If history repeats itself, Hang Seng Index could top out in 2014
Study of long-term data shows a fairly neat seven-year cycle, driven by greed and fear
Marilyn Monroe starred in the movie The Seven Year Itch in 1955, about a platonic relationship between a pretty girl and a married man, which included the famous scene of her dress being lifted by wind through a grate from a passing underground train.
By the standards of the time, it raised eyebrows, but the scenes that did not make the final cut seem, these days, to be witty and amusing rather than shocking.
Perceptions regarding long-term stock-market analysis can be similar - a bit tame though mildly entertaining.
Share prices incorporate the myriad news that affects a market or company. They are the ultimate expression of Adam Smith's "invisible hand" of the marketplace.
2014 should fit worryingly into the market’s seven-year itch, but this cycle looks squashed
A study of the last half-century of the Hang Seng Index can be revealing. Spooked by the 1967 riots, the index touched a low of 65. Then, in the early 1970s, the Hong Kong stock market was discovered by hot global money.