We’ve shown many, many variations of this chart over the years.  This one comes from the WSJ:

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WSJ_finch

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Previously:
Market Cycles: 100 Year DJIA (September 09, 2005)

http://bigpicture.typepad.com/comments/2005/09/market_cycles_1.html

100 Year Dow Jones Industrials Chart (December 28, 2005)

http://bigpicture.typepad.com/comments/2005/12/100_year_bull_b.html

Dow Jones Chart (1900-2004)

http://bigpicture.typepad.com/comments/2005/08/dow_jones_chart.html

Category: Investing, Technical Analysis

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.

26 Responses to “Bull & Bear Cycles”

  1. mutual fund manager says:

    It’s a “stock picker’s market”.

  2. Is it me or does Bernanke always sound like he is ready to crap his pants?

  3. Is it me or does Bernanke always sound like he is ready to crap his pants?

  4. Is it me or does Bernanke always sound like he is ready to crap his pants?

  5. JT says:

    To all the smart ones out there, closed end funds like INB and EXG are sporting 20%+ monthly dividends right now. Should not a conservative investor buy up these funds and sit on those divs for the next 20 years. Is a dividend like that sustainable? Any thoughts?

  6. Ben Esposito says:

    The log chart makes the steep moves seem less dramatic then they are/were. Nice chart though, gets a point across well.

  7. John Borchers says:

    Is this the first Bernanke speach where the market is going to go up as he’s pouring out not good news?

    It looks like it. Gov’t keeps injecting new programs. Hard to fight against that tape.

  8. crack says:

    How about a Nikkei chart?

  9. Riles says:

    Barry, thanks so much for this chart…have been trying for years to get my married kids to grasp that we are in a Secular Bear, and their “Buy and Hold” in sub-par Brokerage “advised” Mutual Funds, or as bad, Index Funds which only work in a Secular Bull. 100 percent invested in such “due” their ages, they’ve been losing their butts, obviously.
    (A few years back, went to the library and checked old (early eighties) Forbes annual “Mutual Funds Guide” and found that there were SOME Funds that had great Real Returns during the ’65-mid’82 Bear, so CAN be done, but only via the FEW great MANAGED Funds available to them.)
    Oh, also, Charlie Gasparino again this am denoting the “causality” of the current Market probs to fear of Obama’s winning! Sent a nasty e-mail to CNBC re. the obvious ignorance of clear causes, public polls on candidates’ handling of Economy, Wall Street’s campaign contributions and Monday’s Market denial of that “thinking”!

  10. Riles says:

    Barry, thanks so much for this chart…have been trying for years to get my married kids to grasp that we are in a Secular Bear, and their “Buy and Hold” in sub-par Brokerage “advised” Mutual Funds, or as bad, Index Funds which only work in a Secular Bull. 100 percent invested in such “due” their ages, they’ve been losing their butts, obviously.
    (A few years back, went to the library and checked old (early eighties) Forbes annual “Mutual Funds Guide” and found that there were SOME Funds that had great Real Returns during the ’65-mid’82 Bear, so CAN be done, but only via the FEW great MANAGED Funds available to them.)
    Oh, also, Charlie Gasparino again this am denoting the “causality” of the current Market probs to fear of Obama’s winning! Sent a nasty e-mail to CNBC re. the obvious ignorance of clear causes, public polls on candidates’ handling of Economy, Wall Street’s campaign contributions and Monday’s Market denial of that “thinking”!

  11. Bruce in Tennessee says:

    Steve Barry,

    My continued congrats to you with your picks, conviction, and discourse.

  12. kurt milne says:

    It is a stock pickers market – which is bad news since the “stock pickers” requently under perform the dart board and the monkey in stock picking contests…

  13. leftback says:

    @ John B: I am inclined to agree but let’s see what the afternoon brings – if we can make it back up and close at 950-960 or so and then see a rebound tomorrow this would be short-term bullish action.

    Lots of bad news today but PPI was less negative and retail was not as bad as I expected (factor in gasoline prices here!). CPI and claims tomorrow – then we should get a holiday from doomsday news for a while. Wall of worry in place?

    Santelli was on this morning, says the low yield is in for the 5- and 10-year. I bet he is long gold and short the 10-year, I am too. Bonds will sell off and some of that cash will go to work. Might be a good place to get a bit longer if today ends well.

  14. leftback says:

    @ Bruce: It is turning out to be a Steve Barry QID/SKF kind of day isn’t it?

    At least we will have a whole new set of technicals to discuss. Very important close coming up. Hoping we don’t get a retest of last week’s lows tomorrow morning, but we should all be prepared for that possibility, I suppose.

    A good day to not be trading on the long side. Looking at PBR, GDX and CHK for a trade later on or tomorrow. That’s a lot of red ink out there….

  15. batmando says:

    @leftback
    Short the 10-yr how? PST?

  16. PeterR says:

    “The Big Churn” — Earth Years 001,997 to 002,021 — was posited in the first chart via the link below on 8/30/01. Looks like it might be playing out?

    Cheers,

    Peter

  17. Observer says:

    Hmmm fascinating. Seems the average bear market lasts ~15 years. Assuming ours started 2000, that means we have another 7 years or so to go of bear before we can get back to long term bull.

