Al
Only by chance of John R.'s reply to you, did I notice your question at the bottom of an email regarding 1914. You are the second person to ask me to expand on this item, so I am including him in my reply to you. It is apposite that I include him, as he is a trustee of funds of a membership organisation of which I am the Chair.
1914 is the year that the comfortable world of the Edwardians came finally to an end. Edward VII of course had died in 1910 (kicked the bucket in popular parlance). The European civil war finally broke out (generally referred to as the saintly Allies against the dastardly Boche) to all participants' disadvantage, save one, that being to the advantage of the elite of the USA.
When a serious miscalculation is made, eventually this has to be revisited and amends made. The passive tense implies that those miscalculating are still alive to revisit and amend. This is not always the case, but a factor I call the "social memory" carries it down over the years and while the memory of it may not be entirely reproduced in every detail, the main outlines are there - the enslavement of African people and their transportation to the Americas, the deceptive separation of children from their parents in the Manchester-Liverpool area by Dr. Barnardo's to be sent as domestic skivvies and unpaid cattle ranch workers to Australia in the 1950's are two examples, the latter recent, the former older.
Equally the miscalculations that led to the 1914 war have to be revisited and one of the signs that I have followed, in some cases with spectacularly positive monetary results, is the price of central London property and the price of gold expressed in paper money. Why these two indices? The need for people to have housing is one. The other is the monetary values that gold expressed over many years.
Just because the world has moved on since 1914 does not mean that basic elements have changed. They have not. Investors traded on margin in 1914, just as they do today. What interests me is finding particularly important signs that are worth keeping in mind when making investments. 1914 supplies two. An illuminating book that hints at what I am describing is Maynard Keynes's "The Economic Consequences of the Peace", published December 1919. Here he points out that "if you do xyz, then abc will follow". He is famous for taking a position in currencies (c. 1921), nearly bankrupting himself by staying in too long, then shorting the franc again and getting it right the second time around. After that, using gold as the price indicator, he landed up with $3million, which in today's money is about 150,000,000 pounds sterling. Not bad for a university lecturer who, between lectures, mainly traded on margin, like Sigops2 does. The Black Swan - still kipping.
Jack
ps. Although it is two years since Paul left us, I would still have enjoyed his commentary on today's markets.
