Monday, May 18, 2009

Now vs. 1938

Over the last several weeks, there have been numerous comparisons made between today's market and 1938. As shown below, an overlay of the current S&P 500 over the period of 1936 - 1938 shows two similar patterns in both the decline from the peak and the advances off the lows. With that in mind, we looked to see how the S&P 500 would have to perform going forward in order to keep the relationship going.

As shown below, at its peak last week, the S&P 500 rallied 38.2% from the March lows. In 1938, the S&P gained 50.5% in the four months following its low. If the S&P 500 were to have a similar rally off of its lows today, it would top out at 1,018. While breaking 1,000 on the S&P 500 seems remarkable given were we were in March, it is still nearly 200 points lower than where the index was trading before the Lehman Brother bankruptcy.

Now vs 30s

No comments:

Lunch is for wimps

Lunch is for wimps
It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another.