Click chart to enlarge:
(Source: Google Finance)You have heard us reminisce about 1974 in articles and comments.
And you've read many, many "scary charts" in the last several months.
And you have no doubt been asked, "Are you scared?"
For me, I remember 1974. When you've been scared once and lived to see a much brighter day, it makes it much easier to endure and face fear the next time around.
I offer the chart above as a reminder that we have been through stock market times like this before and there is no doubt in my mind that better stock market times are just around the corner.
Posts
Except the market has dropped below 6480 which takes it completely off the bottom of your chart.
ReplyDeleteAnonymous,
ReplyDeleteThanks for reading and for your close inspection of the charts of the two stock market "bear dips."
The google tool I used was not precise enough for me try and align the worst delta for 1974-1975 either. The worst "peak to trough" during that down turn was about 48% for the S&P500 from 1/11/73 to 10/3/74. (I only show a 43% drop on the 70s DOW chart.) The chart for the mid-70s as well as for the recent bear market is to demonstrate that -- for some of us -- we have already experienced a bear like this before. (Many of us just forgot.) As you point out, this bear is more extreme on the DOW than the charts show -- but as I've noted in this comment -- the bear of 1974 was more actually extreme than its chart suggests as well)
The point is: for some of us, we've already survived a bear in the 45-50% range. And even tho their were many preaching "the end of the world is near" back in the mid-70s, the country actually prospered quite nicely in the ensuing years. (With other major peaks and troughs in the major stock indexes along the way... which reminds me, this is actually my third -50% bear market... how could I forget 3/24/2000 to 10/09/2002? That S&P 500 bear? -49%)
Thanks again for reading and your comment.
GNE
I would advocate looking systemically and holistically at the entire economy - that is what GNE is doing with this blog.
ReplyDeleteThere are multiple metrics to look at the state of the economy. CNBC and others have a laser like focus on the stock market. If it bleeds, it leads as they say.
It aint great, but, as GNE is doing you can find good news every single day news that literally confounds and mystifies the "experts" (increase in retail, etc) - if you care to look for it. If you don't, then, by all means live with the anxiety and fear. I choose consciously not to be afraid.
"Tuesday Ramblings"
"Tuesday Ramblings"
Nicely said Tuesday.
ReplyDeleteGenerally I do not Post on Blogs, But I Would Like to Say That this Post Really Forced Me to do So! I Just Love Your Blog, Very Informative Post. Thank You!
ReplyDelete...Please Take a Minute to Visit My Stock Market Website as Well:
1. http://www.snurl.com/hotstocks
2. http://www.snurl.com/stockassault
Well spotted, well said - new reader from here on out. Well done. 3 days before the low. Wish I saw this earlier.
ReplyDeleteWhen people first get started in online trading, whether it is buying stocks for long-term holds, or as day traders, they usually feel a little threatened. There are a lot of terms out there that no one really seems to be able to explain to them, and are difficult to really understand. No matter how many issues of the Wall Street Journal that most people read, they are still unclear on puts and calls, options, shorts, bonds, IPOs, or any other term. They pretend they know what they are talking about, use the lingo, but tend to only buy and sell basic stocks.One of the most threatening parts of stock trading for many people is the charts. They think they have to be able to read and interpret a stock market chart, no matter what the parameters are, but in most cases, they do not. Some people make all of their trades, based entirely on the stock market chart of their holdings, while others never look at them at all. It all depends on the kind of trader you are.For more information visit us at:-Online Trading.
ReplyDelete