Customer Reviews

The Roaring 2000s: Building The Wealth And Lifestyle You Desire In The Greatest Boom In History

5 star:		(37)
4 star:		(15)
3 star:		(12)
2 star:		(6)
1 star:		(18)

 

 

The book contains some insightful points about the underlying forces that drive economies such as ours. I really liked the way he fused together a good argument using population dynamics (alternating generation cycles) and market penetration of new technologies (S-Curves) for why we may experience a boom in the early 2000's. Another good observation on Dent's part (although he struggles to explained it at first) is what he terms the new network organization model for business. His chapter on spotting real-estate trends was informative, so was the last chapter on investment strategies.

Some of the things I didn't like (and why I didn't give the book a higher rating):

1) Constant references to his last book regarding key ideas and terminology. 2) Lack of specific references for further independent research (this really hurts his arguments for he cites many studies throughout the text) 3) What appears to be a lack of consideration for some other historical events that spurred change (for example WWII had a major role in the spurring of certain new technologies). 4) His incredible optimism that events will unfold exactly as described, in the time frame mentioned. 5) Some parts of the book seem either like old news or self-evident (see his explaination on page 251 of why some declining neighborhoods regenerate).

Overall, it's a good read and one will find Dent's ideas and philosophy interesting. I hope his vision comes true (for all of us).

Simply put, Dent's predictions cannot occur. Consider the following figures.

Dent's current projections for the Dow Jones Industrials is 41,500 by 2008, whereas he now expects the Nasdaq to reach 45,000 by the same date. Were this to occur, the total stock market capitalization would exceed $101 trillion (currently around $14-$16 trillion)! Were the nominal Gross Domestic Product (GDP) to grow at a rate of approximately 6.5%, including a real GDP rate of 4.0% (Greenspan's best-case target) and inflation of 2.5% (Fed's and GAO estimate), the nominal GDP would reach $17 trillion in 2008.

The ratio of total stock market capitalization to nominal GDP would reach 600%! The figure at the most recent highs was 185%. At the peaks in 1929, 1973, and 1987, the figures were 81%, 70%, and 64% respectively. At the height of Japan's bubble market in December 1989, this figure topped 150%. (The average of the past 129 years in the U.S. has been 50%.) This suggests that the ratio will TRIPLE in the next eight years. How can this happen? Answer: It cannot.

Dent predicted a real estate market crash (30%-50%) in the U.S. in 1994-95, based on his demographic analysis. This was a fundamental blunder.

Dent predicted in late 1997 and early 1998 that the Fed would raise rates in 1998, that the long bond yield would hit 7.25%, and that large-cap stocks would correct and recover but underperform small stocks. Such a failed prediction calls into question his very understanding of the business and interest rate cycles.

There should be no doubt in any reader's mind the dubious nature of Dent's methodology and therefore his projections. More than anything, Dent is an expert marketer of Harry Dent, genius, forecaster extraordinaire.

When the market flattens out or takes a massive dive in the decade or more ahead, Dent will be watching from his Puerto Rican plantation estate where he moved in 1998. I'll leave it to you to figure out why he would move from a spectacular beachside mansion in Half Moon Bay, CA to the Caribbean when he did . . .

When I first read the Great Boom Ahead I found it compelling and when The Roaring 2000's was published I rushed right out and bought it. Dent uses a demographic concept he calls the spending wave to predict the future of the economy and stock market. I was so intrigued by this idea that I decided to replicate his analysis and to extend it back in time as far as I could (just to see if it worked). For a graph of my results see

http://csf.colorado.edu/authors/Alexander.Mike/spendwav.gif

As that graph shows, the spending wave 'worked' for 1929 too. But Dent's predictions really changed between The Great Boom Ahead and The Roaring 2000's. He projects a Dow of 23K to 35K by 2007-2010! He ignored the *level* predicted by his model and simply extrapolated the recent rate of rise to the 2007-2010 date his timing projects. This is a critical error (there could be an intervening bear market between now and 2007 for example). If you focus on the levels predicted using his methods you arrive at the conclusions that the bull market would end in the neighborhood of 1450 (in 1999 dollars) on the S&P500, which means it has ended already. One can interpret this result as a bear market is interposed between now and 2007 so that the index is only getting back to the prior peak (in real terms) by 2007 as Dent's model projects. Mr. Dent should have mentioned this in the Roaring 2000's. As a result I award 5 stars for the originality of the idea and the presentation, but only 1 star for the accuracy of his prediction for an overall three stars. I recommend the book Stock Cycles for a more careful projection of stock returns over the next 20 years.

This book is more than just an investment book. It is a book about where to live, where to work, as well as where to invest in the 2000's. In addition to predictions to the future, the author also takes us back to the past to compare current inventions to those of the past. For example, the importance of the Internet is compared to the invention of the printing press. And, he compares the growth curve of personal computers and the Internet to the growth curve of the automobile industry in the early 1900's.

Because I am a librarian, I came across this book by accident when filling a request for one of my patrons. I took a quick look at it and then decided I needed to get my own copy.

Whether or not you believe all of the predictions in this book, it is still a fascinating read and gives one plenty of food for thought. I don't read very many non-fiction books, but this one certainly grabbed my attention.

Harry Dent poses as an economist but he is not. He also poses as a demographer but he is not either. As a consequence, he develops sweeping broadbased theories without solid scientific foundation. His main theme is that the large Baby Boom generation is going through its peak spending years during this decade, and as a result it will sustain an economic and stock market boom until 2009. He concludes that it is almost certain that the stock market will earn 10% and above returns throughout this decade.

