In 2016, there was a widespread saying, "one's fortune depends on Kangbo. In theory, there are only three opportunities that one can get in his life." If you can grasp it for once, you can at least become middle class. For people born after 1985, the first opportunity in life will only occur in 2019, except in 1999. "

This passage is the conjecture made by many economists according to the Combo economic cycle, to a certain extent, it can be used as our summary and forecast of the macro-economy, so what is the Combo cycle?

What is the Combo cycle?

Combo cycle theory, in fact, is the economic long cycle theory. The key figure in the creation of this theory is the Soviet economist Nicholas Kondratiev. Kangbo theory holds that science and technology is the driving force for the development of productive forces, so the cycle of the development of productive forces is determined by the development of science and technology. On the scale of the long cycle of 40-60 years, Kangbo is divided into four stages: prosperity, recession, depression and recovery: starting with innovative technological change, the first 20 years or so is a period of prosperity, during which new technologies continue to subvert and the economy develops rapidly; then it enters a recession of about 5-10 years, and the economic growth slows obviously; the 10-15 years after the recession is a recession, and the economy lacks growth momentum. Finally, it entered a 10-15-year recovery period, giving birth to the emergence of the next major technological innovation.

In addition to the Combo cycle, there are several other economic cycles worth paying attention to:

Kitchin cycle (inventory cycle)In 1923, the British economist Joseph Kitchen proposed that there is a small cycle of about 40 months (3-4 years), while a large cycle includes two or three small cycles, so it is called the Kitchin cycle. Kitchin mentioned that this small cycle is the result of rhythmic movement caused by psychological reasons, which in turn is caused by the impact of agricultural acidity on food prices.

Juglar cycleC Juglar, a French economist, published the business crisis and its cycle in France, Britain and the United States in 1862, which pointed out that the capitalist economic expenditure fluctuated in a period of 9 to 10 years, which is generally known as the "Jugla cycle".

Kuznets cycleIn 1930, the American economist S. Kuznets proposed that there is an economic cycle related to housing construction, with an average length of 20 years. This is also a long cycle, known as the "Kuznets" cycle, also known as the construction or real estate cycle.

The Application of Kangbo in domestic economy

The use of the superposition and resonance of different economic cycles, such as a precision locator, can accurately locate the high and low points of the economy. That is, the 60-year Kondratiev cycle, that is, Kangbo, nested three 20-year Kuznets cycles, that is, the construction cycle, and each Kuznets cycle nested two 10-year Jugla cycles, namely capital and equipment cycle. each Jugla cycle is nested 3-4 Kitchin cycles, which is also the cycle used in the investment clock.

Through the cycle theory, we can see that China's economy and stock market were very hot from 2005 to 2007. "Merrill Lynch clock" and economic cycle theory shine brilliantly.

In the hot market environment at that time, "investment clock" has become a compulsory course for almost every investor. China's economy and stock market are also very responsive, especially the hot performance of commodities in 2007, which corresponds to the perfect performance of cyclical industries in the stock market, confirming the law of allocating commodities and cyclical industries during the "investment clock" boom (or overheating). Let many investors taste the sweetness of using the "investment clock" for asset allocation.

However, since 2010, with the implementation of structuralism in industrial policy, that is, traditional industries do subtraction and emerging industries add, GDP growth began to decline from highs, from 10.6% in 2010 to 6.0% this year, which can be said to be out of an L-shaped trend, and fluctuations have been converging, which makes it less and less effective to use "investment clock" or Kitchin cycle theory to analyze the economy and the market.

At present, only the ability of the "Kitchin cycle" in the cycle theory to explain China's economy is weakening, and the other three large cycles still have strong applicability to the study of the long-term trend of China's economy.Combo, in particular, is most appropriate in explaining the economic cycle driven by the technological revolution.

After about five technological revolutions, the Industrial Revolution (1771); the Age of Steam engine and Railway (1829); and the Age of Steel, Electric Power and heavy Engineering (1875) In the era of information and communication (1970s), basically every technological revolution is about 60 years or more apart, that is, a Kangbo. For the economic cycle, near the starting point or the first half of the technological revolution, economic growth is relatively rapid and prosperous. In the middle and later stages of the technological revolution, because the technological dividend has been exhausted, economic growth is declining, and it takes another technological revolution to move forward.

Over the past 90 years of the last century, we have entered the Internet era, from the pre-PC in 2008 to the mobile Internet after the crisis, which has prospered the global economy to a great extent. But at present, as the dividend of the mobile Internet is fully tapped, and no technological innovation comparable to the Internet has been found, or the technology is not yet mature, such as artificial intelligence and new energy revolution, it is more to hype the concept, the concept wave of "Internet +" is coming to an end, and the real new technological revolution may not have begun yet.

In other words, it is still in the middle and late stages of Combo, and the global economy is facing the problem of technological revolution breakthroughs. On the other hand, China is faced with the problem of how to achieve economic transformation and upgrading by improving total factor productivity (including land, labor, capital and other factors that affect production efficiency) after the sharp reduction of demographic dividend and open dividend. This is the issue facing development economics.

It is true that there is a lot of downward pressure in 2019, the biggest since at least 2016, but 2019 is clearly not the lowest point of this round of economic adjustment.

Why would you read it wrong? The reason is simple: as mentioned earlier, there are too many factors affecting the operation of the economy. Combo cycle theory is essentially derived from a large number of statistics of western capitalist countries, which is based on the market economy and the great pattern dominated by Europe and the United States.

Moreover, China has stronger macro-control and tends to make mainstream forecasts."countercyclical regulation"Through the surprise and surprise of the policy, constantly break the "common expectation" of the market, iron out the fluctuation of the economy, and deter speculative funds.

In the 60-year global economic cycle, it is difficult for any economy and individual to get rid of Combo's fate. Recovery, prosperity, recession, depression, each stage is about 10-15 years, not only because a person can encounter at most two opportunities to get rich, but also because a large Compal cycle requires the outbreak of an unprecedented new technological revolution to be driven. These are beyond the control of human beings. More often than not, Kangbo gives individuals a form of dividends of the times or technology. If you can judge in advance, you will be able to seize the opportunity of dividend and realize the freedom of personal wealth. I'm afraid you'll have to wait for half your life if you can't catch it.

Just as many young people made a leap in their lives by buying houses after the 2008 financial crisis, an once-in-a-decade opportunity is quietly approaching when the crisis happens again in 2020. Perhaps this time the opportunity will be in the stock market, not in real estate.

Whether it is Combo's theory or other laws of wealth cycle, it can be summed up in one sentence: respond to the situation at the right time! Only by adapting to the times, catching the pulse, thinking and evaluating the situation independently, is it possible to seize the opportunity, whether it is investment or career, to bring better chances of success. In the future, let's wait and see!