The sky is falling! The sky is falling! So
yell the Four Sisters of alternative investing – Elliott Wave International,
Weiss Research, Dent Research and Safe Wealth. And they have sky supports and
bunkers to save you, all for a price of course.
The basic premises of the Four Sisters are
that there is going to be a great depression and that high levels of debt will
be the basic cause of it. All four of them believe in the wave principle and urge
people to think for themselves; don’t follow the herd as Robert R. Prechter of
Elliott Wave International is forever saying.
I whole hardily agree with them that there
is going to be a new great depression and that high levels of debt are at least
a trigger for it. I also follow the wave principle, also called cycles. It
makes sense and you can see it in the ups and downs of the market and in
individual commodities and stocks. And I owe a big debt of gratitude to Prechter
in particular for getting me to think on my own and that includes not
necessarily agreeing with him and the others.
The Four Sisters remind me of the four
gospels in the Bible as three of them are very similar, with the fourth being
quite different. Elliott Wave International, Weiss Research and Dent Research
all offer trading advice and services, while Safe Wealth basically wants to be
your safe deposit box (or your bank) for your wealth. Elliott Wave, Weiss and
Dent are also constantly coming after you with offers, while Safe Wealth
doesn’t and their communications aren’t as frequent.
I have no problems with what they’re
doing. I subscribe to their free stuff and I briefly subscribed to a newsletter
from Elliott Wave International. They definitely have their place. However, I
find it amusing that three of the sisters keep on coming out with new “secrets”
to make money, especially Weiss Research. How many secret ways to legitimately
invest does Wall Street have? Also Elliott Wave, Dent and Weiss all practice a
sense of urgency. That is they have things for “a limited time only” and “this is
the final day” for this incredible offer. I’ve often felt like telling them
please promise that this is absolutely my last chance at this offer.
They also sometimes contradict each other.
Harry Dent of Dent Research recently sent out an email saying that housing
prices could fall 33% this year, while Larry Edelson of Weiss Research claims
that rising mortgage rates will increase housing demand. (I’m still trying to
figure that one out.)
They also have a one size fits all
approach. For all of them central banks are one of the roots of evil, this
includes the Bank Of Canada. Unbeknownst to them the Bank Of Canada could
actually save Canada make the country perhaps the only G7 country not to go
bankrupt. This could easily be accomplished by the simple expedient of having
the federal government and the provinces return to borrowing from the Bank, as
they used to do, instead of on the open market. Incidentally Canada is the only
G7 country to own their central bank.
The biggest problems I have with them is
that they talk about debt, but don’t really deal with the cause, except to
blame it all on government spending and the central banks. The only one who
takes a stab at the underlying cause is Dent Research. Harry S. Dent claims the
problem is caused by an aging population. People spend and earn differently at
different times in their lives. I agree with him. To his credit Dent says that
the answer is not increasing the population as we are facing a global food
shortage if we don’t get the population down.
However, they almost completely ignore the
environment, except in passing, and down play human caused climate change and
peak oil.
So while the Four Sisters all have
something going for them, use them with caution as they all suffer from tunnel
vision.
