Rating: 
Summary: Worth reading and looking back to compare with today.
Review: Definitely worth reading. Mr. Prechter will stretch your mind in new directions, whether or not you agree with him. He is insightful and well researched. He also has a very good long term success rate. He has, however, missed some short term predictions, ie; 1995-1999 bull run, but, he was vindicated in calling the market reveral and bear start of 2000 just weeks before the reversal actually began. A fun read, especially comparing what he wrote in 2002 with today's markets.
Rating: 
Summary: Interesting analysis
Review: I felt this book is excellent in the sense that it gets you to think about the conclusions and opinions you have come to regarding the world's largest economy.
What Pretcher clearly identifies in his text is the major problem facing the US economy, namely a huge debt load that is bearing down upon it. However it must be said that his conclusions leave something to be desired because they are based more on the traditional Kondrattief cycle theory as apposed to elliot wave anyalysis. Moroever many well respected wave analysts completely disagree with Precther's prognosis for the markets.
Anybody that believes the US dollar is about to embark on a major bull market with 1 trillion dollar anual budget deficits (when Social Security raiding and off budget expenses such as the war are taken into account) and a current account deficit well over 500 billion dollars a year is in dream land! Pretcher also fails to acknowledge that his theory of deflation based upon a crippling debt load as leading inveitably to deflation should review the excellent work "when money dies". This work charts the Weimar Republics hyperinflationary collapse in the face of large gov and private debt.
In conclusion makes you think but completely wrong and flawed anaylsis as the US as world resevr currency is in a perfect position to hyperinflate despite a large well developed Bond market as they have been passified by a steep yiel;d curve and extended carry trade.
Rating: 
Summary: Interesting but...
Review: I like Prechter because he's an interesting, unconventional thinker. But... I want to be careful and fair... doesn't his track record leave quite a bit to be desired? At one time (I think the early 80's), I've read or heard he did well with his market predictions. But, not sure, didn't he get the 87 crash wrong in the sense that the market quickly recovered and that would've been the opportunity of a lifetime to buy? And, hasn't he's been bearish though another great opportunity, the incredible bull market of the latter 90's? Finally, here we are in mid 2004, with Gold holding _above_ $400, the stock averages within spitting distance of their old highs, and the fed likely to raise interest rates because of the economic recovery (along with job creation) to keep inflation in check. It just seems like Elliot Wave strings you along... there're always unlikely alternate counts and unlikely alternates to those that make you question why the unlikely of the unlikely seem to happen so often. I'm not trying to bash; would actually prefer to be more positive; but am simply expressing an honest dissapointment.
Rating:
Summary: SOME USEFUL INFO, BUT NOTHING EARTH SHATTERING
Review: If you take anything at all from this book, it should be that the only way to stay afloat in the financial world is to spend wisely, save at least 10-15% of your income each year, and diversify your investment portfolio with alternative asset classes like gold & commodities. When I say diversify, I mean that a 60/40 stock/bond portfolio won't do it anymore. I have read similar views from Harry Browne's "Fail-Safe Investing" and from fund managers such as David Tice of the Prudent Bear Funds. They all have been successful for years, and stress that with the falling dollar, one needs exposure to non-dollar-denominated securities and hard assets. I'm not convinced that the U.S., the engine of growth in the world is going into depression. That would have to be brought on by foreign sellers of U.S. bonds, and what would the alternative safe-haven be? EURO, Gold, a basket of currencies? Don't bet on it if you really think that our trading partners would stick a knife in us, the largest consumer market in the world. Besides, don't believe everything that the author says. We all know that trying to predict the future is an exercise in futlity and is akin to gambling....then again, so is playing the markets. Just be smart about it and do your research first before making investment decisions.
Rating: 
Summary: Shows you how to profit from the coming depression.
