CFD 433 – Turning The Great Bubble Burst To Your Advantage

December 21st, 2017

Harry Dent is the Founder of Dent Research, Editor of the FREE newsletter Economy & Markets, and the author of the new book The Sale of a Lifetime: How the Great Bubble Burst of 2017 Can Make You Rich. He received his MBA from Harvard Business School and was a successful consultant to Fortune 100 companies at Bain & Company. Harry Dent has also spent much of his career speaking to executives, financial advisors and investors around the world.

He’s appeared on “Good Morning America,” PBS, CNBC and CNN/FN. He’s been featured in Barron’s, Investor’s Business Daily, Entrepreneur, Fortune, Success, U.S. News and World Report, Business Week, The Wall Street Journal, American Demographics and Omni. He is also a regular guest on Fox Business.

Podcast Highlights

  • Who is Harry Dent?

Harry started out by working for Fortune 100 companies after college and later went to Harvard Business School which is where he really discovered his true talents of seeing the big picture. thinking on his feet, and being able to argue very well. While consulting, Harry learned nearly everything there is to know about demographics.

  • What was it that clued you into what you were meant to do?

Harry’s experience in Harvard debating real world business scenarios is where he learned that he was really good at communicating.

Some people know what they want to do when they are 14, and some people like Harry discover what they are meant to do through a series of fortunate accidents.

Leaving Bain & Company was like jumping off a cliff, but entrepreneurs have to take calculated risks on top of having a vision for the future.

  • Where did you develop the confidence to make the jump?

You have to take risks intelligently. Start your business on the side, and make the transition step by step. Test everything and don’t gamble your whole enterprise on one thing.

  • What is it about demographics that gets you so excited?

Prior to President Ford, there was no middle class. With the creation of the middle class and the advent of the baby boom, demographics became incredibly important.

Demographics give you an insight into the behaviour of very large groups of people. If you’re taking a risk, you’re going to have a better chance of succeeding if you take that risk on a trend that is growing instead of declining.

Marketing is always the biggest initial challenge of starting a business, not the technology.

  • What do you think about trends in real estate?

Nursing homes, funeral homes, and hospitals will all see upswings in terms of real estate value.

Harry predicts another big financial crisis coming, but he believes it’s going to be a major opportunities for entrepreneurs.

  • How can we see bubbles coming and what can we do about them?

You have to have a different strategy for each season. When bubbles occur, they don’t see them because they are getting something for nothing.

Bubbles rise exponentially, come to an explosive climax, followed by a tremendous crash. You can’t keep a bubble going forever. As high as they go, the crash twice as fast. It’s better to get out early, rather than late. When things go down, the opportunities open up at the speed of light.

The businesses that hunker down at the top of the bubble with cash in reserve will find themselves in a solid position to pick up assets at a deep discount.

  • Where do precious metals come in?

Harry told his clients to get out of gold and silver at the top of the market. Gold is an inflation hedge, but this bubble will be deflationary.

  • What are the four indicators that you looked at to see the crash?

There was a geopolitical cycle that peaked in 2000 and doesn’t finish until 2020. The second cycle is the generational spending wave which peaks around the world at different times. The third is an innovation cycle that affects productivity which peaks every 45 years like clockwork. The final indicator is a scientific indicator, the sunspot cycle which is now pointing down.

All indicators are pointing down at the same time, the only other time this happened was in the early 70’s and 30’s.

When something happens that doesn’t seem to fit, Harry will dig until he identifies the cycle that’s responsible.

Reference: The Sale of a Lifetime: How the Great Bubble Burst of 2017 Can Make You Rich, Harry Dent

  • Harry’s Takeaway

Sell any financial asset that is not strategic to your business or life and create as much cash as possible. The people will ample cash reserves and cash flow will be in the best position to take advantage of the coming crash.

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