From Macro to Micro | August 14, 2026

August 14, 2026

Supercycles

While I spend most of my time looking at individual investments, portfolio construction and management, and risk, I often like to follow the adage of “when in doubt, zoom out.” A while back I wrote about cycles, and since a certain chart is out there floating around in the social media ether, I thought another piece on cycles, namely supercycles, would be helpful.

There has been plenty written on cycles, from Ray Dalio¹ on cycles related to debt, political arcs, new world orders, and productivity to Strauss and Howe² in The Fourth Turning on generational personalities or archetypes.

There has been and there likely will continue to be much written about different types of economic, market, and demographic cycles and supercycles. Full disclosure – I am a big believer that cycles exist and that they are everywhere. But I also am skeptical about anyone or anything that supposedly can predict with any degree of precision when cycles or supercycles will start and end. The truth is, much of the data we have on cycles is after the fact, not before they start and end. Regarding supercycles – cycles that can last 10 years or more – these are not rhythmic sine waves that are predictable. Some cycles last longer than others. They are also not uniform in shape, as the image below illustrates.

(Image produced by ChatGPT)

Kondratieff³, Schumpeter⁴, Perez⁵, Benner⁶, and the “historians”⁷, who were only looking at the Industrial Revolution phase, have done extensive analysis of cycles. The historians see the Industrial Revolution as not part of a cycle but as a one-time structural transformation.

That brings us to today and what is happening with AI. As it relates to memory demand and supply, GPUs, infrastructure buildout, and consumer adoption, I wholeheartedly believe there are cycles for each of these and I believe they vary by duration. But when we zoom out and look at the larger landscape, it could be one large supercycle or it could be a very large one-time structural transformation, like what may have transpired during the Industrial Revolution. The key for all of us who are living through it now is to realize that we are not likely going to know where and how it ends until after it happens. That could be stressful to think about for some, but it could also be reassuring to others.

I remain optimistic that whatever the timeline and however it completely unfolds, we will be better off with it than without it.

Footnotes:

1. Dalio, R. Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail. 2021
2. Strauss, W. and N. Howe. The Fourth Turning:An American Prophecy. 1997
3. Kondratiev, N. D. "Die langen Wellen der Konjunktur." Archiv für Sozialwissenschaft und Sozialpolitik 56 (1926): 573–609. Abridged English translation: "The Long Waves in Economic Life," Review of Economic Statistics 17, no. 6 (1935): 105–115.
4. Schumpeter, J. A. Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process. 2 vols. New York: McGraw-Hill, 1939.
5. Perez, C. Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages. Cheltenham: Edward Elgar, 2002.
6. Benner, S. T. Benner's Prophecies of Future Ups and Downs in Prices. Cincinnati: Robert Clarke & Co., 1875.
7. The “Historians”:

• Toynbee, A. Lectures on the Industrial Revolution in England. London: Rivingtons, 1884. Delivered 1881–82; published posthumously. 
• Mantoux, P. La Révolution industrielle au XVIIIᵉ siècle. Paris, 1906. English trans. The Industrial Revolution in the Eighteenth Century. London: Jonathan Cape, 1928. 
• Ashton, T. S. The Industrial Revolution 1760–1830. Oxford: Oxford University Press, 1948. 
• Deane, P., and W. A. Cole. British Economic Growth 1688–1959: Trends and Structure. Cambridge: Cambridge University Press, 1962. 
• Hobsbawm, E. J. Industry and Empire. London: Weidenfeld & Nicolson, 1968. 
• Landes, D. S. The Unbound Prometheus. Cambridge: Cambridge University Press, 1969. 
• Cameron, R. "A New View of European Industrialization." Economic History Review 38, no. 1 (1985): 1–23. 
• Crafts, N. F. R. British Economic Growth during the Industrial Revolution. Oxford: Clarendon Press, 1985. 
• Wrigley, E. A. Continuity, Chance and Change: The Character of the Industrial Revolution in England. Cambridge: Cambridge University Press, 1988. 
• Crafts, N. F. R., and C. K. Harley. "Output Growth and the British Industrial Revolution: A Restatement of the Crafts–Harley View." Economic History Review 45, no. 4 (1992): 703–730. 
• Mokyr, J., ed. The British Industrial Revolution: An Economic Perspective. Boulder: Westview Press, 1993; 2nd ed. 1999. 
• Allen, R. C. The British Industrial Revolution in Global Perspective. Cambridge: Cambridge University Press, 2009.
• Mokyr, J. The Enlightened Economy: An Economic History of Britain 1700–1850. New Haven: Yale University Press, 2009.

