Hi Jerome, I don’t want to speak for Andreas, but just throw out what I can share on this. I’m pretty sure that image is from Hedgeye and is part of their rate of change process. (I followed them for a while after Andreas’s suggestion and learned from it.) Eric Basmajian on seeking alpha I think has a process that uses similar rate-of-change analysis for for looking at macro and I think his articles are very good.
I did a bit of math on it over last 20 years as well as since 1968, and if I did my numbers right (not a given as I’m not sure I’m using “right” rate of change in all cases), while returns coming out of quads 3/4 have been bad over the past 20 yrs, returns subsequent to quad 4 (slowing gdp growth and falling inflation) weren’t as bad over long term - perhaps due to sometimes getting big rallies coming out of cyclical bottoms, and perhaps due to more rapid historic cyclicality than we see presently. (I’m not sure about this. The latter is just speculation, just musing out loud.) Subsequent returns to the quad 4s in the 80s and 90s seem to do pretty well - such that quad 4 seemed like a signal to get positioned into equities over that time frame. Figuring out and positioning for the coming “quad” is a big part of what hedgeye seems to do though.