Secular Stock Markets Explained
We've been discussing the 100 year charts that look at the secular history of Bull and Bear markets, including Adjusting Stock Prices for Inflation. This has been a favorite of mine for some time, and I highlighted it in the technical segment (part II) of the Cult of the Bear.
Ed Easterling was kind enough to let us run his chart, and I find it to be the very best of these longterm secular views: He overlays the Bull and Bear periods with trailing P/E -- this fits in very nicely with our contracting P/E thesis.
Dow Chart with P/E, 105 Years
click for larger chart
Incidentally, in terms of what readers purchased via links at this site, Ed's book, Understanding Secular Stock Market Cycles, is your most popular buy, just edging out Barton Bigg's Hedgehogging this quarter.
Secular Stock Cycles Explained (pdf)
Crestmont Research, 2006
http://www.crestmontresearch.com/pdfs/Stock Secular Explained.pdf
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Can we go a bit deeper into the data here? What was the direction of the E in these periods? My guess would be down and then it is a bit of a duh. Stocks go up when earnings improve but go down when they don't. What am I missing?
Posted by: Ned | Jun 13, 2006 10:57:51 AM
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