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  • The Worst Bear Market in Modern History? [View article]
    Excellent suggestion. I'll take a look at this. I find the topic of inflation adjustment to stock market valuations very interesting. I wrote a feture article for The AAII Journal in February, 1996 looking at how the market at that time should be valued on an inflation adjusted basis. I came to the conclusion that, in February, 2006, U.S. stocks were undervalued. I have never done a follow-up study.


    On Nov 21 11:34 AM SpinWatch wrote:

    > John - This is a good comparison that gives a feel for what might
    > be in the market's future. One refinement to this analysis would
    > be to add inflation or deflation to this process. I bought my first
    > stock in the 1973-1974 market when the market was at 689. The market
    > continued crashing until it reached 642 upon which the media said
    > that this was worse than the 1929-1932 period when adjusted for the
    > deflation then versus the 1970's high inflation. Adjusting for inflation/deflation
    > would narrow the percentage gap in the table (89% versus 48%) considerably.
    > As the deflationary spiral drags on the comparative pain of the 2008
    > crash could be put into a better perspective with an adjustment for
    > deflation.
    Nov 21 14:16 pm |Rating: +2 0
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