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Stingy Investor Tip Sheet

Party like it's 1968

After another down day on the markets we're in shooting distance of 1968 prices on the S&P500. That is, if you take inflation into account.

The following graph shows the real S&P500 price index with current price levels highlighted by the green line. The red line shows what we'd be in store for if we suffer from a repeat of the 1929-32 collapse.

Today I want to highlight the yellow line which reflects a further 10% decline from today's price. That's about what it would take for the S&P500 to be roughly even with its inflation-adjusted level in 1968 based on monthly prices.

But hold the presses! Based on the daily December 2, 1968 high, we are only a 6.8% drop away from being even with 1968 prices on an inflation-adjusted basis. Keep an eye out for 653.32 on the S&P500 which is the magic number.

(click for larger version)

As an aside, it's oddly fascinating to see that the S&P500 has basically wiped out all of the gains from the 1990s bubble.


The 1929-32 loss was corrected from 86.1% to 80.61%. The extra 0 was lost in transcription. The graph's red line was modified slightly to reflect this change.

03/02/2009   10:30 PM EST   Permlink   save & shareMarkets

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