Definitions

Federal Reserve: The central banking system of the United States that manages monetary policy to promote maximum employment and stable prices. It regulates financial institutions and maintains stability in the overall financial system.

Consumer Price Index: An economic metric that measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It serves as the primary tool for measuring inflation and deflation.

Global Supply Chain Pressure Index: An index created by the Federal Reserve Bank of New York that tracks global supply chain disruptions using shipping rates and manufacturing data. It helps gauge inflationary pressures stemming from logistical bottlenecks.

Standard Deviation: A statistical measurement that quantifies the amount of variation or dispersion in a set of data values. In finance, it is commonly used to measure investment volatility and risk.

Effective Federal Funds Rate: The volume-weighted median of overnight interest rates backed by transactions between depository institutions. It represents the actual rate at which banks lend to each other overnight.

Goldman Sachs US Financial Conditions Index: A weighted index that tracks stock prices, interest rates, credit spreads, and currency values to gauge the overall availability of credit in the U.S. economy. A lower index level signifies looser financial conditions that support economic growth.

S&P 500: A stock market index that tracks the performance of 500 of the largest companies listed on United States stock exchanges. It is widely regarded as the best single gauge of large-cap U.S. equities.

Earnings Per Share: A financial metric calculated by dividing a company's net profit by the number of its outstanding shares of common stock. It indicates how much money a company makes for each share of its stock.

Artificial intelligence (AI):Computer systems capable of performing tasks commonly associated with human intelligence, including learning, reasoning, pattern recognition, and content generation.

Cycle:A recurring or broadly repeating pattern in economic, market, technological, or demographic activity. The timing, duration, and shape of cycles can vary.

Supercycle:As used in this article, a long-duration cycle that can extend for 10 years or more.

Graphics processing unit (GPU):A processor designed for highly parallel computation and widely used in artificial-intelligence workloads.

Memory:In this context, semiconductor-based computer memory used to store and rapidly access data for computing workloads.

Infrastructure buildout:The expansion of physical and digital capacity, such as data centers, networking, power, cooling, and computing hardware, needed to support technology deployment.

Sine wave:A smooth, periodic mathematical wave used here only as a conceptual illustration of a repeating cycle.

Structural transformation:A long-lasting change in the structure or functioning of an economy, industry, or technology ecosystem that may not be recurring or cyclical.

Disclosures

This material is provided for informational and educational purposes only and is not intended as investment advice, a recommendation, or an offer or solicitation to buy or sell any security, investment product, or investment strategy.

The views expressed are opinions as of August 13, 2026, are based on information available at the time of writing, and are subject to change without notice. Forward-looking statements reflect current expectations and are inherently uncertain; actual outcomes may differ materially. No forecast or projection is guaranteed.

References to historical economic, market, demographic, and technological cycles are illustrative. Historical patterns may not repeat and should not be relied upon to predict the timing, duration, or outcome of future cycles, market events, or investment performance.

The image in this article was produced using ChatGPT and is a conceptual illustration only. It is not based on historical or empirical market data and is not intended to depict or forecast the timing, duration, amplitude, or sequence of any actual economic, technological, or market cycle.

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Publication Date: August 14, 2026

For Public Use in the US

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