All over the news today was the quote:
”Markets hate uncertainty“.
If anyone, let alone the whole market, is certain about the future then call me and I’ll happily hire you at a rate of $1 million a minute.
Archive for September, 2008
Nowhere for the last 9 years
11,405 - Dow Jones, 24th Dec, 1999
11,433 - Dow Jones, 11th Sept, 2008
1,279 - S&P 500, 24th Jan, 1999
1,249 - S&P 500, 11th Sept, 2008
Warren Buffett, in a speech he gave back in 1999, discussed the ebbs and flows of the market during the previous 34 years. The most interesting part of the speech was his analysis of the two distinct phases that he was witness too; where from 1964 to 1981 the Dow Jones didn’t move 1 point and from 1982 to 1999 it increased tenfold. This 17 year pattern was only unique in one regard: it’s length. The pendulum of investor opinion has swung back and forth many times since the turn of the 20th century and the only guarantee for the 21st century is that it will continue doing so.
Fast forward to today as we near the end of 2008 and the figures at the beginning of this post tell a familiar story. Here we are 9 years later and nothing has moved even though the US economy has grown throughout that time period. How long will this negative pendulum swing last? Who knows. The one thing I can say with certainty though is that when it does go positive again the ride up will be much smaller and shorter than the epic bull market that ended in 1999.