About the Author
You’ve probably seen Bert Dohmen on Neil Cavuto’s show on FOX News, CNBC, Louis Rukeyer’s Wall Street Week, CNN’s Moneyline, , or or read his views in Barron’s, the Wall Street Journal, Investor’s Business Daily, Business Week, etc. Over the past 33 years, he has been a favorite speaker at the largest investment conferences.
Bert Dohmen is not a “perma-bear,” i.e. someone who is always negative on the markets, predicting the end of the world. In fact, most of the time he has been an optimist, especially when gloom and doom hangs over Wall Street.
Therefore, it is even more relevant that he predicted the 2008 global financial crisis as early the beginning of 2007. He wrote a book at the time, PRELUDE TO MELTDOWN, which was right on target. But few investment professionals paid attention. Even as late as in mid-2008, the attitude amongst policy makers, Wall Street analysts, and economists was one of complacency and denial of reality.
In 2007 he wrote that the crisis would be the worst since the early 1930′s. As we know now, it was! Bert has never been a broker and has no conflicts of interest. He can call it the way he sees it, not having to worry about being “politically correct” in his market views and forecasts.
Bert Dohmen wrote that all the arguments of the bulls regarding good economic growth, corporate profits, low inflation, and reasonable stock valuations, are unimportant during a credit crunch: the only thing that matters is an unprecedented liquidity implosion in the aftermath of the greatest credit bubble the world has ever seen.
He pointed out that the “ocean of liquidity” theory everyone was talking about was really an illusion. It was actually a credit bubble, something which can disappear overnight, and then cause an avalanche of bankruptcies. The inability of the people in Washington to recognize that danger made the danger of a meltdown even greater.
Reading this book may save you, or make you, a fortune. It’s the most important read of the year.
Bert Dohmen founded the Dohmen Capital Research Group in 1977. The firm’s investment advisory services have received awards of excellence, as well as #1 ratings. Bert Dohmen has forecast every recession and every bear market of the past 33 years. Dohmen Capital’s only business is to analyze the major global investment markets for the best opportunities, and then issue forecasts to its clients. There is no conflict of interest, no axe to grind, and no compulsion to just be bullish. Over the past 33 years, the forecasts have often called important market tops and bottoms within one or two days.
Bert Dohmen uses sophisticated technical analysis for his timing. This discipline measures the change in the supply/demand equation for an investment or an index over different time periods. Logically, only a change in supply/demand can change the price of a stock or the trend of the market. Everything, including earnings and sales performance, are reflected in the technicals.
The firm’s services include Bert Dohmen’s WELLINGTON LETTER, now in its 34th year, SMARTE TRADER for short term stock traders, PRIVATE PORTFOLIOS which is designed to let investors manage their own money, and several other highly regarded subscription services.
Bert Dohmen is a member of the Market Technicians Association, and the National Association of Business Economists.
Highlights of BERT DOHMEN’S
33-Year Track Record
“Wall Street called it ludicrous!”
Bert Dohmen has established on unsurpassed record of contrarian forecasts. He knows that being right means to be in the small minority. Going with the crowd usually means substantial investment losses. He is founder of the well-known investment and economic research firm, Dohmen Capital Holdings.
He uses advanced technical analysis for precise market sector timing. And his skill of predicting Federal Reserve policy has earned him the title of “Leading Fed Watcher” (WSJ).
Astonishing forecasts of Bert Dohmen:
In 1978, Bert Dohmen predicted that long-term U.S. Treasury bonds would lose 40%-50% of their value over the next several years. Wall Street called the prediction “ludicrous.” A leading Wall Street economist said at a seminar that this was impossible, as the U.S. financial markets would stop functioning.
Over the next three years, U.S. T-bonds lost 44% of their value.
In early 1979, with the prime rate around 12%, Bert Dohmen predicted that the lending rate would go to 20%. Wall Street economists called it “ludicrous.”
Yet, one year later, the prime rate hit 20%.
In 1980, after gold had hit an all-time high above $800 dollars, a bull market Dohmen’s clients participated in with great profits, he predicted that gold would go into a 20-year bear market. Even some of his strongest supporters had doubts about that forecast. His colleagues and Wall Street analysts called the prediction “ludicrous.”
