Charting some of the big global events of the last 20 years
I just wanted to add a few events to a chart of the S&P 500 and share some quick thoughts about them. The first and most obvious is just how strong this bull market has become.
It's more than doubled its highs from the DotCom Bubble and the Great Financial crisis.
The 2016 election and the COVID-19 crisis both barely put a dent into the price action. It is really hard to call tops and bet against the market. Only a few people in history have ever done it well.
For me, when I see this chart, I just don't know how the market suffers another 20% drawdown again in the next 12 months. The COVID-19 crash seemed to be the big one. It wiped out a lot of "weak hands" and it also brought in a wave of new investors, mostly young and just getting started. The market would have to correct 30% just to get back to its prior COVID-19 lows.
And so I am left wondering: has new bull market just begun? Are we at the stages of something like the DotCom Bubble? Do we need to climb even higher, say another 50%-100% before we can talk about an impending correction? The strength of this market is a site to behold. And the difference between the DotCom Bubble and the Financial Crisis was that those were structural, broad market moments that lead to devaluation and cycle reset. I'm not sure now is the time for a cycle reset because it seems the sudden transition to WFH, remote work, and immediate Fed supportive policy may actually be the start of the next cycle.
This is on my mind and I'm thinking about it daily.
It's more than doubled its highs from the DotCom Bubble and the Great Financial crisis.
The 2016 election and the COVID-19 crisis both barely put a dent into the price action. It is really hard to call tops and bet against the market. Only a few people in history have ever done it well.
For me, when I see this chart, I just don't know how the market suffers another 20% drawdown again in the next 12 months. The COVID-19 crash seemed to be the big one. It wiped out a lot of "weak hands" and it also brought in a wave of new investors, mostly young and just getting started. The market would have to correct 30% just to get back to its prior COVID-19 lows.
And so I am left wondering: has new bull market just begun? Are we at the stages of something like the DotCom Bubble? Do we need to climb even higher, say another 50%-100% before we can talk about an impending correction? The strength of this market is a site to behold. And the difference between the DotCom Bubble and the Financial Crisis was that those were structural, broad market moments that lead to devaluation and cycle reset. I'm not sure now is the time for a cycle reset because it seems the sudden transition to WFH, remote work, and immediate Fed supportive policy may actually be the start of the next cycle.
This is on my mind and I'm thinking about it daily.
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