November 7, 2021

From Gold to Bitcoin - Insight With Andrew Pancholi Part 2

Smart Money vs Dumb Money. From gold to Bitcoin, the top mistakes most traders make.

From Gold to Bitcoin - Insight With Andrew Pancholi Part 2

Doug

Welcome to Alt Monie. I'm Doug Lehman with our resident educator, Sonia Dumas. Sonia, we got another dynamite show. Let's talk about it.

Sonia

Doug, we are going to continue the conversation with Andy Pancholi. And for those who want to be a part of the smart money crowd, it is my pleasure to introduce the author of the highly acclaimed Market Timing Report.

If you don't know, he is a consultant for institutional investors and multi billion dollar hedge funds. He's an absolute golden vault of historical context when it comes to cycles and geopolitical shifts and finance. And so he's going to share with us how is smart money responding to this global reset?

Doug

Andy, welcome back.

Andy

Thank you very much. Exciting to be back on the show.

Sonia

Andy, based on currency volatility, what kinds of Black Swan events can we expect in the year ahead?

Andy

Okay, well, I love talking about Black Swan events because most people say you couldn't see that ever happening. You couldn't see it coming. And my argument is that you quite often can, if you understand cycles a Black Swan event for a cycles person is basically a bigger cycle that we don't either have enough data on or we just didn't have that cycle in our sights. But one of the really interesting things right now, and we've seen some of it bubbling alread this year is conflict cycles.

Andy

Geopolitical conflict cycles, which of course, have huge impacts on markets. And let me show you. Okay. So years ending in one 2021, I think we're moving into we're in this backdrop of coming out of Covid downturn, everything is picking up quickly. The stock markets are all time highs. I think there's another geopolitical threat and people will probably say this is potentially a Black Swan. I think there's a lot of conflict cycles coming together in 2021 and let me walk you through them. And I'll show you why.

Andy

Quite simply, years ending in one tend to see a degree of significant conflict in the Western world. So I think a good anchor point is 2001 and the events in New York on September 11, 2001, 9/11. And what we saw there was aircrafts being flown into buildings not just in New York but also elsewhere. And basically people said that was a Black Swan event. Nobody could have seen that coming. Well, if we head back ten years before that, actually, let's head back eleven years before that.

Andy

And what we saw, I think it was the second or 3 August 1990 and Saddam Hussein marches and drives his tanks into Kuwait and takes over the oil there. And then in January 1991, we see Operation Desert Storm, where the allied forces then moved to recapture Kuwait and oust Saddam. So you can see how we got this conflict crisis in 2001. Then you go back ten years. We see in 1981, Britain was involved in the Falklands crisis, where it launched this big entire fleet all the way down to the Falkland Islands, whereby Argentina had laid claim to these Islands.

Andy

And that was a significant but brief war, a very important war. If we go back to 1971, not only are we seeing a series of hostilities around the Middle East, we also see India and Pakistan flare up into a very significant war that was very destabilizing across the world. And then, of course, we can move back. Another Vietnam War takes a big escalation. We also see the Bay of Pigs invasion that failed. So American forces went into Cuba and that failed. So this is kind of quite interesting.

Andy

We can go back another ten years and we get to 1951. And this is when the Korean War was going on. So then let's go back one more decennial cycles. You call that the ten year cycles of decennial cycle. December 1, Pearl Harbor is attacked. America ceases being neutral in the Second World War and joins World War Two. So this is quite interesting because 1941 and we talk about 60 year cycles.

Andy

And they're the only two times America has been attacked on its own soil. In most of the other cases, America has been involved in some sort of intervention. And just to complete the story, 2011 is the Arab Spring. And specifically, we're seeing American and allied intervention in Libya, which led to the downfall of Colonel Gaddafi. So you can see that we're now in the next cycle within this series, which is 2021. But there's something more to add to this. So 2021, we did see a few months ago, we did see hostilities flare up between Hamas and Israel.

Andy

There was a short shot war there. I don't think that's finished yet. And I think there's other factors likely to come into play. But also there's an 82 to 84 year war cycle and revolutionary cycle. And if we go back basically 82 to 84 years, we're going to see 1939 was the outbreak of World War Two at 82 years takes us to 2021. If we had 84, it's going to take us to 2023. So we're potentially in the window for some significant destabilization. And we can see the Cold War is building steam, but go back again.

