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Wall Street History
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11/07/2003
Going Nowhere
Some of my friends in the financial services industry may not be
too fired up over this little piece, but despite the big rally we’ve
seen in the equity markets, particularly off the October 2002
lows, there are some respected voices such as that of John
Bollinger (a leading technician) who believe we have entered a
long period of stagnant, narrow, range-bound market action
5-10 years worth, perhaps.
No way, you might be thinking, but there have been other
prolonged periods where investors tired of equities and economic
trends weren’t always favorable. I’m not saying this will be the
case for the next decade, but one thing is clear:
Equities may be in favor today, thanks in large part to pitifully
low bond yields and the lack of competition for the investment
dollar, but once rates start heading back up, as is now the case in
Australia and Britain, investors may seek other alternatives to the
stock market, especially if the market averages themselves
stagnate.
What follows below is a graphic illustration of how trends can
persist for years, in this case 16 years, despite inevitable bumps
along the way such as in the bear market of ‘73’-74. Today,
these bumps could be precipitated by a terror attack on a key
global city or state (New York, Los Angeles, London, Paris,
Tokyo, etc.).
Add a ‘zero’ to the actual Dow Jones Industrial Average figures
below and you get a better picture of what I’m talking about. As
I write this, we sit at about Dow 9800. Many think we could
trade between 8000 and 12000 for the foreseeable future.
But, importantly, even if this were to be the case, actual returns
on stocks could be still be significant if you are in the right
sectors at the right time...meaning, not just cyclical vs. growth,
for example, but also large cap vs. small.
[Month end closing #’s for the DJIA]
12/65 969
1/66 ..983
2/66 ..951
3/66 ..924
4/66 ..933
5/66 ..884
6/66 ..870
7/66 ..847
8/66 ..788
9/66 ..774
10/66 807
11/66 791
12/66 785
1/67 ..849
2/67 ..839
3/67 ..865
4/67 ..897
5/67 ..852
6/67 ..860
7/67 ..904
8/67 ..901
9/67 ..926
10/67 879
11/67 875
12/67 905
1/68 ..855
2/68 ..840
3/68 ..840
4/68 ..912
5/68 ..899
6/68 ..897
7/68 ..883
8/68 ..896
9/68 ..935
10/68 952
11/68 985
12/68 943
1/69 ..946
2/69 ..905
3/69 ..935
4/69 ..950
5/69 ..937
6/69 ..873
7/69 ..815
8/69 ..836
9/69 ..813
10/69 855
11/69 812
12/69 800
1/70 ..744
2/70 ..777
3/70 ..785
4/70 ..736
5/70 ..700
6/70 ..683
7/70 ..734
8/70 ..764
9/70 ..760
10/70 755
11/70 794
12/70 838
1/71 ..868
2/71 ..878
3/71 ..904
4/71 ..941
5/71 ..907
6/71 ..891
7/71 ..858
8/71 ..898
9/71 ..887
10/71 839
11/71 831
12/71 890
1/72 ..902
2/72 ..928
3/72 ..940
4/72 ..954
5/72 ..960
6/72 ..929
7/72 ..924
8/72 ..963
9/72 ..953
10/72 955
11/72 1018
12/72 1020
1/73 ..999
2/73 ..955
3/73 ..951
4/73 ..921
5/73 ..901
6/73 ..891
7/73 ..926
8/73 ..887
9/73 ..947
10/73....956
11/73 822
12/73 850
1/74 ..855
2/74 ..860
3/74 ..846
4/74 ..836
5/74 ..802
6/74 ..802
7/74 ..757
8/74 ..678
9/74 ..607
10/74 665
11/74 618
12/74 616
1/75 ..703
2/75 ..739
3/75 ..768
4/75 ..821
5/75 ..832
6/75 ..878
7/75 ..831
8/75 ..835
9/75 ..793
10/75 836
11/75 860
12/75 852
1/76 ..975
2/76 ..972
3/76 ..999
4/76 ..996
5/76 ..975
6/76.....1002
7/76 ..984
8/76 ..973
9/76 ..990
10/76 964
11/76 947
12/76 1004
1/77 ..954
2/77 ..936
3/77 ..919
4/77 ..926
5/77 ..898
6/77 ..916
7/77 ..890
8/77 ..861
9/77 ..847
10/77 818
11/77 829
12/77 831
1/78 ..769
2/78 ..742
3/78 ..757
4/78 ..837
5/78 ..840
6/78 ..818
7/78 ..862
8/78 ..876
9/78 ..865
10/78 792
11/78 799
12/78 805
1/79 ..839
2/79 ..808
3/79 ..862
4/79 ..854
5/79 ..822
6/79 ..841
7/79 ..846
8/79 ..887
9/79 ..878
10/79 815
11/79 822
12/79 838
1/80 ..875
2/80 ..863
3/80 ..785
4/80 ..817
5/80 ..850
6/80 ..867
7/80 ..935
8/80 ..932
9/80 ..932
10/80 924
11/80 993
12/80 963
1/81 ..947
2/81 ..974
3/81 ..1003
4/81 ..997
5/81 ..991
6/81 ..976
7/81 ..952
8/81 ..881
9/81 ..849
10/81 852
11/81 888
12/81 875
1/82 ..871
2/82 ..824
3/82 ..822
4/82 ..848
5/82 ..819
6/82 ..811
7/82 ..808
8/82 ..901 *776 low on 8/12 then off to the races yippee!
9/82 ..896
10/82 991
11/82 1039
12/82 1046
12/83 1258
[Source: "The Dow Jones Averages: 1885-1995" Edited by
Phyllis S. Pierce]
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Wall Street History returns 11/14.
Brian Trumbore
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