Today’s chart comes courtesy of Vanguard Funds. It shows the
total value (NYSE, Nasdaq and Amex) as a percentage of GDP. Historically, the
market has run into trouble when, after a long Bull run, it penetrated the
average Market Value as a % of GDP to the upside. Mean reversion would be the
rationale for some of the bigger Bear Markets following theses spikes (shaded
Market Value of Equities as a % of GDP
Note that after 1990, this measure completely detached from
its prior range. This implies that there may be yet more mean reversion in
equities’ near future.
Quote of the Day:
“The things which hurt, instruct.”
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.