Posts filed under “Cycles”

Is it a secular bull market? What it means for investors

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My Sunday Washington Post Business Section column is out. This morning, we look at secular markets, and what they mean to investors.

The print version had the full headline (Page G1) Is it a secular bull market? What it means for investors while the online version sported the headline Significance of secular market should not be underestimated.

The best descriptor was really the headline after the print jump (Page G6): Secular market cycles reflect geo-political, economic and technological issues of era.

Here’s an excerpt from the column:

“I have come to understand that societies, beliefs and fashions all move in long arcs of time. We call these arcs several things: cycles, periods, eras. They vary in length and intensity, but they are typically characterized by an idiosyncratic set of qualities that set them apart from each other as unique.

Regardless of the name we affix to them, we intuitively understand what defines a specific period of time. If you name an era, I can describe for you the dominant economic and societal themes and trends. Ultimately, all of these eventually find their way to equities and bonds . . .

Secular cycles are the long periods — as long as decades — that come to define each market era. These cycles alternate between long-term bull and bear markets. Societal elements affect these markets. These cycles are driven by specific and dominant economic ideas.

Each secular market cycle reflects the key issues of an era. These can include geo-politics, economics, resource consumption, technology or any one of a number of other elements. Over time, each of these factors comes to define the dominant economic theme of a generation. Consider the post-War World II era, or the inflationary malaise of the 1970s or even the roaring 1980s and 1990s. Each period can be defined as a secular cycle.”

The Post included the classic chart in the dead tree version of the paper:
 

click for ginormous version of print edition
Secular cycles

 

 

Source:
Significance of secular market should not be underestimated
Barry Ritholtz
Washington Post, November 9 2014 
http://wapo.st/1ym3egt

Category: Apprenticed Investor, Cycles

Investors Always Seem to Miss Stock Market Rallies

Source: Business Insider     UPDATE: We’ve shown the opposite over the years as well — here is what happens if you manage to miss the worst days. • Missing Best & Worst Days in Markets – April 28th, 2011 • Missing Best & Worst Days of S&P500 – September 14th, 2010 The fascinating wrinkle about…Read More

Category: Cycles, Investing, Markets

Market Sell Off May Not Have Run Its Course Yet

The change in tone in the equity markets is unmistakable: There is a palpable tension that leads some money managers to shoot first and ask questions later. The net result of that anxiety can be seen in the flood of new money into U.S Treasuries, which ever so briefly drove the yield on the 10…Read More

Category: Cycles, Investing, Markets, Trading

Stock Market Since 1900

click for ginormous chart Source: JP Morgan     One of my favorite charts to show people is the long-term market returns since 1900. I find it is incredibly telling in the information provided by a very simply line chart. Have a look at the chart nearby. It is from JP Morgan’s quarterly chart book…Read More

Category: Cycles, Markets, Technical Analysis

Correction or New Bear Market ?

Here we are, 10-plus months into the year, and we have nothing to show for it. At least, that is the case if we measure our progress by the gains (or losses) of the Dow Jones Industrial Average. The index is now unchanged for the year after last week’s losses. The previously one direction market…Read More

Category: Cycles, Investing, Quantitative, Trading

Is the Bull Market Turning Bear?

Yesterday’s sell off has the bulls worried. Major U.S. indexes fell about 1.5 percent. Ten of the past 12 trading sessions saw swings of 100 points or more in the Dow Jones Industrial Average. The list of worries ranges from the strengthening dollar’s harm to U.S. earnings, the end of quantitative easing, Europe’s weakening economy…Read More

Category: Cycles, Investing, Trading

Business Cycle Chart

I love this chart from Fidelity:   How to Invest Using the Business Cycle Source: Fidelity

Category: Cycles, Investing

NDR: 1980s Gold Pattern Suggests $660/oz

Gold is one of those topics that always generates fierce pushback whenever I write about it. Yesterday’s column How Low Can Gold Go? was no different. A deluge of emails and over 150 comments soon followed. I may post some of the more informative, vociferous and misguided comments / emails from readers later today as…Read More

Category: Cycles, Gold & Precious Metals, Technical Analysis, Trading

How Credit Came to Rule – and Ruin – Our Economy

On this day 56 years ago, the U.S. economy began to undergo a momentous change. It was Oct. 1, 1958, and the company known best for its Travelers Cheques introduced a new product: The charge card. Although American Express technically wasn’t the first company to introduce a charge card, it was the first to make…Read More

Category: Bailouts, Consumer Spending, Credit, Cycles

Business Cycle Index

Interesting trio of charts from Russell showing the Business Cycle Index (BCI).

The goal of the BCI is to forecast the strength of economic expansion or recession in the coming months, along with forecasts for other prominent economic measures. How well it does that is a subject of debate.

Inputs to the model include non-farm payroll, core inflation (without food and energy), the slope of the yield curve, and the yield spreads between Aaa and Baa corporate bonds and between commercial paper and Treasury bills. A different choice of financial and macroeconomic data would affect the resulting business cycle index and forecasts.

 

 

 

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Category: Cycles, Economy