As part of our standard equipment, human beings, have an innate need to know the future. Since the dawn of societal communication, we have sought out oracles, soothsayers, prophets, psychics, and a host of others who promise to deliver accurate forecasts of our various futures.
Our quest for direction in a seemingly directionless world, has been met with only minimal success. Yes, meteorologists have grown more skilled at predicting the weather. There are even some geologists who believe that earthquake forecasts are in the offing. Yet each of us has the ability to create a totally accurate, albeit somewhat limited prediction device. Simply remove the batteries from an electric clock and it will, with 100% accuracy, predict the time 12 hours from now.
What about other forms of prediction? Those who try to predict the incredibly complex future of massive crowd behavior often grow frustrated with the enormity of the problem and finally resort to the same “stopped clock solution.” Nowhere is this solution more prevalent than in the business of financial prophecy. Financial forecasters have learned that fantastic prophesies often lead to instant notoriety and colossal book sales. These prognosticators have also discovered that, despite the fact that their predictions are almost never accurate, their followers rarely hold it against them.
That is why we have decided to honor the best of the best in the “stopped clock” business with induction into the Stopped Clock Hall of Fame. Here are the nominees:
One of the best examples of the power of the “stopped clock solution” comes from a once obscure professor of economics at Southern Methodist University, Dr. Ravi Batra. Back in 1987, Dr. Batra’s book, “The Great Depression of 1990” became a bestseller. Millions of people were convinced that the economy of the United States would collapse within the next few years, based on Dr. Batra’s is argument that economies moved in accurately predictable cycles. The book did so well, that Dr. Batra followed it up with a sequel in 1988, “Surviving the Great Depression of 1990.”
To this day, Dr. Barta claims that his prediction was accurate, despite the fact that the US economy failed to collapse and went on to grow at a phenomenal pace over the next decade. He bases his claim of accuracy on the fact that the US economy did suffer a mild recession session for a few months in 1990. He claimed that the next Great Depression was merely on hold and would eventually occur. This led to a gloomy new tome in 1999, “The Crash of the Millennium,” in which he predicted both a devastating stock market collapse and rampaging inflation throughout the coming decade. This book proved that if you make the same prediction long enough, you will eventually end up getting something right.
The U.S. stock market did, in fact, take a major beating in 2001 and for much of the rest of the decade. However, it was certainly not a period of rampant inflation as deflation seemed to loom as a larger threat. Even though Dr. Batra was not entirely correct in his 1999 dissertation, we must give credit where credit is due. His persistent use of the “stopped clock solution” finally led to a partially accurate prediction. Congratulations, Dr. Batra, on your incredibly single-minded dedication to your position and almost perpetual intransigence. You have set a standard which other members of the “stopped clock” community will be hard-pressed to match.
Yet, Dr. Batra’s persistence in the face of constant failure was matched only by the body of work from demographer and investment manager, Harry Dent. Unlike Dr. Batra, Harry Dent has been out outrageously optimistic about the American economy for the majority of his prognosticative career.
In 1993, he came to fame with his book that captured the confidence of the time, “The Great Boom Ahead.” Rather than starting his career with a failed prediction, Dent came roaring on to the financial scene with a largely accurate take on the next several years. With his “uncanny” veracity came widespread fame and financial success. He was sought out as both a speaker and a money manager.
As the “roaring 90s” were coming to an end, Dent decided to extend his fame with another predictive publication, “The Roaring 2000s,” published in 1998. Where Dr. Batra played to our fears, Harry Dent went in the opposite direction. He continued to appeal to our greed during a period of rampant wealth building.
Dent’s book predicted that the Dow Jones 30 industrial average would reach 40,000 by 2001. When that failed to happen (and the market actually plummeted), Dent maintained his positive outlook until 2006, in the true stalwart spirit of a “stopped clock.”
By 2008, it was apparent that the “The Roaring 2000s” were increasingly unlikely. This led Mr. Dent to question the settings of his particular “stopped clock.” Rather than remain true original thesis, Gant decided to turn the hands on his clock ahead six hours and move forward as a fear monger as opposed to a cheerleader, hoping this would repair his damaged reputation.
In early 2009, Dent published his first book in this new “time zone,” “The Great Depression Ahead.” In this new treatise, Dent threw caution to the wind and promised his readers almost immediate gratification – an economic crisis that would begin in 2010 and continue, at least, through 2012.
Had Mr. Dent maintained his positive outlook into this new decade the decision would have been far more difficult. We applaud Dent’s long term commitment to the “money tree of persistence.” However, because of his recent change of direction, we feel that the person most deserving of the first place in our celebrated chamber of consistent conjecture in the face of constant criticism is the champion of committed conviction Dr. Raveendra N. Batra. We are pleased to welcome Dr. Batra to the Stopped Clock Hall of Fame.