Thursday, October 9, 2008


Read about them here. I will be updating this post with a few charts of some bear markets/crashes. MSN has some decent historic charts!


-45% in 2 years.

We have done -43% in 1 year. Take that dot com bubble!


No bear market though, I wish our market acted like this. Buyers stepped up right away. This time around people are way more hesitant.


50% decline, took about 2 years.

This last one seems to be the closest match to what we have going on. Read about the bear market here and here.

The worst drop during that market was an 18% drop in a little over 1 month and a 33% drop in 3 months. We have dropped 28% in about 1 month. There were about 6-10% rallies in between, but that is almost pathetic! This makes you think that it really is not worth it to buy stocks for an oversold rally unless it really is the bottom.

Even given all these past events, there has not been one (post WWII) market that has dropped this far this fast. That is what makes this market so special. At this rate we could probably bottom at about -60%, which is SPY at 63. But I think valuations would be way too ridiculous at that point. I expected either a bottom to be formed within the next 2 weeks around the 80-90 range, or a more severe bear market that bottoms in the 65-75 range. Either way, this will be historic.