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03/20/2009
1973-74 vs. Today
With the recent bounce off the lows in the stock market, I thought I’d look at the numbers during the 1973-74 bear market to point out how one can miss some huge gains off the bottom…not that anyone can call that exactly.
But, by May 1975, the Dow Jones was back to 858 (5/14/75…a 49% bounce off lows), and 878 (6/30/75…52%).
By January 1976, the Dow was at 975 (1/30) and two months after that 1009 (3/24…or up 75% off bear market low in about 15 months).
October 2007, the Dow Jones peaks at 14164 (10/9). But it wasn’t straight down from there. As of 12/10/07, the Dow was still at 13727.
Then the Dow closed at 11740 on 3/10/08, or 17% off the all-time high. But two months later it was back to 13028 (5/19/08). ‘Whoopty-damn-do,’ as former NBA star Derrick Coleman would have said had he been asked at the time to analyze the market’s movements.
Then, two months after this, the Dow had fallen to 10962 (7/15/08) or 23% off the high, officially a bear market.
What crisis?! Well, of course the intraday activity, as we dealt with the likes of Lehman Brothers, AIG, and Merrill Lynch, was stupendous, but you could have easily been faked out that the Dow Jones had stabilized.
Three days after this, though, the Dow was 9387 (10/13/08). And later, 9625 (11/4/08).
But then a sickening slide to 7552 (11/20/08)…and a last rally back to 9034 (1/2/09), before yet another crash to 6547 (3/9/09).
[Sources: Yahoo Finance; “The Dow Jones Averages, 1885-1995,” edited by Phyllis S. Pierce]