Customer Review

36 of 43 people found the following review helpful
3.0 out of 5 stars We're still waiting, 8 April 2006
This review is from: Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression (Paperback)
Prechter must be thanked for bringing Elliott's Wave Principle to the world and educating a generation of Elliott Wave disciples; but there's a world of difference between being a great theoretician and being a source of well-timed financial advice.
Prechter has been doomy with such reliability, and for so long (1987, 1995, 1998, and 2000 to date) that at SOME point he will be entitled to say "see, I told you so", but no matter how intellectually dazzling his commentary is, the markets do not exist to prove Prechter right and the results of following his trading forecasts (i.e. being monster short of Stocks, Treasury Bonds and Gold) have SO FAR been strongly negative. If the average person followed his advice and sold his house and all his stocks, he would not have experienced financial harm, but instead would have been on the side-lines for the biggest up-moves in stocks and real estate in the whole of human history. So we must tread with caution regarding the timing of Prechter's calls. That's not to say they're valueless, but we must be careful nonetheless.
It's my belief, as a follower of my own home-grown variant of the Wave Principle, that there is SOMETHING to it, but that it has to be used carefully. Further, I believe that if you know the Wave Principle, you know people. And thus, if you know people, you know that SOMEONE out there is going to freak out and short everything they can, and lose themselves a fortune.
The point of this review is therefore not to be negative, but to add some RESPONSIBLE advice that should be be included in this otherwise brilliantly researched and eloquent book. The advice is: read the analysis, note the conclusions but REMEMBER THAT THE "GRAND SUPERCYCLE" IS UNPROVEN AND MAYBE DOES NOT EXIST AT ALL. I would also note that much of his analysis is based on the idea of "mean reversion", i.e. that markets for whatever reason always tend back to some form of average metric. Mean reversion, when it occurs, tends to happen by chance, not compulsion, so also bear in mind that just because things are "out of whack", it doesn't mean they're just about to snap back because you read this book. Perhaps the internet really did change things for good - we certainly don't know for sure one way or the other.
Ultimately the successful practice of the Wave Principle relies very much on the judgement of the analyst, despite perhaps giving the appearance that it is an exact science. There is a big difference between being a responsible analyst and producing horrifying nerve-jangling research. Never forget that Prechter is a superb theoretician and sometimes not a bad analyst, but no more - and note that he has said on the public record that he rarely trades.
This book is probably a "must read", but must be referred to wisely. So don't freak out, don't panic, keep this forecast somewhere in your mind and continue to invest wisely and carefully.
I hope that these words might save some people out there a lot of money.
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Showing 1-4 of 4 posts in this discussion
Initial post: 25 Aug 2009 12:22:05 BDT
Brad Durden says:
The date of this comment is 2006. I wonder what this person is thinking now. Is he still thinking there is no Grand Supercycle? Prechter has reported that he has made one of his greatest trades by shorting the 2007-2009 decline.

Posted on 11 Dec 2009 10:28:24 GMT
[Deleted by the author on 11 Dec 2009 10:29:06 GMT]

In reply to an earlier post on 13 Jun 2010 23:34:22 BDT
Confuseius says:
None of my opinions have changed. There is still no proof of Elliott Wave as a discipline, let along the Grand Supercycle. Believing in either is still just a leap of faith. Yes the crash was devastating and horrible. But what does it prove?
Of course, I have somewhat made that leap of faith myself and have continued to practice Elliott analysis - but I can no more prove or disprove Elliott or the Grand Supercycle now than I could before the crash. I have traded through many crashes and am confident there will be many more in my lifetime. I'm just not sure that any will count as proof of the theories of wave analysis.
I hope everyone who read my review kept their wits about them and stayed safe.

Posted on 11 Oct 2011 18:08:56 BDT
Mr S D Kerr says:
Very balanced review.
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