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Updated: history of SP500 off major lows
Old 01-03-2016, 10:29 AM   #1
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Updated: history of SP500 off major lows

This is an updated chart through the 2015 close (thick blue line for current market). Good luck in 2016!



That dashed line is the slope of the stock market's average (after inflation) return of 7%. We appear to be going parallel with it for about the last 2 years. Not a bad thing if it continues.
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Old 01-03-2016, 10:30 PM   #2
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Interesting chart, though I don't really know what to make of it, other than the recovery looks to be on the good side of history?

Provides a nice perspective though - thanks!

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Old 01-04-2016, 03:50 AM   #3
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Why is the y scale not linear? Is the Y axis 0%?
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Old 01-04-2016, 05:21 AM   #4
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Why is the y scale not linear? Is the Y axis 0%?
I should let the OP respond, but the scale appears to be logarithmic with starting points all normalized to the same value. This lets you show steady growth (which is exponential) as a straight line, like the handily included 7% slope. In this case the Y axis starts at 1 rather than 0 since 1.0 times the initial value represents 0 growth.
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Old 01-04-2016, 06:21 AM   #5
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This chart is telling me a fairly good year ahead...today notwithstanding.
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Old 01-04-2016, 06:58 AM   #6
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Grest, can some body now call the next low?


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Old 01-04-2016, 07:12 AM   #7
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I have to admit, I never expected we would track the '82 line!
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Old 01-04-2016, 08:24 AM   #8
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Interesting chart, though I don't really know what to make of it
Maybe that is a useful conclusion in itself - that there's no obvious anomaly or pattern.

It also shows things like the dispersion of results, variance over time etc. Not a directly actionable observation but still helpful to know.
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Old 01-04-2016, 09:59 AM   #9
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I have to admit, I never expected we would track the '82 line!
Actually that is partly why I started tracking this stuff plus I wanted to get a feeling for the broad historical moves. I kind of hoped we'd track that '82 line.

I don't know what is coming next but am hopeful ... as always.
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Old 01-04-2016, 10:09 AM   #10
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Here is another view of similar data but using decade cycles. Of course, there is nothing terribly special about where to cut the graph up. But we do tend to think of decades like the 1990's where stocks zoomed up and we were all younger and brilliant investors.

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Old 01-04-2016, 10:12 AM   #11
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Maybe that is a useful conclusion in itself - that there's no obvious anomaly or pattern.

It also shows things like the dispersion of results, variance over time etc. Not a directly actionable observation but still helpful to know.
Good points. I would also add that first and second charts show that we are not living in an unusual time for the markets. Growth really does happen.
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Old 01-04-2016, 11:21 AM   #12
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I greatly appreciate this effort. It is not something I particularly need to make decisions, but it definitely gives clarity to what a recovery is, how long, etc.
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Old 01-04-2016, 11:33 AM   #13
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Thanks, we can't predict anything from it, but I enjoy looking at your periodic updates!
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Old 01-04-2016, 11:47 AM   #14
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Here is another view of similar data but using decade cycles. Of course, there is nothing terribly special about where to cut the graph up. But we do tend to think of decades like the 1990's where stocks zoomed up and we were all younger and brilliant investors.

Thank you. Very helpful in seeing the big picture (like just how awful the 2000's really were).
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Old 01-04-2016, 01:54 PM   #15
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This is an updated chart through the 2015 close (thick blue line for current market). Good luck in 2016!



That dashed line is the slope of the stock market's average (after inflation) return of 7%. We appear to be going parallel with it for about the last 2 years. Not a bad thing if it continues.
I like the graphs, but can you tell me why the May 70 low does not continue thru the full 84 months?
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Old 01-04-2016, 02:50 PM   #16
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Log chart and inflation corrected. Somebody knows what they're doing!
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Old 01-04-2016, 02:57 PM   #17
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I like the graphs, but can you tell me why the May 70 low does not continue thru the full 84 months?
I think that my intention when I set this up was to show rising markets and then perhaps a falloff. The Oct 1974 low (orange line) duplicates the later rising part of the yellow line which was really a rise off an SP500 low.

In that period there were 2 closely spaced bear markets (starting mid 1969 and mid 1973). Hence 2 rises off longish term lows. Of course, this is all semantics as these markets are continuous with nobody waving a flag at a local minimum and calling it the bear market lows. We know only after a few years that it was indeed a local minimum like in March 2009.

Since major declines are so emotional, it is well to remember that there has always been an end to declining markets and the rise can be explosive. That was my original intent with the chart.
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Old 01-04-2016, 03:00 PM   #18
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I like the graphs, but can you tell me why the May 70 low does not continue thru the full 84 months?
Because another bear hit in 74?
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