Andy

Then we're in the Crimean War there involving various parties including Britain and France and Russia and the Ottoman Empire, the Ottoman Empire being modern day Turkey. So we've got these war cycles coming together and people will say, well, this is potential Black Swan when something happens, that was a Black Swan. But I would say we need to be alert for such geopolitical event.

Sonia

And so how do you look at the markets right now? Whether it's the financial markets, both from an opportunistic standpoint, but also from a capital preservation standpoint. How do you make protective measures to say, okay, there's opportunities let's take advantage of it.

Andy

Right. Well, you got to identify the potential geopolitical threats and the obvious ones have been spoken about the threat from China towards the West, Russia, et cetera. And there will be other things as well. So we can look at it at separate, different levels. It's obviously protect your assets and make sure your nearest and dearest your loved ones are all safe. This doesn't necessarily mean it's going to flare up like this. But what usually takes place where we tend to see, for example, if America is getting involved in conflict, then defense stocks will likely boom.

Andy

So look at the patterns in those and you got to know how to trade and invest and manage risk. And that's a separate thing we can talk about. We teach that. But also historically, gold tends to go up. And initially, when wars break out, markets have shocks and tend to go down. But generally, wars stimulate. Now we're outside the realms of conventionality now with the cyber attacks and things like that. But the first part of the war tends to be negative on the stock market.

Andy

But then as industrial production picks up, it stimulates the economy. This is just a fact. Please don't consider. I'm talking in a harsh way. I'm just talking about what happens in terms of cycles. This is just exactly what happens. Gold is a really good example, and we can take a look at that now and show some of the factors around gold.

Sonia

Let's look at gold because it also corresponds to the conversation around digital gold, which also includes Bitcoin and what that means because to your point, we're moving from an industrial based economy to a cloud service based economy. So how it reacts in wars is going to be completely different. We haven't seen what that looks like.

Andy

Well, let's drill down into gold then, and I'll show you some more of the timing system, and we can ascertain some really interesting things by putting a bunch of factors together. Let's do it. All right. Okay.

So what I want to introduce people to is this whole idea of to be successful in trading an investment. I don't really think there is a magic bullet, but what there is the ability to gain information that just gives you an edge. And when you can layer this information and get several edges, you're in a situation where you get the rewards very much in your favor and the risk kind of reduced.

Andy

And that's the key to being in the trading and investing game in the long term, what you find is that 95% of retail investors coming to the market are out of business within six months because they just don't know how to do these things. So let me introduce you to one of the simplest techniques.

This is part of our Master Traders platform where we look at seasonal patterns in markets. Let me explain what this is. What I'm going to show you. I only want you to look at the blue line.

Andy

The gold line is a little bit more complicated. This is the average path of gold through any year. Over the last 46 years, gold has been freely traded since 1975. And what's called the futures market. So if you're trading ETFs like GLV, et cetera, or the multiples are long, short, et cetera. It's all reference to this. So the first thing is, most people think gold moves up and down sideways at random. But if you look at this chart, what can you see? Well, you can see that gold tends to have a bit of a run up around here.

Andy

We're looking at the blue line, folks. It also tends to have a little bit of a surge towards the back end there of the year as well. Also, there's a little bit of a bump here. So if you knew that this was the average path and you traded this every year, then in the long term, you're going to make money. Yeah, sure. Some years it will fail, but it's better than nothing. You're getting an edge. Now, what I want you to look at here is as we head into August, 1 of all, gold tends to make lows round about mid June, right.

Andy

I think that's pretty much what's been happening this year. Then it heads up and then as we get into August, it accelerates. Right. It really starts moving up, and then it can run out of steam in about the second week of October and then head sideways to down.

So this will be a logical place to buy gold just based on seasonal patterns. Well, there's several points there to learn. If you understand that seasonality across anything you trade. Now, I'm going to show you something that we've created and this is unique to us.

Andy

And I know, Sonia, you've seen this before. And in fact, that's why you got in touch with us. I've talked to you in the various presentations about long term cycles.

We drill these down into short term cycles. And what we see here is that we put them into little histograms at the bottom of the chart. And this is what the market time report is all about and where they spike. Okay. We are likely to see a change in trend, and I know what you're thinking. It's easy to see a spike.

