By W. D. Gann (1942)
“History proves that wars break out every 20 to 25 years. It also proves that there is a great wave of SPECULATION and a BOOM of some kind in nearly every country every 20 to 25 years. Why do these WAR PERIODS and BOOM TIMES come at such regular cycles of intervals?
The main cause of these is that HUMAN NATURE NEVER CHANGES. Every 20 years a new generation comes along. They are full of hope, optimistic and are progressive and up-to-date. They are inexperienced. They know nothing of war or of the bitterness of war, because they have never been in a fight. They are anxious to get into a fight. It is easy for the politicians to induce the young men to go to war, but it is hard to get the old fellows who have had the bitter experience and the suffering, to go to war. They want no more of it. The young buck is wild and always ready to run and to fight.
It is the same with the Commodity market. The young generations either have inherited money or they make money, and they want to take a chance. It is the nature of youth to gamble, to take changes and to be fearless of danger. Therefore, the young generation are anxious and eager to try their hands at SPECULATION. When they get into a RUN AWAY BULL MARKET, they have no more sense than to keep on BUYING. They throw caution to the wind. This increased BUYING power causes Commodities to go to HEIGHTS UNWARRANTED BY SUPPLY AND DEMAND. The result is that when this BOOM is over, the young generation suffer severe LOSSES, get some valuable experience and are not so anxious to try it again.
Just as sure as young generations come along from time to time, we will continue to have BOOMS in business, BOOMS in the STOCK MARKETS and COMMODITIES, LAND (Real Estate ‘Bubbles’ – George) BOOMS and other wild WAVES of speculation. Youth has to be served and young nature has to have its fling. That is why HISTORY REPEATS, because HUMAN NATURE DOES NOT CHANGE and each coming generation have to go through the same EXPERIENCE as the former GENERATION did..” – WD GANN (1942)
George’s Commentary . . .
This is as current a topic as when it was first written by W.D. Gann back in 1942.
In these brief paragraphs, WD Gann reveals the truth about markets and Human Nature.
In these writings of W.D. Gann, we find the reason Mankind continually finds itself at war and, also why the war and market price cycles continues with each new generation.
Except for a change in terminology (what Gann called Booms, we call ‘Bubbles’ today) nothing else has changed.
Think on that! In a world of seemingly constant change, here are Rules that never change and the reasons for their constancy!
The US Wars in 1896, 1916-1918, WW2 in 1939, Vietnam in the 1960’s- 1970’s, 1990’s Persian Gulf, 2001 Middle East and now the rumblings of new wars in Ukraine in 2014 (the 100-year cycle from World War 1) have continued beyond Mr. Gann’s lifetime just as they preceded him and have repeated throughout Human History. WD Gann teaches us to watch for certain market actions that pivot around war periods such as rising grain prices. As we can’t seem to avoid these cycles due to the nature of Man, then, at least we could learn from History personally and align ourselves economically with the right side of the markets and how they have always behaved during these important times. – GR HARRISON