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Secular Stock Markets Explained

Posted By Barry Ritholtz On June 13, 2006 @ 10:05 am In Apprenticed Investor,Earnings,Investing,Markets,Psychology,Technical Analysis | Comments Disabled

We’ve been discussing the 100 year charts [1] that look at the secular history of Bull and Bear markets, including Adjusting Stock Prices for Inflation [2]. This has been a favorite of mine for some time, and I highlighted it in the technical segment (part II) of the Cult of the Bear [3].

Ed Easterling was kind enough to let us run his chart, and I find it to be the very best of these longterm secular views: He overlays the Bull and Bear periods with trailing P/E — this fits in very nicely with our contracting P/E thesis.

Dow Chart with P/E, 105 Years
click for larger chart

100_year_market_with_pe [4]

Source: Crestmont Research [5]


Incidentally, in terms of what readers purchased via links at this site, Ed’s book, Understanding Secular Stock Market Cycles [6], is your most popular buy, just edging out Barton Bigg’s Hedgehogging [7] this quarter.


Stock Cycles Explained
Ed Easterling
Crestmont Research,
http://www.crestmontresearch.com/pdfs/Stock Secular Explained.pdf

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2006/06/secular-stock-markets-explained/

URLs in this post:

[1] 100 year charts: http://bigpicture.typepad.com/comments/2006/06/read_it_here_fi.html

[2] Adjusting Stock Prices for Inflation: http://bigpicture.typepad.com/comments/2006/06/stock_prices_ad.html

[3] Cult of the Bear: http://www.thestreet.com/comment/investing/10260656.html

[4] Image: http://bigpicture.typepad.com/.shared/image.html?/photos/uncategorized/100_year_market_with_pe.png

[5] Crestmont Research: http://www.crestmontresearch.com

[6] Understanding Secular Stock Market Cycles: http://www.amazon.com/exec/obidos/ASIN/1879384620/thebigpictu09-20

[7] Hedgehogging: http://www.amazon.com/exec/obidos/ASIN/0471771910/thebigpictu09-20

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