OK, OK — we’ve had a few folks who seem to have noticed that I promised to follow up on my original Harry Dent piece, and then didn’t follow through.
That first piece came out last week, when I revealed the stock that Dent was claiming will go bankrupt as soon as August 1, when their next debt payment comes due and it’s revealed that they’re standing there naked behind the racks of cell phones, remote-control helicopters and obscure batteries. That was RadioShack (RSH), as you may well remember, and we had a good long chat about it (and some reminiscing from the hobbyists and closet electrical engineers out there).
But while that was the headliner, Dent also said that he thought there were two other stocks that were destined for the trash heap of history — and sooner rather than later, with bankruptcy announcements expected (by him, at least) sometime this year. So let’s ID those for you, shall we?
The basic idea, if you don’t feel like going back to read our original article, is that the big demographic wave (baby boomers retiring) is, along with other forces, pushing a “great shakeout” in the economy that will crush businesses and clear the way for the world’s next great innovations. That’s nothing new, of course, that’s one consequence of the march of capitalism and free markets and the “creative destruction” that feeds so many economic cycles, at least on the micro scale.
Here’s how Dent puts it in the teaser ad:
“The first announcement that I see coming will take place on Thursday, August 1. [that’s the RadioShack one]
“And this will be just the beginning of a wave of corporate failures that will send the economy into a tailspin and the Dow plunging.
“Why am I so certain?
“Because the one thing – that’s about to devastate these companies – is the most powerful and destructive economic force known to man.
“It’s the same force that likely caused these well-known American companies to fall by the wayside:
- Borders Books
- Blockbuster Video
- Ritz Camera
- Linens ‘n Things
- KB Toys
- Circuit City
- Bear Stearns
- Lehman Brothers
- General Motors
- Hollywood Video
“I call it The Great Shakeout.
“It’s a survival-of-the-fittest crisis period.
“Its whole function is to:
“WAKE UP Society…
“WAKE UP Companies…
“And WAKE UP Governments…
“During a Shakeout, it’s not enough anymore for companies just to come up with a revolutionary new technology or product.
“They’ll have to know how to market and distribute it.
“They’ll have to know how to connect and collaborate with customers and partners.
“They’ll have to be quick to take advantage of disruptive new technologies, radical new business models, economical new supply chains, just-in-time fulfillment processes, and new leaner manufacturing methods.”
There’s certainly some logical sense to it, and we know that companies rise and fall with changing trends and demographics all the time — though it’s rarely so specifically predictable that you’d want to say