Some of what you say has merit but you have the bravado of a coked out schizophrenic

Guns, bullets, toilet paper and soap will be far more valuable than gold if the future you predict comes true.

I've been through more than one crash and everyone is always very eager to predict the next one. It's like being afraid to leave the house so you don't get in a car crash. You miss out on a lot of life because of fear. I don't doubt some sort of correction is coming, maybe a small one, maybe a bigger one, probably sooner than later. But I'm pretty sure neither you or Rand know when it is coming.

I'd say it's more fascinating how people who dont know the bare basics always are the most likely to think they have unique insights.

His theory of 6-8 years boom, 1.5 years bust just plain doesn't hold true even if you're looking in hindsight at the very narrow time frame that he chose.

A shame because it would be very easy to pick apart historic results and find meaningless trends that offer nothing in terms of predictive value.

The idea that shifts in the markets are determined by the sequential passing of years (as opposed to actual events that are happening in the world) is definitely an interesting perspective though. If only there was a newsletter I could subscribe to...

You finally said something I agree with But you have to be careful about predicting the end of the world as it only happens once. We have had severe corrections and recessions in the past. We will have them again in the future. Do they mean the collapse of society as we know it now? Highly unlikely. But if it does happen owning gold and silver won't help as everyone will be screwed no matter once the world economy crumbles to dust. Shotgun shells and canned beans will be more valuable than gold/silver.

You like to refer to thousands of years ago when gold was valuable. Well, since then the world economy has grown and grown and grown and I am betting it will continue to grow rather than implode.

I posed this question before but you didn't answer. If we were living in some SciFi movie/book and woke up tomorrow and all gold magically turned into sand how would the world/economy be vastly different? I say it wouldn't be. Because gold is basically useless. If all oil turned into sand there would be major consequences, or copper, or corn or steel. Eventually we would adapt but if it was gold we mostly wouldn't even notice.

Seriously, you think I don't know the bare basics? I am not claiming this is a unique insight.

LOL WTF? I was looking at the SnP it holds for the better part of the 20th century and looks pretty good in the 21st so far. Look again...

You misunderstand the cyclical argument if you think the passing of years are the causal element here. It is various events that coincide with the passage of time that lead to market shifts.

Presidents have 4 year terms, presidents appoint Fed chairs. Or, let's say there is a balance sheet recession and it takes people a couple of years to pay off their credit cards and 5-10 to max them again.

This is called the business cycle.

Dont know what I am talking about...I am surprised I am even talking to you. That is laughable.

Go ahead, follow it up. Tell me, what are the "bare basics" that I am missing?

While I am responding to clowns mrbaseball, **** you.

Was I quoting you when i made that first comment? Derrr

So here's a basic inflation adjusted S&P garph (chosen because it makes the variability more defined).

http://www.multpl.com/inflation-adjusted-s-p-500


Tell me where you believe the trend starts so we can test your theory against the actual results.

Never listen to a gold bug.

No one trades off of an inflation adjusted chart. I was looking at cash SPX, you can use the max setting on Yahoo finance: http://finance.yahoo.com/chart/%5EGS...5nZSI6Im1heCJ9

Frankly this is a two year old thread that I had forgotten about but I am grateful for the bump because of my trading (not because of the quality of the conversation).

Anyway, I'll indulge you by revisiting the cycles. In reverse chronological order, here is a historical narrative of the SPX for the past half century:

1. Artificially low interest rates & Fed (really not just the Fed) funny money rally from the Jan '09 lows. That is about 8 years ago.

2. Dot-com double top that saw a rally from the Jun '02 lows (bursting of the dot-com bubble) to a high of 1576.09 in Sept of '07 that was followed by subprime and the "'08 financial crisis" which ended with the intervention of the Fed at the above mentioned point in price and time. Whole thing about 6 years.

3. The Dot-com bubble which was a steep rally from the mostly sideways action in the spring of '94 to the 2000 top around 1500 to the previously mentioned lows. Whole thing about 8 years.

4. The post Black Monday (87) recovery until the high of in early '94 through the mostly sideways action that proceeded the Dot-com bubble. This was 7 years.

