Brief Book Review: What To Do When The Bubble Pops

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Smith1776
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Brief Book Review: What To Do When The Bubble Pops

Post by Smith1776 » Thu Dec 24, 2020 1:24 am

I just finished reading Harry Dent's What To Do When The Bubble Pops. It is a book with some interesting insights, but I overall found that it lacked rigour and substance.

To his credit, Dent has been consistent with his message over the years. His two-pronged message: 1) demographic trends tell you everything you need to know about where the economy is headed; 2) we are headed for a deflationary spiral.

Demographics are apparently the underlying force for just about everything we've ever discussed on this forum. From 1929, the inflationary period of the 70s, to the 2008 crisis.

The middle of the book is the part that I found most interesting. Dent claims that the epicentre of the next bubble is China. China's entire economy is driven by government spending, and not by the invisible hand of the markets. The Chinese have consistently reported 7%+ annual economic growth, but it's likely that at least half of that is manufactured. He cites a real estate bubble in China that has spread to other parts of the world. The Chinese citizenry buy up real estate around the world as a way to get their assets out of the country that circumvents capital controls.

China along with the world's low interest rates and bubble-ish tonality is what causes Dent to come to the conclusion that we will enter a second Great Depression with a deflationary spiral. His recommendation? Naturally it is long-term treasury bonds.

The entire book reads like someone just took the long-term bond chapter out of Craig and Tex's book and amalgamated it with a narrative as to why it's the most likely outcome.

People who subscribe to the approach of the PP will likely not find the book particularly convincing. But as mentioned, some of the perspectives on China were interesting. Given how quick of a read it was, I'd recommend it overall.


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Re: Brief Book Review: What To Do When The Bubble Pops

Post by AdamA » Thu Dec 24, 2020 1:48 am

At the very least it sounds entertaining. I think I will read it.
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Re: Brief Book Review: What To Do When The Bubble Pops

Post by Kriegsspiel » Thu Dec 24, 2020 5:24 am

Correct me if I'm wrong, but hasn't Dent been wrong with all of his books' recommendations?
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Re: Brief Book Review: What To Do When The Bubble Pops

Post by Smith1776 » Thu Dec 24, 2020 12:00 pm

My observation is that he has at least been less wrong than Peter Schiff.
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Re: Brief Book Review: What To Do When The Bubble Pops

Post by SomeDude » Thu Dec 24, 2020 12:02 pm

Isn't his basic premise is that the dollar will massively appreciate in value through some deflationary spiral? How likely does that sound?
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Re: Brief Book Review: What To Do When The Bubble Pops

Post by Smith1776 » Thu Dec 24, 2020 12:04 pm

SomeDude wrote:
Thu Dec 24, 2020 12:02 pm
Isn't his basic premise is that the dollar will massively appreciate in value through some deflationary spiral? How likely does that sound?
This is exactly why I like the PP. Prognosticators like Dent will tell everyone to hold cash and bonds. Buffett says to hold mostly stocks and be confident about prosperity. Peter Schiff is all about gold due to coming hyperinflation.

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Re: Brief Book Review: What To Do When The Bubble Pops

Post by vnatale » Thu Dec 24, 2020 3:10 pm

Smith1776 wrote:
Thu Dec 24, 2020 1:24 am
I just finished reading Harry Dent's What To Do When The Bubble Pops. It is a book with some interesting insights, but I overall found that it lacked rigour and substance.

To his credit, Dent has been consistent with his message over the years. His two-pronged message: 1) demographic trends tell you everything you need to know about where the economy is headed; 2) we are headed for a deflationary spiral.

Demographics are apparently the underlying force for just about everything we've ever discussed on this forum. From 1929, the inflationary period of the 70s, to the 2008 crisis.

The middle of the book is the part that I found most interesting. Dent claims that the epicentre of the next bubble is China. China's entire economy is driven by government spending, and not by the invisible hand of the markets. The Chinese have consistently reported 7%+ annual economic growth, but it's likely that at least half of that is manufactured. He cites a real estate bubble in China that has spread to other parts of the world. The Chinese citizenry buy up real estate around the world as a way to get their assets out of the country that circumvents capital controls.

China along with the world's low interest rates and bubble-ish tonality is what causes Dent to come to the conclusion that we will enter a second Great Depression with a deflationary spiral. His recommendation? Naturally it is long-term treasury bonds.

The entire book reads like someone just took the long-term bond chapter out of Craig and Tex's book and amalgamated it with a narrative as to why it's the most likely outcome.

People who subscribe to the approach of the PP will likely not find the book particularly convincing. But as mentioned, some of the perspectives on China were interesting. Given how quick of a read it was, I'd recommend it overall.



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For $2.99....just bought it! Thanks for the review and recommendation.

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Re: Brief Book Review: What To Do When The Bubble Pops

Post by ppnewbie » Sat Dec 26, 2020 2:20 am

I read Dent’s “Sale Of A Lifetime”. The book was entertaining but he lost me when he correlated market events with sunspots.
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Re: Brief Book Review: What To Do When The Bubble Pops

Post by Hal » Sat Dec 26, 2020 7:22 am

Is he still spruiking his new fund?
Maybe he took more than a chapter from the PP book ::)

https://www.dentsectorfund.com.au/the-fund
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