Secular Stock Markets Explained

Tuesday, June 13, 2006 | 10:05 AM

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.

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Dow Chart with P/E, 105 Years
click for larger chart

100_year_market_with_pe

Source: Crestmont Research

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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.

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Source:
Secular Stock Cycles Explained (pdf)
Ed Easterling
Crestmont Research,
2006
http://www.crestmontresearch.com/pdfs/Stock Secular Explained.pdf

Tuesday, June 13, 2006 | 10:05 AM | Permalink | Comments (9) | TrackBack (0)
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Comments

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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