INTERVIEW
Haven't We Had This Conversation Before?
Bill Meridian And Those Long-Term Cycles
by Jayanthi Gopalakrishnan
Cycles theorist Bill Meridian began on Wall Street in a
most conventional way, as a fundamental analyst at the Value Line Investment
Survey, where he began to develop his work on cash flow. Then in 1978,
he began to design computer programs to perform the number-crunching required
to relate stock market movements to cycles.
By 1981, he had written a simple spreadsheet program in Lotus to
calculate stock market cycles, followed by more sophisticated software.
He has worked both the buy and sell sides of Wall Street, most recently
spending 14 years in the Middle East as a fund manager and strategist.
He currently operates his own business from his home in Europe, traveling
to Vienna, London, Tokyo, and Abu Dhabi for his clients. How did Meridian
get started on cycles, anyway? Technical Analysis of STOCKS & COMMODITIES
Editor Jayanthi Gopalakrishnan interviewed Meridian on February 6, 2007,
via telephone to find out.
You would be surprised about how many cycles are 220 to 240 years
long. Dynasties or whole civilizations have been in power for that
cycle.
Bill, what path brought you to where you are now in cycles research?
When I was a boy I read a lot about history, and then as a teenager
I studied books on technical analysis. As a result, I was very aware of
market movements during my college and graduate-school years. Technical
analysis will take you so far, I discovered, but I liked anything that
projected into the future, and that is how I first got interested in cycles
in relation to the markets. It looked as if some of these historical cycles
repeated. And that's what got me interested.
When you say these cycles repeated historically, did you recognize
that a certain number of years would have similar patterns?
Yes. My old neighbor in Greenwich Village, George Lindsay, was the first
person I discovered to write about this. He wrote a book called The
Other History, and in it he pointed out there are numerous cycles.
When you get numerous cycles overlapping, you get a major event. I wrote
an article about it for the Market Technicians Association Journal, in
which I explained what Lindsay did. Then I applied the theory myself and
concluded that the United States would either become more isolationist
or more internationalist in 2000-01. That article was repeated in the
first new journal of the Foundation for the Study of Cycles, which is coming
back into existence.
The cycles theory is pretty far-reaching, too. I lived for 14 years
in Abu Dhabi, and if you read Sir John Glubb's A Short History Of The
Arab Peoples, he mentions cycles there. You would be surprised about
how many cycles are 220 to 240 years long. Dynasties or whole civilizations
or tribes have been in power for that one cycle.
Do you have an example?
Yes. I now work in Japan frequently, and if you look at the history
of the Japanese you'll find that firearms were introduced there by the
Portuguese, and the Japanese actually manufactured more total firearms
in Japan than all of Europe did back in the 1500s and 1600s. In fact, they
invented volley fire, where everybody lines up and fires simultaneously.
It was not the British. What happened was that after 200-plus years of
free trade, the Japanese decided to isolate themselves.
That lasted about 220 to 240 years, until an American, Commodore Matthew
Perry, arrived with a fleet of battleships. When the Japanese saw the size
of the guns on the battleships they realized they had done themselves a
disservice by cutting themselves off from the rest of the world. That started
a new 220- to 240-year cycle. And if you divide that by four, about 60
years later the Japanese invaded China.
And if you add 60 years to that, you come to 1989-90, when their
market had this giant top of 38,000. So the next manifestation of the cycle
would be close to 1989 plus 60 years, or 2049.
...Continued in the April 2007 issue of Technical Analysis
of STOCKS & COMMODITIES
Excerpted from an article originally published in the April 2007
issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights
reserved. © Copyright 2007, Technical Analysis, Inc.
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