The Chart

I refer often to a 100 year Wall Chart on the wall (of course) of my office to see what the current situation looks like from a very long term point of view. The chart has various stock indices, GNP, earnings per share and major economic events marked in a 100 year period. It's a logarithmic scale, of course. The chart also permits one to add some facts to what today is often simply bloviating opinions.

Today's headline says the Dow Industrials has dropped to a low of 12 years. That is true.

Quiz: when did this occur last ?

Answer: 1974. Near the end of 1974, the Dow Industrials dropped below 600, which was roughly the level it has in the 1962 panic twelve years earlier.

Quiz #2: When did this event ( a 12-year low) occur before that time ?

Answer #2: 1932. In mid 1932, the Dow Industrials dropped below the low of 1914 when the NYSE re-opened after World War I commenced. That 1932 drop also broke under the Dow Industrial of 11 years prior in the post World War I recession.

In both cases, the exact bottom might not have been that day. But ... you can guess that those times were rather good times to stage in long term investments. And were poor - ultrapoor - times to sell out in fear.

OK, enough of the "All is well".

Word of the Day

"Aurochs" - noun (plural is same) [$10]; a Mencken word
Aurochs means an extinct wild ox, Bos primigenius, ancestor of dometic cattle and formerly native to many parts of the world. Also called urus.
Sentence: Have the bulls of Wall Street gone the way of the aurochs, or have they developed the ability to hiberate while the bears romp unchecked?

Le Mot du Jour

"S'effrondrer" - verb, pronomial; regular -er conjugation
S'effrondrer means to collapse, to plummet.
La Phrase: Hier, Les Bourses américaines se sont effrondrées de nouveau.
Sentence: Yesterday, the American stock markets collapsed again.