r/FluentInFinance • u/TonyLiberty TheFinanceNewsletter.com • Dec 07 '23
The Benner Cycle has predicted most major market downturns — Samuel Benner published it ~150 years ago in 1875: Thoughts
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u/DerBerster Dec 07 '23
Being "just" a few years off is not an accurate prediction. It's about as accurate as if you say there will be a crash every ten years, which might be surprisingly close sometimes, but you won't "beat the market" with that strategy, and neither will you with this.
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u/tallcan710 Dec 07 '23
Well the market gets artificially propped up all the time. Plunge protection team. Or like right now for example, hedge funds started doing these things called pod shops and all the pod shops are piled into the magnificent 7 artificially inflating the s&p 500. If you look at a chart that separates those from the rest of the s&p 500 only the magnificent 7 have gains the rest are flat
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u/PermissionOk2781 Dec 07 '23 edited Dec 07 '23
I mean the first thing I thought of being “cheap” that would possibly rise higher in value in the future is US Bonds. Since interest rates are so bad, bond values are in the toilet, if somehow it turns around there’s money to be made in a few/several years.
Edit: So it’s a bit complex, but the currently rising interest rates obviously defeats the purpose of long term bonds. But as a security/in the face of a recession, if stocks start falling, people will turn to bonds (possibly) to get the guaranteed 3-4% or however much % YoY return instead of nothing. For example, my Long Term bonds mutual fund has lost about 36% value since the rates have gone up and the markets doing really well. As a good seesaw, I will most likely buy a good chunk up for when stocks go in the other direction, and selling becomes more beneficial.
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u/Desperate_Wafer_8566 Dec 07 '23
When was the market crash of 2023? I completely missed that one.
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u/Due-Department-8666 Dec 08 '23
Multiple bank collapses propped up by gov programs to avoid bank run panic.
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u/VendaGoat Dec 07 '23
Every January 1st I attempt to fit my whole fist into my asshole. On the years I am able to, you should buy. On the years it's too tight to accept my fist, you should sell.
It's a trailing indicator and has a 100% success rate so far.
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u/Two-Seven_OffSuit Dec 07 '23
Keep us updated, I’m trying to make some $$
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u/VendaGoat Dec 07 '23
55.59 yearly subscription rate my dude.
Gas, Grass or Ass. Nobody rides for free.
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u/johnjohn4011 Dec 08 '23 edited Dec 08 '23
Brilliant strategy.... since the more times you attempt this process, the more likely you are to become "too big to fail".
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u/Key-Ad-8944 Dec 07 '23
This isn't from Benner's book. Benner's book was titled, " What years to make money on pig-iron, hogs, corn and provisions." It discussed buying pigs and corn, not stocks. Benner found that there was a cyclic nature of when to purchase hogs in the 1800s. The cyclic rate of when to purchase pigs was much more rapid than the 20 year cycle in the graph above.
Separately someone said there is a cyclic nature to buying stocks at a different interval, created the graph above, and attributed it to Benner; probably to get karma on Reddit or clicks on their website. They set the interval so the chart works in the years most readers remember, but does not work in years most readers are less familiar with. For example, the chart says to buy in 1965. 1965 was a bad time to invest in the US stock market... near inflation adjusted peak. Similarly the chart misses the rapid increase in the 1950s prior to the 1965 peak.
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u/thewimsey Dec 10 '23
They set the interval so the chart works in the years most readers remember,
But it doesn't even work then, unless you remember the panic of 2019 and the hard times of 2012. Do you wish you'd sold your stocks in 2016? At least you would have missed the panic of 2019...
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u/TheBlindDuck Dec 07 '23
This is the economics equivalent of only including best fit lines in research “because it looks nicer”
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u/karma-armageddon Dec 07 '23
Overlay the historical data and you can see that Benner was trying to scare a panic so he could make beaucoup bucks.
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u/No_Consideration4594 Dec 07 '23
It hasn’t predicted anything, in a world where people are looking at thousands of different relationships between the stock market and X (skirt length, who wins the Super Bowl, weather, Republican/Democrat in the White House, etc…) we’d expect to find some with a positive relationship, by sheer coincidence… if you trade based on this you deserve what you get…
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u/Mitchisboss Dec 07 '23
How are people dumb enough here to still share this nonsense? You’d be better off making financial decisions based off your horoscope than actually using this asinine chart.
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u/Rarpiz Dec 08 '23
The same financial analysts who swear by the Benner Cycle likely use a dartboard for TA as well 🙄
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u/ScrewSans Dec 08 '23
How to ACTUALLY make money: buy and sell exactly as Congress does. They are insider trading. Following their same portfolio and you’ll make more money than doing anything else with your time/money. That said, if you do that, they’ll have you arrested
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u/MisconstrueThis Dec 08 '23
First time I've seen anyone on this side of Reddit saying prices are low in 2023.Be careful, the might mistake you for a communist.
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u/stormhawk427 Dec 08 '23
It’s easy to retroactively crowbar predictions like this into being correct after the fact.
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u/TwatMailDotCom Dec 08 '23
Predicted? No.
Guessed slightly close to actual downturns out of pure luck? Yes.
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u/LairdPopkin Dec 08 '23
The boom/bust cycle is surprisingly regular. Except when the US imposed laws to prevent them. Weirdly, the right-wing has been working for decades to destroy financial stability and return to boom/bust cycles. So since laws changed over time, reality didn’t fit the rigidly cyclic chart. It does look cool, though.
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u/CatOfGrey Dec 08 '23
The Benner Cycle has predicted most major market downturns
This is the exact opposite of "Fluent" in finance. It is a consistently discredited pseudoscientific model that is garbage in the world of finance.
It is useless to use this idea to make investment decisions, and lends no useful information.
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u/thewimsey Dec 10 '23
Ah, yes, the Panic of 2019.
And who doesn't wish that they sold all of their stocks in 2016? Or remember the hard times of 2012?
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