The Stock Market Crash of 1929
The Stock Market Crash
of 1929 occurred at the beginning of the Great Depression
and led to a Stock Market Bubble similar to what has occurred in the Nasdaq from
2000 to 2002.
Notice what happened in the 1920's and 1930's and compare that to what the
Nasdaq has done since 1990. From 1924, when the Dow was around 100, until
the Dow peaked in 1929 around 375 it appreciated near 275% over a 5 1/2 year
period before crashing in late 1929 and losing 87% of its value from late 1929
through 1932. Meanwhile the Nasdaq which really
started to take off in 1995, when it was near 1000 peaked in early 2000 just
above 5100 and appreciated nearly 400% over the 5 year period before selling off
severely as well and losing 78% of its value from 2000 through 2002.
If you compare the stock chart of the Dow before the
Stock Market Crash of 1929 to the more recent chart of the Nasdaq they look very similar. Also notice what happened to the Dow after it finally bottomed in
1932. It was followed by a steady up trend through 1936.
As shown by the table below after the stock market crashed in
1929 the Dow suffered horrific losses
from 1929-1932 but then had four consecutive up years from
1933-1936. Can the Nasdaq pull off a similar feat from 2003-2006
just like the Dow did after the stock market crash of 1929?
|
Year
|
Dow |
Year |
Nasdaq |
|
Return |
|
Return |
| 1920 |
-32.9% |
1990 |
-17.8% |
| 1921 |
12.7% |
1991 |
56.8% |
| 1922 |
21.7% |
1992 |
15.5% |
| 1923 |
-3.3% |
1993 |
14.7% |
| 1924 |
26.2% |
1994 |
-3.2% |
| 1925 |
30.0% |
1995 |
39.9% |
| 1926 |
0.3% |
1996 |
22.7% |
| 1927 |
28.8% |
1997 |
21.6% |
| 1928 |
48.2% |
1998 |
39.6% |
| 1929 |
-17.2% |
1999 |
85.6% |
| 1930 |
-33.8% |
2000 |
-39.3% |
| 1931 |
-52.7% |
2001 |
-21.1% |
| 1932 |
-23.1% |
2002 |
-31.5% |
| 1933 |
66.7% |
2003 |
50.0% |
| 1934 |
4.1% |
2004 |
8.6% |
| 1935 |
38.5% |
2005 |
1.4% |
| 1936 |
24.8% |
2006 |
? |
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