Posted on 10/15/2009 11:17:16 AM PDT by blam
1929 And Today - Sobering Parallels Abound
By Simon Maierhofer
On 1:14 pm EDT, Thursday October 15, 2009
When was the last time you saw stocks decline 54% followed by a 55% rally?
When was the last time you saw stocks (NYSEArca: VTI - News), bonds (NYSEArca:
AGG) and commodities (NYSEArca: DBC - News) move in sync for nearly two years?
When was the last time asset allocation did not really provide the diversification and protection it was supposed to?
When was the last time, a ten year investment in the stock market delivered negative returns?
Investors that care to harken back 80 years will find that the 1929 - 1932 era is the only period of time that compares to today. In fact, the parallels between now and then are bountiful and scary.
[snip]
(Excerpt) Read more at finance.yahoo.com ...
Kevin Depew
Oct 15, 2009 1:55 pm
Markets tend to reach exhaustion on good news, not bad.
How long, O Lord, how long? It's always good to remember that the stock market is not the economy. Every day I come into the office to find literally dozens of emails complaining that the market is ignoring the relentlessly bearish news flow. But that doesn't bother me. What will bother me is when we start getting good news. Markets tend to reach exhaustion on good news, not bad. And these days it's hard to discern between what's merely bad and what's actually disastrous. So, let's take a look at what the difference between the two really is, and what it means going forward.
[snip]
Well, no, 1929-1932 isn’t the only time that parallels today. 1873 to 1876 also does quite well, but is much less well documented.
Thank you for the info. MOST people believe that the Market is an indicator of the Health of the Economy. I blame the schools and msm for fostering this fallacy.
Additionally, looking at the big picture, gold keeps climbing, oil so-so, and general retail sales and employment numbers tell more on this.
Exactly, Retail sales are tanking and unemployment is not near a recovery.
I am not an expert (not even close) but I do know that the market can be and is manipulated.
However, certain things are more indicative or the real state of affairs:
- Retail sales.
- Retail and Industrial vacancies.
- Employment.
- Idle trucks.
- Capital investments.
Of course, we don’t hear much about that.
Yep years ago.When discussing SM the first words were. Don’t invest money you are not ready to LOSE.
Can’t be, the state run fringe media is telling us all is good! There is no problem....
Near the end of the piece, they mention the part that I find most frightening: the current P/E ratio over 140!! A more normal number would be 15-20, which means stocks are over-priced by 7-10 times. (That would equate to a DOW of 1000-1428, based on current earnings... a drop of 85-90%.) Even if you take the position that the stock prices are anticipating higher earnings in the next year, does anyone really think (honest) earnings will increase 700-1000% in the next year to bring the P/E into a more sustainable number? I don’t...
hh
With the dollar hitting new lows against most major curriencies, gold at near-historic highs, credit tight, RE bubble still deflating, consumption down, hidden and real inflation, low bond yields (re: inflation) where else would you put your money?
Not sure where they got the 140 P/E ratio... My investment broker pegs the S&P’s P/E at ~ 16-17... based on forecasted 2010 earnings...
Well if you think about it. The penalties and TAX implications of switching or pulling out of a 401k, makes sure WS has a steady diet of the little guys money.
It reminds me of a line from the old Dick and Jane movie.
Jane is looking at a loss in an investment...then says I lost the game and I didn’t even get to play.
Now look what has happened..all the people that are invested have seen their 401’s tank...so much for retirement.
I wonder if this whole 401,Ira etc could be classified as a ponzi scheme?
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