Originally posted by Jacob08
My biggest concern is with the rate of growth in the past 20 years before this crash, which in my opinion is far from over. In 1988 the DOW was at 2000, only 20 years later it was at 12 000 in 2008. That's a lot faster growth then the previous 20 years, in 1968 it was at 900 and grew to 2000 by 1988. In short 1968-1988 saw 122% growth (average of 6.1% a year), 1988-2008 saw 500% growth (average of 25% per year).

How much of those gains will have be returned until we are at realistic levels of growth over the 20 year period? I think the credit bubble was responsible for much of that huge growth and now it has burst much of it will be returned. If growth was at 122% for the last 20 years (the same as the previous 20) the market would have been about 4400 in 2008. That's not to say the past 20 years growth wasn't based on anything real or sustainable but it's worth thinking about.

[edit on 12-3-2009 by Jacob08]

No offense but your math is soooo off its pathetic. Here is the equation for how to find compounded annual growth rate(CAGR) is:

CAGR = (Ending Value/Beginning Value) to the power of (1/number of years)

So in the example you gave from 1988 we will use 2,000 as the Dow value in 1988, and 14000 as the Dow value in 2008.

CAGR = (14,000/2,000) to the power of (1/20) = 10.22%

Your calculation was 250% off. lol.

From 1965 to 1982 the market was in a complete dead era. Essentially flat. So that era isn't one to compare all others to. Although, we could be entering a similar time in which market indexes are essentially flat for an extended period of time. If thats the case, buy and hold won't make money, although active management will

Originally posted by invisibleman11
the global melt down hasnt even began. what were seing is the tip of the iceberg and to say dont prepeare any more and buy stock after one day of gains is retarded. just because the dow rose to 6,970 something after falling from 14,000 something means nothing...its a propaganda tool for tools to buy more stock in a broken economy

indeed mate, i would have to agree with you. But do you know how many people..strike that Sheeple will fall for this?

Originally posted by pavil
Ok, I'll bite. Give me three other indicators that we are at a turning point for the positive.

1.) Change

2.) Hope

3.) Er...I think those were the only two words our president has. You win.

[edit on 12-3-2009 by saint4God]

Originally posted by saint4God

Originally posted by pavil
Ok, I'll bite. Give me three other indicators that we are at a turning point for the positive.

1.) Change

2.) Hope

3.) Er...I think those were the only two words our president has. You win.

[edit on 12-3-2009 by saint4God]

You forgot TRANSPARENCY.
It's the new joke of the week.

At this point the "meltdown" is in job losses. Citi has very little to do with creating jobs on a large scale.

Fears in job loss came quickly, unfortunately, confidence in the US government and job creation will take time IMO.

The industrial revolution is behind about a hundred and fifty years. I don't think Citi Group loans are going to finance the future of green business.

Ethical anarchy will get all of us through these difficult times. We don't need an artificial stock market to dictate prosperity. All the good people of America need to take freedom in their own hands and go back to a barter system.

The current financial crisis is a manufactured event to promote more wealth distribution to those who least need it. Buying failed American corporations stocks will only encourage more handouts to toxic assets.

The current economic crisis is not a lack of money, it is a labor crisis. The number of capable workers of all skill levels can't be filled. Those who wish to make it big or be well in America need to understand the American way.

What is the American way? Lie, cheat, steal...But don't sell out your family and friends. The tribal clans of this country might have been deemed primitive savages but they were capable of an economic system that did not depend on big government.

We have to sell our labor at our defined cost and simply not garnish our wages to big government.

Someone's feeling bullish today.

3 days of green and it's declared that we've hit bottom. Thank god it's so easy to tell. I guess we can safely say, the stimulus package worked and it didn't even take 3 weeks. Geez, we should go through another enormous BOOM if it's supposed to prop up the economy for another year or two.

Citi makes a profit for 2 months and the stocks go berserk, but is your average American back out, shopping at Wal-Mart for $80 electronic nose hair trimmers made in China? I suppose the fact that 651,000 people lost their jobs last month is completely irrelevant too? Decreased wages/hours don't matter?

Originally posted by Angry Danish
I suppose the fact that 651,000 people lost their jobs last month is completely irrelevant too? Decreased wages/hours don't matter?

Both means less going into 401(k) as monthly contributions which surely is not good. Investors are 'shooting themselves in the foot' by insisting that companies cut cost when the cost is workers with 401(k)s.

Originally posted by saint4God

Originally posted by pavil
Ok, I'll bite. Give me three other indicators that we are at a turning point for the positive.

1.) Change

2.) Hope

3.) Er...I think those were the only two words our president has. You win.

[edit on 12-3-2009 by saint4God]

Those aren't indicators. The markets are just in a bear market rally right now. Completely normal. Here's what to watch for so you can tell the markets are turning into bull markets:

1) Economic indicators show economy is bottoming. Markets are forward looking. If the economy is bottoming, the market will trade for the coming economic expansion.

2) Housing inventories are decreasing and home values stabalizing.

3) Bank start announcing asset write-ups. We've seen all the write downs as asset prices decrease. As money moves off the sidelines, we will start seeing asset price write-ups. This is a big one.

4) Watch the 50 day and 200 day moving averages. If the market trades above them, a prolonged rally can occur.

Posted to the wrong thread, sorry.

[edit on 12-3-2009 by saint4God]

rattan i will tell you this

Now i believe is the best opp. in a while to "watch" the banking sector go long

ticker (KBW)

and when the commercial real estate collapse takes down the small and medium size banks the larger institutions may be able to power grab big time....

suspension of Mark to market accounting and uptick rule reinstatment may be the fuel for a sustainable bear mkt rally (instead of the buy the rumor/sell the offical news) time will tell.