Morgan Creek examines how recurring market cycles, excessive central bank confidence, and investor complacency may be setting up another painful reset. Mark Yusko ties today’s “New Normal” narrative to prior peaks in 2000 and 2007, arguing that historical cycles and valuation extremes rarely disappear permanently.
Year of The Alligator
Morgan Creek Capital Management
Mark Yusko
Research
16 Pages
Key Takeaways
Seven Year Cycles: Market peaks in 2000, 2007, and 2014 followed similar 7 year patterns, challenging claims that central banks permanently reduced recession and bear market risks.
Valuation Expansion Risks: Equity markets reached historically elevated multiples despite weaker economic growth, echoing prior late cycle periods that preceded 10%+ drawdowns in major indexes.
Templeton Psychology Lessons: Sir John Templeton’s “this time it’s different” warning framed the paper’s view that investor optimism and policy faith often peak near important turning points within recurring 14 year innovation cycles.
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