I saw a couple graphs posted on Twitter last week that really sparked my interest.
I wanted to post them here so when I get some spare time I can sit back in my chair and ponder them more over a couple cocktails.
The first graph is a look at the current “recovery” compared to prior recoveries. I believe the lines on the graph start at zero in the Quarter following a recession and end when a new recession begins.
The current recovery is the 4th longest (since 1948), but reminds me a bit of the t-shirts I saw protesters wearing last year at Jackson Hole that proclaimed “what recovery?”.
The second graph I wanted to save to review at a later date shows the annual return of the $SPX since 1980 along with the intra-year drawdowns. (click for full-size).
Sure I’ve watched the BTFD video enough times for it to sink in, but seeing those returns after significant drawdowns helps reinforce the notion that “every dip is a buying opportunity”.
If you don’t believe me, this 500-year chart proves that the market inevitably goes up – given a long enough timeline.
Now I know why all those guys wearing neckties on CNBC say “we’re long-term investors” so often. It always pays to be bullish when you manage other people’s money and I would use that chart to prove the case.