Notice: This is an excerpt from a reply to a post in Daily Speculations, Investments Office took the liberty to add a title to it ("71 reasons to be bearish from 1934 to 2005").
One of my prized possessions is a chart of stock market returns in Venita Van Caspel's book "The Power of Money Dynamics." Each year is annotated with a reason to have been bearish that year:
1934: Depression 1935: Civil war in Spain 1936: Economy still struggling 1937: Recession 1938: War clouds gather 1939: War in Europe
1940: France falls 1941: Pearl Harbor 1942: Wartime price controls 1943: Industry mobilizes 1944: Consumer goods shortages 1945: Post-war recession predicted 1946: Dow tops 200 - market "too high" 1947: Cold war begins 1948: Berlin blockade 1949: Russia explodes A-bomb
1950: Korean war 1951: Excess profits tax 1952: U.S. seizes steel mills 1953: Russia explodes H-bomb 1954: Dow tops 300 - market "too high" 1955: Eisenhower illness 1956: Suez crisis 1957: Russia launches Sputnik 1958: Recession 1959: Castro seizes power in Cuba
1960: Russians down U-2 plane 1961: Berlin Wall erected 1962: Cuban missile crisis 1963: Kennedy assassinated 1964: Gulf of Tonkin 1965: Civil rights marches 1966: Vietnam war escalates 1967: Newark race riots 1968: USS Pueblo seized 1969: Money tightens; market falls
1970: Cambodia invaded; war spreads 1971: Wage-price freeze 1972: Largest U.S. trade deficit in history 1973: Energy crisis 1974: Steepest market drop in four decades 1975: Clouded economic prospects 1976: Economic recover slows 1977: Market slumps 1978: Interest rates rise 1979: Oil prices skyrocket
1980: Interest rates at all-time highs 1981: Steep recession begins
(Van Caspel, 1983, pp. 124-125)
Unfortunately, I have the 1983 edition, so the chart ends there.
A modest attempt to bring the record up to date:
1982: Double-digit unemployment 1983: Record budget deficit 1984: Technology new issues bubble bursts 1985: Dollar too strong 1986: Dow at 1800 - "too high" 1987: Stock market crash 1988: Worst drought in 50 years 1989: Savings & loan scandal
1990: Iraq invades Kuwait 1991: Recession 1992: Record budget deficit 1993: Clinton health care plan 1994: Rising interest rates 1995: Dollar at historic lows 1996: Greenspan "irrational exuberance" speech 1997: Asian markets collapse 1998: Long Term Capital collapses 1999: Y2K problem
2000: Dot-com stocks plunge 2001: Terrorist attacks 2002: Corporate scandals 2003: Gulf War II 2004: High oil prices 2005: Trade deficit
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