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Jul
06
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Predictions of stock market directions are always interesting. I just came across a forecast from Robert Prechter, according to him, something worse than the great depression is on the horizon.
From the NYTimes
Mr. Prechter is convinced that we have entered a market decline of staggering proportions — perhaps the biggest of the last 300 years.
The Dow, which now stands at 9,686.48, is likely to fall well below 1,000 over perhaps five or six years as a grand market cycle comes to an end, he said.
Robert Prechter Elliot Wave Theory
Robert Prechter extraordinary forecast is based on some mathematical formula he invented, which is based on his version of the Elliott Wave theory — a technical approach to market analysis. The article does not go into details of the formula used but my guess is Robert Prechter is the only one who understands it.
Robert Prechter Past Economic & Stock Market Predictions
Should you believe Robert Prechter market forecast? According to the article Mr. Prechter wrote “Elliott Wave Principle,” a 1978 book that predicted the emergence of a great bull market — a forecast that was largely fulfilled.
And if you had followed the investment advise he dishes out in his newsletter since 1980, you would have gotten returns lower than the overall US stock market but the on the positive side his advice would have protected your stock investment from losses – you would have lost money in only one calendar year, according to calculations by The Hulbert Financial Digest.
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