5. The '87 lows to the '82 lows. The '82 lows are very obvious on your inflation adjusted chart and were right after the energy crisis & the Iranian Hostage Crisis. This is about 6 years.

6. The '82 lows to the lows of the mid '70s, just post the oil shock and the end of the Vietnam "War." This (& the cycle before it) was a terribly interesting period for the US (and the world financially). It saw Nixon, Kissinger, & Volcker take us off the gold standard, it saw crazy inflation & Vockler's treatment of it with 20% interest rates & it saw the oil crises with the OPEC embargo of '73. That is about 6 years.

That is all I feel like doing. As it is the end of an era (Bretton Woods) it seems like a good place to stop.

Please feel free to argue and whine all you want, but to those looking to get an edge in the markets it is a useful thing to be aware of.

And for the record, I am not saying go completely flat as a passive investor because 6-8 years has elapsed. I am saying that maybe it is time start lighting positions, taking profits, trading out of growth stocks and into companies with no debt.

Or maybe you should hold everything and start writing ST calls and buying some LT puts. IDK what is right for you. But this is useful information to people looking to learn.

Forgot about this. IDK, you must have quoted someone but you didn't attribute the quote to anyone. I assumed the first sentence (/paragraph?) referred to me because the next one seemed to. "His theory," I did start this thread, it seems to be my theory that you are referring to.

I may have screwed up there, but certainly you can see why. Your communication was not very clear.

So this one thing I can agree with, as passive investors there should be some rebalancing going on to keep your asset allocation within some nominal range. If you haven't been rebalancing during this market you are likely out of whack equity /bond allocation wise and making those adjustments will take some profits off the table.

Looking at your chosen graphs for the first few examples,

Seems like it was a 5 year bull market from the min in 2002 to the peak in 2007, and a 3 year bear market from early 00 to early 03. Both fall well outside the parameters you chose.

And these were the two most recent examples. Go back further and you have to fudge the numbers even more.

ie: Why are you counting the stagnation between 93 and 95 as being a bear market, but you aren't counting the far more dramatic decline between 76 and 78 as one?

Bump. Hey, Rand, how has keeping your money out of the stock market treated you the last couple years?

Obvious to me, obvious to you?

Just fine, the opportunity cost of my capital is way too high to own equities. I will have an actual (as opposed to synthetic) equity portfolio when I stop seeing opportunities else where. Or, when I have "too much" capital and want to mess with portfolio risk.

lol sick bump

we seem to be fairly effective at meeting demand. that means capital is going to raw materials fairly efficiently...avoiding price spikes. I believe its fairly difficult to have a recession unless all countries are firing on all cylinders and that demand drives up energy and base metals. some other reason too...technology is very deflationary.

I just think this is the new normal and we will have a very long cycle. maybe another 5 or 10 years before a recession. it mostly depends on demand for base inputs from China...but if they get strong with currency then that will slow down the demand...energy is getting cheap. i dont think its possible to have a recession without a debt fueled housing bubble, a base metal shortage shortage, a huge shock on wheat and corn, a rise in energy prices...or something unpredictable from cryptos.

Iwould not look at long term trends to predict what happens next as conditions have changed.. and policies have changed. No sense looking at graphs from a different paradigm

we seem to be fairly effective at meeting demand. that means capital is going to raw materials fairly efficiently...avoiding price spikes. I believe its fairly difficult to have a recession unless all countries are firing on all cylinders and that demand drives up energy and base metals. some other reason too...technology is very deflationary.

I just think this is the new normal and we will have a very long cycle. maybe another 5 or 10 years before a recession. it mostly depends on demand for base inputs from China...but if they get strong with currency then that will slow down the demand...energy is getting cheap. i dont think its possible to have a recession without a debt fueled housing bubble, a base metal shortage shortage, a huge shock on wheat and corn, a rise in energy prices...or something unpredictable from cryptos.

Iwould not look at long term trends to predict what happens next as conditions have changed.. and policies have changed. No sense looking at graphs from a different paradigm

Maybe. The main issue is that raw materials are being demanded based upon flawed assumptions about capital costs. I actually see it very, very strongly here. Luxury condos are being way overdeveloped. There will be bankruptcies and REITs will be taking some hits.