We’ve done it - at least in some sense… Throughout my entire career, I used the Japanese stock market as a cautious tale of the risks to equity investments even if you are a very long-term investor. But as of today, the Nikkei 225 has finally recovered all its losses created after the bubble burst in 1989. It only took 34 years and a few months and the index dropped 78.8% from peak to trough, but we finally are back to all-time highs in Japan! It’s the real-time example of what I wrote about
which makes one wonder: what is the longest peak-to-trough-to-peak as of yet?
My gom (guess-o-meter) says Russia got back to zero in the 1990s, Germany in the 1960s, Venezuela and Zimbabwe: not yet by a long shot... But do those countries that have defaulted even count?
I think the longest period is thousands of years because any investment in the futures markets of Ancient Egypt are kind of worthless today. And when it comes to stocks, then the problem with Germany, Russia, etc. is that there is no continuous time series. The stock market seized to exist for a while under the Soviet Union or in Germany during the second World War and was then reinstated starting from scratch afterward.
Update: The peak of the MIB is precisely the one dated 1999. Being a “value” index, it distributes "heavy" dividends and, if considered, currently bring the index to the highs. From this point of view, the Chinese index, on the other hand, is in the doldrums even considering the dividends.
Me too. The data trace back to the december of 1997. Anyway I'm curious to see its value at the beginning of the nineties when Italy was the economic power number 4.
Glad to see that you are showing the inflation adjusted numbers, however you appear to be missing a key aspect here: dividends. If you run the total returns for the Nikkei 225, you will see that it has already surpassed it 1989 peak some time ago (and the Topic). So the new news is actually old news.
As an aside, given the knowledge and computing power we have today, I'm not sure why we are still using historical and misleading artifacts like price-weighted indexes or price return indexes - rather than using total return indexes for long term data.
Good point about total return indices. Why aren't we using total return indices? I don't really know. My guess is we are just creatures of habit. After all, the Americans still use the Dow Jones Industrial, which is price weighted and makes no sense whatsoever.
Meanwhile, there is one country that uses a total return index: Germany. Few people know that the the Dax is a total return index which is why they tend to overestimate the performance of German stocks when they compare the Dax with, say the EuroStoxx or the CAC40.
which makes one wonder: what is the longest peak-to-trough-to-peak as of yet?
My gom (guess-o-meter) says Russia got back to zero in the 1990s, Germany in the 1960s, Venezuela and Zimbabwe: not yet by a long shot... But do those countries that have defaulted even count?
I think the longest period is thousands of years because any investment in the futures markets of Ancient Egypt are kind of worthless today. And when it comes to stocks, then the problem with Germany, Russia, etc. is that there is no continuous time series. The stock market seized to exist for a while under the Soviet Union or in Germany during the second World War and was then reinstated starting from scratch afterward.
And yesterday's high seems to be fueled by Nvidia, and that may not be a long lasting tailwind.
I NEVER ignore inflation, which is the major tool by which the financial hegemony rips off investors and people generally
The forward looking question I think is whether to buy, hold and/or sell. Wasn’t Momentum a significant factor in equities?
And the FTSE MIB????????????
I only have that since 198. How long has it been under water?
Update: The peak of the MIB is precisely the one dated 1999. Being a “value” index, it distributes "heavy" dividends and, if considered, currently bring the index to the highs. From this point of view, the Chinese index, on the other hand, is in the doldrums even considering the dividends.
Me too. The data trace back to the december of 1997. Anyway I'm curious to see its value at the beginning of the nineties when Italy was the economic power number 4.
Anyway the ftse mib is still on the right path
Glad to see that you are showing the inflation adjusted numbers, however you appear to be missing a key aspect here: dividends. If you run the total returns for the Nikkei 225, you will see that it has already surpassed it 1989 peak some time ago (and the Topic). So the new news is actually old news.
As an aside, given the knowledge and computing power we have today, I'm not sure why we are still using historical and misleading artifacts like price-weighted indexes or price return indexes - rather than using total return indexes for long term data.
*Topix
Good point about total return indices. Why aren't we using total return indices? I don't really know. My guess is we are just creatures of habit. After all, the Americans still use the Dow Jones Industrial, which is price weighted and makes no sense whatsoever.
Meanwhile, there is one country that uses a total return index: Germany. Few people know that the the Dax is a total return index which is why they tend to overestimate the performance of German stocks when they compare the Dax with, say the EuroStoxx or the CAC40.