See here. Back in November, I figured that inflation-adjusted Dow took 16 years to decline from 1966 to 1982, and my guess is that we're on a similar inflation-fuelled ride, so starting with the last peak in 2000, we might think about hitting bottom in real terms in 2016.
On the other hand, history doesn't repeat, it rhymes. In 1966 China was... a disaster area. The world economy is much more interconnected now, and the tide is Eastwards, and big business is global. The company you invest in, if US or UK-based, may still be making good profits on its overseas earnings, even if domestic workers are all on the dole.
A recovery for the investors may happen sooner, and the market bottom may not be so deep in nominal terms (currency-adjusted is something else: look at what has happened to the dollar and pound; and what may yet happen). I think there's a big disconnect between the markets and Joe Average, since the extra wealth from 1980 on has mostly accrued to the top layer of society.
The concentration of money into fewer hands means that investment issues must inevitably give way to considerations of maintaining (repairing) the social and political fabric of our democracies.
Showing posts with label investment cycles. Show all posts
Showing posts with label investment cycles. Show all posts
Wednesday, July 08, 2009
Saturday, December 22, 2007
Green screens
The traders seem to be filling their boots with annual bonuses, as I guessed on 20 November (Red Screens) - or is it just the cyclical winter upswing in the market, as Joseph Dancy shows?
Saturday, November 17, 2007
Winter is the growing season
Following my search for predictable stockmarket patterns ("Real Cycles"), Joseph Dancy analyses the phenomenon of winter season investment growth. It seems that "sell in May and go away" is still good advice. Dancy quotes Mark Hulbert:
[The research] implies that simply going to cash between May Day and Halloween will have only minor impact on long-term returns while dramatically reducing risk -- a winning combination that would show up in a much improved risk-adjusted performance.
Until everybody does it, of course. But what are the chances of that happening?
[The research] implies that simply going to cash between May Day and Halloween will have only minor impact on long-term returns while dramatically reducing risk -- a winning combination that would show up in a much improved risk-adjusted performance.
Until everybody does it, of course. But what are the chances of that happening?
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