If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

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nedsaid
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by nedsaid »

MrCheapo wrote: Sun Dec 05, 2021 11:50 am

What do you mean by " "one decision" stocks"? I think you mean it's like the 1970's where 50 stocks propelled the market to its highs and then a subsequent crash?
Reaching into very foggy memory banks, the phrase came about during the 1960's, the era of the Nifty Fifty stocks. The idea was that you could buy a stock and just put it away. If you could buy enough "one decision" stocks that you never needed to sell, you would have a pretty good portfolio. In the era of index funds, you can do much of the same by buying an S&P 500 Index fund.

In real life, nothing is forever, even great companies. Eastman Kodak, for example, is just a shell of its former self. The good news is that a broad index adjusts for this.
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by peskypesky »

000 wrote: Sat Dec 04, 2021 6:36 pm
peskypesky wrote: Sat Dec 04, 2021 6:28 pm well, that it very interesting. As I've written on another thread, for the first time in my life, I've been examining the possibility of buying gold. Probably will do it soon with my self-directed IRA.
Just make sure you buy the kind of gold that is allowable within an IRA (lookup IRA prohibited transactions).
thank you for the tip. I'll look into that.
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JoMoney
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by JoMoney »

MrCheapo wrote: Sun Dec 05, 2021 11:48 am Clearly you gave this some thought, but I'm not sure what conclusion you wish to draw from this? The two time frames overlap
Yes, it is an overlapping period, the 2000-present period also contains the 2008-present period.
I'm not necessarily trying to draw any conclusion. Just present historical time periods that had experienced the same market growth (inflation adjusted) over the same relative amount of time. I did it both from what appeared to me as the most notable recent "bull market peak" and "bear market trough"

It looks to me like there were periods in the past where such growth was followed by continued growth for 10+ years, sideways moves for 10+ years, and periods that were peaks followed by a severe drop.
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by jeffyscott »

MrCheapo wrote: Sun Dec 05, 2021 11:50 am
jeffyscott wrote: Sun Dec 05, 2021 7:18 am
MrCheapo wrote: Wed Dec 01, 2021 1:41 pm As a student of history I'd like to understand which time period (and why) we are now in is most like a period from the past.

Some thoughts. Certainly not like 2001 .com Tech crash. The tech companies now have had a material impact on society and mostly justify their high valuations. Perhaps more similar to the 2008/9 sub-prime mortgage crisis because a global event caused a major disruption?
I see it being much more like the 1990s than 2008, wrt stocks. Like then and unlike 2008, it's only a subset of stocks that are, perhaps, overpriced or at least priced for perfection.

International and value stocks are much more reasonably priced, just like the in the late 1990s.

But maybe it's more like the "nifty fifty" era, perhaps with a smaller set of "one decision" stocks?
Interesting observation. Your point is that in 2008 everything was overpriced? Is that right?
Yeah or, in any case, all types of stocks went down at once. In the post-2000 period, small cap value went up until about the middle of 2002 as one example. Depending on how you accessed it, value in general did okay (Vanguard Value index, not so much, but things like DFLVX or deep value managed funds like DODGX). Of course, these same market segments had fallen far behind in the 1990s (just as has happened in the past 5-10 years).
What do you mean by " "one decision" stocks"?
That was just another term for the "nifty fifty", I was reminded of it when I was looking for the time period that the nifty fifty was a thing. I was thinking that is sorta equivalent to FAANG (or whatever the latest acronym is, MAANA :?: :wink: ), without the dividends.
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JoeRetire
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by JoeRetire »

interwebopinion wrote: Wed Dec 01, 2021 2:46 pm
The prevalence of nuclear weapons have paradoxically made the world safer, since it forecloses the risk of large-scale wars. The autocrats that have taken power in countries with nuclear weapons have deep business interests, and so have a vested interest in the global economy.
Uh, no.
If Poland or France had a nuclear deterrent in WW2, then Hitler would never have been as dangerous.
Are you assuming that if two countries had nuclear weapons at the beginning of WW2, that Hitler wouldn't have obtained them as well?
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by rockstar »

Bitcoin reminds me of the dotcom run up.

The rest I can't compare to anything I've see in the past. The 1918 Spanish Flu occurred in a very different world with wars, much smaller population, less advanced medicine, and with less ability to travel. How people are reacting to it financially is unique to this time period. The closest comparison to what I'm seeing is in the Canadian TV show ReGenesis. It's the closest proxy I have to the events today. Then, I'll also fall back on Demolition Man as a good future proxy as well.

