To: Box-By-The-Riviera™ who wrote (213016 ) 4/7/2025 9:07:50 AM From: TobagoJack Read Replies (4) | Respond to Re <<up> zerohedge.com Crashes By Eric Peters, CIO of One River Asset Management mentioned the dotcom bubble and the GFC when describing the kind of market calamity he hopes to avoid. The Nasdaq Index peaked in March 2000 and bottomed 31mths later, down 78% from the highs. The S&P 500 fell 49%. In the Global Financial Crisis, the S&P 500 peaked in October 2007 and bottomed out 17mths later in March 2009, down 57% from the highs. The 2020 Covid collapse lasted 1.5mths (33 trading days) during which the S&P 500 fell 37%. The 2022 bear market lasted 9mths and the S&P fell 25%. The S&P 500 index peaked on August 25, 1987. It chopped around sideways to lower until Wednesday October 14 when it broke below its trading range. Prices fell sharply on Thursday and Friday, with the market closing on the lows. On Monday, October 19 it crashed, falling 20.5% in a single day, Black Monday . The following day, Tuesday, it made a lower low and that was it, the bear market ended, with a 36% decline from the August high. The steepest part of the crash happened that October, although the bear market had years left to run. The Smoot-Hawley Tariff Act was enacted in June of 1930, approved by President Hoover despite a petition signed by 1000 economists imploring him to veto it. The final market low was reached in July 1932 at 41.22 points. The market lost 89% of its value. Rough Math: The S&P 500 closed Fri at 5,074 and the 12mth forward P/E multiple is around 18x. If earnings estimates decline by 25% in a scenario where the trade war drags out, and the P/E multiple declines to 15x (the low in 2022), then the S&P 500 should trade at 3,171 (which is where it was in in both Dec 2019 and June 2020). In the GFC, earnings fell something like 50%, so if that happened now due to a cascading global recession/depression and the multiple declined to 15, the S&P 500 would trade at 2,114 which would take it back to 2016 levels.
