The intra-day low on the S&P 500 so far today was 734.52. That's lower than the intra-day low (742.61) on December 5, 1996—the day Alan Greenspan gave his famous "irrational exuberance" speech. The closing price that day was 744.38. If it doesn't happen today, we will likely close below that level within the next week or so.
From that day until today, you would have been better off investing in short-term Treasury bonds.
Update: The S&P 500 ended the day at 735.09, lower than when Alan Greenspan warned of a possible stock market bubble over 12 years ago.
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It will go lower...this is just the beginning!
ReplyDeleteyou would have also fared better investing in SPAM and other canned goods with infinite shelf lifes...
ReplyDeletewho would have known, right? My call is that it will continue to fall at levels no one even expects. If the unknown is truly unknown (hello, housing prices won't stop falling!!) then the only direction is down.
ReplyDeleteMore wisdom from our good friend Neil...
ReplyDelete"I believe strongly we will have "economic riots" before this plays out much further. Spring/Summer 2008 or 2009. Most likely 2008.
Got Popcorn?
Neil
2:51 PM, September 11, 2007"
The ever prescient nostradamus strikes again!!!
Keep in mind that you would have done SIGNIFICANTLY BETTER in treasuries not only since you'd have likely almost doubled your initial money at 5% for 10 years, but in addition, look how dollar-cost-averaging would have done!! You would have lost significant actual money on virtualy everything you've bought since (as opposed to opportunity costs).
ReplyDeleteFrom DC2
ReplyDeleteGreat Chart
It also proves that although housing prices are depreciating, there are still much better investments than stocks.
Home prices are not at 10-year low levels yet.
Riots, huh? Figures. It's not real until it puts it stamp on you.
ReplyDelete"It also proves that although housing prices are depreciating, there are still much better investments than stocks. "
ReplyDeleteWhich is a lot like trying to figure out whether you are better off chopping your money up into little bits, or just burning it.
Anonymous 1:29
ReplyDeleteWe are talking long term and provided you do not buy a property at the peak. You have to be smart about that.
I would call the stock market traders making the market tank to protest Obamas stimulus package an "economic riot".
ReplyDeleteA riot is civil disorder by groups lashing out in a sudden and intense rash of violence.
That graph looks like cleavage.
ReplyDelete"I would call the stock market traders making the market tank to protest Obamas stimulus package an "economic riot"."
ReplyDeleteYeah, because traders throwing away hundreds of billions of dollars as a protest is a really plausible.
"It also proves that although housing prices are depreciating, there are still much better investments than stocks. "
ReplyDeleteI think a point has to be made here. I don't think anybody here has ever said that buying real estate 10 years ago was stupid. They were saying buying it in 2004/2005/2006/2007 was stupid.
Of cousre spx doesn't account for dividends. (remember those?) Before they bacame all unfashionable when peope worried about double taxation they were the reason to buy stocks.
ReplyDeleteJim A