Famed market forecaster Robert Prechter has been, over the last 15 years, pioneering research in a new field called Socionomics - a blending of “social mood” measurements, and economics. Prechter’s thesis is that the social mood of society rises and falls intrinsically, in wave-like patterns.
During waves up, people feel good about life, and they bid up stock prices. During waves down, the opposite happens – social mood declines, and folks dump their stocks. They get more conservative in business life as well, which creates a negative feedback loop of sorts – one that is only broken when the market finally bottoms, and mood turns up once again (as it inevitably does).
Michael Flagg blogs about socionomics and social mood trends on his excellent site FutureJacked. I found Mike via a great guest article he wrote for The Socionomist, Bob Prechter’s newsletter dedicated to the observation of social mood trends. Since catching Mike’s piece, I’ve been reading his work regularly, and recently asked him if he’d like to get on the horn and chat about his latest thoughts and observations.
Mike graciously agreed, and we had a great conversation, covering a variety of topics, including:
- How socionomic theory acts as history’s “hidden engine”
- Why the Civil War broke out when it did
- Why Peak Oil is the ultimate negative mood trend story
- How to align your career and professional life with the broader trend in social mood
(In case the player above is not available, you can also use this link to listen to and download the interview).
Socionomics is becoming a very hot, and equally controversial topic. It seems like folks either love it or hate it – I personally find it very intriguing, and well worth paying attention to. I’m always up for a thoughtful alternative interpretation of history, and this certainly fits that bill in my opinion.
Again, you can stay up to speed on Mike’s observations at his insightful blog FutureJacked.
More on Socionomics:
- The stock market’s correlation with pop music trends – a case study on Katy Perry
- What’s actually driving Obama’s approval rating
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