Prophets and Losses

John Goodell, 4:02 am ET

OFTEN WRONG, never in doubt. That describes many economic prognosticators. A rational response: Treat their predictions like hazardous waste—handle with caution, or better yet, don’t handle at all.

Among the countless examples, consider newsletter writer Harry Dent. Armed with a Harvard MBA, Dent makes market predictions that are fantastic and frequently wrong. In late April and more recently in June, he predicted that the market would crash, adding that if he’s wrong, he would quit his job. I’m not holding my breath.

In 1998, Dent published The Roaring 2000s, predicting that the decade was a sure winner. It turned out to be the worst investing decade of my lifetime—by a significant margin. Dent’s The Great Depression Ahead was published in 2009, at the start of the longest bull market in history. In 2011, he doubled down, publishing The Great Crash Ahead. In 2016, Dent wrote The Sale of a Lifetime: How the Great Bubble Bust of 2017 Can Make You Rich.

Such predictions may seem foolish. But it’s all about marketing. Nothing gets eyeballs like doom-and-gloom predictions. Enter “stock market crash” on YouTube and compare the number of views for videos predicting financial disaster to others from the same analyst. You’ll invariably find many more views of the crash videos. They cater to the part of our brains that fixates on fear—a learned survival mechanism from our hunter-gatherer ancestors. But the fact is, nobody knows what the future holds for the financial markets.

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Ben Rodriguez
Ben Rodriguez
11 months ago

If you keep predicting a market crash, eventually you’ll be right.

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