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+--- Thread: Scary 1929 Market Chart - huh? (/showthread.php?tid=392)
Scary 1929 Market Chart - huh? - Dividend Watcher - 02-12-2014
Mark Hulbert of the Hulbert Financial Digest posted this article on Marketwatch:
http://www.marketwatch.com/story/scary-1929-market-chart-gains-traction-2014-02-11/print?guid=93670D26-9278-11E3-B214-00212803FAD6
This isn't the first time I've noted someone bring this up. This was published in several other places in the last month or two also. However, I was a little disappointed that someone with Hulbert's reputation wasn't a little more sceptical. I don't have all those numbers available at my fingertips and I'm not a student of the Great Depression so I'm not qualified to pick apart the yeahs and nays.
Yeah, the chart looks eerie but ...
* if you're going to use two different scales, the Y-axis should be log, not linear, to show and compare relative changes.
* the economy doesn't seem to be in the same position as we were in 1929.
* there isn't the hubris to the extent as in 1929.
What do you think?
RE: Scary 1929 Market Chart - huh? - hendi_alex - 02-13-2014
World economies are far more connected than they were in 29. Governments are far more levered than they were in 29. There are still some serious currency issues unfolding and yet to unfold. The chart may be nothing more than an interesting coincidence, but for now my bias is toward raising cash, up to the 25%-30% level. Will likely hold at that level until uncertainties settle and until divergence from the chart takes place.
RE: Scary 1929 Market Chart - huh? - Kerim - 02-13-2014
That's pretty interesting, hadn't seen it before. Hard for me to take it very seriously, though. I don't believe in technical / charting, and I'm sure you can find many many instances of similar-looking slices of charts. It certainly doesn't compel me to sell all my stocks to avoid the possible downturn.
And if it does come to pass, I'd actually be pretty glad to buy more shares of the best companies in the world at depressed prices. My only regret from the 2008 / 2009 chaos was that I did not grasp the magnitude of the opportunity that the markets presented.
RE: Scary 1929 Market Chart - huh? - Ok Red - 02-13-2014
Not a big fan of the chart - I think it's apples to oranges - but I'm with Alex. Times are strange. Way more government and private debt in conjunction with economic interconnectedness (ie counterparty risk) and the unprecendented QE experiment. Add to that a strong bull market that seems to be disconnected with the rate economic growth (weak at best). Strange, strange times.
I'm old enough to remember many recessions (and the resultant market moves). The big boys get out the door first and the little guys get smoke checked. 1980, 1987, 1990, 1998, 2000, 2008. Hell, in 1998 and 99 people were getting pissed if they make 100% in a year. I knew guys in that era who were close to retirement and lost 80% in the 2000 downdraft. They simply could never recover what they lost even if they worked years past their projected retirement date. So at 55 I'm conservatively invested, but if there is a big downdraft I'll be a buyer for sure
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RE: Scary 1929 Market Chart - huh? - Dividend Watcher - 02-14-2014
This morning, the rebuttal finally appeared.
http://www.marketwatch.com/story/correction-anxiety-boosts-talk-of-next-10-stock-drop-2014-02-13?dist=beforebell
RE: Scary 1929 Market Chart - huh? - Dividend Watcher - 02-14-2014
And this was posted around noon today:
http://blogs.marketwatch.com/thetell/2014/02/14/consensus-on-scary-1929-chart-enough-already-its-not-happening/
Sometimes it's pretty funny the stuff they "print" just to gain eyeballs. (Referring to Hulbert's initial article.)