Review: In his new book, Robert Prechter makes a convincing case that we are heading for a deflationary depression, similar to the environment the U.S. saw in the early 1930's, and Japan has experienced for the last 12 years. Readers are shown how to prepare, and even prosper as this deflationary scenario unfolds. While most will be crushed by the weight of their own mortgage and credit card debt, readers of this book can take advantage of a once in a lifetime investment opportunity. Prechter's understanding of technical, contrary, and economic analysis is exceptional. According to conventional wisdom of investors, traders, and the so-called "experts" on Wall Street, external events and fundamentals cause psychology and social mood to change. Flying in the face of this conventional wisdom, Prechter maintains that in reality the opposite is true; psychology and social mood cause underlying economic and market conditions to change. Once you view events from this perspective you can successfully anticipate conditions and properly adjust your investment techniques for maximum wealth appreciation and preservation. Prechter identifies the many ways for readers to profit off the continuing stock market decline. Whether you trade stocks, bonds, commodities, or options you will find valuable advice in this book. It will have a permanent spot on my own bookshelf next to Prechter's earlier classic "At the Crest Of the Tidal Wave". Prechter's advice will surely be used in my own trading.
Rating:
Summary: A poorly argued case, even for market bears.
Review: Mr. Prechter is best known as a popular advocate for the Elliot Wave principle. He continues this school of thought in this book. The book is divided into two parts. The first part attempts to persuade the reader that the US economy is headed for a deflationary depression. The second part recommends actions to prepare and prosper during a deflationary depression. This specific edition of the book also includes an update written in 2004. (The original book was written in 2002.) First of all, with any investment book review, it is important to understand the reviewer's biases. My belief is that the US will enter some type of unwinding, either through an extended securities bear market, or more severe overall imbalance. I maintain a minor belief in technical analysis but do not rely on it. Elliot Wave analysis is, at its core, a technical analysis methodology. Elliot Wave claims to find a recurring pattern in short term, long term, and ultra-long term market price charts. What is gravely missing, however, is some sort of explanation or justification for its supposed utility. Many schools of technical analysis, for example, give plausible explanations for why "resistance levels" exist based on market or individual investor psychology. This is completely missing from Mr. Prechter's writings and thus he fails to distinguish himself from a long line of failed data miners. This missing and crucial "why" is the most glaring hole in this book. While other writers attempt to prove a thesis through a chain of reasoning and supporting data, Mr. Prechter skips steps in his thesis. The holes are not glaring to a casual reader, but a person with some breadth in economic knowledge will easily spot large omissions. For example, even if you accept the disjointed framework of technical and fundamental analysis, the fundamental arguments for deflation are seriously flawed. Note, also, that Elliot Wave principles claim only to predict the performance of securities. Thus, Elliot Wave is agnostic with respect to the inflation vs. deflation debate. Therefore, Mr. Prechter's arguments for deflation are purely fundamental in basis. This is where his loose foundation really comes apart. His understanding of the Federal Reserve functions are contrary to those written by many other writers and scholars, including many who share similar contempt for the Federal Reserve. This is rather crucial, because the specific authorities and obligations of the Federal Reserve can determine whether a presumed economic failure results in deflation or hyper-inflation. Convincing cases for deflation have been made, but Mr. Prechter does not offer one. Where many market bears thoroughly argue and carefully build their conclusions, Mr. Prechter glosses over far too many details to arrive at this deflation conclusion and blatantly ignores examples that contradict his thesis. He uses the US depression of 1929 as his sole argument that monetary policy is powerless to prevent deflation, forgetting that Federal Reserve authority was much lesser back then. Meanwhile, he ignores the numerous historical hyper-inflation examples caused by monetarism, such as 1970's US "stagflation", the recent collapses of Argentinean and Mexican currency, or even popular historical cases such as the South Sea Company bubble and post World War One Germany. Mr. Prechter is either grossly ignorant or deliberately avoiding such cases. Neither speaks well for him. Most importantly, he sets up his own case of why he is wrong. He admits that there is a small probability that he could be wrong and that hyper-inflation will set in. Mr. Prechter says that this would be indicated by a declining US dollar and a price of gold reaching above $400 per ounce. Both are now clearly true, yet in his 50-page 2004 appendix, he conveniently ignores this fact and chooses to emphasize only his market index prognostication. The rest of his fundamental case rests on material already beaten to death by other bearish scholars. He writes about historical price to earnings ratios, the contrarian indications given by popular finance magazines and long-to-short ratios, for example. His fundamental arguments are not thoroughly presented and escape ridicule only because others have argued the case before him. He adds nothing new here. Since the first part of the book is so poorly supported, the second part regarding how to survive a depression is irrelevant. His recommendations generally apply only to deflation and would not work in a hyper-inflation or zero-inflation economy. When one supports an already argued case, the burden of proof is small. However, if one dares to present a different case as Mr. Prechter has done, one needs to cover all well known and reasonably applicable cases at a minimum. Mr. Prechter has failed in this regard and by his own criteria.
