Inflation:
Inflation matters.
Why? Look at the two charts here and you will see why inflation matters.
Over time, inflation changes the "real price" of the things we buy by dramatic amounts.
What everyone saw in 1980's Presidential Election was a big breakout in price above the major top extending back a decade. What really had happened though over the previous decade was a decline of 43% in the "real value of the portfolio" of stocks. That is a crushing decline, and a reason for investors to demand a change of leadership.
What happened AFTER the election is the interesting part. The RAW ENTHUSIASM of the Reagan landslide victory in the electoral college vote 489-49 where Reagan won all states except 7 states (Hawaii, Minnesota, DC, Maryland, Rhode Island, Georgia, West Virginia), the market had a dramatic 27% decline from the peak which put the total drop in the market "inflation-adjusted" at 62.8%!
It takes PAIN to help spur us on and 62.8% is a LOT OF PAIN. Many changes started in the depths of this BEAR MARKET decline which everyone KNEW and FELT, but doesn't SHOW in the popular price averages which aren't adjusted for inflation.
Some may argue that dividends helped reduce the amount of the decline, and that is true, but also tax rates were so high to offset that benefit or cushion of dividend income.
That is what I wanted to show you all today. A LONG TERM picture of PAIN, which is a very different story from what most people are summarizing about that time when they look back and talk about the 1970's-1980's in the news today. Be mindful of listening to ANYONE's summary of the past, for it likely glosses over very important facts with great omissions and mis-statements. Do your own research right here at TradingView.com and see for yourself so you aren't mis-led by the noise in the media.
Cheers.
Tim West
4:59AM EST February 3, 2017
PS - My favorite chart link below is the last one, DJIA INDUSTRIALS 100 YEARS .... Check it out.
Inflation matters.
Why? Look at the two charts here and you will see why inflation matters.
Over time, inflation changes the "real price" of the things we buy by dramatic amounts.
What everyone saw in 1980's Presidential Election was a big breakout in price above the major top extending back a decade. What really had happened though over the previous decade was a decline of 43% in the "real value of the portfolio" of stocks. That is a crushing decline, and a reason for investors to demand a change of leadership.
What happened AFTER the election is the interesting part. The RAW ENTHUSIASM of the Reagan landslide victory in the electoral college vote 489-49 where Reagan won all states except 7 states (Hawaii, Minnesota, DC, Maryland, Rhode Island, Georgia, West Virginia), the market had a dramatic 27% decline from the peak which put the total drop in the market "inflation-adjusted" at 62.8%!
It takes PAIN to help spur us on and 62.8% is a LOT OF PAIN. Many changes started in the depths of this BEAR MARKET decline which everyone KNEW and FELT, but doesn't SHOW in the popular price averages which aren't adjusted for inflation.
Some may argue that dividends helped reduce the amount of the decline, and that is true, but also tax rates were so high to offset that benefit or cushion of dividend income.
That is what I wanted to show you all today. A LONG TERM picture of PAIN, which is a very different story from what most people are summarizing about that time when they look back and talk about the 1970's-1980's in the news today. Be mindful of listening to ANYONE's summary of the past, for it likely glosses over very important facts with great omissions and mis-statements. Do your own research right here at TradingView.com and see for yourself so you aren't mis-led by the noise in the media.
Cheers.
Tim West
4:59AM EST February 3, 2017
PS - My favorite chart link below is the last one, DJIA INDUSTRIALS 100 YEARS .... Check it out.
코멘트:
And you can how President Bush did in his two terms versus Gold in this next chart.
Here's the data point: President Bush lost 78% vs Gold over his two terms, putting him just a little worse than President Jimmy Carter's loss of 75%. Amazing.
Here's the data point: President Bush lost 78% vs Gold over his two terms, putting him just a little worse than President Jimmy Carter's loss of 75%. Amazing.
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Add in the relative performance of the S&P500 versus GOLD which we do by dividing the S&P500 by the price of Gold (SPX500/XAUUSD) and you really see the picture even in more detailed "pain".