Depression Chart

Interesting chart:

Depression

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UPDATE:  May 6, 2006 7:28am

Stop racking your brain as to what this means:  I found it a few weeks ago (unfortunately lost the source), and posted it without comment ’cause I thought it was an intriguing look at some history.

There was no point other than "hey, thats kinda neat — I didn’t know that."

As to other charts that DO HAVE SOME MEANING — I have a few queued up over the next few days — they will make you go hmmmmmm.   

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UPDATE 2:  May 7, 2006 6:08am

A reader points us to this collection of charts from Dow Jones, showing the Index by decades going back to 1895. Cool!

http://djindexes.com/mdsidx/index.cfm?event=showAverages

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What's been said:

Discussions found on the web:
  1. Mike commented on May 5

    So…what is your point exactly Barry? Are you forcasting doom and gloom again? You’re starting to sound like a broken record, get over it.

  2. Aaron commented on May 6

    So, at the risk of sounding like a dufas, the x axis is the dow, right? Just want to make sure I’m reading the chart right.

  3. Alaskan Pete commented on May 6

    Mike, chill buddy. Why so angry? Are you depressed or something? Bwhahahaha!

    The thing I noticed is that the “depression” included both recessionary and growth periods. Also, chart looks pretty similar to the NAZ playing out from beginning 2000 to present. Cratered for a couple of years, rallied for a few without even approaching old highs. Is it time to crater again?

    Aaron, you are successful in sound like a dufas. ;^) The X axis is the horizontal one.

  4. Andy commented on May 6

    Maybe the point he’s trying to make is that we’re now nearing the moment where Congress does something really stupid…? The second dip (in ’38) looks almost “technically” normal.

  5. Ari commented on May 6

    Not so fast all, if DXY (Bberg index) flirting with 82 ish and move side way for some time, can at least we make a case of multinational within DOW and S&P beating the Russel? (Of course all bet are lost if the 10 yrs sitting on the moon)

  6. ballyache commented on May 6

    The chart clearly shows what people were reluctant to believe for years – the only thing that ended the Depression was WWII. As the war was winding down the politicians were scared silly that we would go right back into it.

  7. Barry Ritholtz commented on May 6

    Actually, I thought it was an intriguing look at some history — there was no point other than “hey, thats kinda neat — I didn’t know that.”

  8. RW commented on May 6

    An interesting historical view indeed – terrible things were happening but life went on and things still got done – now, should we blame Smoot-Hawley or the invention of supermarkets for the final crash ;-)

    It still fascinates me that the whole stock market debacle took so long to play out but it’s good to remember that is the typical way of bears, not the quick episode of 1987 but the increasingly deep slice of a surgical saw, in the case of 1930-32 all the way into the bone. According to my father, his step father (who I never knew) was quite wealthy in 1930 and, to my father’s best recollection, appeared to accept that a bear market might be happening but could neither accept the magnitude nor the possibility that the solid names he owned such as Nash Motors might founder along with the rest. By the end of 1930 he was getting advice from virtually everyone to sell but delayed too long. He finally did sell but it broke him and he never recovered. It seems likely that is one of the reasons the ‘old pros’ emphasize decisiveness and preservation of capital above all else.

    The circumstances of 1930 are not now – these days it seems more likely a particular sector or group of sectors will founder but not the whole market – still, although BR presents this chart as an interesting historical view, it doesn’t hurt to remember that it is possible for declines to be broad, long lasting, and deep; deep enough in some cases to take away everything you’ve earned and then some. I freely confess I have been a net seller these past few weeks and while I may eventually pay an opportunity cost for doing that, it feels just fine right now.

  9. drey commented on May 7

    Good post RW – capital preservation is a beautiful thing. There may be an entire generation (or two) out there that still needs to learn that lesson…

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