Stock Market Crash a la 1929?
My only experience with the stock market and the macro economy is a little common sense and a little historical perspective.
As the Dow approaches historic highs (20,000), I decided to take a trip through history.
From August 1921, when the Dow Jones was at 916.52, to August 1929, when the Dow Jones hit historic levels of 5,314.35, there were 96 months. During this period the Dow ticked up by 480%.
From March 2009, when the Dow Jones sat at 8,643.73, to November 2016, as the Dow hits historic highs past 19,000 (currently 19,872.23), there have been 93 month. December is also shaping up to be an up month so I will add it in there also. During this period the Dow has ticked up 121%.
Please bare in mind that these numbers have been adjusted for inflation.
The increase from ’21 to ’29 was 4,397. The increase from ’09 to the present has been an increase in about 11,228.
So, I’m going to call it now. A recession/crash is coming. Will it be as big as ’29? I don’t know, but the numbers and history line up. Are we a month (94) away or a couple (96)? I don’t know, but the general trends in the last hundred years point to a rapid decline.
