This chart appears to be a market cycle based on the ideas of Samuel Benner (1875). It is a historical prediction of when to buy and sell assets.
In economics, this relates to **economic cycles** or **business cycles**, which are recurring fluctuations in overall economic activity.
Explanation of Benner's Cycle Chart
The chart divides time into three main phases, based on patterns that supposedly repeat every 8, 9, or 10 years:
A. Panic Years (High Peaks) 📉
These are the years when **panics** or severe market declines (crises) are predicted to occur.
* **Recommended action:** Sell or be very cautious.
* Given examples: 1927, 1945, 1965, 1981, 1999, 2019...
B. Good Times Years (Sell) 📈
These are the years of **high prices** and "good times" (booms).
* **Recommended action:** Sell stocks and securities.
* Given examples: 1926, 1935, 1945, 1953, 1962, 1972...
C. Hard Times Years (Buy) 💰
These are the years of **hard times** and **low prices** (market bottoms).
* **Recommended action:** Buy stocks, real estate ("Corner Lots"), and commodities, and hold until the "Boom" (Phase B) arrives.
* Given examples: 1924, 1931, 1942, 1951, 1958, 1969...
Related Economic Concepts
This pattern attempts to capture the **cyclical nature** of financial markets.
1. **Business Cycles:** The economy does not grow linearly. It goes through expansions and contractions.
2. **Supply and Demand:** High prices (Phase B) occur when demand exceeds supply, and low prices (Phase C) occur when there is excess supply or panic.
This type of analysis, although historical, relates to the idea of **market timing**, although most modern economists doubt the exact predictability of such rigid patterns.
