The-New-Yorker-artic - THE sECRET CYClE Is the financier Martin Armstrong a con man a crank or a genius BY NiCK paumgaRTEN T he education of Martin

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66± THE±NEW±YORKER,±OCTOBER±12,±2009 OuR±lOCal±CORREspONdENTs THE±sECRET±CYClE Is the financier Martin Armstrong a con man, a crank, or a genius? BY±NiCK±paumgaRTEN JONATHON ROSEN Some see mysterious links between pi and the dates of turning points in the markets. asset class after another. One summer, his father took him to Europe, and the web of foreign currencies gave him a tactile sense of interconnectivity and the oscilla- tions that might come of it. The follow- ing year, Armstrong’s high-school history teacher showed his class the 1937 film “The Toast of New York,” about the Black Friday panic of 1869 and the gold speculator and con man Jim Fisk, with a young Cary Grant as Fisk’s accomplice. At one point in the film, Fisk quotes gold at a hundred and sixty-two dollars and fifty cents an ounce. Armstrong, aware that the price, in 1966, was just thirty-five dollars, assumed that the line was Holly- wood nonsense. Prices could not possibly have fallen so far over the span of a cen- tury. He went to the library, however, and found, on microfilm, a contemporaneous reference in the Times to a gold price of a hundred and sixty-two dollars. It further demolished his youthful assumption that assets gradually appreciated over time— that markets were linear. One day, in a newspaper, he came across a list of financial panics that oc- curred between 1683 and 1907. On a lark, he divided the span (two hundred and twenty-four years) by the number of pan- ics (twenty-six) and found that, on aver- age, there had been a panic every 8.6 years. As he read more, he began to sus- pect that 8.6 was a highly significant number. He discerned a recurrence of major turning points in the economy and in world affairs that followed a distinct and unwavering 8.6-year rhythm. Six cy- cles of 8.6 years added up to a long-wave cycle of 51.6 years, which separated such phenomena as Black Friday and the com- modity panic of 1920, and the Second and Third Punic Wars. Armstrong was, for the most part, self- taught. His father had him reading Ar- istotle at the age of nine, which, along with movies like “Cleopatra,” inspired him to delve deeply into ancient history: the arcana of Mesopotamian commodi- ties, the decline of the Ro man denarius. After high school, Armstrong attended the RCA Institutes, now called the Tech- nical Career Institutes, and he audited a few courses at Princeton, but he never earned a college degree. School bored him. Still, he adopted the habit of a learned man. In the early seventies, he became a trader and dealer in gold, and began com- precipitated the discovery of a greater sup- ply, their value plunged, and he was once again a regular South Jersey kid working weekends in a coin shop. Armstrong’s father, a lawyer and poly- math whose grandfather had lost a for- tune in the 1929 crash, disapproved of spec ulation, and he persuaded his son to put his diminished fortune in a fashion- able but conservative investment vehicle called a mutual fund. Not long afterward, mutual funds, along with the broader stock market, abruptly crashed.
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This note was uploaded on 08/13/2011 for the course FIN 3100 taught by Professor Martinarmstrong during the Spring '07 term at CUNY City Tech.

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The-New-Yorker-artic - THE sECRET CYClE Is the financier Martin Armstrong a con man a crank or a genius BY NiCK paumgaRTEN T he education of Martin

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