Last year was a shocker for insurance companies. A raft of large catastrophes took their toll on profits, with the usual "rainy day" reserves proving insufficient to meet the claims of policyholders.
Shares, on the news, took a beating.
Miners, on the other hand, had a great 2017 financial year. Prices were up, volumes were steady or higher, and that one-two punch sent profits (and share prices) soaring.
So sell insurers and buy miners, right? Not so fast.
First, no investor ever made money (other than through sheer luck) looking only in the rear vision mirror. Last year's profits belong to last year's investors. Buying (or holding) those shares entitle you to a piece of next year's profit, as surely as you can't collect last year's rent if you buy an investment property today.
After almost three decades without a recession, Australians could be excused for thinking the economic cycle is a relic of history. We really are living through a Goldilocks period of prosperity, even if it's not evenly shared.
But within that longer-term success, we've seen our share of economic volatility. The Asian financial crisis, the dotcom crash and global financial crisis each put the economy under pressure.
It's worth, then, reminding ourselves what economic volatility is; the inexorable - despite central bankers' best efforts - swings between optimism and pessimism. Between success and failure. Between, in both economic and investing parlance, boom and bust.
Those swings have been with us since at least the 1600s, with the most famous historical example being the Dutch tulip mania of that century, when otherwise rational people were paying the equivalent of house prices for tulip bulbs. It is perhaps bizarre, then, that it took the economics profession another four centuries to properly embrace the reality of humans as flawed economic actors.
Booms and busts - economic cycles - are a feature of all economies. And of the different parts of those economies. They are caused by human emotion - our inbuilt tendency to overreact to both good and bad news. Generally, the root cause can be traced back to extrapolation - the sense that whatever is currently happening will continue.
Iron ore selling for $140 per tonne during the mining boom, for example. Many investors were seduced into believing that the height of the boom was a "new normal". The concepts of the "super boom" and "stronger for longer" were born ??? and subsequently killed off, as economic reality imposed itself.
More bizarre are the impacts on mining company shares based on the overnight moves in commodity prices. If you're an investor, yesterday's gold or copper price means little - this year's profit (and next year's and the years after that) relies on future prices and production.
Insurers tend to be treated the same way. A few years of catastrophe-free profits do wonderful things to share prices, and shareholders somehow forget that bad things happen to insured buildings, cars and businesses. Then, when those catastrophes occur, share prices get hammered.
The irony - especially when it comes to insurance companies - is that those businesses are designed specifically to absorb catastrophes on behalf of policyholders. They are supposed to have good and bad years, thanks to their role as corporate shock-absorbers. But over time, if the policies are priced appropriately, insurers and their owners can make a decent profit.
As long as those owners pay the right price for their shares.
The stockmarket has often been described as a mechanism to transfer profits from the impatient to patient. It could just as easily be described as shifting wealth from those who forget about the reality of cycles to those who know it only too well.
Buying shares in cyclical businesses requires that you understand two key factors: firstly, that cycles exist, and second, that it's the average profit across the cycle which tells you whether you're getting a bargain or being taken for a ride.
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Scott Phillips is the Motley Fool's director of research. You can follow Scott on Twitter @TMFScottP or email ScottTheFool@gmail.com. The Motley Fool's purpose is to educate, amuse and enrich investors.