Financial analyst Robert Prechter is in the headlines, this time for another look at his 2003 predictions of financial apocalypse. You’d think I’d see eye-to-eye with the guy. He’s pessimistic on the economy and so am I.
The difference is that he’s a permabear who always thinks the world’s about to end. He’s been pessimistic since 2003, and most of the horrible thing’s he’s been predicting have yet to pass. So sure, he may not have gotten killed in the end of 2008 meltdown, but he didn’t have a run up, either.
I found this link a few months ago detailing Prechter’s terrible investment record:
Actually, Prechter has been making predictions for many years through his investment newsletter, Elliott Wave Financial Forecast. Newsletter tracker Mark Hulbert has been documenting Prechter’s investment trading predictions and picks since 1985 so he now has a nearly 25 year long track record which can tell us whether you should trade on his predictions or not. Here’s how Prechter’s trading advice has done from 1/1/85 through 5/31/09 versus the broad U.S. stock market average (Wilshire 5000 index) according to Hulbert’s analysis:
Annualized Return:
- Wilshire 5000 Index + 9.7 percent
- Prechter’s Trading Advice -15.4 percent
Total Return:
- Wilshire 5000 Index + 857.1 percent
- Prechter’s Trading Advice – 98.3 percent
$100,000 Invested (1/1/85-5/31/09):
- Wilshire 5000 Index $957,100
- Prechter’s Trading Advice $1,700
It’s pretty common for investment firms, funds, and pundits to underperform market indeces such as the S&P 500 and Wilshire 5000. Prechter didn’t just under-perform the indeces – his advice would have virtually wiped out your entire investment. Yet he’s constantly quoted in the press and can sell books and seminars. Amazing.
And from Mark Hulbert himself:
The last time that [Prechter's] newsletter recommended that traders be long stocks was in 1997, some 12 years ago. In fact, during the bull market of the 1990s, traders following his advice spent most of the time short the market or in cash.
This helps to explain why the newsletter’s timing advice for traders is in last place for performance over the last 20 years among all stock market timing strategies tracked by the Hulbert Financial Digest.
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Yoour analysis of Prechter is wrong. Go back to the record to get it straight!
This is a terrible article .. all of the facts are wrong.
Prechter made the
1982 Big Bull run Call …
2000 Collapse
2003 Big Bull run
2010 January collapse
I read and follow him and he is usually spot on!
Due to his Elliott Wave methodology he is sometimes early … but he has crushed the averages for decades.
THAT is why he is a multi-millionaire …
and has been one since winning all of the Investment Championships of the 1980′s.
Anyway … I assume you just don’t like him or don’t understand Elliott Wave Theory.
Come to my website for some Free Lessons.
Good Luck !!!
And Prechter called a big rally off the March 2009 low. He went short in 2007 making 800 SP points in a futures trade.
Look at these hacks for prechter . PRechter is an idiot plain and simple.
Prechter has been short since at least 2003. He actually thought 2000 was the grand cycle ultimate top. He never saw the rally in 2003 coming. He conveniently showed only his predictions since about 2005 or 6 in his new addition of Conquer the Crash to suggest that he foretold the 2007 crash. He was early in 2007 too, calling the July 2007 peak the peak, when in fact it reached the peak in December. Since calling the bottom in Feb of 2009, he has initially said SP would rally to 1100, but then gave multiple wrong signals for his clients to sell short, in July 09, Nov, Jan, and April of 2010. Each time, he failed to tell his clients to cover their shorts and get out after a short term decline in the market. If you held the shorts that he seemed to be telling you to do, you would be losing a ton of money. Prechter may be right about the ultimate bottom, but his predictions do not help you time or trade the market at all. His call of the 2000 top, 2007 top and 2009 bottom were calls that would have been nullified by each of his other mistakes. Thus I believe the net gain of $1700 calculated in this article is probably correct.
the predictions of EWI are so wrong tha some time i thought about foul play. bsesids the constant failuer about the stock market when every few weeks the are calling for the start of a 3rd wave , or keep pushing second waves higher and higher , they called for years to silver to go back to 4$ ( it is just 5 times more now) ,or called a top in gold from 700 on,
or predicted a start of bull market at the dollar when it was 15% stronger than today and so on and so on , those people are hurting small investore who seeks advice.the only advice i can give is that you have to trade simply the other way around, they are the best service in the world ,100% wrong … so trading should be easy.
To my misfortune, I have subscribed to and followed Bob Prechter and Elliott Wave International’s advice since 2003.
I say to my misfortune because following their recommendations have cost me over $400k (and that loss takes into account making back a couple of hundred thousand during the 2008 fall and 2009 rise).
They constantly revise/cherry pick their recommendation history after the fact to try and make it look like they can predict the market and know what they are doing.
EWI and Prechter make their living off of selling books. It is a sure bet they don’t make any money trading their own recommendations on the markets.
