Three Laws of Market Behavior
Power Law
Understanding market behavior through three fundamental laws that govern economic cycles and investment opportunities.
Signal
Law of the Obvious
When something becomes undeniably visible, capital must react.
The measurable trigger that forces attention.
Criteria (tests)
These four criteria are the gate: if a trend fails them, it's noise.
Note: A Structural Signal can be a cycle-within-cycle (sector/budget shift) or a full cycle reset — the gate is the same.
1
Novelty
Hasn't happened in recent history / breaks the local pattern library.
Test:Outside recent cycle memory (last cycle / ~5–15y)?
Why:If common, already priced.
2
Observability
Measurable, verifiable, not vibe-based.
Test:Hard data, rule change, or price move?
Why:Keeps you from narrative chasing.
3
Persistence
Long enough to matter for allocation (not just trading).
Test:Likely persists 12–36 months?
Why:Structural signal, not noise.
4
Capital Gravity
Forces money to move (budgets, capex, risk premia, flows).
Test:Changes spending, financing, or returns?
Why:Capital flow = mechanism that makes it real.
Examples
•
Market pain: Inflation, yields, or valuations in 90+ percentile
•
Policy shift: Fed pivot from QE to QT, new tariff regime, industrial policy changes