Will You be Surfing the new wave coming? Or will a change in the tides wash you out to Sea?

Millennial Money Mindset
6 min readMar 21, 2020


The seasons are beautiful. The sound of the ocean lapping against the sand is evidence that order exists in nature. The seasons are both segments of time and states of mind. Though our word for seasons refers for sowing and used to mean only spring, every culture has its terms whether winter and summer or rainy and dry. Our hearts have season too. We call them moods. We recall the crucial moments in our lives by the weather that still swirls around them in memory. Weddings and family reunion, holidays and Christmas are more often than not planned by the seasons

With markets, just like the seasons, there are distinct cycles. This is called the business cycle. These cycles have patterns that mean it’s more probable that the economic winds will be colder in the winter of recession, than it will be in the summer of expansion. Knowing these patterns can mean the difference between planting the right seed or investment that will flourish in these conditions or a seed that will not.

There is order and predictability in nature. Look at the smallest sea shell or a flower petal and up to the swirling of a hurricane to the vast Milky Way galaxy they share a similar pattern. These patterns were written about by an Italian Mathematician called Leonardo Fibonacci. (Show pictures). Fibonacci numbers are everywhere in nature.

In the 12th century King Canute tried to stop the power of the oceans. We humans have invented some amazing things however as King Canute found when he tried to control the tides it’s impossible to defy nature.

Nature is its own free market. The laws of supply and demand as Adam Smith described. A more efficient allocation of societies resources than any design could achieve. A more efficient economy is created to the benefit of a whole society. This is Smith’s invisible hand he described in the Wealth of Nations (1776)


However, in this seeming order, there is also chaos and unpredictability in nature. No one can predict what the weather will be doing accurately a year from today. If it will be raining, what the temperature will be or if the sun will be shining. There are too many variables and random events. Just like the markets, no one knows if the markets will rise or fall a year from today.

The market is like a stream that is in constant motion. It doesn’t start, stop or wait even when the market is shut, prices are still in motion. When your mind and the market is in sync, you sense what the market is about to do as if there is no separation between yourself and the collective conscience of everyone participating in the market, world-class traders can anticipate a change in the market. Like being in complete harmony. Similar to how a flock of birds or a school of fish charge direction simultaneously. There must be a way they are all linked. People become linked in the same way. Tapping into this collective consciences you can anticipate a change in direction.

Markets move up over time. The market is not just a line on a screen. The market is actual real life business that produces earnings and profit. To bet against the market (to short a stock) is to bet against its fundamental nature.

Markets are like waves as suggested by R Elliot. Each rise and fall has predictable patterns as it follows the mathematics that exists in nature. These waves get their patterns from the mathematics that are commonly seen in nature. Simply put, the stock market is a human creation and believe it or not, we humans are emotional creatures therefore reflects human’s natural behaviour. These patterns are seen in nature from the smallest seashell on a beach and the patterns in sunflower seeds up to the vast Milky Way galaxy.

They all follow a mathematical pattern which was first written about by the Italian mathematician Fibonacci. He wrote that the proportions of these natural structures followed a predictable sequence when measured.

The financial markets have similar patterns to both nature and the great pyramids. There are rises and falls or ups and downs of markets and move similarly to waves in an ocean, with their own distinctive mathematical patterns, which follow these Fibonacci numbers. These’ Elliot waves’ are dividend into major waves where the pattern moves upwards 5 times (called a bull markets) followed by moving downward 3 times (called a bear market). This means that the total completed cycle is 8 (5+3=8). This can be further subdivided into smaller patterns or intermediate waves which move between the larger major waves. In this pattern, there are 21 upward moves (bull market) and then 13 downwards moves (bear market). The total completed cycles in the intermediate is 34 (21+13= 34). The length of the wave may vary, but not the number.

‘All human activities have three distinctive features- pattern, time and ration, all which observe the Fibonacci pattern. Once the waves can be interpreted, the knowledge may be applied to any movement, as the same rules apply to the price of stocks, bonds, grain, cotton, coffee or any other activity. The most important factor is pattern. A pattern is always in process of formation.’

R.N Elliot Nature’s Law (1946)

Repetitive patterns in markets mixed with psychology of masses and over long time frames there are waves of similarities. Trends and corrections leading to market cycles. Five waves up and 3 moves down. Like a surfer reading the patterns of the surf or knowing the tide. Waves count like a surfer trying to pick the biggest wave to ride. Needs experience to understand the nature of the environment. Every action is followed by a reaction like Butterfly theory.

That a flap of the wing of a butterfly could cause a hurricane the other side of the world due to the change in the force and therefore the momentum and the vast amount of mass of ocean.

Looking at charts and trying to spot patterns to predict what the price will do is called technical analysis. There is a big difference between speculating and investing and technical analysis can be used for speculation and can also be used when investing as a guide. (Please note this is financial guidance and not financial advice. Speculating is betting that the price you pay today someone will pay a higher price tomorrow. Investing is buying an asset that you expect to get the money you paid for that asset plus a reward for taking the risk. This reward may be a share of the profits (dividends) or that the price of that asset will grow over time.

Due to human behaviour repeating itself there are patterns in charts. Traders take advantage of these patterns by trying to predict what will happen next. The two forces at work are greed and fear. Human psychology (discussed in chapter 9) means these patterns move in waves. Humans have evolved to be more have a more emotional attachment to fear than greed. The behaviour of loss aversion means markets in a pattern that resembles a more slow and steady rise in prices similar to walking up the stairs as people get more confident of markets and greed slowly increase over time and then when humans feel fear they act similar to herd animals as the more strongly affect of the emotion of flight or flight kicks in and the hormone of adrenaline is released, which has kept our ancestor out of trouble by running away from predators. This emotion causes panic and for people to flight and flee the markets.

In the short term, these smaller waves or trends can be ridden like a surfer riding a wave. It’s often not known at the time if this wave will turn into a trend and keep growing or be revealed to be only a fad. A short high and then a sudden sharp drop.

If you are not experienced or if you have not diversified in other assets or markets then this drop can be painful or even fatal to your financial wellbeing. By having a better financial education improves your financial well being giving you better money mindset.

Neil Doig’s Financial Times shortlisted book Millennial Money Mindset: If you want the fruits you need the roots is now available to buy on Amazon in print, kindle and audible now

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Millennial Money Mindset

Educating and Inspiring Better Investing | Author of Millennial Money Mindset: If you want the Fruits you need the Roots and Football Formation Asset Allocation