40 year & 80 year Market Cycles

[dex]

Worth your time to listen to - unless you would have been a buy and holder in 1929 and 1968

Listen to the 40 year cycle commentary

Terry Laundry's T Theoryâ„¢ Observations: Terry Laundry's Weekly T Theoryâ„¢ Observations for March 28 2010

PS - This view fits with mine about the USA being an empire in decline. There are times to bet with the USA and there are times to bet against it. We are entering a period where the money is to be made betting against the USA. If the down turn is correct the US$ should strengthen for safety for a short period of time but it will not last - that is the time to buy foreign currencies, foreign stocks and Vanguard High Yield Corp Bonds.

 

[Gone4Good]

and Vanguard High Yield Corp Bonds.

 

[plex]

I am waiting until the dollar gets near .9, or 1.0, before buying foreign stocks. The dollar, while it is increasing a bit, is still at a pretty historically low point (as evidence by your link as well, it points to the $ going into the undersold range), which means it still has a pretty poor exchange value. The International economy is also not the same as the US economy, they are only weakly linked, so a short term buying opportunity may also arise when the International market is doing poorly and the US market is doing well (which invariably occurs at some point).

 

[Gone4Good]

Throw in that most of the developed world (Europe, Japan) has more problems then we do, and that developing countries are already extremely pricey (and have a host of problems of there own) and it's hard to see how jumping into international equities is a slam dunk.

I know China is going to take over the world, but to my knowledge there has never been a country that successfully transitioned from a command economy to a market economy. Maybe China will be the first, but its no slam dunk. Meanwhile the imbalances in their economy grow. I'm always amused when listening to people extol the virtues and efficiency of China's command economy "They make a decision to build a high-speed train, and it gets built". But simultaneously lose their minds over the slightest government intervention into the U.S. economy. Either government directed investment is good, or it isn't. You can't have it both ways.

 

[MasterBlaster]

Elliott Wave theory

I didn't read the article. But it brings to mind a well known theory of investing know as the Elliott Wave Theory. In a nutshell they break the market response down in various time cycles (waves) and make predictions based on the wave response.
(here is a link)
Elliott wave principle - Wikipedia, the free encyclopedia

Bull markets are built on climbing a wall of worry and people predicting bad things always get lots of ink.

My personal take is that riding the bull (both in the US and overseas) may be a wild but profitable undertaking.

 

[dex]

I didn't read the article. But it brings to mind a well known theory of investing know as the Elliott Wave Theory. In a nutshell they break the market response down in various time cycles (waves) and make predictions based on the wave response.
(here is a link)
Elliott wave principle - Wikipedia, the free encyclopedia

Bull markets are built on climbing a wall of worry and people predicting bad things always get lots of ink.

My personal take is that riding the bull (both in the US and overseas) may be a wild but profitable undertaking.

I've seen people try to apply it to stock charts and trading - it appeared to be very subjective and it had many alternative readings.. And, the basis at its hart is trying to figure out mass psychology.

 

[kat]

I had a windfall to invest a few years ago, and I sought advice at the Bogleheads forum. I had already done the prerequisite waiting a year to do anything, and learned enough to know where to ask my questions. I followed the advice.

I remember then that there were three different posters who came in later, after I had received and liked the usual advice (total stock market, total bond, international, small value if you want to...).

They all said things very nicely and politely and asked the other posters if maybe they were steering me wrong, with price to earnings ratio so high (what's that?, I wondered), and the funds being over valued......

Well, I lost a lot of money, and gained a lot of wisdom. I listen to the small voice that resonates. I don't have much fear or phobia, and I have a knack for recognizing the bottom and good dips to buy. And I might never be a buy and hold investor.

I also enjoy reading about cycles and realizing I can never know, but can do my best.

 

[RonBoyd]

PS - This view fits with mine about the USA being an empire in decline.

Relax, We’ll Be Fine

In sum, the U.S. is on the verge of a demographic, economic and social revival, built on its historic strengths. The U.S. has always been good at disruptive change. It’s always excelled at decentralized community-building. It’s always had that moral materialism that creates meaning-rich products

.

 

[dex]

Relax, We’ll Be Fine

.

Past Performance is No Guarantee of Future Results

 

[RonBoyd]

Past Performance is No Guarantee of Future Results

 

[Gone4Good]

Relax, We’ll Be Fine

.

I saw the Brooks article. It is a refreshing tonic to the steady drum beat of doom and gloom. Not all is bad news out there.

 

[dex]

I saw the Brooks article. It is a refreshing tonic to the steady drum beat of doom and gloom. Not all is bad news out there.

I read it and thought it was a hodgepodge of loosely connected and ill-defined thoughts.

Also, if it were to be an article of why the USA were not in decline, he would first show from history what the characteristics are of a empire in decline and then why the USA is not following that path.

 

[ERD50]

I read it and thought it was a hodgepodge of loosely connected and ill-defined thoughts.

I agree. He seemed to form a conclusion, and then look for evidence to support it. Look at the slant right from the start...

According to recent polls, 60 percent of Americans think the country is heading in the wrong direction. The same percentage believe that the U.S. is in long-term decline. The political system is dysfunctional. A fiscal crisis looks unavoidable. There are plenty of reasons to be gloomy.

But if you want to read about them, stop right here. This column is a great luscious orgy of optimism.

Ignore that man behind the curtain, I'm gonna tell you what I want you to think!

If you were to look back at some of Mr Brooks other pieces, you might understand why he wants to ignore polls that say that '60 percent of Americans think the country is heading in the wrong direction'.

-ERD50

 

[Gone4Good]

Also, if it were to be an article of why the USA were not in decline, he would first show from history what the characteristics are of a empire in decline and then why the USA is not following that path.

You mean like the absence of expansionist territorial overreach?

 

[Hamlet]

The problem I have with the idea that the US is in decline and that we should all buy foreign stocks is that most of the rest of the world has problems that greatly exceed ours.

If you think our government debt problem is large, look at most of Europe.

Japan has been stagnant for 20 years now.

I'll worry about China when they are able to feed, clothe, and house the majority of their people with some money left over to buy more than a few iPods. For all the talk of growth in China, they are starting from a base so small per capita that it should be laughable.

We have vast problems, but at the end of the day most poor people in this country live better than the majority of people in the world.

 

[dex]

The problem I have with the idea that the US is in decline and that we should all buy foreign stocks is that most of the rest of the world has problems that greatly exceed ours.

If you think our government debt problem is large, look at most of Europe.

Japan has been stagnant for 20 years now.

I'll worry about China when they are able to feed, clothe, and house the majority of their people with some money left over to buy more than a few iPods. For all the talk of growth in China, they are starting from a base so small per capita that it should be laughable.

We have vast problems, but at the end of the day most poor people in this country live better than the majority of people in the world.

Foreign Stocks is one aspect and it is mostly a currency play. That other countries are doing better, the same or worse does not really mean the USA can not be in decline. Similar concept with the USA poor situation.

 

[Gone4Good]

That other countries are doing better, the same or worse does not really mean the USA can not be in decline.

No, but it is certainly relevant to any investment decision.