THE COMING CRASH WILL RESEMBLE THE 1929 CRASH

Three Things You Didn’t Know About The Crash Of 1929 –Black/Zero Hedge
“The US stock market had peaked the previous month, on September 3, 1929, with the Dow Jones stock index reaching a record high of 381. But throughout September and October, nervous investors began pulling their money out of the market. And over a three day period in late October (including Black Monday), the market lost more than 30% of its value. Ninety years later, I thought it would be prudent to look at three key insights from that historic crash, starting with: 1) Stocks are more overvalued today than they were in 1929. Back in 1929, the price/earnings ratio of the average company trading on the New York Stock Exchange was about 15…Today it’s 30….2) Stocks fell by nearly 90% in 1929… and it took decades to recover. The ‘crash’ wasn’t isolated to Black Monday. From the peak in September 1929, stocks ultimately fell nearly 90% over the next three years. The Dow bottomed out in 1932 at just 42 points…If that were to happen today, it means the Dow would fall to just 2,700… a level it hasn’t seen since the early 1990s. And it wouldn’t return to today’s highs until the mid 2040s….3) Adjusted for inflation, stocks have returned just 1.7% per year since 1929….Every single year your money loses around 2% of its value….It’s interesting to note that, when adjusted for inflation, GOLD has outperformed stocks over the long run. When adjusted for inflation, gold has averaged a 1.8% return since 1929 (slightly higher than stocks), and a 6.7% return since 1999 – more than 3x as much as stocks. But unlike stocks, people who own gold haven’t had to put up with the same risks.”