I recently read about the history of Benner's cycle and I must say it is fascinating how such an old pattern continues to be relevant to today's markets. Samuel Benner was a farmer from Ohio who published his work in 1875 after experiencing the crash of 1873. From that bitter experience, he embarked on a research journey that led him to discover something interesting: markets move according to predictable cycles.

What strikes me is how Benner linked agricultural cycles to market cycles. As a farmer, he knew well that seasons influence harvests, which in turn impact supply and demand, and ultimately prices. Digging deeper, he discovered an 11-year cycle in corn and pig prices, with peaks every 5-6 years. Interestingly, this matched the 11-year solar cycle. For iron, he calculated a 27-year cycle with lows every 11, 9, and 7 years, and peaks every 8, 9, and 10 years.

Benner's cycle essentially divides market periods into three phases. During panic years, volatility is extreme and investors act impulsively, driven by fear or euphoria. This is when prices plummet to incredibly low levels or rise unexpectedly. It requires nerves of steel because those who know how to move well can realize enormous profits, but the risk of severe losses is equally high.

Then there are good times, when prices rise and conditions are favorable for selling. This is when assets reach their highs and investors can monetize optimally. Finally, the tough years are when prices fall and it’s better to accumulate, holding assets until the next bullish cycle to sell at the peaks.

What makes Benner's cycle extraordinary is its historical accuracy. He predicted the Great Depression of 1929, the Dotcom bubble in the 2000s, even the COVID crisis in 2020. Over 100 years of almost perfect success. Benner himself wrote under his photo: one thing is certain.

Now, according to this analysis, we are in a difficult times phase. Asset prices are declining, which theoretically presents an accumulation opportunity. Studying how these cycles have historically influenced prices helps better understand where we might be in the current cycle. If Benner's cycle continues to work as it has for over a century, it might be worth paying attention to these signals.