Marc Faber was one of the very few money managers in the public view who has reasonably consistently understood and timed the Kondratieff wave. He nailed the very last phase of the disinflationary half cycle from 1996 into the whole bottoming phase from 1999-2003. And he was buying during that bottom.
A Bloomberg article today (May 2, 2007) examines his current position which is shared by a very few others:
If you are only interested in stocks and not in asset classes benefitting more specifically from inflation, remember that stocks go up during mild to moderate deflation and mild to moderate inflation. But even in stocks you should want to emphasize inflation beneficiaries and de-emphasize bonds.
Very few ever get the key concept that the stock market starts its disinflationary stock bull market as soon as interest rates start to fall from their 27 year highs (1932, 1982). That bull market continues until rates get "too low" and indicative of impending deflation (1946, 2000). After a quick deflationary stock bear market low (1896, 1949, 2003), economic demand picks up and prices of everything go up, including stocks. That runs for several decades for stuff and stocks and until rates get "too high" for stocks (1966-72).
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