Yes I would have to agree that EWI and Robert Prechter get it terribly wrong and have cost me a lot of money also. There worst recommendation is Safe Wealth. What a piece of work they are. They constantly change the rules of their wealth protection services and retrospectively manage expectations downwards. I had a particularly bad experince with them where I unnecessarily lost money due to their failure to perform. The key is when reading their services is to watch for the arrogant tone. The more arrogant it is the less likely it is to come true. To suggest that markets operate under their wave principle is too fantastic. It failed completely to account for the quantative easing tactics of the Federal Reserve. Hence they got the US dollar and gold wrong as well as the recent rally in all asset prices.
yes i remember being a member around 2002 when the stock market rebounded they were looking for another crash saying wave 5 is over and now the market will turn down, however when the market continued to go up the dofus wrote something like “we have an unusual situation of an extended wave 5″ in other words ‘please market fall down soon because we are looking like morons here. they wasted my money and i had losses. do your own research for no one is going to give you money if they can take it themselves in the market. if you cant trade then teach…thats why i dont buy any articles.
I wish I’d come across sites like this back at the end of August when I decided to short the market on EWI’s advice. Boy were they wrong!!! And it cost me several thousand dollars. I will no longer subscribe to EWI. Current EWI subscribers BEWARE!
Amen!
I have also to admit that I lost a lot of money for my clients in 2010, following this damned Prechter since april, when he told that the markets have topped and that wave 3 has begun. Actually, the markets have plunged until end of june, but unfortunately, I didn’t come back to the basics of investing which are to look at individual stocks and I missed completely the rally. So now I have angry clients on my back and of course I cannot explain to them that I missed the mark by a huge gap, because I was following EWI. Did you notice how agressively they send you every week a spam mail telling you to subscribe to their newsletter ?
Well, now I am strongly determined to do my own homework for 2011 and effectively, to do the opposite of what EWI and Prechter is recommending is the right Happy and prosperous year 2011…. provided you don’t follow Prechter !
Past could be explained by EW, but future would not be
It took me less than a year to realize that in order to protect my money I had to cancel my subscription and stop listening to Bob Prechter. Fortunately I only invested a small percentage of my portfolio on shorting the market and limited my losses to 10-15%. I think that Mr. Prechter makes no money with his investments. He makes a living because he’s able to recruit new subscribers (like me) who stick around for a while. He’s able to do so by presenting dishonest information about his past record. Eventually he will be right, everyone is right at some point if they keep repeating the same thing. And the new subscribers to his newsletter in 2013 will be told about his great call for the market crash of 2012. Problem is, even if there’s a market crash in 2012, the people who’ve been subscribers for a long enough time will have no money left to short the market.
Actually I hope that Prechter will continue his insane cataclysmic calls on the market ! the longer he stays ultra bearish, the longer the market will climb ! he wrote a great article last year about the “zombies banks” I wished I would have done the exact contrary to his comments and bought them ! Thank you, M. Prechter, do continue to be very very very bearish, it helps all of us !!!
A few points on Prechter: 1. He called the top of the ‘Grand Supercycle Bull Market’ in 1987. He has been long term bearish every since. 2. Prechter cost me $100,000 in 1998 and cost me another $100,000 in 2008 by causing me to bail out of my Berkshire Hathaway at the lows and go to cash. 3. Prechter always says everyone is bullish, but today for example, the 1st page of the WSJ Money Section says traders are afraid and calling a top. The market climbs a wall of worry. 4. Prechter could never make a living as a trader because he’s been wrong by 24+ years and counting. 5. Prechter is INSANE — he has crazy eyes, just look at the photos — he thinks the dow is headed BELOW 400!!! If that happens, we’re all dead anyway. So invest the majority of your money like Buffet and keep a solar powered shack in the woods full of guns and silver in case Prechter is ever right.
I lost a ton of money while paying this group a big fee to get it right. Chicken little has cost investors millions. Every time Prechter was on Bloomberg with a warning the indexes pushed a little higher. I know he is right about the market going down – but he’s been calling for it since 1995. If you don’t think the Fed can affect the market, look at what they did with QE2. Oh, I talked with his world famous trader Dick Diamond. what a joke, He won’t even give you a name of someone who has made money with him. Maybe a class action suit is in order.
Mr. Prechter has made another bearish call on the stock market. Time to buy!!!!
I have been following EWI for over 10 years and I have gathered lots of charts on all his bad calls. I gave up on any of his calls the last time I saw his bearish wave count on gold. He has missed “major” turnings in Gold,US dollar and the Euro. If you follow his wave counts, you can see that they get trashed on a regular basis.
Sure, Prechter got a few big ones right but he has been wrong for decades in calling a depression. He also called the 2007-2009 crash but has been wrong on the counter rally all the time. EWI changes their wave counts like some people change their shorts. This is not the sign of a accurate wave count. His great Primary degree wave two up has been proven wrong many times already, as not a” single” stock in the DOW confirms any 5 waves down which he claims. Also no other country in the world or commodity ETF has made anything close to the 5 waves that he is counting out!
EWI most certainly did “not” see the bull market going as high as it did as they also missed the Greatest Stock Market Rally since the Depression! Yes we are going down just like Prechter says we are, but you will be left behind again at the bottom, if you listen to his Primary wave 3 call! My bet is he will be totally wrong again as the DOW stops short of his claims and roars back for another 3-5 year bull market!
