QUESTION: Mr. Armstrong, Your fame precedes you. They name you the legend as a result of you might have been the one analyst who forecasts occasions years prematurely. All through the rise and fall the inventory market, you referred to as for less than 2 12 months correction from 2000 and 2008 and the market would stay in a bullish pattern. I learn that Barrows piece on you the place it appeared they laughed at your forecast I feel in 2010 once you stated the market would rally and make new highs. You probably did the identical in 1987. My query is, do you might have a selected indicator that lets you see the long-term like that within the inventory market?
PE
ANSWER: For this reason I stress that to be a profitable dealer, you must conquer your feelings. I used to be at all times institutional. Our stories have been too costly for the retail world for they use to exit over telex, which might value $75 alone per transmission again then. That’s the reason we opened places of work world wide to scale back supply prices. We’d ship one transmission to that workplace and they might redistribute it to the purchasers in that area. We’re gathering all our outdated forecasts that have been in storage and can attempt to assemble them on annual foundation for reference.
When FAX turned frequent, we moved to that supply system and that introduced the prices down dramatically. Immediately, it’s e mail and that’s all free. So that’s the reason we turned the biggest institutional adviser. Nonetheless, as a result of our purchasers have been institutional, we needed to focus on dependable long-term forecasting. Day merchants weren’t our focus.
We developed our Excessive Lengthy-term pattern indicator. This has efficiently calculated that these corrections the place everybody calls would be the subsequent Despair have been solely short-term corrections. The calculations are intensive, however this indicator has been utilized by our Institutional Purchasers to supply underlying confidence in what’s REALLY unfolding within the markets on a broader foundation.
These are the charts I used to be exhibiting at our institutional classes world wide going into 1985. This indicator was beginning to take off on the Quarterly stage in 1982. It was absolutely outright bullish in 1984 on the Yearly Stage one 12 months earlier than the ECM turned in 1985. For this reason I ended up advising just a few of the takeover gamers again then who they ended up making the film Wall Road about with Michael Douglas and his well-known speech on greed. What the film didn’t clarify was that the e-book worth declined a lot that we might purchase corporations, promote their property, and double and even triple our cash. I used to be warned that we have been coming into a takeover increase.
We took out the again cowl of the Economist in July 1985 to forecast that the deflation was ending and a brand new Non-public Wave was starting that will finally peak in 2032.
The ECM even picked the excessive within the rates of interest on the Fed. Our long-term forecasts have been superb. They even impressed me. As I stated on the final WEC, no one has tried to defeat these fashions greater than me. True, I don’t like their challenge into 2032. However that’s my private opinion which isn’t one thing purchasers depend on. Everyone knows that the forecasts can solely come from Socrates. These indicators have been dependable and you can not forecast the longer term from a private intestine feeling.
