Is the stock market brewin’ for a boomin’?

Earlier I wrote about how similar this period is to the 1970’s and Nixon-Ford-Carter years in office. And how, within a few years of Carter, we underwent perhaps the greatest economic expansion in history. Before that, I wrote how the various crises of our times were encouraging. Because crises typically lead to reforms. And reforms are good for us.

Now to the stock market. It looks a lot like the market from 1967 to 1982. In those years the market went nowhere. (January 1967 – Dow was 786. January 1982 it was 875.) Meanwhile, pressures grew.

Sure, it went up a hundred points. And down a hundred points. But for years when it rose it hit a ceiling. When it fell it hit a floor. And so the ups and downs were contained within the ceiling and the floor. The market did not break beyond them. So after many years of ups and downs the market was no further ahead than where it stood many years before.

That’s what our market has been doing for 11 years.

This also looks a lot like the market from 1931 to 1947. (January 1931 – Dow was 170. January 1947 it was 170.) Again, lots of ups and downs. Between ceiling and floor. But after many years the market was no higher than it had been at the start.

And that is where our market is today. (January 2000 – Dow at 11,700. As I write this, Dow at 11,850.)

Now for the interesting part. After doldrums, the market roared.  After 1947 the market rose 447 percent. That was huge. It created fortunes for investors. After 1982 the market rose 1300 percent. That is not a typo. If you had $10,000 invested broadly in stocks in 1982 you would have seen it grow to $130,000 by 2000.