Where will the “teens” take equities?

[Midpack]

A similar, even more useful chart IMO, starting from market lows instead of decade beginnings - also by Lsbcal (the OP on this thread)...thanks again.

http://www.early-retirement.org/foru...hat-63224.html

[Lsbcal]

Quote:

Originally Posted by Midpack A similar, even more useful chart IMO, starting from market lows instead of decade beginnings - also by Lsbcal (the OP on this thread)...thanks again. http://www.early-retirement.org/foru...hat-63224.html

I will post an update of that chart today. If one wants to start the clock ticking on the start of a bull market, that is perhaps a better chart.

To me the decades chart here is useful because it is easier to eyeball slopes (growth rates) to compare time periods. It is like taking a standard semilog chart, and making it return to 1 at the start of each decade. We could have returned it to 1 at year 3 or whatever, that is the arbitrary part. The way peaks and valleys line up between decades is unimportant.

[samclem]

Quote:

Originally Posted by Lsbcal I will post an update of that chart today. If one wants to start the clock ticking on the start of a bull market, that is perhaps a better chart. To me the decades chart here is useful because it is easier to eyeball slopes (growth rates) to compare time periods.

One advantage of the decades chart vs. the market bottoms chart: We can know in advance when a decade will begin. Not so much with bull markets.

[Midpack]

Quote:

Originally Posted by samclem One advantage of the decades chart vs. the market bottoms chart: We can know in advance when a decade will begin. Not so much with bull markets.

Yes, but how do market returns correlate with when a decade begins? Not at all that I'm aware of.

OTOH, you know when we're in a recession and the economic metrics (employment, GDP, etc.) and that a "bull" market will follow - admittedly the timing/duration of recessions and expansions are trickier (insert tongue in cheek smiley here). We know we're almost 4 years into an expansion now with a weak economy (by US historical standards at least), what comes next, who knows...though the charts show no expansion that lasted more than 6 years without some correction.

[Lsbcal]

By popular demand , I posted the new SP500 off of market lows chart here: http://www.early-retirement.org/foru...ml#post1265802

[Midpack]

Quote:

Originally Posted by Lsbcal By popular demand , I posted the new SP500 off of market lows chart here: http://www.early-retirement.org/foru...ml#post1265802

That's a keeper IMO. Can you update us all quarterly? just kidding...

[samclem]

Quote:

Originally Posted by Midpack OTOH, you know when we're in a recession and the economic metrics (employment, GDP, etc.) and that a "bull" market will follow - admittedly the timing/duration of recessions and expansions are trickier (insert tongue in cheek smiley here). We know we're almost 4 years into an expansion now with a weak economy (by US historical standards at least), what comes next, who knows...though the charts show no expansion that lasted more than 6 years without some correction.

Warning: DMT alert! DMT alert!

[Midpack]

Quote:

Originally Posted by samclem Warning: DMT alert! DMT alert!

No idea what DMT is, despite an attempt with Google.

Did I miss your reply regarding 'how market returns correlate to the beginning of each decade' from your earlier post?

[REWahoo]

Quote:

Originally Posted by Midpack No idea what DMT is, despite an attempt with Google.

Could be dimethyltryptamine, Detroit Metropolitan Transit, diamond machining technology or dirty market timer. You can probably find the answer here: http://www.early-retirement.org/foru...rum-34884.html

[samclem]

Quote:

Originally Posted by Midpack No idea what DMT is, despite an attempt with Google. Did I miss your reply regarding 'how market returns correlate to the beginning of each decade' from your earlier post?

Apologies-- "DMT" is an E-R.org local acronym: "Dirty Market Timer." Usually used in a lighthearted way to chide those who engage in attempts to get in and out of the market based on valuations, tea leaves, moving averages, moon phases, etc.

Regarding market returns and correlations to decade starts: I'm not aware of any correlation. It's just a handy mark on the wall.

[Midpack]

Quote:

Originally Posted by samclem Apologies-- "DMT" is an E-R.org local acronym: "Dirty Market Timer." Usually used in a lighthearted way to chide those who engage in attempts to get in and out of the market based on valuations, tea leaves, moving averages, moon, etc.

Thanks, I hadn't seen that one before that I recall. Didn't remember there was an ER.org acronym FAQ.

[Lsbcal]

Quote:

Originally Posted by samclem Apologies-- "DMT" is an E-R.org local acronym: "Dirty Market Timer." Usually used in a lighthearted way to chide those who engage in attempts to get in and out of the market based on valuations, tea leaves, moving averages, moon phases, etc. Regarding market returns and correlations to decade starts: I'm not aware of any correlation. It's just a handy mark on the wall.

