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The New York Times writes:

Market historians have noted that stocks can take a long time to recover from periods of great excess. The Dow and the S.&. P., for instance, did not return to their 1929 pre-crash peaks until 1954, long after the Depression and World War II ended.

That's true, but it ignores the effect of dividends--which were quite generous back then--and inflation, which in this case was deflation.

The total return of the stock market in real terms made a new high by 1936, which is surprisingly similar to the period from the March 2000 peak to today. After 1936, the market collapsed again for another five years.

Posted by edelfenbein at October 4, 2006 12:27 AM