Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Tommaso who wrote (843)	11/21/2000 4:03:46 PM
From: Joshua Corbin	Read Replies (2) of 74559

Depends on how long you live. If you were 50 in 1929, as one of my grandfathers was, and lose most of your wealth, as he did, and then die in 1944, you have to wait until 1952 to break even again. This is one of the better anti-LTB&H arguments. Unfortunately, I don't think it applies to this situation -- even if history repeated. The guy who started this debate is 25 years old. Imagine TraderMike living through the same scenario. By the time the cycle finished he'd only be 48. That's not yet old enough to crack open his IRA. Even if you factor in inflation, he's still got plenty of cushion. And in 1952 the Dow was preparing its run to 1,000. This example also assumes he never buys another share for all those years. Since he'll probably be tossing in the usual $2,000 every year, that's not likely. My grandparents sold their pre-1929 holdings in the 1940s and my parents unloaded P&G in the 1960s. Boy, did they live to regret it. The future looks bright for TraderMike. I can't imagine why he's been so negative lately. :-)

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