I'll say this again just to be very clear -- there is no way to predict the future.

The charts and numbers are just ways to understand what has happened in the past. There might be some lessons for the present in past market correlations to economic variables, or there might not be. Personally I don't see how such information could be construed as market timing or even the suggestion of market timing.

The chart in the OP is not trying to show any correlations to decades. I thought I made that clear.

BTW, I don't consider market timing to carry any stigma. But dumb market timing (and there is plenty of that) is not my cup of tea.

[NW-Bound]

Quote:

Originally Posted by samclem One advantage of the decades chart vs. the market bottoms chart: We can know in advance when a decade will begin. Not so much with bull markets.

Quote:

Originally Posted by Midpack Yes, but how do market returns correlate with when a decade begins? Not at all that I'm aware of.

Quote:

Originally Posted by Lsbcal The chart in the OP is not trying to show any correlations to decades. I thought I made that clear.

Of course, there is no significance to the start of each calendar decade, other than it's just a convenient way to roughly reference a time period.

So, by quantizing or presenting the market return in the 10-yr modulo fashion in the OP, that helps us see that in the past, bad periods do not last longer than perhaps 10 years. Those periods do not coincide with any decade start of course, just that we have not had bad spells lasting a lot longer. That may just be the nature of economic cycles.

So, I wonder if the decade charts are remade with the start at another random year, such as 1927, 1937, 1947, etc..., would I still make the same conclusion that 10 years is about the length of a trough of an economic cycle?

Of course, that still does not answer the perennial question of whether the future will rhyme with the past.

"History does not repeat itself, but it does rhyme." - Mark Twain

[audreyh1]

Most of the cycles have really lasted about 16-18 years - bear cycles and bull cycles. It's really hard to pick that up on a chart cut into decade long pieces.

[NW-Bound]

Then, Lsbcal has to prepare different charts with truncation periods of 16-18 years, and of course with different punctuations, so that we might see some better patterns.

What bothers me about anything that deals with human-related activities such as economics is that human actions are so random and unpredictable. Else, one can just apply elementary Fourier analysis to pick up the period and phase of the economic cycles among the noise.

Darn crazy humans!

[Alan]

Quote:

Originally Posted by samclem Apologies-- "DMT" is an E-R.org local acronym: "Dirty Market Timer." Usually used in a lighthearted way to chide those who engage in attempts to get in and out of the market based on valuations, tea leaves, moving averages, moon phases, etc. Regarding market returns and correlations to decade starts: I'm not aware of any correlation. It's just a handy mark on the wall.

http://www.early-retirement.org/foru...rum-34884.html

[Lsbcal]

Quote:

Originally Posted by NW-Bound Then, Lsbcal has to prepare different charts with truncation periods of 16-18 years, and of course with different punctuations, so that we might see some better patterns.

Don't hold your breath on that one. At one point I did try aligning some with the Presidential cycle but didn't pursue it further.

Quote:

What bothers me about anything that deals with human-related activities such as economics is that human actions are so random and unpredictable. Else, one can just apply elementary Fourier analysis to pick up the period and phase of the economic cycles among the noise. Darn crazy humans!

And then there are the interactions of weather, diseases, and all sorts of natural phenomena like hurricanes and volcanoes (I'm thinking of major ones that could blow in Iceland).

[NW-Bound]

Quote:

Originally Posted by Lsbcal Don't hold your breath on that one. At one point I did try aligning some with the Presidential cycle but didn't pursue it further.

Oh doggone it! I thought I could talk you into doing more community services.

Quote:

And then there are the interactions of weather, diseases, and all sorts of natural phenomena like hurricanes and volcanoes (I'm thinking of major ones that could blow in Iceland).

Yes. But short of true world-wide disasters like the plague or the flu pandemic, most of catastrophic events in human history are self-inflicted, namely wars. Natural disasters pale by comparison.

I still say, damn stupid humans!

[Lsbcal]

Quote:

Originally Posted by NW-Bound ...(snip)... Yes. But short of true world-wide disasters like the plague or the flu pandemic, most of catastrophic events in human history are self-inflicted, namely wars. Natural disasters pale by comparison. ...

Maybe that appears so on a gut level.

But how are we to separate out the universe and terrestrial influences from human activity? One could make the case that within some local space (a sphere of maybe speed of light times 1 month radius) we exist in a complex interlinked system. Humans may be more affected by environment and even microbes then we imagine. Could be an interesting philosophical subject.