From another thread that I may have slightly hijacked
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Quote:
Originally Posted by Snidely Whiplash
My reasoning for a quicker recovery than most expect would be:
(1) Montgomery's studies show we touch upon previous highs in relatively short order after a bear market trough - http://www.statefarm.com/_pdf/surviving_a_bear_market.pdf
The indices may not stay at those recovered levels, but it would at least give one a chance to re-evaluate / re-allocate resources.
(2) Although I'm not particularly fond of Ken Fisher, he makes some very good points here - Anticipate the V - Forbes.com
This very much looks like the start of a V recovery to me as evidenced by the extreme right side of this chart - .INX - S&P 500 INDEX - Google Finance
(3) The exceptionaly tremendous amount of stimulus we (country) have thrown at this recession has been historic in proportion. It has to have some affect. The after-affects (positive or negative) may be an issue down the road (time frame debatable). |
And ................
Quote:
Originally Posted by Snidely Whiplash
Oops, forgot one.......
(4) If you look at the return for the S&P 500 for the years after we suffer a major decline (ex. great depression, which I believe is NOT on the table) of more than 20% you see pretty decent returns.
1937 -32%
1938 +17%
1974 -26%
1975 +38%
2002 -22%
2003 +28%
For 2008 we were down 37%. And for 2009 we are just now even. This rally could be substantial and have quite a way more to go.
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And yet one more to add...
(5) James Paulson can articulate the "green shoots" much better than I can and our correlation to a similar / earlier crisis and recovery.
https://www.wellscap.com/docs/ecomon...date051109.pdf
I dont think we are nearly out of the woods yet, but I believe the end of the world is off of the table and recovery, even if it matches prior rates, will be much stronger than most expect.
Linear Mode