I think, you'll find fiction as a more reliable source of inspiration for what's happening today from a financial perspective than history.
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by ClassII »

JoeRetire wrote: Mon Dec 06, 2021 11:52 am
interwebopinion wrote: Wed Dec 01, 2021 2:46 pm
The prevalence of nuclear weapons have paradoxically made the world safer, since it forecloses the risk of large-scale wars. The autocrats that have taken power in countries with nuclear weapons have deep business interests, and so have a vested interest in the global economy.
Uh, no.
If Poland or France had a nuclear deterrent in WW2, then Hitler would never have been as dangerous.
Are you assuming that if two countries had nuclear weapons at the beginning of WW2, that Hitler wouldn't have obtained them as well?
Well for starters there hasn't been any major wars between powers since WWII (75 years!). That's fairly unprecedented in history and considering how fast the world has been moving since it's even more surprising. The only major difference between antiquity-1945 and 1945-Present is nuclear weapons. To your second point: Lets say in 1935 the atomic bomb was developed and shortly after the US, France, Germany and Russia all had them. It would make it all but impossible for Hitler to invade the rest of Europe because he would know the moment he stepped foot in France he would be blown sky high. Even a first strike nuclear blitz hitting Paris, London and Moscow would end in the same spot, oblivion. The Cold War went the way it did precisely because of the no-win chess game that is nuclear warfare. Sure someone could of made a mistake in 1939 just like it could of in 1962, 1985 or even 2021 but generally speaking the moment nuclear bombs were created war was completely changed.
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by ClassII »

I'll go with the theory that today's economy is closest to shortly after WWII America. There was a lot of teething problems as the economy realigned once the war was over. I recall stories of my grandparents desperate for concrete of all things to build their house in 1950. There was a lot of demand-driven inflation back then just like today. However, the massive government stimulus of the New Deal and the war effort caused a surge in the 50s from a combination of stimulus dollars flooding the world and the technological improvements created from the war. All of that sounds awfully like what we're going through right now (We're closer to 1946 than 1955 so we'll just have to see).

I'm optimistic the surge of investment in biotech will pay dividends over the next decade as technology such an mRNA that was merely being scratched at is going to create a flood of new treatments. Not only will that do well for biotech stocks but should give a big boost to the whole economy. That's just one very obvious sector.
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by AnnetteLouisan »

There was widespread rationing in the general population through the Dept of Agriculture of an extremely long list of the most basic food items in the US through 1949: food oils, powdered milk, wheat, sorghum (??), the very basics.
Last edited by AnnetteLouisan on Mon Dec 06, 2021 4:48 pm, edited 1 time in total.
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by rockstar »

AnnetteLouisan wrote: Mon Dec 06, 2021 4:45 pm There was widespread rationing in the general population through the Dept of Agriculture of the most basic food items in the US through 1949: food oils, wheat, the very basics.
This is why I often go to fiction as an inspiration source. Demolition Man for me hits the major bullet points. It's uncanny.

https://www.vulture.com/2020/04/intervi ... aters.html
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by AnnetteLouisan »

rockstar wrote: Mon Dec 06, 2021 4:48 pm
AnnetteLouisan wrote: Mon Dec 06, 2021 4:45 pm There was widespread rationing in the general population through the Dept of Agriculture of the most basic food items in the US through 1949: food oils, wheat, the very basics.
This is why I often go to fiction as an inspiration source. Demolition Man for me hits the major bullet points. It's uncanny.
My point was just that this ain’t that IMHO. Maybe for some it is.

(I wasn’t there in ‘49, but I saw the list. It’s in the federal register for the ag dept if anyone wants to check it out. There’s like 100 rationed items and it’s all like wheat, corn, soy, oil, margarine, kerosene, barley, coffee substitute, powdered milk, steel wool, wood shavings, soap flakes… just unreal).like ration coupons- the real deal!
Last edited by AnnetteLouisan on Mon Dec 06, 2021 4:58 pm, edited 1 time in total.
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JoeRetire
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by JoeRetire »

ClassII wrote: Mon Dec 06, 2021 4:33 pmThe only major difference between antiquity-1945 and 1945-Present is nuclear weapons.
You think that's the only major difference?
Lets say in 1935 the atomic bomb was developed and shortly after the US, France, Germany and Russia all had them. It would make it all but impossible for Hitler to invade the rest of Europe because he would know the moment he stepped foot in France he would be blown sky high. Even a first strike nuclear blitz hitting Paris, London and Moscow would end in the same spot, oblivion.
Oblivion for...?
Sure someone could of made a mistake in 1939
It only takes one.
the moment nuclear bombs were created war was completely changed.
I agree with this part.
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by Fallible »

MrCheapo wrote: Wed Dec 01, 2021 1:41 pm As a student of history I'd like to understand which time period (and why) we are now in is most like a period from the past. ...
An interesting thread and discussion, but can meaningful comparisons be made to the financial period we are in now that includes nearly two years of a historic, still-surging global pandemic?
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by MrCheapo »