All it takes is changing the 1929 wave count and presto, you no longer have Grand Supercycle Degree wave patterns.
Telling customers to be in cash today is criminal.
Calling the March 2009 low or the 1987 crash are not particularly impressive calls. Marc Faber made the same calls without the whole pseudo-world historical “system” Prechter employs. He confuses deleveraging with deflation and entirely disregards the impact of the Fed and QE on markets. In fact, recently he claimed that the Fed engaged in QE back in 2007 when in fact they had sold as much of their balance sheet as they had bought, which resulted in a net wash for the US money supply, not the increases that QE caused later – and is causing now.
Prechter makes money selling his products, not managing money.
To my understanding Pretcher pretty good….sure he has missed some moves, but I’d like to get from the guy who does nail them all.
You can tell people on this site are shite at playing the markets or have an agenda.
And as for this comment: -
” lux57
December 31, 2010
I have also to admit that I lost a lot of money for my clients in 2010, following this damned Prechter since april”
He gave an interview on Bloomberg or CNBC a few days before the flash crash. He nailed the highs. Sure, he was saying that this should be the final top and now the new high means it’s an extended fifth wave or whatever EW. Still nailed though didn’t he?
EVERY time that Prechter is appearing on TV, he is saying “that’s is the final top, markets will crash, bla, bla, bla ….!” has he EVER produced a track record or his ACTUAL investments ? Back in the Eighties, I remember that he first told that the Dow will go to 3.600 before crashing to 1.000, so when the Dow reached a high above 2.700 points in august 1987 and crashed in october to the low 1.600, it did NEVER go either to 3.600 points first or go after that to 1.000 points. So the “celebrity” Prechter “earned” about calling the 1987 market crash has no sound basis. And this guy is bearish with his “Super Grand Cycle” top since 2002 at the low of the market. This guy must be the only one who floods you with spam mail about his EW letter, I try to get rid of this spam mail and still received it…only because I gave my email adress to receive a “free copy” !
If he is making tons of money because he is so accurate in his predictions, why does he need to send spam mail all around to beg people to subscribe to his letter ???
Since I stop reading at his worthless reports, the fund I manage for my clients is doing much better. Always do your own homework, never listen to so-called gurus, especially when they try to sell you whatever investment advice !!
It’s all true. Since June of 2010 Prechter has been dead wrong. THIS is why the country is in the shape it is in. The people who are supposed to have the expertise actually are just as fallible as anyone else. WHO CAUSED THE CRASH OF 2008? A bunch of college educated greedy people perpetrating short sighted policies on the public. But its always been this way hasn’t it?
Pls try to study Elliot Wave compulsory with Fibbonacci
it will alway solve EWT problems.Analysist does their jobs very well. i am from india Using Gann with EWT
I know there are many out that think that EWI or Prechter has a good track record, and he has made some good calls. But when you track his calls in detail you will see he has missed some major turning points that should never have happened when you employ 20 some odd other wave counters. EWI and most everyone else are creating wave counts, where they are forcing their personal opinions onto a wave count.
This is subjective wave counting and always makes a wave count worthless. EWI has proven this many times as they changed the wave count from the 2009 bottom already! Just like the German Enigma Cipher machine has billions upon billions of letter combinations so does EWP. All it takes is one wrong placement of the Numbers or Letters and your EWP count is scrambled. EWP is counted in sequence and if you lay down any Idealized wave pattern side by side you have the sequence or what I call the code. Changing the wave counts constantly scrambles your code and then it becomes worthless with nothing but gibberish coming out the other end.
Anyone can totally eliminate or throw a monkey wrench into Grand Supercycle wave counts by changing the wave count for 1929-1932! The majority have 1929-1932 as wave 3-4 in Supercycle degree making 2000 the top in wave 5 Supercycle degree. Change 1929-1932 to a wave 1-2 in Supercycle degree and you have a totally different top for 2000 as a Supercycle wave 3. Grand Supercycle degree wave 3 top is still about 18-20 years away!
On my site http://supercycleelliottwave.blogspot.com/ I run everything in Supercycle degree, one full degree lower than Grand Supercycle. Not a “single” stock in the DOW or any other world index supports the 5 wave Impulse that EWI is pushing.
Elliott wave actually cannot be used to trade in a market. Why? because there are so many different ways to count the waves in a given price chart. You can make either bullish or bearish predictions based on these counts. So it won’t give you any useful guidance on trading. If you want to be a serious trader in a market, you will be much better off just using a moving average line than the stupid elliott wave model. Elliott waves can make a trader get broke faster. I think that is also why Prechter himself does not trade with his analysis.
I think Prechter was wrong for the most of time in the past because his wave count on grand supercycle is possibly wrong. Unfortunately, he seems to be a very stubborn person and refused to analyze the markets with an open mind. Most people in his group just followed his style and made terrible predictions in the past. If you want to prosper by trading in a market. Better forget about elliott wave and Robert Prechter.