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US stocks today versus 1938

Posted By Prieur du Plessis On May 20, 2009 @ 10:01 am In Investment,Markets,Money | 1 Comment


As investors debate the longevity of the nascent stock market advance, they are increasingly falling back on similar historical situations to glean perspective. In this regard, a comparison of the current market and that of 1936 – 1938 makes for interesting reading.

Strikingly, the charts below, courtesy of Bespoke [1], show similar patterns in the movements of the S&P 500 Index from 2007 to 2009 to those of 1936 to 1938.

Given the similarity of the advances and declines in these periods, Bespoke looked at how the S&P 500 would have to perform going forward in order to keep the relationship intact.

At its peak on May 8, the S&P 500 had notched up gains of 38.2% from the March lows. In 1938, the S&P advanced 50.5% in the four months following its low.

Bespoke [1] said: “If the S&P 500 were to have a similar rally off its lows today, it would top out at 1,018. While breaking 1,000 on the S&P 500 seems remarkable given where we were in March, it is still nearly 200 points lower than where the index was trading before the Lehman Brothers bankruptcy.” Time will tell …

20-mei-b1

Source: Bespoke [1], May 18, 2009.

Did you enjoy this post? If so, click here to subscribe to updates to Investment Postcards from Cape Town by e-mail. [2]

More on this topic (What's this?) [3]
S&P 500 Index Returns by Year [4] (Top Foreign Stocks, 4/6/09)
Best Month since 1938, not an April Fools Joke [5] (WC Power Tech Fund, 4/30/09)
S&P 500 Operating Earnings - What Are You Focusing On? [6] (Fusion Investing and Analysis, 4/2/09)
Read more on Chitose EL Constr [7], S&P 500 (SPX) [8] at Wikinvest [9]

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URLs in this post:

[1] Bespoke: http://bespokeinvest.typepad.com/bespoke/2009/05/now-vs-1938.html

[2] Did you enjoy this post? If so, click here to subscribe to updates to Investment Postcards from Cape Town by e-mail.: http://www.feedburner.com/fb/a/emailverifySubmit?feedId=921608&loc=en_US

[3] (What's this?): http://www.wikinvest.com/blogger/wikinvest_wire

[4] S&P 500 Index Returns by Year: http://topforeignstocks.com/wp/2009/04/06/sp-500-index-returns-by-year

[5] Best Month since 1938, not an April Fools Joke: http://wcpowertechfund.blogspot.com/2009/04/best-month-since-1938-not-april-fools.html

[6] S&P 500 Operating Earnings - What Are You Focusing On?: http://www.fusioninvesting.com/2009/04/sp-500-operating-earnings-what-are-you-focusing-on

[7] Chitose EL Constr: http://www.wikinvest.com/stock/Chitose_EL_Constr_(TYO:1938)

[8] S&P 500 (SPX): http://www.wikinvest.com/index/S%26P_500_(SPX)

[9] Wikinvest: http://www.wikinvest.com

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