My Elastic Band Theory of our Universe

A few people who know me may have heard this one before. What I didn't realize until today, is that there actually is an Elastic Band Theory of tectonic plates as they relate to earthquakes as well as a theory called The Rubber Band (Dark Energy) Theory of the Universe - which relates to Einstein’s theory of relativity. The real thing is actually very scientific and perhaps geeky (as seen in this video).

I have tried to relate my thinking around the elastic nature of the universe to both cosmological and everyday aspects of life - including consumer behavior. It may be particularly relevant given the level of fear and panic in the financial markets right now.

I once used the concept of balancing on a fulcrum in a historical market analysis and strategy proposal to a wealth management client.

But a snapshot of the Rubber Band Theory video in midstream looks a lot like what the markets have done just as I have written this today:

Here are thoughts or examples around the broader concept:

• Everything is in a relative state of balance – not completely predictable, yet predictable from a larger perspective. The earth revolves around the sun in an elliptical orbit (versus circular).
• Our four seasons change and are predictable, but the weather next week is not.
• The circle of life is real but the variables often relatively vast. For instance most people on this planet will probably live within a short distance of where they have grown up, but the details of their lives, including relationships, jobs, etc are less predictable.
• When extreme forces push in one direction (political for an example), forces develop to push back.

I suppose this also relates to Newton’s Third Law of physics that for every action there is an equal and opposite reaction – although I’m not certain about the “equal” part. It may also relate to the idea of Yin-Yang or other balance concepts.

Unless we are witnessing the complete end of the stock market – which hardly seems likely from a hundred year perspective,
we are nearing one end of an elastic band as it relates to investor confidence. I would suggest there are significant opportunities to take advantage of the fact that the band will begin to contract soon. Exactly when is the less predictable time (and conditions) up for debate. But heck, the massively capitalized and strong business performance Dow stocks rather than just the Dogs of the Dow appear to be a huge bargain right now. We all know the smart investor will buy low and sell high. "Warren Buffet's Dirty Little Secret" really isn't that much of a secret.
Now if I only had a steady income and more cash in my pocket right now. Or the guts and patience to borrow and make money with other people’s money – which is what the credit markets are all about.
If anyone is reading this, I would love to hear your ideas of how the Elastic Band Theory of the Universe might work in other aspects of your life (or not).
Finally, on a related but different note, I find it just a little disturbing on a cosmological level that astronomers discovered (in 1998) that the expanding universe is actually accelerating vs. slowing down at the moment (perhaps my rubber band theory has holes?).