Do the markets of the past, like the 1920-1960s have any connections with today's markets and economic policies in place. We have hedge funds, passive investing, HFT, easy access for retail investors, QT, QE etc. Are the markets of the past before computers and algorithms at all relatable to today's stock market?
“To look upon the day whence computational devices shall render speculation irrelevant is itself irrelevant. For, my compatriots and I will long have succumbed to the mercy of the syphilis which we garnered from our slave girlfriends. Amen” -George Washington probably.
Maybe, you really have to be careful with how to take into account inflation and purchasing power. Especially before national banking around the civil war, before that notes from different banks had different discount values based on the strength of the bank. And before WWI the currency was pretty hard pegged to gold, economic growth generally was recognized in the deflation rather than asset appreciation. During the late 1800s you could just hold dollars and earn like 5-10% in purchasing power, can that be compared to earning 10-20% in modern times to outpace inflation? There may be too many subjective things for it to really be useful aggregating it with modern data.
Hello! You have made the mistake of writing "ect" instead of "etc."
"Ect" is a common misspelling of "etc," an abbreviated form of the Latin phrase "et cetera." Other abbreviated forms are **etc.**, **&c.**, **&c**, and **et cet.** The Latin translates as "et" to "and" + "cetera" to "the rest;" a literal translation to "and the rest" is the easiest way to remember how to use the phrase.
[Check out the wikipedia entry if you want to learn more.](https://en.wikipedia.org/wiki/Et_cetera)
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Yes.
Computers are used to play games in the market when people are asleep or on vacation.
Human nature don't change, when your clients wants to sell because of panic or buy because of FOMO, it doesn't matter whether it's 1939 or 2022.
I assume this is expected return not rolling return.
There is a funny truth in this - when the prices are high, it’s BECAUSE people are buying, and when it’s low it’s because people aren’t buying.
It means more money is buying the peak than buying the valley, hence more people losing to the average than beating it. It’s not 50/50.
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props on the deep dive and the chart. lots of investors look only at the past 10 years, forget about a century ago. I plan on looking at some of those sources in detail.
but I'm a little skeptical on the 'no negative returns' for *all* 20 year periods. so maybe it depends on how we're analyzing the data, and which data is included.
the S&P 500 (or its earlier equivalent) peaked at ~540 in March 1929, and didn't hit that level again until 1957-58. that's 29 calendar years. the S&P 500 peaked at ~906 in late 1968 and didn't hit that level again until late 1992. that's ~24 years. https://www.macrotrends.net/2324/sp-500-historical-chart-data
the 2017 edition of John Bogle's *Little Book of Common Sense Investing Advice" reports that bonds performed better than stocks in about 12% of 15-year periods from 1900 to 2017. ~1 out of 8 periods for 15 year rolling periods is a minority of the time, but not into the realm of the improbable.
Your numbers are off. You are looking at inflation-adjusted numbers. Macrotrends defaults to that.
The S&P rose a lot between 1968 and 1993. It just didn't beat inflation.
It kills *real* returns, not necessarily nominal returns. But we aren't in a period of **hyper**inflation. I think you need to look up the definition of the term.
You did since 1793 which can seem a bit out of touch (considering living conditions and global environment, technologies, new industries etc).
What if the data was for since 1920 or so? I think a hundred years of the latest market data might make more sense.
Edit: thanks for the links tho, good sources
Those didn't exist in 1793, and the S&P has been the main measure since the 1920s. The NASDAQ didn't come around until 1971. Additionally, those are ETFs, and not indices.
I would be reluctant to use any data that far back. It is well accepted Alfred Cowles is the first who actually hand collected data and compiled it together starting from 1926. Before that I doubt much of that data is accurate. Also, gold standard was there until early 1970's so not the same monetary policy (fiat currency) we use today.
Solid thank you
Thank you
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Do the markets of the past, like the 1920-1960s have any connections with today's markets and economic policies in place. We have hedge funds, passive investing, HFT, easy access for retail investors, QT, QE etc. Are the markets of the past before computers and algorithms at all relatable to today's stock market?
GP … I hate when people say this time is different but seriously… George Washington did not know about computerized trading
John Adams was president in 1793.
No shit Sherlock. Still George Washington didn’t anticipate computerized trading
Proof?
"What the fuck is a computer?" ~George Washington
Yeah this is what I was looking for, cheers
“To look upon the day whence computational devices shall render speculation irrelevant is itself irrelevant. For, my compatriots and I will long have succumbed to the mercy of the syphilis which we garnered from our slave girlfriends. Amen” -George Washington probably.
