Comparing the 1932-1937 Rally to the 2009-2011 Rally

[Trajan]

anyone put any stock ( no pun intended) in these seeming corollaries?


Comparing the 1932-1937 Rally to the 2009-2011 Rally

There is an interesting fractal of the rally of the period from 1932 to 1937 and that of 2009 to 2011.

While the current rally is a 100% advance from the low in approximately 720 degrees of time, the rally from a price of 40 on the Dow Jones Industrial Average in 1932 to 190 in 1937 represented a rally to 50% of the 380 DJIA high in 1929 in 1800 degrees of time. Kind of mirror-image, fold-back symmetry at play.

Stock Market: Comparing The 1932-1937 Rally To The 2009-2011 Rally | Markets | Minyanville.com

 

[Toro]

I think with the stock market, Twain's refrain of history not repeating but rhyming is pretty good. I am always hesitant to overlay time periods on each other but they can give us a good understanding of what could happen if a course of events occur.

These type of graphical comparisons are best for bubbles and panics as they capture the extremes of human behavior.

 

[Mad Scientist]

I think more than one economist predicted this would be the effect of Stimulus (Porkulus)

 

[william the wie]

I think with the stock market, Twain's refrain of history not repeating but rhyming is pretty good. I am always hesitant to overlay time periods on each other but they can give us a good understanding of what could happen if a course of events occur.

These type of graphical comparisons are best for bubbles and panics as they capture the extremes of human behavior.

I think the proper way to handle such analogies is to compare age and income distributions for both periods and in both cases there are big similarities. 40 years prior to the 1933 collapse was the anti-inflationary gold standard position of Cleveland in 1893. Prior to this mess 40 years ago was Nixon's attempt to inflate out of LBJ's "Guns and butter" deficits. In both cases the effects on birthrates and immigration were sharply downward. So, a crash is highly likely/almost certain but whether of stocks or the dollar is a different question.