Lol! Yes, I can see it now, "We're so proud of you, son! Now that you're a speculator and all...Remember how you wanted to get your MBA - oh, thank goodness that phase passed!"
The Pain of History
- Thread starter ShoeshineBoy
- Start date
Lol! Yes, I can see it now, "We're so proud of you, son! Now that you're a speculator and all...Remember how you wanted to get your MBA - oh, thank goodness that phase passed!"
I agree it's all relative. But nevertheless I think if we studied it we'd find that it required significantly different strategies with different parameters. So if someone will kindly send me stock data for equites in the 1920's and 1930's I'll prove my point...
Aargghh, mates! I don't think it's worth arguing over, but I don't need a log chart to see that
1. The trend for the SnP was essentially sideways for 60 years. This is not true for those who have backtested with post 1980 data.
2. The SnP traded in a narrower range for the great majority of those earlier years when compared with 1980 on. Again, consider this: the SnP spend about 80-90% of the time from 1900 to 1960 traded between 100 and 200. In the first place, that's a sixty year time frame. And, secondly, that's only a 1X multiple. Again, this is not even close to being true (logged or unlogged) post 1980 where the multiple is 3-5X in less than 20 years. Yes, logged will "compress" that, but it won't compress the time axis regardless. Can't we all agree that if you backtest using 1980 data you're not getting a pre-1980 picture of life from this standpoint? And that's all I was getting at.
Again, I'm not saying nothing technical will work or anything like that. I'm just saying life was probably very different...
No, I believe what you are saying about the y axis from the visual standpoint. But what investor cares if his investment goes up by the log? Here's what I mean:
Let's say investor #1 buys and holds an investment for 10 years and it goes up 100%. And let's say investor #2 buys and holds an investment for 10 years and it goes up 300%. Investor #2 won't care how his investment looks on a log chart. He'll only care that he has three times the money as his less lucky cohort...
That's what I'm getting at and the same is true to a certain extent to the trader as well...But if I'm grossly missing something here, let me know...
Everything you are saying is true, but all this is from an investor's perspective. In reality this 60 years was a big rollercoaster like someone mentioned here before, this is much better visible on a log chart (what you are really are looking at is % change so its only normal to use a log-chart). Lots of opportunities for traders there. As i'm not really into buy and hold, that's all I really care about. And now if someone could really get this log-chart here ...
First of all, if you're in Belgium, I'm jealous...
I re-read the first part of my thread and it was a little gloomy sounding - I was reeling from the shock of seeing how sideways the mkt was for 60 years. But I never meant to imply there weren't opportunites for traders even in those very different times.
And I was definitely not trying to look at it from the investor's perspective. But don't you agree there can be eras where different types of instruments excel other types? That is commodities have at times been more favorable to almost any pool of equites and vice versa? You're not saying that all time periods are equal across all markets are you?
I think that there is some value in examining these kind of differing time periods and markets and understanding the history of what can happen. Maybe this is a minor point somehow though...
Last of all, if you're in Belgium, I'm jealous...
; lucky for us. But yes it was a bad period for a long term investor. So just be a trader is the answer imo ...Can't argue with that!