In a post yesterday, we questioned whether the Dow was really in the midst of repeating a pattern it went through in the early part of the Great Depression. The post got a few comments suggesting that we make a different comparison:
- You should really plot what Louise Yamada has been saying for a long long time. She says that the entire market episode from 1928 to 1945 is being repeated all over again if you start your clock in 1999. By that count, the current year corresponds to 1939. It will be great if you could plot these charts. If Louise is right, and past is the prelude, then we are in for choppy market action for another five or six years.
- I agree with the comment about Louise’s assessment, especially if you use the Nasdaq composite from 1999 vs the Dow from 1929. I believe it’s a fairer comparison as our economy today is more technology based, whereas it was industrial based in the 30’s.
- You’re comparing the wrong time frames. Compare starting at DOW at 1929 and DOW at 2000, then look at the chart.
For those that asked for the charts with the new comparisons, here you go: