The least useful investment books are those that describe either extremely bright or very dark outcomes for the markets. The quality of predictions in both types tends to be so awful that they generally provide reliable contrarian indicators. If the author says buy, you should sell, and vice versa.
Michael Panzner’s Financial Armageddon, which was published in early 2007, is an exception to this rule. The book’s deeply gloomy predictions have proved so accurate that, if the text were changed from the future to the past tense, it would read like a financial history of the past year and a half. There’s more bad news to come, says Panzner. Given his extraordinary track record, investors are bound to pay attention.
One seldom profits from following the advice of a doom-monger. In September 1981, The Coming Currency Collapse by Jerome Smith was published. Over the next year the dollar appreciated by roughly one third against the yen. Richard Zambell’s Hyperinflation or Depression appeared in 1984. This book ushered in more than two decades of stable consumer prices. James Dale Davidson’s The Plague of the Black Debt: How to Survive the Coming Depression went to press in 1993, just as the U.S. economy was about to embark on a decade and a half of credit-fueled expansion. The optimists haven’t much to crow about, either. Far from tripling in value, as the authors of Dow 36,000 predicted back in the summer of 1999, U.S. stocks are currently worth one third less than a decade ago. ....