Andy

I know it. The key point is that these are predictive. We know these spikes in advance. So we knew these spikes were coming up, and these are future spikes. And you can see there was a spike. There was the high, there was a spike, there was a high, there's a spike, there's a high, there's a spike. There's actually a low just there that's one off the high. And so it goes on. So if you know, there's a change in trend coming. And this is based on the DNA of the market.

Andy

This is a highly proprietary system. And that's why so many people come to us. We're able to sort of predict things that we're able to protect positions. So here is a super long term set of cycles. And this is the history of the Euro. Now, as I say, a lot of the FX traders, the Euro first started trading in 1998, and this is a monthly chart of the Euro. And the Euro has been going up for a couple of years. So we saw this coming up, but we saw this massive spike ahead.

Andy

So none of this was unfolded. So we knew something was going to happen. So the logical thing is to protect your position as you approach this. And we'll go into more detail on this. But let me explain.

Professional fund traders are trend followers, so they will tend to buy as the market goes up. They tend to buy more and more and more. But when the trend changes, they wait till previous swings are knocked out and they give back a good proportion of the profits. So this system allows us to be alert for what's coming up next.

Andy

So coming back to the Euro, we had a monthly cycle spike. But when we looked at a weekly chart, we had the biggest weekly cycle spike we've ever seen. And the market was heading up there for several years. As we said. So if we put these together, this is the monthly cycle we were looking at. This is the weekly cycle. This is looking pretty exciting. As I said, none of this had unfolded. This is all in real time. So we knew that this trend was possibly at risk.

Andy

And so we were getting prepared. We had a long position there, as you know, do manager portfolio. We had a long position here, and we knew that was going to be at risk. Then we got an absolute gem, which is this daily cycle. We had three big spikes. So we knew this is probably going to play out here. And sure enough, that was the day of the high. So that gave us the ability to identify this high position. And when we use this information in trading, we then wait for the market to prove itself to take the inverse position.

Andy

We don't just go. We wait for the market to prove itself, and we use a lot of trading techniques. There's a difference in forecasting and trading. Let me just show you a little bit more about this. So here we've got the same thing happening on crude oil. So we see here a double spike that was the big high. There another double spike that was a big high there. So now let's go.

Andy

And I just want to just recap something. Whilst we've been looking at this, we looked at gold. I want you to see here very carefully on this blue line. Do you see this acceleration takes place round about the first week of August, right? Yes. Is that clear? And this then tends to top out round about the end of the first or beginning of the second week of October. Bear that in mind, that's regular seasonality. Now we're going to go back to what I've just shown you.

Andy

These are the gold cycles on our forecasting system that you'll have seen because you've been reading the Market Timing Report. We have a very big spike coming in round about the first week of August. It's actually for the weekend in the 7 August, and we have a daily cycle on the 2 August. So, as you know, you're probably going to be watching this as we head into August. What we're seeing here is that we might well see a change in trend. And of course, the gold actually popped down.

Andy

We just haven't quite updated this chart here. And we're probably looking now for some significance if we're coming into a low round about the first week of August, that's going to tie up with our seasonal flow, which the market should be heading up. Okay. So we'd be looking to do that. But the next big cycle is for the 24 September. Remember, we were looking for the end of this move around about the first week of October. This suggests that this move might actually stop a bit earlier around about the weekend, the 24 September, and we have a daily cycle, the 22 September.

Andy

So this is looking quite interesting. Right. So the idea is we know the odds are favoring a low. That's what we're forecasting. Let's say we make a big high into the 2 August. Then we could be seeing a reversal to the downside and what we call an inversion in cycles.

For those of you watching, you might want to write these dates down in your diary because we're happy to predict the weekend 3 December, 2021. We'll see a reversal there and a very strong cycle set already showing for the weekend on 15 April 2022.

Andy

And I don't think you'll find anybody else that can tell you where market terms are going to be. Is it going to be a high? Is it going to be a low? We don't know. We look at the market, we know the direction of the market into that turn.

So first of all, we protect that position if we're already in it and then we look to see if we can manage the reversal. And how do we do that? Well, we teach various bits of form and this is some geometry and you can see this enables us to this is going from forecasting all the way to trading and risk management.

