2008: Start date = 8/1/2008 End date = 10/9/2008
1929: Start date = 8/20/1929 End date = 10/28/2008
Clearly, trillions of dollars worth of government intervention are needed to save the world from the depression!
There needs to be a GM and Ford death watch. Those companies are at $5+ and $2+ a share now. Effing incredible. Well, that’s what happens when you manage your company like it’s still 1957.
Corey, where did you get your data from? And which factor are you using to normalize the scale of small numbers in 1929 vs. big numbers in 2008?
I charted a similar graph (it is posted on my blog), and the crash of 1929 is a few days after the peak, while the crash of 2008 is about a year after the peak that happened in 2007.
I agree with you that so far the loss of equity has been similar.
No conclusions should be made yet, as the bear market of late 2007-2008 is still too recent. More time is needed.
I got the data from yahoo finance. To normalize the data I just set the starting value of each period equal to 100 then applied the daily percent change to that at each time step.
For the 1929 period I used the dates 8/1/1929 - 10/29/1929
For the 2008 period I used the dates 7/15/2008 - 10/9/2008
I didn’t intend to imply any predictive power in the comparison, I was just trying to get some idea of what it might have been like in 1929.
I made the chart to show the dangers of the buy and hold strategy to a few acquaintances. They insist that cost averaging on the way down then waiting for prices to rise again is the best strategy.