TK,
Interesting chart.
I see some major difference between 1929 and now.
1929 - 60% of Americans made below $2K, the poverty line.
1999 - 4-5% unemployment, poverty line ~20% (IRS?)
1929 - Key points: Insull Utility stock collapsed on Aug. 9. Many margin calls made. Many people borrowed to cover margin calls. Later, Union Industrial bank caught by huge embezzlement scandal in Sep 1929. Embezzellers blew money on the market. Bank of England raises interest rates driving foreign dollars to England. Massive selling volume prior to crash. Too many were paper millionaires in a few stocks. Diversification was not practiced.
Today, Unemployment low, inflation generally low (discounting recent PPI), interest rates low, oil is high but not above $30 like early 1990's during Gulf War. In 1999, the US leads in technology. Not the Far East as was in the 1980's. This difference cannot be overstated.
I think the analysts missed Intel's earnings big time and market oversold since then.
SUNW and BRCM have records earnings and no one cares.
This is very similar to the late July 99 correction. It took CSCO to blow out earnings in early August and start back up the market.
April 99 - was scary and I think many margin players got hurt when the big NASDAQ stocks got hurt.
I don't buy a 25% collapse of the market. S & P has been hammered, but NASDAQ still way up for the year. Give me 1.5 Billion shares on NASDAQ on a 2% down day, maybe then.
No one wants to be the Raging Bull that lives in infamy, but I am betting my $$$ on a recovery in stocks. NASDAQ is at 2731, S&P is 1247, and DOW is 10019. Well see in a month.
I do have a bond fund in event of a total market collapse, but I haven't touched it in years. The 1987 crash taught me diversification painfully. I don't borrow on margin so I see no sense of urgency yet.
Phophets of Doom were plentiful then too. Takes guts to buy stocks in a down market. I remember the Magellan fund going heavy into cash during one bull run in the 1990's. Mr. V thought stocks were overvalued. What a mistake and Mr.V left. Doing better now.
Jack
BTW: How the SA treating you? Curious. |
