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Chuck Jaffe: Why You Should Listen To Harry Dent Even If You Don’t Believe A Word
Chuck Jaffe is an excellent financial analyst and writer. The short referenced article is yet another example that reinforces his solid investment work.
Harry Dent Jr. has been making extreme market forecasts for decades. His analyses are very simplistic. They emphasize the impact of demographics on broad market movements. He has sold a ton of books using very linear consumption and demographic trend lines. His talks are compelling because he seems to be a true believer. Snake oil salesman is a fair characterization of him.
Dent practices the golden rule for forecasters: Make many forecasts. Most folks don't keep score. As Jaffe observed: " His often-spectacular misses typically are forgotten in the hype over the next prediction. "
Dent has been a controversial forecaster for a long time. Here is a Link to a Barron's article that assessed his track record a few years ago.
Not much has changed. Dent has continued to be extreme in his evaluations.
But the thrust of Jaffe's article is that it is prudent to familiarize yourself with a viewpoint that is contrary to your assessment or a very low probability happening. Any analysis could be wrong or rare events could happen more frequently than the odds might suggest.
It is a wise action to protect against what Nichols Taleb would describe as a gray swan. The military strategy of two-up and one-back also applies to investing. Keeping some cash as a reserve works by adding depth to any position.
Comments
Chuck Jaffe is an excellent financial analyst and writer. The short referenced article is yet another example that reinforces his solid investment work.
Harry Dent Jr. has been making extreme market forecasts for decades. His analyses are very simplistic. They emphasize the impact of demographics on broad market movements. He has sold a ton of books using very linear consumption and demographic trend lines. His talks are compelling because he seems to be a true believer. Snake oil salesman is a fair characterization of him.
Dent practices the golden rule for forecasters: Make many forecasts. Most folks don't keep score. As Jaffe observed: " His often-spectacular misses typically are forgotten in the hype over the next prediction. "
Dent has been a controversial forecaster for a long time. Here is a Link to a Barron's article that assessed his track record a few years ago.
http://www.barrons.com/articles/SB50001424052702303392404576566841665679146
Not much has changed. Dent has continued to be extreme in his evaluations.
But the thrust of Jaffe's article is that it is prudent to familiarize yourself with a viewpoint that is contrary to your assessment or a very low probability happening. Any analysis could be wrong or rare events could happen more frequently than the odds might suggest.
It is a wise action to protect against what Nichols Taleb would describe as a gray swan. The military strategy of two-up and one-back also applies to investing. Keeping some cash as a reserve works by adding depth to any position.
Best Wishes.