<<1974 Redux: Why Bear Market May Be Over>>
I just posted this on a semi-conducter equipment board, but it applies here as well, perhaps more so. Everyone is comparing this downturn to the 70's. I do not disagree, but also think investors should at least be aware of the '29 crash.
History does repeat itself. I highly recommend everyone currently in the market read "The Great Crash: The anatomy of financial disaster" by the famed economist John Kenneth Galbraith. Small book, and easy reading. Same story, different years. The part about embezzlement has particular parallels with ENRON, WorldComm, Global Crossing, etc. The greed that led to inflation of assets, the belief that everyone who invested in the market was a geniuos and would make money, and a complete disregard for company and economic fundamentals --- well, as I said, same story, different years.
Not to say it is exactly the same, or that the downturn will last as long, or that a great depression will follow, but it is eerily akin to the current situation. |
