Building goes before a fall. Or at least that's how it looks to Kiril Sokoloff.
Mr. Sokoloff says one might call the top of a market by the timing of construction of the world's tallest buildings, namely, the Empire State Building, Sears Tower, the World Trade Center twin towers, Petronas Towers.
The president of 13D Research Inc., Ketchum, Idaho, and New York, and manager of Global Focus Fund Ltd., a hedge fund, said studying the monumental construction isn't just whimsy.
It reveals some fundamental, troubling signals about an economy.
Such construction, he said, "shows signs of overbuilding, overinvestment, excess spending, overconfidence, arrogance."
"It's really amazing," he said. "It's a small anecdote that gets you thinking."
He began to sour on the Asian emerging markets in part after he saw the construction in Kuala Lumpur, Malaysia, of Petronas Towers, which would be designated the world's tallest buildings.
"That's when I studied this situation and saw it in a different light and saw an economic crisis," he added.
He noted other "world's tallest buildings" were built at the top of the market in their eras: The Empire State Building, New York, was begun in 1929, just before the October crash that preceded the Great Depression; and Sears Tower, Chicago, and the World Trade Center Towers, New York, were begun just before the 1973 oil-embargo-induced stock market fall.
"What the world's highest buildings imply is enormous optimism, complacency and arrogance," he added.
"Shanghai was going to build the world's highest building (surpassing Petronas and Sears)," he added.
"But construction was stopped" because funding dried up.