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Aperiodic cycle is a succession of regularly occurring events. There are also chaotic cycles...
Chaotic cycles = oxymoron alert! Simplifying assumptions can be useful in life, but not when there is just plain no basis for them. In those cases you just have to deal with complexity.
We were discussing "business cycles". To me it seems clear that there is not much in the economy or markets that helps with the idea of a cycle. There is seldom anything that is cyclical. No clear repetition following consistent time periods. No clear cycle with the same highs and lows. Calling past events "chaotic cycles" does not seem to help.
Rather than think about cycles, I suspect we would be better to concentration on "patterns". Also there are trends and measures that might indicate a repeat of a past pattern. I can think of quite a few patterns. One I would call by the well known phrase: irrational exuberance. This involves an overheated market with excessive speculative investing. A "bubble" is another similar example but the investing is usually concentrated in a limited area such as technology or real estate.
I wonder how Gunlach is doing with his investment, he mentioned gold on CNBC before Trump was elected.
well if he bought it before than it ain't doing well . if he bought it and sold it he might have made a profit . gold is not about time in the market but timing the market if you are buying it as is and not part of a comprehensive portfolio strategy . of course the timing can be an issue if you guess wrong .
well if he bought it before than it ain't doing well . if he bought it and sold it he might have made a profit . gold is not about time in the market but timing the market if you are buying it as is and not part of a comprehensive portfolio strategy . of course the timing can be an issue if you guess wrong .
He is a bond guru and bonds have not done well either. How do these people make money?
they can short and hedge with options too depending on the fund and it's policy . i use both pimco mint and i-shares shy for cash . mint is usually up lately when shy is down .
if it is a go any where bond fund there are bond funds doing well like high yield up double digits and floating rate loans .
No, there are many cycles in nature, but extrapolation from such elementary observations would be foolish. People have made every effort to uncover cycles in economics, and they have all failed. Things go up, things go down, and things stay about the same. There is no discernible pattern to any of it.
There is no pattern, but it is still volatile and fluctuates. You can still assign a probability to a particular event. And the odds are, there will be a recession every 5-10 years.
But truthfully, I don't buy the argument that recessions have no cyclical causes. If you look at the data, it is pretty clear that unemployment reaches a minimum, central banks start raising interest rates, over optimistic speculative investments begin to sour and markets go through a period of correction to bring the allocation of capital inline with fundamentals.
Markets are to a large degree driven by psychology and irrational behavior. Sooner or later, recessions occur which serve the purpose of ending the irrational behavior and reallocating capital to more productive uses.
The efficient market hypothesis is a nice theory, but real people and real markets don't operate with Vulcan-like objectivity. It is only efficient in the long run (>10 years). In the short term, it is driven by behavioral economics.
There is no pattern, but it is still volatile and fluctuates. You can still assign a probability to a particular event. And the odds are, there will be a recession every 5-10 years.
But truthfully, I don't buy the argument that recessions have no cyclical causes. If you look at the data, it is pretty clear that unemployment reaches a minimum, central banks start raising interest rates, over optimistic speculative investments begin to sour and markets go through a period of correction to bring the allocation of capital inline with fundamentals.
Markets are to a large degree driven by psychology and irrational behavior. Sooner or later, recessions occur which serve the purpose of ending the irrational behavior and reallocating capital to more productive uses.
The efficient market hypothesis is a nice theory, but real people and real markets don't operate with Vulcan-like objectivity. It is only efficient in the long run (>10 years). In the short term, it is driven by behavioral economics.
I don't see any facts to back up these assertions.
First, what measurements are you using that indicate a recession every 5-10 years? Are you looking at GDP or the stock markets, such as the DJIA? Neither show this pattern.
How about using unemployment to mark the "cycle" changes? Low unemployment periods have been 2006, 1999, 1989, 1973, and 1969. The intervals have been 7, 10, 16 and 4 years.
Your second paragraph, defined the classical definition of a business cycle. Again, that cycle is more theoretical than actual. In recent decades we have had the dot com bubble. Tech has given us some big time winners such as Microsoft, Apple, Google and Facebook. Unfortunately too many people got caught up in the speculation and many overbid the markets. That was a phenomenon that really does not match your definition of a business cycle. The Great Recession hit due to lenders playing musical chairs with bad loans. Again, that does not fit your definition.
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