The graphic below, Stages in a Bubble, was created by Professor Jean-Paul Rodrigue in 2008. Note the “New Paradigm” at the top. When I reference the idea of a “new paradigm” in my notes (like here and here), it is because it has long-been noticed that when the consensus thinks there is a new paradigm (as Artificial Intelligence represents in this cycle) to justify higher and higher stock valuations (i.e. NVIDIA), it is really a contrarian signal of the top of an economic cycle; like now.

Stages in a bubble

With NVIDIA flirting with a top (down 9% from its peak), the yield curve being inverted, the Leading Economic Index down 14.7% from its peak, and the Unemployment rate rising 0.6% from its low, the best long-term reliable indicators are clear about an upcoming recession; one is coming.

Note: I’ve put the last year of my notes onto my website so I can reference past ideas and are available.