Rating:
Summary: Highly Recommended!
Review: Prophets of doom have always made entertaining reading. In his latest fire-and-brimstone warning, Robert R. Prechter, Jr., an experienced forecaster of long-term economic and social trends, says financial Armageddon is just around the corner. While his technical analysis ("Wave Theory") may appear to be stock-market astrology, readers may appreciate his examination of the basic functions of money and credit, his argument that worldwide central banking has fundamentally altered these functions, and his perceptive comparisons of the late 1990s with the Roaring Twenties. Prechter might have appealed to a broader audience by toning down his graphs and technical talk, and focusing instead on his investment suggestions: If the market turns down, you'll save your skin, but even in a bull market, keeping your money safe can't hurt. We recommend this book to anyone looking for bear-market investment advice, as well as those interested in technical analysis or an opinionated view of business and market cycles.
Rating:
Summary: Provocative Viewpoint on the Market and the Economy
Review: Robert Prechter Jr. is well-known in stock market circles for his Elliott Wave predictions over the years have had their success and failures. This is Prechter's third and latest book (At the Crest of the Tidal Wave (1995) and The Elliott Wave Principle (1978)). His current book is really two books in one printed on different colored paper! Even if you do not agree with Prechter's view of the world, you should certainly understand his arguments and make your own decisions. Part I (135 pp.) focuses on why he believes a stock market crash will occur in the near term, as well why deflation and economic depression are high probability scenarios. Although deflation and depression are rare occurrences, Prechter believes that they are at the brink. His goal is writing the book is to provide insight into defining both events and make you believe that they can happen, and eventually make you believe that they are likely to happen. Prechter compares the period 1942-1966 (called Wave III) with the economic expansion of 1974-2000 (Wave V). He points out that the most recent period had much weaker economic fundamentals and performance than the prior period, although by stock market standards Wave V had an increase of 1930% on the DJIA compared to 971% during Wave III. In his analysis he provides comprehensive statistics on GDP, Industrial Production, Capacity Utilization, Unemployment rate, household's liquid assets, federal and consumer debt, prime rate, federal budget deficit, personal savings among others. Prechter then defines depression and its relationship to the stock market. One of his key observations is that 'major stock market declines lead directly to depressions'. Prechter depicts the five waves evident in the stock market using four charts. He points out that the five-wave pattern occurs even taking into account major news events such as Hitler's rise to power and the end of the Vietnam war. Prechter provides four signs of a market top and explains the Elliott Wave characteristics of each of the five waves. Prechter presents his case for the existing stock market precarious situation (as of March 2002) by covering Wave V in great detail. He spends considerable time examining the fifth wave from 1974 to 2000 compared to previous waves. The case for the historically high stock evaluation is made by focusing on the low dividend yield, outrageously high book value, and high P/E ratio. Prechter then covers how psychology plays a major role in a stock market advance and decline. He reviews the psychology of he economists, brokerage strategists, money managers, public, and the media. Prechter believes that the upcoming bear market will be the most devastating since the great depression and perhaps since 1720-1784. If this occurs, he indicates that the U.S. will experience another depression. He forecasts that the DJI will plummet to 777, the August 1982 low, if that average follows the pattern of the prior manias (e.g., Nikkei; DJI 1929-32; Gouda tulip bulbs (1634-1722); and the South Sea Company (1719-1722)). Lastly, he makes the case for deflation, and discusses the Fed and banking system. Book Two provided Prechter's advice for protecting yourself and profiting from the upcoming depression. His recommendations include:
1. Have safety of principal by being in cash or high-quality short-term U.S. Government treasuries (T-bills) or money market mutual funds that invest in these types of instruments.
