Friday, May 7, 2010

CRASH



The current magnificent drop in the DOW (due to a trading error?) is scary.

Is the market so sensitive to events (and fumbling fingers)?

Yet, I have faith in the market's ability to recover.
Check out the last great crash, in 1987:

Notice anything interesting (besides the crash in October)?
You'd have made money in 1987, investing in the DOW.
Not much (0.6%), but some.

And the greatest crash of all, in 1929?
Has you bought the DOW 5 years before October 1929, fell asleep and awoke 5 years after the crash ... you'd have made money.
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See any similarities?



I recall (10 years ago?) all the gurus were saying:
"The days of double-digit gains are over"

P.S. I thought that the DOW and the European stock markets would (by now) be fairly independent. Maybe not, eh?

 

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