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Recession and the stock market
10-30-2007, 07:10 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Nov 2006
Posts: 2,288
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Recession and the stock market
OK, so lets assume that we are in or will very shortly will be in a recession.
How has the stock market perforemd in previous recessions?
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10-30-2007, 08:53 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,006
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If we were already in a recession, the stock market would have sold off 6 months ago - say 20%. It did sell off 10% over the summer, but since recovered to new highs and has pulled back a little.
You really can't know/predict this stuff!
Usually, the market sells off pretty hard 6 months ahead of a recession. But there are lots of other reasons why the market might sell off.
Audrey
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10-30-2007, 09:30 AM
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#3
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Recycles dryer sheets
Join Date: Oct 2007
Posts: 156
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(ETF) SH might be a good bet if you think your timing and knowledge are correct.
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10-30-2007, 01:35 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Nov 2006
Posts: 2,288
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I have no idea if we are in a recession or heading for one. Im just asking how the market has reacted in previous recessions.
Wasnt there a recesison in '90-'91? The market did pretty good during that timeframe.
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10-30-2007, 02:09 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Posts: 1,703
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Recessions mean that earnings drop. The stock market does not like recessions. The last one was in 2001, and you remember how that went.
Here's 1990:
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Emancipated from wage-slavery since 2002
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10-30-2007, 04:03 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Nov 2006
Posts: 2,288
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The conditions today are even remotely close to 2001. I would bet they are closer to 1990 than 2001.
The chart shows the DJIA market flat and the Nas up during that recession. Besides, thats only 7 months. That doesnt mean much of anything.
Is there any multi - recession data?
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10-30-2007, 04:12 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Posts: 1,703
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Quote:
Originally Posted by utrecht
The conditions today are even remotely close to 2001.
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You're right. We're having a *much* bigger housing bust this time. Probably Japan-1990 is a better analogy.
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Emancipated from wage-slavery since 2002
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10-30-2007, 06:35 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,455
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Quote:
Originally Posted by twaddle
You're right. We're having a *much* bigger housing bust this time. Probably Japan-1990 is a better analogy.
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Are you pretty much in cash already?
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10-30-2007, 06:43 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Posts: 1,703
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Quote:
Originally Posted by Spanky
Are you pretty much in cash already?
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No, I'm going down with the rest of you.
There's no way to predict the duration or magnitude of a recession. I think we'll probably have one, and I may do some "tactical allocation" if the indicators become more bearish.
In the meantime, I get my thrills with an occasional options-based bet.
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Emancipated from wage-slavery since 2002
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10-30-2007, 07:14 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,006
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Quote:
Originally Posted by utrecht
I have no idea if we are in a recession or heading for one. Im just asking how the market has reacted in previous recessions.
Wasnt there a recesison in '90-'91? The market did pretty good during that timeframe.
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No, the market did poorly going into it.
Remember, the market sells off before the recession, during the recession - at least towards the end of it, the market recovers.
Audrey
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10-30-2007, 08:37 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Nov 2006
Posts: 2,288
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Well, if earnings are bad during a recession and the market sells off before a recession, then we arent in one.
Earnings have been mostly good and the market is definatley not selling off.
I think this is all just mumbo jumbo. Its like chart reading. You can make it say whatever you want it to say.
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