What Is T Theory®?

T Theory® is a method of analyzing general investment trends using a time symmetry property discovered by Terry Laundry in the early 1970s. At that time the time symmetry was christened “The Law of Matched Trend Time” because it basically states the duration over which investors can obtain “superior equity returns” will always be equal to the previous time period in which returns were subnormal. A simpler way to put it is to say the market can only “make a strong run ” as long as it has previously ”rested.” As you might expect, the practical purpose of T Theory® is to anticipate the runs of “superior returns”.

This time match property can be shown to be reasonably accurate and reliable historically.  The time symmetry is most easily represented by the graphical “T” thus the name T Theory®.  In all instances the left side of the graphical T spans the market’s “rest period” or “cash build up” phase, while the right side spans the “ run period’ where returns should be the greatest.

For more information on the history of T Theory®, please see our LINKS page for an Introduction to T Theory® written by Terry Laundry in 1997.