Hi Headsetdotcom,
As a former historian the first year that come to my mind when I read
your question is 1929. I have found a nice website focusing on that
crash. The answer depends on how you would define "bottom", but it
took until 1934, 1935 for the stock markets to recover. As you might
remember: the world at large had some bigger problems by then. Asia
was a big mess and Europe was heading for one itself. Stock markets
were not seen anymore as a large issue.
While analysts are trying to make us believe that the crises will be
over very soon, what they mainly try to do is creating a sentiment.
People lost their trust in the system in 1929; investors jumped from
buildings, the trust was gone. So it makes sense that the industry at
large has an interest in pretending things will be over very soon.
When investors, the people start to lose their trust in the system, it
is going to be bad, taught my economy teacher when he told about the
1929 crash.
Last month I met here in Shanghai an experienced and retired British
banker and I mentioned the word 'analysts'. I cannot repeat his
response because it would be pulled by our minders at GA for being
indecent. They basically sell themselves for money.
Your question will of course be: how long is this one going to last. I
hope, with the better-paid analysts, it will be over at the end of
this year, but for the first time things really look bad. Why? Because
a basic trust in the system has been undermined. We see large
companies who have cooked the books in a grand way and many of the
managers of listed companies are telling me now what kind of pressure
they have been under to come with 'good' results to satify the needs
of the stock markets.
It is too early to compare what is going on now to 1987 and certainly
1929. The history does not repeat itself, I have learned as an
historian. But it does look damned scary.
Later this week new indicators in the US will be released. Just like
many others, I will be watching the results very closely, simply
because nobody can tell now exactly what is going to happen.
I'm not sure if this is the answer you want to get, it is the best I
can give now.
Let's keep our fingers crossed.
Fons
Useful links
On the 1929 crash
http://www.arts.unimelb.edu.au/amu/ucr/student/1997/Yee/1929.htm
Comparison of the 1929 and 1987 crash
http://www.arts.unimelb.edu.au/amu/ucr/student/1997/Yee/
Search strategy:
Google: 1929 stock |
Clarification of Answer by
fons-ga
on
27 Jul 2002 17:44 PDT
Hi Headsetcom,
What I tried to explain, and it was supported by Morris-ga who gave
the example of the Japanese stock market who is already on its return
for the past 14 years, that in time there is no real time frame that
can be called typical for a bottom in the stock market.
The last illusions on how predictable the market could be I lost when
I read the book of Howard Kurtz, The Fortune Tellers. Inside Wall
Street;s game of money, media and manipulation (ISBN 0-684-86879-2).
Unfortunately, bottoms in the stock market can be explained very well
afterwards and on itself, it is not really possible to come up with a
really typical partner.
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