Brothers, let's clarify what cycle we are in.
Making money through investments is simply going with the flow.

01. Wealth in life relies on Kondratiev waves, not mysticism.
Rather, it is about respect for economic laws.
By 2025, we stand at the end of an old cycle and the beginning of a new one. It is no exaggeration to say that those who miss the cryptocurrency market in 2025-2026 are likely to regret it for a lifetime.

Only by understanding trends, respecting risks, and maintaining flexibility,
can one become a winner of 'fate' and 'luck' in the sixth Kondratiev wave.

There is a well-known secret in the circle of the rich: success in life mainly relies on cycles, not effort. I don't know if everyone believes this, but I firmly do.

If you don't believe it, just look at those who have become wealthy in China over the past 20 years:

The coal bosses in Shanxi, who can't read a word, don't understand business models or enterprise operations; they just find a coal mine and dig like crazy, then adorn themselves with 999k gold necklaces.

Then there are the landlords in big cities like Beijing, Shanghai, Guangzhou, and Shenzhen, many of whom only graduated from elementary school and can barely speak Mandarin, yet their monthly income is enough for you to spend half a lifetime.

If you say it's about hard work, I believe that both the migrant workers on construction sites and the college students who have studied hard for over a decade are working harder than them, yet the gap in life is far beyond our imagination.

This is the power of cycles; you don't need to work too hard—just hit the right timing, and you can achieve decades of progress in less time than others.

Speaking of investments, cyclicality arises from the contradiction between one-time expenses in investments and the installment nature of income, as well as the contradiction between certain expenses and uncertain future income.
Some investments require decades of continuous effort to recoup the initial investment. Others might take only a few days, some need ten years, and others five.
Depending on the return cycle, cycles can be divided into several types.

02. Kitchin Cycle: Short Cycle
In 1923, British statistician Kitchin conducted a detailed study of price levels, bank settlements, and interest rates in the UK and the US between 1890 and 1922. In his article 'Cycles and Trends in Economic Factors', he pointed out that economic cycles actually consist of major cycles and minor cycles. The average length of a minor cycle is about 40 months (3-5 years), and a major cycle includes two or three minor cycles. This cycle with an average length of 40 months.

Hansen calculated that there were 37 such cycles in the US from 1807 to 1937, with an average length of 3.51 years.

The Kitchin cycle, also known as the inventory cycle, is primarily driven by inventory levels. As shown in the figure below, the cyclical nature of finished goods inventory in China over the past 20 years perfectly matches the Kitchin cycle.

Why is this the case?
As mentioned earlier, the main reason for the formation of cycles is the contradiction between one-time expenses and installment income in investments, as well as the contradiction between certain expenses and uncertain future income.

This is a deeper reason; on top of this reason is the contradiction between slow supply and fast demand.

We only need one night to decide whether to eat meat tomorrow, but the breeding cycle for pigs takes six months. We only need one night to decide whether to expand solar investment, but building a solar plant takes about two years.

Therefore, when demand changes rapidly and supply cannot keep up, a transition from supply shortage to oversupply will occur, accompanied by periodic fluctuations in inventory. Hence, a typical inventory cycle consists of four stages: proactive restocking, passive restocking, proactive destocking, and passive destocking.

Why is this cycle 40 months?
On one hand, many industries have an expansion cycle of about 1-2 years, and after the expansion ends, the fundamentals often change; on the other hand, there is the debt cycle.

Generally speaking, the corporate bond cycle is 2-3 years. For example, the latest data shows that the weighted average transaction term for secondary capital bonds, perpetual bonds, and general commercial bonds is 3.53 years, 3.34 years, and 2.08 years, respectively; they must be repaid upon maturity, creating contraction pressure.

Thus, the peaks and troughs of the inventory cycle are often accompanied by monetary easing and tightening, and sometimes there are noticeable inflation changes. When supply is insufficient, inventory is low, prices rise, leading to inflation, which in turn drives up interest rates, suppressing demand, restoring supply, and then entering the oversupply phase.

In this process, asset prices will fluctuate up and down. Investors only need to buy at the bottom of the fluctuations and sell at the top to ride the waves.

03. Juglar Cycle: Medium Cycle
In 1860, French economist Juglar wrote a book called 'On the Business Crises and Their Cycles in France, England, and the United States'. In it, he mentioned that the emergence of crises or panics is not an isolated event but just one of the three stages that economic society continuously faces: prosperity, crisis, and depression. These three stages repeatedly form cyclical phenomena, with an average cycle length of 9-10 years.

Hansen referred to this cycle as the major economic cycle and calculated that from 1975 to 1937, there were 17 such cycles in the US, with an average length of 8.35 years.

The Juglar cycle is also called the fixed asset investment cycle. As mentioned in the short cycle, the speed of corporate expansion controls the cycle, while the driving factor behind the Juglar cycle is the updating of equipment.

Because equipment depreciates; after a long time of use, it naturally becomes unusable. Moreover, due to technological updates, the efficiency of old equipment often becomes inadequate, resulting in the need to purchase new equipment after a certain cycle, thus driving an upward cycle. Once the equipment is updated, demand suddenly contracts, and the economy enters a downward cycle.

