The Two Things Needed to See the Opportunities

With all the doom and gloom in the world, you might find it hard to get out of the bed in the morning.

That’s not a problem I have.

I’m seeing too many opportunities in both the share and property markets.

That’s what gets me up in the morning.

Today I’ll show you the two things you need to know to see the same opportunities I do.

This pattern has repeated for over 200 years

At Cycles, Trends and Forecasts we say the first thing you have to know is the US real estate cycle.

This is a clearly repeating pattern in history that runs 18–20 years.

It’s not something that we came up with either.

A man called Homer Hoyt let the cat out of the bag way back in 1933 with his book One Hundred Years of Land Values in Chicago.

In that book he identified what happens in the economy to make the cycle turn from one phase to the next.

This is how Cycles, Trends and Forecasts editor Phillip J Anderson saw a major crisis coming before 2008.

He went on record, too. He wrote in December 2007, after the collapse of British bank Northern Rock:

The collapse of the bank here in the UK is a really big deal, do not underestimate the probable implications. Repercussions will go worldwide next year. Plan for the credit cycle to worsen. This has not hit Mr and Mrs Joe Average yet about the impending effects it seems to me. Why? Because they have no understanding of historical cycles.

The global financial crisis of 2008 is just one of many such crises that have occurred since 1800 with astonishing regularity.

We call it a financial crisis, but it wasn’t. It was a land crisis. The easy bank lending (‘subprime’) allowing land prices to be bid up ever higher only exacerbates the bad situation.

It’s when land gets bid up so high that unaffordable rents and mortgages leave no money left over to fund other areas of the economy. Business starts to get slow, people get laid off, and on the downward spiral goes.

Because most commentators do not understand this, they thought 2008 would bring on a new depression from which the world might never recover.

But not Phillip J Anderson. He wrote in November 2009:

The “great recession”, GFC, call it what you will, is just about over, and stock markets are on the way up, recovering…

Two prescient calls, wouldn’t you agree?

Good luck finding someone else who called both of those moves with the timing almost exact.

Who do you take your financial advice from?

Here’s how he was able to do that. The move out of the recession comes from land becoming affordable again. It just doesn’t occur to anyone that, after the land bust, more affordable mortgages leave a little bit of money left over from the weekly pay packet to fund other areas of the economy.

And away we go into the next real estate cycle…

Nothing has changed in 2016

It’s the speculation in land and the inevitable bust that drives the cycle.

So when the G20 took steps to reform the financial system to prevent a financial meltdown like 2008 from ever happening again, you know those financial reforms won’t work.

They’ve only guaranteed another one. Because policy makers and economists disregard the real cause of the cycle and the collapse: speculation in land values.

They could stop this if they chose too.

But then how would the banks make bln if you didn’t have to slave away for the enormous mortgage to pay for the land your house sits on?

This is why you can have absolute confidence the cycle will, indeed, MUST repeat.

The astonishing thing is no one else seems to see it.

You could read Homer Hoyts book (some 500 pages of it). Or you could go and see that information distilled in Cycles, Trends and Forecasts’ 18 year real estate clock, shown here.

This gives the signposts in the economy that you as an investor can recognise. You’ll know where the economy is at any point in time.

The 18 year real estate clock is not only applicable to property investments. It spills over into the share market as well.

That’s why the second thing you need to know is how to read a chart.

Start studying these to make profits in the market

The way we empower you as an investor to see the same opportunities we see is through tracking the real estate cycle, and reading the stock charts.

We believe that the stock chart tells the truth — if you can read one. It tells the truth because the only thing that matters in the stock market is what people do with their money. The only place you can see this is in a stock chart.

You often hear it said, ‘If only I had some inside information then I could make a real killing in the market.’

But any insider buying or selling MUST show up on a chart. So if you can read a chart, you can get in on the inside.

Note, I’m not talking about insider trading or anything illegal. It’s just that the news somehow finds a way to get out. Someone just seems to know before the news arrives to mainstream awareness.

Understand that dynamic, get your psychology right and you will start to see the same investment opportunities we see.

Everything we do at Cycles Trends and Forecasts challenges the status quo.

So if you’re the kind of person who is prepared to be challenged, the kind of person who just wants the truth, rather than somebody’s opinions, then you can find out more about our services here.


Terence Duffy

From the Port Phillip Publishing Library

Special Report: The biggest stock gains can come from the least likely places. While the ASX fell 9% in the 12 months to November 2015, one tiny, hated mining stock soared 1,200%. What seemed like an ugly, bad investment quickly transformed every $5,000 worth of shares into $65,000. This is the power of ‘10-bagger’ companies. Where will the next one come from? Read Greg Canavan’s special Crisis & Opportunity presentation to find out…[more]

Join Money Morning on Google+

Terence Duffy is an analyst and chartist, specialising in researching economic trends and cycles.  His primary focus is housing and land affordability. But you can also depend on him to offer his unique analysis of stock market charts. As Terence will show you, the charts often forecast, well in advance, the good or bad news to come.

Money Morning Australia