The Benner Cycle: The historical method that has predicted market movements for 150 years

The predictive accuracy of the Benner Cycle over a century and a half

Samuel Benner, an American farmer from the early 19th century, developed one of the most fascinating models for predicting economic cycles after personally experiencing the devastating effects of the financial panic of 1873. His curiosity to understand the cyclical patterns of the market led him to publish in 1875 the work "Business Prophecies of the Future Ups and Downs in Prices" (, where he presented an economic prediction method that has demonstrated astonishing accuracy for over 150 years.

Benner identified that market movements follow recurring cyclical patterns, categorizing them into three distinct phases that repeat systematically. His analysis successfully predicted significant economic events such as the Great Depression of 1929, the tech bubble of the early 2000s, and the crisis caused by COVID-19 in 2020.

The Three Phases of the Benner Cycle: Anatomy of Economic Cycles

The Benner model divides economic cycles into three clearly differentiated phases:

1. Years of Panic: Periods characterized by extreme volatility in financial markets, where price fluctuations are pronounced and unpredictable. During these phases:

• Investors operate with short-term horizons
• Investment decisions are often driven by emotional rather than rational reactions.
• Assets experience drastic price drops or, at times, unexpected surges.
• Market risk intensifies, requiring more sophisticated management strategies.
• Volatility creates both exceptional opportunities and significant risks.

2. Good times: They represent the optimal periods for asset liquidation, characterized by:

• High valuations across multiple asset classes
• Favorable conditions for the sale of stocks, commodities, and other financial instruments
• Strategic opportunities to materialize benefits
• Widespread optimism in the markets
• Potential signs of overvaluation that anticipate future corrections

3. Hard Times: Phases that Benner identifies as ideal for the strategic accumulation of assets:

• Depressed prices that offer attractive entry points
• Opportunity to acquire quality assets at discounted valuations
• A good time to position oneself before the next bull cycle
• Widespread pessimism leading to significant undervaluations
• Basis for building positions that will maximize returns during the next phase of "good times"

The scientific basis of the Benner Cycle

Samuel Benner's intuition as a farmer allowed him to establish fundamental connections between natural and economic cycles. His analysis revealed:

• An 11-year cycle in corn and pig prices, with peaks every 5-6 years
• A direct correlation between this cycle and the 11-year solar cycle
• A 27-year pattern in iron prices, with lows occurring every 11, 9, and 7 years
• Peaks in the iron cycle that occur every 8, 9, and 10 years

Benner established that solar cycles directly affect agricultural productivity, which influences income, the supply-demand relationship, and consequently, market prices. This interrelation between natural and economic phenomena underpins the remarkable accuracy of his model.

"A certainty" verified for over a century

What Benner called "A Sure Thing" has shown extraordinary reliability through different eras and market conditions. His investment strategy, based on identifying positions within the economic cycle, has maintained a remarkable level of accuracy since its inception.

The effectiveness of the model is based on its ability to identify:

• Recurrent patterns in economic activity
• Optimal moments for the accumulation and distribution of assets
• Turning points in market cycles
• Periods of economic expansion and contraction

According to the current application of the Benner Cycle, we are in a phase of "hard times," which suggests a favorable environment for the strategic accumulation of assets before the next expansion cycle. The most experienced market analysts believe that this period could extend until 2025, when the cycle could enter a new phase according to the historical projections of the model.

The longevity and precision of the Benner Cycle position it as a valuable analytical tool for investors seeking to understand the cyclical patterns of the market and optimize their strategies based on the different economic phases.