The depreciation period for fixed assets is clearly stipulated in accounting standards, with different types of fixed assets having different minimum depreciation periods. For example, the depreciation period for airplanes, trains, ships, machinery, and other production equipment is 10 years.

Therefore, when measuring the Juglar cycle, the proportion of fixed asset investment to GDP is often observed. However, the timing of this cycle is not fixed. For instance, in the recent cycle, the overlap of equipment cycles with the real estate cycle has led to a long-term decline in fixed asset investment, which is a main reason why China has been struggling in recent years.

Why does the Juglar cycle exhibit significant fluctuations?
Firstly, the depreciation cycles of different equipment vary greatly, and short cycles must comply with long cycles. For example, cars have a cycle of 6-10 years, real estate has a 20-year cycle, and automobiles must conform to the real estate cycle.

Secondly, equipment has high capital demand, requiring supportive credit policies.

Thirdly, technological advancements drive updates, but technology development is uncertain, sometimes rapid, sometimes slow.

In addition to the Juglar cycle, there is another 20-year cycle called the Kuznets cycle or real estate cycle. In 1930, American economist Kuznets proposed an economic cycle related to real estate, lasting about 15-20 years, with an average length of 20 years.

It’s actually quite simple, as people typically buy property at this cycle: in their 20s, they buy a house to start a family, and by their 40s, they look for improved housing. At the same time, people tend to have children around 20, and 20 years later, the next generation becomes adults and needs housing.

04. Kondratiev Cycle: Long Cycle
In 1925, Russian economist Kondratiev, in his book 'Long Waves in Economic Life', discovered a relatively long economic cycle based on changes in wholesale price indexes, interest rates, wage levels, foreign trade volume, and coal production and consumption in the US, UK, and France over more than a century, with an average length of 50 years.

Kondratiev divided the period from the 1780s to 1920 into three long cycles:
① 1789-1849 (25 years up/35 years down, 60 years);
② 1849-1896 (24 years up/23 years down, 47 years);
③ 1890- (24 years up/).

A typical Kondratiev cycle consists of recovery, prosperity, recession, and depression. Technological bubbles are usually a sign of prosperity, while supply-side reforms often signal a global downturn.

Regarding this cycle, I wonder if you've heard a famous saying: 'Wealth in life relies on Kondratiev waves'. Here 'Kondratiev waves' refers to Kondratiev's long wave cycle, also known as the Kondratiev cycle.

What does this mean?
"The accumulation of wealth for each of us should not be thought of as merely our own ability; rather, it is entirely based on the stage of economic cycle movement that presents opportunities to you."

"In theory, there are three opportunities in a person's life. If you miss even one opportunity, you will lose out on your entire wealth. If you seize one, you can at least become middle class, and these three opportunities can be traced within the Kondratiev cycle."

Some have even systematically classified past Kondratiev cycles:
√ The first Kondratiev cycle began in 1780-1790 and ended in 1830-1840, initiating the first industrial revolution represented by steam engines and textile machines, during which the Rothschild family rapidly rose.

√ The second Kondratiev cycle began in 1840-1850 and ended in 1900-1910, leading to the second industrial revolution represented by railroads, internal combustion engines, and steel, during which the Rockefeller family quickly amassed wealth.

√ The third Kondratiev cycle began in 1910-1920, ushering in the age of electricity, heavy chemicals, and automobiles, ending in 1960-1970, during which the Ford family wrote legends riding the tide of the era.

√ The fourth Kondratiev cycle began in 1970-1980, represented by the rise of the internet, electronic products, and communication technology, expected to last until 2020-2030, during which technology entrepreneurs like Bill Gates created immense wealth.

√ The fifth Kondratiev cycle is expected to begin from 2020-2030, characterized by artificial intelligence technology, along with new energy and life sciences, reaching its peak by the middle of this century. This Kondratiev wave will likely surpass the previous four cycles, bringing unprecedented historical changes to human society and creating an unprecedented myth of social wealth.

In China, there is a very famous researcher on Kondratiev waves named Zhou Jintao.
He successfully predicted the subprime mortgage crisis in 2007,
pointed out the turning point of the real estate cycle in 2013,
successfully predicted the global asset price turmoil in 2015,
and in November 2015 predicted that the Chinese economy would hit bottom in the first quarter of 2016.
The saying 'Wealth in life relies on Kondratiev waves' is his famous quote.
He also has another famous saying: 'When a technology penetrates into every corner of a country, it has certainly reached the final stage of its life cycle.'

However, the hero passed away early. Yet before his death, during a speech in 2016, he asserted that 2016-2026 would be the downturn phase of the Kondratiev wave, and indeed, it feels somewhat stagnant now.

Specifically, he believed that 1975 to 1982 was the downturn phase of the previous Kondratiev wave. This Kondratiev wave began to recover in 1982, with the American information technology bubble from 1991 to 1994 marking the prosperity of this wave. After the American bubble burst, the economy grew for another seven to eight years until 2004, which was the prosperous period of this Kondratiev wave, continuing until 2008, which was essentially the golden period of this Kondratiev wave. The period from 2004 to 2015 represents a recession, while 2016-2026 will be the downturn phase of this Kondratiev wave.

According to this theory, this means that starting in 2026, we will welcome a new round of recovery in the Kondratiev wave, a financial player's wealth cycle, and an unprecedented bull market may be on the horizon.