Cycles Feel Permanent Until They Aren’t

By early 2024, the same stocks that people had written off were back at fresh all time highs. Meta Platforms had recovered sharply after being down roughly 75% from about $380 to $88. Nvidia was in the middle of a historic rally. Microsoft was trading at record levels. The Nasdaq had just delivered one of its strongest years in decades in 2023. Confidence returned quickly, almost like the drawdown never happened.

But late 2022 felt very different. The S&P 500 was down around 25% and the Nasdaq more than 35%. Inflation was elevated and the Federal Reserve was hiking aggressively. Recession seemed unavoidable. Banks were discussing 3,000 on the S&P. Michael Burry was floating levels near 1,800. The overall tone was that more downside was likely.

Around that period, I can’t even say I paid attention to gold. It wasn’t part of my focus. I was mostly watching equities bleed and managing positions. I only started noticing gold later when it randomly showed up in my bitget tradFi section. Before that, it barely crossed my mind. At the time I was already down on other holdings, so I ignored it. It didn’t feel urgent compared to everything else going on.

Meanwhile, Meta wasn’t alone. Amazon posted an unprofitable year. Alphabet saw ad revenue decline. Growth at Microsoft slowed. Tesla traded near $113 at its low. Institutions were cutting targets across the board. Selling felt rational because the macro backdrop supported the fear.

Then the shift began. Companies adjusted costs. Earnings stabilized. By mid 2023 inflation started cooling and the Federal Reserve hinted at pausing hikes. Meta followed with stronger earnings and a $40B buyback. Momentum changed. Stocks that were down 25% to 75% began climbing back, and the recovery extended further than most expected.

Markets have a way of making both extremes feel permanent. In drawdowns, it feels like prices will keep falling. At highs, it feels like they won’t drop. The cycle keeps proving otherwise.