Andy

And we set these scenarios up. So this is the updated chart to today. As we said, the market has come down. If it comes down to the 2 August and it's on this line, we've got somewhere to manage our risk. We know where to put a stop loss in, and we know where to project targets to, which is a separate thing that's all taught in our courses. So I think that really is pretty useful. But what I'll now do is move into our Professional Traders Platform and talk to you about smart money and dumb money.

Andy

And let's see what they're doing. And that gives us some ideas of how strong a move could be.

Sonia

And, Andy, while you're going through that, can you touch on you said something earlier. The difference between forecasting and trading, can you make it clear to people what that is?

Andy

Yeah. Right. So especially in this world of cycles, you can see something coming up. I already told you about the 5 April 2022. I don't know what's going to happen there. I used to try and guess it. I mean, bringing it back closer into August. Seasonality suggests gold is going to come up, but it might do the opposite. It might go down. And we talked about W.D. Gann earlier on. He said, look for inversions, but the histogram system I've shown you is the actual DNA of the market right now.

Andy

It's tempting to just like, wow, I've got something big going on here. I'm just going to get into the market. You can't do that. You've got to know where you're going to get in and where you're going to get out. And you've got to have a plan to manage your money.

And here's what I say. People look at me as if I'm dumb when I asked this question, “Did you ever get onto an airline flight and you didn't know where it was going?” And everybody goes, I don't know what you're talking about, Pancholi, why the heck did you get into that position when you didn't know where you were going to get out?

Andy

Right. And at what point were you going to get off the plane when you found it was going the wrong way? Where's your stop loss? Right. So this is the difference between forecasting and trading, right?

You've got to have your stop loss in a position where you know you're going to have to balance that with how much you got in your account or your 401K or whatever it is. If you're a portfolio manager and you don't want to be playing for the same amount of return as you're potentially losing one to one is no good.

Andy

But when we have cycles, giving us some clues and we have seasonality and then you know the direction of the market. So if you're going to play the casino because let's face it a lot of people trade like a casino.

You want to get the odds on your side and you're never going to get the odds on your side in a casino. I'm going in there with a set amount of money with some pals just for a bit of fun, because, you know, you're not going to win right on that roulette wheel.

Andy

There's an extra number. There an extra color there. And that's for the house. And that's what makes sure the house always wins. Right.

Sonia

Exactly.

Andy

You can do it with blackjack. And I think you can do it with craps. But most things you can’t. So let's now take a look at the platform and we'll see some clues there as well. Right.

Sonia

Show us what smart money is doing.

Andy

Yeah. Sure. So, Sonia, Doug, I want to just introduce you to a quick overview on the commitment of traders data, which is published by the CFTC. This shows us what the smart and dumb money is doing.

And this gives us clues about the direction of the market. And I want to start off with gold. So let's just recap there. We saw this chart here where we saw this potential seasonal trend up here.

Andy

Right now, what we see is let me just explain what smart money and dumb money is. Right. So everybody who trades above a certain amount of a commodity or an instrument has to report this to the CFTC, and they release this data every week and it comes out in huge spreadsheets.

And we put this into our platform and we take a look and see what's happening. Now. There are three bunches. There are three types of people, but we'll just deal with two of them. The first one called the commercials.

Andy

So the easy way of saying this is, let's say a commercial is basically the producer of a commodity. So in gold, it's going to be somebody who mines it or somebody who sells it like wheat. It's probably going to be the big farmers. And what happens is that the price of wheat goes up. If you're a farmer, you're going to sell it, aren't you? Because I'm going to make it a bit more for it. And then you're going to sell a bit more and so on.

Andy

And also there's a thing called hedging.

If you have to buy wheat to make bread or whatever, you're going to buy that and you want to lock in your costs. These are all like what we call the commercials. They control 60% of the activity in the markets, and they tend to know what's going on. They know if they're going to get a bad crop, they know if there's going to be a shortage. So what happens is as the price of something goes up, they sell and they sell and they sell.

Andy

Initially they start buying and then they start selling when they think this is above fair value or whatever. And they get to the point where they can't sell anymore. Now to make this a little easy. So if we Zoom in, what we'll see is that the price of gold was coming down. In this case, they're actually buying and buying and buying to get to this point here. And remember, they do the opposite to what the price does. So when we get to this point, it suggests we're running out of steam.

Andy

And the same thing happened here when we got to this level, the market came down. So we do the opposite as traders. We look to enter at these points here, and you can see that this provides us with good entry levels when we get to these sorts of levels right here. So again, we were in this area here, that was a low and the market went up again, the low there and a low here, etc. This is what we see. So this gives us some clues as to when a market direction is about to change.

