Unexpectedly Intriguing!
January 5, 2009

Doug Short has a great chart comparing four big bear markets for stocks as a percentage change of their peak value before finally hitting bottom:

Four Bad Bears, 2009-01-02 - Source: Doug Short

We thought it might be fun to turn that chart on it's head and look at how stock prices changed in the ten years following their hitting bottom, as a percentage of their lowest average monthly value during their crashes. To do that, we turned to our historic data for the S&P 500, found the five worst percentage declines from peak to trough, then created the following graph to show the post-crash aftermath:

Post-Recovery Value of S&P 500 as Percentage of Bottom Following the Biggest Crashes on Record

We should note that the periods showing the ten years spanning June 1932 to May 1942 and April 1938 to March 1948 overlap. The data for the June 1932 to May 1942 period reveals the crash that created the bottom for against which the April 1938 to March 1948 was measured!

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