Additional References
February 2005, EWFF
The exact nature of the impending reversal is apparent in the inflationary mindset of investors, which is now as visible on the best-seller list as the mania for stocks was in 2000. In addition to two different books by real estate tycoon Donald Trump, recent Business Week best sellers include Nothing Down for the 2000s, The ABCs of Real Estate Investing and The Millionaire Real Estate Agent. Another popular tome, Hot Commodities, calls for a bull market in inflation hedges that will last at least a decade. Also, The Coming Collapse in the U.S. Dollar (James Turk) was just released. With so many gearing up for inflation, investors’ blindside is clearly wide open to deflation.
November 2004, EWFF
Donald Trump also has another book out. Back in February, when he announced his last book, How To Get Rich, The Elliott Wave Financial Forecast said it was “perfect for the final high.” The Dow peaked less than three weeks later. His latest book, Think Like A Billionaire, came not eight days after the recent peak in the small-cap stocks. As EWFF noted in January, Trump simply has a knack for training the spotlight on himself at the end of long uptrends. Pride comes before the fall, and nobody expresses the virtue of the unbounded ego better than The Donald. This is clearly the most pronounced signal yet. In addition to being the only double sell signal in one year, Think Like a Billionaire is Trump’s cheesiest and most self-serving book to date. It consists of page after page of glossy color photos featuring Trump, his supermodel fiancée and fellow celebrities.
Trump’s public image is way too straight forward to survive the bear market. Back in 1988, when the stock market was traversing a fourth wave correction, The Elliott Wave Theorist explained that declining waves are periods in which “more complex role models and antiheroes emerge.”
February 2004, EWFF
Real Estate’s Trump Card
January brought several indications of a top in real estate prices, including this release from Inman.com, a real estate news service: “There’s a frenzy that’s feeding the real estate market and that has a lot of people talking and speculating. This ‘bubble’ won’t POP!” There are many reasons to think otherwise. One of the most reliable is provided by the National Association of Realtors. The explosion in the number of real estate agents in recent years is the same thing that happened in 1987, as one real estate sector after the other began a topping process that led to the industry-wide slump of the early 1990s. The same thing happened to Wall Street in May 2000, when brokerage firm employment hit its all-time high (see May 2000 issue).
Another sign is the re-emergence of Donald Trump. The real estate billionaire has turned up as the focal point of a TV-show called The Apprentice, which features 16 contestants vying for a position in Trump’s firm. Trump’s authorship of Trump: The Art of the Comeback in 1997 was part of the reason The Elliott Wave Theorist called for a peak in the REIT Index back in 1997. It wasn’t the ultimate high EWT expected, but it was followed by a 30% correction. A five-month run on prime time television is a much more resounding signal. Given the evidence of a major reversal of “monetary, financial and economic trends” cited in the January issue of The Elliott Wave Theorist, it is probably a final testament to the unbridled belief in the permanence of inflation.
CULTURAL TRENDS
The Apprentice is also a manifestation of the mixed social forces that took over as the countertrend rally from October 2002 played itself out (see January, December and November Cultural Trends sections). One article headlined “Survivor Meets Millionaire” described the program as a cross between Who Wants to be Millionaire and Survivor, which replaced Millionaire to become the No. 1 show in the first few months of the bear market. At that time, The Elliott Wave Financial Forecast identified the change at the top of the TV listings as “one of the most visible images of a mood shift.” The prize is the same, $1 million, but the emerging influence of the bear market is evident in Survivor’s format and setting. Set in desolate jungles and deserts, Survivor is about physical endurance and the elimination of opponents. Who Wants to be a Millionaire, on the other hand, was an appeal to the public’s fascination with instant wealth. While The Apprentice celebrates the idea of money and the glamour that it buys, the basic idea is closer to Survivor. Most episodes highlight bickering contestants and lame appeals to Trump’s vanity. Each show ends with Trump firing a contestant. In Trump’s words, the essence of the show is “brutal and real,” which makes it more reflective of the mood behind a bear market.
The training of the spotlight on Trump is perfect for the final high of the long-term topping process. Trump, one of the great heroes of Primary 5, is a master at climbing into the limelight near important market peaks. His three other books, Trump: The Art of the Deal (1987), Trump: Surviving At the Top (1990) and The America We Deserve (2000), all appeared within a few months of peaks at all-time Dow highs. Today Trump announced his latest book: How To Get Rich: Lessons from ‘The Apprentice’ and Other Big Deals. It’s a how-to-book, Trump explained, “I think that’s what people are looking for.” For Trump, the title will probably turn out to be as ironic as Surviving At the Top, which was soon followed by his own bankruptcy.
July 1998, The Elliott Wave Theorist
The Chicago proposal and the tall-building syndrome’s relationship to bull market tops reinforces At the Crest’s contention that real estate prices in the 1990s are actually just tagging along for the ride in financial assets. Last September, EWT reiterated that real estate was in a “wave two” rally and suggested that it might be tiring on the basis of several property equitizations by real estate moguls and Donald Trump’s authorship of a new book. As the chart shows, the peak came a month later.
September 1997, The Elliott Wave Theorist
The net worth of another famous landlord, Donald Trump, is back over $1 billion. He also has a new book, The Art of the Comeback. His first book came out in (you guessed it) 1989, at the real estate top, when his net worth was $1.7 billion. His shareholders, however, aren’t doing nearly as well. Trump Hotel shares are down 70% from last year’s high. |
