The Four Sisters Of Alternative Investing

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.