Robert Prekter is the developer of a theory of social causation called socionomy. It explains the nature of trends and events in finance, macroeconomics, politics, fashion, entertainment, demography and other aspects of human social life. Robert Prekter's book on Elliott Wave Theory is popular among people in many countries.
Carier start
Prekter graduated from Yale with a Bachelor of Psychology in 1971. During training, he was the drummer of his own rock band. Robert's analytical career began in 1975, when he became a market technician for a major US bank, Merrill Lynch. His mentor was the main market strategist of the time, Robert Farrell. At the same time, the novice analyst found out about Ralph Elliot's wave principle and became interested in him. Prekter realized that mass psychology affects all aspects of financial and social life.
Fame
In 1979, Prekter decided to establish his own business. He quit Merrill Lynch and began releasing the Elliot Wave Theory monthly subscription. It is still being printed continuously. Analyst's forecasts for stock indices were correct. Prekter got a lot of followers. As a publisher, he published all the famous works of Ralph Elliot.
His fame was growing. The number of subscribers has reached 20,000. Prekter is still often cited on financial sites, blogs, news groups, books, academic papers and the media.
Prekter Weekly includes an analysis of financial markets and cultural trends, as well as comments on topics including technical analysis, behavioral finance, physics, pattern recognition, and socionomics.
Socionomics
The socionomic hypothesis of Robert Precker is that the social mood, which is regulated endogenously, is the main engine of social action. Developed since the 1970s, this idea first reached a national audience in a 1985 article in Barrons Magazine. Prekter made presentations on socionomic theory at the London School of Economics, Massachusetts Institute of Technology, Georgia, Suna, Cambridge University, Trinity College Dublin, Oxford University and various scientific conferences.
Main books
Robert Prektor is the author of more than 14 works. The most significant books of the analyst:
- The Wave Principle of Human Social Behavior (1999).
- "New Science - Socionomics" (1999).
- "Pioneering conditions in the field of Socionomics" (2003).
- "Socionomic theory of finance" (2015).
Financial theory
Robert Prekter developed a new theory of financial causation. It involves a fundamental separation between the fields of finance and economics. Robert Prekter’s books indicate that the pricing of utilitarian goods and services in the economic sphere is largely objective. It is motivated by the conscious maximization of utility, as producers and consumers are aware of their own needs and desires. In this context, the balance of supply and demand between heterogeneous groups of producers and consumers leads to a search for equilibrium in prices.
Robert Prekter Wave Principle
The law proposed by the author is that investor sentiment and their decision to buy and sell are governed by waves of optimism and pessimism. Prices for goods and services are important. They regulate supply and demand. Investment prices are not so important. They are only a temporary by-product of impulses caused by the mood to buy and sell. It is this theory that underlies Robert Precker's book, The Elliott Wave Principle.
The creator of this principle is R.N. Elliot, an accountant and stock market enthusiast who died in 1948. The theory was lost to the public and markets, but was revealed and reintroduced into the financial community by Robert Prekter.
Its essence is that the behavior of the crowd changes in recognizable patterns. Stock prices follow social sentiment. Investors buy stocks when they feel good, and sell when the mood drops. Leading waves have five stages, lowering - three. The Elliot Certified Wave Analyst program is an academic discipline in which candidates are given tools to analyze the market through the prism of human behavior.
Major publications
You can learn more about the wave principle in the following works of Prekter:
- "Financial and economic dichotomy: Socionomic perspective." This is an article by Robert Prekter and Dr. Wayne Parker, published in the summer of 2007 in the Journal of Behavioral Finance.
- "Toward a New Science of Social Forecasting: Report at the London School of Economics." This is a two-hour video presentation on socionomics and financial theory for students and teachers (2009).
- "Social Sentiment, Stock Market Results, and US Presidential Elections: A Socionomic View of Voting Results." The article was published on a social network of scientific research in January 2012, where it became the third most downloaded in a year.
Market analysis and forecasting
Robert Prekter began applying the Wave Principle to financial markets in 1972. Each month, he wrote a hundred pages of analysis of major markets around the world. His company conducts short-term updates three times a week for each region of the USA, Europe and Asia.
Awards
The main achievements in the career of the theorist were:
- The first place at the US Championship in trading in 1984 with a record profitability of 444% in four months on a controlled trading account for real money options.
- The book "Elliot Wave Theory" received numerous awards in the 80s.
- In 1989, Prekter was named the "guru of the decade" on the financial news network.
- First Prize of the Canadian Society of Technical Analysts.
- Hall of Fame Award presented by the Traders Library in 2003.
- Association of Market Technicians annual award in 2013.
Criticism
In addition to fans, Robert Prekter has detractors. Not all critics and experts perceive its continued success. Some of them do not believe in Elliot's theory. They consider it not natural, but favorably and vividly presented to the general public.