Harry Dent will buy back into property after next bubble burst
"I will buy back into real estate when there is a second crash," Harry Dent told me this week.
The bold forecaster - who is speaking this Friday and Sunday at a Sydney event and then Brisbane on the February 21 weekend - had been asked whether his money had ever been on the line over the past few tumultuous decades.
"Both short-term and long-term I am ahead because I sold in Florida in 2005," he said indicating he had since been a long-term renter, but would buy back into the US property market when he saw it as being the right time.
With some liquid cash, his acquistion path was more likely to be sent on shorting stocks on US markets before property.
He also continued to invest in new technology as a venture capitalist, fully expecting nine or 10 to fail, but the one that succeeds outperforming the losses elsewhere.
Interestingly Harry does own a holiday home - in Puerto Rico - where he has been underwhelmed by the housing construction work ethic.
I asked him about how hard it was to be always out there on the left field with his forecasts.
He said it was sometimes tough being the contrarian.
"But I am neither bullish or bearish, not conservative or liberal," he said.
"I study bubbles," he said.
"When everyone is in a bubble, most can't see it, when the markets are at their lows, they can't see the recovery...and that's when there is money to be made," he said.
"Sometimes it is a little lonely being early... after my Japanese forecast everyone was asking what was I smoking."
That's the forecast he his most proud of as most economists envisaged Japan overtaking the US in world economic dominance. Dent tipped that Japan, then on top of the economic world, would suffer a slowdown lasting more than a decade. It is still pretty much in a coma, he says, 22 years after the 1991 peak.
"Commercial real estate goes down harder, and tends to be the last to come back where as a lot of people stay in their home," he said.
"You can't keep bubbles from bursting for ever."
He says the one thing he does better than anyone else was forecast the major long term shifts.
Last week Dent made headlines when he remarked that the property market is like popcorn popping - different markets bursting at different times.
He says Australia doesn't have quite the demographic cliff problem as the US and Europe. But there was the risk of the expansionary China collapse to hurt Australian property prices.
He sees the international commodity cycle as not bottoming for a decade.
"There is no way there will be a soft landing in China." he suggests even if the government seeks it.
"China's blow will really hit Australia," he says.
Asked on his hit and miss success rate, Dent was forthright.
"I am likely to get 30 or 40% of forecasts wrong in the timing," he said. His US critics point to his 2005 forecast that the Dow would hit 40,000 by the end of the decade. His local critics point to his 2011 call that property in Australia was set to crash.
Saying it often can be just one piece of information that can provide the clue, his late 1980s Japanese forecast was based on his premise that people slow in spending way ahead of retirement, from 46 years onwards.
I asked how much understanding the pysche of the population of a city or country was helpful in understanding market movement, and he agreed.
"You are right, yes markets do go up and down together, but to different degrees.
"But the bubble will be here and there, say Melbourne and Brisbane."
Harry is the founder and senior editor at Dent Research, where he seeks to identify and study demographic, technological, consumer spending and geopolitical trends to forecast economic booms and busts well ahead of the mainstream.
