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As the latest issue of The Elliott Wave Forecast notes, since we issued our warning on amusement park shares, the stock of Six Flags, Inc., the purest roller coaster play, is down 77%, from $23.73 to $5.25. The latest issue also offers a long-term chart of roller coaster installations that reinforces the point with more than 100 years of data. A spate of headlines on “roller coaster” safety and recent problems with injuries and deaths at parks also captures some of the gathering bearishness that “thrill rides” are suddenly up against. In a bull market, a certain amount of injury and even an occasional death are tolerated. It’s a price society is willing to pay for the rush produced by these rides. In the transition to a bear market, however, alarm is mounting. As the bear market rolls on, the greater centrifugal forces, speeds and whiplash inducing turns of the bull market will be reduced, one way or another. When the 4-year old collapsed and died after riding Disney’s Mission Space in June, one Florida paper said, “The state doesn't regulate the rides at big theme parks, despite the attempts to make each one bigger, faster and more wild than the last.” The latest incident doesn’t even involve a ride, but it’s making headlines because of the two prior incidents that did. In other words, the danger is the same, but fears about amusement park safety are rising fast.

EWFF, May 2001
Here is an interesting forecast from the April 17 issue of The Wall Street Journal:
Theme Parks Predict a Summer of Thrills, Few Chills Industry experts are forecasting “mostly sunny skies” saying amusement parks do well no matter what happens to the economy. Is it a coincidence that investors are now saying the same thing about stocks? We do not think so. A little socionomic detective work explains why. First, you have to look at the current state of the industry. The big news is that there is no big news in the amusement park business this year. For the first time since at least the middle of the 1990s, no park has unveiled a momentous ride that will break all the records. “Roller coasters debuting at many parks in 2001 herald a departure from the emphasis on height, speed and distance records prevalent the past few years,” reports Amusement Business magazine. Where else but in the past two decades in the stock market is it news when records aren’t set? Another coincidence? History says no way. The deeper you dig, the more you discover that the amusement industry is a finely tuned instrument in the orchestra of the century-long bull market in social mood. Some of the highlights include the development of the nation’s first major park on Coney Island in 1897 (the Dow bottomed in 1896) and an explosion in the number and sophistication of roller coasters during the bull market of the 1920s.

By all accounts, the Golden Age of roller coasters ended with the crash of 1929. Like the Dow, the amusement park industry did not recover from this near vertical plunge until the 1950s, i.e., after the end of the bear market in inflation-adjusted terms that occurred in 1949. A decline in the number new of roller coasters ended in 1980, at the end of the stealth bear market of the 1970s. In the second half of the 1990s, growth accelerated to a full-fledged boom in which billions of dollars were spent on attractions of ever-more-thrilling dimension. The downturn in social mood has started with the amusements themselves, but it will soon filter into the financial performance of the parks. Contrary to the opinion of amusement industry experts, roller coasters are not on an ever-upward path. The business should experience a deep depression in the first half of the 2000s. If you own an amusement park or amusement park shares, sell this year.

EWFF, August 2001
Remember this headline from the May issue?
Theme Parks Predict a Summer
of Thrills, Few Chills

EWFF responded with an immediate sell signal saying. Industry experts were not swayed. As the amusement park season entered full swing in June, they were still insisting that the roller coaster business was on an ever-upward path. In late June, an analyst with a major Wall Street firm called the industry “nearly recession proof.” The following headline appeared a few days later:

Theme Park Attendance Slip
Blamed on Economy