THE great American writer Mark Twain once observed that while history does not repeat itself, it often rhymes.
In the stock market, a huge industry has grown around this perception, with legions of chartists peering over copious volumes of past data to try to decipher how the market will behave going forward.
It is perhaps in this light that geomancers, chartists and even respectable economists spend some time around this time each year to give their two cents’ worth on the year going forward.
Even though the new year and new decade has started about three weeks ago, for much of Asia, it is the Lunar year which kicks off on February 14 that matters to them.
And because the coming year happens to be a Tiger year, you can trust superstitious people to quake with fear over what it might bring.
Over the past five years, I have also taken to writing a column on the new lunar year, as characterised by the animal zodiac sign associated with it. It is quite a fun exercise and I enjoy doing it every year.
2007 was the year of the Golden Pig and the headline read that it was set to bring home the bacon for investors. As it turned out, the benchmark Straits Times Index surged to a record high of 3,865 in October that year – a high-water mark which is likely to stay unsurpassed for a long while.
The following year -2008 – was the year of the Earth Rat and I wrote that even before it arrived, the rodent had already gnawed a big hole in investors’ portfolios. STI went on to lose about half of its value that year.
Last year started on such a gloomy note that it was almost impossible to be cheerful about it at all. And the sub-editor reading the uncertain mood wrote the headline as “Bull charge or slow as an ox ?”
How prescient it turned out to be. Deep despair gave way to wild exuberance as thundering herds of bulls roared back into action and gave the local stock market its biggest rally in a decade.
Now that the Year of the Metal Tiger is about to arrive, what might the year bring ?
As I went through the history book for the momentous events that characterised previous Tiger years for this morning’s Cai Jin column, I could not help noticing the spate of human catastrophes that accompanied each of these Tiger years.
1914 was the start of World War One, 1926 was the year that Britain had a nationwide general strike – an event which would presage a global economic depression three years later, while one could trace 1938 as the year when the seeds of World War Two were sown when Germany invaded and partitioned Czechoslovakia.
It was followed by the Korean War in 1950 and the Cuban missile crisis in 1962 – an event which brought the US and Russia to the brink of a nuclear conflict.
But in the past 40 years, hot wars – involving huge of human lives - had gone out of fashion and the more recent Tiger years were characterised by big economic disasters.
So we saw a huge global recession in 1974 which was especially severe in countries such as Britain which was living beyond its means and could not balance its books - resulting in a run on the sterling when an inconclusive election produced a hung parliament. Doesn’t that remind us of a similar predicament which the UK is facing now, with elections just around the corner?
What triggered the slowdown in 1974 was sky-rocketing oil prices which unleashed hyperinflation around the world. This is incidentally also a big concern now, given the manner in which the US Federal Reserve and Chinese banks had been printing money non-stop over the past year.
Then there was 1998 when the Asian financial crisis was at its heights. The wounds inflicted by that Tiger year like the closure of the Clob market for trading of KL-listed stocks are still fresh for some of us.
Even 1986 – a relatively quiet year on the world front – brought back bad memories for some of us. Singapore was then suffering its first major slowdown since independence, and I remembered fresh graduates taking jobs which paid them only $800 a month.
No surprise then that the sub-editor should write the headline for my Cai Jin column as “Ride the unpredictable Tiger if you dare”. But there is also a picture showing off a tiger lantern which accompanies the column – a hope perhaps that this will be a paper tiger – with nothing to fear about.
Well, I do expect the year to produce a lot of surprises – given the manner in which all sorts of problems carried over from the global financial crisis have been carried over and have stayed unresolved. Let's hope that the surprises will mostly turn out to be pleasant.
In the meantime, investors should make the most of what is left of the Ox Year. Even though it was supposed to be an earth ox, plodding along slowly and steadily, it had morphed into a golden bull on a stock market rampage.
When last year started, people had wished that it would pass as quickly as possible. They are probably wishing otherwise now.