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Boom-Bust Cycle Update

Steven Saville profile picture
Steven Saville


  • In early-July of this year, the HYIOAS was at its lowest level in more than 10 years and not far from an all-time low.
  • For long-side speculations and investments, during the boom phase of the cycle, it’s important to emphasise assets and commodities that do well during booms.
  • Industrial commodities generally should be favoured over gold during the boom phase, with the opposite applying during the bust phase.

Concrete wall on a white background shatters into the pieces, 3d illustration

urfinguss/iStock via Getty Images

Editor's note: Originally published at tsi-blog.com on October 4, 2021

There are two things that always happen at or prior to the start of a boom-to-bust transition for the US economy. One is a clear-cut widening of

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Steven Saville profile picture
I graduated from the University of Western Australia in 1984 with a degree in electronic engineering and from 1984 until 1998 worked in the commercial construction industry as an engineer, a project manager and an operations manager. I began investing in the stock market 2 months prior to the 1987 stock market crash and thus quickly learned about the downside potential of stocks. Only slightly daunted by the rather inauspicious timing of my entry into the world of financial market investments, my interest in the stock market grew steadily over the years. In 1993, after studying the history of money, the nature of our present-day fiat monetary system and the role of banks in the creation of money, I developed an interest in gold. Another very important lesson soon followed: gold may be the ideal form of money for those who believe in free markets and a wonderful hedge against the inherent instability of the government-imposed paper currencies, but it is not always a good investment. By mid-1998 the time and money involved in my financial market research/investments had grown to the point where I was forced to make a decision: scale back on my involvement in the financial world or give up my day job. The decision was actually quite an easy one to make and so, at the beginning of 1999, I began investing/trading on a full-time basis. My major concern in deciding to pursue a career in which I devoted all of my time to my own investments was that I would miss the personal interaction that had been part and parcel of my business management career. The Speculative Investor (TSI) web site was launched in August of 1999 as a means for me to interact with the world by making my analysis/ideas available on the Internet and inviting feedback from others with similar interests. During its first 14 months of operation the TSI web site was free of charge, but due to the site's growing popularity I changed it to a subscription-based service in October of 2000. Its popularity continued to grow, although I remained -- and remain to this day -- a professional speculator who happens to write a newsletter as opposed to someone whose overriding focus is selling newsletter subscriptions. My approach is 'top down'; specifically, I first ascertain overall market trends and then use a combination of fundamental and technical analysis to find individual stocks that stand to benefit from these broad trends. This approach is based on my experience that it's an order of magnitude easier to pick a winning stock from within a market or market sector that's immersed in a long-term bullish trend than to do so against the backdrop of a bearish overall market trend. Fortunately, there's always a bull market somewhere. I've lived in Asia (Hong Kong, China and Malaysia) since 1995 and currently reside in Malaysian Borneo.

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Comments (7)

oliviawise profile picture
Impressive find. Precisely what stocks are favorable in this phase any technical stocks you would buy?
What's the most BOOM sentiment in the Market ?
ans. spacs - Green New SPIN`ouch! - x-mas missing presents returns to sender. .

What's the most BUST sentiment in the Market ?
ans. taper trist - Trump on Twitter - Dr.Fauci's gains a new function .
... just another awesomely informed article. Thank you~
I quit reading when i saw HYIOAS. I'm supposed to know of the top of my head what that means?
SleepyInSeattle profile picture
@ababich1 US High Yield Index Option-Adjusted Spread (HYIOAS) - wish the author had indicated meaning.
Thanks for the article, good info.
It does look like the 200 SMA is catching up with the trendline.
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