“Thank you for your attention to this matter.”

This note highlights many economic indicators that are flashing warning signs for history-aware investors.

A thorough examination of history reveals that these cross-sectional trends from the economy are extremely useful (and profitable) in understanding where both economies and market pricing of economies are within their respective cycles.

History doesn't repeat, but it does rhyme.

There was a time when active, fundamental investors dominated investment markets. The pricing of financial assets was (more) forward-looking. Today, with passive investing growing and broadening, and the gamification of trading exploding, a reactive set of investors has emerged. This will be characterised by violent share price moves once someone with authority bias informs them (after the event) what happened. Recent reporting seasons have evidenced this volatility.

The recognition of these characteristics is not unique. As the late, great Charlie Munger said, "Show me the incentive and I will show you the outcome."