Krash

Sunday, August 15, 1999

Book warns of market crash

By BARBARA AARSTEINSEN -- Southam News

VANCOUVER - Stephen Gadsden expects to become a pariah in the financial services industry.

The Toronto-based financial planner doesn't even want to mention the firm that employs him because his co-workers are less than thrilled with his latest book, Krash, which he co-authored with business journalist Jonathan Chevreau.

The book, published earlier this month, is just starting to hit store shelves across the country and Gadsden is already dodging flak for its dire predictions of an impending stock market collapse set off by millennium problems - a downturn in equities severe enough to rival the 1929 crash.

"We are on the eve of an historic event, one that threatens every dollar you've ever tucked into a retirement account the last 20 or 30 years," the two authors declare.

"So, forget about buy-and-hold, averaging down, stocks for the long run, buying the dips and all the rest of the mindless mantras dispensed by North America's financial planners and fund salespeople."

"We're not trying to be harbingers of doom, but we think there's a need to revisit Y2K," said the financial planner, who has been in the business for 16 years and has written 11 other books, including Investing for Life and Retire Rich.

"We see this as a heads-up. If you look at facts and feel comfortable, then don't make any adjustments.

"If you see something ominous in the scenario ahead, then perhaps it's time to take action."

Gadsden and Chevreau basically contend that, with Y2K serving as the trigger, stock markets are going to tank in a big way sometime between now and next March.

The declines will be in the 30-per-cent range at least and could be as much as 60 per cent if mass panic sets in.

Once the rout begins, the authors predict, there may be only weeks or even just days to get out "before the whole shaky edifice comes crashing down.

"When it does, no one will be talking buying opportunity," they write. "It will be every person for himself or herself in a wholesale rush for the exits."

Looking historically at the cyclical nature of the financial markets, Gadsden and Chevreau argue that even without the prospect of Y2K, equities, overvalued in an overheated climate, have been headed for a fall.

Millennium woes - which they believe are real and discuss from a historical and technological perspective in several chapters - just seal the case."

-- Rachel Gibson (rgibson@hotmail.com), August 18, 1999

Answers

i'm no mrket player but i do think that when the crash comes people will not be looking to take their money out in cash. rather they will look for other safe investments within the system. keep your eye on gold stocks. they went through the roof when the market crashed in 1929.

-- Guns, Grub & Gold (home@the city.com), August 18, 1999.

Well, it's nice to see that SOMEONE (besides me) finally agrees with Dr. Yardeni!

-- Mad Monk (madmonk@hawaiian.net), August 18, 1999.