Andy

So what we can also see is we can see the amount they're buying and selling. And this is quite advanced. But I'll just give you a quick overview. This is the amount of selling and how it comes off. So here they're selling a lot and they're selling less and less and less. So this here is a point at this level where a major low comes in here because they're down at this level. And last time we were at that low, there was a major low there.

Andy

So if gold were to come down to this sort of level of selling, then that's where we're going to get a potential significant load coming in right now. It's kind of wandering sort of sideways it's towards the middle. But in the shorter term, the non commercials are the other people. They're the big hedge funds. They're trend followers. They just started buying this last week and they've reduced the shorts that suggest the bigger funds are suggesting that we might be heading up in gold right now. Okay.

Andy

So they're preparing for this move that might be coming in August. Does that make sense?

Sonia

It does. And something you mentioned is that you said this a couple of times that these hedge funds that they are trend followers. So they follow the trend after the trend has been set versus being proactive. Am I hearing that correctly?

Andy

Yeah. That is absolutely right. So that's a good example. Let me just explain here. The blue line is the net position in this area here. We're looking at the non-commercials, the hedge funds. Okay. That's the overall picture. So you can see here they were selling and selling and selling all this all the way down. And if I just take this off here, they were increasing. This is the amount of selling they were doing the red line. And can you see, they got to this extreme level here.

Andy

So, you know, they were wrong way around there, right.

Because they got to such an extreme level. And what we can do is, in fact, we haven't got to that level in recent years at all at this high level here. So they were so wrong when this market turned at this point. But when we see this sort of level increasing like that, we know that they are in the wrong place.

Andy

And of course, we follow this up with our histogram system, which is very accurate. So we're getting our index, suggesting that was at a buying level. And also when it gets to zero, that's a selling level. And that's exactly where it got to just at that point there. Do you see that? Yes. But basically we got another sell point there before that dip. And then now it's slowly heading up and up like that.

Andy

So there's a little bit of interest coming back in. But we're really interested in this indicator when it's at extreme levels here and here. So that is very telling. But yeah, what we find is the trend followers, the hedge funds are the wrong way. So they're the wrong way there. So here they were maximum long, right. Just here just as the market made a high. Do you see that very long there and very long there.

Sonia

What's the statistic like, the average hedge fund only lasts about seven years or something to that nature.

Andy

I did not know that, Sonia.

Sonia

I was reading something in the Psychology of Money that the average hedge fund does not last that long. And maybe this is why.

Andy

Well, this is very interesting. Well, one of the biggest hedge funds that I've consulted to for a long time, they've been around in decades, but that's because they're using cycles and smart money. Right. So I think that's a really interesting point, though, that you're making. So if we look at the net positions of the hedge funds here, they're like just buying and buying and buying because the market is going up. But they get to this extreme. And, of course, when they get to the extreme, they're wrong.

Andy

And here they're selling and selling and selling into this low, which is this point here. And, of course, the wrong way as the market changes direction. So this is very telling. But let's say if we finetune this with our profit finding Oracle system that gives us some good advantages.

Andy

That's where the whales take a hit. Usually. Well, there's two types. There's the super whales that control the market. And then there's the next lot of whales who are the big trend followers, and they tend to get bounced out at these extremes. So if I can now move on to Bitcoin. Yeah.

Sonia

So speaking of whales and mega whales, let's talk about Bitcoin.

Andy

Right. Well, this is in its infancy right now because we've only got eight years of data. But first of all, let's look at the seasonality on Bitcoin. And what we see is the end of the year. Really things start from the beginning of October. Eight years isn't, to be quite honest enough of a sample. But it's starting to show a pattern already. And we have seen these little spikes in April there as well. But gentle lows round about July, and then a gentle move up. Well, that's what we're seeing right now, isn't it?

Andy

We started moving a little bit more than gentle the last couple of days.


Sonia

A little more than that.

Andy

And then sideways to down, maybe a little high at the beginning of September and sideways consolidating before I move up right now, we don't have as much data here. There's a lot to this index situation. But here's our index that we look at here's the price of Bitcoin. And what we saw here was that as Bitcoin, the index started moving up, generated a sort of buy signal here. And if you bought there, you'd have done pretty well. Right. Exactly. People are buying. And then we get the next move here from this area here.

