The Bear Market Blog

By Ken Knight, MBA

I mentioned in the last blog that we would touch on how society's mood affects things like fashions and music.  But recent events have prompted me to respond to them.

Let me start off by reiterating that social events are caused by social mood (positive or negative) NOT the other way around.  The events going on now in the country and all over the world are because the world social mood is negative, or what I call, in a bear market.  Think of the stock market as a barometer of social mood.  Especially the stock market as measured in real money (gold).  Bear markets are difficult to live through. But with the proper knowledge, life can be made more safe and financially comfortable.  That's the purpose of this blog.  

I am sure many of you are wondering "where did he get this stuff?"  Well. while studying for my MBA I became interested in the stock market and whether it was predictable.  I found an organization that was not only fascinating but prophetic.  Even a new term was created: Socionomics.  Not social economics. "Socionomics is a field of study conducted under the hypothesis that waves of social mood motivate the character of social actions."  .  (If you are intrigued by all of this go to the highlighted link: Socionomics.com. For a video presentation go to "History's Hidden Engine" Fascinating stuff!) This is very apparent today with all the violence that was hardly occurring during previous bull markets.  We saw a huge change in mood starting in 2008 that created
a number of groups expressing their anger and frustration at "the status quo"  The Tea Party, the Black Lives Matter movement, , Occupy Wall Street, to name the most prominent.  Violence is a common occurrence during bear markets.  From 9-11 to the Paris and Brussels attacks. And the wars that continue to fester throughout the middle east.  Regretfully, we'll be seeing a lot more of it. And conspiracy theories will continue to develop such as the the Birther Movement.  Politically we see a tremendous polarization between factions.  Congress hasn't functioned in a number of years. And the idea of an "outsider" taking over a political party just 4 years ago would be unheard of.  Yet Donald Trump has done it.  And Bernie Sanders, a socialist, came pretty close, pressuring the Democratic Party to move further to the left.  And don't think this will all end soon.  I predict (my first here!) that whoever wins the White House will be a one term president.  This is typical of bear markets.  Just ask Jimmy Carter!  
I previously said that I was interested in learning if the stock market and therefore social mood swings was predictable.  My answer to this is - yes, somewhat!  Can I tell you exactly when the bear will turn to a bull?  I wish!  But I have learned that somewhat is better than not at all.  The Kontradieff  Wave mentioned in and earlier blog shows 2020 as a probable bottom to the bear market.  But I have also discovered other promising studies that I am finding.  One is called the Elliott Wave Principle (I will be spending more time on this fascinating subject in future blogs one bite at a time).  It is predicting sometime in 2022.  Time will tell how accurate these predictions are.  But I can tell you that we still have a long ways to go.  We still haven't "seen the other shoe drop", that is, the U.S. stock market will follow the other markets lower around the world.  And I predict (Number 2!) that it will go lower than the last time!  

Baron Rothschild, a distinguished member of the wealthy banking family that bears his last name, is credited with saying, "Buy when there's blood in the streets." In other words, buy when no one else is buying.  Again buy at the bottom of the market sell at the top.  We're close to the top.

So again, be safe  and put your finances in order.

Best regards,
Ken