A much better start than last week
We thought that the market would like the (tardy) resolve of the Euro-zone countries, as well as the Treasury’s overtures on increasing bank capital. The market reacted positively. WSJ:
Stocks snapped a brutal losing streak in resounding fashion as the Dow Jones Industrial Average enjoyed its biggest one-day point gain ever following new moves by governments to shore up the global financial system. The Dow leapt 936.42 points, or 11.1%, to 9387.61. The rally ended an eight-day slide in which the blue-chip measure plummeted almost 2,400 points and endured the worst full-week performance in its 112-year history. Monday’s move was the best one-day closing point gain ever for the Dow and its biggest one-day percentage climb since March 15, 1933.
The climb in the Dow on March 15, 1933 took it from 53.84 to 62.10, by the way. Of course, it wasn’t until 1954 that the Dow undid the damage that had been done in 1929.
October 14th, 2008 at 3:23 am
Of course, it wasn’t until 1954 that the Dow undid the damage that had been done in 1929.
Not to be pedantic, but it took almost 3 years for the October Dow to bottom from its 1929 high. Come to think of it, I do hope my point is pedantic with no relation to the immediate future.
It’s been too long since I read The Intelligent Investor, but iirc it states that an investor who began dollar-cost-averaging at the 1929 high would have compounded his money at an annual average of 8% by the time the market returned to the high a quarter-century later.
October 14th, 2008 at 5:06 pm
Maybe the bankers finally figured it out. If they don’t lend money, who needs bankers?
October 14th, 2008 at 10:54 pm
Just a dead cat bounce???? We’ll see soon enough.