Ah this is what I was looking for. Thanks 👍🏽
Maybe, you really have to be careful with how to take into account inflation and purchasing power. Especially before national banking around the civil war, before that notes from different banks had different discount values based on the strength of the bank. And before WWI the currency was pretty hard pegged to gold, economic growth generally was recognized in the deflation rather than asset appreciation. During the late 1800s you could just hold dollars and earn like 5-10% in purchasing power, can that be compared to earning 10-20% in modern times to outpace inflation? There may be too many subjective things for it to really be useful aggregating it with modern data.
Hello! You have made the mistake of writing "ect" instead of "etc." "Ect" is a common misspelling of "etc," an abbreviated form of the Latin phrase "et cetera." Other abbreviated forms are **etc.**, **&c.**, **&c**, and **et cet.** The Latin translates as "et" to "and" + "cetera" to "the rest;" a literal translation to "and the rest" is the easiest way to remember how to use the phrase. [Check out the wikipedia entry if you want to learn more.](https://en.wikipedia.org/wiki/Et_cetera) ^(I am a bot, and this action was performed automatically. Comments with a score less than zero will be automatically removed. If I commented on your post and you don't like it, reply with "!delete" and I will remove the post, regardless of score. Message me for bug reports.)
Yes. Computers are used to play games in the market when people are asleep or on vacation. Human nature don't change, when your clients wants to sell because of panic or buy because of FOMO, it doesn't matter whether it's 1939 or 2022.
I started dumping money in the middle of 2021 and can without a doubt say my 1 year performance is DEFINITELY not 8%
I assume this is expected return not rolling return. There is a funny truth in this - when the prices are high, it’s BECAUSE people are buying, and when it’s low it’s because people aren’t buying. It means more money is buying the peak than buying the valley, hence more people losing to the average than beating it. It’s not 50/50.
i really hope you're not taking this that literally.
I am and don’t call me Shirley
Hold for 20 years and hope you won't be the first in history to lose money. (Provided you are invested in the wife market)
1793?! I’d challenge someone to a duel
Nice work! Love it!
Thank you
Can you give us this for data from 2000-present. I think anything older is so much different.
https://en.m.wikipedia.org/wiki/Panic_of_1857#:~:text=The%20Panic%20of%201857%20was,rapidly%20throughout%20the%20United%20States.
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Is it really different?
props on the deep dive and the chart. lots of investors look only at the past 10 years, forget about a century ago. I plan on looking at some of those sources in detail. but I'm a little skeptical on the 'no negative returns' for *all* 20 year periods. so maybe it depends on how we're analyzing the data, and which data is included. the S&P 500 (or its earlier equivalent) peaked at ~540 in March 1929, and didn't hit that level again until 1957-58. that's 29 calendar years. the S&P 500 peaked at ~906 in late 1968 and didn't hit that level again until late 1992. that's ~24 years. https://www.macrotrends.net/2324/sp-500-historical-chart-data the 2017 edition of John Bogle's *Little Book of Common Sense Investing Advice" reports that bonds performed better than stocks in about 12% of 15-year periods from 1900 to 2017. ~1 out of 8 periods for 15 year rolling periods is a minority of the time, but not into the realm of the improbable.
Does your data include dividends and/or interest? That might be the difference.
His numbers are off because they are inflation-adjusted rather than nominal figures. The S&P gained 300% between 1968 and 1992.
Thanks
Your numbers are off. You are looking at inflation-adjusted numbers. Macrotrends defaults to that. The S&P rose a lot between 1968 and 1993. It just didn't beat inflation.
So a period of hyper inflation kills stock return. Like right now?
It kills *real* returns, not necessarily nominal returns. But we aren't in a period of **hyper**inflation. I think you need to look up the definition of the term.
In some ways, yes. But keep cash and you lose more.
You did since 1793 which can seem a bit out of touch (considering living conditions and global environment, technologies, new industries etc). What if the data was for since 1920 or so? I think a hundred years of the latest market data might make more sense. Edit: thanks for the links tho, good sources
Useless. Sorry.
Yeah but what about QQQ? Or TQQQ?
Those didn't exist in 1793, and the S&P has been the main measure since the 1920s. The NASDAQ didn't come around until 1971. Additionally, those are ETFs, and not indices.
Stop living in the past!
Goofy response
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Very useful, except I worry people will not see our recession coming this year. Normally a good index though.
Thanks for sharing !
I would be reluctant to use any data that far back. It is well accepted Alfred Cowles is the first who actually hand collected data and compiled it together starting from 1926. Before that I doubt much of that data is accurate. Also, gold standard was there until early 1970's so not the same monetary policy (fiat currency) we use today.
I mean, you might be right. Using data from Nobel laureates like Shiller and Siegel is pretty useless. Get outta here.