Comments on: Chart of the day: Dow 1914-1929 vs. 1982-1999 http://www.creditwritedowns.com/2009/03/chart-of-the-day-dow-1914-1929-vs-1982-1999.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: stilettoheels http://www.creditwritedowns.com/2009/03/chart-of-the-day-dow-1914-1929-vs-1982-1999.html#comment-4573 stilettoheels Tue, 31 Mar 2009 01:46:12 +0000 http://www.creditwritedowns.com/?p=7609#comment-4573 I assume that these Dow charts are nominal, index only. You may be interested in the chart of the <a HREF="http://dshort.com/" rel="nofollow">Four Bad Bears</A> from Doug Short. A better comparison would be real, total returns. The S&P500 (a superior index in my opinion) data is available from <a HREF="http://politicalcalculations.blogspot.com/2006/12/sp-500-at-your-fingertips.html" rel="nofollow">Political Calculations</A>. The real, annualized total return for your 5 charts listed in order of appearance are: 1... 9.82% 2..14.40% 3... 6.10% 4... 9.32% 5... 8.02% I'm certain that most equity investors would be pleased with a 8.02% annualized real, total return for the 8 years ending in 2015. Inflation and dividends matter. I assume that these Dow charts are nominal, index only. You may be interested in the chart of the Four Bad Bears from Doug Short.

A better comparison would be real, total returns. The S&P500 (a superior index in my opinion) data is available from Political Calculations.

The real, annualized total return for your 5 charts listed in order of appearance are:

1… 9.82%
2..14.40%
3… 6.10%
4… 9.32%
5… 8.02%

I’m certain that most equity investors would be pleased with a 8.02% annualized real, total return for the 8 years ending in 2015. Inflation and dividends matter.

]]> By: aitrader http://www.creditwritedowns.com/2009/03/chart-of-the-day-dow-1914-1929-vs-1982-1999.html#comment-4568 aitrader Mon, 30 Mar 2009 13:52:01 +0000 http://www.creditwritedowns.com/?p=7609#comment-4568 I think you are likely right about the low rate and delay. Certainly worth further analysis. Looking forward to reading it. I think you are likely right about the low rate and delay. Certainly worth further analysis. Looking forward to reading it.

]]> By: Edward Harrison http://www.creditwritedowns.com/2009/03/chart-of-the-day-dow-1914-1929-vs-1982-1999.html#comment-4567 Edward Harrison Mon, 30 Mar 2009 12:03:57 +0000 http://www.creditwritedowns.com/?p=7609#comment-4567 I have been toying with an idea regarding this that I may write up: that is that the original difference between 1929-1942 and today came from the 1% policy response by the Fed in 2003 and that this has meant a different outcome and a delayed deflationary threat. I do not think we are completely out of the woods here due to banking fragility in the U.S. and Europe in particular. However, I am now leaning toward an inflationary rebound as a likely outcome. So, aitrader, like you, I see CRE as a particularly nasty fly in the ointment. We shall see whether it proves fatal. I have been toying with an idea regarding this that I may write up: that is that the original difference between 1929-1942 and today came from the 1% policy response by the Fed in 2003 and that this has meant a different outcome and a delayed deflationary threat. I do not think we are completely out of the woods here due to banking fragility in the U.S. and Europe in particular. However, I am now leaning toward an inflationary rebound as a likely outcome.

So, aitrader, like you, I see CRE as a particularly nasty fly in the ointment. We shall see whether it proves fatal.

]]> By: aitrader http://www.creditwritedowns.com/2009/03/chart-of-the-day-dow-1914-1929-vs-1982-1999.html#comment-4565 aitrader Mon, 30 Mar 2009 06:09:06 +0000 http://www.creditwritedowns.com/?p=7609#comment-4565 As is often said, history doesn't repeat but it does rhyme. Prognostications are hard to pinpoint with any accuracy but I think your chart comparisons are apt and telling. I would just add that the current downtrend seems unlikely to have hit bottom and the 1937 comparison, though it mirrors the current market snapshot, may not be the entire story. My bet is that we see a further breakdown below the 6550 level by Summer leading the DOW to levels not seen since the late 1980's. I base this on an expected collapse in commercial real estate, mirroring the ongoing collapse in residential markets, the ongoing collapse in international trade, and dismal earnings figures in DOW components over the next two quarters. If it's any consolation to folks in North America, it appears Europe is unwilling or unable to get its already unstable house in order and things will likely hit first and hardest there than in other regions. As is often said, history doesn’t repeat but it does rhyme.

Prognostications are hard to pinpoint with any accuracy but I think your chart comparisons are apt and telling. I would just add that the current downtrend seems unlikely to have hit bottom and the 1937 comparison, though it mirrors the current market snapshot, may not be the entire story.

My bet is that we see a further breakdown below the 6550 level by Summer leading the DOW to levels not seen since the late 1980′s. I base this on an expected collapse in commercial real estate, mirroring the ongoing collapse in residential markets, the ongoing collapse in international trade, and dismal earnings figures in DOW components over the next two quarters.

If it’s any consolation to folks in North America, it appears Europe is unwilling or unable to get its already unstable house in order and things will likely hit first and hardest there than in other regions.

]]> By: Gregor http://www.creditwritedowns.com/2009/03/chart-of-the-day-dow-1914-1929-vs-1982-1999.html#comment-4564 Gregor Mon, 30 Mar 2009 03:37:02 +0000 http://www.creditwritedowns.com/?p=7609#comment-4564 Thankyou. It's about time someone did this chart series in a single post. This has been my operating thesis for some time. Our 2007 to 2009 decline is more severe than the 1937 decline for various reasons, most of them fundamental. However, the fact that we made a new high in the broad market this time around probably has something to do with it. (Though the COMPQ of course is more like the INDU of the 1930s). Good post. Thankyou. It’s about time someone did this chart series in a single post. This has been my operating thesis for some time. Our 2007 to 2009 decline is more severe than the 1937 decline for various reasons, most of them fundamental. However, the fact that we made a new high in the broad market this time around probably has something to do with it. (Though the COMPQ of course is more like the INDU of the 1930s).

Good post.

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