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It was on March 8, 1971, that Joe Frazier fought Muhammad Ali at Madison Square Garden in what was dubbed, “The Fight of the Century.” It was the first fight in the Frazier – Ali trilogy and while the fight did live up to its hype, the backstory preceding the bout is equally thrilling and, dare we say, culturally important. Nearly three years later the duo fought in the second of their three bouts and Ali took the rematch unanimously, but not without controversy. The third fight was colloquially known as “The Thrilla in Manila” though fight historians refer to it as “the greatest fight of all time” Ali won by TKO as Frazier’s trainer, Eddie Futch, asked the referee to stop the fight after the 14th round as he feared for his fighter’s life. Ali said that if the ref had not stopped the fight, then there was no way he was getting off his stool for the 15th and final round – “It was like death. Closest thing to dyin’ that I know of,” Ali said afterward.
At its most basic level, we believe “The Fight of the Century” from a market perspective is expressed in the relative chart below showing the S&P / Gold. We’ve been showing this relationship for some months now (see annotated comment) but believe that the long-term nature of prior down cycles – where gold outperforms – is not well respected. Certainly, the paucity of the cycles makes the evidence easy to dismiss. But, while presenting the cycle data in Stats class might result in a poor grade, presenting the cycle data in portfolio management class might just get you on the Dean’s List. The ratio is down, in gold’s favor, by 22% since its recent peak in December 2021. But if the limited history here is any guide, the down move favoring gold is still in its very early stages.