However, when you look at the record so far, Harry Dent's prediction in 1999 for the first decade of 2000's is way off. The ink was barely dry on his book when the stock market actually peaked (first quarter of 2000) and then tanked. The stock market then suffered a three year bear market. Current outlook for the stock market is for increased volatility, but reduced growth in the single digit range (not the double digit range, Dent predicted).

Dent missed a lot of things. Some of them he could not have predicted such as heightened geopolitical risk, terrorism. Some other factors, he should have predicted. These included the overvaluation of stocks as a result of the Internet Bubble, the onset of World deflation associated with the flooding of cheap exports from China, the eventual slow down of the U.S. economy among others.

Dent also pauses as a futurist. In this role, he just repeats what Alvin Toffler stated in Future Shock almost 30 years ago. Technology will reform the workplace, will boost economic productivity, etc... Nothing new or informative here.

The only somewhat valuable part of this book includes several recommendations for successful investing, including:
1) Save at least 10% of your salary;
2) Use buy and hold strategies, don't try to time the market;
3) Use mutual funds to most efficiently diversify your holdings;
4) Use asset allocation. The greatest returns result from the correct asset allocation. Asset allocation should match your personal risk tolerance; and
5) Invest systematically not emotionally.

However, the author did not support these good investment strategies with adequate useful details. For instance, using a 401K is the best and easiest way to implement all of his five strategies mentioned above. Also, within his mutual fund recommendation, he did not mention the advantages of index funds (greater diversification, lower cost). Thus, he omitted much information for this section of the book to be as informative as it could have.

I received this book as a gift from a dear friend of mine about twelve months ago. When he gave it to me he looked in my eyes and said ... "STUDY THIS BOOK."

And I did what almost every normal person with little time on his hands does .... I put the book in my book case and did not read it.

Six months went by, and Laura, my youngest daughter (26) came to visit for a couple of days and asked to borrow the book.

Two days went by and Laura called me and asked if I thought Mr. Dent was on the money in his predictions. She was surprised to hear that I have not read the book yet, and made me swear that I will buy another copy and read it, and I did. This took place in October 1999.

After reading this book, I was a believer that technology will lead us to better places and I started investing heavily in the stock market. At the same time, I read another excellent book on short-term trading, "Stock Trading Wizard" by Tony Oz, and he talked about cost averaging for long-term growth. He wrote about the QQQ which tracks tech stocks (nasdaq 100 index) and I started buying into this stock. I also bought other tech issues and on the morning of January 2, 2000, I sold half my portfolio for more money than I initially invested. I took my initial investment off the table, plus some profits, and I have the rest invested in QQQ for long-term growth. I am staying with technology.

I want to thank Mr. Dent as it was for him that I saw the opportunity. I still think that his predictions will come true, and I have my money where his mouth is.

So if you believe him or not, I think you should read it. So far, I have more than 250,000 reasons to believe him.

On first blush Harry Dent looks like a genius. After all, years before everyone talked mutual funds and daytrading he predicted a stock market bonanza. What's easy to forget, though, is that in his earlier book (admittedly, I only read one and it was years ago so I'm a little sketchy on the details) there were lots of predictions--such what would happen to Asian economies-- which turned out to be way off the mark. No doubt, there is something to Dent's boomers- leading-the-economic-boom theory, but any theory that simplicistic, is well, overly simplicistic. I, for one, wouldn't throw caution to the wind and take his recommendations blindly. For an excellent book on creating a truly satisfying financial life (both fiscally and emotionally) no matter what happens in the coming millenium, check out my new favorite recommendation: The Mindful Money Guide. It succicntly, but comprehensively covers a wide range of money issues; The author isn't afraid to take a stand. Don't let the serious-sounding title scare you, it's entertaining.

I am a short-term trader. I face the challenge of making calls on the direction of the market, industries and individual stocks on a daily basis. I think it takes a lot of courage to try and forecast global economy and the stock market ten years into the future.

The author illustrates very interesting points and paints a picture that is definitely worth looking at.

I recommend reading this book. Even if you disagree with some of the points or even all of the points in this book, I still think it will be worth your time and money.

Tony Oz - Author Stock Trading wizard

As of the Oct. 9, 2002 stock market low, ALL of the market gains since 1990 have been totally wiped out! Notice how most of the ratings for this book have been negative for quite a while and the postive reviews over the past 18 months have obviously been from beginning investors. Dent's simplistic advice is built around only demographics, a financially fatal strategy. Seek out Charles Minter, look for David Tice of prudent bear. I agree with earlier review, read Sy Harding's book. Ignore all of Harry Dent's stuff.

If you are a bull, the Harry Dent's book is the one you want to read. If you are looking for facts to support the many conclusions he draws, then you should probably look somewhere else.

I found a number of the theories Dent advances to be fascinating, and it has even caused me to rethink some of thoughts I have in relation to my own work. And I am happy to have this book to put into my personal library. But.....

I was surprised by the complete lack of footnotes or other documentation to support some of the assertions made. In a book that uses, and needs to use, so many statistics and charts to support its claims I found that a little disconcerting. For example:

Dent describes a "500 year cycle of change" (starting page 93) as if for millenia every 500 years there have been huge changes, but he fails to ever goe back further than 500 years to show a true cycle. This makes his parallel between movable type and the transistor strained at best.

From page 171: "The fact is, DNA research has shown that 70 percent of the population has a risk averse gene." Excuse me, whose research? What makes this a fact? Is that the same research that found the meteorite on Antartica and determined it had come from Mars 60,000 years ago?

These are just two examples of the many I could use to illustrate my points.

Don't get me wrong. I enjoyed reading this book and I would read it again. Dent has analyzed population trends, the Internet, and history in a way no others (that I've read) has. The calls he has made have been for the long term and he has also predicted both bull and bear cycles. I just wish he had made it easier for me to believe him.