Andy

And you can see that there's a lot of buying pressure coming in. And if we look at the commercials, so people say, who are the commercials? Well, the commercials really are the Bitcoin miners or the people that are backing the Bitcoin futures that we now have at the CME, right. So look at this. As this started moving up, these people started buying. So they were fuelling this wave. You knew the smart money was piling in, and then they backed off a little bit. And then this is really interesting.

Andy

What we got here. This is the sort of amount of buying and the red lines the amount of selling. So what happened here was that at this point, we got this first high here in January. And look at this. The smart money started coming out of it and actually increased its selling. It was selling into this next bit. But then we got this high. Remember, we talked about the 5 May and the 90 year cycle from European collapse and the next shock. This was this move here.

Andy

And look what happened. There was this selling climax, and everybody got out. It went like that straight out. See, the number of longs collapsed, the number of shorts collapsed. Everybody left the market at this point, everybody is leaving the casino. Everybody is leaving the party. But look at this now. We've been in a consolidation phase and the smart money has been buying back in.

Andy

And they stopped selling. They're not selling as much. Can you see that? Yes. So this is really interesting. So that's suggesting that the smart money is going back. But look at this. The hedge funds are buying. They've also increased the selling a bit. But what we're saying is money is going into the market again. So if we were to see this level here broken by, sorry, this level here broken. Right. Because we basically got a top here and then a top here. So the level of activity here is equivalent to it was here as this was going up.

Andy

If this gets up above here, then we should be set up for a very big move up that could potentially take out these highs.

Sonia

I think what's interesting to see is that even though we're talking about a new asset class, right. This is basically powered by human emotions and code. Essentially, that's what Bitcoin is, right. Your belief system and some code put together, being able to see that even this asset class is having a level of seasonality similar to traditional asset classes that's been around for hundreds of years, just like gold. And so I look at it and think at the end of the day, it's human beings and emotions and money. It doesn't matter what the asset is Tulips, coconut shells, Badger skins, Bitcoin.

Andy

And, you know, Bitcoin cryptocurrencies are the in thing. We talked about the 300 year cycle in bubbles. Actually, it's all about a market is a representation of human behavior, right? It's hope, it's fear, and it's greed.

And that's exactly what we're seeing.

Sonia

Right. It's interesting because I find the conversations on whether or not Bitcoin is legit. It's like that conversation has shifted because to your point, there's hope, human emotions. We're in this global reset. So people are looking for opportunities that quite frankly, I don't know when the last time we've seen an asset class grow almost 200% a year since it's inception. And so being able to quickly grab on onto something that hasn't really existed before because we're used to hearing, well, if you can put your money in a mutual fund and earn 10%, you're doing well for 20 years, that's it. That's the narrative.

Now itt's put your money in Bitcoin, hold on to it for a couple of months and you're up. So it's hard to refute that argument.

Andy

Right. And we got that with some of the dot com stocks as well. It was boom and bust, right. And everything is boom and bust. That's the way it is, because that's how human behavior is. One of the other long term cycles if you look at the last five years of every century, we've only got three examples, right. The 1700, 1800, 1900, there was a five year Bull market in each of those.

So if you knew that at the time and I only discovered that obviously in the early two thousands, I've been doing this stuff since the 80s.

It's a freebie, isn't it? And whoever is going to sit in the White House in that time is probably going to preside over a massive stock market boom. It's got to have nothing to do with their policies. So this is it.

And it's all about this feeling of abundance. But then you can see how quickly it turns when the pandemic kicked in, and suddenly everybody's feeling a little unsure that stability is gone, the income sources have gone. And so on. Go ahead. No, I was going to say and then you look at government policy, not just in America, but in most Western Nations.

There's big bailout checks and taxpayers are going to have to pay for that. Money is just printed left, right and center. We don't have balanced economies, and it's all Fiat currency now. But this is it. This is the reality of it all.

Sonia

And one of the things I think that's interesting if we go back to the tech boom right, there are companies that survive, like Amazon, Google, Facebook. And so I think there's a maturing that happens, at least from what I've witnessed with bubbles that then helps to continue to fuel whatever that bubble started. What are your thoughts?

Andy

Yeah. I think you're right. There will always be the core companies in the group. And one of the big things is innovation cycles.

