History and Cycles
Anyone watching the news is keenly aware the world seems more volatile. We are witnessing a dramatic rise of red and blue populism. It seems if you are not on an extreme end, there is no place for you in this world. In addition, our own American democracy came into question under President Trump with large support from his base. Today we are witnessing the threat of a new multi-country war with Russia’s invasion of Ukraine. The conflict and extremism is likely to get worse. It seems no one is happy with the way things are. These events could be looked at through the lens of linear history with little relation to the past. Another way to look at it is it represents the ebbs and flows of human behavior that repeat.
Of course, we know history never repeats exactly as it did in the past but as the saying goes, history doesn’t repeat, but it often rhymes. Why is that? In the book “The Fourth Turning,” by William Strauss and Neil Howe, believe they have outlined generational cycles through American history. These cycles take place roughly over a human lifetime of 80 years. The work is more compelling when one considers their conclusions and predictions from 1997, accurately lines up with what is currently happening in the world today. I suggest any big picture thinkers out there to read the book. If you want the cliff notes, one can see a current interview with Neil here https://www.youtube.com/watch?v=-q1RI1_MT7o
Looking at the stock market through its repeated patterns can help you make profits and avoid trouble. Looking at current events through this bigger cyclical view may help you understand the context of where we are today and why we are witnessing so much extremism and conflict. It also gave me a little more empathy for my fellow man. Understanding something is better than reacting to it emotionally and becoming an extremist yourself. It also gives you peace of mind and maybe even investing ideas. As the authors point out, there will be peace and cooperation after the conflict ends. That thought should give you some peace of mind. And focusing on the bigger picture with lower emotions always leads to better investing.