The consulting group Gartner has developed a hype cycle for technology. It can be applied to just about any idea that is associated with investing. This hype cycle includes any idea about a firm, industry, or macro idea. There will be a trigger idea that gains traction which then reaches some form of peak. There will then be a period of disillusionment which will then be converted into some deeper enlightenment or truth until there will be a plateau of productivity which will be a normal set of expectations.
I may not put a lot of stock in the hype cycle, but I can say that there are memes that develop within the markets which become excess and subject to reversal only to see a normalization. For example, in case of an industry we can think about the hype associated with EV cars. In the macro arena, the meme that the Fed will cut rates took the markets by storm only to lead to current disillusion. We will likely see rates decline but base on the same arguments last quarter, but it will be tempered until sometime later. Unfortunately, the time frames for these cycles are highly variable. We will just have to accept there will be a hype cycle.
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