So when a whole new concept comes into being part of the 1920s saw this boom into the 1929 crash that was based really on things like radio, aircraft industry, right? Aircraft. That was it. This is the new thing, right? 1857. It was railroads. We can't build enough trains and locomotive engines. And then 1957, as I said, it was cars and so on automobiles. So we got the Internet boomed. We got mobile phones, right. Everything took off. Well, it was the last five years of the century, or was it because we suddenly got mobile phones?

I'm sitting in front of a PC, but most people have tablets now. What happened to fax machines that was going to be the greatest thing ever where you could send a message. I deal predominantly with people in America, and I thought it was so cool when I bought a fax machine in the late 80s or the early 90s, and I can get a message over and I can get it back within, like, ten minutes.

Andy

Wow. But now I can send you a PDF and you've got it instantaneously. We're sitting here, you're up in the mountains, Doug’s in Atlanta, and I'm just outside London, and we're all chatting away as if we're just sitting in a local bistro or bar or something. And it's great. It's fantastic.

So you have to see what the latest thing is. The latest technology. And this is why we see booms in Pharma when they hit a certain area.

And it will be the companies that produce those drugs that win that manage to get to the finishing line, because, remember, there will be companies that fall by the wayside because they didn't get the certification or whatever it is that's needed the testing.

So that exactly underlines what you said. Some will continue and some will fall by the wayside. It's the same with cars. How many car companies are there now? They've been consolidated. How many aircraft companies are there now? They've been consolidated. Everything consolidates. But now because we've got instantaneous communication, we've got super consolidation with Amazon.

Andy

That's what happens. I just say we're going into a new super cycle, and I don't know what lies ahead. The human race is based on hope, fear, and greed. And we just have to make sure we don't super destruct or anything at some point. That's it. But it's like climate cycles as well. There's nothing new as we've had warming and cooling before.

Sonia

And that relates to sunspots. We won't go into that, right.

Andy

I’ll save that for another time, maybe we should go to a bar to talk about that.

Sonia

That's right. Doug. Any questions for you?

Doug

No, I just find it quite fascinating. It's just what happens today may change tomorrow. What happens yesterday has an impact on the day. I don't know what else to say, but you're backing up with stats and information, and it's just, yeah, I'm excited. I want to hear more.

And I know you've got a lot of great resources as well.

Andy

Well, thank you. I think one of the interesting things is that I think all the wise people of every culture know about this. And if you're from a Christian background and you'll know about Ecclesiastes and how it says there's a time to sow and a time to reap and there is no new thing under the sun, it's clearly stated in all these texts, be it Christianity or Hinduism or Judaism and so on. These cycles are there, and they just exist. That's it. I don't know why they exist.

I'd love to figure it out. I've spent a long time trying to do it, and I'm still going to be doing it.

Sonia

It's interesting because we're just looking at one microcosm sector, right? Which is financial. There's so many aspects to cycles, especially when you get into, like, W. D. Gann's work, he really goes to the moon.

Andy

His work is incredible. He was a complete genius and prolific researcher of cycles. And whilst he was able to apply them really clearly to markets and trading, and he always said time was more important than price, by the way, even though he was able to pick some pretty clear high and low numbers on markets.

But he did do a lot of research into all sorts of things and just this repetitive nature of cycles in human behavior and history and nature. I think if I may, just as you know, I sit on the board of the foundation for the Study of Cycles, which is a nonprofit and that was originally created by President Hoover and the seven of us, seven or eight of us said on the board, and he appointed his chief economist, Edward Dewey, to see what cycles they could research.

And the whole point of this was in 1941, and he wanted to see basically, Dewey was tasked to see if anybody could have foreseen the Great Depression after the 29 crash, and they figure it out. And the more research Dewey did, he started looking way beyond markets and commodities. He started looking at cycles in species and how reproduction rates go up and go down and nine year patterns, which is half this 18 year pattern. So this is like a generational cycle humans 18 to 20 years.

Andy

So there is clearly something there that in God's great pattern of the universe. That's it. Whatever you subscribe to, whatever belief systems you have, there is some bigger plan in my opinion.

Sonia

Well, with that, Andy, thank you so much for this conversation. This has been incredible.

Andy

It's been a lot of fun. Thank you so much for having me on the show and for our viewers.

Sonia

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