Harry Dent is back. Who would have believed it?
This guy made me millions, now he’s got it totally wrong!
I'm going to let you in on how the doomsday PR game works.
But before I do that Harry made me millions: Back in 1995 I read his book called the ‘The Great Boom Ahead'. It sent a rocket up my backside and motivated me to get into real estate in a big way.
Back then he was predicting an almighty boom.
He got it absolutely spot-on. I invested in real estate in a big way and now I'm a multimillionaire. So I'm a Harry dent fanboy from way back.
So the fact that I can give you an objective opinion is based on a 20 year love affair. I'm not a hater, I just think he's now got it wrong, and being in the marketing game I think he's been managed by a PR department that has sold him on bad-news sells.
*Sidenote: You've really got to be careful as to who you take advice from. I know several people who absolutely hate Harry with a passion. Why? They subscribed to his thinking and narrative in 2011-12, bought into the ‘The Great Crash Ahead' and they sold all their real estate in Sydney, literally costing them millions of dollars in future profits – Ouch!
Now to the crux of the matter and how the doomsday market works.
Some people look at me a little sceptically when I say that the media is just a circus, and everyone is pushing a barrow.
“But Jon, you've got a property portfolio worth millions. You've got a barrow too.”
And sure. That's true. And I'm probably biased to property in ways that I don't even realise. But I'm not out there pissing on punters and telling them that it's raining.
Like Harry Dent is.
Who is Harry Dent?
He's an American ‘economist'. He's toured here a few times.
In 2011, he came and said Australian house prices were about to fall 50%.
In 2014, he came and said that Australian house prices were about to fall 60%, and that people should sell up.
In case you're new to the planet, those predictions never quite came true.
In fact, since 2014, house prices are up 46%, so that makes his prediction about 100% wrong.
Hellava track record.
But that's not stopping him. He's back, touting another book on another road show.
What's more, he's shamelessly glossing over his track record.
From his publicist:
“Mainstream media pundits are calling me crazy, an idiot, and a quack.
“But that’s nothing new…
“After all, I’ve been making predictions that people are sceptical of for decades… but one after another keeps coming true anyway!”
One after another? Seriously? I can think of two calls that were so far off the mark they weren’t ‘wide’, they were out of bounds on the full.
And if people had listened to you and sold up in 2014, they would have lost out on hundreds of thousands of dollars.
But this is the thing about the game – it doesn’t matter.
In a world where facts matter and truth rules, an analyst whose predictions were consistently in the wrong post-code would find themselves out of a job.
No one would care what Harry had to say.
But this isn’t the world we live in. We live in a world of hype and whatever sells.
In that world, the Harry Dents do well. It doesn’t matter how wrong they are. The only thing that matters is how ‘wow’ they are.
And predictions of a 60% fall in house prices is pretty wow.
And so what’s to stop economists like Dent making sensational and sensationally bad calls?
There’s no downside. The only thing that matters is what kind of media splash he gets.
Now, I’ve read Harry’s work. Mostly, it’s pretty good he knows his stuff. If you want a good introduction into how all the pieces of the global economic order fit together, this is as good a starting point as any.
And I’m not going to begrudge Harry for playing the game. He knows how the game works. He knows that if he came all the way to Australia and said that house prices might fall 2-3%, no ones going to listen to him.
And so he’s doing what he needs to do, to be the entertainer that he is.
And I don’t even hate the game all that much. It’s mostly entertaining, and if you can see through the fluff, it can give you a read on where trends are going.
But make no mistake. It’s a game.
If it’s not a game, how does an economist with two 100% wrong calls under his belt get taken seriously?
It’s a game. The media is full of hype and trouble and sensation.
If you don’t know this as a starting point, then you’re any one’s fool.