Batman and Financial Predictions: Heroes or Villains?

Financial “gurus” love making bold crash predictions — but they’re almost always wrong. In this episode, I break down the track records of Robert Kiyosaki and Harry Dent, exposing the harm caused by constant doom-and-gloom forecasting. Instead of chasing predictions, learn why long-term, evidence-based investing is the only strategy that works.

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Chapters🕓
00:00 - Intro
00:42 - Why predictions are harmful
01:13 - Predictions should be illegal
01:31 - Robert Kiyosaki’s rise
02:53 - Kiyosaki’s failed predictions
05:18 - Doom and gloom niche
06:46 - Enter Harry Dent
07:21 - Harry Dent’s track record
09:30 - The case against predictions
10:15 - Long-term investing
11:07 - Turn off the noise
11:34 - Final thoughts

Transcript

>> Wes Cuprill: 0:00

One of my favorite questions is, who is Batman to you? Because I think it's a great indirect identifier of what generation you grew up in. Full disclosure, Batman to me is Christian Bale. I grew up watching his trilogy of movies. And there's a line in the second movie, the Dark Knight, that has always stuck with me because I think it's very applicable to the financial services world. And the line is from Harvey Dent's character, he says, you either die the hero or you live long enough to see yourself become the villain. And I'll talk a little bit more in a bit about why I think that line is so applicable to the financial services world. But in last week's episode, which, by the way, if you haven't caught that episode, you can do so by clicking here, I talked about how I'm going to begin tracking and really countering financial predictions that I see. Because as I said in that episode, I'm going to say it again and again. Nobody can predict what the market is going to do. Nobody can predict what individual stocks or assay classes are going to do. If you can, you clearly have inside information that is truly the only way you can predict what's going to happen. And I will very much stand by this statement. I think that financial predictions, especially those done on TV to a national audience, should be illegal. They really, really should be. they're harmful. At the end of the day, that's the only value that they have is really being harmful to the average investor. But going back to the line from the Dark Knight, that line of you either die the hero or you live long enough to see yourself become the villain is very applicable to one person in particular. Now, this individual wrote a book back in the 90s that was and still is very influential and very impactful in terms of educating along the lines of overall financial literacy, which I think is fantastic. It's a lot behind why we do what we do at Money and Clarity. We believe in improving financial literacy for everyone. I think everybody can benefit by being more literate when it comes to finances. But the book in question is Rich Dad, Poor dad by Robert Kiyosaki wrote this back in the 90s and it was a bestseller. I don't know if it still is. It might honestly still be. But it was a book that has been well received in terms of how it talks about the importance of financial literacy and really helping you seize control of your financial future. And when he came out with this, Robert Kiyosaki became really a preeminent figure in the world of finance, especially for the individual investor who wants to become more literate about finance. But back to the Harvey Dent line. We have really seen a morphing of who Robert Kiyosaki is and he's going to be the first of my two prime suspects or targets with this whole prediction tracker. Because when it came out, Robert Kiyosaki again became a preeminent figure in the world of personal finance. However, over time, Robert has really, I think become a broken record, if you will, when it comes to talking about personal finance. The man loves to make predictions and he is wrong a lot. All of his predictions are doom and gloom. Please let me know if there are have been any that are positive but I just wantn to walk through a few with you. Let's start in 2016. One of Robert Kiyosaki's predictions. He predicted a stock market crash would occur in 2016. The S&P posted a 9.5% gain for the year. In 2017, he predicted another real estate crash. The market continued to rise steadily and it still is continuing to rise steadily. In April of 2020, early in the pandemic, Kiyosaki said the market crash was only beginning. If you remember from that year, the S and P went on to gain over 50% in the following year. In 2021, he warned of a giant stock market crash. In October, while the stock market dipped over the filing 12 months, Bitcoin and other investments fell much more significantly. Yeah, Kiyosaki has become a huge champion of bitcoin and silver and gold. More on that in a second. In 2022, he predicted an everything crash covering stocks, bonds, real estate and crypto. Instead the S&P 500 gold, silver and bitcoin also saw positive returns. So I guess what I just said, is a little bit contradictory. He's kind of been all over the place. 2023, this one's great. In February of 23, Kiyosaki predicted a depression and massive price increases for gold. He predicted $5,000 an ounce. Silver would reach $500 an ounce and Bitcoin would reach$500,000 driven by a collapse in confidence in the US dollar. Stock market actually finished the year up 24%. Gold as of day is sitting at $3,400 an ounce and then silver is only ah, at $38 an ounce. All of his past predictions have very much missed the mark. And now his latest. I'm reading an article as of 4 hours ago, this one says boomers are out of luck. Robert Kiyosaki warns that the biggest crash in history is coming. Here's his strategy. To get rich before things get worse. I mean, at what point do we stop listening to these people? You come out with a book once and then all of a sudden you think that you are a, prophet or able to tell the future. A fortune teller. I mean, we really need to stop giving these people airtime. The problem is, unfortunately, everybody loves the doom and gloom story. So I think what Kiyosaki has done is found himself a nice little niche that gets him a lot of airtime, and he obviously loves that airtime. And he's just constantly out here pounding the drum that the market is going toa crash and that the future is bleak and we're just eventually going toa be walking around on dirt floors eatating rice and the