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Comparing Bear Markets from 1929 to Early 2009
Old 02-25-2009, 03:00 PM   #1
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Comparing Bear Markets from 1929 to Early 2009

As of Feb 24th:

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Old 02-25-2009, 03:01 PM   #2
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2000-2002 Tech Bubble does not look so bad now.
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Old 02-25-2009, 03:06 PM   #3
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No, I'm not calling a bottom, but if one considers this the second major down leg of a secular bear market that started in 2000, that would have mapped to about 1938 in Depression-era bear market and in late 1974 in the 1966-82 secular bear market. And note that the sharp declines ending in 1938 and 1974 were of about the same magnitude, nearly a 50% haircut.

Not significant, perhaps, but I find it a little interesting in a can't-take-my-eyes-off-the-train-wreck sort of way.
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Old 02-25-2009, 03:17 PM   #4
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No, I'm not calling a bottom, but if one considers this the second major down leg of a secular bear market that started in 2000,
I am looking at it in terms of weeks. The average is about 90 weeks.

Based on that I am thinking another 12-15% down and another 15-20 weeks.

Lower forward earnings = price contractions in share prices.
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Old 02-25-2009, 04:54 PM   #5
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Nice chart there! It would be interesting to see the same thing done for bull markets that started at the end of those periods.
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Old 02-25-2009, 04:58 PM   #6
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Nice chart there! It would be interesting to see the same thing done for bull markets that started at the end of those periods.
Well, the single best calendar year on record for U.S. stocks was 1933, so...
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Old 02-25-2009, 06:02 PM   #7
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Well, the single best calendar year on record for U.S. stocks was 1933, so...
Yes, a very good year. Here is a link to a brighter-side-of-the-Depression story:
http://www.marketwatch.com/news/story/Finding-a-silver-lining-Great/story.aspx?guid={08E3BCA1-506B-4A66-839C-C128CFEA6546}

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Furthermore, over the five years beginning at the end of 1930, the stock market, on an inflation-adjusted total-return basis, produced a 7% annualized return -- notwithstanding the 60% drop in the first five months of that five-year period.
In other words, even if you had been so unlucky as to buy stocks right before a six-month decline of 60%, you would have been whole again within just two years and would have earned a 7% real return over the next five years.
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Old 02-25-2009, 07:51 PM   #8
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Using technical analysis, I integrated the product of the cosine of the asymtote, then divided by the number of ice cream cones it takes to cover a dog house, and concluded the we're about at the median length-wise, but percentage decline is a different story...
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Old 02-25-2009, 08:06 PM   #9
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The current line is the closest in slope to that of the great depression! Eerie!
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Old 02-25-2009, 08:12 PM   #10
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Only steeper...
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Old 02-25-2009, 08:13 PM   #11
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Only steeper...
And, unless we are lucky, it isn't over yet!
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