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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Terry Whitman who wrote (23776)	5/30/2000 6:07:00 PM
From: Dan Duchardt	Read Replies (1) \| Respond to of 42787

Terry, Thanks for that chart. The inflation adjustment certainly paints a different picture than a fixed dollar based chart. When you add to this all the comparisons the financial advisors love to make between the "outstanding market performance" vs "safer" investments, it suggests that over a long time you had to be in the market just to break even. If you caught the end of the WWII bull market and held, in the early 80s you fell below even. Folks who started feeding the market in the 80s have certainly gotten the best of it. It would be nice to see an update of this chart. With relatively low inflation the last couple of years, I'm guessing that in 1988 dollars the Dow peaked a bit below 11000. One thing that strikes me about the chart is that just about every rising segment has roughly the same slope, suggesting that present day "irrational exuberance" differs from the past in the length of time it lasted, but not so much in the rate the market climbed. The period following the crash in 1987 through the mid 90s appears to be the only period of "rational" growth since 1900. You can also see how much sharper the pull backs tend to be compared to the rising segments, especially the ones that abruptly end at a reversal into continued growth. Those drops seem to last only a couple of months. If anything is to be learned from this, perhaps it is that if we don't get a sustained uptrend established soon, the first significant bottom could be many months away, reproducing the pattern of the 70s. Dan