The Market Cycles Analysis Framework

The Market Cycles framework does not ask "which stock should I buy?" — it asks "what environment am I operating in, and what asset classes thrive in this environment?" It is a top-down analytical process: first understand the macroeconomic regime; then assess where in the cycle we are; then allocate capital to the assets that do well in that regime. Individual security selection is the last step, not the first.

Why This Matters

The framework integrates Dalio's economic machine template (short-term and long-term debt cycles), Marks's market cycle positioning methodology (assessing where the pendulum sits), Grantham's valuation framework (7-year asset class return forecasts based on starting valuation), and Soros's reflexivity concept (identifying when feedback loops are amplifying a trend to an unsustainable extreme). This is not a trading system — it does not predict the timing of cycle turns. It is a positioning system: it tells you whether conditions favour risk-taking or risk reduction, and in which asset classes and geographies. The goal is to avoid being in the wrong assets in the wrong regime, not to time the precise market peak or trough.