    2015, anyone?

    Benjamin Graham may have been right- best to stay 50/50 stocks/bonds long term and keep it pegged there.

  18. Anonymous says:

    Sure, the average is about 15 years, but look at the chart from 1906-1942, just chop for 36 full years.

  19. PureGuesswork says:

    And obviously a chart of the S&P 500 would show this decade in an even more bearish light. While the Dow made a high last year noticeably higher than that made in 2000, the S&P did not. It failed at roughly the same level as the 2000 high. And don’t even look at a chart of the Nasdaq…

  20. i am having a tough time observing the chart in the 1929 period. the market corrected to zero. is it possible we see that happen again. fannie and freddie went to zero, i have this sense that the whole market will get there. meanwhile i am long select solars. how big is the debt problem when the credit card companies wont allow you to roll that 0% balance transfer anymore. this is getting scary.

  21. curtis says:

    Barry,

    I like the WSJ chart, but isn’t it odd that they say that stocks are only down 3.7%? The S&P was at 1500 then and is now at 1000. My basic math skills say that the market is down around 33%!! What gives? Are they all biased Republicans or am I missing something?

    Curtis

  22. NC Jim says:

    On a real rather than nominal chart the 1965-82 period looks mucho worse. Lots on inflation in that period.

    BTW: Good job standing your ground on CNBC.

    Jim

  23. What the heck was going on between 1966 and 1982?

    Was this largely a period where one party or the other controlled both the Senate and House and the Presidency? I ask because the data seem to show that the economy does between when control of the government is divided between the Democrats and the GOP — see:

    Divided Government & McCain for President: Liberal (ill)Values Blog makes the case!

  24. Sorry — I mean to write: “I ask because the data seem to show that the economy does BETTER when control of the government is divided between the Democrats and the GOP” …

  25. jimcos42 says:

    There’s a lot more to this then just the price movement of market averages. Each of the “secular” bear markets happened concurrently with– not in any necessary cause/effect relationship to– fundamental changes in the prevailing socio-economic paradigm.

    In the early 1900′s the nation wrestled with big oil, big steel and the railroads. We had to figure out and rationalize how the country would work in that “new industrial age.” That led to Great Depression I.

    By the 1920′s we had it figured out. The games began, as they always do, and one abuse and transgression led to another.

    This led to Great Depression II. The 1930′s gave us the New Deal (OMG! Socialism!) and a whole boatload of securities laws, many of which still carry force.

    By the end of WWII, with P/Es and dividend yields about the same, the stage was set for a great bull run. And boy, was it great.

    The heady 1960′s ushered in the go-go years, the Great Society, leading edge Boomers coming of age, Oil Crisis I and the genesis of Great Depression III. Billy Joel pretty much wrapped it with: http://yeli.us/Flash/Fire.html.

    By 1982 we had the death of equities, with P/Es again within shouting distance of dividend yields. You know what happened next. The “new era” of technolgy was born. And by the end of the century, smart guys (and now, gals) had figured out how to game the game. All of which, historically, ends badly,

    So, here we are. Great Depression IV. Reinventing America. Resetting the financial rules of engagement. More globally tethered this time. One way or another, having a historic election. Deciding how to manage energy (diversity of supply maybe?), what to do with immigrants (put them to work!), how to get America’s mojo back again.

    In every one of these “depressions”, the basic premises of America have been called to question, as they should, because abuses have occurred. I remember a joke in the 1970′s where GM was going to pay YOU to buy their stock. We had the Club-of-Rome-limits-to-growth people telling us it (growth) was over. Earnest discussions took place questioning the validity of the American Experiment. So far, we’ve met the challenge. While past performance is no guarantee, the trend is my friend.

    Here’s more good news: By the end of this regurgitation, whenever it is, savers will have gathered the tinder that will fuel the next great bull market. That’s the one that’ll send the DJIA to 100,000 by around 2042. Do I tell my kids to worry about whether the Dow goes to 7000 or 6000 or whatever? Not for a minute. I want them to think about how they’re gonna be on that train. And don’t dither about buying tickets. No saving = no investment = no return = work ’til you drop.

    Since we can only guess at what might drive the next great bull market (who knew in 1919, 1949, 1982?), broadly diversified global indexing makes intuitive sense. Investors are guaranteed to make the market return (less expenses), whatever it is by whoever drives it.

    Of course, statistically, a few smarty traders will indeed find nuggets and get filthy rich. And there’s a new Magellan being nurtured somewhere, but far be it from me to able to spot it. In fact, the current fund manager doesn’t even know it!

    There will be dynamite new investment products offered because that’s the way Wall Street works. You also know that the inventors and marketers of those products will do very well, thank you. But you are not likely to because you’re the patsy– waiting for things to clear up before you invest.

    Next stop: Wall of Worryville.

  26. Eric says:

    thnaks for the great story Jimcos42. The writing was on the wall for some years, but I am now convinced the party is over. So I’ll shift my money to a savings account and will continue the bear’s winter sleep for the next decade or so. The next big think probably has something to do with energy.