During the 4-Day workshop with T. Harv Eker 2 weeks ago,
another great speaker, Harry Dent,
gave an impressive seminar via the teleconferencing.
This best-selling author and economist,
touched based on the 12 evidences that lead
to the imminent Great Depression
(already started and expected to bottom around 2011)
The 12 evidences were comprehensively derived from
multiple perspectives of the economy, analysing
the tech bubble, geopolitical cycle, the housing bubble,
the oil and commodity bubble,
the weakening baby boom spending wave and etc...
(more info: http://www.hsdent.com)
Dent's seminar finally ended with two full screen of
advice to handle this serious economy downturn
that will finally lead to deflation.
Some of the notes taken from the screen:
"Cash/Cash flow is King" ... Steps for Surviving the Shake-out
- Identify the parts/lines/stores of your business that are least profitable
and that you want to keep. Sell and divest the rest to increase cash/cashflow
- sell unnecessary real estate in 2009 to create cash and lease/rent until 2012.
- cut unnecessary cost now before being forced to later
- outsource non-strategic functions for greater focus and flexibility
- defer capital expenditure until downturn bottoms up and costs fall.
Focus now on investments that increase cash flow near term
- pay off high interest loans by late 2009/early 2010
and refinance at lower rates later ... if you will be credit worthy
- structure fixed rate loans/mortgages that switch to
variable rates from late 2010 foward
- structure leases/loans to mature between mid 2011 and mid 2013
for best leverage to renegotiate or refinance
- protect your personal assests from lawsuits - trusts, variable annuities
Cash is King ... Investor Strategies for Surviving Deflation
- sell stocks/business investments on likely bounce into Apr or Jul
- sell commodities into likely bounce into late 2009/early 2010
- sell investment,noncore real estate by fall of 2009
- pay down high interest debt
- refinance mortgages now and/or mid-2011-late 2012
... fixed rates until late 2010/early 2011/early 2012
- lock in long term government bonds around mid 2010
- lock in long term corporate bonds around late 2010
- lock in municipal bonds around late 2010/mid 2011
- reinvest in Asian Stocks around Late 2010
- reinvest in health care/Australian Growth sotcks around mid 2012
- reinvest in select real estate around late 2012/early 2013
- sell stocks again around early to mid 2017
- reinvest long term between early 2020 and late 2022
- avoid East Asia after 2019 (China South Korea, Japan)
With Metta,
Kee Yew
p/s: Further recommended reading on
Harry Dent's "Great Depression Ahead"
.
Thanks! -RJ
ReplyDeleteThis is the same Harry Dent who, as late as Dec 2005, predicted that the Dow Jones Average will hit 40,000 in 2010 - a five fold increase in 17 months for him to be correct. If he is so far wrong looking 5 years ahead, think about how accurate he will be looking 10 years ahead.
ReplyDeleteSee it in his own words at : http://www.sfomag.com/homefeaturedetail.asp?ID=1917751905&MonthNameID=December&YearID=2005
Agree :)
ReplyDeleteBasically not many people can predict the future in that kind of precision.
I guess the essense of his messages is to alert us on the logics and principles he uses to predict future economic trend. We should see his messages as a rough framework guidance, rather than a crystal ball =)
-- At least when we do investment in future, we know we should consider those 12 factors that he brought up?
Cheers,
KY