Fallible wrote: Mon Dec 06, 2021 6:49 pm
MrCheapo wrote: Wed Dec 01, 2021 1:41 pm As a student of history I'd like to understand which time period (and why) we are now in is most like a period from the past. ...
An interesting thread and discussion, but can meaningful comparisons be made to the financial period we are in now that includes nearly two years of a historic, still-surging global pandemic?
Whilst is true there hasn't been a global pandemic since 1918, we can replace global pandemic with any other event that causes a global meltdown of the market. The 2007-2008 global financial crisis comes to mind https://en.wikipedia.org/wiki/Financial ... _2007–2008
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by averagedude »

It is said that history doesn't necessarily repeat itself, but it often rhymes.
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by Monsterflockster »

MrCheapo wrote: Wed Dec 01, 2021 1:41 pm As a student of history I'd like to understand which time period (and why) we are now in is most like a period from the past.

Some thoughts. Certainly not like 2001 .com Tech crash. The tech companies now have had a material impact on society and mostly justify their high valuations. Perhaps more similar to the 2008/9 sub-prime mortgage crisis because a global event caused a major disruption?

It seems we are entering a higher inflationary environment with the stock market at highs due to excessive cash due to government funding and margin lending?
This is a time like no other. We have nearly doubled the population, adding nearly 4 billion people to our planet. Technological advances the past 100 years are like no other time in our history. At some point our species will reach its carrying capacity… our only hope is further advancement of technology to somehow not destroy our environment or each other.
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by Tamalak »

No historical parallels imo. Valuations are close to dot-com levels but the reasons for the valuations are completely different. Covid, and our response to it, on top of our high level of technology, is re-wiring our economy into something we've never seen before. Fed policy is dovish in an unprecedented sense and I don't think they're ever going back to the interest rates of the past.

My guess now is that equities, especially US equities, will have lower than historical real returns but also be more stable going forward.
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by interwebopinion »

JoeRetire wrote: Mon Dec 06, 2021 11:52 am
If Poland or France had a nuclear deterrent in WW2, then Hitler would never have been as dangerous.
Are you assuming that if two countries had nuclear weapons at the beginning of WW2, that Hitler wouldn't have obtained them as well?
Doesn't matter if he did. As long as the others had them, there would be a credible deterrent. The only reason there's peace between India and Pakistan is I believe because both have nuclear weapons. If Poland or France had had them, Hitler would not have been able to invade, and WW2 perhaps would never have happened.
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by sunnywindy »

Today reminds me of the late 1980s or early 1990s and the ascendance of the Baby Boomers. In 2020, the Millennials became the largest group in US history. They will most certainly drive equity prices higher than people are realizing; the only risk to this is if they invest in non-equity offerings like Bitcoin, the Metaverse, or something we don't know about yet.
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by Fallible »

MrCheapo wrote: Mon Dec 06, 2021 10:50 pm
Fallible wrote: Mon Dec 06, 2021 6:49 pm
MrCheapo wrote: Wed Dec 01, 2021 1:41 pm As a student of history I'd like to understand which time period (and why) we are now in is most like a period from the past. ...
An interesting thread and discussion, but can meaningful comparisons be made to the financial period we are in now that includes nearly two years of a historic, still-surging global pandemic?
Whilst is true there hasn't been a global pandemic since 1918, we can replace global pandemic with any other event that causes a global meltdown of the market. The 2007-2008 global financial crisis comes to mind https://en.wikipedia.org/wiki/Financial ... _2007–2008
Besides the human toll, the global pandemic has wreaked havoc not just with the stock market (although the market so far keeps bouncing back), but also the economy, and the causes of each differ greatly. We also pretty much know how the '08 financial crisis and fears of financial meltdown turned out. Maybe there could be comparisons with some areas of the two crises, but probably nothing meaningful until we know how Covid plays out.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by VanGar+Goyle »

MrCheapo wrote: Wed Dec 01, 2021 1:41 pm As a student of history I'd like to understand which time period (and why) we are now in is most like a period from the past.
This time reminds me of December 2017, when one party was trying to cram many changes in the tax code before year
end, the reconciliation bill was large and poorly defined, and maybe changing in unknown ways in real time.
The stock market and housing market felt overpriced, but I have learned to not trust my feelings.
It also feels like a Holiday Season in the Roaring Twenties :)
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by MrCheapo »

