the demographic cliff

The demographic cliff, How to Survive and Prosper during the Great Deflation of 2014-2019, by Harry S. Dent, Jr., Portfolio 2014

Holy margin call, you mean despite suffering through the longest coldest winter in The Mill Girl’s lifetime, and watching my Sep Account shrivel and drop in 2008, and then losing Steve Jobs, it could get worse? 

Yup, that’s what Harry S. Dent, Jr says, backing up his miserable prognostication with data and then offering some Plan B options:

          Inflation rises with younger people entering the workforce.

          People do predictable things as they age. 

          Denton recommends investing long-term in emerging countries starting around 2023.

          Prepare for the crisis that will occur between 2014 and 2023 – most of the deflation and decline in stock prices I am predicting is likely to occur by late 2019.

Dent offers recommendations for four US sectors.  Businesses should continue to strategically think lean and mean, and dump those business sectors that don’t produce or remain marginal.  In his chapter “Business Strategies for the Winter Season,” he highlights some businesses that show promise and perhaps a safe haven for investors:

1.     Discretionary healthcare and wellness

2.    Nursing home and assisted living facilities

3.    Health and life insurance

4.    Retirement and financial planning

5.    Home maintenance services

6.    Convenience stores and drugstores

7.    Pharmaceuticals and vitamins

8.    Downtown townhomes/condos

9.    Active retirement communities

10.           Recreational vehicles!

So these ten bullets clearly point to end-game Boomer domination.  Further US migration patterns illustrated in his Chapter 8 chart, “The Top 5 Inbound and Outbound and Trends by Region” show what we all been hearing from around the water cooler – in fifth place, South Carolina showed a 55.4% inbound growth, while Pennsylvania, ranked fifth in outbound showed 56.0%. Dent claims that the best source for tracking this movement is United Van Lines.

This book is a long read, filled with curves and charts, bubble analyses and percentages, but in the end what impressed is the “D” word, demographics.  Explained as an inevitable cycle of birth, youth, middle-age and seniordom, so many trends that Dent examines now make complete sense.  The questions we need to prepare for are how to get in and out of these big shifts without losing everything, waiting too long for the tide to turn.