Mar
8
Chart of the Day — Blue Sky Ahead, from Kim Zussman
March 8, 2010 |
Multi-year lows in stocks occurred twice in the last decade: Both in March, in 2003 and in 2009.
The attached chart shows log(SPY) daily closes for both the 2003 and 2009 bottoms, aligning the low days exactly (3/11/03 and 3/9/09). Both series look back 608 trading days before the bottom. Following 3/11/03, log(SPY) is shown to +900 days (10/4/06), and we are now beyond the 3/9/09 low by +250 days.
Plotting log(SPY) allows direct comparison of proportional returns (eg, %) going into and coming out of the abysses. What are the differences?
2009 decline was faster/deeper than 2003
2009 post-decline rise was faster than 2003
2003 is prime and 2009 is not
one is red the other yellow
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Only to have another comparison (perhaps in black) in coming few years. More like blue value-abyss ahead.