I live in the USA and I am concerned about the future. I created this blog to share my thoughts on the economy and anything else that might catch my attention.
Wednesday, July 18, 2012
Stock Market Risk
Click to enlarge.
One chart to rule them all, one chart to find them
One chart to bring them all, and in the darkness bind them
Dont think this chart actually points out unreasonable growth which would suggest risk. You have to look at other changes that occured. Banking for example saw huge consolidation. The banks in this average were literally hundreds of banks just 20 years ago. Walmarts growth ocuured over the last 30 years and that probably represents what was once thousands of reatilers.
I was going to bring up inflation adjustment, but I see this chart is already adjusted. Ruh, roh.
That run from 1990 to 2000 was something special. It looks like even a Nobel winning PhD economist from LTCM could figure out a formula for that run. Too bad, it didn't work out and they blew up the company.
Dont think this chart actually points out unreasonable growth which would suggest risk. You have to look at other changes that occured. Banking for example saw huge consolidation. The banks in this average were literally hundreds of banks just 20 years ago. Walmarts growth ocuured over the last 30 years and that probably represents what was once thousands of reatilers.
ReplyDeleteAnonymous,
ReplyDeleteDont think this chart actually points out unreasonable growth which would suggest risk.
Perhaps this collection of exponential failure charts will help you see the risk?
The banks in this average were literally hundreds of banks just 20 years ago.
ReplyDeleteIf bigger is safer, then explain Citigroup.
I was going to bring up inflation adjustment, but I see this chart is already adjusted. Ruh, roh.
ReplyDeleteThat run from 1990 to 2000 was something special. It looks like even a Nobel winning PhD economist from LTCM could figure out a formula for that run. Too bad, it didn't work out and they blew up the company.
Mr Slippery,
ReplyDeleteRuh, roh.
We were Scooby duped. ;)