The Next Great Bubble Boom: How to Profit from the Greatest Boom in History: 2006-2010

The Next Great Bubble Boom: How to Profit from the Greatest Boom in History: 2006-2010 | Harry S. Dent | Melding Economies

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The Next Great Bub...

	The Next Great Bubble Boom: How to Profit from the Greatest Boom in History: 2006-2010 Harry S. Dent Free Press, 2006 - 384 pages average customer review:based on 58 reviews view larger image
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Excellent book - A Must Read!

This book is a must read for anyone interested in demographic stock market trends from the early 1900's to present. His analysis of the coming boom in the stock market, specifically the large capitalization equity markets, is both insightful and mesmerizing. The author does an excellent job in showing demographic/technology driven market cycles and how they CAN be forecasted accuratly. He manages to do it in a way that keeps the reader interested and makes some startling comparisons to the roaring 20's stock market boom and the last great boom cycle that we are currently experiencing. Harry S. Dent proves that the baby boom generation will change the world we live in and the economic market conditions for decades to come. When you read this book, these economic cycles become both exciting and frightful. This book is highly recommended and it is hard to put down.

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Melding Economies

The boom Mr. Dent speaks of HAS begun-but is starting in the population centers of the Far East and is being partially digitally controlled by companies here in America. The boom will hit us in industries that we have competitive advantage in and will then expand into the financial sector once enough excess labor is absorbed in the competitive advantage industries that wages go up as companies compete for workers. Since so many of our publicly-traded companies outsource and have significant overseas manufacturing operations, they are using that cost-savings in order to finance the implementation of Sarbanes-Oxley. The net effect is that Sarbanes-Oxley is being digitally enforced throughout the global operations of U.S. publicly-traded companies. This is part of the reason why you hear of increasing unrest in many emerging markets. Large portions of their economies are being reshuffled in order to digitally align with our securities laws. So the industries that will expand will primarily focus around:

1. Baby Boomer spending
2. Competitive advantage exports

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An awkwardly written look at booms and bust ahead

This bestseller has some methodology problems and it is written awkwardly, but it might nonetheless be true. Author Harry S. Dent, Jr., claims to have predicted the great stock market boom of the 1990s. He contends that demographics, economics, modern markets and information technology make the future almost surely predictable, though most experts would disagree. In fact, common knowledge challenges some of his data, such as his contention that newspapers are a growth opportunity. However, his suggestion that a stock market bubble in the first decade of this new millennium will end in a crash of historic size is a possibility worth considering. Moreover, his comments about demographic trends, especially the slowing of population growth and the graying of developing-country populations, have ample support from other sources and should be part of the calculus of any international investor. We suggest reading this intriguing book with the caveat that soothsaying is a chancy undertaking. Read this book as you would read science fiction - with the thought that, in spite of everything, it just might come true. In other words, keep Dent's advice in mind, but don't get carried away.

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Does the Japanese experience validiate the Dent's model?

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This morning (December 2, 2006), Dent was on a talkshow and repeatedly saying that his model accurately predicted the Japanese recession in 1990.

I found it odd, if his theory is correct, the Japanese recession should be after and not before the US recession.

Baby boom came later in Japan than US because of war destruction and massive causality of civilians. In contract, the US homeland was not affected and civilian causality is minimal.

I searched the web and found the population pyramid for Japan:
http://www.stat.go.jp/english/data/figures/f2.htm

Clearly, the graph there shows a deferred baby boom as compared to that of the US.

It seems that the more prevalent factor is the low fertility rate and low migration rate in the Japan. Once factoring the newcomers and new born, one must estimate the net replacement effect. If one compares the population pyramids of Japan, US and EU, one can find that the US has the broadest base.

In addition, Japan has a large gender difference in labor participation. So Dent's model is just a starting point, but an over-focus on baby boomers miss other sustainability factors - in-migration, natural birth, natural increase, productivity increase, and labor participation.

The Japanese case squarely indicates the weakness of his simple model.

Sidney
A Philadelphia-based researcher in planning, demographics, and economic development.

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