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How to Avoid a 90% Crash

By 2018, the price of New York City taxi cab medallions plummeted 90%

by Bob Stokes
Updated: September 26, 2019

The beauty of the Elliott wave model is that it can be applied to all speculative financial assets.

Of course, that includes stocks, bonds, gold, oil, etc. Yet, Elliott waves can also be useful in identifying trend changes in, say, the average value per acre of Iowa farmland, the classic car market and many other financial arenas where prices fluctuate -- even unconventional ones, including New York City taxi medallions.

Indeed, our May 2014 Elliott Wave Financial Forecast showed this chart and said:

May2014TaxiMedallions

Since the 1940s, New York City has regulated the number of taxicab medallion licenses. Thanks to a limit, which currently stands at 13,605, and a bull market, prices for medallions have risen steadily. After a rare setback in the early 2000s, prices started to rise exponentially as corporate and individual licenses passed $1 million apiece. Notice, however, that the acceleration comes at the end of a five-wave pattern.

As you know, the completion of a five-wave move means that a trend change is at hand, and that's exactly what happened.

Here's an updated chart and commentary from our June 2019 Financial Forecast:

June2019NYCTaxi

From a high in 2014, the price of taxi cab medallions crashed as much as 90% in 2018. The figure for 2018 is $150,000 based on media accounts stating that prices fell as low as $130,000 to $150,000 last year. According to The New York Times, the current average price is $190,000.

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