Posts filed under “Markets”
This weeks Barron’s has an interesting chart from Sy Harding. If you are unfamiliar with Harding’s work, have a look at his prescient 1999 book, “Riding the Bear: How to Prosper in the Coming Bear Market.” (Spend the $1.49 on used copy — its well worth it).
Harding suggests that:
“UNLESS I’M LOOKING AT the wrong calendar, stocks are headed for a rough patch next year. That’s because 2006 is the second year of a presidential term, and the market historically hits a significant low in those years.
The trend has been strongest in long-term, or secular, bear markets,
such as the period of 1965 through 1982. But the pattern has been clear through bull and bear periods alike — and through war and peace, rising and falling interest rates, high and low inflation — regardless of which party was in power.”
In the past, I wondered if the 2nd year low held up for two term Presidents. Harding assures us it does: ” This has been true even for second-term presidents like George Bush. After all, they want their party to remain in power.”
I found the numerical equivalent of this some years ago, and posted it in the Mid-term Presidential Election cycle:
This is consistent with my prior expectation that my most likely scenario, where the markets top out in December, and then head south in ’06.
It’s the Cycle, Stupid!
Barron’s, Saturday, September 10, 2005
The previous chart reveals the long standing secular moves of the markets; What’s an investor to do during one of the long periods of weakness? One answer is to learn to be more nimble, and trade the cyclical markets. > Dow Jones Industrial Average, 1966 – 1982 click for larger chart data for chart courtesy…Read More
Yet another look (see prior takes here and here) at the concept of market cycles. The past century shows alternating Bullish and Bearish phases, secular periods each lasting for an extended time (between 10 to 20 years). > Dow Jones Industrials, 1903 – 2004 Note that markets are up slightly for 2005 since this chart…Read More
Good round up from Dow Jones:
Over a week after making
landfall, the broad economic fallout from Hurricane Katrina continues to
unfold. Economists are downgrading their third quarter growth forecasts for
the U.S. economy and not all think that rebuilding in the wake of the storm
will bring things back in the fourth quarter. Markets have stabilized
however, taking their cue from the price of oil and other refined energy
products, which have been hit by a major international effort to release
emergency energy reserves in an attempt to alleviate a supply crunch.
Estimates of the economic loss from the hurricane exceed $100 billion, with
the Senate’s top Democrat putting it closer to $150 billion.
are some of the main market and economic impacts:
There is a terrific Dow Jones Chart (1900-2004) for sale at the Minyanville.com gallery. Its along the same concept of a chart we did back in 2003 — only this one includes P/E ratios, which is a very instructive addition to the graph: click for an enormous chart: “Officially licensed and designed by Minyanville’s own…Read More