Recently, I’ve been reviewing a economist’s theories, and the more I look, the more interesting they become. His name is Zhou Jintao, who was formerly the Chief Economist at CITIC Securities. He proposed a concept called the Kondratiev wave cycle, used to explain long-term economic movement patterns. I think this perspective offers some insights into understanding the current market and individual wealth accumulation.

The Kondratiev wave has gone through five cycles since the Industrial Revolution. The first wave was textiles and steam engines (1782-1845), the second was steel and railroads (1845-1892), the third was electricity and heavy chemical industries (1892-1948), the fourth was automobiles and computers (1948-1991), and the fifth is the information technology revolution (1991 to present). Each wave has driven the development of its era, but the key point is that these cycles never shift based on individual will.

Zhou Jintao has a phrase that I find particularly memorable: "Wealth accumulation entirely comes from the opportunities that economic cycle movements’ timing provides you." In other words, whether you make money or not doesn’t solely depend on your skills, but on whether you are standing at the right point in time. It sounds a bit deterministic, but based on historical data, his predictions have indeed been quite accurate. He warned of the subprime crisis in 2007, predicted the second shock of the Kondratiev recession in 2015, which indeed caused a global stock market crash. In 2016, he judged that China’s economy was near the bottom, and commodities would rebound, which later proved true. These predictions weren’t guesses—they were based on the theoretical framework of the Kondratiev cycle.

His judgment on the real estate cycle is also well-known. He said real estate roughly cycles every 20 years, and a person can encounter at most two opportunities in their lifetime. He clearly pointed out that 2014 was the peak of China’s real estate market, and the rise in first-tier cities in 2016 was just a bear market rebound. He advised considering selling investment properties in the first half of 2017. Looking back now, the accuracy of this judgment is truly astonishing.

But for me, the most inspiring theory he has is about life’s wealth opportunities. Zhou Jintao said that in a person’s 60-year main period of economic activity, the Kondratiev wave offers only three wealth opportunities. According to his analysis framework, the first was in 2008 (which has already passed), the second in 2019 (also gone), and the third around 2030 (still to come). He also gave advice for different age groups, saying that those born after 1985 and under 30 now, their first wealth opportunity could only appear in 2019. So if you weren’t old enough then, you really missed that chance. It sounds a bit harsh, but that’s the reality of cycles.

He also developed a complete cycle framework called the Three Cycles Nested Theory. The Kondratiev cycle is a long cycle of 50-60 years, the real estate cycle is 20-25 years (Kuznets cycle), the capital expenditure cycle is 9-11 years (Juglar cycle), and the inventory cycle is 3-4 years (Kitchin cycle). A full Kondratiev cycle contains three real estate cycles, six capital expenditure cycles, and eighteen inventory cycles. He straightforwardly said: "Your life is one Kondratiev wave, with three real estate cycles, nine fixed asset investment cycles, and eighteen inventory cycles." Although this description sounds a bit deterministic, it’s also quite accurate.

From his theoretical framework, the prosperity period of the fifth Kondratiev wave was from 1991 to 2004, the recession from 2004 to 2015, and the depression from 2015 to 2025. That depression period has already passed, and we are now in a new phase. He once said that during the depression, the most important thing isn’t making money but preserving value and liquidity. These two principles were especially critical during that period. He also emphasized that 2018-2019 was a key turning point in the Kondratiev cycle, when asset prices would hit their final lows.

Looking back at these theories now, I think the most valuable insight is his understanding of the essence of cycles. He wrote: "Recognizing that everything has its own laws, on a sufficiently long scale, even rocks from their birth to becoming dust particles have their own lifespan. So don’t try to surpass the cycle." This perspective is quite profound. Many times, we think about how to beat the market or how to outsmart cycles, but perhaps the smartest approach is to understand the cycle and go with the flow.

Around 2030, the next Kondratiev cycle’s upward opportunity will arrive. For us now, understanding these long-term economic patterns might be more important than short-term market fluctuations. After all, understanding the Kondratiev cycle helps us see our place in history; understanding patterns allows us to find our rhythm amid unstoppable waves.