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Saturday, November 22, 2008

Some Historical Bear Market Perspective

Some Historical Bear Market Perspective By Zhuge Liang

Dow Jones October 1929

Over a 23 day period, the Dow lost 49% of its value, but that was just the start of the bear market during which the Dow would eventually lose 89% of its value (386.10 to 40.56). How many people do you think called the October 1929 low of 195 "the bottom" only to get decimated by the continued weakness over the next 3 years?

Today we remain in a bear market and ALL rallies should be treated as guilty until proven innocent, meaning you need to maintain a super strong defense. Feel bullish at your own peril..

Do not be too quick to call last Thursday's low "the bottom", there are serious flaws in the US economic system and a lot of closets with ugly contents are still being opened.

Dow Jones 1929-1933
Notice how insignificant October 1929 becomes when viewed on a larger timeframe



Dow Jones October 1987


S&P 500 (SPY) 2000-2003


1 comment:

Ivan said...

Many people believe that DJIA is not yet at the bottom . ..

just wait and see..
and perhaps it is at level 7000?
or. . maybe it can find a bottom at 5000. .. nobody know. .but is it important for us?

important = find money ?

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