2. Sell your home (if you have a large mortgage) and rent instead.
3. Find a safe bank (using Weiss Ratings, Inc., for example) and keep your money there.
4. Do not own or invest in stocks, options or futures.
5. Consider buying inverse mutual funds (such as Rydex Tempest that double short the S&P 500) and Rydex Venture (double short NASDAQ 100). ProFunds also offers bear funds. To invest in any of these funds, Prechter cautions that you must be a short-term timer to be successful.
6. Buy physical gold and silver metals.
7. Cash out your whole life insurance policies and convert to term insurance from the safest firms (based on Weiss Ratings, Inc., for example) Prechter provides a very sobering view of the future that few individuals will heed because of its negative and extreme consequences. But if this book makes you think about the safety of your financial nest eggs, retirement funds, insurance policies, etc; then at least you can decide to take some steps to protect yourself. If the stock market can manage to rally 20-40% from the lows of July 2002, then perhaps you should consider cashing in your remaining equity and mutual funds positions before the 'real' bear market takes hold as Prechter envisions. I know I will be doing that and then using my charts and technical indicators to tell me when to get back in. It's shame that Prechter did not publish this book in March 2000 when the market was at its peak. He would have saved most investors, who believed his work, a great deal of money if they had followed his recommendations. Whether you agree with Prechter's view of the world, you will certainly agree with this quote:
'To be successful in life, or at least learn something along the way, you have to think for yourself.'
Rating:
Summary: READ THIS BOOK NOW!
Review: Scary as it may sound, things can get a lot worse! With the Bull on the run, the Bears quietly plan for the new depression. Will we see NASDAQ 5000? OR will we see NASDAQ 1000? Dont think another minute about what will happen, get the book and start thinking about how to prosper in it. - Mason Johnson, President, www.TomorrowsGold.com
Rating:
Summary: Who are you going to believe?
Review: Subscribers to Prechter's newsletters will have already read most of what is in this book. But for the other 99.99% of investors in the world who are not his subscribers, he has distilled down his reasoning and recommended course of actions into one convenient place. This book is really two books within one set of covers -- the publisher even uses two different kinds of paper stock to differentiate the "books." In "book one," Prechter draws from history and shows charts & graphs (some going back 300 years) of what has happened in situations similar to what we are going through today. Known for his Elliott Wave analysis, Prechter does not stop there. He uses all of the tools of technical and fundamental analysis to methodically build his argument that the current market downturn is very far from over. Like a lawyer presenting a case, he covers everything from esoteric considerations such as rising federal debt as a percentage of GDP, to public psychology, to the ultimate impotence of the Fed. At the end of the section, the reader is left with the choice to either believe that history repeats, or that "this time it's different." "Book two" presents practical advice of what to do now. He offers suggestions of what to do if you're in the stock market and your account is way down. He covers junk bonds, real estate, treasuries, pension plans, 401Ks, insurance, gold, and the whole spectrum of investments. To help the reader, he lists the safest banks in the country. He has eye-opening advice for people who are relying on government protection such as FDIC bank account insurance. Finally, he shows how to actually profit in the environment we are currently in. Some disparage Prechter for his past fault of getting out of the market too early. It's a valid criticism; nevertheless, every one of his predictions are currently playing out. How do you argue with someone who is right? Ultimately, the reader is left with a choice. One is to follow the financial mass media, economists and brokerage analysts who say recovery is just around the corner. The other is to look at history and Prechter's prediction, along with his track record of being only one of a handful of people to predict the magnitude of the market crash. Who are you going to believe?
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