The Fourth Turning Theory

There is a concept that everyone in the market should understand: Strauss and Howe's "Generational Theory." In simple terms, history tends to cycle every 80-90 years, with each cycle divided into four stages, each lasting about 20 years.

The Four Turnings:
- High (High) is the period after a crisis. Institutions are strong, society is united, and the economy is on the rise. Individualism is at its lowest, and everyone is working for the collective good.
- Awakening is when society begins to rebel. Spiritual exploration, protest movements, cultural revolutions. People grow tired of order and seek freedom.
- Unraveling is when institutions weaken, and trust in authority declines. Individualism flourishes. Everyone looks out for themselves.
- Crisis is a time of great upheaval. War, revolution, economic collapse. The old order is destroyed, and a new order is built on the ruins.

Why is this especially worth paying attention to now?

According to this theory, the last major crisis was World War II (1940s). Adding 80 years brings us to the 2020s. The COVID-19 pandemic, inflation, the Ukraine war—now there are conflicts in Iran, energy crises, and a crypto winter. All these align with the characteristics of a crisis period.

Interestingly, after every crisis, a high-growth period follows. New institutions, new technologies, new growth. After WWII, the world experienced the largest economic boom in history.

If this theory is reliable, then we are currently in the most difficult phase of the entire cycle. But it is precisely during this phase that new opportunities emerge—those that will shape the next decades. Crypto, AI, blockchain—all could become the foundation of the next high-growth cycle.

This isn’t about hype; it’s about understanding the cycle. Knowing which stage we’re in helps you stay calm during market crashes and avoid getting overly excited during rapid rallies.