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One Wave You Definitely Don't Want to Catch
January 18, 2010
From a big-picture perspective, proponents of the Kondratieff Wave theory insist that the rally we're seeing now will eventually falter and stocks will fall significantly below their lows of last March as bad debt continues to be cleared.
The Kondratieff Wave theory varies on the length of time depending on the proponent you read, but in general, it's a 45-70 year wave of upward growth, a slowdown, the emergence of a speculative bubble, and the collapse of that bubble, wiping out nearly all the gains…and starting again.
Because the Kondratieff Wave theory lasts for so long (one's investment lifetime, essentially), it's hard to view without recognizing major markers… like the recent buildup of speculation in the past ten years, first in tech stocks followed by real estate…
Some of these theorists believe the collapse in the stock market should follow with a 90+% drop from its peak, which would put the Dow somewhere near 1,000. And it's a trend that, over long periods of time, has played out before, so naturally, it stands to reason that it could happen again.
Frankly, this alternative perspective makes selecting shorts based on declining credit and balance sheet fundamentals look downright bullish.
But this time it's different… right?
Stay Sovereign,
Andrew Packer
Managing Editor of The Sovereign Individual
SUBSCRIBE to The A-Letter for FREE or send to a friend at LINK: http://www.sovereignsociety.com/
Original Posting At: TheSovereignSociety
The Kondratieff Wave theory varies on the length of time depending on the proponent you read, but in general, it's a 45-70 year wave of upward growth, a slowdown, the emergence of a speculative bubble, and the collapse of that bubble, wiping out nearly all the gains…and starting again.
Because the Kondratieff Wave theory lasts for so long (one's investment lifetime, essentially), it's hard to view without recognizing major markers… like the recent buildup of speculation in the past ten years, first in tech stocks followed by real estate…
Some of these theorists believe the collapse in the stock market should follow with a 90+% drop from its peak, which would put the Dow somewhere near 1,000. And it's a trend that, over long periods of time, has played out before, so naturally, it stands to reason that it could happen again.
Frankly, this alternative perspective makes selecting shorts based on declining credit and balance sheet fundamentals look downright bullish.
But this time it's different… right?
Stay Sovereign,
Andrew Packer
Managing Editor of The Sovereign Individual
SUBSCRIBE to The A-Letter for FREE or send to a friend at LINK: http://www.sovereignsociety.com/
Original Posting At: TheSovereignSociety
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