world as we know it is coming to an end. He really is one of the worst out there, the worst offenders in terms of trying to come up with these predictions. And unfortunately, obviously there's enough people who still listen to him because I'm always seeing his stuff out there and it's always the same tired story about the market is going to crash. He's been wrong again and again and again. We really, really need to stop giving him attention. And really, I just wish he'd go away. All right, now, the other person who I just want to more or less just raise awareness to, I think he's been quieter as of late. I mean, he is getting older. So forgive me if it sounds like I'm picking on an older person here. I obviously don't want that to be the case. But the person in question here is Harry Dent. He's probably a less known figure for most people compared to Kiyosaki. Caus at least Kiyosaki wrote a book that I think a lot of people have read sort of long lines of. He's got the similar fame to, Dave Ramsey. If you are a DIY investor type, you'll probably have seen his books. But let me just read off some of his bibliography here. So in 1998, he wrote a book, the Roaring 2000s, that was followed up a year later by the roaring 2000s investor. And to summarize these books, he talked about how the 2000s were going to be roaring and he could predict what stocks were going to do well and how to be a successful investor. And stock picking. When he wrote those books, the s and P500 was a little over a thousand, judging by the looks of it. I'm looking at A graph here and just trying to throw out some general numbers. S and M P around 1300 and the S and P ended up peaking in late 2000 at around give or take 15, 500. Well we know what happened around that time or at least most people do. The S&P 500 crashed because the dot com bubble first and we didn't see The S&P 500 hit 1500 again until 2007, which we know what ended up happening. Then we saw the great crash of 2008. But the 2000s were not nearly as roaring as Harry Dent prophesied they would be. And then from there he went on to write the Great Depression ahead. That was in 2009. Well he was a little, he was a few years too late on that one I would say. And he wastty predicting that the market would crash again. I guess that didn't happen. And then he wrote the great crash ahead in 2011. As we've seen, the market has gone up significantly since these times. December 2011 S&P 500 was at 1,525. As of today it's at 6,439. Here's another one, the sale of a lifetime. How the great bubble bust of 2017 can make you rich. That was in 2016. We didn't see a bubble bust in 2016. The market just continued to go up and up and up. There have obviously been sharp downturns. I mean just looking at the graph, go on Yahoo Finance and zoom out to 1985, you'll see the graph goes like this. It's sharp, it's up and down. That's always going to be the case. The thing is people do not have any idea what's going to happen in the future. But unfortunately there is this market out there for writing these books and writing these stories and just getting on your pulpit and pounding the drum and making these predictions of what's going to happen in the world. In my opinion they are nothing but harmful to people because again, nobody knows, nobody knows what the market is going to do. I'm just curious at what point these people finally stop pounding the drum. I mean I guess if you've made it your life's work to make predictions in one way, shape or form, I guess it's hard to make a career change at the end of the day. They're modern day charlatans at this point and we need to stop giving them their time. So again that's why we believe in just a foundational principle of buying for the long term. I could be right once and you know, that's great but if I'm wrong 99 other times, how many people's money have I lost by doing that? I mean, how many people would I have harmed by being wrong that many times? Blah, blah, I was right that one time. It shouldn't matter. Making predictions on such a grand scale like these people are should straight up be illegal. And frankly, in my opinion, these people should be ashamed of themselves. I stand by that statement. I don't care how ridiculous that is. And again, I know who I am. I know the reach that this show currently has. I don't care. I will stand by these statements and make them again and again. People like Robert Kiyosaki, Harry Den should be ashamed of the predictions that they have made. My encouragement to everybody is this. Turn off the news, don't watch it, only read it. It's good to stay up to date obviously, but don't listen to all the doom and gloomr and don't even listen to a lot of the predictions that you know, bitcoin is going to reach 500,000 or whatever it might be. Nobody knows. Don't pick stocks, don't try and time anything. Invest in science backed principles and evidence based principles and enjoy your life. That's all I can say. So that is my initial prediction tracker episode. It was more me railing against a lot of those people who like to make financial predictions. I do realize that. However, this is going to be a common theme. I think it's going to be something that I continuously talk about because a lot of investing is psychology. And while we can sit here and understand the principles behind investing, I think it's something that needs to be always revisited. It's like any professional athlete out there. I've talked about the comparison with professional athletes before where they have coaches, they're at the top of their respective sports, but they still have coaches to help them train and improve every day. And an athlete doesn't just reach the pinnacle of their sport and then stop practicing. No. If anything, they continue practicing harder and more often. And when it comes to investing this, it's a lot of the same. What I'm going to continue to do is hammer on the same principles. And while it may seem repetitive at the end of the day, I think that's what's necessary. I need constant reminders at the end of the day of why I stay committed to the various things that I do. So that will be, a repeated theme within the show of talking about a lot of the same principles over and over again. Because even though we may understand them and we may know them, being reminded of them enables us to continue to act in that same manner. So that being said, hope you enjoyed this episode, and I'll see you next week. Thank you.