The “Holy Crap” Insight That Changed Everything

I started my career as a consultant at Bain and Company, helping large Fortune 100 companies reverse market share losses resulting from new technologies and innovations.

When I grew tired of the slow pace of change inherent in most large companies, I started consulting with startup ventures in California.

You see, I was an entrepreneur at heart, not the corporate consultant and manager I was trained to be.

As I consulted, I discovered that many new companies were growing exponentially by working with the innovations of the Baby Boom generation. I’m not just talking adoption of new computer technologies. I’m talking adoption of new lifestyle products and services.

I’d been aware of it before, but one thing crystalized in my mind during those years…

Young people drive radical innovations in our economy. They question the prior generation’s assumptions.

At the time, those young people were the Baby Boomers… and I became transfixed by the generation’s massive size and its thirst for innovation.

I read all I could on the subject.

I found a treasure trove of income and spending data in the U.S. Bureau of Labor Consumer Expenditures Surveys.

My intellectual curiosity led to a discovery of the wonders of demographics — the most predictable and scientific influence in economics — and the best leading indicator ever!

My research in demographics greatly expanded my keen interest in cycles. From my life experience and education, I saw clear evidence of up and down cycles throughout history.

I always believed there must be a way to predict such cycles. They are so consistent and pervasive. So I studied and documented every cycle I could find throughout an exhaustive search of history, which led me to a “holy crap” insight in 1988…

On one side of my desk was a long-term chart of births in the U.S. On the other side was a chart of the S&P 500 Index, adjusted for inflation. I was looking back and forth between these two charts when it suddenly struck me that they were practically identical. The only difference between them was an approximate 45- to 49-year lag.

If I’d been naked in the bathtub, that would have been my “Eureka!” moment.

What I saw, right under my nose, was that a large increase in the U.S. birth rate foretold a large increase in the S&P 500 Index about 45 to 49 years later.

To me, this was no random correlation.

My demographic research told me otherwise.

What I was seeing was the peak in spending of the average family.

As we’ve refined our data over the last 25 years, that correlation I identified back in ’88 has become a 46-year leading indicator for the economy… One I’ve used since then to accurately forecast the housing bubble, the dot.com bubble, the 2008 crash… you name it.

My “holy crap!” insights didn’t stop there. One year later, I found a similar correlation between inflation rates and workforce growth, this time with a 2.5-year lag. And I quickly realized I could project the number of new workforce entrants and retirees accurately over time to extend this indicator.

You read that correctly. That means it’s possible to predict inflation rates decades in advance, as I did starting in the late 1980s.

From there, I integrated the S-Curve and the product life cycles for technologies and businesses… and my Dent Method was born.

Using this method, we can tell when the average person will do most things in life, from cradle to grave.

Of course, short-term cycles are harder to predict because human nature allows us to get over-optimistic when times are good and too dour when times are bad… but they’re not impossible.

Naturally, things only get worse when we factor in the government’s manipulations in its efforts to control a naturally cyclical economy!

We continue to refine our analytical method, on both macro and micro levels. Our approach provides us with unique insights, which often run contrary to popular opinion.

But we’re not afraid to make bold calls.

Yes… I’m talking about my Dow 6,000 minimum call, and more likely 3,300 before this winter season is over… and my gold $750 call, and possibly as low as $250… both of which I still stand firmly by.

We’re here to provide you with the unvarnished truth… with a more realistic view of trends… so you can prosper in good times or bad… over the short or long haul.

The demographic cycles we study say bad times will continue after this leading indicator peaked in 2007, with a particularly rough stretch from late 2013 to early 2015 or so… then again around 2017 into early 2020.

Then the good times will come around again by 2024.

Life goes in cycles! Predictable cycles.

And we’ll be there to help you survive and prosper every step of the way.

Harry

 

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Categories: Economy

About Author

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.