How Does the ’09 Rally Stack Up Against ’82 Bull Market?

This is one of the things I will be discussing at the Berlin Conference:

Comparing the 1982 Bull Market with the 2009 Rally


Rally Comparison 1982 2009
P/E Multiple 8X 26X
Dividend Yields 6% below 2%
Book Value Discount to Book 2X Premium
Monetary Policy Reducing money growth and inflation rates Creating money growth and inflation rates
Fiscal Policy Aimed at reducing nondefense spending Aimed at accelerating nondefense spending
Deficits Peaking and coming down relative to GDP Surging to 10%+ relative to GDP
Global Trade Barriers Were being torn down Are being erected
Regulation Deregulation in vogue Re-regulation rising
US Dollar Plaza Accord bull market Mercantilist bear market
Household Credit Balance sheets and participation rates expanding Balance sheets now contracting
Tax rates Income, capital gains and dividend taxes declining Taxes Rising Now

Sources: Gluskin Sheff, S&P, Bloomberg

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