I haven't read Morris, the book sounds interesting. As you know, I am reading about the Great Depression now, but I am also reading one book that takes a much longer timeline, starting from the 13th century, "The Great Wave," by David Hackett-Fischer. He sees cycles, too, but when I look at the data he produces, which is very good - he's got quite a rich collection of data - I don't see it as forming patterns.
You know how some investors are TA types and some are FA types. Well, I'm a fundamentalist. I don't believe in charts. Some people make a lot of money following charts, though, and they look for patterns.
Maybe I don't see the patterns because I keep seeing the details that don't conform to the patterns.
But what I think is that historians who put things into patterns are trying to make history into a science, and it's not. The motivation in trying to decipher cycles in the past is so they can predict the future. If you know what the future will be then you can use that information to make money, putting it bluntly. If you know that when the Fed cuts interest rates the S&P will go up, that's useful information, but if you know that the Fed actually has to cut real interest rates, not nominal interest rates, that's even more useful. But that's not really a cycle, that's cause and effect.
Every time I look at an economic event that affected a lot of people, I see a lot of causes and effects but I don't see cycles. |
