Book Review  

The Life Cycle Hypothesis by Tony Plummer

The Life Cycle Hypothesis by Tony Plummer

Tony Plummer claims that the key to life and predicting financial markets can be found in an analysis of the number of pages in each of the 36 chapters of William Gann’s 1927 novel The Tunnel Thru the Air.

Mr Gann was indeed a market trader with an interest in numerology and other arcana. Mr Plummer explains in his book that for mysterious reasons, Mr Gann “concealed the pattern, instead of simply revealing it” and that it fell to him – Mr Plummer – to decipher it for us.

By analogy, we are entitled to ask of whomsoever proposes a money-making stock market system, ‘If your predictions are so accurate, where are you on the Sunday Times Rich List?’

According to Wikipedia, when Mr Gann died in the 1950s, his estate, including his house, was worth slightly more than $100,000.

Meanwhile, here is Mr Plummer’s own, scarcely ringing, conclusion about the efficacy of his hypothesis: “This does not mean that the predictions will be either faultless or accurate in terms of detail, but they will undoubtedly reduce the degree of uncertainty that normally emerges when we face the future.”

I review the book as a market professional and my single criterion for judging it is: will it make money for the reader? I am not so sure.

What I will grant is that Mr Plummer raises stimulating questions about the “pacemakers”, as he puts it, of history – the big impersonal forces that actually make stuff happen. And I am sure he is right, that conventional macroeconomic theories are inadequate.

For me, the most useful section of his book is an appendix where he has listed notable technological breakthroughs for every year between 1781 and 2010. Useful because I side with Edinburgh Partners’ chief executive Sandy Nairn and concur with the title of his 2001 book: Engines That Move Markets: Technology Investing from the Railroads to the Internet.  

Technology is the engine that moves markets and civilisation.

The good news for investors and humans is that the trajectory of technology is secular and exponential – building on centuries of accumulated knowledge. The best is yet to come.

Nick Train is co-founder of Lindsell Train 

Published by Harriman House