Fallible wrote: Tue Dec 07, 2021 2:53 pm
MrCheapo wrote: Mon Dec 06, 2021 10:50 pm
Fallible wrote: Mon Dec 06, 2021 6:49 pm
MrCheapo wrote: Wed Dec 01, 2021 1:41 pm As a student of history I'd like to understand which time period (and why) we are now in is most like a period from the past. ...
An interesting thread and discussion, but can meaningful comparisons be made to the financial period we are in now that includes nearly two years of a historic, still-surging global pandemic?
Whilst is true there hasn't been a global pandemic since 1918, we can replace global pandemic with any other event that causes a global meltdown of the market. The 2007-2008 global financial crisis comes to mind https://en.wikipedia.org/wiki/Financial ... _2007–2008
Besides the human toll, the global pandemic has wreaked havoc not just with the stock market (although the market so far keeps bouncing back), but also the economy, and the causes of each differ greatly. We also pretty much know how the '08 financial crisis and fears of financial meltdown turned out. Maybe there could be comparisons with some areas of the two crises, but probably nothing meaningful until we know how Covid plays out.
That's an interesting point. I remember the delayed reaction to the sub-prime crisis. I bought a home in 2007 at half the price it was in 2006 (these are tract homes) but the melt down didn't hit the SP500 until 2008. Maybe that's what we can learn from that previous crisis: that the affect on the economies are drastic but don't hit the market until later?
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by Fallible »

MrCheapo wrote: Wed Dec 08, 2021 11:17 am
Fallible wrote: Tue Dec 07, 2021 2:53 pm
MrCheapo wrote: Mon Dec 06, 2021 10:50 pm
Fallible wrote: Mon Dec 06, 2021 6:49 pm
MrCheapo wrote: Wed Dec 01, 2021 1:41 pm As a student of history I'd like to understand which time period (and why) we are now in is most like a period from the past. ...
An interesting thread and discussion, but can meaningful comparisons be made to the financial period we are in now that includes nearly two years of a historic, still-surging global pandemic?
Whilst is true there hasn't been a global pandemic since 1918, we can replace global pandemic with any other event that causes a global meltdown of the market. The 2007-2008 global financial crisis comes to mind https://en.wikipedia.org/wiki/Financial ... _2007–2008
Besides the human toll, the global pandemic has wreaked havoc not just with the stock market (although the market so far keeps bouncing back), but also the economy, and the causes of each differ greatly. We also pretty much know how the '08 financial crisis and fears of financial meltdown turned out. Maybe there could be comparisons with some areas of the two crises, but probably nothing meaningful until we know how Covid plays out.
That's an interesting point. I remember the delayed reaction to the sub-prime crisis. I bought a home in 2007 at half the price it was in 2006 (these are tract homes) but the melt down didn't hit the SP500 until 2008. Maybe that's what we can learn from that previous crisis: that the affect on the economies are drastic but don't hit the market until later?
Then there is John Bogle, who has said of history repeating itself: “My concern is too many of us make the implicit assumption that stock market history repeats itself when we know, deep down, that the only certainty about the equity returns that lie ahead is their very uncertainty.”
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by ApeAttack »

interwebopinion wrote: Tue Dec 07, 2021 1:05 pm
JoeRetire wrote: Mon Dec 06, 2021 11:52 am
If Poland or France had a nuclear deterrent in WW2, then Hitler would never have been as dangerous.
Are you assuming that if two countries had nuclear weapons at the beginning of WW2, that Hitler wouldn't have obtained them as well?
Doesn't matter if he did. As long as the others had them, there would be a credible deterrent. The only reason there's peace between India and Pakistan is I believe because both have nuclear weapons. If Poland or France had had them, Hitler would not have been able to invade, and WW2 perhaps would never have happened.
So let's give every nation nuclear weapons and we will end war everywhere.
May all your index funds gain +0.5% today.
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by ApeAttack »

rockstar wrote: Mon Dec 06, 2021 4:48 pm
AnnetteLouisan wrote: Mon Dec 06, 2021 4:45 pm There was widespread rationing in the general population through the Dept of Agriculture of the most basic food items in the US through 1949: food oils, wheat, the very basics.
This is why I often go to fiction as an inspiration source. Demolition Man for me hits the major bullet points. It's uncanny.

https://www.vulture.com/2020/04/intervi ... aters.html
Well, Taco Bell did win the fast food wars and I currently use my 3 shells very well.
May all your index funds gain +0.5% today.
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Re: If History Repeats - From a Financial Perspective What Period of Time Does Today Most Remind you Off?

Post by ApeAttack »

JoeRetire wrote: Mon Dec 06, 2021 11:52 am
interwebopinion wrote: Wed Dec 01, 2021 2:46 pm
The prevalence of nuclear weapons have paradoxically made the world safer, since it forecloses the risk of large-scale wars. The autocrats that have taken power in countries with nuclear weapons have deep business interests, and so have a vested interest in the global economy.
Uh, no.
If Poland or France had a nuclear deterrent in WW2, then Hitler would never have been as dangerous.
Are you assuming that if two countries had nuclear weapons at the beginning of WW2, that Hitler wouldn't have obtained them as well?
Yup. Germany was a leader in scientific knowledge at the time. It's highly unlikely Poland or France would have developed nukes before Germany.
May all your index funds gain +0.5% today.
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