Druids and stock traders have some things in common. No, it's not that both groups spend a lot of times in robes conducting bizarre ritualistic sacrifices (but, hey, who are we to judge what people do in their spare time?). It's that both groups believe in the importance of cycles.
Druids placed great ceremonial meaning on the turning of the seasons. Similarly, traders put stress on the stock cycle, a pattern of increasing prices, followed by a peak, and an eventual decline...before starting all over again.
The technical theory of the stock cycle was developed by Richard Wyckoff, who saw it unfolding in four distinct phases: 1) accumulation, 2) markup, 3) distribution, and 4) markdown.
The cycle perpetuates because of the movement of money from large institutions. Wyckoff believed that, by anticipating the stages in the cycle, a trader could profit from big money moving in and out of stocks...like the hyenas who follow the lion pride around, waiting to pick up some scraps. Or, if you want to think of it more generously, like farmers anticipating the weather so they know the best time of the year to plant, and then harvest, their crops.
Related or Semi-related Video
Finance: What is a Business Cycle?3 Views
Finance allah shmoop What is a business cycle Well here's
a guy giving his cycle the business Yeah the bike
moves forward in time but this little white mark on
the tire while it keeps returning to the same place
again and again and again So yeah that's the foundation
of the notion of business as a cycle time continues
but you know business gets hot then cold then hot
then cold and yeah you get the idea Well why
is this the case Well lots factors They mostly revolve
around the wild pagan dance of greed and fear And
they get exacerbated when governments actively monkey around with the
cost of renting money otherwise known as the raising and
lowering of interest rates And if you're new to this
whole space if you lower interest rates and make money
cheap to borrow you heat up the economy or at
least you encourage it to get hot And if you
raise the cost of borrowing money well then you're going
to try to cool it off And the reason he
might want to do that is if inflation is roaring
right All right well in the us the business cycle
Runs roughly every eight years for what is called the
short cycle of business cycles for reasons only partly known
to humankind the money cycle revolves around the presidential election
cycle when historically every couple of terms the population gets
sick of one process of messing up government and they
choose to elect a new way to mess up government
So that's The short cycle happens every seven or eight
years and you see it in the stock market with
generally meaningful corrections Along that pattern there's also ate a
long business cycle that sees major shift about every quarter
century World wars affected numbers Technology innovation affects the numbers
and other exogenous factors like pollution and labor replacement by
robots Yeah yeah it's coming and healthcare or disease changes
and or big innovations that completely repaint the pavement such
that the tire slipped and turn and twist trying to
keep the bicycle upright The key goal Look outfor bollards