Prechter: "I'd Love to...Turn Long-Term Bullish Again"

Home > Classic Prechter
Prechter: "I'd Love to...Turn Long-Term Bullish Again"
The next buying opportunity is going to be BIGGER.

By Bob Stokes
Tue, 14 Feb 2012 16:45:00 ET

Get investable insights sent to your inbox at least once a week – for free. Challenge the way you think about investing with The EWI Independent.

Privacy

On 18 August 1983, Robert Prechter wrote this in The Elliott Wave Theorist:

...the current environment is providing a once-in-a-generation money making opportunity. This opportunity takes on greater importance, however, because it may well precede not merely a Kondratieff cycle downswing, but the biggest financial catastrophe since the founding of the Republic.

The benefit of hindsight allows us to say that Prechter's then-radical forecast of a "once-in-a-generation money making opportunity" did happen. It actually surpassed what Prechter anticipated.

Yet that was a two-part forecast, so this question remains: Is the "biggest financial catastrophe" that Prechter foresaw still unfolding, or has the Fed confined the damage to the 2007-2009 financial crisis?

And if the worst is yet to come, how bad will it be -- and what will follow?

Near the start of the new year, Prechter provided a glimpse into the answers in an interview with Kate Welling of Welling@Weeden, a journal of independent research, analysis and opinion.

A link to the full interview is in the January Elliott Wave Theorist. Below is an edited excerpt.

-----------------------

Welling: ...the social funk you see descending won't last forever?

Prechter: Well, it has to play out. I'm still hoping that it happens fast enough that I'm not dead by the time it does. I'd love to be able to come out and turn long-term bullish again, like I was in the early '80s. That was a great time and a good opportunity. The next one coming up is going to be even bigger.

Welling: So anybody left with investable assets at that juncture will have a great buying opportunity?

Prechter: Of a lifetime! In my book, I said real estate is probably going to drop 90%. It's down 45%, so arithmetically it's halfway there. But can you imagine buying your dream properties at ten cents on the dollar, or even less? I see that coming. Commodities will be a whole lot cheaper; way cheaper than people imagine today. People think that oil is only going to go up; that we are running out of it, and so forth. But I expect oil to take out its 2008 low before this deflation and depression are over.

Welling: I take it you don't agree with the rosy forecasts...for 2012.

Prechter: Not in the least. The leading indicators are telling us the economy is rolling over...In 2012, I expect to see the economy go back into contraction. We'll probably see the S&P resume its bear market and start a bigger decline than we saw from '07 to '09 - but that won't all take place next year. The bigger down years are going to be in the hard-down phase of the cycle...During 2012, there will be plenty of reasons for people to hold onto stocks and keep hope going. But hope is a four letter word in the financial markets when you resort to it at the wrong time.

-----------------------

Robert Prechter lays out his compelling case for why "hope" remains a slippery slope in what is already a classic -- his special 54-minute video August Elliott Wave Theorist. His presentation is so powerful that we've kept it available for our new subscribers, even though it was published 6 months ago! The accompanying text is fully 50% longer than the regular length of a Theorist, and you'll find over 50 eye-opening charts.

You can view this special Theorist as part of your risk-free read of our Financial Forecast Service.

Plus, the NEW February Elliott Wave Theorist is now online with 16 must-see charts and Prechter's 2012 market insights. This link takes you to your risk-free read>>

Read Prechter's Latest 2012 Market Analysis in the NEW Elliott Wave Theorist!

Plus see his classic 54-minute video Elliott Wave Theorist -- as part of your risk-free review of our FINANCIAL FORECAST SERVICE

Get the latest Elliott Wave Theorist, Financial Forecast and Short Term Update at a 24% bundled savings

RISK-FREE read>>

Tags: Bear market, bull market, deflation, investment strategy, market forecasts, Robert Prechter

May 13-16

Las Vegas Money Show

July 10-13

Freedom Fest Conference

Stay Ahead of the Trend in U.S. Stocks

EWI's Financial Forecast Service equips you to think, trade and invest independently from the crowd. Here's what you'll get, risk-free:

Short Term Update -- Intensive forecasts and analysis3x/week for U.S. stocks, gold, silver, bonds and the U.S. dollar.
Financial Forecast -- In-depth,intermediate-term perspective on U.S. stocks, gold, silver, bonds and the U.S. dollar.
Theorist -- Bob Prechter's monthly big-picture insights.

Put the Financial Forecast Service on your screen in minutes, risk-free>>

Most Read

Highest Rated

Free 50-Page eBook

Learn to Think Independently

The Independent Investor eBook can help you to challenge conventional notions about investing and explain market behaviors that most people consider "inexplicable."
Download your free Independent Investor eBook

Classic Prechter

CLOSE [ X ]

The Elliott Wave Principle is a detailed description of how financial markets behave. The description reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific Elliott wave patterns in price movements. Each pattern has implications regarding the position of the market within its overall progression, past, present and future. The purpose of Elliott Wave International’s market-oriented publications is to outline the progress of markets in terms of the Wave Principle and to educate interested parties in the successful application of the Wave Principle. While a course of conduct regarding investments can be formulated from such application of the Wave Principle, at no time will Elliott Wave International make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Investing carries risk of losses, and trading futures or options is especially risky because these instruments are highly leveraged, and traders can lose more than their initial margin funds. Information provided by Elliott Wave International is expressed in good faith, but it is not guaranteed. The market service that never makes mistakes does not exist. Long-term success trading or investing in the markets demands recognition of the fact that error and uncertainty are part of any effort to assess future probabilities. Please ask your broker or your advisor to explain all risks to you before making any trading and investing decisions.