From prescient forecasts to practical "how-to's", this updated third edition of Conquer the Crash gives everything you need know in order to survive and prosper in a long-term bear market. The doors to financial safety are closing, and prudent people must act while they can.
No book forecast the financial turmoil in 2002-03 and 2007-08 as early and in as much detail as the first and second editions of Conquer the Crash. More than 100,000 people read the New York Times bestseller in time to protect their wealth. But only some of the future has caught up with the forecasts in the previous editions.
There is much more to come, which is why it remains your best resource for practical "How To," "What To" and "Should You" advice to help you survive and prosper in a long-term bear market. If you own an earlier edition, you already know it was a financial lifesaver in 2002 and again in 2006-2007.
The third edition will prove itself the most imperative of all. No investment volume can match the fearless candor of Prechter's analysis regarding the months and years ahead.
You can (and should) get your hands on Conquer the Crash immediately. As Bob explains in the book, bear markets are much shorter affairs than bull markets. They bring the kind of destruction that can ruin anyone who ignores the warning signs. It can take decades - not years - to recoup losses. It's more important than ever to take action now before the next one hits.
Much of the book's text remains word-for-word from the previous two editions. Yet the third edition includes 130 pages of all-new content, including analysis, forecasts, charts and specific instruction, now appearing for the first time in print:
Robert Prechter began his professional career in 1975 as a Technical Market Specialist with the Merrill Lynch Market Analysis Department in New York. He has been publishing The Elliott Wave Theorist since 1979 and is the president of Elliott Wave International. He is also Executive Director of the Socionomics Institute, which studies social mood and its impact on social action, including the stock market and the economy.
There's never been a book like Conquer the Crash: It foresaw and explained the debt crisis, the devastating collapse in home prices, the two-bear-market-in-one-decade stock declines, the demise of Fannie and Freddie, the Federal Reserve's failure to turn the trend, and lots more.
Conquer the Crash said this about real estate:
Real estate prices have always fallen hard when stock prices have fallen hard.... What screams "bubble" – giant, historic bubble – in real estate today is the system-wide extension of massive amounts of credit to finance property purchases.... Many people have been rushing to borrow the last pennies possible on their homes. They have been taking out home equity loans so they can buy stocks and TVs and cars and whatever else their hearts desire at the moment. This widespread practice is brewing a terrible disaster. (p. 152)
And this about the coming debt crisis before it happened:
Debts are retired by paying them off, "restructuring" or default. In the first case, no value is lost; in the second, some value; in the third, all value. In desperately trying to raise cash to pay off loans, borrowers bring all kinds of assets to market, including stocks, bonds, commodities and real estate, causing their prices to plummet. The process ends only after the supply of credit falls to a level at which it is collateralized acceptably to the surviving creditors. (pp. 91-92)
And this about the Federal Reserve:
For many people, the single biggest financial shock and surprise over the next decade will be the revelation that the Fed has never really known what on earth it was doing....Make sure that you avoid the disillusion and financial devastation that will afflict those who harbor a misguided faith in the world’s central bankers and the idea that they can manage our money, our credit or our economy. (p. 124)
And this about Fannie Mae and Freddie Mac:
Major financial institutions actually invest in huge packages of [Fannie and Freddie's] mortgages, an investment that they and their clients (which may include you) will surely regret.... Investors in these companies' stocks and bonds will be just as surprised when [Fannie and Freddie's] stock prices and bond ratings collapse. Most rating services will not see it coming. (p. 154, 225)
The first two editions of Conquer the Crash published when optimism reigned and the financial world was partying around-the-clock. But then the average U.S. homeowner suffered a decline of 30% to 40% in property value. In 2007-2009, investors suffered their biggest portfolio losses since 1929-1932. Homeowners watched Fannie Mae wither into a zombie corporation under the government's protection. Citizens in the U.S. and Europe watched politicians try to cope with the growing debt crisis -- to no avail. Those leaders in fact made the crisis worse by piling new debt on top of old.
And for the record, Prechter's foresight has extended far beyond the realm of finance:
The occupation of Iraq by the U.S. will progress from a quagmire to a financial, political and public relations disaster. (October 1, 2003)
The benefit of hindsight helps us see that those forecasts were stunningly accurate. But at the time he published them, Prechter's analysis was contrary to the conventional wisdom in the financial media, on Wall Street, and among most of the investing public.
Here's what others think of Conquer the Crash:
- David Tice, President, Prudent Bear Funds (2002 edition)
- Kirk Washington, Benchmark magazine (2004 edition)
- Ken McCarthy, The Independence Day Blueprint (2009 edition)