Everything has a cycle. From the regular cycle of the universe, sunrise and sunset, the ebb and flow of the tide. Observing the cycle of celestial bodies can reveal the mysteries of space.
also has cycles in nature, such as the cycle of spring, summer, autumn and winter, living things have their own life cycles, animals and plants have birth, aging, sickness and death, and even the earth has a cold and warm climate. Night and day, etc., these are the cycles of all things. By studying these cycles, we can discover the magic of everything on earth.
Humans also have periodicity. For example, in Chinese history, we must divide for a long time, and we must divide for a long time. Not to mention the menstrual cycle of women. Even the emotions of both men and women are periodic according to scientific research. Looking at human society, in modern times, the left and the right have also appeared alternately and reincarnation constantly. The study of the various cycles of humans has led to various disciplines, such as psychology, social sciences, and economics.
is more cyclical in economic activities, such as interest rate hike cycles and interest rate cut cycles, fiscal policy easing and tightening cycles, economic recession, recovery, overheating, stagflation cycles, inventory cycle, etc., Studying economic cycle can better carry out economic activities and macroeconomic regulation.
The stock market is also cyclical. Everyone knows the cycle switching between bulls and bears, as well as the style switching of large-cap stocks and small-cap stocks, as well as the switching of value stocks and growth stocks. Research on these cycles can be more Good stocks.
Today is to illustrate the importance of the cycle. After studying the cycle, it is very powerful. Here I am just sharing my personal thoughts on the operation of the next cycle. Since it is talking about the cycle, I have to talk about cycle stocks, then Let’s talk about the inventory cycle. Industrial enterprises have an inventory cycle of about 40 months based on their own production, including passive replenishment of inventory and active replenishment of inventory.Passive destocking and active destocking bring about different economic phenomena here.
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is like the economic recession, the economic downturn, the continuous decline in the prices of industrial products and bulk commodities, the enterprises take the initiative to destock. When the reduction in production capacity exceeds the demand, it will stop the decline. Just like at the beginning of last year, the economy began to recover. In modern society, this recovery is generally accompanied by the introduction of economic stimulus policies, which will make the cycle change even more. Faster. If no policy is issued, the cycle can be achieved, but the speed of market-oriented adjustment will be slightly different in time.
When the recovery cycle begins, companies increase production, demand increases, and start restocking. At this time, commodity prices will rise, because prices only rise from the bottom, and companies just passively increase inventory, but they are not very strong. As the recovery cycle continues, commodity prices are gradually rising. Once the trend is formed, it will continue. When prices continue to rise, companies start to increase production. Consumers generally Lower consumption will also increase consumption. After all, the price of the latter is more expensive, which forms a positive cycle, which belongs to the overheating stage of the economy.
How long this economic overheating phase lasts depends on several links of these positive cycles, which will be broken, such as the demand side, the interest rate side after increasing debt, and the impact of the supply side on prices. Finally, as prices continue to rise, the supply of production capacity rises, and the interest rate policy changes after inflation. The economy changes from overheating to stagflation. At this stage, demand no longer grows high, but prices have reached a high level.
Finally, with the continuous expansion of production capacity, the increase in supply and then the decline in prices, began the recession cycle.
This is only theoretical. The actual production may be that no matter how the price rises, the total may not change significantly. For example, no matter how the house price rises, the total number of houses in Hong Kong will not change. There are some changes, but in fact there is not much fluctuation. This has led to price increases and demand has always been high, but it is always insufficient, and housing prices can continue to maintain high levels and continue to rise.
For resources, some resources don’t say that it takes time to expand. Petroleum is relatively easy to expand. For resources, especially those with no proven minerals, such as cobalt, lithium, etc., production capacity Expansion is also difficult to expand because of price increases, at least it requires a high price increase and a long time to make a big change. This also brings about the extension of this cycle.
There are still many factors affecting, especially in terms of policy, carbon neutrality brings restrictions on the capacity expansion of polluting resources, which brings variables to the original cycle law, which will affect it. Distortions have caused the upward cycle of prices to lengthen. For example, the demand for new energy vehicles and new energy resources did not have much impact in the past. However, the continuous explosive increase in these two years can be said to be against the original The cycle once again increases the demand side, and this demand side is still very strong, which distorts the original cycle rule again, all of which brings this time the commodity cycle is different from the previous one.
The difference between this time and 2016 to 2017 is that the last time was based on the decrease in supply caused by the supply side, but the demand did not change much, but this time, the supply is also restricted, but the demand side is substantially larger. Increase, especially in new energy, the direction of new energy vehicles has produced a huge explosive demand, but from the perspective of the economic cycle, it is still not as good as the full-scale economic cycle in 2007, so this cycle is unprecedented. . It belongs to the variant form of the standard commodity cycle.
new energy,Great strides in new energy vehicles, etc., can be said to be a new energy revolution, but at least for now, it is not a full-scale industrial revolution. It is local for the time being. This local growth will bring about a local increase. The prosperity of this is a bit similar to the prosperity brought to Japan by the vigorous development of home appliances and automobiles decades ago, but it is not at the level of the industrial revolution.
When this round of the cycle will end, it actually depends on two aspects. One is the demand side, the development of new energy vehicles and new energy. Looking at it now, at least the next five years will continue to grow rapidly, and the overall economic demand Looking at it, if the United States does not tighten its currency and does not break out of a crisis, the overall situation will be basically stable, then demand will be basically no problem. On the supply side, the impact of the epidemic depends on how it develops, and it seems unlikely that the epidemic will change much in the short term. In terms of prospecting, the individual should improve, but as a whole, it will not change within a certain period of time.
In fact, the research cycle is human nature behind it. It is like every time when the rise is crazy, it is not because people are rushing towards it. To buy it? Whether it is the stock market or real estate, when it fell sharply, but waited and watched, thinking about falling again. This is the weakness of human nature. It is these that promote the cyclical operation of human economic activities. The cycle of human nature is the direction of the most esoteric research. This is the most difficult topic.
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