I have ECRI's Business Cycle book, and its very good. But its not an investment advisor, partly because investing relative to the Business Cycle is challenging, given the longer periods it takes for Macro situations to develop -- think of the overvalued dotcom bubble: it took years before it finally succumbed to the cycle, which should have ended in 1998 or so.
As to Templeton, his #5 is a corollary to #4 -- you should "buy what most investors are selling -- but only when pessimism is at its maximum.
The opposite is also true -- sell when optimism is at its maximum, and sell what most investors are buying.
Barry,
Thanks for the note. Yes, I'm aware that ECRI's key indices don't directly provide investment advice but it's one additional piece of information that comes quite useful when you are investing. That's why I said I'd *add* it to the list :-)
Incidentally, I don't know whether you've noticed it but the growth rate cycle following the WLI seems to be happening at shorter time scales than what ECRI says. I've been following it for over a year now and I wonder if more transparent supply chains can contribute to that.
Posted by eriposte at June 7, 2005 07:39 AM