Veteran investor mentions that every bull run follows a familiar cycle, from opportunity to optimism, euphoria, correction, and eventually a new opportunity again. Understanding this pattern can help investors avoid chasing expensive assets and make better long-term investment decisions.
In a post on X on 26 June 2026, Kedia explained that while the asset class, investment theme and market narrative may change over time, the underlying pattern remains remarkably consistent.
According to him, who understand this cycle are better positioned to grab the next opportunity.
The cycle every investor should understand
Kedia summarised the journey of every major asset class in one line:
“Opportunity > Optimism > Narrative > Euphoria > Correction > New Opportunity”
He further wrote, “Financial assets don’t move in a straight line. They move in rotation.”
According to Kedia, every major investment trend follows the same sequence. A genuine opportunity attracts early investors, optimism builds, a compelling narrative gains popularity, and more participants enter the market.
Eventually, excessive enthusiasm pushes valuations too high, leading to a correction. That correction, in turn, creates the next opportunity.
How this played out after COVID?
Kedia used the post- period (2020–2026) as an example of asset rotation.
He noted that Indian equities staged a sharp recovery after the pandemic and went on to become one of the world’s best-performing major markets between 2021 and September 2024, with many stocks delivering multibagger returns.
He wrote, “The narrative – India being the world’s fastest-growing major economy – was true. But as valuations became richer, optimism gradually turned into euphoria, and investors needed to moderate their return expectations.”
From there, leadership shifted across different asset classes instead of remaining concentrated in equities.
How leadership rotated across asset classes?
According to Kedia, market leadership changed multiple times over the past few years.
- Real estate gained momentum after equities.
- Cryptocurrencies became the next favourite, driven by themes such as digital gold, institutional adoption and a new financial system. Retail participation surged before volatility returned.
- Gold rallied as investors sought safety, while silver witnessed an even stronger rally amid excitement around artificial intelligence (AI), solar energy and electrification.
- Industrial metals, including copper, aluminium and zinc, benefited from themes such as infrastructure, energy transition and AI-led demand before beginning to soften.
- The AI revolution then shifted attention towards technology companies, semiconductor manufacturers, and markets closely linked to that ecosystem, particularly the US, Taiwan and South Korea. However, Kedia believes even this leadership will eventually change. He wrote, “This leadership too will eventually rotate.”
Kedia’s timeless investing lesson
Summing up his view, Kedia wrote, “Different asset classes. Different narratives. Different cycles. Same pattern. Different outcome for investors.”
He concluded with what he considers the essence of market cycles. “A good opportunity creates optimism. Optimism creates a narrative. The narrative attracts more participants. Participation fuels euphoria. Euphoria is followed by correction. And every correction quietly creates a new opportunity.”
What investors can learn?
It is important to understand that no asset class remains the market favourite forever. Equity, real estate, gold, cryptocurrencies, commodities and technology themes all go through phases of enthusiasm and correction.
Instead of investing based solely on headlines or prevailing narratives, investors may benefit from focusing on valuations, fundamentals and where an asset lies in its broader market cycle. Recognizing when optimism turns into euphoria, and eventually into a correction, can help investors spot the next investment opportunity.