Yet, gold plunged and the bear market lasted until early in the year 2001 when it made a low of $252.
In mid-year 1981, the year-end interest rate forecasts of a select group of noted economists were featured in the Wall Street Journal. The next month, in the July 1981 issue of The Wellington Letter, Bert Dohmen added his own prediction. That table is reproduced here. The list included the future Federal Reserve Chairman, Dr. Alan Greenspan. Note how wrong these economists were. And then note Bert Dohmen’s forecasts.
|B. DOHMEN’S BULLS EYE FORECASTS|
|In July 1982, other leading economists made these forecasts in the Wall Street Journal|
|Forecasts Made in July 1982 for
T Bond (%)
|Alan Greenspan (Townsend-Greenspan)||16||12||13 3/4|
|Timothy Howard (Fannie Mae)||14 3/4||10 1/2||12 1/2|
|David Jones (Aubrey G. Lanston)||14 1/2||11||13|
|Irwin Kellner (Manufacturers Hanover)||16||12 1/2||13|
|Alan Lerner (Bankers Trust)||15 1/2||11 3/4||13 1/4|
|Donald Maude (Merrill Lynch)||15 1/2||11 3/4||13 1/4|
|Robert Parry (Security Pacific)||16||12||13 3/4|
|John Paulus (Goldman Sachs)||15||11||13 1/2|
|Norman Robertson (Mellon Bank)||15 1/2||11 3/4||13 1/2|
|Francis Schott (Equitable Life)||15||12||13 1/2|
|A. Gary Shilling (Shilling & Co)||14 1/2||11 3/4||13|
|Allen Sinai (Data Resources)||14 1/2||11 3/4||13|
|Thomas Thomson (Crocker National Bank)||15||11 3/4||13 1/4|
|John Wilson (Bank of America)||14||12||13 1/4|
|Rates on July 2nd||16||12.43||13.92|
|BERT DOHMEN (BD’s Wellington Letter 7/82)||12 3/4||8||10.5|
|ACTUAL RATES on Dec 28, 1982||11.5||8||10.5|
Bert predicted the 90-day T-Bill rate would plunge from 12.43% to 8% by year end. Wall Street called it “ludicrous” because inflation was still very high.
At the end of the year, the T-bill yield was exactly 8%.
In the late 1980’s, major hedge funds started short selling the Japanese stock market, when the Nikkei went above 23,000. Dohmen said it was too early. In early 1990, after the Tokyo Nikkei Index had soared above 39,000, Bert Dohmen predicted the Nikkei would finally crash and go into a bear market lasting at least ten years. Wall Street analysts called it “ludicrous.” Economists and Washington politicians felt that the Japanese model was one that should be replicated in the U.S. Japan was a major lender and capital-provider to the world. Seven of the world’s largest banks were Japanese.
Yet, twelve years later, the Nikkei Index made a new low, down more than 75%.
In March 2000, when the NASDAQ COMPOSITE made its all-time high above 5100, Bert Dohmen wrote: “When the Fed pursues this type of policy it always ends in a crash.” That was right on target. The crash started the next month.
In September 2000 Bert Dohmen predicted that the NASDAQ COMP would plunge to 1400 from the 3000 area at the time. The bulls called the forecast “ludicrous.” Bullish sentiment about the internet and technology sectors was near their highs.
In February 2002, on FoxNews’s Neil Cavuto program, Bert Dohmen predicted that the NASDAQ Composite would not see its March 2000 high of 5,132 again for at least the next ten years. The Wall Street analyst on the same program said: “That’s ludicrous!”
Eight months later the NASDAQ had plunged to the 1108, down 78% from its peak.
The bear market of 2000-2002 produced the worst wealth-devastation in world history up to that time. More than $9 trillion dollars of wealth was wiped-out. Of course, that was far exceeded by the 2007-2008 global meltdown, which was another prescient forecast of Bert Dohmen.
Lesson: a prediction which Wall Street calls “ludicrous” may turn out to be correct.