We were presented a copy of the column and its mysterious commodity chart almost three decades ago, which was published in 1958 in The Minneapolis Star. We were impressed that the pattern accurately projected a major market high in 1972 and a panic low in 1982. Further along the timeline, the chart essentially warned of the 2000 high (albeit a year in advance).

Chart 1

There are obviously several misses but we were intrigued enough to research its origins further, and found that it was initially proposed by Ohio farmer Samuel Benner in the 1880s. We analyzed the original chart's pattern (which ended in the year 2000) and extended the timeline forward another 50 years (Table 1). Its first “real time” forecast, in our experience, was labeling 2007 a year of “good times and high prices… time to sell.” Bullseye! The subsequent two forecasts had mixed results. The year 2012 was identified as one of “hard times and low prices… time to buy.” This was better advice for buyers of European stocks than domestic ones, in which a major low had occurred the year before. Our chart projection then labeled 2016 as a year of “good times and high prices… time to sell.” That was good advice for the first five weeks of the year... but disastrous afterward.

This year, though, is our first real-time experience with the ominous and less frequent occurrence of the third alternative, which falls on line C: “years in which panics occurred and will occur again.” 

Table 1