflation and depression?

CAN the Fed prevent deflation?

WHERE can you find the few exceptionally sound banks, insurers, gold dealers and other essential service providers that can help you protect your wealth?

HOW should you arrange your finances and your life in order to survive the depression, prosper while it's happening, and take advantage of the unprecedented opportunity coming at the next major bottom?

Not one in ten thousand investors will think to ask these questions, even as their financial institutions may be lurching toward insolvency.

YOU WILL FIND THE ANSWERS IN THIS BOOK

"This book outlines brilliantly and simply the rationale for how and why the bubble developed. Prechter will go down in history as a legend for having predicted the secular bull market and now having provided a lucid description of the economic cataclysm that unfortunately lies ahead. I urge you to read this book and give it to your loved ones. It provides great tactical advice on how to prepare yourself financially. Reading this book could make the difference between agony and comfort over the next 20 years."
—David Tice
President, Prudent Bear Funds

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Product Details

• Paperback: 352 pages
• Publisher: Wiley; Exp Upd edition (November 14, 2003)
• Language: English
• ISBN-10: 0470870907
• ISBN-13: 978-0470870907
• Product Dimensions: 9.1 x 6.1 x 1 inches
• Shipping Weight: 14.4 ounces (View shipping rates and policies)
• Average Customer Review: 3.7 out of 5 stars  See all reviews (119 customer reviews)
• Amazon.com Sales Rank: #92,550 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

232 of 247 people found the following review helpful:

5.0 out of 5 stars This book will cause you no financial harm if followed, August 27, 2002

By	T. Austin (Van Nuys, CA United States) - See all my reviews (REAL NAME)

Amazon Verified Purchase

This review is from: Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression (Hardcover)

Let me get this off my chest first: I read every single review here at Amazon before I bought this book and I must say that the negative reviews; or more accurately the nasty ones, lead me to believe that the reviewers did not read the book. I say that because even if Prichter is wrong, and there is no upcoming "Deflationary Depression" and this decade is all blue skies just like the late 1990's were, any subsequent readers who followed his advice to the exact letter of the verbage would NOT lose any of their assets whatsoever. Therefore, how could this book do harm? At worst it educates the reader as to how to handle uncertain times. There is no bad or harmful advice in this book.

His advice is basically to pay off your bills, put your money in rock solid banks. Don't rely on the government to protect you, buy some precious metals, and get ready to profit once we are at the rock bottom by way of investment strategies that take advantage of the subsequent inflation post a "Deflationary Depression." What's harmful about being in cash?

Now the review: Prichter is confident that there is going to be a deflationary depression. A period of great contraction in our economy that drives down any and all inflated value out of any goods or services such as the depression the United States suffered through in 1929.

He supports his premise with monetary statistics such as the 30 trillion dollar credit bubble that America now has, and numerous other statistics that aren't that pretty.

Prichter also bases his premise for a "Deflationary Depression" on a controversial charting method known as "The Elliot Wave Theory". It's controversial in that some stock market analysts think it is merely conjecture, while other analysts feel it is an absolute, social, "fractal". (A "Fractal" is defined as a geometric shape that self repeats over and over into a larger shape. This can especially be observed in nature.)

As a result, the Elliot Wave Theory is believed to be an accurate way of charting graphs whereas the viewer trained in this principle can predict where that statistic is going to go based on Elliot Wave analysis. Whether this is nonsense or not, every major brokerage firm has an Elliot Wave analyst.

Prichter teaches the basics of this technique and supports his findings with background statistics such as market volume and breath.

The book is divided into two sections: Why a "Deflationary Depression" is going to happen, and the second part of the book covering how to profit and protect yourself when it does. At the very least this book is an educational exercise as to what to do if a "Deflationary Depression" or bear market occurs.

To repeat, his advice would do no harm if followed even if he is wrong. Challenge any reviewer who says otherwise.

Tony

94 of 97 people found the following review helpful:

3.0 out of 5 stars Provocative Viewpoint on the Market and the Economy, August 18, 2002

By	L. Masonson (Monroe, New York USA) - See all my reviews (REAL NAME)

This review is from: Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression (Hardcover)

Robert Prechter Jr. is well-known in stock market circles for his Elliott Wave predictions over the years have had their success and failures. This is Prechters third and latest book (At the Crest of the Tidal Wave (1995) and The Elliott Wave Principle (1978)). His current book is really two books in one printed on different colored paper! Even if you do not agree with Prechters view of the world, you should certainly understand his arguments and make your own decisions.

Part I (135 pp.) focuses on why he believes a stock market crash will occur in the near term, as well why deflation and economic depression are high probability scenarios. Although deflation and depression are rare occurrences, Prechter believes that they are at the brink. His goal is writing the book is to provide insight into defining both events and make you believe that they can happen, and eventually make you believe that they are likely to happen.

Prechter compares the period 1942-1966 (called Wave III) with the economic expansion of 1974-2000 (Wave V). He points out that the most recent period had much weaker economic fundamentals and performance than the prior period, although by stock market standards Wave V had an increase of 1930% on the DJIA compared to 971% during Wave III. In his analysis he provides comprehensive statistics on GDP, Industrial Production, Capacity Utilization, Unemployment rate, households liquid assets, federal and consumer debt, prime rate, federal budget deficit, personal savings among others. Prechter then defines depression and its relationship to the stock market. One of his key observations is that major stock market declines lead directly to depressions.

