A comparison of the Dow Jones Industrial Average today to Japan's Nikkei Index leading up to and after its peak in 1989. There are a lot of similarities and some differences. What do they mean?
=
Interesting article and good to see some analysis. I have often warned against taking any notice of the finance media's love of pumping up stocks. The nightmare scenario for the major indices is that they follow the path of the Nikkei - down some 80% from its peak.
The article overlaps the Dow and Nikkei taking the zero point at the peak of both markets. The Dow bubble was partially pricked by the dotcom crash, so that its rally was less spiked than the Nikkei. However, we are approaching a critical period where either the Dow (and other US markets) continues to slide as the Nikkei has been doing or the analysis starts to break down and we see a concerted effort globally to get the economy growing again.
I know, these seem like obvious either/or options but it is wise to see how far history can be a guide. It is particularly useful as an antidote to the gushing press who see the slightest rise as a cue to con people into buying more stocks. Things can get worse!
Make Money from Bookmarks Too!
0 comments:
Post a Comment