2009 was our 1974

Discussion in 'Trading' started by KINGOFSHORTS, Dec 31, 2009.

  1. Now 8 years of the bear cycle/sideways market to conclude before the next mega bull market takes effect

    2017 for superbull run.
  2. Or maybe 2000 was our 1974, and we are now in 1983 ready to start a 2 decade boom. :p

    Seriously though...trying to correlate time frames is such hogwash. It's called curve fitting. It means nothing really. The only statistic that matters IMO is the acceleration/deceleration of trends in the macros. Since every time-frame is unique in its own manner, and the current "minds" are using tactics based on that unique timeframe, it's pointless to look at long term trends from any point in history as some kind of reference. Too many different variables were at play all the way from the types of industries prevalent at the time to strategies used by the fed and companies to "stem" destruction.
  3. 1983 when the big bull started rates were 17% at the start of huge 25 year down cycle and now they have no were to go but up. 1983 the economy had no deleveraging problems and now the deleveraging has just started. we have a decade to work threw this bust
  4. That is precisely my point. Trying to "predict" what is going to happen in the future is ridiculous. You don't know what the fed is going to do. Inflation was already beginning to be a problem in 1974. Where is our inflation right now? There was an oil supply shock in the 70's. Are we going to have an oil shock? What if the fed keeps rates low? What if we don't have any inflation due to deleveraging, but the fed prints enough to keep deflation from taking over?

    What if...what if...what if? Like I said...current macro trends and current reactions to combat economic crisis is more important than whatever happened in 1974. Every time frame is an apple to orange comparison. Unless every variable was identical, you aren't going to have any 2 timeframes play out exactly the same. Have we yet in the last 100 years?
  5. Every time frame is an apple to orange comparison. Unless every variable was identical, you aren't going to have any 2 timeframes play out exactly the same. Have we yet in the last 100 years?


    Presidential cycles.
  6. I'm sold on the weak dollar + inflation hypothesis. Its not that complicated. Put yourself in the shoes of the Fed and the gov and ask what you would do?

    Would you let housing continue to decline, banks falter as a result, and risk depression? Or would you do anything you possibly can to fix the housing price problem?

    Well, they've already answered that question. The problem is they can't actually stop the deflation of housing as an asset. What they can do is weaken the dollar to nominally get the prices back up, thereby avoiding many of the most critical problems.

    They really don't have any choice.

    So, this is what they will do. The only two questions are what are the timing of the inflationary effects, and how to best profit from it.

    If you are a long term investor, it's pretty easy to just start positioning yourself strategically for a 10 year inflationary period.

    If you are a trader, its a lot more complicated. Most likely the gold and commodities runup we've already had is premature and will selloff before really and truly ramping.
  7. do you really think the rest of the world will just sit there and let the us devalue its currency to hell? hell no we'll have massive competitive devaluations with one currency trying to devalue more than the other. you're forgetting much of the worlds money is in $ assets which kills them if the $ goes to shit. throw in that there strong currencies(aka the yen) kill there economies theres no way that happens.
  8. Yes piglet you raise a good point. I do expect there will be a lot of devaluation competition.

    Honestly I don't know what role that will play or what impact it will have.

    Still, I expect more of a 70s replay than anything. The purchasing power of the dollar will decline, which will have a primary effect of stabilizing and raising housing prices.
  9. 2000 <=> 1966
    2009 <=> 1973

    It's a defensible argument that has been made fairly convincingly by a number of people.

    Only '74 through '82 wasn't "sideways", it was a toboggan ride down.
  10. It was a roller coaster, pointed down most dramatically by the loss of purchasing power, i believe.
    #10     Dec 31, 2009