Rebuttal to checklist :)
LOL! This might seem like it is getting ridiculous (and I concede that) but I think this is a very productive debate. We are being civil and on point and supporting our arguments with facts, not hyperbole. I think we respect each other (well, I certainly respect him at any rate) and I think this debate is of benefit to the community.
Checklist has made the point before that 3 >50% drops is uprecendented in a bear market. This is an incorrect statement. Allow me to point out my evidence. I don't have to go back 100 years, or anything fancy:
It is actually quite precedented, as evidenced by the NIKKEI above. It is a major economy that has faced many of the same macro headwinds we face now and our policy responses thus far has been amazingly similar. I am obviously not making a 1-for-1 comparison between the US and Japan, but this is a situation that cannot be easily ignored.
Okay, so what about US indices? In comparing the S&P in the 70s checklist has pointed out on many occasions that 'Low 60s in 1974... low 100's in 1982.' (referring that the end of the secular bear was in 82, not 74). And like I have repeatedly pointed out, inflation was massive in the late 70s / early 80s. And so looking at nominal prices not only doesn't tell the whole story, it is actually highly misleading.
So allow me to retort with a chart:
In real (inflation adjusted terms) the S&P 500 made a clear lower low in 1982 vs 1974.
So one can say that in the US markets a 3x >50% drop in a secular bear is 'unprecedented', but that is highly disingenuous. We had a 41% / 57% / 44% drop. That is pretty da*n close to a 50 / 50 / 50.
checklist makes excellent points about true honest-to-goodness values at the bottom in 2009. I don't deny that at all.
But I strongly challenge the 'unprecedented' claim with regard to 3x 50% drops in a secular bear.