The Next Great Bubble Boom - 2005 to 2009

Hardcover: 336 pages

Publisher: Free Press (September 2004)

Language: English

ISBN-10: 0743222997

ISBN-13: 978-0743222990

Harry S. Dent makes a startling yet convincing argument on the current boom we are now experiencing. He draws much of his conclusion based on demographics. Population and age plays a huge role in the economy due to changes in policies and laws to suit people, and the needs of people change across time. The predictions follow closely to Elliot Wave patterns.

Since he mentioned that the boom will persist from 2005 to 2009, a rudimentary research for the past 2 years till now (2007) has confirmed much of his forecasts. Locally speaking, I can safely say that as the region is still hugely dependent on the US economy, Singapore will continue to ride on this boom as well.

There are much lessons I learnt in this book as listed.

1. Buy and Hold is not advisable. Marketing timing reaps more profits.
2. Technology S-curves
1. Greatest growth is spurred by 50% penetration of a major technology (like the Internet in 1990s and in the future broadband
3. Cyclical trends
2. 80-year economic cycles (4 seasons)
• Innovation (1968 to 1980s) – focus on small cap; rising inflation
• Growth (1980s to 2009) – 2 phases on disinflation followed by stable prices; invest in large cap
• Shakeout (2010 to 2022) – focus on bonds; disinflation
• Maturity (2023 to 2048) – 2 phases on inflation followed by stable prices; more gradual economic growth than ‘growth season’.
3. 10-year cycles
4. 4 year presidential cycle
5. Annual seasonal cycle (note that Feb, May and Sept are probably down periods to buy in
4. Boom from 2005-2009
1. 2003-2004 – recovery
2. 2005-2006 – acceleration
3. 2007-2009 – Bubble
5. Bear market from 2010 to 2022
1. 2010 – 2012/14 – deflationary crash
2. 2015 – 2019 – bear rally
3. 2020 – 2022 – 2^nd crash
4. 2023 onwards – Bull market

The author also guides the reading on certain investment strategies on different regions and sectors as well life-planning at the different years.

The book is an interesting read though there are doubts on how much of it are applicable to Singapore. Nevertheless, the US economy is definitely something we ought to look out for.