The Seeds of the Foundation
Before we were the Foundation for the Study of Cycles, there was a “committee.” The Foundation is the outgrowth of the permanent committee set up at the First International Conference on Biological Cycles, held at Matamek, Canada, in 1931
Seventy years ago, a young economist from Harvard, along with some of the world’s top scientists, set out to unravel a mystery.
Young Harvard economist, Edward R. Dewey, was Chief Economist for President Herbert Hoover at the beginning of the great depression. President Hoover assigned to him the task of determining the causes of the depression.
In January 1941, the Foundation for the Study of Cycles was incorporated Connecticut, dedicated to discovering the mystery behind cycles. Since then, the Foundation has been working to shed light on this mystery.
The Depression… but not the only one
Dewey discovered this wasn’t the first time the U.S. economy suffered a depression. In fact, it had done so with some regularity.
After seeking out the opinions of economists, he realized the only answer they could give him were conflicting opinions with very little insight. Repeatedly, Dewey was led to the door of cycles.
While conducting some research at the Stamford library, Dewey encountered a report on biological cycles. As he read the report, he realized that the cycles biologists had identified in nature, were in fact, identical in both length and timing to those he had described in business and stocks. The implications of this discovery were to change his life, along with the lives of many others who would follow him.
Foundation’s mission: Finding CAUSE
Edward R. Dewey wasn’t so interested in using cycles to predict the stock so much as he was fixated on the higher goal of discovering the cause of cycles, which he suggested was a force “Out There.”
Over the years, the Foundation developed a strong readership subscribing to their monthly Cycles magazine for $12.50 per year. The Foundation’s membership was dutifully attended to by Mrs. Gertrude Roessle, membership manager, who played a strong role in the Foundation for more years than even Dewey had.
Public “reaction” to cycles
Dewey noticed a peculiar reaction from people when he discussed cycles with them… a reaction that seemed to combine amusement, skepticism, and a certain suppressed fascination. As Dewey put it, “Cycles get people. Pro or con, the idea engages strong emotions. One of our greatest problems is to keep people’s thinking about our work on a level-headed plane.”
First formal cycle studies
Cycles were formally studied scientifically prior to Dewey’s arrival, but only dates back to the nineteenth century. In 1847, Dr Hyde Clarke of England, published a paper attempting to correlate economic events with astronomical data—very much what we have accomplished with Zarathustra. In 1862, Clement Juglar reported on a nine-year economic rhythm that he recognized in Western Europe and the United States. This became known as the Juglar cycle. And, in 1892, Eduard Bruckner suggested there was a 35-year weather cycle operating in Europe, which many meteorologists claim is still operating. In the mid-20s, N.D. Kondratieff documented a 56-year cycles in wholesale prices later to be called the “Kondratieff Wave.”
By the time the Foundation was established, efforts to understand all types of cycles were stepped up in the U.S. as people attempted to explain the depression.
Cycles, cycles everywhere
Since the time of its founding, the Foundation has documented almost 5,000 cycles ranging from earthquakes and sunspots, to barometric pressure and temperatures, to lynx populations in Canada.
One of the most popular theories regarding economic cycles at this time was correlating peaks and valleys of the 11.15-year sunspot cycle with the tops and bottoms of common stock prices. However, evidence was scant and Dewey said, “I don’t believe that sunspots as such have any effect on the stock market.”
A healthy compromise
Dewey admitted that “The activities of the Foundation are a compromise between the desires of most of our members… and our own desires.” He ran a survey at that time to find out which element of cycles research most interested the Foundation’s readership. It turned out to by 874 of the 1,108 (79%) that responded were primarily interested in stock market and other business and finance cycles. No surprise that a recent survey we conducted in 2010 indicated the same. Little has changed it would seem.
So, while we are a research organization interested in all the ways cycles impact our world, and with our primary purpose being to discern and make predictions from the underlying cause of cycles – much of our research centers around stock markets. This is due to two reasons: 1) Our membership is primarily interested in market cycles; and 2) Of all data, financial data is in the greatest abundance.
Dewey coins a new term
Just as in Dewey’s time, we have a certain number of cycles enthusiasts that become what might be called “cranks.” These “true believers” become fanatical about cycles, losing all perspective. Dewey coined the term “cyclomaniac” to describe these obsessive individuals. The term also covered another group that didn’t lose perspective, but did devote every waking hour to the study of cycles. Dewey included himself in the latter group. To keep his perspective, he always hedged his claims about cycles as he suggested that “Cycle knowledge is only partial knowledge.”
A book is published
In 1944, Dewey collaborated with E.F. Dakin on a book titled, Cycles, the Science of Prediction. In this, they focused on four key economic cycles: Kondratieff’s 50-60 year cycle; Juglar’s 9 year cycles; an 18 and 1/3 year cycle mostly applying to real estate activity; and a 3 and 1/2 year stock price and business activity cycle. It became a best-seller. The most accurate cycles, however, were found to be ones in specific industrial segments, rather than broader ones.
The Work of the Foundation Today
The Foundation serves as a clearinghouse for the research of scholars and scientists, as well as nonprofessional investigators in cyclic behavior. The Foundation’s principle activities lie in three areas:
The Foundation’s research program aims to isolate, record, classify, catalog, compare, project, and monitor significant cycles in time series data with the use of computer analysis and the latest statistical techniques. Results have been regularly reported in Cycles Magazine, and occasionally are issued separately as special reports. The Foundation also updates past analyses using current data.
The most extensive selection of unique computerized statistical data found anywhere in the world is maintained by the Foundation. Many series are exclusive to the Foundation, which is continually enlarging its database of statistical series. The Foundation’s “catalog” of more than 4,300 definitive cycles, recorded by length and by discipline, is updated regularly.