Business Cycle
Where are we in the cycle—and what does that mean for asset performance?
The business cycle is at the core of the Everything Code.
The Cycles
| Cycle | Timeframe | Driver |
|---|---|---|
| Short-term | Months | Sentiment, CESI |
| Business Cycle | 3-7 years | Credit, ISM |
| Secular Cycle | 10-20 years | Demographics, debt |
| Commodity Super Cycle | 20-40 years | Capex, innovation |
| Debt Super Cycle | 50-80 years | Leverage, deleveraging |
Key Indicators
| Indicator | What It Measures | Correlation |
|---|---|---|
| ISM | Manufacturing activity | US GDP, World GDP, S&P 500 |
| CESI | Economic surprises | Short-term momentum |
| Lumber/Copper | Construction demand | Leading indicator |
| Oil | Energy demand | Business activity |
| Credit Spreads | Risk appetite | Fear gauge |
| Bond Yields | Interest rate expectations | Policy direction |
| CPI | Inflation | Purchasing power |
Framework
How to read the cycle:
- Identify position — Early, mid, or late cycle?
- Check indicators — ISM trend, credit spreads, yield curve
- Assess sentiment — Euphoria or despair?
- Position accordingly — Different assets for different phases
Context
- Macroeconomics — The big picture
- Economics — Money and markets
- Investing — Putting it to work
- Predictions — What comes next?
Resources
Questions
What is the most important question this topic raises that current discourse tends to avoid or understate?
- Which assumption in the standard framing of this topic is most likely to be wrong in a 5-year horizon?
- How does the DePIN or agent-native lens change what matters most about this topic?
- Which first principle, if violated, would make the analysis of this topic fundamentally incorrect?