Prechter depicts the five waves evident in the stock market using four charts. He points out that the five-wave pattern occurs even taking into account major news events such as Hitlers rise to power and the end of the Vietnam war. Prechter provides four signs of a market top and explains the Elliott Wave characteristics of each of the five waves.

Prechter presents his case for the existing stock market precarious situation (as of March 2002) by covering Wave V in great detail. He spends considerable time examining the fifth wave from 1974 to 2000 compared to previous waves. The case for the historically high stock evaluation is made by focusing on the low dividend yield, outrageously high book value, and high P/E ratio. Prechter then covers how psychology plays a major role in a stock market advance and decline. He reviews the psychology of he economists, brokerage strategists, money managers, public, and the media.

Prechter believes that the upcoming bear market will be the most devastating since the great depression and perhaps since 1720-1784. If this occurs, he indicates that the U.S. will experience another depression. He forecasts that the DJI will plummet to 777, the August 1982 low, if that average follows the pattern of the prior manias (e.g., Nikkei; DJI 1929-32; Gouda tulip bulbs (1634-1722); and the South Sea Company (1719-1722)). Lastly, he makes the case for deflation, and discusses the Fed and banking system.

Book Two provided Prechters advice for protecting yourself and profiting from the upcoming depression. His recommendations include:
1. Have safety of principal by being in cash or high-quality short-term U.S. Government treasuries (T-bills) or money market mutual funds that invest in these types of instruments.
2. Sell your home (if you have a large mortgage) and rent instead.
3. Find a safe bank (using Weiss Ratings, Inc., for example) and keep your money there.
4. Do not own or invest in stocks, options or futures.
5. Consider buying inverse mutual funds (such as Rydex Tempest that double short the S&P 500) and Rydex Venture (double short NASDAQ 100). ProFunds also offers bear funds. To invest in any of these funds, Prechter cautions that you must be a short-term timer to be successful.
6. Buy physical gold and silver metals.
7. Cash out your whole life insurance policies and convert to term insurance from the safest firms (based on Weiss Ratings, Inc., for example)

Prechter provides a very sobering view of the future that few individuals will heed because of its negative and extreme consequences. But if this book makes you think about the safety of your financial nest eggs, retirement funds, insurance policies, etc; then at least you can decide to take some steps to protect yourself. If the stock market can manage to rally 20-40% from the lows of July 2002, then perhaps you should consider cashing in your remaining equity and mutual funds positions before the real bear market takes hold as Prechter envisions. I know I will be doing that and then using my charts and technical indicators to tell me when to get back in. Its shame that Prechter did not publish this book in March 2000 when the market was at its peak. He would have saved most investors, who believed his work, a great deal of money if they had followed his recommendations.

Whether you agree with Prechters view of the world, you will certainly agree with this quote:
To be successful in life, or at least learn something along the way, you have to think for yourself.

69 of 73 people found the following review helpful:

4.0 out of 5 stars Good to read but be aware, September 21, 2005

By	Alexey Panchekha (NJ USA) - See all my reviews (REAL NAME)

If you are an experienced reader of financial publications and would like to read a view that is very different but presented with arguments and reasoning - this is a good book to read. A different view will likely shine a new light to known facts and pull some new ones that you have not considered recently. Even if you don't agree with the author, such reading has high value if facts are presented well. These are. You should keep in mind though, that author stresses that he foresaw long bull market before many, knew its characteristics, etc. But his own advisory service (tracked by Hulbert Financial Magazine) has very poor results. He is way behind broad market on a "regular investors" portfolio and dramatically negative in his "trader" portfolio. His performance looks very consistent bad during a good 20 years period. So, in fact, you would look like a true hero if you took all his "trader" advises and did just opposite! Note, that it is not just stock picking that is bad. Timing-only returns are even worse. So, remember, your brain cannot retire yet. Given that - it is a good reading, good perspective to consider.

If you are just starting to read financial publications - you might not appreciate the fact that there are thousands of financial publishers at any given time. All, yes, all of them are smart. Really smart. Finance has so many dimensions that it is possible to argue any number of views at the same time - all well grounded and reasoned. When you are starting, anything you read impresses you, looks totally convincing and even evident. Moreover, you will have a feeling that you can make a confident use of newly acquired knowledge. This is why it is NOT good first reading for you. Before you have your brain active - you need some measured background reading. It is simply NOT POSSIBLE to judge from common sense - it takes decades to build common sense in finance. This is a radical view, expressed by rather radical author, practicing non-scientific ideas. His ideas cannot be proven or disproven because he talks about things that happens ones in a century or once in 3 centuries! So, keep in mind a simple fact - this particular man was right big time once but he himself was not able to make any use of his seeing into future. His theory was with him all along but help none either. In fact, you were better off not hearing his advices! I'd keep doing just that. This does not mean I dislike (or like) his prognosis. He may be right and he maybe wrong. He might be right in direction but wrong in the extent. Or any combinations. There is nothing in his book or in his performance so far to make it anything but a pure guess.