Initial Post

This website is dedicated to an analysis of the property/casualty insurance industry using the Elliott Wave Theory.

The Elliott Wave Theory (EWT) is a form of technical analysis uses identifies socioeconomic trends, attitudes, and psychology. EWT is based upon the belief that these trends and attitudes are cyclical and follows relatively standard patterns. By analyzing both long-term and short-term term trends, EWT can be used to make forecasts regarding the financial markets as well as other activity prone to cycles.

In this first posting, I will briefly mention what I expect to occur based on an analysis using primarily EWT. In future postings, I will expand upon these forecasts and provide support for my assertions.

I expect the following to occur:

• Before the year is over there will be a serious decline in the financial markets.
• The decline will be a full-blown depression that will last about five years.
• The insurance industry will fare better than other industries. 
• There will be a reduction of the workforce in the insurance industry, but it will probably be to a lesser extent than other industries. 
• Some insurance companies that are not prepared from the coming financial crisis will become insolvent.
• Companies that weather the economic storm will be poised for growth at the end of the depression.
• Insurance companies that tighten up their underwriting now will weather the storm better than those companies that do not. 
• Though I don’t expect it to occur, companies that reduce their investments in stocks (and most bonds) to the lower limits allowed by state regulation, and rely primarily on achieving underwriting profits, would whether the expected economic trouble much better than those that don't. 
• We will see a hardening of the markets.
• Insurance companies that weather the coming economic storm will be well poised for future growth.
• Individuals that have their 401ks invested in mutual funds will suffer from the economic downturn. They would be much safer  moving their investments into the money market/cash options that are offered by most plans. If the downturn doesn't occur, the only thing that they would lose would be some potential profit. If they don't move their funds, they stand to lose their nest egg. 
• There is no stock that stands out as a good "buy and hold" long-term investment right now. Going long may be a good idea as a short-term swing trade during brief rebounds.