Observations

It must be a professional bias. I look for patterns every time I read opinions, ponder about recent events, and analyze data,. Then I ask myself if the pattern has been repeated in history enough times to become useful.

History does not repeat itself, but it rhymes. Or, those that do not learn from the past are bound to repeat it. OK, it sounds reasonable. But, what are the patterns we can use and profit from them?

We know the dramatic events of the past 10 years. We know the details. How did we get here? What happened?

The brightest and smartest people in the world live in the USA. We have the most Nobel prizes, students from all over the world flock here to enroll in our superb universities. I was one of them. Washington is the premier magnet for all this brainpower. Yet, in less than 100 years, we have been going through disastrous events of cataclysmic proportions.

The stock market is a sad testimonial. Market crashes, depressions, and wars from 1910 to 1950; inflation, war, periodic recessions during the depressing 1970s; from 1995 to 2009 we have experienced financial crises in Latin America, Russia, the fall of the Asian tigers, a back-to-back real estate, tech, and financial crash. Yet, we still believe the same people (leaders?) will solve our problems – however we perceive them.

History rhymes, but we keep repeating the same mistakes. Why? There is something else at work transcending the historical patterns. The naïveté of the population and shrewdness of those seeking power cause those less prepared to pay the price. We will never learn from history because history is the outcome of power struggles that cannot be controlled.

Take the “too-big-to-fail” concept. We are in this mess because of this idea. Why didn’t we break down the too-big-to-fail companies? Why did we make them even bigger by letting them absorb other institutions? This is exactly why I say we cannot learn from history. The pursuit of power cannot be stopped. It follows random patterns as we seek to profit from current opportunities.

To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest

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